EPA Replaces the MACT "Once In, Always In" Policy

by Katten Muchin Rosenman LLP

On January 25, 2018, EPA issued guidance replacing the maximum achievable control technology (MACT) "once in, always in" (OIAI) policy under the federal Clean Air Act (CAA). Memorandum from William L. Wehrum, Assistant Administrator, to Regional Air Division Directors, "Reclassification of Major Sources as Area Sources Under Section 112 of the Clean Air Act," (Jan. 25, 2018) (Guidance). The Guidance allows major sources subject to a MACT standard under CAA § 112 to be reclassified as area sources and, thus, to avoid being subject thereafter to major source MACT requirements. Specifically, the Guidance allows major sources to take enforceable limits on their potential to emit (PTE) hazardous air pollutants (HAP) below major source thresholds (i.e., 10 tons per year of any single HAP or 25 of any combination of HAP).

The Guidance replaces an earlier EPA policy memorandum. See "Potential to Emit for MACT Standards – Guidance on Timing Issues." John Seitz, Director, Office of Air Quality Planning Standards, U.S. Environmental Protection Agency (May 16, 1995) (Seitz Memorandum). The Seitz Memorandum set forth the OIAI policy under which facilities could switch to area source status at any time prior to the "first compliance date of the MACT standard," with the first compliance date being defined to mean the "first date a source must comply with an emission limitation or other substantive regulatory requirement" of a MACT standard. Seitz Memorandum at 5. Under the OIAI policy, facilities that were major sources for HAP on or after the first compliance date were required to comply permanently with the major source MACT standard requirements. Id. The Guidance replaces the OIAI policy and supersedes the Seitz Memorandum. Guidance at 1.

In reaching its new policy position, EPA determined that the OIAI policy was contrary to the plain language of the CAA. It noted that Congress expressly defined the terms "major source" and "area source" and that the statutory definitions contain no reference to the compliance date of the MACT standard. Id. at 3. Further, EPA noted in its discussion that the phrase "considering controls" within the definition of "major source" indicates that the measures a source might adopt to lower its PTE below the major source threshold must be considered as operating to remove it from the major source category, regardless of the time at which those controls are adopted. Id. The Guidance reasons that because Congress placed no temporal limitations on the determination of whether a source emits or has the PTE HAP in sufficient quantity to qualify as a major source, EPA had no authority to impose a temporal limitation through the OIAI policy (i.e., before the "first compliance date"). Id.

Presumably, the Guidance applies to both MACT standards developed by rulemaking and those developed in accordance with case-by-case reviews. It will be interesting to see the effects the new policy will have on MACT standard case-by-case determinations. Generally, facilities that would otherwise be required to have a case-by-case MACT standard developed, will likely choose to take an enforceable limit to their PTE of HAP below major source thresholds in order to avoid establishment of MACT facility-specific HAP limits. Consequently, it is likely that this new policy will make MACT case-by-case standard determinations very rare.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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