New directions from the Obama EPA

In less than a year into its new administration, the Obama White House and its EPA Administrator Lisa Jackson have already made quite an imprint on the environmental regulatory landscape.

During his first month in office, President Obama directed EPA to review the action taken by the previous administration in prohibiting California from regulating automobile carbon dioxide emissions. This directive followed the Supreme Court’s ruling under Massachusetts v EPA that carbon dioxide is an air pollutant under the Clean Air Act and that EPA must regulate it if it is found to cause harm to public health and welfare.

EPA promptly issued a draft endangerment study on April 14, 2009 proposing that CO2 and other greenhouse gases pose a threat to public health and welfare. On July 1, 2009, EPA reversed the Bush administration’s decision and allowed California to regulate CO2 from tail pipes.

The Obama EPA is tackling the greenhouse gas issues on two fronts. It is working with Congress to develop new cap-and-trade laws to reduce greenhouse gas while developing its own regulations under the Clean Air Act to regulate it.

On September 30, 2009, Lisa Jackson announced that EPA is proposing new regulation under the Clean Air Act to curb greenhouse gas from industries that emit more than 25,000 tons of CO2 per year. This would bring many plants under the new regulation if it becomes final.

The Obama EPA has also dropped a Bush plan to exempt some 3,500 facilities from reporting chemical releases under the Toxic release Inventory. You can expect to see a few more rule reversals in the future.

EPA gets ready to regulate greenhouse gas

On September 30, 2009, EPA announced a proposal that is focused on large facilities emitting over 25,000 tons of greenhouse gases a year. These facilities would be required to obtain permits that would demonstrate they are using the best practices and technologies to minimize GHG emissions.

The rule proposes new thresholds for greenhouse gas emissions (GHG) that define when Clean Air Act (CAA) permits under the New Source Review (NSR) and title V operating permits programs would be required for new or existing industrial facilities.  Click here for a copy of EPA’s fact sheet on this latest regulatory proposal.

The NSR will trigger the need for PSD (Prevention of Significant Deterioration) permits for new source or major modification in attainment areas.

Some observers have noted that this EPA step is a strategic move to motivate industries to lobby the Senate for a Climate Change Bill. Many in industry would prefer to be regulated under a new Climate Change Bill than under the Clean Air Act.

Just exactly what is “used oil”?

Used oil is defined as any petroleum-based or synthetic oil that has been USED. When you use oil, impurities or contaminants such as dirt, metal scrapings, water or other chemicals can get mixed in with the oil. such impurities may make your oil less effective as a lubricant for example.

Some examples of used oil are engine oil, transmission fluid, refrigeration oil, compressor oils, metal working fluids and oils, laminating oils, electrical insulating oil, industrial process oils, etc. Waste oil is not used oil. Oil that has been spilled is not classified as used oil because it has not been used for its original purpose.

You should recycle your used oil by re-conditioning, re-refining or burning it for energy recovery. EPA has specific management standards that you should comply with if you handle used oil in your business. You should label all containers and tanks as “Used Oil”. Keep these containers in good condition. You are not permitted to store used oil in lagoons, pits or surface impoundment.

If your used oil is mixed with hazardous waste, you may have to dispose of the mixture as hazardous waste. So make sure you store your used oil away from other hazardous wastes.

Always check with your state agencies because they may have more stringent used oil regulations.

Resist the temptation ……don’t do it!

Has this ever  happened to you?

After you tell your VP of production that he cannot install his new equipment because he has to get a pre-construction permit first, he tells you that it is unacceptable and he threatens to call the state senator or the governor. He wants to “bypass” this lengthy permitting process because customers are clamoring for his products. He has orders to fill. He has to make his numbers. 

Situations like this happen a lot more frequently than you think. The production folks somehow get the idea that the sole purpose of the regulatory agency is to assist them in meeting their production quotas. To the contrary, the agency people are there to implement state and federal laws that say you cannot install any new air emission sources without first getting a pre-construction permit. That’s the law of the land.

If your VP calls up the governor’s office and tries to do an end run on the permitting process, two things will likely happen. First, he will get turned down.  The governor’s office will most likely tell your VP to pay an extra fee to get on the “fast permitting track”. Most agencies have that program. He will still have to wait and get his construction permit.

Second, you will have made an enemy in the permit writer once he  finds out that you try to bypass him. Put yourself in the permit writer’s shoes. How would you feel if some one goes over your head to your boss?

The best way to get a permit in a timely manner is to be upfront with the agency. Provide everything the agency needs to process your permit in a timely manner. Try to do it right the first time. Do not play cat-and-mouse game with the permit writer. Be courteous. Be professional. Remember – the permit is simply doing his job – just like you are. He is not your enemy. But if you treat him like one, he will become one. 

On last point. If you hire a consultant to get a permit for you, make sure that the consultant has a good working relationship with the agency and your consultant gets along with the permit writer. You do NOT want an arrogant  consultant representing you before the agency.

Satellite Accumulation Points

40 CFR 262.34(c) allows hazardous waste generators to accumulate waste in a 55-gallon container at or near the place of generation. This is known as the satellite accumulation point (SAP) Once the container is full, the generator has 3 days to move it to the central storage area – at which time the usual (90 days or 180 days) accumulation time starts. By the way, you cannot store waste in a SAP for longer than one year in California.

While it is permissble to have more than one SAP if you generate wastes at different locations, it is illegal for waste generator to move waste from one  SAP to another. Doing so would defeat the purpose of having SAPs in the first place – reduce frequencies of waste movement within the plant.

Why SPCC is not delegated to the states?

As we all know, many federal environmental programs are delegated to the state levels for implementation with oversight from EPA. Such is not the case with the Spill Prevention Control and Countermeasures (SPCC).

When Congress passed the Clean Water Act in 1972, it directed the President to develop a National Contingency Plan. Under Section 311(j)(1) of the Act, the President is directed to est”lish procedures, methods,a nd equipment and other requirements for equipment ot prevent discharge of oil and hazardous substances from vessels and from onshore facilities…”…..

The President is specifically authorized to delegate the administration of Section 311 of the Clean Water Act to “the heads of those Federal departments, agencies, and instrumentalities which he determines to be appropriate”.  There is no mention of any authority to delegate to state agencies.

Some state governments have enacted state laws that require their industries to have spill prevention plans that are the same as those spelled out in the SPCC regulations. California is one of these states. So if an inspector from one of the California state regional water quality control boards finds that you don’t have a SPCC plan, the agency can cite you  for violating the state law - but not the federal law.

Only an EPA inspector can cite you for SPCC violations.

Harvard/Georgetown University Study on EPA Self-Audit Policy

One of our readers made the comment that a recent Harvard/Georgetown University study on EPA’s Self-audit Policy shows that it may not be good for all companies. 

Below is a brief summary of the Harvard/Georgetown findings from the reader’s website:

“Our results … demonstrate that Audit Policy participants with clean past compliance records improved their environmental performance by reducing their accidental releases of toxic chemicals to the environment.  We also find that regulators rewarded these effective self-policers with an inspection holiday.  By contrast, bad apple self-disclosers did not improve their performance compared with similar non-disclosing firms.  We find no evidence that regulators altered their scrutiny over these ineffective self-policers.

… it turns out that regulators are quite adept at … sorting the good apples from the bad.  We found that regulators had accurately parsed these two groups of self-disclosers, rewarding the former but not the latter with inspection holidays.

… self-disclosing firms on average reduce the number of abnormal events resulting in toxic chemicals being released to the environment.”

____________________________________________________________________

My comments on this study are as follows:

The study is flawed in its basic premise. It presupposes that a company undertakes the self audit because it expects an “inspection holiday” AND improved performance. Quite the contrary – the MAIN focus and reason for a company to go the self-audit route with EPA is to secure substantial penalty waiver and avert possible criminal sanction in the face of uncovered environmental violations. The subsequent improvement in environmental performance is a natural byproduct and bonus as a result of the remedial action following the self  disclosure.

The study also finds out that “self disclosing firms on average reduce the number of abnormal events”. Well – the reason is very simple. They have few is because they perform audits! They discover small problems before they become major abnormal events. Nothing new here. That’s why people do environmental audits.

As to the “inspection holiday” – you do not need a Harvard study to discover that a regulatory agency carries out more inspections on the bad apples. It is common sense and it happens in the real world. Agencies generally do not waste their limited resources on good apples. Why would they?  They can get a much larger return by going after the dirty companies. Again, nothing new here.

 

EPA’s self-audit policy – a case study

Under EPA’s Audit Policy – finalized on April 11, 2000 – if a company discover environmental violations through its own voluntary audit, it can report the violations to EPA within 21 days of discovery and seek significant reduction in civil penalties from the agency. The company must meet nine conditions to be eligible for a 100% reduction of the gravity portion of the civil penalty. (More on the gravity portion later).

The 9 conditions are:

1. The audit must be systematic.
2. It must be voluntary.
3. Prompt disclosure of violations within 21 days.
4. Audits must be independent of permit or settlement conditions.
5. Correct violation within 60 days.
6. Prevent recurrence of violation.
7. No repeat violations.
8. No serious harm to human health or environment.
9. Cooperate with agency.

EPA’s civil penalty polciy has two portions: Gravity and economic benefits portions. The gravity portion of the civil penalty refers to the part of penalty that pertains to how much damage is done to the environment or the severity (gravity) of the violation. The economic benefits portion is the amount of money the violator has saved by not being in compliance.  For example, if you have been dumping your toxic wastes into the river for a year, you have saved a certain amount of money by not having to pay for the proper disposal of those wastes. The economic benefits portion of the civil penalty would be the amount of money you have saved that the agency wants from you.

Click here for a list of frequently asked questions about EPA’s self-audit policy.

On april 30, 2004, subsidiaries of Koch Industries purchased 40 manufacturing plants from DuPont. Twelve of these facilities are located in the United States. The company entered into a corporate-wide auditing agreement with EPA under EPA’s self-audit policy and uncovered over 680 violations of water, air, hazardous waste, emergency planning and preparedness and pesticide regulations. The company disclosed these violations in accordance with EPA’s  audit policy agreement. 

As part of a Consent Agreement, EPA waived the gravity portion of the civil penalty but fined the company $1.7 million as the economic benefits portion of the civil penalty. This would be the amount of money EPA estimated the company would have saved by not being in compliance from the time it acquired those 12 facilities to the time when all the violations are corrected.  The company also agreed to spend between $240 and $500 million to correct all the environmental violations at those facilities.

This is a classic case of how a large company can take advantage of EPA’s self-auditing policy to start over with a clean slate. By agreeing with EPA to conduct a self-audit, the company averted the gravity portion of the penalty and paid only $1.7 million for over 680 violations. Without the self-audit agreement beforehand, the company would have to pay a substantial gravity portion of the civil penalty in addition to the $1.7 million for economic benefits. 

This particular case has helped EPA to develop a separate self auditing policy designed specifically for “new owners” of facilities. If you acquire a facility and conduct a voluntary self-audit of that facility within 9 months from the date of acquisition, you may be eligible for waiver of the gravity portion of the civil penalty under the “new owner” policy which relaxes some of the nine conditions cited above.

You will still be liable for the economic portion of the civil penalty.

Dilution as a solution to pollution

Yes – Virginia – there is a Santa Claus. There is also a mixing zone – where you can use dilution as a solution to pollution.

Under EPA regulation 40 CFR 131.13, states “may, at their discretion, include in their State standards, policies generally affecting their application and implementation, such as mixing zones, low flows and variances. such policies are subject to EPA review and approval.”

Mixing zones are defined as “a limited area or volume of water where initial dilution of a discharge takes place and where numeric water quality criteria can be exceeded but acutely toxic conditions are prevented from occurring.”

Many states – including California – allow mixing zones. If you are applying for a permit to discharge your waterwater directly to the navigable waters of the United States, you might want to seriously consider including a mixing zone in your application. The benefits to you can be enormous.

Once you obtain a mixing zone for a particular wastewater parameter, you will only need to meet that parameter’s water quality standard at the edge of the mixing zone. Without a mixing zone, you will have to meet the water quality standard at the end of your discharge pipe.  Mixing zones usually carry a dilution ratio of 100:1. That means you only need to treat your waste parameter down to 100 times the concentration of its water quality standard at the end of your pipe. The dilution effect of the mixing zone will bring the concentration down to the water quality standard level at the edge of the mixing zone.

To get a mixing zone, you will need to do computer modelling of your discharge plume taking into consideration the depth, water quality and flow conditions of your receiving water. You must follow your state agency’s guidelines on mixing zones.

How to use EPA’s RCRA online database

There is a little known database in EPA’s website that addresses hazardous waste management issues. It is the RCRA-online database.  It stores hundreds of guidance documents prepared by EPA over the program’s 29-year history. If you go to the database and type in your keywords, you may just find a few guidance documents prepared by EPA on your topic.

Below is an example of an EPA guidance document on the subject of representative sampling under RCRA:

A company wanted to dispose of a large number of fluorescent tubes in 1995. It sent one spent fluorescent tube to a laboratory for TCLP (Toxic Characteristic Leaching Procedure) analysis. The result came back indicating that the one tube “passed” the TCLP test – meaning none of the regulatory levels for the 40 chemicals on the TCLP list was exceeded. The company wrote to EPA to ask if it could then dispose of its entire inventory of spent tubes as non-hazardous waste.

EPA wrote back and told the company that the one tube that was tested was not a representative sample of the entire inventory of spent tubes.  The sampling had to take into account the different brands, the various ages of the tubes, and different wattages, etc. The EPA letter is one of the Faxback documents (Faxback 11907) that you can obtain from RCRA online.