Regulatory Developments

MACT program’s OIAI Ended by EPA Air Chief

Under new Assistant Administrator William Wehrum, EPA’s Office of Air and Radiation (OAR) has issued a memo withdrawing a 21-year-old policy on the classification of sources under Clean Air Act Section 112 (control of hazardous air pollutants (HAPs); also called the maximum achievable control technology (MACT) program).
Issued by John Seitz, then the director of the OAR, the 1995 “Seitz memo” stated that once a source of HAPs was listed as a major source, it could only be reclassified as a nonmajor or area source before the compliance date of the standard to which it was subject. If the compliance date passed without the reclassification, the source would remain a major source, regardless of how much it reduced its actual emissions or potential to emit (PTE). This position by the EPA became known as the once-in-always-in policy (OIAI). Major sources are subject MACT controls, while area sources are generally required to meet less stringent emissions limits.

OIAI Discouraged Backsliding

The Seitz memo explains its reasoning as follows:

“In many cases, application of the MACT will reduce a major emitter’s emissions to levels substantially below the major [source] thresholds. Without a [OIAI policy], these facilities could ‘backslide’ from MACT control levels by obtaining [PTE] limits, escaping applicability of the MACT standard and increasing emissions to the major-source threshold (10/25 tons HAP per year). Thus, the maximum achievable emissions reductions that Congress mandated for major sources would not be achieved. A [OIAI] policy ensures that MACT emission reductions are permanent and that the health and environmental protection provided by MACT standards is not undermined.”

EPW Republicans Request Change

The EPA has made several overtures toward withdrawing the OIAI policy, including two proposals under the G.W. Bush administration, which were never made final. Elimination of the policy remained a regular agenda item for major industrial facilities that are the principal targets of the MACT program. The current memo may have been prompted by a January 9, 2018, letter from John Barrasso (R-WY), chair of the Senate Committee on Environment and Public Works (EPW), and Shelly Moore Capito (R-WV), who heads an EPW subcommittee.

Addressed to EPA Administrator Scott Pruitt, the letter states that the OIAI policy discourages greater emissions reductions. “Withdrawing this policy would allow facilities that lower their emissions below the MACT-triggering threshold to invest in modernization and other projects, rather than spend money complying with unnecessary rules,” the senators wrote.

Focus on Statutory Language

In his memo, Wehrum focuses on the limits of MACT authorizing language in Section 112 and particularly on the prohibition in the Seitz memo that major sources cannot be reclassified into area sources after the compliance date of the relevant standard.

“… the phrase ‘considering controls’ within the definition of ‘major source’ indicates that measures a source adopts 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. In short, 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. To the extent the OIAI policy imposed such a temporal limitation (i.e., before the ‘first compliance date’), EPA had no authority to do so under the plain language of the statute.”

The Wehrum memo emphasizes that reclassification of a major source to an area source at any time is permissible as long as the source’s PTE remains below the applicable major-source HAP emissions limit.

The memo adds that the EPA anticipates it will soon publish an FR notice to take comment on adding regulatory text that will reflect the Agency’s plain-language reading of the statute.