Anticipated Regulatory Initiatives and Developments for 2011 - Air and Waste

January 7, 2011
Client Alert Newsletter Forecast 2011

During 2010, the U.S. Environmental Protection Agency ("EPA") initiated several significant rulemaking efforts that are likely to result in the promulgation of final regulations during 2011. Among the more significant of these rulemakings, EPA is scheduled to finalize several stringent air quality regulations.

Pursuant to Section 112 of the federal Clean Air Act, EPA must finalize the regulation of hazardous air pollutants ("HAPs") from various sources. Relevant to many sources in the region, EPA is likely to finalize its "replacement" HAP regulation for industrial and commercial boilers. These regulations will impose maximum achievable control technology ("MACT") requirements for fossil fuel-fired combustion sources located at both major and non-major "area" sources of HAPs. Industry generally criticized EPA’s proposed new Boiler MACT regulations as imposing significant costs without corresponding environmental benefits. If promulgated in accordance with EPA's proposed rule, this Boiler MACT regulatory package may result in substantial additional costs for many owners and operators of fossil fuel-fired boilers.

EPA is also poised to promulgate significant additional regulations applicable to air emissions from electric generating units. The proposed utility MACT would primarily address the control of mercury emissions, following the vacatur by the Circuit Court of Appeal for the District of Columbia of EPA's prior mercury control regulation for the utility sector. The same Appellate Court also previously invalidated EPA's regulations governing the interstate transport of criteria pollutants generated by electric generating units (known as the Clean Air Interstate Rule, or "CAIR"). EPA is therefore pursuing a replacement rule for CAIR, now known as the "Transport Rule," designed to also limit emissions of sulfur dioxide and nitrous oxides from these facilities. EPA continues to re-evaluate its approach toward this rulemaking, but nonetheless hopes to finalize the Transport Rule during 2011.

EPA is also scheduled to finalize and promulgate its new regulation of air emissions from commercial and industrial solid waste incineration ("CISWI") units. In conjunction with this air quality regulation, EPA is reevaluating the scope of its definition of "solid waste" for purposes of its CISWI air regulatory standards. EPA has proposed to substantially revise its characterization of solid waste for these purposes. Significantly, the combustion of many materials previously beneficially used as fuels may now be regulated as solid waste incineration under these federal standards. Further, because of EPA’s associated reconsideration of the definition of solid waste for these purposes, these federal rulemaking packages may consequentially impact solid waste regulatory programs at both the state and federal levels.

In accordance with a judicial directive and statutory standards, EPA is also scheduled to finalize its determination regarding regulation of the management and disposal of ash generated by the combustion of coal, including for electricity generation. This issue has received significant national attention, as interested stakeholders have argued strenuously in favor of alternative regulatory schemes. Various environmental interests have pressed for regulation of coal combustion ash as a hazardous waste; by contrast, electric generating facilities and energy consumers insist that coal ash can be safely managed and disposed as nonhazardous waste, and the regulation of this material as hazardous waste would result in unnecessary and exorbitant costs that would adversely affect all aspects of the economy. EPA's pending proposal would regulate the material as nonhazardous waste. Given the controversy surrounding this rulemaking dictates that the form of the final regulation cannot be confidently predicted.