API and EPA Resolve Challenge to Stationary Combustion Engine Standards

September 8, 2009
Client Alert Newsletter September 2009

On June 4, 2009, notice of a proposed settlement reached between the American Petroleum Institute ("API") and the U.S. Environmental Protection Agency ("EPA") was published in the Federal Register, the terms of which address API's challenge to an EPA rule promulgating regulations requiring new source performance standards ("NSPS") for new stationary compression ignition internal combustion engines, also known as Subpart IIII standard of the NSPS. Engines covered by the standards are typically used to generate electricity and operate compressors and pumps. The original rule, which took effect September 11, 2006, required all new, modified, and reconstructed stationary compression ignition internal combustion engines to use the best demonstrated system of continuous emissions reduction to reduce emissions of nitrogen oxides ("NOx"), particulate matter ("PM"), carbon monoxide ("CO"), sulfur oxides ("SO2"), and non-methane hydrocarbons ("HC").

The settlement requires EPA to finalize revisions to the Subpart IIII standards of the NSPS within one year and to issue a guidance document that lists specific emission standards for various pollutants. Under the terms of the proposed settlement, EPA agreed to propose the following revisions to the regulations:

(1) revisions to allow owners and/or operators to operate and maintain their engines according to their own operation and maintenance ("O&M") practices, rather than engine manufacturer O&M practices, as long as the owner maintains and operates the engine in a manner consistent with good air pollution control practices;

(2) revisions to allow the use of temporary replacement engines (i.e., those in place for less than one year), if the owners and/or operators of such engines meet the requirements of the NSPS or meet the requirements for non-road engines;

(3) revisions to refer to an engine's "certified emissions life" rather than its "useful life;" and,

(4) revisions to include a not-to-exceed ("NTE") emissions limit that applies to engines which are required to test emissions. The proposed NTE limits are intended to simplify the compliance process by adopting specific NOx, CO, PM, and HC exhaust limits specifically applicable to engines undergoing performance testing. For example, current emission standards for NOx compounds listed in table 1 of the regulation are 6.9 g/bhp-hr and would be applicable to manufacturers of certified engines. The addition of the NTE standards to table 1 would result in an NTE for NOx of 8.6 g/bhp-hr and would be the prevailing standard for demonstrating NOx emission compliance by owners and/or operators required to test the engine.