Court Vacates EPA’s Self-Imposed Stay on Boiler MACT Rules

The U.S. District Court of D.C. recently vacated EPA’s “Delay Notice” on the Boiler MACT rule it promulgated in February 2011 (and the related solid waste incinerator rule), leaving uncertainty as to the rule’s current effect and whether regulated entities will be required to meet its upcoming compliance date of March 21, 2014.  This is the latest in a long line of legal challenges involving the Boiler MACT rules that has, in the words of Foghorn Leghorn, caused more confusion than a mouse in a burlesque show. 

On February 11, 2011, EPA promulgated standards regulating hazardous air pollutants from Industrial, Commercial, and Institutional Boilers and Process Heaters (referred to as “Boiler MACT”) and Commercial and Industrial Solid Waste Incinerators (“CISWI”).  Numerous environmental and industry groups appealed the rules to the Court of Appeals for the D.C. Circuit.  Due to serious concerns raised about the rules by the public and regulated community after their promulgation, EPA elected to place a stay on their implementation in order to reconsider their content and seek additional comments.

Specifically, EPA found in its Delay Notice: 

justice requires postponing the effectiveness of these rules. . . . EPA has identified several issues in the final rules which it intends to reconsider because we believe the public did not have a sufficient opportunity to comment on certain revisions EPA made to the proposed rules. . . . In addition, EPA received data before finalizing both rules but was unable to incorporate that data into the final rules given the court deadline for issuing the rules, which the Agency was unable to extend. 

Federal Register, Vol. 76, No. 96 (May 18, 2011), pp. 28662–28664, at  http://www.gpo.gov/fdsys/pkg/FR-2011-05-18/pdf/2011-12308.pdf (May 25, 2011).

The Sierra Club immediately challenged the Delay Notice in the U.S District Court of D.C.  Then, in January 2012, the court held that the EPA’s action in issuing the Delay Notice was arbitrary and capricious and vacated the stay.  EPA argued that the stay was allowed because of the pending judicial review in the Court of Appeals, which is a legitimate basis for a stay.  However, the court vacated the Delay Notice because EPA failed to apply the proper four-part test for determining whether a stay was warranted and EPA also explicitly stated that the stay was actually for its own reconsideration of the rules rather than for purposes of judicial review.

EPA has released a proposal for amendments to certain elements of the rules and indicated that it expects to complete its reconsideration of the rules by April 30, 2012, with the final revised rules expected in the fall of 2012. Technically, now that the stay has been vacated, the rules that were published in February 2011 are in effect and require compliance with emissions limits by March 21, 2014 and with certain interim notification deadlines that have already passed.  In order to reduce confusion caused by the vacatur, EPA has now issued a "No Action Assurance" letter to make clear that it will not pursue enforcement of any violations associated with failure to meet initial notification deadlines. This No Action Assurance will be in effect until new compliance deadlines are set by EPA.

The final revised Boiler MACT rule, when published, will extend the compliance date to 3 years from the date of its publication.  Even then, however, the rules are still subject to change as a result of the judicial review by the D.C. Court of Appeals, which is expected to rule on the challenges to the rules in late fall 2012.  In addition, the deadlines may be altered by Congress to allow EPA more time to complete its reconsideration.