3.7.10.1 Introduction to the U.S. EPA

In the United States, air quality regulations are enforced through two types of agencies. These agencies are the Environmental Protection Agency (EPA), the national agency, and the individual state and local Air Quality Management Agencies whose job it is to oversee selected areas within their state. This sub-section will focus on the EPA and the South Coast AQMD that governs the Los Angeles area because of the level of development at these agencies. While the SCAQMD might pursue higher control requirements and fines than other regions due to its air quality problems, the general concepts integrated into the SCAQMD’s are some of the best in the world and are worthy of consideration.

The EPA typically focuses its compliance activities on general issues and leaves it up to state and local agencies to handle specific enforcement issues. However, the EPA does have significant regulatory power under the Clean Air Act. "EPA may issue an order to any person or company who violates the Clean Air Act. The order may impose a civil penalty plus recovery of any economic benefit of non-compliance and may also require correction of the violation" (“CAA Statute,” 2007). The EPA also regulates a program called the New Source Review (NSR) program. This program addresses major new stationary sources and modified stationary sources. It ensures that the most up-to-date pollution controls and equipment are placed on these NSR sources. "The U.S. EPA has broad authority under the Clean Air Act to pursue alleged violators of the NSR permitting requirements. The Act grants EPA expansive and sweeping authority to: request information from individuals and companies, inspect facilities, conduct investigations, and pursue judicial and administrative enforcement actions for injunctive relief and civil penalties" (CAA National Enforcement Programs). EPA also enforces mobile source regulations and import regulations whereas most state and local agencies do not.

State and local agencies are responsible for issuing permits, inspecting facilities, listening to air quality complaints, distributing fines, and ensuring that emissions limits are being met and maintained under the review of the EPA. State and local agencies handle civil violations and can refer some violations to the police agencies to address “criminal violations." State and local agencies must rely on the governments policing agencies (e.g. the attorney generals office) to pursue criminal charges for an air pollution violation. "In deciding whether to refer a case for criminal prosecution, agencies will consider such factors as the type and severity of the violation, the state of mind of the violator, and the harm or risk to the public created by the violation" ("AQMD's Enforcement Authority", 2004).

3.7.10.2 General Compliance Policy

It is important to understand that there is no uniform way to penalize companies. Each violation is assessed individually under the General Compliance Policy. "This policy recognizes that what might be a fair penalty for a large company might not be for a small company, despite the fact that the same rule was violated. The California Health and Safety Code requires that the following factors be considered in assessing penalties: a) The extent of harm caused by the violation, b) The nature and persistence of the violation, c) The length of time over which the violation occurs, d) The frequency of past violations, e) The record of maintenance, f) The unproven or innovative nature of the control equipment, g) Any action taken by the defendant to mitigate the violation, h) The financial burden to the defendant" (“General Compliance,” 2005). After assessing a violation, the AQMD decides if they would like to move forward with a fine or with some other form of punishment. The SCAQMD has a program designed to offer alternate civil penalties rather than fines if the circumstances are appropriate or if a financial penalty would be too devastating to the company. It is called the Supplemental Environmental Project (SEP) Program. "Depending upon the circumstances of the case, a SEP penalty typically involves a change of process, equipment, material, environmental clean up, indirect source reduction, or public outreach for the purposes of eliminating or reducing air contaminant emissions" (“Supplemental Environmental,” 2004). If an SEP penalty is chosen it still is required to benefit the public and/or the environment and the facility operator is still obligated to correct the original problem and come into compliance with the air quality standards. This program allows the AQMD some flexibility with their penalties and aids the General Compliance Policy.

3.7.10.3 Inspections

Inspections are a way for the SCAQMD to check how well an industry's equipment is performing, to test the knowledge of the company's employees, and to investigate whether or not a company is maintaining its emission standards. Typically, facilities are aware of an upcoming inspection well ahead of time, but should the SCAQMD receive an air quality complaint about the facility, an unannounced inspection may occur. "During the inspection itself, the Inspector looks to see if the proper permits are posted near the equipment. Inspectors may ask the facility representative to describe types of equipment at the facility, and how each type is used and maintained. All conditions, practices, and other relevant observations are noted, and those which are unusual or which may create problems are recorded and described in detail" (“During the Inspection,” 2006). Should an inspector encounter a violation of any kind, one of two types of notices will be issued. The first type of notice is the Notice to Comply. This is a written method of alleging a minor violation, which does not carry penalties as long as the facility owners make any needed corrections in a timely manner. The second type of notice is the Notice of Violation. This written notice is typically used when emissions standards have been violated and this notice can involve penalties. "In handling violations, SCAQMD carefully considers all the facts and circumstances under its General Compliance Policy. If a facility has a good compliance record and other requirements are met, the violation may be resolved under SCAQMD's Supplemental Environmental Project (SEP) Policy, which allows the use of measures which will create a direct or indirect air pollution benefit, instead of cash, as a form of civil penalty" (“Compliance Assurance,” 2004).

3.7.10.4 Fines

Fines can be used instead of SEP penalties if the SCAQMD feels that a fine is a more appropriate punishment. Paying the fine does not take away any obligation to correct the original problem. Different monetary amounts are determined based on the severity of the violation. Amounts can range anywhere from $1,000 per day of violation up to $1,000,000 per day. The following paragraphs come directly from "AQMD's Enforcement Authority” (2004).

$1,000 per Day Strict Liability

A person who violates any provision of the Health and Safety Code or an AQMD rule, regulation, order or permit, regardless of an emission violation, is strictly liable for a civil penalty of $1,000 per day.

$10,000 per Day

A person who violates an AQMD rule, regulation, order, permit condition or applicable state law, will be subject to a civil penalty of up to $10,000 per day unless the violator can establish that the violation was not the result of intentional or negligent conduct. If the violation involves the emission of air contaminants, the penalty could be higher than $10,000 per day.

$25,000 per Day

A person who carelessly, inattentively, or inadvertently violates air pollution rules, causing the emission of air contaminants, will be subject to a civil penalty of up to $25,000 per day. Moreover, if the negligent emission of air contaminants causes actual harm to an individual, a civil penalty of up to $100,000 per day may be imposed.

$40,000 per Day

A person who violates air pollution rules will be subject to a civil penalty of up to $40,000 per day if the violation causes the emission of an air contaminant and the person knows of the emission but fails to act promptly to halt the emission. What matters here is that there was a violation that caused an emission and the person knew of the emission without acting as quickly as he could have to stop it. The person's knowledge of the emission and the failure to act promptly are the key elements in making this a serious type of violation.

$75,000 per Day

A person who willfully and intentionally emits an air contaminant in violation of any Health and Safety Code or rule or regulation of the state Air Resources Board or AQMD may be liable for a civil penalty of up to $75,000 per day.

If the willful and intentional emission of air contaminants causes injury to any person or results in the violation of Health and Safety Code Section 41700 which poses a risk of injury to any person, one may be liable for a civil penalty of up to $125,000 per day and a corporation may be liable for an amount up to $500,000 per day. If the willful and intentional emission of air contaminants causes great bodily injury or death, a person may be liable for a civil penalty of up to $250,000 per day and a corporation may be liable for an amount up to $1,000,000 per day.

3.7.10.5 Self-Auditing

Finally, there is a program used within the SCAQMD that rewards businesses who report air quality violations on their own. "The Prosecutor's Office's self auditing policy is founded on the basic principle that violations which are self-audited, disclosed and corrected, warrant penalties that are consistently and predictably lower than penalties for violations which are discovered by the SCAQMD" (“Self-Auditing Policy,” 2004). In order for a company to be considered for a reduced or waived penalty, they must meet four criteria: "1. The violation was discovered by the facility without any participation by the SCAQMD or other regulatory agency. 2. The violation was reported voluntarily by the facility, i.e. without any requirement to do so by law, regulation, permit or agreement. 3. The violation was reported promptly by the facility to appropriate SCAQMD staff, as soon as possible after the discovery. 4. The violation was corrected promptly and effectively by the facility to reduce or eliminate all emissions and to prevent reoccurrence of the violation" (“Self-Auditing Policy,” 2004). This program encourages businesses to keep a close watch on their facilities and report violations before they become a bigger problem, as well as allowing them a way to avoid expensive fines.

3.7.10.6 Example Refinery Related Regulations from the South Coast Air Quality Management District

3.7.10.7 Rule 1118: Control of Emissions from Refinery Flares

The purpose of Rule 1118 is to provide guidelines for the operation of petroleum refineries, sulfur recovery plants, and hydrogen production plants. The rule includes performance targets and dates by which these targets should be achieved. Should a refinery not achieve their goals in a timely manner, certain penalties will apply. At the end of each calendar year, a refinery will have its annual flare sulfur dioxide emissions assessed. If the refinery has exceeded their target limits for the year, the Executive Officer may issue a Notice of Sulfur Dioxide Exceedance. This notice will go on the refineries compliance record. In addition to the notice the owner or operator of the facility will, "Submit a Flare Minimization Plan…and pay the District mitigation fees, within 90 days following the end of a calendar year for which the performance target was exceeded, according to the following schedule: If the excess emissions are no more than ten percent of the petroleum refinery specific performance target, $25,000 per ton for all sulfur dioxide emission(s) in excess of the applicable performance target. Or if excess emissions are greater than ten percent but no more than twenty percent of the petroleum refinery specific performance target, $50,000 per ton of all sulfur dioxide emission(s) in excess of the applicable performance target. Or if excess emissions are greater than twenty percent of the petroleum refinery specific performance target, $100,000 per ton of all sulfur dioxide emission(s) in excess of the applicable performance target. Notwithstanding the mitigation fee schedule of the subparagraph, the mitigation fee for a petroleum refinery for a calendar year will not exceed $4,000,000" (“Rule 1118,” 2005). In addition to the aforementioned fines, the owner or operator must submit a complete Flare Minimization Plan no later than 90 days from the end of a calendar year. This plan will detail the future actions the refinery will take in order to meet their performance targets. If, in the future, the refinery does not meet their performance targets, does not submit an appropriate plan, or violates their plan, then the refinery will suffer additional penalties. For the complete text on Rule 1118, please see Appendix A.

3.7.10.8 Rule 1109: Emissions of Oxides of Nitrogen from Boilers and Process Heaters in Petroleum Refineries

Rule 1109 provides numerical limits for emissions from boilers and process heaters at petroleum refineries. In addition to the numerical limits, this rule describes record keeping and planning requirements. This rule applies to all petroleum refineries within the SCAQMD jurisdiction:

(ii) From December 31, 1995, emissions must be less than or equal to 0.03 pound per million BTU of heat input when firing at the maximum rated capacity, or as specified in an Alternative Emissions Control Plan (AECP).

(iii) For each unit firing at less than the maximum rated capacity, mass emissions of nitrogen oxides shall be less than or equal to the quantity that would occur at the applicable limit specified in (b)(1)(B)(i) and (b)(1)(B)(ii) at maximum rated capacity, or as specified in the AECP.

When the specifications above refer to an AECP, they mean an Alternative Emissions Control Plan. Each petroleum refinery must submit a control plan to the SCAQMD Executive Officer describing the steps they will take to meet emission standards. If a petroleum refinery can meet the standards, but in such a way that is more agreeable to their company (i.e. more cost effective), then that refinery may submit an AECP that describes the measures they will take to achieve emission reductions. In addition to the plans petroleum refineries must submit, they are also responsible for keeping records. These records of equipment performance must be maintained and made accessible to the Executive Officer for a period of 2 years. Compliance with this rule will be determined by testing of equipment and the equipment’s performance. For the complete text of this rule, please see Appendix A. The full text also includes plan specifications, compliance dates, and exemptions.

3.7.10.9 Rule 1123: Refinery Process Turnarounds

Rule 1123 describes the actions that must be taken in cases of refinery process turnarounds.

(1) During refinery process turnarounds, a person shall not depressurize any vessel containing organic materials unless the vapors released from the vessel are collected and contained for use as fuel or sent to a gas disposal system until the pressure in the vessel is below five pounds per square inch, gauge, or is within ten percent above the minimum gauge pressure at which the vapors can be collected, whichever is lower.

In addition to this, every refinery that uses inert gas displacement or vacuum evacuation for process turnaround, must submit a plan for the process to the Executive Officer. This plan must be approved by the Executive Officer. Lastly, a refinery operator shall maintain a record of each refinery process until turnaround. For the complete text of this rule, please see Appendix A. The full text also includes plan requirements, record keeping requirements, and exemptions.