Legal watch: Payback time for CEMS

The "credible evidence" or "any credible evidence" (ACE) rule (40 CFR 51.212, 52.12, 52.33, 60.11 and 61.12) allows the U.S. Environmental Protection Agency (EPA) to use any evidence to show that a source is violating applicable emission limits. Before promulgating this rule in 1997 in response to the 1990 Clean Air Act Amendments (CAAA), EPA could only use an agency-prescribed performance or reference method test to sample and analyze air pollutants to show noncompliance, except where regulations explicitly specified continuous emissions monitoring systems (CEMS) or similar approaches for determining compliance. Under the credible evidence rule, however, EPA may use operating parameter data, production, maintenance records or anything that might bear on emissions. In August 1998, a U.S. appeals court in Washington, D.C., dismissed an industry challenge to the ACE rule as premature, thus clearing the way for EPA to use the rule in enforcement proceedings around the country, and to require states to include credible evidence provisions in their implementation plans. To illustrate the ACE rule's operation, suppose your source is subject to a carbon monoxide emission limit, with compliance based on an annual stack test. Before the credible evidence rule, the only way for EPA to show noncompliance with the CO limit was to use the results of the reference method test specified in the regulation. Now, however, the EPA can use operating data, including temperature and oxygen level, as credible evidence of noncompliance. Nothing in the ACE rule defines or limits possible kinds of evidence that the phrase "credible evidence" encompasses. The evidence must only be sufficient to show that, had the source performed the applicable method test, it would have shown a violation. The problem The compliance assurance monitoring (CAM) rule requires the collection of process and control device data to ensure good control device performance, and so give a reasonable (but not absolute) assurance of compliance with emission limits. Because the CAM rule's focus is on providing a reasonable assurance of compliance and not on measuring actual emissions, it has no requirement to install CEMS or any other technology that provides actual emissions data. Particularly in light of the CAM rule, source owners and operators have a legitimate concern about enforcement actions based on process data. How can you protect yourself against these enforcement actions, possibly initiated by citizens? This problem may be expressed more concretely as follows: You may understand how your facility operates, and know that, although a boiler temperature was lower than normal, or one field of an electrostatic precipitator was not energized, your emissions were still below the applicable standard. The problem becomes proving compliance - possibly in court - given a possible presumption by people unfamiliar with your particular facility, that such parameter excursions mean increased emissions? Equally important, how can you avoid having actions brought in the first place? Even if you can prove your innocence after a protracted legal battle, you still have lost considerable time and money, not to mention the good will of the surrounding community. This problem takes on added significance for the source's "designated representative," who could be the president, vice president or plant manager, and who must warrant compliance. Given the criminal penalties, including jail time, for noncompliance, does the designated representative want to rely on possibly ambiguous process data compiled by a line operator whose first priority is production, not compliance with air emission rules? The solution Knowing your emission levels at all times through direct, continuous measurement proves compliance with applicable standards. Even if operating parameters suggest an exceedance, direct emissions measurements will protect you from enforcement actions. EPA and citizen activists are unlikely to scrutinize process data to show noncompliance if you have direct emissions measurements showing compliance. Designated company officials facing criminal penalties for noncompliance can breathe easier. While there are various approaches to continuously obtain direct emissions measurements, the most reliable involve the use of CEMS and continuous opacity monitoring systems (COMS; in the remainder of this article, we use CEMS to include COMS). These devices measure emissions or opacity directly and continuously, while providing emissions data in the units of the applicable standard, making proof of compliance straightforward. Further, when operating parameters suggest a violation of permit conditions, CEMS data may provide the only means for proving your innocence. Regulatory agencies should trust CEMS over other means of determining emissions. Because these devices measure emissions directly and in the units of the applicable standard, no manipulation or interpretation of their output is necessary to determine emissions. Regular calibration and use in thousands of applications worldwide mean that CEMS data is reliable and widely understood. Environmental and community watchdog groups, which might bring potential violations such as reports of excess opacity to the attention of regulatory authorities, also favor CEMS. Direct and continuous measurement allows such groups to assure their constituencies they are protected from excess emissions. Further, allegations of violations that are contradicted by CEMS data are very unlikely to be taken seriously. Other benefits of continuous monitoring Use of CEMS as protection against frivolous credible evidence actions also gives plants operational flexibility. Rather than maintaining narrow process and control device parameters to avoid the appearance of emissions exceedances, plants using CEMS may adjust operating parameters at will to maximize production and minimize operating costs. Parameter monitoring-based approaches obviously do not provide this flexibility. In the sense that CEMS data are operating parameters, they may be used to improve operations. In several cases, plant owners required to install CEMS have found that output emissions data could be fed back to processes to improve performance and efficiency, or to diagnose unexpected equipment failures. With the continued growth of emissions trading in the United States, continuous monitoring provides one additional benefit: CEMS data can be used to document over-compliance with emission limits and to obtain saleable emissions reductions. Measurement of operating parameters, while allowing compliance with the CAM rule, typically cannot be used to show over-compliance. Continuous monitoring misconceptions The principal perceived drawback of continuous monitoring systems is cost. Conventional wisdom holds they are expensive to buy and expensive to operate. In fact, however, the purchase cost of CEMS has dropped considerably over the past decade, in some cases by over 50 percent, and continues to fall. A basic nitrogen oxide and ozone CEMS, including sample probe, analyzers, and enclosure, is $29,000 to $50,000, a bargain compared to past prices. Further, modern CEMS from reputable vendors are very reliable and typically have low operating and maintenance labor requirements. While high-end monitoring systems still remain expensive, such as those required under the acid rain provisions of the CAAA, there is little need for such systems in typical industrial applications. Less complicated CEMS, with lesser audit requirements, and thus lower costs, should suffice in defending against credible evidence actions. Further, as noted above, the increased operational flexibility that CEMS provide over parameter monitoring systems, the use of CEMS output to improve operation and the use of CEMS to certify surplus emissions for trading purposes, all mean that continuous monitoring is likely to provide a payback. Finally, a key reason for using CEMS to forestall credible evidence actions is to avoid expenditures on fines and legal defense, which likely would far exceed the cost of purchasing and operating a monitoring system. A second perceived drawback to CEMS is that they will provide definitive evidence of noncompliance, increasing the chances (relative to using low-grade parameter monitoring) that out-of-compliance sources will be caught. However, the credible evidence rule will increase the chances that habitual noncompliers will be caught in any case. Further, giving the appearance of choosing the least precise monitoring device could hurt a company's standing with regulators and the local community. Good citizenship Beyond other benefits, protection against credible evidence actions, the installation of CEMS will help industrial sources show good environmental citizenship. Merely showing that you are not hiding anything helps build good community relations. Further, good monitoring allows you to show environmental awareness, and may be used for "green marketing" beyond the community. CEMS and emissions trading EPA and the states are increasingly seeking to use the power of the marketplace to lower compliance costs and increase compliance flexibility. Diverse programs and proposals lumped under the term "emissions trading" allow a source to comply with a clean air mandate by reducing its own emissions or purchasing emission reductions (sometimes called "emission allowances") elsewhere from a source that has over-complied. Trading provides an alternative to installation of control equipment, process modification and production reformulation where such actions would disrupt production or be economically impossible. At the same time, trading creates an incentive for a source with low compliance costs to overcontrol, so it can sell its surplus reductions. Essential to a smoothly operating emissions trading market, however, is a method to quantify precisely the commodity being traded. For this purpose, EPA calls CEMS data "the gold standard to back up the paper currency of emissions allowances". CEMS data, EPA has stressed, instills confidence in a market-based approach since it clearly quantifies and values the emission being traded.

This article originally appeared in the 03/01/1999 issue of Environmental Protection.

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