1
\ UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
I ' WASHINGTON, D.C. 20460
March 19, 1996
OFFICE OF
THE INSPECTOR GENERAL
MEMORANDUM
SUBJECT: Audit Report No. E1KAF5-11-0001-6100140
Development of Maximum Achievable
Control Technology Standards
FROM: Edward Gekosky
Divisional Inspectpr General for Audit
Headquarters Audit -Division .
TO: John S.-Seitz
Director, Office of Air Quality Planning .
and Standards (OAQPS) , Office of Air and Radiation
This report presents the results of our audit of the
development of Maximum Achievable Control Technology (MACT)
standards. The audit objectives were to identify efficiencies
that could be implemented to accelerate the MACT standards
development process and to evaluate the Agency' s method of
determining the MACT floor for emission standards. During this
review, we found that the Agency adopted many initiatives to
improve the MACT standards development process. However, OAQPS
was behind schedule for completing MACT standards within the
statutory timeframes. We also found that the Agency had not
established the required category for research and development
(R&D) facilities, and believe that EPA should seek a
clarification of the method for computing the emission standard.
In response to our draft report, we are pleased that you plan to
take actions to establish a source category for R&D facilities.
We also acknowledge your view that seeking a clarification of
calculating the MACT floor as not being a vital issue at this
time, but we continue to believe that a clarification should
occur as reauthorization of the Clean Air Act occurs.
ACTION REQUIRED
In accordance with EPA Order 2750, you as the action
official are required to provide this office a written response
to the audit report within 90 days of the final audit report
date. For corrective actions planned but not completed by your
response date', reference to specific milestone dates will assist
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DEVELOPMENT OF MACT STANDARDS
this.office in deciding whether to close this report. We have no
objections to the further release of this report to the public.
We appreciation the cooperation extended to our auditors
during this audit by your staff. Should you or. your staff have
any questions about this report, please contact Michael Prater,
Audit Manager, at (703) 308-8222. •
Attachment
ii
Report No. E1KAF5-11-0001-6100140
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DEVELOPMENT OF MACT STANDARDS
This report presents the results of an audit by the Office
of Inspector General on the development of Maximum Achievable
Control Technology (MACT) standards. MACT standards are
performance criteria designed to significantly reduce air toxics
emissions.
SCOPE AND METHODOLOGY
The audit objectives were to identify efficiencies that
could be implemented to accelerate the MACT standards development
process, and to evaluate the Agency's method of determining the
MACT floor for emission standards. To achieve these objectives,
we reviewed available records for the MACT development process.
We also interviewed Agency personnel, State officials and other
interested parties. We conducted our review activities from
October 1994 to August 1995, and performed the audit in
accordance with the Government Auditing Standards issued by the
Comptroller General of the United States (1994 Revision).
We did not verify data from any management information
system and did not perform a comprehensive evaluation of internal
controls. However, in March 1995, the General Accounting Office
(GAO) addressed internal controls in a report on Clean Air
Rulemakina which concluded that EPA did not have a systematic way
of measuring the impact of its efforts to reduce the time it
takes to issue rules. GAO recommended that EPA implement a
tracking system to record key dates, resources, and historical
information needed to monitor and evaluate the Agency's clean air
rulemaking process. In response to the GAO report, OAR plans to
develop a new resource management system. We agree that a .
tracking system would assist management in identifying problem
areas in the rulemaking process and assessing their streamlining
efforts. No other significant issues came to our attention that
warranted expanding the scope of our audit.
BACKGROUND
One of the most extensive revisions in the Clean Air Act
Amendments (CAAA) of 1990 addressed the Air Toxics Program. Air
toxics are those pollutants known or suspected of causing cancer
or other serious health effects. Prior to passage of the 1990
Amendments, the air toxics program was at a standstill. Since
1970, the Environmental Protection Agency (EPA) had regulated
only eight of the hundreds of toxic air pollutants emitted from
industrial processes. The problem under the 1970 law was that
EPA was required to regulate air toxics based on risk to public*
health. In setting control standards, EPA was to prevent adverse
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DEVELOPMENT OF MACT STANDARDS
health effects associated with exposure to air toxics "with an
ample margin of safety." Since EPA could not clearly define a
safe level of exposure to these cancer-causing pollutants, it
became almost impossible to issue regulations.
The 1990 Amendments reflected a different approach for
regulating air toxics. EPA was to identify categories of major
sources that emit any of the 189 toxic air pollutants listed in
the Act. A major source is one that emits more than 10 tons per
year of a single air toxic or 25 tons per year of any combination
of air toxics. The CAAA also required EPA to establish a
separate category to cover air toxic emissions from research or
laboratory facilities. In July 1992, EPA published a list of 174
source categories which included 166 major source categories and
8 area source categories (any source not considered a major
source). Over the next 10 years, EPA was to develop technoloav-
based MACT standards for these categories. These standards
require emitters to use the best control technologies already
demonstrated by industry sources. The new air toxics program did
not dictate the specific equipment that a facility mUst install,
but rather focused on the emissions standards that the facility
must achieve. This approach allowed industry the flexibility to
develop its own methods of reducing air toxics emissions.
The CAAA set forth the basic methodology by which these
standards were to be developed. The methodology required the
Agency to determine the emissions reductions of the various
sources and then average the top 12 percent to establish what is
commonly referred to as the MACT floor or emission limitation.
There is an exception for small industries. If a source category
has less than 30 sources, the best five performing sources are
averaged to arrive at the MACT floor. To determine the MACT
floor, EPA ranks the existing sources in each source category
using emission reduction data gathered from questionnaires and
other sources. The agency averages the best 12 percent of
emission reductions from the ranking list to arrive at the MACT
floor.
EMISSIONS FROM MAJOR SOURCES AT RESEARCH
AND DEVELOPMENT FACILITIES LACK REGULATION
Section 112(c)(7) of the Clean Air Act requires EPA to
establish a separate category to cover air toxic emissions from
research or laboratory facilities whose primary purpose is to
conduct Research and Development (R&D) into new processes and
products. During our review of the MACT standards development
process, we learned that a separate category did not exist.. As a
result, R&D facilities can operate without restriction in those
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DEVELOPMENT OF MACT STANDARDS
states that have no independent regulation. Of nine completed
MACT standards, five explicitly exempted R&D facilities and four
were silent.
R&D operations involve not just research in laboratories but
full-scale production facilities. R&D production facilities
operate for extended periods of time and can be major emitters of
air pollution. An EPA official told us that some R&D facilities
manufacture large quantities of products for sale as test
products and that it is not clear when an operation crosses the
line between R&D and manufacturing. In our opinion, the
possibility exists that with no air toxics controls required for
R&D, industry could take advantage of R&D status to avoid
complying with air toxics regulations.
Our discussions with Agency officials revealed that little
.is known regarding the number of major R&D facilities that exist
nor the emissions produced by these facilities. However, no
effort was under way to include R&D facilities as a separate
category. As a result, we could not determine how many major
source R&D facilities exist. In one MACT we reviewed, an
industry spokesperson told us his company has a sizeable R&D
facility in a metropolitan area. The state environmental
official said that the R&D facility is a major source emitter
which she believes should be regulated. In another MACT we
reviewed, a state official said they do not keep records of major
sources of air toxics at R&D facilities. However, he was able to
list at least 24 R&D facilities that he believed were major
sources of Volatile Organic Compounds (VOCs). The VOCs were
Criteria Air Pollutants which are regulated under Title I of the
CAAA. An EPA official believes it is likely that major
quantities of air toxics are emitted along with the VOC
emissions. In that case, those R&D facilities could potentially
meet the criteria for major sources of air toxics and be excluded
from federal regulations.
Conclusion
From our review of the law, we concluded that the CAAA
intended that R&D facilities be categorized as a separate
category. However, from our discussions with Agency
representatives and other stakeholders, we learned that R&D
facilities are not currently subject to MACT standards and that
no separate category for R&D facilities now exists. We believe
one solution for covering unregulated R&D facilities would be to
create a separate category for R&D facilities.
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DEVELOPMENT OF MACT STANDARDS
Recommendation
We recommend that the Director, OAQPS, establish a separate
category covering research or laboratory facilities.
MACT STANDARDS DEVELOPMENT
One of the objectives of this review was to identify
efficiencies that could be implemented to reduce the ruleroaking
time. We found that OAQPS was addressing the problems and delays
they encountered. We performed a detailed review of two
completed MACT standards and a MACT partnership pilot project
that is expected to be finished in 1996. With assistance from
officials in the Office of Air Quality Planning and Standards
(OAQPS), we picked one MACT that worked well (Magnetic Tapes -
surface coatings), one that experienced problems (Petroleum
Refineries), and one of the MACT partnership pilot projects
(Bakers Yeast Manufacturing) .•
MACT That Worked Well. The MACT that worked well was
promulgated in about 4 years. The project leader told us
the industry consisted of less than 30 plants and about half
were major sources of air toxics. This rule, was identified
as nonsignificant (exempt from OMB review) and tier 3
(exempt from high level EPA review), which likely speeded
the process. Industry became involved early in the process.
An industry representative said that from prior experience
with government regulations, they knew if they were not
involved before the proposal they would not have much impact
on the final outcome. Though it was a long process, the
industry representative said they ended up with a good rule
that was flexible and responsive to industry. We believe
the factors that contributed to the success of this MACT
were a relatively small industry, lower level review, early
industry involvement, and limited or no controversy with, the
industry.
MACT .That Had Problems. The MACT that experienced problems
was completed under court order in four and a half years.
An Agency official said that previously, with statutory
deadlines, decisions were put off and few regulations were
promulgated. He said that court-ordered deadlines are very
effective; decisions must be made and regulations are
promulgated much more quickly. The implication is that
without a court-ordered deadline, this MACT would have taken
considerably longer than four and a half years. This MACT
involved a large industry and a great amount of controversy
including Congressional inquiries. It was an industry that
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DEVELOPMENT OF MACT STANDARDS
was already heavily regulated. The industry was split into
two factions, generally determined by company size. Large
companies, .located mainly in urban areas, had upgraded their
control technology to meet prior regulations. Small
companies, on the other hand, were located mainly in non-
urban areas and were not previously required to update their
control technology. Also, the-small companies could least
afford expensive control changes. EPA estimated that
approximately zero to seven companies would be put out of '
business by the MACT requirements; the small companies
argued that the number was understated. This standard was
delayed partly because industry had to respond to a second
questionnaire after small companies complained that they
were not represented in the first questionnaire. In fact,
the first questionnaire went only to the large companies
because they had the most advanced technology which would be
used to establish the MACT standard. We believe the major
factor that caused problems for this MACT was a politically
strong and divided industry.
MACT Partnership Pilot Project. EPA officials expected this
MACT to take 2 years from start to finish which was 2 years
faster than any of the previous MACT standards. It involved
a relatively small industry of 13 plants (owned by about six
companies) located in ten states. EPA formed a partnership
with two states that had implemented state regulations.
This MACT standard was scheduled for promulgation in the
year 2000. The project leader told us that industry
supported the effort to get the MACT out 4 years before the
deadline f*or economic reasons. The improvements in
technology required by the new rule could increase their
yield and the improvements would more than pay for
themselves. On the down side, a state official recalled a
problem that arose because a company was concerned about
providing confidential business information that might find
its way to one of their competitors that was located in the
state of one of the MACT partners. He said the appearance
of favoritism toward companies in the MACT partner's state
. could be a problem for MACT partnerships. Factors
contributing to the success of this MACT partnership include
having interested states and a cooperative industry.
Conclusion
Our review of the MACT standards identified the complexities
involved in developing the various MACTs. We found it difficult,
if not impossible, to compare the current activities with the
MACTs begun under conditions that no longer exist. For example,
5 Report No. E1KAF5-11-0001-6X00140
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DEVELOPMENT OF MACT STANDARDS
many regulations no longer require OMB and high level EPA review;
later regulations also benefit by using parts of previously
written rules; and, following the reorganization of OAQPS in
early fiscal year 1995, rules are now prepared in one group
rather than the former practice of starting in one branch and
being completed in another. We found that OAQPS was addressing
the problems and delays they encountered. The following section
discusses many of the initiatives OAQPS staff adopted to improve
and speed the MACT development process.
OAOPS ADOPTS INITIATIVES TO IMPROVE THE MACT DEVELOPMENT PROCESS
Duririg the first four years of the new approach, EPA made
progress toward fulfilling the legislative mandate. However, the
Agency was falling behind schedule for completing MACT standards
within the statutory timeframes. The Act required EPA to
.regulate 25 percent of the source categories by November IS,
1994, another 25 percent by "November 15, 1997, and. remaining
source categories by November 15, 2000. The Agency allocated 45
source categories to be completed by the 1994 deadline, 42 by the
1997 deadline, and 87 by the year 2000 deadline. As of March
1995: .'.
Nine MACT standards had been promulgated which regulated 20
source categories, or about 11 percent of the total. The
remaining 25 source categories slated for completion by
November 1994 were under court-ordered deadlines with all to
be promulgated by May 1996.
All MACT standard projects due in November 1997 were
started. Twenty-eight MACT standards will be promulgated to
regulate the 42 source categories.
Work had started on 14 of the remaining 87 source categories
that are due by November 2000.
An attorney in EPA's Office of General Counsel said that EPA
will not miss court-ordered deadlines. An OAQPS official stated
that EPA met all the courtBordered deadlines; however, extensions
can be granted through agreements with plaintiffs.
During our review, OAQPS and other stakeholders discussed
many initiatives and other factors that improved and speeded the
MACT development process. While recognizing that OAQPS is not
meeting the statutorily mandated schedule established by
Congress, we believe OAQPS has been proactive in seeking and
putting to use innovations to speed and improve the MACT
Report No. E1KAF5-11-0001-6100140
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DEVELOPMENT OF MACT STANDARDS
development process. We discussed several of these initiatives
with OAQPS and other stakeholders,
Futures-Team. The Futures Team was formed by OAQPS in the
"early 1990's to generate ways to shorten the MACT
development process in response to expected budget cuts.
Its mission was to analyze the roles and responsibilities of
its Emissions Standards Division and to identify ways to
streamline processes and achieve CAAA goals within the
reduced budget. The Futures Team resulted in (1) a system
for typing the MACTs and (2) the MACT Partnership Program.
Typing (Grouping) of MACTs. OAQPS developed a system for
grouping MACTs into Type A, B,. or C. A representative told
us that typing was their procedure for sorting MACTs with
regard to the amount of information and resources it takes
to complete the rule. The Futures Team recognized that
planning was an important element needed to speed and
improve the overall process. "Typing" formalized planning
by setting the scope of each project up front and gaining a
commitment by those involved.
MACT Partnerships. Probably the most well-known initiative
adopted by OAQPS is the MACT Partnership Program. The
Partnership Program is characterized by EPA and states
working together with industry and environmentalists to
fulfill the mandate to set MACT standards for sources of air
toxics. This program is expected to reduce the time,
resources, and funds needed for completing the MACTs.
Partnerships are founded on the mutual interests of the
major stakeholders in the air toxics program (EPA, state
governments, industry, and environmentalists).
Tiering of Agency Regulations. Under this Agency-wide
program, all rules (both planned and under development) are
classified into either Tier 1, 2, or 3. For example, Tier
1, requires the highest level of review of the three tiers
and generally takes the longest to complete. The
characteristics of Tier 1 regulations include cross-Agency
controversy, great impact on the public, high external and
political interest, and controversy with other Federal
Agencies. Approximately half of the MACT Standards are
categorized as tier 3, only one or two MACTs are categorized
as tier 1, and the remaining .MACTs are categorized as tier
2.
Nonsignificant Rules Exempt from OMB Review. In addition to
time saved through OAQPS "typing" and Agency-wide "tiering,"
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DEVELOPMENT OF MACT STANDARDS
proposed rules can be classified "nonsignificant" and do not
undergo OMB review. Elimination of the OMB review can save
up to six months during promulgation.
• Regulatory Negotiation. A regulatory negotiation brings all
the stakeholders together to develop a regulation. A
regulatory negotiation requires the parties to reach a
consensus. Since everyone must agree on the final outcome,
the development process can be very time consuming.
However, once consensus is reached, the rest of the process
goes very easily because the proposal is accepted and there
is no need for public hearings and time consuming rewrites
and litigation over the final rule.
Workshops and Working Meetings. OAQPS hosted implementation
workshops and working meetings with regional, state, and
local government representatives. At these gatherings, EPA
officials discuss the direction of the program and obtain
ideas from outside parties.
Conclusion
In summary, our review of the development process of the
MACTs showed that OAQPS was actively seeking and adopting
initiatives to speed and improve the process. Since the
enactment of the CAAA in 1990, OAQPS issued regulations at a much
faster rate than clean air regulations issued prior to the CAAA.
However, to meet the deadlines set by Congress, they must
continue and even accelerate the issuance of regulations between
now and the year 2000. Our review of these various initiatives
revealed that several have already proven effective (i.e.,
Tiering Program and Nonsignificant designation for OMB) and
others appear to have merit (i.e., MACT Partnerships and
Regulatory Negotiations). We support OAQPS's efforts to seek and
implement any and all possible ways to speed and improve the
regulatory development process.
EVALUATION OF EPA'5 METHOD FOR DETERMINING THE MACT FLOOR
Our other objective was to evaluate EPA's method for
determining the MACT floor.' The method of calculating the MACT
floor as set forth in the CAAA required EPA to determine the
emission reductions of the various sources and then average the
top 12 percent (or top five sources for industries with less than
30 sources) to establish the emission limit or standard. We
found that the method for computing the emission limit, as
required by the CAAA, is not completely defined. For example,
the emission limit calculated from the.top 12 percent could
8
Report No. E1KAFS-11-0001-6100140
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DEVELOPMENT OF.MACT STANDARDS
result in a standard which equals no. emissions control. The
Agency refers to this as a "negative" standard. Regardless of
its shortcomings, OAQPS officials believe that the current law
provides for set limits and strengthens their position when
dealing with industry. They prefer to work with the law as it is
rathex than attempting a change even though there are situations
where strictly following the law results in ambiguities. For
further discussion of calculating the MACT floor see Appendix 1.
Conelus ion
Based on our review, we believe it would be helpful if the
Agency sought clarification of the method for effectively
determining the MACT floor. An ideal time for seeking such
clarification would be during reauthorization of the Clean Air
Act.
OVERALL CONCLUSIONS OF THIS REVIEW
From our review of Title III Section 112(c)(7) of the CAAA,
we concluded that the law intended that R&D facilities be
categorized as-a separate category. However, from our
discussions with Agency representatives and other stakeholders,
we learned that no separate category now exists. We believe one
solution for covering unregulated R&D facilities would be to
create a separate category for R&D. We recommend that the
Director, OAQPS establish a separate category covering research
or laboratory facilities. OAQPS officials stated that they would
take actions to establish a separate category for R&D.
The results of this review indicated that though the Agency
was behind schedule for promulgating the MACT standards within
the statutory timeframes, they actively sought and put to use
many initiatives to speed and improve the MACT development
process. Our review of the various initiatives revealed that
many have already proven effective and others have merit. We
support these efforts and believe the Agency is making progress
toward meeting the legislative requirement for regulating air
toxic pollutants by the year 2000.
We learned that calculating the emission limit as required
by the CAAA does not always result in an unambiguous emission
standard. Regardless of its shortcomings, OAQPS officials
believe that the present situation strengthens their position
when dealing with industry. They prefer to work with the law as
it is rather than attempting a change. Based oh our discussions
with Agency officials, we concur with their position for the time
being but believe it would be helpful if t'he Agency could get
9 Report No. E1KAF5-11-0001-6100140
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DEVELOPMENT OF MACT STANDARDS
clarification or a more effective method of establishing a floor
at a convenient time such as reauthorization of the CAAA.
AGENCY COMMENTS AND PIG EVALUATION
The Director of the Office of Air Quality Planning and
Standards regards our conclusions and recommendations as fair
assessments of the MACT standards development program and plans
to develop a separate source category for research and
development facilities at major sources. A copy of OAQPS
comments is included as Appendix 2.
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DEVELOPMENT OF MACT STANDARDS
APPENDIX 1
Page l of 4
EPA'S METHOD FOR CALCULATING THE MACT FLOOR
The CAAA required the- Administrator to promulgate I
regulations establishing emission standards for each of the 174
source categories. It set forth the basic methodology by which
these standards were to be developed. The methodology required
the Agency to determine the emissions reductions of the various
sources and then average the top 12 percent to establish what is
commonly referred to as the MACT floor or emission limitation.
There is an exception for small industries. If a source category
has less than 30 sources, the best five performing sources are
averaged to arrive at the MACT floor. Most MACT regulations
require that existing sources meet the MACT floor within 3 years
after promulgation. . '
To determine the MACT floor, EPA ranks the existing sources
in each source category using emission reduction .data gathered
from questionnaires and other sources. Emission reductions are
the. difference between having no controls and the amount that
escapes. For example, 80 percent emission reduction means 80
percent of emissions is controlled and 20 percent escapes. The
agency averages the best 12 percent of emission reductions from
the ranking list to arrive at the MACT floor.
Requirement for Averaging Emission Reductions Waa An.Unexpected .
Addition to the CAAA
An EPA official who recalled the legislative struggle said
the word "average* was an unexpected last minute change to the
Act. Originally, the Senate version called for a cutoff at the
10 percent of the best performing sources, the House version
called for 15 percent, and the compromise was 12 percent. The
final result in Section 112(d)(3) NEW AND EXISTING SOURCES
states:
"Emission standards promulgated under this subsection for
existing sources . . . shall not be less stringent and may
be more stringent than--(A) the average emission limitation
achieved by the best performing 12 percent of the existing
sources . . . with 30 or more sources or (B) the average
emission limitation achieved by the best, performing 5
• sources . . . with fewer than 30 sources.
The requirement to average the emission reductions usually
results in a higher level of emission limitations than the 88
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DEVELOPMENT OF MACT STANDARDS
APPENDIX 1
. Page 2 of 4
percentile implied by using the top 12 percent. The issue of
whether Congress intended a lower or higher floor (88th
percentile or the average percentile of the top 12 percent)
resulted in controversy. EPA's Office of General Counsel
determined that the language and the legislative history support
the higher floor interpretation.
Averaging Emission Reductions Results in Ambiguity
EPA officials pointed out that computing the emission
limitation as required by the CAAA can result in ambiguity. So
far, EPA managed to accommodate such situations. For instance.,
the term average is not defined in the CAAA, and they have
interpreted "averaging" to mean using either the arithmetic mean,
median, or mode.1 An EPA official said that a precedent was set
when.the practice was written into the Hazardous Organic NESHAP2
(HON), the MACT standard for the Synthetic Organic Chemical
Manufacturing Industry. The official said that regulation
contained good references for EPA's position and the public
comments.
Averaging the top 12 percent emission reductions complicates
the process of determining the emission limitation. The
following hypothetical examples and problems demonstrate
situations that produce ambiguity when following the calculation
method required by the CAAA. In one example, the emission
limitation can promote the less efficient technology; and in the
other example, the emission limitation fits only the outermost
conditions of two technologies. Agency officials also told us
about another problem associated with averaging emission
reductions that results in a "negative" MACT floor.
In Example 1, the average emission limitation could be
either 74 percent (the arithmetic mean) or 70 percent (both the
median and mode). If EPA uses 74 percent to- determine the MACT
floor, the next most stringent technology would be fabric filters
'Different kind* at average* are often u*ed to describe where cbe center, or tnoac typical value, of a »«t
of data li*«. They are called meaaure* of central tendency, and the three mo*t common and their definition*
are: . .
Arithmetic mean is the *um of the data divided by the number of piece* of data
Median is the dividing point between.Che top half and bottom half of data
Mode i* the mo*t frequent value
'National Smiieion Standard* for Hazardous Air pollutant* (NBSHAP)
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DEVELOPMENT OF MACT STANDARDS
APPENDIX 1
Page 3 of 4
at 80 percent. Wet scrubbers would not meet the requirement and
would have to be replaced with better control technology. If EPA
uses 70 percent to determine the MACT floor, wet scrubbers would
be the standard but not
the maximum achievable
control technology.
Either wet scrubbers or
fabric filters could be
used. In this example,
the arithmetic mean
fits neither
technology, and the
median and mode promote
the less desirable
technology. If
averaging was not
required, both
technologies would be
acceptable.
CONTROL EMISSION
SOURCE TECHNOLOGY REDUCTIONS
1
2
3
4
' 5
Fabric Filters
Fabric Filters
Wet Scrubbers
Wet Scrubbers
Wet Scrubbers. .
80%
80%
70%
70%
70%
Example 1
In Example 2, the average emission limitation would be 75
percent using either the arithmetic mean, median, or mode. In
this situation, a 75 percent MACT floor matches two control
technologies: Wet scrubbers that are used very well and fabric
filters that are not used well. EPA can require that all
existing sources either
(1) achieve 75 percent
emission reductions by
using either fabric
filters or wet
scrubbers or {2} use
fabric filters which is
the better technology
overall. In this
example, the average
emission reductions
fits, only the outermost
conditions of two
technologies. Again,
if averaging was not
required, both - -
technologies would be
acceptable.
CONTROL EMISSION
SOURCE TECHNOLOGY REDUCTIONS
1
2
3
4
5
Fabric Filters
Fabric Filters
Wet Scrubbers
Wet Scrubbers
Wet Scrubbers
90%
75%
75%
70%
65%
Example 2
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APPENDIX 1
Page 4 of 4
OAQPS officials told us about another problem associated
with averaging emission reductions referred to as a "negative"
MACT floor. A "negative" MACT floor determination happens when:
the MACT floor (calculated from the top 12 percent)
equals "no emissions control,"
the MACT floor can not be determined due to the nature
of the pollutant or process, or
not enough emissions information is available to
compute the MACT floor.
For example, if only five sources exist in a source category and
two of the sources have controls and three do not, using the
median or mode would result in a "negative" MACT floor
determination. There have been no instances of a "negative" MACT
floor, for the early MACTS since they were mostly made up of
larger industries that already had controls in place. OAQPS
officials said that a good possibility exists that a "negative"
MACT floor could occur in the future MACTs since they are mostly
smaller industries that do not have controls in place.
The above examples of MACT floor determination and the
"negative" MACT floor demonstrate situations where following the
CAAA requirements to average emission reductions can result in
ambiguity. .
Averaging Complicated MACT Floor Determination. However EPA Found
Solutions
We spoke with Agency officials about attempting to change
the requirement to average emission reductions to arrive at a
MACT standard. Officials believe they have been able to work
around the ambiguity, and would prefer not to seek legislative •
clarification at this time.
14
Report No. ElKAPS-11-0001-6100140
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1
DEVELOPMENT OF MACT STANDARDS
APPENDIX 2
Page 1 of 2
^^%
\ UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
| RESEARCH TRIANGLE PARK. NC 27711
f
Fffl 20 MK
™^ """" AM QUAUTV MANNING
ANO STANOAMOS
SUBJECT: Response to Draft Audit Report Mo. BllBpSy-ll-OOOl
Development off Maximum Achievable Coqt^oy Technology
/t Standards
FROM: I John S. Seitz, Direct*
j£>-l5efice of Air Quality fanning a£|d Standards (MD-iO)
TO: ^ Edward Gekosky .
Divisional Inspector General for Audit Headquarters
Audit Division . •
This is in response to your January 19, 1996 memorandum ,
concerning the subject draft audit report on the development of
""turnip Achievable Control Technology (MACT) standards under the
Clean Air Act Amendments of 1990 (CAAA). The report focused on
four major topics: (1) emissions from major sources at research
and development (R&D) facilities lack regulation; (2) MACT
Standards Development; (3) OAQPS Initiatives to improve the MACT
development process, and; (4) evaluation of EPA's method for
determining the MACT floor. While the report provides a
recommendation for only one of these topics, emissions from R&D
facilities lacking regulation, I would like to briefly respond to
each.
First, with respect to emissions from R&D facilities lacking
regulation, I agree with the report's assessment and plan to
establish, a separate source category to cover research or
laboratory facilities at major sources. In order to do this we
will have to add to the source category list which will require
internal EPA review, a possible, review by the Office of
•Management and Budget (OMB), and publication in the Federal
Register (PR). (He currently have a FR notice to revise the
source category list in OMB review; thus, the addition of R&D
facilities will not occur until a later PR notice). The R&D
source category will most likely be added to the 10-year source
category bin, which requires promulgation of a standard by
November is. 2000. Once the source category is added to the
list, we then assess the relative benefits of controlling
emissions from the category and prioritize the development of a
standard accordingly.
Regarding the second and third topics addressed in the
report, MACT standards development and OAQPS developing
initiatives to improve the MACT development process, I concur
with your observation that the process has changed dramatically
15 Report No. E1KAF5-11-0001-6100140
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DEVELOPMENT OF MACT STANDARDS
APPENDIX 2
Page 2 of 2
since the passage of the CAM and I appreciate the recognition
of our initiative* and attempt* «o-4aprove the process. Moat of
the change* in the MACT development process were Initiated a* a
remit of us attempting to find way* to achieve our goal* within
a shrinking resource base. Furthermore) I also agree with your
assessment'that in order to meet the statutory dates set forth in
the CAAA, we will have to accelerate the issuance of MACT
regulations. Tfiis will be difficult given our inability to
adequately plan due to'a lack of a fiscal year 199$ resource
allocation. Some budget scenarios that are being considered
would require a rethinking of our entire philosophy toward
meeting the seven and ten year MACT statutory deadlines.
Finally, the report suggests that it would be a good idea
for the Agency to seek clarification on the method for
calculating the MACT floor or the original intent of the language
•describing how to do so. Following the passage'of the CAAA, this
issue was debated within .the Agency and our Office of General
Counsel provided the ruling/interpretation with which, we
currently comply. We have been able to operate effectively
within this ruling and thus, I do not view this as a vital issue
at this point in time.
In summary, I believe that all of the conclusions and'
recommendations' presented the report are fair assessments of the
MACT standards development program. The QAQPS will continue to
strive to meet the objectives contained in the CAAA, which
include the development of a •separate source category for
research and laboratory facilities at major sources. If you have
any questions concerning this response, please feel free to
contact Mr. Bruce Jordan, the Director of the Emission Standards
Division. Thank you for the opportunity to respond.
16
Report No. E1KAF5-11-0001-6100140
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DEVELOPMENT OF MACT STANDARDS
APPENDIX 3
Page 1 of 1
DISTRIBUTION OF REPORT
Inspector General (2410)
Deputy Inspector General (2410)
Director, Emissions Standards Division, OAQPS (Durham, NC)
Agency Followup Official (3304), Attn: Assistant Administrator
for Administration and Resources Management
Agency Followup Coordinator (3304), Attn: Director, Resources.
Management Division
Audit Followup Coordinator (3304), Attn: Audit Management
Branch . . •
Audit Followup Coordinator (3802F), Attn: Office of Policy,
Training, and: Oversight Division
Audit Followup Coordinator (1104), Attn: Executive Support
Office
Headquarters Library (3404)
17 Report NO. E1KAF5-11-0001-6100140
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