The Clean Air Act: What You Need to Know

April 30, 2004
The Clean Air Act once the esoteric domain of environmental engineers, consultants, lawyers and regulators has emerged as one of the key regulatory programs.

If managed correctly, the Clean Air Act can provide flexibility for businesses competing in the new global economy. If managed poorly, which is all too often the case, the Clean Air Act can impede business growth and, worse yet, lead to lengthy and expensive enforcement actions that result in the assessment of substantial fines and the requirement to install potentially unplanned and expensive pollution controls.

The Basics

In order to effectively deal with the myriad requirements of the act, environmental professionals (and nowadays, senior business managers) must have a basic understanding of the law and how it is enforced. The Clean Air Act was enacted in 1970 and substantially amended in 1978 and 1990. The broad sweep of the act regulates everything from cars to air conditioners/refrigerants to smokestack emissions. In addition to its broad reach, the law is implemented in most cases by the states, which have the ability (and most have) to add state variations to the basic federal regulatory program.

As if adding 50 variations is not enough, both state and federal regulators have the ability to interpret the laws and regulations and each can enforce them. In such a regulatory scheme, careful planning based on a sound understanding of the program is essential.

Clean or Dirty?

Key to managing a business subject to the act is knowing whether the plant is located in an area with good air quality (also known as attainment) or poor air quality (also known as non-attainment). Most large cities in the United States have some air quality problems and are classified as non-attainment areas. Businesses located in non-attainment areas are subject to strict emission requirements, including the need to obtain emission offsets for planned expansions or changes in processes that increase emissions. Offsets can be expensive (if even available), and many times, companies with multiple plants will adopt a strategy of only expanding production at facilities located in attainment areas.

Knowing the status of a location's air quality can be a significant factor in acquisition as well. Expansion of a newly purchased plant in a non-attainment area can be very difficult, and a buyer may be badly disappointed to discover its plans for expansion or new production either cannot go forward or will be very expensive to undertake.

Permits, Permits, Permits

Another challenge for the environmental and business managers is obtaining and complying with the Clean Air Act permit program. Under the act, there are two types of permits construction and operating. Both may be required for a particular operation, and making sure the construction permit requirements match the operating permit requirements can be a significant challenge. In some states, the construction and operating permits may be combined into a single permit (Arizona and Minnesota, for example), while in other states, the minimum thresholds of when a permit is required may vary substantially.

Construction Permits A Delicate Balance

Complying with the construction permit requirements is often a significant and daunting task. If a construction permit is required, in most instances, work on the planned change cannot commence until the permit is issued. Thus, the timing of a permit application and permit issuance becomes a delicate balancing act, as the application needs to be complete but also needs to be submitted early enough to allow regulators time to develop a proposed permit, seek public input and issue the final permit. Companies that actively coordinately environmental permitting with their business plans can effectively manage the task. Those which do not are either delayed in the ability to install or upgrade equipment or, worse yet, put themselves in a position of violating the law.

For larger plants with significant emissions, understanding the intricacies of the federal and state New Source Review (NSR) program is key to successfully managing construction permitting under the act, especially since the NSR rules make the Internal Revenue Service code look easy. Under these rules, environmental managers need to evaluate changes to the production process to determine if proposed change is an exempt routine repair or meets the significance test and requires not only a permit but installation of best available control technology. A failure to do such an analysis can lead to substantial enforcement issues.

Recently, EPA initiated a process to reform the NSR rules and incorporate new concepts to avoid permitting delays and enforcement traps. As with most aspects of the Clean Air Act, state NSR rules may vary from the federal approach. It is essential that the environmental manager understand the nuances of the state program. This is particularly important over the next few years as states implement the recent federal reforms.

Of the recent EPA reforms, the one holding the most promise is the clean unit exemption. In short, if a production line or emission source coal-fired boiler, for example has state-of-the-art pollution control equipment, then projects done to the production line or the emission source do not have to go through NSR permitting for 10 years. After 10 years, if the pollution controls are still considered state of the art, the exemption can be renewed. Effective use of the clean unit exemption can significantly reduce the permitting burden and allow facilities to quickly respond to global market conditions.

Given the complexity of the NSR rules, another useful tool for the environmental manager is the applicability determination. If asked, state agencies will provide written guidance on whether NSR permitting applies to a particular project. Such guidance can be invaluable should enforcement issues arise.

The License to Do Business

The second type of air permit is the operating permit, which came into law in 1990. These permits differ from construction permits as they establish emission limits, monitoring and reporting requirements for the entire facility. While some states have aggressively issued operating permits, other states are playing catch up and are now issuing large numbers of permits in order to address complaints from EPA and many environmental groups.

Operating permits should be treated as the license to operate the business, and of all the requirements under the Clean Air Act, meeting the conditions and limitations of the operating permit is essential. This means a plant cannot simply file the permit away in a drawer. Rather, companies need to make sure that personnel running each of the production lines governed by the operating permit fully understand the permit's terms and meet the emission limits, the monitoring and recordkeeping mandates.

In order to make sure companies do comply, the operating permit requires annual certification of the facility's compliance status signed by a senior executive. The certification includes a statement that all conditions of the permit have been met on a continuous basis during the year or, if not, a specific listing of each requirement that was not met. Since this statement is signed under penalty of perjury, any business that submits a compliance certification showing noncompliance becomes an easy target for enforcement.

More Pollutants, More Complexity

The Clean Air Act not only regulates conventional pollutants (such as volatile organic compounds, particulates, nitrogen oxide and sulfur dioxide) but air toxics as well. It is in the regulation of the air toxics that there is the greatest variation among states. Some follow the federal program; others have substantially different rules that govern hundreds of other chemicals. Knowing what substances are regulated, whether they are present in any of the raw materials used and whether the regulation is a state only requirement, can be a significant task in and of itself.

The federal approach to air toxics focuses on specific industrial sectors, such as pulp and paper, boilers, secondary aluminum production or printing. There are numerous groupings, and one needs to review them to determine which group applies to which plant or process. If a group category applies, then one must determine if the facility is a major (larger) source or an area (smaller) source.

Adding to the complexity, many states have their own hazardous air pollutant (HAP) requirements, and it is essential that environmental managers know the chemicals in the raw materials purchased from vendors. While material safety data sheets (MSDS) can be used, often times manufacturers will not fully reveal all of the chemicals present in the formulation for proprietary reasons. Depending on the state regulation, it may be necessary to work out confidentiality arrangements with the manufacturers in order to obtain the information.

Risk Management Plans

Related to HAP controls is the requirement that facilities develop risk management plans to address the accidental release of HAPs. These plans should already be in place at facilities that have the potential to accidentally release a significant amount of HAPs. Typically, the plans apply to facilities storing HAPs in tanks that, if leaks occurred, could have catastrophic consequences. Certainly, if there is any question as to whether the risk management requirements apply, the environmental manager should verify that the facility is in compliance before an accidental release occurs.

Enforcement The Cost of Noncompliance

Unfortunately, despite the best efforts of environmental managers, violations of the Clean Air Act do occur. In recent years, it has been one of the more fertile areas for federal, state and citizen group enforcers. In large part, this is due to the complexity of the program and the hidden enforcement traps created by a system where there are "two masters" state environmental agencies and federal EPA which often differ in interpretation of the same requirements.

The Clean Air Act allows three groups to pursue enforcement against regulated companies the federal EPA, the state environmental agency and the citizen groups. The latter may only pursue enforcement in situations where state and federal authorities have not initiated their own enforcement action. With limited state resources, many less significant violations are not pursued, and it is in these situations where the citizens groups can step in and pursue their own lawsuit.


As enforcement is a fact of life under the Clean Air Act, environmental managers need to:

  • Manage the inspection and data gathering process
  • Know how the enforcement process works
  • Understand how penalties are assessed.

Knowing in advance how to deal with an inspection can aid in the defense of an enforcement action or even result in the inspector deciding not to pursue the formal enforcement route.

Whether an inspection goes well or not depends to a great extent on the advance planning undertaken by the environmental manager. Procedures need to be in place and people trained in how to handle the inspection, what should or should not be said and how to address requests to take samples. Further, the environmental manager should know what the company's legal rights and obligations are during an inspection. An often overlooked but very useful procedure is simply creating a written description of what took place during the inspection so that, if issues arise in a subsequent enforcement proceeding, memories can be readily refreshed.

Assuming issues arise out of the inspection, the next step is either a formal data request or a notice of violation. Receipt of either document is the initiation of the legal process. While there may be a temptation to try to handle it without legal assistance, it is not a good course of action. The stakes are very high.

New Opportunities

In the next several years, many states and even the federal government may be looking at ways to ease the regulatory burdens and complexity of the law. In a global market economy, environmental and business managers need to look at "alternative" compliance approaches. Whether it is through EPA's Project XL or state cooperative agreements, these alternative compliance methods offer substantial promise by allowing facilities to quickly respond to market conditions while meeting environmental requirements in a cost efficient manner.

In the meantime, taking the time to understand the Clean Air Act and plan accordingly whether it is to obtain permits or to avoid enforcement traps is well worth the effort in light of the costs associated with noncompliance.

Mark A. Thimke is a regulatory attorney with Foley & Lardner LLP. Over the last 25 years of environmental practice, he has represented clients in numerous state and federal Clean Air Act compliance cases (including companies targeted under the current NSR and MACT enforcement initiatives), counseled companies in strategic compliance planning and permitting activities and negotiated hazardous air emission rules and air permitting reforms with the Wisconsin Department of Natural Resources. Currently, Thimke serves as a member of the Wisconsin Department of Natural Resources Advisory Committee developing the Wisconsin counterpart to the recent federal EPA NSR reform regulations.

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