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Preparing for Major New Air Challenges and Risks

February 18, 2008

As you are probably aware, companies that emit ozone-forming chemicals and air toxics – especially those with frequent upsets – will likely face much stricter scrutiny in the near future.  Significant potential compliance, enforcement, and liability risks can be mitigated by performing well-designed air quality audits before you find yourself directly in the crosshairs of federal, state, and local regulators or environmental groups on these issues.  Bracewell & Giuliani is helping several clients develop and implement targeted, independent audits to help get their house in order in the event of inspection, enforcement, or litigation and to help favorably resolve potential liability exposures. 

As noted above, companies are likely to see greater scrutiny and enforcement and litigation risk in the immediate future for several reasons:

  • Environmental Defense and the Sierra Club recently filed formal litigation regarding upset emissions against a Houston-area refinery.  Other facilities may face similar claims.

  • TCEQ appears to be narrowing its interpretation of its "affirmative defense" for upsets

  • Many industries and facilities have recently completed or soon will complete permitting for planned startup, shutdown, and maintenance ("SSM") permitting.  This moment offers an opportunity for a clean break from the past and clearer path forward on SSM issues.

  • Bracewell & Giuliani attorney Rich Alonso, who recently joined the firm after serving as U.S. EPA's second ranking official for stationary source enforcement, reports that future enforcement activity will almost certainly focus even more on upsets.

  • EPA, TCEQ, and others are now focusing on perceived emission inventory errors and unpermitted emissions that contribute to non-attainment status.

  • Environmental Defense and the Sierra Club have also petitioned EPA to revoke TCEQ's Clean Air Act permitting authority and prohibit the construction of new or modified sources in Texas.  The petition reflects attention to the details of TCEQ's permitting and enforcement programs and may cause both TCEQ and EPA to scrutinize emitting facilities and their permits even more closely.

As these events converge to present heightened challenges for regulated industry, we have found carefully constructed environmental audits to be an important tool for many of our clients.  An audit can help:

  • Determine what problems may exist and allow a company to address the problems before litigation or enforcement occurs

  • Concerns identified through audits, if properly managed and disclosed, may be eligible for a substantial reduction of or immunity from penalties.

  • Create an opportunity for careful self-evaluation that may be protected from discovery in a citizen suit or an agency enforcement action.  With potential litigation on the horizon, we believe companies might find it useful to better protect communications and proactively address enforcement exposures.

  • Audit programs can create opportunities for facilities to participate in State and Federal incentive programs that place the facility in a "low enforcement priority" status with regulatory agencies.

Bracewell & Giuliani is nationally recognized for its work on environmental audits and audit privilege issues.  Every day we work with our clients' management and environmental personnel and with top independent environmental consulting firms to design and implement audit programs that can best help companies achieve and maintain compliance, appropriately manage and correct identified concerns, and protect their legal interests with respect to privilege, enforcement, and liability.   We believe that this era of increased attention to SSM and other air emissions concerns warrants careful consideration of well-designed compliance audits as a tool to help your company get ahead of these issues and to become confidently prepared for inevitably increasing scrutiny.