: Livestock Producers Must Evaluate Benefits and Risks of the EPA Air Emission Consent Agreement:

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  • August
    04
    2005

    Livestock Producers Must Evaluate Benefits and Risks of the EPA Air Emission Consent Agreement

    Todd Palmer

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    Operators of animal feeding operations have a big decision to make in the spring of 2005 - whether to sign a Consent Agreement with EPA to resolve their potential liability stemming from air emissions emitted by their operation.

    Livestock Producers Must Evaluate Benefits and Risks of the EPA Air Emission Consent Agreement

    June 9, 2005

    by Todd Palmer, Esq.
    DeWitt Ross & Stevens S.C.

    Operators of animal feeding operations have a big decision to make in the summer of 2005 - whether to sign a Consent Agreement with EPA to resolve their potential liability stemming from air emissions emitted by their operations. The Agreement is now final and producers have until August 12, 2005 to make up their minds whether they will sign the document. Those who do sign will commit themselves to abide by the results of future air emission studies and will likely be required to obtain air permits from the WDNR as well as file reports with the EPA. The ultimate decision should not be made lightly.

    Background of the Final Consent Agreement

    For nearly three years, activist groups have been suing livestock producers alleging that their operations emit air emissions which violate environmental laws. These lawsuits have been costly to defend. Although these legal theories are novel, several courts have sided with the activists and thereby have encouraged the proliferation of these lawsuits throughout the country. A "copycat" legal proceeding was threatened here in Wisconsin but was never filed.

    In an effort to bring more clarity to the situation, representatives of the livestock, hog and poultry industries have been working to get a "safe harbor" agreement for air emissions from farms. These negotiations are complete and the final Agreement was published in the Federal Register on January 31, 2005. Producers must now make a decision whether to take the safe harbor offered by EPA or "go it alone" with these issues. Participation is voluntary.

    EPA received numerous adverse comments on the Agreement and four organizations have filed a lawsuit in the United States Court of Appeals for the District of Columbia seeking to have the Agreement nullified.

    The Final Agreement and related information has been posted at www.dewittross.com/practice_areas under the Environment practice area of the website.

    Key Provisions of the Agreement

    The Agreement is being offered to animal feeding operations ("AFOs") as defined under the Clean Water Act. AFOs which choose to participate will pay a penalty ranging from $200 to $100,000 depending on the size and number of AFOs that the source operates. Single farms that have less than 700 mature dairy cows or 1000 dairy heifers must pay a $200 penalty. If a dairy producer owns more than one farm, each farm with less than 700 mature dairy cows or 1000 dairy heifers is assessed a $500 penalty and each farm with a greater number of animals is assessed a $1,000 penalty. The maximum penalty any producer must pay is $100,000. These penalties must be paid within thirty (30) days of EPA executing the Agreement with the producer.

    In addition to a fine, a participating producer must contribute to a fund that will be used to develop and implement a national emission study. Each producer must pay the lesser of $2,500 per farm or the producer's pro rata share to fully fund the study for its group. Participating facilities must make their operations available for this national monitoring study.

    Participating operations must agree to apply for all applicable air permits and comply with those permit conditions as dictated by the results of the monitoring studies. If emissions are large enough, the source may be required to install pollution control technology which can, in some circumstances, be rather costly. In addition, participating AFOs agree to report any qualifying releases of ammonia, hydrogen sulfide or other air contaminants as required by the CERCLA laws within 120 days after EPA publishes the emission estimating factors from the national studies.

    AFOs that participate in this Agreement will receive from EPA a covenant not to sue for past violations of:

    • The Clean Air Act permitting requirements associated with various air pollutants which emanate from animal confinement structures and agricultural livestock waste lagoons.
    • The CERCLA and EPCRA hazardous substance reporting requirements arising from releases of ammonia and hydrogen sulfide from the same structures and lagoons.

    Notably, this covenant would not prevent EPA from prosecuting cases that "may present an imminent and substantial endangerment to human health" or emissions from land application of animal waste. The covenant would also not affect air permits required for new construction or modifications of AFOs (i.e., facilities undergoing expansion during the time period covered by the agreement). The covenant would also not apply to: waste-to-energy systems; generators; open cattle feedlots for beef production; and requirements that are not triggered by the quantity, concentration or rate of emissions of VOCs, H 2S, PM 2.5, TSP, PM 10, or ammonia.

    It is uncertain whether the covenant not to sue would extend to citizen suit actions (which could be filed by environmental groups) or state enforcement actions.

    Dairy May Not Be Allowed to Participate Under the Agreement

    It remains uncertain as to whether the dairy industry will be eligible to participate under the Agreement. Individual dairies can apply to participate under the Agreement during the sign up period which ends July 1, 2005. However, EPA has reserved the right to decide – after the sign up period – whether a sufficient number of dairies have applied to fully fund the associated monitoring study and provide a representative sample base for developing emission factors. If the total number of dairy participants is insufficient for either purpose, EPA can refuse to finalize any of the individual dairy agreements and the industry may not be allowed to participate.

    Notably, the Agreement seems to be written such that the EPA could chose to limit participation to a discrete geographic region or type of dairy operation. Accordingly, Wisconsin or upper Mid-West dairies may be able to participate if a sufficient number of operations from that region sign the Agreement prior to the deadline.

    Time Period for Making a Decision

    To participate in this Agreement, the source must first determine its eligibility. Eligible sources must fill out and sign the Agreement. The signed Agreement must be returned to EPA prior to July 29, 2005.

    No later than thirty (30) days after the end of the sign-up period, EPA will decide whether to proceed with all, part, or none of the monitoring studies and will sign the agreements. The signed Agreements will be forwarded to the EPA's Environmental Appeals Board for final approval. The pending lawsuit challenging the Agreement could affect these deadlines.

    Conclusion

    Producers have much information to take in during a very short time. However, many operators have known that this Agreement was coming. The only uncertainty has been when the Agreement would become final and its exact terms.

    AFOs of any significant size or that have experienced local opposition should seriously evaluate participating in this program. However, there are many consequences of signing the Agreement which are not readily apparent to the casually reader and which could profoundly impact operators in the future.

    From a practical standpoint, operations which choose not to participate in the Agreement will still need to determine their compliance obligations under the environmental laws. If those sources do not use the emission factors developed by EPA, they will need to base their decisions on some other emission-related information. There is always the possibility that courts will ultimately decide that these environmental laws do not apply to AFOs. But at this point, the appellate courts that have considered the issue have ruled against agriculture.

    Agricultural/Agribusiness Law Section