HCFC Smuggling: Miami Man Sentenced to 18 Months in Prison

Today, U.S. District Court Judge Adalberto Jordan sentenced Brendan Clery, 34, to 18 months in prison and ordered him to pay a $10,000 criminal fine and forfeit illegal proceeds in the amount of $935,240. Clery pleaded guilty in April 2011 to knowingly importing approximately 278,256 kilograms of illegal hydrochlorofluorocarbon - 22 (HCFC-22, also known as R-22) into the United States.

"EPA takes seriously the smuggling of illegal substances that can harm the ozone layer, which protects us from harmful UVB radiation that can cause skin cancer and cataracts,” said Cynthia Giles, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance. “Today’s sentencing is an example of EPA’s commitment to aggressively enforce U.S. laws and meet our international obligations."

This case was part of a larger criminal investigation known as Operation Catch-22. It was investigated by the Environmental Protection Agency, U.S. Immigration and Customs Enforcement, and the Florida Department of Environmental Protection, Criminal Investigation Bureau, and prosecuted by special assistant U. S. Attorney Jodi A. Mazer.

More information on EPA’s criminal enforcement program: http://www.epa.gov/compliance/criminal/index.html

Carrier Petition to EPA to Stop "Dry-Shipped" Stirring the Pot

The NEWS' story this week announcing Carrier Corps petition filed with the EPA to reclassify condensing units as "subsystems" and therefore make the manufacturer of "dry-shipped" R-22 condensing units illegal has really fired up some in the industry. Check out the comments posted in response to The NEWS article. Anyone who still thinks these "dry-shipped" units are going to be an insignificant percentage of total shipments is either selling R-410a or in the window-banger business. By the way, HARDI had been asked to provide comment for the article but we do not have a formal position yet on Carrier's petition.

Missing the Forest Through the "Dry-Shipped" Trees

Yesterday HARDI filed comments with the U.S. Dept. of Energy (DOE) on their proposed guidance for certifying newly-produced R-22 residential condensing units. DOE proposed two paths that would essentially pave the way for the installation of mis-matched condensing units, and it was this apparent reversal in decades of precedent that is the point; a point that I fear most in our industry may be missing. While the recent reintroduction of "dry-shipped" R-22 condensing units (due to the way EPA's 2010 HCFC Phaseout Regulations were written which I still consider a loophole) is the talk of the HVAC community right now, DOE's proposed certification procedures for these units is the real story. If unchanged, DOE's guidance is essentially signaling knowing consent that these condensing units will be installed with unmatched indoor coils. This is drastically different than DOE's matched system certifications for any other newly-produced split system based on the assumption that both the indoor and outdoor equipment will be installed at the same time. Instead DOE is proposing a blatant gaming of the test procedure system far detached from reality.

While our industry has invested resources to promote, support, and advocate the value of properly matched system installations, this one DOE ruling could undermine all of it with one bureacratic swoop. Either our industry is based on matched, split-system cooling or it isn't. Either our industry delivers the performance listed on hang tags or it doesn't. This isn't a refrigerant issue, this is a glimpse into our future. Either we support and defend our current matched system certification process or we abandon it because there is no way we can have it both ways for long. R-22, R-410a, or whatever the next refrigerant coursing through our split systems is isn't the point. Ensuring those split systems are properly matched and running as advertised is, which is why HARDI cannot support DOE's proposed endorsement of improper installations.

The Mess That Is (or Will Be) "Dry-Shipped" R-22 Units

Despite HARDI's best efforts to convince them otherwise, the U.S. EPA insisted on allowing a significant loophole to remain in their most recent HCFC phaseout regulations. This loophole allows the continued production and importation of R-22 residential condensing units so long as they're not pre-charged with virgin R-22. While at the time HARDI's primary concern was foreign importers since the domestic manufacturers all insisted having no interest in such a practice, both seem to be happening now and with it will come a host of serious consequences for the HVAC supply chain and the effective transition away from ozone-depleting refrigerants. HARDI distributors have already started calling with compliance and other questions so look soon for more on this topic from HARDI.

Is There a Climate Change Policy Backlash?

This Politico piece outlines a potential rift within the environmental community of what to do next now that any serious climate change legislation appears to be a non-started for the foreseeable future. The story ends with this quote, “At this point, there’s going to be a rebellion,” said Sen. Dick Lugar (R-Ind.). “EPA is likely to see its powers substantially curtailed.”

GM First to Announce HFO-1234yf Plans

Thanks to member CD Jones for forwarding: GM vehicles will use low-GWP alternative refrigerant, HFO-1234yf in most US vehicles starting in 2013. Here's the full release.

AHRI Publishes New Guidelines for Refrigerant Cylinder Handling

Per AHRI's website:
"The Chemical and Refrigerant Reclaimers Section has approved for publication AHRI Guideline Q-2010, Content Recovery & Proper Recycling of Refrigerant Cylinders. This document, which is available for free download at http://www.ahrinet.org/Content/FindaGuideline_240.aspx?Listing_PK=1186, is a guideline for content recovery and recycling of cylinders at the end of their useful service life. This document is not intended to be an exhaustive listing of all good practices or requirements. The guideline applies to all U.S Department of Transportation (DOT) non-refillable and refillable fluorocarbon refrigerant cylinders, as defined in Section 3 of AHRI Guideline Q-2010, having water capacity greater than two pounds used to transport refrigerants sold in the United States. Details: AHRI Manager, Public Affairs Courtney Nogas."

Votes Appearing Hard to Come By for Climate Legislation

Moderate Democrats (even those not facing elections this year) seem reluctant at best to swallow yet another monster bill, this time intended to cap carbon emissions. Regardless of these political headwinds, the debates will still take place this year, but might be most likely to lead to a splintering into several smaller bills, all or some with a climate provision. Of most importance to our industry will be the fate of an HFC phasedown (yes, those same refrigerants we haven't even transitioned to yet). If such a phasedown is to be discussed it better 1) provide flexibility in case alternatives aren't readily available 2) apply only to producers and importers of refrigerants and 3) not have a price-inflating auction as part of it.

SEC "Guides" Firms to Disclose Climate Change Impacts

I have to admit that I had to read this SEC press release a couple of times to believe that it was for real. While not being a regultory mandate (yet, perhaps) this SEC "interpretive guidance" recommends that the following climate change considerations may trigger a disclosure requirement for publicly-traded firms in their filings:

• Impact of Regulation and Legislation
• Impact of International Accords
• Indirect Consequences of Regulation or Business Trends
• Physical Impacts of Climate Change

I think I'll need to chew on this more before posting deeper analysis of this announcement, though I do find it somewhat stunning.

Look for Another Attempt to Expand Protocol

At a stakeholder meeting jointly hosted today by EPA and the State Department, State officials indicated their intent to reintroduce a proposed amendment to the Montreal Protocol that would expand the international accord to include a global pahsedown of HFCs.

A 2009 US/Mexican/Candian joint amendment proposal attempt was blocked primarily by China and India.

The second attempt is expected to look almost identical to the first and would be submitted this spring. In general, the proposal is regarded by industry as more reasonable than what has been proposed so far in domestic legislation to phasedown HFCs.

States Raise Major Concerns Over Potential EPA Carbon Regulations

While many in our industry debate how EPA's recent endangerment finding of CO2 as a pollutant and therefore subject to EPA regulation may affect HFC refrigerants, several states submitted comments to the EPA expressing serious concerns over the implications such regulations could have on their state's economies and respective efforts to reduce greenhouse gas emissions. This WSJ piece outlines exactly how big a bite the EPA may be trying to chew off by trying to regulate carbon emissions, and reiterates the extremely steep hill federal carbon emission legislation faces this year.

Copenhagen Provided Little Clarity for Climate Change Legislation

A number of industry leaders who attended the United Nations Climate Change Convention in Copenhagen last month provided detailed summaries and analyses today at a meeting of the Alliance for a Responsible Atmospheric Policy, of which HARDI is a member. In all, the convention accomplished few, if any, of the U.S.' stated objectives and may have done more to reverse rather than increase momentum for domestic climate change legislation. All that being said, the Senate is still expected to introduce a comprehensive climate and energy bill within the next month or two. Add to this the uncertainty of how the EPA's recent endangerment finding of CO2 as a pollutant might empower the agency to regulate HFCs, U.S. interest in amending the Montreal Protocol to include HFCs, and potential state HFC actions and it becomes almost impossible to predict how HFC policy will shake out in 2010.

EPA Confirms Matching Component Replacements as "Servicing"

EPA staff contacted HARDI today in response to our recommendations to confirm clarification of the HCFC Phaseout Rules' intent to define "servicing" of existing R-22 systems to include replacements of matching components (as long as they are manufactured prior to Jan. 1, 2010 if pre-charged). The EPA made changes to their HCFC Phaseout FAQ page and their regulations summary page to clarify the legality of multiple component replacements required to ensure proper equipment matches and optimal performance while servicing an existing R-22 system. This important clarification confirms what EPA staff had indicated to HARDI prior to finalizing the recently-released HCFC Phaseout Rules, and answers the final outstanding question HARDI had with the new regulations.

HARDI to Post "R-22 Phaseout Question of the Day"

Starting today through the next two weeks, a new "R-22 Phaseout Question of the Day" will be posted to HARDI's homepage with the answer and any other new information about the recently finalized rules. HARDI is also accepting new questions so submit them today.

Air Conditioning Could Contribute Half of All Greenhouse Gases

Says this CNN report. HVACR professionals, put down any sharp objects before viewing.

EPA Finalizes HCFC Phaseout Rules

The HCFC Allocation and Pre-Charged Appliances Ban Rules were signed by the EPA Adminstrator and have been published on the EPA website. HARDI will be reviewing the final rules and preparing a summary as soon as possible. The final rules are expected to be published in the Federal Register before the Holidays.

US EPA Declares Carbon Dioxide a Pollutant

US EPA Adminstrator, Lisa Jackson, gave this speech today declaring the EPA's finding of carbon dioxide as a pollutant. This finding increases the EPA's authority under the Clean Air Act and opens the door to new regulations on emission sources of greenhouse gases. A video of Administrator Jackson's speech will be available on the EPA's homepage for a limited time.

HFC Amendment to Montreal Protocol Takes Hit in Egypt

During the recent meeting of the parties to the Montreal Protocol in Egypt last week, fierce opposition from a group of developing countries led primarily by India essentially ended the prospects of a North American proposed amendment to expand the Protocol to include a phasedown of HFCs from being adopted next year. Canada, Mexico, and the U.S. had jointly drafted and proposed the amendment for an international phasedown of HFCs generally in line with the Waxman-Markey phasedown structure in developed countries. All eyes now turn to Copenhagen where the U.N. Conference on Climate Change will be held soon to see whether any agreements are reached and if so, how they might affect HFCs internationally and potentially in domestic legislation.