Coltec Industries Inc. and National Steel and Shipbuilding Company Settlement

(Washington, DC - March 28, 2012) The U.S. Environmental Protection Agency (EPA) and the U.S. Department of Justice announced that Coltec Industries Inc., (Coltec) and National Steel and Shipbuilding Company (NASSCO) have agreed to pay a civil penalty of $280,000 and spend approximately $500,000 on an environmental project to resolve alleged violations of the Clean Air Act (CAA) and EPA's marine diesel engine air rules. The project will significantly reduce nitrogen oxide emissions from a testing stack at Coltec's Beloit, Wis., engine manufacturing facility, improving air quality for residents. Coltec and NASSCO also agreed to attach the required EPA engine labels to 40 ship engines that were previously unlabeled or improperly labeled.

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Overview of Companies

Coltec Industries Inc. (Coltec) is a subsidiary of EnPro Industries Inc. and operates Fairbank Morse Engines (FME). FME is an unincorporated division of Coltec. For over 75 years, FME has supplied marine propulsion and ship service systems to the U.S. Navy and U.S. Coast Guard. FME's diesel marine engine manufacturing facility is located in Beloit, WI.

National Steel and Shipbuilding Company (NASSCO) is a subsidiary of General Dynamics. NASSCO designs and builds support ships, oil tankers, and dry cargo carriers for the U.S. Navy and commercial markets. NASSCO is located in San Diego, CA.

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NASSCO and Coltec violated Title II of the Clean Air Act (CAA) and 40 C.F.R. Part 94 as follows:

  • Between July 2004 and June 2008, FME manufactured and sold to NASSCO 32 diesel marine engines that were not covered by an EPA-issued certificate of conformity (i.e., uncertified engines). All 32 FME engines were the same design.
  • FME also sold to NASSCO eight certified diesel marine engines that bore noncomplying emission control information labels.
  • NASSCO installed:
    • 32 uncertified FME engines as the main diesel generators on board eight new U.S. Navy's auxiliary cargo and ammunition ship (T-AKE) class vessels.
    • four additional uncertified engines as the main diesel generator on board a new commercial product tanker.
    • two uncertified engines to power emergency generators on board two new vessels.

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Injunctive Relief

Coltec must comply with the recordkeeping, emission-related defect reporting, recall, warranty, and in-use compliance requirements applicable to engine manufacturers.

NASSCO must comply with the maintenance, repair, adjustment, and recordkeeping requirements applicable to vessel manufacturers.

In addition, within 18 months after the effective date of the Consent Decree, Coltec and NASSCO must affix an approved EPA label to each FM engine.

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Pollutant Impacts

No environmental harm resulted from the propulsion engines. The engines met EPA's Tier 1 emission standards because they comply with international standards that pre-dated EPA's Tier 1 emission standards.

EPA estimates that the emergency generator engine will emit less than three tons of nitrogen oxide (NOx) over the engine's useful life.

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Health Effects and Environmental Benefits

NOx can cause or contribute to a variety of health problems and adverse environmental impacts, such as ground-level ozone, acid rain, global warming, water quality deteriorations, and visual impairment. Affected populations include children and people with lung diseases such as asthma. Exposure to these conditions can cause damage to lung tissue for people who work or exercise outside.

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Supplemental Environmental Project

Defendants must design a selective catalytic reduction (SCR) system and install the SCR system on a test stand located at FME's Beloit, Wisconsin engine manufacturing facility. The test stand is used to test FME propulsion diesel engines that will be used in U.S. Navy ships. Presently, the test stand is not equipped with any emission controls. The SCR system is estimated to reduce NOx emissions from 102 pounds per hour to 16 pounds per hour (an 86 pounds per hour reduction). Thus, the SCR system will reduce NOx emissions from the test stand by 85%. With very limited exceptions, the SCR system must be operated for five years or as long as the test stand is operated. Defendants estimate that the design and installation of the SCR system will cost $500,000.

EPA anticipates that the SEP will benefit the Merrill Neighborhood and the City of Beloit by improving air quality adjacent to the FME facility. There are environmental justice concerns for the Beloit area. According to information available from the United States Bureau of Labor Statistics, the City of Beloit has a current unemployment rate of 13.2%. The area in the City of Beloit immediately adjacent to the FME facility, known as the Merrill Neighborhood, is an economically challenged part of the City of Beloit with a high minority population. Available school information shows that the neighborhood elementary school, Merrill Elementary, has a racially diverse population consisting of 30% Hispanic, 57% Black, and 12% other children.

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Civil Penalty

Within 30 days after the effective date of the consent decree, Defendants must pay a $280,000 civil penalty.

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Comment Period

The proposed settlement, lodged in the U.S. District Court for the District of Columbia, is subject to a 30-day public comment period and final court approval. Information on submitting comment is available at the Department of Justice website.

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For more information, contact:

Jocelyn L. Adair
U.S. Environmental Protection Agency (2242A)
1200 Pennsylvania Ave., N.W.
Washington, DC 20460-0001
(202) 564-1011

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