NEW SOURCE REVIEW REFORM/SIMPLIFICATION

JOHN A. PAUL

STAPPA/ALAPCO

MAY, 2002

RESOURCES

AUGUST, 1992 EPA WORKSHOP 1993-1994 FACA PROCESS JULY, 1994 PRELIMINARY STAFF

PROPOSAL 1996 FEDERAL REGISTER PROPOSAL 1998 NOTICE OF AVAILABILITY 1999-2002 STAKEHOLDER MEETINGS

NSR TOPICS

PLANTWIDE APPLICABILITY LIMITS BASELINE EMISSIONS CLEAN UNIT EXEMPTION DEBOTTLENECKING ROUTINE MAINTENANCE, REPAIR,

AND REPLACEMENT

PURPOSE

It is my intent to present the history and reasoning behind the STAPPA/ALAPCO positions.

This is not meant to be a legal review of the NSR reform effort.

It also is not my intent to present the positions of other stakeholders.

AUGUST, 1992 EPA WORKSHOP

The EPA outlined the following Agency goals for the NSR program: (1) to ensure that an increase in emissions due to a greenfield source or modification to an existing source does not exacerbate or significantly deteriorate air quality, (2) to ensure that source emissions are consistent with the State's attainment plan, (3) to ensure that air quality related values are not negatively impacted in Class I areas, and (4) to establish control technology requirements that maximize productive capacity while minimizing impacts on air quality.

AUGUST, 1992 EPA WORKSHOP

The EPA acknowledged a need for NSR program simplification consistent with statutory intent. The NSR program should increase certainty and consistency, improve permit processing time, conserve personnel and financial resources for all parties, remove market distortions and encourage pollution prevention. While no effort was made to reach a consensus on additional NSR goals, the invitees identified other desirable goals: (1) minimize disincentives for sources to modernize or improve operations; (2) include special consideration for process changes that do not negatively impact the environment, but look like major increases when compared on the basis of overtime and capacity; and (3) reduce permit delays to encourage building new, cleaner facilities instead of modifying existing sources.

APPLICABILITY OPTIONS

Option 1 - Chemical Manufacturers Association (CMA) Exhibit B Settlement Agreement (Potential-to-Potential),

Option 2 -WEPCO Remand or Rule, Option 3 - NSPS-Type Test without Netting, Option 4 - NSPS-Type Test with Netting, and Option 5 - Plantwide Emissions Limit.

FACA PROCESS

APPLICABILITY PRECONSTRUCTION ACTIVITIES PALs CLASS I AREA ISSUES POLLUTION CONTROL PROJECTS BACT ISSUES

STAPPA/ALAPCO PRINCIPLES

BEST TIME TO CONTROL IS AT THE TIME OF SOURCE INSTALLATION OR MODIFICATION

SUPPORT TOP DOWN BACK PROCESS AIR QUALITY ANALYSIS OF INCREASED

EMISSIONS NO NETTING OUT OF CONTROL SUPPORT BACT/LAER CLEARINGHOUSE PALs ARE SUPPORTABLE

STAPPA/ALAPCO PRINCIPLES

WE FAVOR A SIMPLIFICATION PROCESS WHICH GIVES INDUSTRY TIMELINESS AND CERTAINTY, BUT RETAINS A STRONG TECHNOLOGY REQUIREMENT FOR ALL NEW OR MODIFIED SOURCES.

REWARD GOOD CONTROLS WITH INCREASED SIMPLICITY AND FLEXIBILITY

PLANTWIDE APPLICABILITY LIMIT

CONCEPT “BORN” IN 1981-1984 EPA SHIFT FROM DUAL-SOURCE DEFINITION TO PLANTWIDE

ORIGINAL PROPOSAL WAS FOR MANDATORY AND AREA-WIDE PALs

BASED ON CURRENT ACTUALS

PALs—1996 PROPOSAL

VOLUNTARY PALs ACTUALS BASED ON LAST 2 YEARS ALLOWABLES IF NEW PLANT IN

LAST 5 YEARS LOTS OF ISSUES FOR COMMENT

PALs—ISSUES

COMPLIANCE VERIFICATION ACTUALS VS ALLOWABLES NEW UNITS AND CONTROLS POLLUTANTS COVERED INTERACTION WITH TITLE V MACT AND HAPs PERIODIC ADJUSTMENTS

STAPPA/ALAPCO RECOMMENDATIONS

ACTUALS BASED ON LAST 2 YEARS ALLOWABLES--DECLINING CAPS

BASED ON BACT SIGNIFICANT NEW UNITS MEET

BACT TITLE V ENFORCEMENT REVIEWED PERIODICALLY

BASELINE EMISSIONS

DESIRE FOR A COMMON, PREDICTABLE, AND USEFUL BASELINE

CURRENTLY AVERAGE OVER LAST TWO YEARS ADMINISTRATOR HAS DISCRETION TO

CONSIDER SOME OTHER TIME PERIOD WEPCO ALLOWS A FIVE YEAR LOOKBACK 1996 PROPOSAL FOR HIGHEST PRODUCTION

LEVEL IN PAST TEN YEARS BUT KEEPS FIVE YEAR CONTEMPORANEOUS RULE

BASELINE EMISSIONS ISSUES

TWO, FIVE, OR TEN YEAR LOOKBACK

HOURLY OR ANNUAL EMISSIONS ACTUAL/POTENTIAL/ALLOWABLE

AND IN WHAT COMBINATION? RESOURCES AND RECORDS

STAPPA/ALAPCO RECOMMENDATIONS

MAINTAIN CURRENT TWO YEAR BASELINE WITH ADMINISTRATOR’S DISCRETION TO CONSIDER A MORE REPRESENTATIVE PERIOD

ALTERNATIVE FOR ALLOWABLES BASED PALs

CLEAN UNIT

GREW OUT OF FACA DISCUSSION OF AN ALLOWABLE-TO-ALLOWABLE TEST FOR PREVIOUSLY REVIEWED UNITS

APPEARED IN 1994 PRELIMINARY STAFF PROPOSAL

CLEAN UNIT—1996 PROPOSAL

EXPANDED TO INCLUDE CLEAN FACILITIES

TEN YEAR TIME PERIOD REJECTED MACT AND RACT AS

“CLEAN” USE OF TITLE V

STAPPA/ALAPCO RECOMMENDATIONS

TEN YEAR TIME PERIOD IS EXCESSIVE

ONLY “TODAY’S” BACT/LAER QUALIFY AS CLEAN

USE TITLE V FOR ENFORCEMENT FIVE YEAR RENEWAL

DEBOTTLENECKING

… where there is reason to believe that the project will result in debottlenecking…………..or other meaningful increase in the use of the unit above current levels. Where the project will increase utilization and emissions, the associated emissions increases are calculated based on the post-modification potential to emit of the unit considering the application of the proposed controls (i.e., the "actual-to-potential" test). In such cases the permitting agency would consider the projected increase in emissions as collateral to the project

DEBOTTLENECKING

NO CURRENT EPA PROPOSAL SHOULD BE “COVERED” UNDER

TITLE V PERMITS SHOULD ALSO BE “COVERED”

UNDER PALs POSSIBLE TIE TO POLLUTION

CONTROL PROJECTS

ROUTINE MAINTENANCE, REPAIR, AND REPLACEMENT

EPA RULES STATE: A physical change or change in the method of operation shall not include:

(a) routine maintenance, repair, and replacement

ROUTINE MAINTENANCE, REPAIR, AND REPLACEMENT

NO DEFINITION BUT LOTS OF HISTORY

WEPCO COURT CASE LIFE EXTENSION PROJECTS/

REFURBISHMENTS CAPITAL COSTS VS MAINTENANCE

COSTS

1994 PRELIMINARY STAFF PROPOSAL

(B) Routine maintenance, repair and replacement does not include:

(1) An activity that either increases or affects: emissions of any pollutant, the present efficiency, capacity, operating rate, utilization, or fuel adaptability of the source or any emission unit;

(2) An activity that substantially extends the useful economic life of the emission unit; or

(3) A reconstruction as defined in 40 CFR 60.15.

STAPPA/ALAPCO RECOMMENDATIONS

EPA DEFINITION COULD HELP INDUSTRY SPECIFIC LISTS COULD

HELP OPPOSED TO INVESTMENT TEST OPPOSED TO LIKE-KIND

REPLACEMENT EXEMPTION

BOTTOM LINE PRINCIPLES

REWARD GOOD CONTROLS WITH INCREASED SIMPLICITY AND FLEXIBILITY

GREATLY STREAMLINE THE NSR PROGRAM FOR WELL-CONTROLLED (CLEAN UNIT) SOURCES

STRESS THE APPLICATION OF BACT