Permit-By-Rule Neal A. Nygaard Chief Operating Officer, Principal - - PowerPoint PPT Presentation

Navigating TCEQ’s “Non Rule” Permit-By-Rule

Neal A. Nygaard Chief Operating Officer, Principal DiSorbo Consulting, LLC Houston, TX Navigating TCEQ’s “Non Rule” Permit-By-Rule 4/3/18 Page 1

So what is this “Non Rule” Permit-By-Rule?

• A “Non Rule” Permit-By-Rule (PBR) is defined as the case by case “off the

books requirements” by which projects are held to in addition to the formally promulgated requirements of 30 TAC Chapter 106.

• The TCEQ “Non Rule” PBR practice bypasses the formal rule making

process which results in an expanded regulatory framework of requirements that are inconsistently applied to the regulated community.

• The “off the books requirements” have evolved over the past 20+ years

and potentially impact 70%+ of the TCEQ NSR authorizations issued/claimed on an annual basis.

Navigating TCEQ’s “Non Rule” Permit-By-Rule 4/3/18 Page 2

So what is this “Non Rule” Permit-By-Rule?

• Examples:
• New hour and affected source actual emission increases
• The 106.261 checklist footnote only applicable to 106.261 claims
• Tank emissions associated with marine unloading activities
• Control Device Requirements Charts for Oil and Gas Handling and

Production Facilities

• Refinery petroleum fractions “post refinery processing” exclusion
• “Case by Case” 30 TAC 106.8 recordkeeping requirements
• Etc.

Navigating TCEQ’s “Non Rule” Permit-By-Rule 4/3/18 Page 3

TCEQ NSR Authorization Trends

https://www.tceq.texas.gov/airquality/airsuccess/airSuccessPermits

Navigating TCEQ’s “Non Rule” Permit-By-Rule 4/3/18 Page 4

TCEQ PBR and SP Authorization Trends

https://www.tceq.texas.gov/airquality/airsuccess/airSuccessPermits

Navigating TCEQ’s “Non Rule” Permit-By-Rule 4/3/18 Page 5

How does “Non-Rule” PBR impact industry?

• Creates uncertainty by having case by case “off the books

requirements”

• Extends timelines to receive TCEQ PBR issuance/concurrence
• Creates competitive advantages and disadvantages for the

regulated community

• Increases permitting costs and often compliance demonstration

burden

Navigating TCEQ’s “Non Rule” Permit-By-Rule 4/3/18 Page 6

What is the regulatory framework for the “Non Rule” PBR?

Navigating TCEQ’s “Non Rule” Permit-By-Rule 4/3/18 Page 7

So how do we navigate the “Non Rule” PBR process with TCEQ staff?

• The fundamental issue is TCEQ Rule Registration staff’s operating

in the “PBR Bubble” completely disconnected from the regulatory foundations established by the Texas Clean Air Act (TCAA) and promulgated requirements of 30 TAC Chapter 116.

• Rule Registration staff incorrectly believe they are tasked with

authorizing emissions rather than new and modified facilities.

• Industry has been successful with establishing the driver for

requiring a NSR authorization as noted in the TCAA and connecting that driver to the promulgated requirements of 30 TAC Chapter 116 and then to 30 TAC Chapter 106.

Navigating TCEQ’s “Non Rule” Permit-By-Rule 4/3/18 Page 8

So how do we navigate the “Non Rule” PBR process with TCEQ staff?

• Back to basics approach that includes educating TCEQ staff on the

underlying foundation established by the TCAA

• Establish connection between the TCAA, 30 TAC Chapter 116, and

30 TAC Chapter 106

• For example, modification is defined in both the TCAA and 30 TAC

Chapter 116 and is the driver of the NSR bus. Affected facilities are simply a rider on the bus and tag along with their buddy Mr. Modification for Federal NSR applicability determination purposes.

Navigating TCEQ’s “Non Rule” Permit-By-Rule 4/3/18 Page 9

So how do we navigate the “Non Rule” PBR process with TCEQ staff?

• TCAA Sec. 382.051(b) establishes the authority for the TCEQ to

“issue a permit to construct a new or modify an existing facility that may emit air contaminants” and Sec. 382.051(b) states “to assist in fulfilling its authorization provided by Subsection (a), the commission may issue a permit by rule for types of facilities that will not significantly contribute to the atmosphere”. Sec 382.003(9) of the TCAA defines “Modification to existing facility” as a “physical change in, or change in the method of operation of, a facility in a manner that increases the amount of any air contaminant emitted by the facility into the atmosphere that results in the emission of any air contaminant not previously emitted”.

Navigating TCEQ’s “Non Rule” Permit-By-Rule 4/3/18 Page 10

So how do we navigate the “Non Rule” PBR process with TCEQ staff?

• The Sec. 382.003(9) “Modification to existing facility” definition

applies to each authorization mechanism (i.e., Subchapter B Permits, Standard Permits, Flexible Permits, Permits By Rule, etc.) codified in Sec. 382.051(b) of the TCAA. The TCAA does not promulgate a framework for evaluating modifications differently across the codified authorization mechanisms.

Navigating TCEQ’s “Non Rule” Permit-By-Rule 4/3/18 Page 11

So how do we navigate the “Non Rule” PBR process with TCEQ staff?

• Meaningful progress is made at the Rule Registration Section

Manager level and above.

• Communicate the need for a clear set of regulatory requirements vs.

20+ years of internal and unpublished TCEQ “guidance”.

• Respectfully request the regulatory basis for any TCEQ additional

information request that you feel is inconsistent with the promulgated requirements of 30 TAC Chapter 106.

• Regulated community present a consistent push back on TCEQ’s

“Non Rule” based requirements and regulation by guidance.

Navigating TCEQ’s “Non Rule” Permit-By-Rule 4/3/18 Page 12

Neal Nygaard DiSorbo Consulting, LLC Chief Operating Officer, Principal nnygaard@disorboconsult.com 713-955-1221

Navigating TCEQ’s “Non Rule” Permit-By-Rule 4/3/18 Page 13