Workshop G Air Permitting Major New Source Review (NSR) Changes - - PDF document

Workshop G

Air Permitting … Major New Source Review (NSR) Changes Impacting How You Do Business in Ohio

Wednesday, July 25, 2018 2:45 p.m. to 4:15 p.m.

Biographical Information Mike Burr, Managing Consultant Trinity Consultants 3401 Enterprise Parkway, Suite 340, Beachwood, Ohio 44122 216.278.0500 Fax: 614.433.0734 mburr@trinityconsultants.com Mike currently operates as a Managing Consultant in Trinity’s Cleveland, Ohio office providing support to numerous industries across Ohio, West Virginia, and Michigan. His work involves air dispersion modeling, state and federal air construction permitting, development of emissions inventories, and comprehensive Title V compliance management. Mike serves as a lead air dispersion modeler in Ohio and has specialized experience performing and managing complex air dispersion modeling analyses in support of state and federal construction permits. Mike received a Bachelor’s degree in meteorology from Ohio University and a Master’s degree in atmospheric science from North Carolina State University. William H. Haak, Founder, Haak Law LLC, 12595 Bentbrook Dr., Cleveland, OH 44026 216.772.3532 whh@haaklawllc.com William H. Haak is the Founder of Haak Law LLC – an environmental, health & safety legal and consulting firm based in Cleveland, Ohio. He has nearly 20 years of experience in occupational safety law and worker safety, and nearly 25 years of experience in environmental law (including extensive experience in air pollution control law and multi-media environmental compliance).

• Mr. Haak practices nationally in the United States and consults globally on all matters related to

the EHS field (plus security and crisis management).

• Mr. Haak graduated from The University of Akron (Business Finance) and Case Western

Reserve University School of Law (J.D. with an emphasis on litigation and trial practice). Following law school, he worked as an Assistant Attorney General in the State of Ohio Attorney General’s Environmental Enforcement Section. As counsel to Ohio EPA, Mr. Haak’s practice was focused primarily on civil and administrative air pollution control cases. During his time with the Attorney General’s Office, Mr. Haak resolved civil environmental enforcement actions resulting in civil penalties totaling approximately $4 million. Prior to forming Haak Law LLC, Mr. Haak was Senior EH&S Counsel for General Electric. He supported GE’s Appliances and Lighting Businesses and was engaged in complex air permitting issues for other GE businesses nationwide. Mr. Haak has also been Associate General Counsel – EH&S for Hexion Specialty Chemicals in Columbus, Ohio, and Senior Regulatory Law Counsel for Owens Corning in Toledo, Ohio. He served overseas in the former Soviet Union (Ukraine) as an Environmental Enforcement Specialist with the American Bar Association’s Central & East European Law Initiative ("ABA/CEELI"). Haak is a frequent lecturer to attorneys, engineers, and environmental professionals on topics concerning federal and state air pollution law. In addition, he has taught as an adjunct faculty member at the University of Central Florida in Orlando and Columbus State in Columbus, Ohio. Since 2005, Haak has taught classes focusing on Air Pollution Law and Occupational Safety and Health Law at The University of Toledo College of Law as an Adjunct Professor.

Biographical Information Robert F. Hodanbosi, Chief Ohio EPA, Division of Air Pollution Control Lazarus Government Center, 50 West Town Street, Columbus, OH 43215 614.644.2270 Fax: 614.644.3681 bob.hodanbosi@epa.state.oh.us Bob Hodanbosi became chief of the Division of Air Pollution Control (DAPC), Ohio Environmental Protection Agency (Ohio EPA) in September 1992. His current duties include being responsible for the air pollution control program for the state of Ohio and development of the programs needed to comply with the Clean Air Act Amendments. In 2004, Bob was selected to represent state permitting authorities on the Title V Permit Performance Task Force that was formed by the U.S. EPA's Clean Air Act Advisory Committee. Bob has also had the opportunity to testify at U.S. House and Senate committees on Clean Air Act implications for facilities in Ohio. From May 1987 to September 1992, his position was assistant chief of DAPC and manager of the Air Quality Modeling and Planning Section, DAPC, Ohio EPA. From April 1978 to May 1987, as manager of the Air Quality Modeling and Planning Section, his main duties included: development of the technical support for air pollution control regulations for criteria air pollutants; atmospheric dispersion modeling; air quality designations under Section 107 of the Clean Air Act and, development of new source review procedures. Since the 1980's, Bob has represented Ohio EPA on the Ohio Coal Development Office, Technical Advisory Committee. From January 1977 to April 1978, his position was supervisor of the Environmental Assessment Unit, DAPC, Ohio EPA. The main responsibilities of this position involved the supervising of all air quality evaluation and atmospheric dispersion modeling activities for DAPC. From June 1973 to December 1976, he held a position in the Northeast District Office/Engineering Services Section, DAPC, Ohio EPA. The main function of this position involved the engineering review of air pollution permit applications. Bob is a member of the American Institute of Chemical Engineers and Air & Waste Management Association and is registered as a Professional Engineer in the state of Ohio. Bob has lectured extensively on topics relating to the requirements under the Clean Air Act and the controls needed to meet air quality standards. Bob received his Masters of Science degree in Chemical Engineering at the Cleveland State University in 1977, and a Bachelor in Chemical Engineering at the Cleveland State University in

• 1973. In addition, he completed post-graduate courses in fluid mechanics and turbulence at the

Ohio State University.

28th Annual Conference on Air & Water Permits – Environmental Permitting in Ohio

Workshop G – Air Permitting … Major New Source Review (NSR) Changes Impacting How You Do Business in Ohio

July 25, 2018

HAAK LAW LLC

Environmental, Health & Safety Legal and Consulting Services

Environmental Permitting in Ohio Workshop G

Bob Hodanbosi Ohio EPA Division of Air Pollution Control July 25, 2018

 What is Major New Source Review

(NSR)?

 Attainment/Nonattainment Areas  Prevention of Significant Deterioration

(PSD) Permitting

 Nonattainment New Source Review

(NNSR) Permitting

 Bonus Material

 Permits required under the Clean Air Act:  Major New Source Review (NSR) includes:

• Prevention of Significant Deterioration (PSD) in

attainment areas

• Non Attainment NSR in non attainment areas

 Can include both “new major” or “major modification”  If the emissions are large enough (over trigger

levels), then a “Major New Source” permit is required

 Criteria pollutants are classified as attainment,

unclassifiable or nonattainment

 An attainment area is designated as “attainment” or

“unclassifiable” for the National Ambient Air Quality Standards (NAAQS).

 A nonattainment area is one officially designated as

nonattainment

 An area can be attainment/unclassified for some

pollutants, and nonattainment for others.

 Geographic areas where U.S. EPA has

designated the area as attainment or non classifiable.

 Applies for only the attainment pollutant and

precursor emissions (VOCs for ozone, NOx and SO2 for PM2.5).

 Some areas violate standards and are not yet

designated nonattainment - PSD still applies

 Geographic areas where U.S. EPA has

designated the area as nonattainment.

 Applies for only the nonattainment pollutant and

precursor emissions.

 Official designation determines regulatory path -

If nonattainment areas attain standards, redesignation process is slow, NNSR applies until area designated to attainment

Pollutant Primary Source Attainment Status Carbon Monoxide cars and trucks Attainment Nitrogen Oxides any type of combustion, utilities, industrial boilers, vehicles Attainment Lead individual industrial facilities Isolated maintenance Sulfur Dioxide coal fired power plants Isolated nonattainment Ozone sources of NOx and hydrocarbons, including cars, trucks, utility boilers, painting operations, refineries Attainment for 2008 standard; Columbus, Cincinnati, and Cleveland areas nonattainment for 2015 standard Particulate Matter coal fired boilers, cement plants, steel making

• perations

Lorain/Cuyahoga Counties nonattainment (in process of redesignation)

Sulfur Dioxide Nonattainment areas PM2.5 Nonattainment Area

 8-hour standard – 0.70 ppm

(avg. of 4th high over 3-yrs)

 June 4, 2018 – US EPA

finalized non-attainment areas (effective August 3, 2018)

• Attainment demonstration

due August 3, 2020

• Ohio’s areas designated

marginal non-attainment (attainment date- August 3, 2021)

Implementation Timeline

 PSD Goals  Important Terms  Applicability  Requirements of PSD

 Designed to protect air quality

in attainment areas

 Allow economic growth  Protect public health and

welfare

 Preserve, protect, and

enhance air quality in special areas

 Attainment

• 28-source category? >100 ton/yr
• Not 28-source category? > 250 t/y

 Determine if the proposed source is a major stationary

source for any attainment area pollutants (100, 250 ton thresholds)

 If any of the attainment pollutants trip the major

stationary source thresholds, then the source is considered a major stationary source for PSD

 Determine if GHGs are above 75,000 CO2 – if yes, PSD

for GHGs

 PSD cannot be triggered by GHGs alone

 First, determine if the existing facility is a major

stationary source for any attainment area pollutants (100, 250 ton thresholds)

 Second, determine that a physical change or change

in the method of operation is occurring

 Third, do the two-part emissions increase test for

each pollutant

 Pollutant and Emissions Rate  Carbon monoxide: 100 tons per year (tpy)  Nitrogen oxides: 40 tpy  Sulfur dioxide: 40 tpy  Particulate matter: 25 tpy of particulate matter emissions  PM10: 15 tpy  PM2.5: 10 tpy of direct PM2.5 emissions; 40 tpy of sulfur dioxide emissions;

40 tpy of nitrogen oxide emissions unless demonstrated not to be a PM2.5 precursor under paragraph (b)(50) of this section

Pollutant and Emissions Rate

 Ozone: 40 tpy of volatile organic compounds or nitrogen oxides  Lead: 0.6 tpy  Fluorides: 3 tpy  Sulfuric acid mist: 7 tpy  Hydrogen sulfide (H2S): 10 tpy  Total reduced sulfur (including H2S): 10 tpy  Reduced sulfur compounds (including H2S): 10 tpy

 Check each regulated NSR pollutant separately  First, determine if the increase associated with the modification

qualifies as a significant emissions increase

 Second, determine if the net emissions increase for that

pollutant is significant

 If PSD is triggered for modification, then GHGs must be

calculated to determine if above 75,000 TPY threshold

 PSD cannot be triggered by GHGs alone

 Net emissions increase can get complex  Important to verify with DO/LAA  Don’t want to find out late in the permit process

that your evaluation was incorrect

 Fugitive emissions means those emissions that cannot

reasonably pass through a stack, chimney, vent or

• ther functionally equivalent opening.

 Examples:

• Particulate matter (PM): Coal piles, road dust,

quarries

• Volatile Organic Compounds (VOCs): Leaky valves

and flanges at refineries and oil processing equipment

 They are included in a source’s PTE to the extent that

they can be quantified, if they are present at:

• One of the 28 PSD source categories
• A source category subject to NSPS or NESHAP as of

8/7/80

 If a source has been determined to be major for that

pollutant, they are included in any subsequent analysis (e.g. air quality impact)

 28 Source categories are general, not specific to NSPS

• r NESHAPS

 Emissions which, although associated with the

construction or operation of a source, are not emitted from the source itself.

 For example, increased rail traffic from new refinery

that will obtain crude by rail

 They do not count toward PTE, but must be

considered in the PSD air quality analysis if PSD is required.

 Typically not an issue

 Employ BACT  Ambient monitoring  Emissions modeling  Other impacts analysis

 Best Available Control Technology means an

emissions limitation … maximum degree of reduction….each regulated NSR pollutant…which the director…taking into account energy, environmental and economic impacts and other costs determines is achievable…

 Can use production processes or available methods,

systems and techniques, including fuel cleaning or treatment or innovative fuel combustion techniques for control

1.

Top-Down Process

2.

Identify all control technologies

3.

Eliminate technically infeasible options

4.

Rank remaining control technologies by control effectiveness

5.

Evaluate most effective controls and document results

6.

Select BACT

*See additional material at the end of the presentation.



Greenhouse Gas Emissions (GHGs) come into play as part of PSD process – decided by U.S. Supreme Court



Must be a PSD “anyway” source – source is

• btaining a PSD permit for other pollutant(s)



Requires application of BACT – focus has been

• verall energy efficiency of proposed source

 Rules require preconstruction monitoring if modeling

shows impacts above monitoring trigger levels

 Monitoring trigger levels – 3745-31-13(H) or EG 69  Monitoring required for one year (mostly)  Court decision on PM2.5 changes ground rules for that

pollutant

 D.C. Court of Appeals determined that

Significant Impact Levels (SILs) not supportable

 Deminimus value would be okay – just not

manner U.S. EPA adopted PM2.5 SIL

 US EPA issued new guidance on SILs  U.S. EPA adopted Significant Monitoring

Concentration (SMC) of 0.0 ug/m3 for PM2.5

 Important ramifications for new projects

 If monitoring is needed,

existing monitors may be sufficient to fulfill requirement

 Ohio is a large network of

monitors in near urban areas for most pollutants

 Nitrogen dioxide is

exception – only a few

• perational

 Rules require air quality impact analysis that

demonstrates:

• NAAQS will be met
• Must be less than allowed increase over the baseline

concentration (typically < ½ available increment)

 Other Impacts Analysis

• Soils, vegetation, visibility etc.
• Additional material at the end of the presentation

 What is a regulated NSR pollutant?  NAAQS Pollutant (SO2, Ozone, PM, PM-10, NOx,

PM2.5, CO, Pb)

 Precursor pollutants

• NOx and VOC for ozone
• SO2 and NOx for PM2.5

 Only covers NAAQS and precursor pollutants,

different than for PSD

 LAER - Lowest Achievable Emission Rate  Emissions Offsets  Net air quality benefit from offsets  Certify all major operations owned by the source in the

state are in compliance with SIP (or on an enforceable schedule)

 A new source/major modification will be subject to NA

NSR in Ohio if:

• Will emit or have the potential to emit 100 tpy, (thus a

Major Source) any criteria pollutant ( or precursor) for which the area is designated as nonattainment, OR

• A modification (any physical or operational change)

which results in a significant increase (see Significance Levels table) in emissions of a pollutant for which the source is major and the area is designated nonattainment.

Marginal Moderate and Basic Serious Severe Extreme Ozone (NOx and VOCs are precursors) 40 40 25* 25* any CO

• 100

50

• PM10
• 15

15

• NO2
• 40
• SO2
• 40
• PM2.5

(Nox and SO2 are precursors)

• 10

40 *when aggregated with all other net increases 25 tpy in emissions from the source over any period of 5 consecutive years

 LAER is the most stringent emission limitation based on

either: 1) the most stringent limitation achieved in practice by class or source category (without taking into account economic, energy, or other environmental factors), OR 2) the most stringent limitation in any SIP for that class

• r source category.

 LAER cannot be less stringent than any applicable

NSPS limit.

 LAER is an emissions rate specific to each emissions

unit.

 This emissions rate may result from a combination of

emissions-limiting measures such as:

• add-on controls
• a process modification
• a change in the raw material

 A new or modified source is required to “offset”

any increased emissions (it generates) with a decrease elsewhere in the same nonattainment area.

 The offset provision shifts the burden of

accommodating new growth in NA areas to new

• sources. Only offsets of the same pollutant are

allowed within a given area.

 Obtaining offsets is generally done by purchasing

emission credits from another source or combination

• f existing sources, within the same nonattainment

area, to offset the increase in emissions from the new source/modification.

 The purpose of the offsets is to allow the area to move

towards attainment while still permitting some industrial growth.

 See Finding Offsets additional material

 Offset ratios need to be greater than 1:1.  Offset ratios for basic are 1.1:1 in basic areas, 1.15:1 for

moderate areas

 Offsets should be located in the same nonattainment area,

• r in adjacent nonattainment areas.

 Offsets must be in the permit or a SIP revision.  Offsets must be practically enforceable.

 Emission reductions required by the State

Implementation Plan (SIP) or a state or federal consent decree

 The difference between the SIP and the NSPS if

it is applicable to the source

 The offsets must produce a “Net Air Quality

Benefit” (for the area affected by the new/modified source)

 This is required so that after the source is built, air

quality is better than before the source began

• peration

 Modeling demonstration required for some

pollutants (SO2, NOx)

 All major sources owned or operated by the

facility in the state must be in compliance with the State Implementation Plan (SIP)

 Rules allow facility to be on an enforceable

schedule or consent decree to achieve compliance

 An analysis by the source owner of:

• Alternative sites
• Sizes
• Production processes
• Environmental control techniques

 Analysis for such proposed source must demonstrate

that benefits significantly outweigh:

• the environmental impacts
• social costs imposed as a result of source location, construction,
• r modification

 Don’t forget about “netting” for both PSD and NNSR  If “internal” offsets (offsets at that plant) can be

generated; “netting” will probably work

 Frequently used on expansions or replacements, but

does not work for new facilities

 Questions…

 Potential to emit means the maximum capacity of an

emissions unit or stationary source to emit an air pollutant under its physical and operational design.

 PTE can be limited through federally enforceable

means, such as:

• Control devices
• Limits on capacity or hours
• Limits on types or amount of material processed,

combusted or stored

 What is a regulated NSR pollutant?  NAAQS and constituents or precursors  Section 111 pollutants (NSPS)  Title VI Class I or II (ozone depleting)  Other CAA regulated except HAPs (unless

constituents or precursors)

 Greenhouse gas emissions

 Emissions Units

belonging to the same industrial grouping or support,

 Located on one or more

contiguous or adjacent properties, and

 Under common control.

 In the same industrial group (SIC

Code)

 Under the control of same owner  Located on contiguous or adjacent

properties – for oil and gas within ¼ mile of each other

 VOC for ozone  Don’t count quantifiable fugitive unless on

the list

 List is not specific to NSPS  If the change by itself is major at a non-

major source, then the project is a major stationary source

 4 page rule definition (3745-31-01(LLL))  Physical change in or change in the method of

• peration of a major stationary source that

would result in:

• A significant emissions increase of a RNSRP,

AND

• A significant net emissions increase of that

pollutant

 The change itself must be above the

significance levels, AND

 The net change must be above the

significance levels for the project to be a major modification

 Both statements must be true to be a major

modification (when not netting)

 Significant VOC = significant ozone  Calculation method for significant emissions

increase is different for existing vs new

 Physical change or change in the method

qualifiers

 PAL qualifier

 Should be comprehensive; source should not

yet discount options because of infeasibility

 Source should consider add-on controls and

inherently lower-emitting processes and practices

 Scope is not limited by other regulations or by

national boundary

 Step 1 (cont)  Innovative technologies may be considered; technology transfer must be

considered

 RBLC:

• http://cfpub.epa.gov/RBLC/index.cfm?action=Home.Home&lang=en

 BAT: needs updated link

• http://www.epa.ohio.gov/dapc/files/files.aspx (Under Permits (Permit to

Install and Permit to Operate) files)

 If a control technology has already been installed

and successfully operated on the type of source under review, it’s technically feasible (unless there are obstacles at the source that justify infeasibility).

 Otherwise, source must consider whether the

technology is:

• Available (obtainable), and
• Applicable (can be reasonably installed and
• perated)

 Rank from most to least effective in terms of

emission reduction.

 If a control technology has a range of

performance, select the reduction level that has been achieved at other sources.

 Weighing of energy, environmental and economic factors  Energy Impacts Analysis  Source should determine whether the control

technology’s energy requirements would result in significant or unusual energy penalties or benefits

 Should only consider direct energy consumption  May involve fuel scarcity

 Environmental Impacts Analysis  Concentrates on non-air quality impacts, such

as solid/hazardous waste, water effluent, visibility, or emission of unregulated pollutants.

 Significant or unusual collateral impacts may be

reason for disqualifying a control technology.

 Economic Impacts Analysis (Cost analysis)  Cost effectiveness: dollars per ton reduced  A technology may be rejected if the cost is

disproportionately high when compared to recent BACT determinations

 BACT analysis may involve vendor-supplied estimates, cost

manuals developed by EPA, data from trade publications, etc.

 (Annualized Cost)/(Baseline emission rate -

Control option emission rate)

• Capital cost estimate may include:
• Equipment and installation costs
• Indirect investment (e.g. engineering,

construction, start-up, performance testing)

• Contingencies
• Working capital

 Annual cost estimate may include:

• Direct costs (e.g. labor, maintenance, electricity, water)
• Indirect costs (overhead, property tax, insurance, capital

recovery)

 Capital charges (taxes and insurance, capital

recovery factor, interest on working capital)

 Engineering Guide #46  EPA Air Pollution Control Cost Manual

http://www.epa.gov/ttncatc1/products.html#cccinfo

 Need help? Talk to NSR contact.

Existing Fac.1 Increase Net Increase Trigger PSD? 251 t/y NOx2 35 t/y 45 t/y 40 t/y No 240 t/y VOC 45 t/y 35 t/y 40 t/y No 15 t/y PM10 5 t/y 20 t/y 15 t/y No 50 t/y SO2 45 t/y 45 t/y 40 t/y Yes

1 Assume facility is located in an attainment area for all of the

above listed pollutants.

2 This emission rate makes it a “major stationary source.”

 PSD permit applicant must prepare an analysis on any

impairment to visibility, soils and vegetation

 Applicant must prepare an analysis of the air quality

impact as a result of the general commercial, residential, industrial or other grown associated with the project

 Rarely significant

 Based on an inventory of the soils and

vegetation types found in the area, including all vegetation of commercial or recreational value

 Rarely significant but can be for pollutants like

hydrogen fluoride

 Affects projects that are located near or impact Class I areas  Class I areas are places like national parks  No Class I areas in Ohio  Closest is Dolly Sods Wilderness area in WV  Rarely significant but could be for large projects like power plants

 Contact the DO/LAA and ask them for recent shutdown

sources in their area.

 Obtain copy of the emissions inventories for past years.

Determine if sources have been shutdown.

 Contact local chamber of commerce to find closures  Contact the Ohio EPA permit staff and ask about

available Emission Reduction Credits in bank

 Ohio EPA developed rules to allow for emission banking  Allows permanent emission reductions to be formally

recognized

 Credits are posted on internet so that interested parties can

see what is available in the area

 For more information contact Sudhir Singhal –

sudhir.singhal@epa.ohio.gov

 Many more nonattainment areas for ozone, SO2,

PM2.5

 Want to attract new business, expansions of current

business

 Ohio EPA bank designed to assist development in

nonattainment areas

 bob.hodanbosi@epa.ohio.gov

Major New Source Review (NSR) Overview of Important Changes

July 25, 2018

Mike Burr Managing Consultant Trinity - Cleveland

mburr@trinityconsultants.com 3401 Enterprise Parkway, Suite 340| Beachwood, Ohio 44122 Office: (216) 278-0500

Air Dispersion Modeling Updates

˃ Air dispersion modeling required to demonstrate

compliance with NAAQS and PSD Increments during major NSR process

 Revised Appendix W published on January 17,

2017

♦Effective 5/22/2017

˃ Wide ranging changes

 NO2 modeling options  Treatment of secondary PM2.5 and ozone  Regional source considerations  Many others…

Draft Engineering Guide #69

˃ Ohio EPA released draft Engineering Guide #69

• n June 26, 2018

 Comments due July 27, 2018  Final guidance expected later this year

˃ Changes generally intended to align EG#69 with

recent revisions to Appendix W

˃ Addresses OAC 3745-31-01(SSS)(1)(b)

 Triggering modeling without an emission

increase

Upcoming

˃ Revised definition of ambient air? ˃ Final Modeling Emission Rates for Precursors

(MERPs) guidance

 No significant changes expected from draft

˃ Draft Ozone/PM2.5 modeling guidance expected

this summer

 Replace 2014 guidance document

˃ Guidance/policy documents on these three (3)

expected this summer (?)

Recent NSR Guidance Documents

˃ New Source Review Preconstruction Permitting

Requirements: Enforceability and Use of the Actual-to- Projected-Actual Applicability Test in Determining Major Modification Applicability, Pruitt, 12/12/2017

˃ Project Emissions Accounting Under the New Source

Review Preconstruction Permitting Program, Pruitt, 03/13/2018

˃ Meadowbrook Energy and Keystone Landfill Common

Control Analysis, Wehrum, 04/30/2018

Project Emissions Accounting

˃ Applicability of Major NSR for existing sources is a 2-step

process:



Step 1: Project emission increase



Step 2: Net emissions increase (commonly referred to as “netting”)

˃ USEPA has historically maintained that emission decreases

associated with a project may not be considered under Step 1 (referred to as ‘project netting’)



Full 5-year netting evaluation required to account for any decrease, even those from decommissioning unit as part of project under consideration

˃ Practical Implementation of this interpretation has

resulted in significant delay and even prevention of certain projects from moving forward

Project Emissions Accounting

˃ March memo documents new EPA

interpretation

 Based on plain language of CAA, which indicates

that Congress intended to apply NSR to changes that increase actual emissions (where actual emissions increase would be a function of both project-related increases AND decreases)

˃ Decreases may now be considered in Step 1

• f NSR applicability evaluation

˃ Project:



Modify emission units P001, P002: +24 tons NOX



Install new emission units B001 +30 tons NOX



Projected decrease at P003, P004

• 19 tons NOX-

˃ Step 1 Increases



No Project netting: 54 tons

♦ Onto step 2! ♦ Other increases in

contemporaneous period?



Project netting: 35 tons

♦ Done!

Project Emissions Accounting

Contemporaneous Period - 5 years

Projected Start Construction

Projected Start Operation

Project Emissions Accounting

˃ Must be causal link between physical/operational

change and change in emissions

˃ Facility responsible for defining project scope

 May not seek to circumvent NSR

˃ Decreases need not be creditable or enforceable to

be considered in Step 1

 However, decreases considered in Step 2 must be both

˃ Caveats:



Local agencies may take more stringent interpretation than federal guidance



Permit engineers may not be receptive to idea of accounting for decreases without method of enforceability

Source Aggregation

˃ When should sources be considered a ‘single

stationary source’ for Title V or NSR permitting purposes?

1.

The stationary sources are located on one or more contiguous or adjacent properties

2.

The stationary sources are under common control

3.

The stationary sources belong to the same major industrial grouping (i.e., all activities have a Standard Industrial Classification (SIC) code beginning with the same two digits)

Common Control

˃ Letter from William Wehrum (EPA) to Patrick

McDonnell (Pennsylvania DEP) re: Meadowbrook Energy LLC

 Meadowbrook letter dated April 30, 2018

 https://www.epa.gov/sites/production/files/2018-

05/documents/meadowbrook_2018.pdf

˃ Relevant for common control determinations

for co-located and support facilities

Source Aggregation

˃ Bottom Line:



Control assessment should focus on power of one entity to dictate air quality compliance decisions of other facility



Ability to “influence” does not constitute common control



Examples of air quality-related control include the power to:

♦Direct the construction/modification of emitting equipment ♦Dictate the manner in which these EUs operate ♦Make decisions re: the installation/operation of air pollution

control equipment

♦Direct monitoring, testing, recordkeeping, and reporting

• bligations



If each entity has autonomy re: its AQ permitting

• bligations and related compliance strategies, each is a

separate source

Source Aggregation

˃ Caveats:

 Refining EPA’s interpretation and policy concerning

“common control” does not “change or substitute for any law, regulation, or other legally binding requirement”

♦ More fine print (in a footnote this time)!- This document is not a rule or regulation,

and the statements herein are not binding on state or local permitting authorities. This discussion reflects a change in how EPA interprets the term “common control” in it regulations but does not change or substitute for any law, regulation, or other legally binding requirement.

 Local agencies may take more stringent

interpretation than federal guidance

 Case-by-case assessment  What if current permit documents same source

status?

Upcoming

˃ Reconsideration of 2009 project aggregation rule

 Final reconsideration rule expected Summer 2018?

˃ Ambient air guidance

 EPA evaluating potential for additional flexibility in

definitions of “general public”, “access”, “building”

 Guidance expected soon

˃ Routine Maintenance, Repair and Replacement

(RMRR) guidance

 EPA evaluating need for clarification of RMRR

interpretation and application

 Clarification anticipated soon

CAA Major New Source Review

Legal Developments and Updates

Session G

July 25, 2018

William H. Haak

Haak Law LLC

HAAK LAW LLC

Environmental, Health & Safety Legal and Consulting Services William H. Haak Tel: 216.772.3532 whh@haaklawllc.com

Introduction

• A scalpel or a stick of dynamite?
• USEPA’s December 2017 NSR Guidance Memo
• USEPA’s changing approach to setting NAAQS
• The legislative and regulatory future of NSR
• Questions?

HAAK LAW LLC

Environmental, Health & Safety Legal and Consulting Services William H. Haak Tel: 216.772.3532 whh@haaklawllc.com

To Snatch Defeat From the Jaws of Victory...

• U.S. v. DTE Energy Co. I and II (2013 and 2017)
• In DTE I, District Court enters summary judgment for DTE, and finds

USEPA must show actual emissions increase in order to commence enforcement

• On appeal, 6th Circuit Court of Appeals holds USEPA need not show

increase in actual emissions to enforce...Remands...

• In DTE II, District Court basically ignores Court of Appeals, enters

summary judgment for DTE again.

• On appeal, 6th Circuit holds USEPA is allowed to review basis for

demand growth exclusion claim and emissions projections without need for actual increase in emissions

• December 2017 Memo states USEPA will no longer enforce

based on projections absent “clear error”

HAAK LAW LLC

Environmental, Health & Safety Legal and Consulting Services William H. Haak Tel: 216.772.3532 whh@haaklawllc.com

USEPA’s Changing NAAQS Approach

• Trump’s April 12, 2018 Memorandum to USEPA
• Promote domestic manufacturing and job creation
• Ensure efficient and cost effective NAAQS implementation
• Reduce impediments to growing economy*
• Pruitt’s May 9, 2018 Back-to-Basics NAAQS Memo
• More closely adhering to statutory deadlines
• Assessing the economic impact of NAAQS revisions
• ”International emissions” and “background concentrations”
• Preference for monitoring data over modeling data
• What does it all mean? Where could this be going?

HAAK LAW LLC

Environmental, Health & Safety Legal and Consulting Services William H. Haak Tel: 216.772.3532 whh@haaklawllc.com

*P .S. Protect the environment and improve air quality...

The Legislative and Regulatory Future of the NAAQS

• USEPA’s June 13, 2018 ANPR
• Advance Notice of Proposed Rulemaking
• “Increasing Consistency and Transparency in Considering

Costs and Benefits in the Rulemaking Process”

• The role of “Chevron Deference”
• April 2018 draft legislation introduced in House
• Rep. H. Morgan Griffith (R-VA)
• Seeks to redefine “modification” under Federal NSR
• Would legislatively overturn Duke Energy Corp. (2007)
• Proposes a (very) unique RMRR approach

HAAK LAW LLC

Environmental, Health & Safety Legal and Consulting Services William H. Haak Tel: 216.772.3532 whh@haaklawllc.com

Questions?

HAAK LAW LLC

Environmental, Health & Safety Legal and Consulting Services William H. Haak Tel: 216.772.3532 whh@haaklawllc.com