November 3, 1997
MEMORANDUM
SUBJECT: Discussion Paper on Options For the Potential to Emit Rulemaking
FROM: Bruce Buckheit, Director
Air Enforcement Division
Office of Enforcement and Compliance Assurance
Lydia N. Wegman, Deputy Director
Office of Air Quality Planning and Standards
TO: Clean Air Act Advisory Committee
Subcommittee on Permits/NSR/Toxic Integration
At the August 6, 1997 meeting of the Clean Air Act Advisory Committee's
Subcommittee on Permits, NSR and Toxic Integration, EPA presented a range of potential
options regarding the definition of "potential to emit." At the request of participants, EPA
agreed to provide a brief written summary of the options presented at the meeting, as well as
some consequences associated with each.
The requested summary is attached for your review. It should be noted that fewer than
five options appear, because some of the options presented on August 6 are shown as subparts of
the same option. "Option A" considers whether state-only enforceable limits should be credited,
including whether such limits could be created by non-air pollution control agencies and the
appropriateness of placing the responsibility for demonstrating the effectiveness of such limits on
the source. "Option B" would require federal enforceability, but discusses the idea of allowing
sources to obtain state-issued enforceable limits (e.g., issued through non-SIP approved
programs), and then "opt in" to the federal enforceability of such limits. Finally, "Option C" sets
forth a streamlined version of the traditional approach for federal enforceability.
This discussion paper is intended to stimulate constructive dialogue on how the proposed
rule could be fashioned. Consistent with the discussion on August 6, this summary presents
options that differ primarily with respect to the question of who should be able to enforce limits
on potential emissions, the burden of proof in any enforcement action, and the need for EPA
review of State programs that issue limits.
Most of the discussion at the August 6 meeting addressed back-end enforcement concerns
(e.g., federal and State versus State-only enforceability), not front-end concerns such as public
comment, EPA review or practical enforceability. In evaluating options for the proposal, it is
important to consider these front-end issues as well. Though not discussed in detail in this paper,
front-end issues will most likely be addressed through a range of approaches that cut across the
options outlined in the discussion paper. We encourage you to review the January 1996
discussion paper ("Effective Limits on Potential to Emit: Issues and Options") for additional
background on the issues to be addressed in the proposal.
We intend to discuss these issues at the next meeting of the CAAAC's Subcommittee on
Permits, NSR and Toxic Integration, scheduled for November 6 in Tampa, Florida. At this time,
EPA is most interested in ensuring that the proposal includes discussion of a complete range of
options and the expected consequences, and input of that nature would probably be of the
greatest short-term benefit. The summary cannot, of course, set forth the entire rationale
supporting each option, nor can it explore every possible iteration of how individual issues could
be addressed in the proposal. We look forward to continuing this dialogue in the public process
that will follow the proposal.
Please submit any brief, preliminary written comments to EPA by November 14.
Comments are welcome on legal issues as well as policy issues. We would, however, appreciate
it if comments could be limited to 20 pages or less. Comments should be sent to Carol Holmes,
Air Enforcement Division, U.S. EPA, 401 M Street, SW, Mail Code 2242A, Washington, D.C.
20460; telephone (202) 564-8709; fax (202) 564-0053.
Attachment
cc: Carol Holmes
Tim Smith
Jim Ketcham-Colwill
Greg Foote
John Walke
Regional office potential to emit workgroup members
For Discussion Purposes Only Not Final Agency Policy
SUMMARY OF OPTIONS FOR
EPA'S POTENTIAL TO EMIT RULEMAKING
Practical Enforceability Criteria
A 1989 EPA memorandum sets forth the most thorough guidance regarding the practical
enforceability of permit limits. See Memorandum from Terrell E. Hunt and John Seitz to
Regional Offices, "Guidance on Limiting Potential to Emit in New Source Permitting"
(June 13, 1989); see also 54 Fed. Reg. 27274, 27283 (June 28, 1989).
As Stated in the January 1996 discussion paper, EPA believes that the potential to emit
rulemaking presents an opportunity to clarify this guidance and provide additional
certainty by promulgating regulatory language setting forth minimum, objective practical
enforceability criteria.
EPA's current thinking is that such objective criteria should apply to all limits restricting
a source's potential to emit, regardless of whether that limit is enforceable by EPA and/or
the State. The following descriptions of the options will occasionally refer specifically to
the criteria. However, stakeholders should consider the appropriateness and need for the
practical enforceability criteria under each scenario.
Description of Options
In order to minimize confusion of these options with the numbered options discussed in
the January 1996 paper, this summary will refer to the options using letters.
A: Limits that are State-only enforceable would be credited. Under this option,
compliance with any permit or enforceable limit on a source's operations could limit
its potential to emit. The source would have the responsibility to demonstrate the
effectiveness of a State-only enforceable limit, as well as its regular compliance with
the limit, in a major source enforcement action. A separate sub-issue is whether
such limits should be confined to limits issued and enforced by air quality control
agencies.
General considerations regarding the acceptance of State-only enforceable limits:
* Some stakeholders argue that accepting conditions that are State-only enforceable may
reduce the administrative process needed to obtain an effective limit. Whether in practice
the process for obtaining a State-only enforceable limit will differ from that required to
obtain a federally enforceable permit will depend on the State process, which may include
front-end procedures common to both types of limits (e.g., public comment, prior EPA
review).
* This may reduce the enforcement vehicles available to EPA or citizens. Because EPA
and citizens could not enforce the limits themselves, they could only bring enforcement
action alleging that the source is violating major source requirements. This approach
raises the following concerns for EPA and citizens:
-- An additional element of proof (i.e., that the source's potential emissions
exceed the applicable thresholds) would be required before EPA or citizens could
abate violations of an emission limitation.
-- Returning the source to compliance with the limit would not be an available
remedy. The only available remedy to the Agency or a citizen when a source was
shown to have violated its limits would be to require compliance with the
appropriate major source requirements (e.g., BACT; LAER; MACT; offsets).
-- Pursuing any action of this nature could possibly require substantial resources
on the part of EPA and citizens, and citizens may not have access to information
needed to prepare such a case. EPA has found it much more resource-intensive to
pursue a major source violation as opposed to enforcing against individual permit
terms and conditions.
* It may be more difficult with State-only enforceable limits for EPA and the public to
identify the limits a source may be relying on to restrict its potential emissions, and to
determine whether the limits are effective. This may be the case, for example, for limits
created by State rules and programs that have not been reviewed by EPA, and by State
permits that have not been reviewed by the public.
Considerations related to a source's responsibility to demonstrate the effectiveness of a
State-only enforceable limit, as well as its compliance with the limit:
* Although a source would have maximum flexibility regarding which limits it could rely
on to limit potential emissions, it also would be responsible for demonstrating the
effectiveness of and regular compliance with those limits in an enforcement action or
citizen suit.
* Requiring the source to be responsible for demonstrating the effectiveness of the limit
would make enforcement of the major source threshold easier for EPA and citizens. Due
to the variety of possible types of limits, it may be reasonable to place the responsibility
of showing how such limits are effective on the source. In general, some stakeholders
argue that a limit created outside a federally-approved program may be issued with fewer
safeguards (e.g., the source may not be required to provide as much information on its
compliance). Thus, unless the State requires the same information and processes as
federally-approved programs, information regarding the effectiveness of a limit and the
source's compliance history may be less accessible to EPA, the State and the public than
if the limit were created under a federally-approved program. Thus, some stakeholders
believe that the source should be responsible for demonstrating these elements.
* Some stakeholders disagree, however, arguing that many limits issued pursuant to State
programs are effective, regardless of whether the State program is part of the SIP. They
believe that EPA should credit these limits as it would credit limits issued pursuant to
SIP-approved programs and not require the source to assume responsibility for proving
the effectiveness of the limit. At this time, however, for the reasons set forth above,
among others, EPA favors an approach that places the responsibility for demonstrating
effectiveness and compliance on the source.
Considerations related to crediting limits from non-air agencies:
* Some non-air pollution control agency requirements might establish clear limits on a
source's potential operations, such as requirements that restrict the number of hours of
operation. The Agency has some concern with how limits on hours of operation issued
by non-air pollution control agencies would be translated into levels of potential
emissions. For example, State "blue laws" dating back to colonial times may
theoretically restrict Sunday operations by some facilities, but unless it is clear that such
laws can be, are, and will be enforced, these laws cannot reasonably be said to provide a
"practically effective" limitation on emissions.
* Where the establishment of emission limits requires engineering expertise to develop an
appropriate set of terms and conditions for a given source, non-air quality agencies may
not have sufficient expertise to establish effective limits.
* State air pollution control agencies are typically not provided authority to enforce
limitations created by other State or local agencies (e.g., blue laws). In addition, such
limits could be relaxed or altered without the knowledge of the air pollution control
agency, and without any review of whether the relaxation results in the source becoming
a major source.
B: Federal enforceability with an "opt in" approach. Federal recognition and
enforcement of effective State and local limits, without a requirement for prior EPA
review of the State program or the limit. A source could obtain a limit on its
potential emissions that was initially enforceable only in State court (e.g., the same
limits it could obtain under Option A) and then "opt in" to the federal enforceability
of the limit in order to use the limit to restrict the source's potential emissions and
become a synthetic minor source under the federal Clean Air Act.
This was discussed under the heading "Voluntary acceptance of the federal enforceability
of State limits" within Approach 2 of the January 1996 discussion paper.
A source would have maximum flexibility regarding what limits it could rely on to
restrict its potential emissions, and the procedure for opting in would be simple, perhaps
involving only submittal of notice to the appropriate permitting agency (and perhaps, but
not necessarily, EPA) that the source is relying on the State limit to restrict its potential
emissions and agrees to the federal enforceability of the limit.
Compliance incentive effectiveness and public confidence in the resulting limit should be
enhanced due to the ability of EPA and the public, as well as the State, to enforce the
limits.
EPA approval (through a SIP or otherwise) of the State programs under which the limits
would be issued would not be a requirement. Nor would EPA review or approve
individual limits.
Unlike Option A, if the source has not "opted in" to federal enforceability, then the limit
would not be credited by EPA, and EPA and citizens would have the right to take the
source to court for violation of major source requirements, irrespective of the existence of
the State permit.
C: Streamlined version of current approach. Under this option, EPA would reinState
the federal enforceability requirement, but streamline the system to address the
court's concerns in NMA. Sources would still need to obtain a federally enforceable
State operating permit (FESOP) or other federally-enforceable limit, but EPA
would streamline the system in two ways, as referred to in "Approach or Option 2"
in the January 1996 memorandum:
* EPA would explicitly accept State-only enforceable limits during the period
when EPA is acting to approve a State's program.
* EPA would provide substantial flexibility to States on the types of limits
that require up-front EPA and public review, consistent with the efforts
currently underway in the part 70 rulemaking.
This approach provides for the maximum level of EPA and citizen involvement and
enforcement, as well as increased flexibility in enforcement actions. For example,
enforcement cases could be more narrowly tailored to ensure compliance with the limit,
rather than being directed only towards major source violations.
In addition, because enforcement of emission limits generally requires less resources than
enforcement of major source requirements, EPA and citizens would probably be able to
pursue more emission limitation cases than they could major source cases. This added
enforcement potential may increase compliance incentives.
May be least disruptive to existing State and local programs, because most States have
adopted some mechanism for creating federally enforceable limits.
May be more burdensome on sources obtaining limits and agencies issuing limits than the
other Options, especially in States which have not yet established mechanisms for
creating federally enforceable limits.
Discussion Questions
1. Title V permits are intended to provide a benefit to all involved by establishing a central
repository for a source's obligations. It has been suggested that a source already subject
to Title V because it is a major source for one pollutant should be required to consider
any limit on its potential to emit that the source wants to take to avoid other major source
requirements a federally applicable requirement that must be contained in the Title V
permit. For example, under this approach, if a source were major for nitrogen oxides
(NOx), but a synthetic minor for hazardous air pollutants (HAP), its Title V permit
should contain the synthetic minor limits for HAPs as a federally applicable requirement.
This approach seems appropriate for these reasons: (1) the source is a major source
subject to major source requirements, including Title V, and (2) the procedure for putting
the limits in the Title V permit should be a negligible element of the entire Title V
permitting process. What additional burdens, if any, would such an approach place on a
Title V source and/or the permitting agency? How else could a citizen track limits on a
Title V source's potential emissions?
2. Where limits on hours of operation created by non-air pollution control agencies (e.g., a
local ordinance limiting hours of operation) are present, is there a need for a
demonstration on how and whether these limits create synthetic minor status? If Option
A were selected, should the rule require that a source limited in this manner translate the
limit on its hours into potential emissions and submit it to the air pollution control
agency? Similarly, would there need to be a showing that the other agency possessed
equivalent enforcement authority and history as the State air quality control agency and
that the rules were actually enforced (e.g., blue laws)? In addition should the non-pollution control agency be bound by the EPA-State air control agency enforcement
agreements and policies?
3. Under Option A, EPA is considering requiring sources relying on non-federally
enforceable limits to submit a notice of its reliance on these limits so that EPA, the State
and citizens could track these limits, and could determine whether the limit should be
considered a valid PTE limit, or whether it should be changed. Moreover, EPA is
considering whether such a notice should include a stipulation of major source status but
for compliance with the State-only enforceable limit. How would such a requirement
help alleviate citizen group concerns with limits that are only State-only enforceable?
What type and level of burdens, if any would such a requirement place on a source?
4. In fashioning a reasonable solution, should there be a relationship between front-end and
back-end issues? For example, under Option A, where sources are responsible for
demonstrating that limits adhere to objective criteria, should there be less EPA and
citizen involvement in fashioning the limit? Additionally, if practical enforceability
requirements are general in nature, is there a greater need for up-front review than if
practical enforceability requirements are more specific in nature?
5. If EPA were to propose Option C, in what additional ways could streamlining be
accomplished?
Footnotes:
1. Throughout this document, the term "State" refers to State and local agencies.
1. EPA also is considering using the practical enforceability criteria to establish a rebuttable
presumption of ineffectiveness when a limit fails to meet all the criteria. For instance, if a
source's limit did not contain the appropriate averaging time, the source would have to rebut the
presumption and demonstrate effectiveness of the limit despite its variation from the criteria.
2. It is important to remember that a source can always obtain a federally enforceable limit
on its emissions, even if the final rule does not require federal enforceability.
3. There are several avenues for obtaining federally enforceable limits in addition to a
FESOP or minor NSR permit (e.g., general permits, permits by rule, prohibitory rules, source-specific SIP revisions). See Memorandum from John Seitz and Robert Van Heuvelen to
Regional Offices, "Options for Limiting the Potential to Emit (PTE) of a Stationary Source
Under Section 112 and Title V of the Clean Air Act (Act)" (Jan. 25, 1995).
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