Mr. William H. Lewis
Morgan, Lewis and Bockius
1800 M Street, N.W.
Washington, D.C. 20036-5869
Dear Mr. Lewis:
As you know, the Environmental Protection Agency (EPA) is
committed to working with industry and other stakeholders to
develop flexible solutions to address the implementation concerns
raised with our programs. Thanks in a large part to your
initiative, we were able to hold a successful meeting with you
and over 55 of your colleagues to discuss implementation issues
of concern. I am providing our responses to the issues raised by
the industry representatives at the April 12, 1995 meeting.
The EPA has made considerable progress in developing rules
and guidance that take into consideration many of your concerns.
Several of the concerns you raised are being addressed in
rulemaking packages that are underway for new source review
reform and operating permits. In addition, we are holding
stakeholder meetings on enhanced monitoring and section 112(g).
EPA is also developing guidance in several areas that will help
clarify a number of the uncertainties that have been raised in
the industry comments.
I look forward to continue working with you as we move
forward in developing rules that work for all parties and
foremost in achieving clean air for all our citizens.
Sincerely yours,
Mary D. Nichols
Assistant Administrator
for Air and Radiation
Attachment
ENVIRONMENTAL PROTECTION AGENCY
(EPA)
RESPONSE TO ISSUES RAISED BY INDUSTRY ON
CLEAN AIR ACT IMPLEMENTATION REFORM
May 30, 1995
TABLE OF CONTENTS
EPA'S RESPONSE TO ISSUES RAISED BY INDUSTRY ON
CLEAN AIR ACT IMPLEMENTATION REFORM
Page
Summary of EPA Efforts................................3
EPA Response to Specific Issues
Operating Permit Program.........................6
New Source Review...............................13
Air Toxics......................................27
Enhanced Monitoring.............................40
Potential to Emit...............................43
Fugitive Emissions..............................46
EPA'S RESPONSE TO INDUSTRY CONCERNS ON
CLEAN AIR ACT IMPLEMENTATION REFORM
On April 12, 1995, EPA met with 55 industry representatives
to discuss issues they had raised and to indicate what actions
EPA intends to take on the issues. The specific issues raised by
the various industry representatives and EPA's responses to those
issues are attached. The vast majority of issues raised by
industry were not new to EPA; the Agency has been working with
industry representatives and other stakeholders for several
months trying to find cost-effective, common sense solutions to
these often complex issues.
It is also important to note that the responses included in
this document reflect the Agency's positions as of mid-May 1995.
On several of these issues, notably operating permits and 112(g),
EPA is in the midst of reevaluating its programs in light of
recent feedback from various stakeholders. In June 1995 EPA will
meet with the Clean Air Act Advisory Committee to discuss options
for addressing section 112(g). EPA is also currently working out
final details of a proposed supplemental rule on operating
permits and will shortly make available additional information
about that proposal.
Enhanced Monitoring
In general, EPA agrees with concerns raised about the
enhanced monitoring rule and has withdrawn the package from
review by the Office of Management and Budget. EPA hopes to
develop a strategy that will allow it to issue compliance
assurance requirements that build on the requirements of existing
rules and ensure that the environmental results expected from
those rules are being achieved. EPA received an extension of the
court-ordered deadline until June 30, 1995. EPA intends to seek
a further extension of at least a year to allow time for
stakeholder involvement in development of the rule. One of the
first steps EPA will take is to hold a stakeholders' meeting on
May 31, 1995. EPA will work with representatives from industry,
states, and environmental groups to obtain their assistance in
developing a new flexible approach for the enhanced monitoring
rule.
Operating Permit Program
Over the next month EPA plans to make several significant
improvements to the permit program that will enhance a facility's
ability to make process or operational changes without revising
its Title V permit, make far greater use of existing State permit
programs for purposes of Title V, and reduce the costs and
burdens of developing permit applications. Some of these changes
are described below. EPA intends to make available information
about the other changes shortly.
In the last several months EPA has been working with
representatives from industry, states, and environmental groups
to find a solution that will allow a more streamlined process for
permit revisions and provide more flexibility to states and
industry. EPA plans to issue a supplemental proposed rule on
operating permit revisions in June 1995. EPA has already shared
a draft of the supplemental proposal with industry, states and
other stakeholders to get their comments on the revised approach.
EPA is currently in the process of working out final details
about what will be in the supplemental proposal, so it is not
possible to fully describe the extent of the changes in that
document here. However, in general the supplemental proposal
will include a streamlined system for permit revisions that
builds on existing successful State programs. Under this
process, States would have greater flexibility to decide the
amount of public review and EPA review for most permits, by
matching the level of review to the environmental significance of
the changes. A State would not be required to provide any EPA or
public review for changes that it can show are de minimis.
EPA is also working on a series of guidance documents that
will address many implementation issues raised by industry and
states. This guidance is expected to clarify the flexibility
allowed under the current rule and provide guidance on ways to
reduce the costs and effort in preparing permit applications,
which in turn will reduce the administrative and economic burdens
of this program. As a result of concerns about the size and cost
of some permit applications that have recently come to EPA's
attention, the Agency plans to hold meetings with industry and
State stakeholders in June to clarify the requirements on permit
application content and ensure that State or local agencies do
not request needless information in the applications.
New Source Review
EPA has worked through the Clean Air Act Advisory Committee
to obtain independent advice and counsel on policy and technical
issues associated with reforming the New Source Review program.
Through these efforts, EPA provided a draft NSR reform rule for
stakeholders' comment in 1994. Based on input received from the
industry, states, environmental and other groups, EPA has revised
the draft rule and intends to propose the reform rule in July
1995. The proposed revisions provide stakeholders with more
certainty and flexibility to comply with EPA's NSR requirements,
and promote the use of innovative control technologies and
pollution prevention.
While EPA views the NSR proposal package as being balanced
and as not sacrificing environmental protection, this package
provides industry with several important benefits. To name just
a few, EPA plans to exempt certain "clean" emission units, and
pollution control and pollution prevention projects from NSR
altogether. EPA also plans to provide an approach that promotes
voluntary use of plant-wide applicability limits which allows
industry to operate without changes to its' permit as long as the
plant's emissions do not exceed a cap.
Air Toxics
EPA recognizes that states and industry need lead time to be
able to implement the modification provisions contained in
section 112(g). EPA published an interpretive notice in February
1995 advising states that they are not required to implement the
modification provisions until EPA issues the final rule. This
reversed an earlier EPA legal interpretation. In developing the
final section 112(g) rule, EPA will consider the need for
additional lead time to implement the modification provisions
following promulgation of the rule.
In response to comments received on the proposed rule, EPA
is considering making several significant changes. EPA plans to
discuss these proposed changes at the June meeting of the Clean
Air Advisory Committee meeting. As it develops the final rule,
EPA plans to hold meetings with industry, states and other
stakeholders about potential changes to the proposed rule. EPA
plans to issue the final rule in early 1996.
Potential to Emit
EPA's requirements for a source's limits on its potential to
emit to be federally enforceable is currently in litigation. In
that litigation EPA has taken the position that it has the legal
authority to require federal enforceability. EPA believes there
should be a credible system to ensure adherence to restrictions
which allow a source to avoid federal requirements. Federal
enforceability provides EPA the opportunity to ensure compliance;
it also provides citizens the opportunity to ensure that sources
in their communities are taking steps to reduce toxic air
pollution.
In January 1995, EPA issued a memorandum outlining
alternative ways that restrictions on potential to emit could be
less burdensome. For example, EPA identified approaches such as
general rules and general permits to create restrictions on large
numbers of sources without having to resort to individual
permits. To ensure that states have sufficient time to implement
these approaches, EPA provided a two-year transition period.
During the transition period, sources emitting less than 50
percent of the major source threshold would be excluded from
having federally enforceable limitations, as long as appropriate
records are kept. Sources above the 50 percent threshold that
have State permit limits can simply submit certifications that
accept their State limits as federally enforceable. EPA is
giving serious consideration to extending the provision for
sources emitting less than the 50 percent cutoff beyond the two-
year period.
Fugitive Emissions
EPA continues to conduct section 302(j) rulemakings where
required under the Act, but believes section 112 does not require
such a rulemaking. A court decision on the legal issue of
whether such rulemaking is required under section 112 is expected
to be issued shortly. EPA is interested in specific concerns
about the technical feasibility of measuring fugitive hazardous
air pollutant emissions, and in providing guidance in this area.
EPA has committed to issue guidance in May 1995 on treatment
of co-located sources of fugitive emissions that have not been
listed under section 302(j).
EPA'S RESPONSE TO ISSUES RAISED BY INDUSTRY ON
CLEAN AIR ACT IMPLEMENTATION REFORM
Operating Permit Program
REDUCING PERMIT APPLICATION BURDENS
Issue 1: To reduce the burden of the permit application, EPA
should issue guidance to confirm that sources are not
required to include a substantial level of detail in
their permit applications. Specifically covered should
be limiting detail on emissions and reviews related to
identification of applicable requirements.
Response:
EPA agrees and is creating guidance on this and many other
implementation issues.
EPA's guidance will address the extent to which emissions
must be quantified for purposes other than determining a
facility s potential emissions. EPA will clarify that
extensive emission inventories are not the main goal of the
Title V operating permit program, and that documentation of
emissions may be reduced where the purpose is for cataloging
emissions rather than, for example, determining whether a
State or federal rule applies.
EPA will clarify that emissions of very small amounts of
pollutants could be reported as present in trace amounts,
instead of calculating the actual quantity of emissions.
The guidance will clarify that calculation of tons per year
emissions of pollutants covered under the accidental release
program [section 112(r)] is not required, unless the
pollutant is also a hazardous air pollutant (HAP) under the
air toxics provisions in section 112(b).
Although not part of industry s recommendation, another
means of reducing the burden of permit applications is to
allow part of an application to be submitted within the one
year deadline and the remaining information to be submitted
nearer the date of permit issuance for sources whose
required date for permit issuance is significantly later in
the state's 3-year transition period. EPA will clarify that
permit authorities may initially deem an application
complete, provided core information is included, and then
allow submittal of additional necessary information nearer
the date of permit issuance. The application shield will
continue to be provided to applications deemed complete in
this manner.
UPDATED EMISSIONS ESTIMATES
Issue 2: EPA should issue guidance that, at a minimum,
establishes the following:
1) If emissions estimates developed in preparing Title
V applications differ from prior good faith estimates,
then use of the prior estimates should not be called
into question by the new estimates, and
2) If emission limits were based on prior good faith
estimates that are lower than current estimates, then
the previous emission limits may be revised using the
Title V permit process to reflect estimates based on
current methodologies.
Response:
EPA recognizes the need for fair and appropriate measures
under these circumstances.
EPA is developing guidance on what effect new emission
factors or information would have on a previously submitted
permit application. This guidance is expected to be issued
very shortly.
EPA agrees that good faith estimates are an important factor
in this issue. EPA is soliciting comments from industry on
how it should address the issue of good faith estimates.
EPA also agrees that changes to emission estimates should
not require a revision of the operating permit if the new
estimate has no affect on what requirements apply. If new
requirements apply, the existing rule defines the procedures
for incorporation into the permit.
INSIGNIFICANT ACTIVITIES
Issue 3: EPA should allow States to exclude as insignificant
activities any units with emissions below the State-
established significance thresholds -- even if the
units are subject to an applicable requirement.
Response:
EPA will provide additional guidance to States concerning
exclusion of certain activities from the obtaining a permit.
EPA will clarify through guidance that States may reduce the
level of information in the application for activities
subject to a generically applicable State implementation
plan (SIP) requirement, such as small units subject to
general SIP opacity requirements.
MINOR NEW SOURCE REVIEW/TITLE I MODIFICATIONS
Issue 4: EPA should immediately issue a ruling that Title I
modifications include only changes explicitly defined
as modifications under the Act, and do not include
changes not covered by those definitions that are
governed by State or local minor new source review
(NSR) programs.
Response:
EPA is continuing to consider how best to address this issue
in the supplemental proposal it plans to issue in June 1995.
In the meantime, EPA has approved a number of state permit
programs that have not treated minor changes under their new
source review program as Title I modifications. These
programs allow minor NSR changes to be processed as minor
permit modifications under their Title V program.
EPA's interpretation of the phrase Title I modifications
in the current rule allows this approval and EPA will
continue to grant similar approvals.
As part of its supplemental proposal EPA currently intends
to offer for public comment a streamlined two-tracked system
for permit revisions that builds on existing successful
State new source review programs. Under this process,
States would have greater flexibility to decide the amount
of public and EPA review for most permit revisions, by
matching the level of review to the environmental
significance of the change. The new system for permit
revisions will reduce the importance of the phrase "Title I
modifications" because consideration of whether the change
is a Title I modification would not be a factor in
determining what revision process is necessary.
APPLICABLE REQUIREMENTS - EXCLUSION OF CERTAIN TERMS
Issue 5: EPA should issue guidance confirming the following:
- States can limit minor NSR terms included in title V
permits to those that they deem to be environmentally
significant (but States would have the option to treat
minor NSR and Title V separately), and
- States are only required to include state
implementation plan (SIP) terms that are necessary
elements of an EPA-required nonattainment or
maintenance plan.
Response:
EPA agrees that some minor NSR terms may be obsolete or
inappropriate for operating permits.
EPA intends to clarify through guidance that, for example,
the permit would not need to incorporate the NSR application
by reference or include certain other terms determined by
the source and permit authority to be extraneous. This
guidance will indicate the types of terms that may be
extraneous and would suggest ways in which States may drop
these requirements from NSR and Title V permits.
[For treating minor NSR and Title V separately, see response to
the next issue.]
APPLICABLE REQUIREMENTS - LEVEL OF DETAIL
Issue 6: EPA should allow States to include a basic requirement
to comply with a particular general program in the
Title V permit, with an acknowledgment that compliance
with the underlying requirements, as revised from time
to time, will be required. These general programs
would include:
- minor NSR
- monitoring and enhanced monitoring
- categories of de minimis reasonably available
control technology (RACT) requirements and
determinations of RACT non-applicability
- 112(r) risk management plans
EPA should issue guidance to confirm that applicable
requirements may be incorporated into Title V permits
using citations (i.e., references) rather than
narrative restatement.
Response:
While EPA believes this approach could lead to permits that
would not have specific, enforceable conditions for some of
these requirements, EPA is continuing to consider varying
ways in which states may incorporate new source review
requirements into Title V permits.
Some requirements do lend themselves to generic treatment.
In the March 1994 supplemental proposal on accidental
releases under section 112(r), EPA proposed standard permit
conditions that would assure compliance with requirements of
the accidental release program. Under this approach the
risk management plan would not be a part of the application
or the permit. Changes to the risk management plan would
not require revising the permit.
EPA agrees that a citation-based approach to identifying
underlying requirements is needed and will be issuing
guidance on the use of citations in June 1995.
EPA described for public comment an approach to cross-
referencing in its August 29, 1994 proposal, and intends to
expand on this approach in the guidance document mentioned
above. Under the August proposal, the permit would need to
include the emission limits and monitoring requirements,
while test methods and lengthy procedures could be
referenced. Any citation would need to ensure that
judgements required in an underlying requirement are
identified in the permit.
OPERATIONAL FLEXIBILITY AND PERMIT REVISION PROCEDURES
Issue 7: EPA should promulgate the operating permit revision
procedures that reflect the approach set out in
industry s straw proposal.
Response:
EPA's supplemental rule on Title V permit revisions, which
will be issued in June 1995, will address this issue. This
proposal will include an alternative, streamlined system for
permit revisions that builds upon existing state permit
programs.
It will give States great flexibility to decide the amount
of public and EPA review for most permit revisions, by
matching the level of review to the environmental
significance of the change. A State is not required to
provide any review for changes that it can show are de
minimis. The public, affected States, and EPA would have an
adequate opportunity to review and comment on more
environmentally significant actions.
Under the June proposal, changes that do not require
approval under State minor NSR would be allowed to proceed
with no further review upon submittal of a notice to the
State, provided the change would not conflict with the Title
V permit.
The permit revision procedures are expected to avoid
duplication with existing State permit programs. For
changes subject to preconstruction review, any public,
affected State or EPA review would occur prior to
construction of the project. This is where State review is
already provided under new source review, and would avoid
second-guessing of a preconstruction permit by EPA.
TITLE V MONITORING
Issue 8: EPA should issue Title V monitoring guidance that
provides:
1) Existing monitoring established as part of an
applicable requirement should satisfy the Title V
monitoring requirement.
2) If no such monitoring is provided in the underlying
requirement, states can establish Title V monitoring as
part of the permitting process, subject to the
following constraints:
- monitoring data that is sufficient to determine
compliance with the underlying applicable
requirement shall be the objective of any new
monitoring, and where the applicable requirement
was established through rulemaking, should only
serve as indicator monitoring until the compliance
determination aspects of the underlying
requirement can be formally reviewed and revised
through rulemaking.
- costs shall be taken in account in determining
such monitoring, expressly recognizing that
monitoring may not be feasible for certain units
because any benefits will be outweighed by
associated costs.
- monitoring must be established in a manner that
will assure that an increase in stringency of the
underlying requirement will not result.
3) States should be able to exempt small units from
monitoring.
Response:
Several of the points raised are related to EPA's enhanced
monitoring proposed rule which EPA is currently reexamining.
Either as part of that reexamination, or in separate
guidance EPA will clarify what is necessary to meet the
operating permit rule requirements on periodic monitoring.
EPA agrees directionally with the points that periodic
monitoring should be satisfied by monitoring included in an
applicable requirement.
EPA also agrees that periodic or enhanced monitoring is not
intended to increase the stringency of the underlying
requirement.
RESEARCH AND DEVELOPMENT ACTIVITIES
Issue 9: EPA should exclude research and development (R&D) and
related activities from coverage under Title V and
section 112(g). At a minimum, the current Title V rule
must be implemented consistent with the preamble to
make clear that states have authority to treat co-
located R&D facilities and related activities
separately in determining whether they are a Title V
major source.
Response:
In the June 1995 supplemental proposal on permit revisions,
EPA will clarify that under the current rule, R&D facilities
may be considered separately from the manufacturing facility
at which they are located. This means that R&D laboratories
would not be required to obtain a permit, unless the R&D
facility alone is a major source.
EPA'S RESPONSE TO ISSUES RAISED BY INDUSTRY ON
CLEAN AIR ACT IMPLEMENTATION REFORM
New Source Review
SUMMARY OF RECOMMENDATIONS
Issue 1: New source review (NSR) is triggered by two types of
activities at existing sources: installing new
emissions units and changing existing emissions units.
With respect to new units, the NSR "emission increase"
tests exclusively govern NSR applicability. As to
existing units, the NSR "exclusions" from "physical or
operational change," as well as the "emissions
increase" tests determine applicability. EPA's July
NSR reform package addressed both types of activities
and contains certain solutions that industry supports.
It contains other provisions that industry does not
support in their present form. Finally, the July
package omits provisions that industry believes are
essential to meaningful reform.
"One size does not fit all" is a principle that needs
to be recognized in the NSR program. Both "exclusion"
provisions and "the emission increase" tests must
reflect this principle.
The "exclusions" to NSR either focus on conduct that
existing facilities normally undertake during their
useful life or on conduct that the Agency wishes to
encourage because it is in the public interest.
Different "exclusions" are needed in order to reflect
different conditions that exist in different
facilities. The "exclusion" options need to be
expanded.
Options are also needed under the emissions increase
test. An allowable-to-allowable test should be
provided for sources that have undergone NSR review and
for sources where the State implementation plan (SIP)
is consistent with that approach. EPA should also
confirm the existing discretion of sources to use an
actual-to-actual approach. Source owners should also
have discretion to choose from a menu that includes, at
a minimum, these tests and plantwide applicability
limits (PALs).
Response:
EPA began a comprehensive reassessment of its NSR program
over two years ago. That process involved extensive
discussions with representatives from all the stakeholder
groups and resulted in recommendations forwarded to EPA from
the Clean Air Act Advisory Committee (CAAAC).
EPA has developed a regulatory package addressing the
recommended changes and expects the proposed rules to be
signed by the Administrator within the next few months.
While EPA views the package as being balanced and as not
sacrificing the environmental protection inherent in the New
Source Review program, there is no doubt that the package
will provide industry with several important benefits
including:
Deregulation of many changes at "clean" emissions units
and pollution control and pollution prevention projects
-- Sources that have clean emissions units or are
undertaking projects to clean up air pollution would
generally not be targeted for federal new source
review.
Promotion of voluntary plant-wide limits -- Rather than
face potentially complicated, piecemeal applicability
decisions every time a change at a plant is
contemplated, most plant managers prefer to work with
an emissions cap or budget, an annual emissions limit
that allows managers to make almost any change any time
as long as the plant's emissions do not exceed the cap.
EPA will include this option in the proposed rule.
Help for cyclical industries such as the automobile
manufacturing companies -- Industry alleges that
existing regulations unintentionally penalize
industries that have suffered recent downturns and
inhibit modernizing changes that are vital to their
recovery, even when changes at a plant lower emissions.
EPA's proposal will level the playing field for these
sources by extending the range of years they can use to
establish their emissions baseline.
Encouragement of pollution prevention and innovative
control technologies -- The proposed changes will
ensure that bona fide pollution prevention qualifies
for the pollution control project exclusion and revamp
the under-used innovative control technology waiver to
simplify the process and eliminate penalties for good
faith failures.
Better coordination of permits impacting Class I areas
-- EPA will clarify the role of the Federal Land
Manager, the State permitting authority and the
applicant with regard to the NSR permitting process.
Other changes establish de minimis levels for air
quality impacts and provide mitigation alternatives for
sources whose proposed new emissions threaten Class I
areas. The changes should dramatically reduce delays
and disputes currently associated with permitting near
federal Class I areas.
Increased State flexibility -- Instead of one-size-
fits-all solutions to applicability and other issues,
States would be explicitly allowed for the first time
to choose applicability and implementation approaches
from a menu of alternatives.
EXCLUSIONS FROM PHYSICAL AND OPERATIONAL CHANGES
Issue 2: Pollution Control Project (PCP) Exclusion: The
exclusion should follow the Wisconsin Electric Power
Company (WEPCO) exclusion by dropping the following
from the July draft:
- The requirement that the source owner seek and obtain
a prior state determination that the pollution control
project exclusion applies "up-front" before commencing
construction on a project.
- The mandatory control requirements of collateral
emissions increases.
- The "offset" requirement for nonattainment areas.
- The "air toxics" risk evaluation.
Response:
EPA generally agrees and as mentioned above, EPA will be
proposing a broad pollution control project exclusion as
part of its NSR reform package to allow exemptions for
sources that have clean emission units or undertaking
projects to clean up air pollution.
This exclusion will not include any specific requirement for
State pre-authorization. EPA expects that most projects
will be reviewed by states as part of their minor NSR
programs. As with EPA's existing NSR exclusions, the timing
and nature of this state minor NSR approval will be left for
states to determine.
The proposed exclusion will include the following safeguard
used in the WEPCO rule to ensure that pollution control
projects do not have an adverse environmental impact: The
project cannot cause or contribute to a violation of a
national ambient air quality standards (NAAQS), or
prevention of significant deterioration (PSD) increment or
have an adverse impact on air quality related values (AQRVs)
in a Class I area.
Under this test, states are to consider the collateral
emissions from a project and ensure that new emissions
of nonattainment pollutants do not contribute to the
existing problem. EPA regulations will not specify how
the state must deal with increases that do not
contribute to a nonattainment problem.
EPA will not require an evaluation for toxic emissions for
pollution control projects that are add-on or fuel switches
to a less polluting fuel. EPA's experience with such
projects has shown that a toxics safeguard is not needed.
Given the uncertain nature of many pollution prevention
projects, EPA believes that it is a reasonable environmental
safeguard to confirm that such projects result in an
environmental benefit before a pollution control project
exemption is granted. As part of an evaluation of whether a
project is environmentally beneficial, EPA would expect
states to consider any increase in toxic emissions.
Issue 3: Pollution Prevention Exemption: As EPA has recognized
in numerous public statements, "pollution prevention"
projects (i.e., projects that allow a facility to
produce a product with less environmental discharges
per unit of product made) must be encouraged. To
effectuate this policy, the "pollution prevention"
exclusion proposed by the Agency should:
- Eliminate the July draft requirement that the project
not improve efficiency nor increase annual utilization.
- Exclude all "pollution prevention" projects from NSR
unless the project increases the source's "potential to
emit."
Response:
The pollution control project exclusion included in the NSR
Reform rulemaking will extend the exclusion to pollution
prevention projects. Any pollution prevention project will
qualify as long as it is "environmentally beneficial" and
will not cause or contribute to a violation of a NAAQS or
PSD increment, or cause a Class I adverse impact.
These conditions are patterned after the WEPCO rule and
will create a broad, flexible exclusion for pollution
prevention projects.
An exclusion of projects that do not increase a source's
potential to emit would create an exclusion that could
considerably reduce the effectiveness of the NSR program.
Almost any modernization that a source undertakes has the
incidental effect of lowering emissions. A new emissions
unit or modernization generally has fewer emissions that one
built 40 years earlier. Since these types of changes would
not likely increase a source's potential to emit, industry
would claim this as a pollution prevention project -- even
though its' pollution prevention aspects are likely to be
negligible and actual emissions may increase dramatically
due to increased utilization.
Issue 4: A New "Cross Media" Project Exclusion: EPA should
recognize that pollution control projects required
under other laws may result in "collateral" emissions
increases of air pollutants. The PCP exclusion for air
pollution projects should be extended to these
projects.
Response:
Cross media project exclusions are under consideration by
EPA. EPA will solicit comments on extending the PCP
exclusion to cover these types of projects, provided they do
not cause or contribute to NAAQS violation, PSD increment
violation or adverse impact on Class I area.
Also this issue may be addressed in multi-media permitting
pilot initiative currently underway.
Issue 5: "Routine Maintenance, Repair and Replacement"
Exclusion: The July guidance on this exclusion should
be dropped. Instead, the following guidance should be
included in the proposal:
"Routine maintenance, repair, and replacement
means maintenance, repair and replacement projects
occurring on a regular basis, on a cyclical basis,
or due to unanticipated failure of equipment,
which are undertaken in an industrial category to
maintain competitive position or reliable
operation."
Response:
EPA agrees with removing the routine maintenance, repair and
replacement language from the proposal package.
With other changes being made to NSR applicability, this
issue becomes less important. Both PALs and the Clean Unit
Test (included in the NSR Reform proposal rule) will provide
clear distinction of the types of changes that can be
undertaken without triggering NSR.
Issue 6: A "Restoration" Exclusion: A new exclusion, based on
the "results in" language in the modification
definition, should be included for activities that
restore a unit to the highest capacity achievable in
the previous five years. The exclusion would be
limited in time and would recognize that requirements
governing the timing of capital expenditures vary
depending upon market conditions, and may not allow an
industry to make a capital investment to restore
operations immediately after a problem occurs. It
would also recognize that units that have deteriorated
over more than a five year period of time should be
evaluated under other tests. This is consistent with
the WEPCO rule's implementation of the "causal link"
requirement though the rule's focus on "representative
baseline" year conditions in the definition of
"representative actual annual emissions."
Response:
EPA believes the issue of how restoration of lost capacity
should be treated for NSR applicability purposes is better
resolved by the PAL, the Clean Unit Test, and other
mechanisms in the NSR Reform package that provide sources
with considerable flexibility to make changes. EPA believes
that the routine maintenance exclusion already included in
the existing NSR regulations also has the effect of
excluding "routine restorations."
Issue 7: "Clean Unit" Exclusion: Establish an exclusion for
sources that have installed BACT equivalent level of
control or MACT or reasonably available control
technology (RACT) or their equivalent, under a state or
voluntary control program. Units that have undergone
NSR should be subject to the "allowable-allowable" test
discussed in the following issue.
Response:
EPA agrees and has included a new clean unit exclusion which
allows an operator of a unit to make changes to the unit
provided the change does not increase hourly emissions (and
is allowed under permit). EPA is taking comment on several
alternative definitions for "clean unit" including the
industry's suggested definition.
Issue 8: Non-Emissions Unit Exclusion: Industry supports EPA's
suggestion in draft NSR package of last summer that a
NSR exclusion be created for non-emitting units.
Response:
After consultation with a number of state permitting
authorities, EPA determined that a regulatory change is not
required to exclude units that are generally not targeted as
emitters of air pollutants. Moreover, there was concern
that the draft non-emitting unit regulations could subject
units, currently excluded as a matter of common sense, to
major NSR due to the narrow exclusion that was being
proposed. To preserve the permitting authority's existing
flexibility, EPA is not proposing a regulatory exclusion for
nonemitting units. EPA will continue to evaluate this
issue, particularly with regard to changes to units that
affect the emissions at other units, and if warranted,
provide guidance in the future.
EMISSIONS INCREASE TESTS
Issue 9: EPA's proposal should include a menu of alternative
emissions increase tests. If a source owner could show
that there would be no significant emission increase
under a particular test, NSR would not be triggered.
(1) "Allowable-to-allowable" test for units that have
undergone NSR. The "allowable-to-allowable" treatment
for units that have undergone NSR review is a
clarification of current law -- these units have been
evaluated and permitted under the NSR program at the
allowable level and have been evaluated for BACT or
LAER at that level. Any changes in the unit that allow
the unit to achieve permitted levels have been
authorized by the NSR permit.
(2) An "actual-to-actual" test for units that have
"begun normal operations" with a 5 year look-back and
explicit preamble language recognizing that if a
projected or actual increase in production rate or
hours of operation above past actual levels is not
caused by a change, the hours of operation production
rate increase exclusions applies.
(3) An actual-to-potential test with a 10 year look-
back that applies to units that are new greenfield
units, and at the option of the source owner, to units
that have begun normal operations.
(4) Plant-wide applicability limits -- as in the July
draft rule.
Response:
EPA is for the first time proposing to give States a series
of applicability options including versions of all four of
these tests for determining whether an increase in emissions
will follow from a proposed change. As a result, States may
offer all of these options to industry with the only
limitation that sources will not be allowed to "game" the
system by switching between incompatible options. For
instance, if a source chooses a PAL, it may not go above the
PAL limit because it wants to use a "clean unit" test.
CLASS I AREAS
Issue 10: Permitting Authority Control: EPA s NSR rules must make
it clear that it is the permit issuing agencies -- not
Federal Land Managers (FLM) -- that have the authority
to determine if a PSD permit applicants' proposed new
source will have an adverse impact on air quality
related values (AQRVs) in Class I areas.
Response:
EPA's draft NSR Reform package sets up criteria for the
permitting authority to consider when rejecting a FLM's
finding of adverse impact. The draft preamble and
regulations make clear that this is ultimately the
permitting authority's decision when the proposed source
does not cause or contribute to a Class I increment
exceedance.
Issue 11: Class I Size/Distance Cut-Offs: EPA should set
reasonable size/distance cut-offs so that sources can
avoid all aspects of the Class I area review process if
they are small enough or propose to locate far enough
away from Class I areas.
Response:
EPA's draft NSR Reform package for the first time proposes
Class I increment significance levels which will allow small
sources to demonstrate that they will have a de minimis
impact on the Class I increment. Since AQRVs may be
specific to the Class I area and involve secondary impacts
that are considerably more complicated to assess than an
increment, EPA does not set national significance levels for
AQRVs. EPA expects that the existence of the Class I
significance levels will help considerably in eliminating
delays for small sources.
Issue 12: Early FLM Coordination: Permit applicants should be
encouraged, but not required, to notify FLMs early on
of major sources proposing to locate within 100 km of a
Class I area. This may be accomplished through
establishment of a bulletin board service.
Response:
EPA's draft proposal does address the establishment of a
bulletin board system and calls for States to list projects
on the data base. States are also required to include FLMs
in any pre-application meetings involving projects within
100 kilometers (kms) of a Class I area and provide copies of
permit applications for proposed sources within 100 kms of a
Federal Class I area. For new, large projects outside of
100 kms, States are encouraged, but not required, to include
the FLM in any pre-application meeting as appropriate.
Issue 13: EPA Approval of Models and Modeling Techniques: EPA
should make it clear that permit issuing agencies need
not give any deference to FLM claims of adverse impacts
on AQRVs in a Class I area when the FLM claims are not
based on use of EPA-approved models or modeling
techniques for evaluating the impacts of a proposed new
source on AQRVs.
Response:
EPA's draft proposal distinguishes between modeling to
determine air quality impacts and an AQRV analysis. EPA
does approve models used to predict the impact of emissions
from a source on the surrounding air quality, and generally
requires the use of an EPA-approved model for this showing.
However, AQRV analyses generally start with the ambient
loadings predicted by the EPA-approved models and then
determine what the impact of that loading will be on the
AQRV in question, such as the impact of ambient sulfur
dioxide (and its derivatives) on visibility. In general,
EPA has no approval procedures in place for these conversion
methodologies and does not require that FLMs, States, or
sources secure EPA approval. In the draft NSR Reform
package, EPA provides that conversion methodologies be
subject to public notice and comment, either before its use
by a source or FLM or in conjunction with a determination on
a specific permit.
Issue 14: Mitigation of Source Impacts Through Offsets: EPA
should provide States in rules for a broad range of
approaches for assessing the adequacy of offsets in
mitigation of adverse AQRV impacts.
Response:
The draft NSR Reform Rule sets out general principles for
assessing offsets. EPA is also taking comment on whether
offsets for sources impacting Class I areas may include
"double-counting" emissions reductions needed by a source to
comply with other Clean Air Act requirements.
Issue 15: Existing Source Problems: EPA should not use the NSR
process to address problems that may be caused by
existing sources (including existing mobile sources)
impacts on Class I areas.
Response:
EPA is in the process of developing regional haze
regulations that are focused on existing sources and Class I
area visibility degradation caused by these existing
emissions. Assuming all other applicable PSD requirements
are met, the draft NSR Reform package would require permit
denial for Class I area concerns if the new emissions will
have an adverse impact on AQRVs. It is the state or other
permitting authority, and not the FLMs, that will make the
final determination as to whether the proposed source's
emissions will have these proscribed results (for AQRVs, the
state decides when the proposed source does not cause or
contribute to a Class I increment exceedance).
TOP-DOWN BEST AVAILABLE CONTROL TECHNOLOGY
Issue 16: Eliminate Top Down BACT: The top-down BACT approach
removes from the States discretion that the Clean Air
Act has given to them to make BACT determinations. EPA
should substantially revise or eliminate the "top down
BACT" approach.
Response:
EPA does not require states to use the top down methodology
for making BACT determinations in its draft NSR Reform
package. Instead, EPA's proposed regulations for state
programs will identify certain core criteria that BACT
determinations must meet. These criteria include that the
applicant consider the most stringent technology and provide
an acceptable rationale if the most stringent technology is
not accepted. EPA would propose a top-down approach in its
PSD regulations which are applicable to states without SIP-
approved PSD programs.
Issue 17: Require Exclusive Use of Incremental Costs: EPA should
specify that incremental rather than average costs
should be the basis for selection and rejection of
control technologies under the BACT process.
Response:
Since EPA's draft provides states with discretion in making
BACT determinations and in evaluating the factors that go
into that decision, it would be inappropriate for EPA to
mandate that states use only incremental costs in assessing
BACT options. The draft NSR Reform package would not change
EPA's current policy that recommends states consider both
average and incremental costs in selecting the final BACT
level.
Issue 18: BACT Cut-Off: EPA must establish a cut-off date
for considering undocumented new technologies in the
BACT selection. EPA should retain the proposed
provision requiring commenters on draft PSD permits to
show that technologies have been demonstrated in
practice, i.e., that a new or emerging technology must
have six months of operating performance history to
verify its claimed effectiveness.
Response:
In the draft NSR Reform package, EPA is including a
presumptive cut-off date and a provision that undocumented
new technologies considered in determining BACT must have
six months of operations to verify claimed effectiveness.
AIR QUALITY ISSUES
Issue 19: EPA should delete pre-construction monitoring
requirements from the PSD rules. Where post-
construction monitoring can produce useful data, it may
be appropriate for EPA to require such monitoring.
Response:
Section 165(e)(1) of the CAA requires each PSD source (or
permitting authority) to conduct a preconstruction analysis
of the ambient air quality at the proposed site and in areas
which may be affected by the source's emissions, in
accordance with regulations issued by EPA. EPA believes
that it is appropriate to reevaluate the regulatory
requirements for preconstruction monitoring for proposed PSD
construction where air quality data cannot feasibly be used
to analyze a source's impact upon air quality standards. In
the draft NSR Reform Rule, EPA is soliciting comment on the
appropriateness of providing an exemption for some cases
from PSD preconstruction monitoring.
Existing regulations [e.g., 51.166(m)(2)] provide for the
use of post-construction monitoring when in the opinion of
the permitting authority such monitoring is necessary to
determine the effect emissions may have, or are having, on
air quality in any area. However, existing regulations do
not specify that such ambient monitoring may include the
monitoring of air quality-related impacts in Federal Class I
areas. In the draft NSR Reform Rule, EPA is proposing to
amend its PSD regulations to clarify that post-construction
ambient monitoring may be required for the purpose of
determining the effect emissions from a facility may have,
or are having, on AQRVs in a Federal Class I area.
Issue 20: Since the Clean Air Act specifically exempts from PSD
review pollutants that are regulated under section 112,
EPA should drop its proposal for air quality impact
analyses for section 112 pollutants.
Response:
Section 112(b)(6) of the Act provides that part C
requirements for prevention of significant deterioration
(PSD) do not apply to hazardous air pollutants (HAPs) listed
under section 112. In a March 11, 1991 memorandum, EPA
stated that it would no longer consider HAPs to be
individually regulated under the Federal PSD regulations at
40 CFR 52.21. However, EPA also indicated that any HAP that
is a constituent of a more general pollutant listed under
section 108 of the CAA (e.g., VOC, particulate matter)
remains regulated under PSD as part of that regulated
pollutant. See 57 FR 18070 at 18074-75 (April 28, 1992)
(publication of March 11, 1991 memorandum). This policy
will be addressed in EPA's rulemaking initiative to update
the PSD and NSR regulations based on the 1990 CAA
Amendments, scheduled for proposal this summer. EPA has
removed additional discussion of HAPs/PSD implementation
issues from the draft NSR Reform rule and will evaluate the
need for further guidance over the next several months.
LOWEST ACHIEVABLE EMISSION RATE
Issue 21: Lowest Achievable Emission Rate (LAER) determinations
should factor in economic considerations.
Response:
As opposed to BACT, the definition of LAER does not provide
for the consideration of economics. However, EPA's existing
guidance provides, in a generic sense, for limited
consideration of economic factors in a LAER determination.
EPA's policy is that if an emission limit will preclude
construction of new plants within a class or category of
sources, then there is justification for the permitting
authority to reevaluate that particular LAER limit for that
class or category of source. If another plant in the same
(or comparable) industry already uses that control
technology, then such use constitutes evidence that the cost
to industry of that control technology is not prohibitive.
Thus, LAER costs are considered only to the degree that they
reflect unusual circumstances which, in some manner,
differentiate the cost of control for a source from control
costs for the rest of the industry.
UNDEMONSTRATED CONTROL TECHNOLOGY/APPLICATION (UT/A) AND
DEMONSTRATED POLLUTION PREVENTION
Issue 22: EPA must extend the UT/A waiver to LAER decisions for
sources in nonattainment areas. Although the UT/A
waiver provides evidence that the LAER definition can
be interpreted to provide for "comparability," the
concept was not properly extended to projects that
employ demonstrated pollution prevention technologies
in nonattainment areas.
Response:
EPA agrees that applicability of the UT/A should be extended
to nonattainment areas and is proposing to do so in the
draft NSR Reform Rule.
The UT/A waiver does not provide evidence that the LAER
definition can be interpreted to provide for "comparability"
and that it should be extended to demonstrated control
techniques or applications. The draft UT/A waiver
regulations, consistent with the Agency's interpretation of
LAER, require an undemonstrated control technique installed
in a nonattainment area to achieve applicable LAER limits.
The comparability concept is applicable only to an
undemonstrated technique that marginally fails to achieve
its permitted limit. As crafted, the permitting authority
establishes marginal failure emission limits which are
included in the UT/A's permit and subject to public review
and comment. This concept is designed to enhance and
encourage the installation of undemonstrated control
techniques or applications by providing the permitting
authority with increased flexibility to either accept or
reject an UT/A that marginally fails to achieve its
permitted limit. This flexibility is not available under
existing innovative control technology waiver regulations.
Issue 23: The concept of "comparable emission reductions" which
EPA has proposed for UT/A waivers in nonattainment
areas should be extended to demonstrated pollution
prevention technologies in nonattainment areas.
Response:
The concept of "comparable emission reductions" and its
application to demonstrated pollution prevention
technologies in nonattainment areas is addressed in the
Agency's response to Issue 22 above.
EPA'S RESPONSE TO ISSUES RAISED BY INDUSTRY ON
CLEAN AIR ACT IMPLEMENTATION REFORM
Air Toxics - Section 112
Issue 1: The Section 112 program being developed and implemented
by EPA is contrary to Congress's plan for regulating
air toxics, and is fundamentally unfair to the
regulated community because controls are required
sooner, apply more broadly, and are more stringent than
Congress intended. EPA must adopt an air toxics
program that reflects the gradations and distinctions
mandated by Congress. By imposing overly-broad
regulations EPA is severely complicating the
implementation of Section 112 and forcing regulated
sources to commit substantial human and financial
resources to meet standards that are neither justified
nor authorized by the Clean Air Act.
Response:
Section 112 is a common sense approach to the regulation of
air toxics across the Nation. For 20 years, the Clean Air
Act directed EPA to use risk assessment to regulate
hazardous air pollutants to an "ample margin of safety"
level. By 1990, there was broad consensus that this
approach had failed. Due to controversy and litigation over
risk assessments and "how safe is safe," EPA had managed to
set standards for only seven toxic air pollutants and a
handful of sources. More than two-and-one-half billion
pounds of toxic chemicals were still released into the air
each year, according to industry-reported Toxics Release
Inventory (TRI) data. Thus, industry, environmentalists,
States and EPA broadly agreed in 1990 to use a technology-
based approach as the primary means of reducing emissions of
air toxics.
Congress created the Maximum Achievable Control Technology
or MACT program as a practical approach: based on
evaluation of existing control technologies, EPA must
establish control requirements to assure all major sources
of hazardous air pollutants (HAPs) achieve the level of
control already being achieved by the better performing
similar sources. The MACT program provides for
environmental equity by leveling the playing field for
industry so that cleaner facilities are not at a competitive
disadvantage relative to their dirtier competitors.
EPA believes the MACT program is working. In the four years
since 1990, the air toxics program has achieved more than
was accomplished during the prior 20 years. EPA already has
set standards for 10 major industries, which when fully
implemented will reduce toxic emissions by more than one
billion pounds per year. In doing so, EPA is implementing
the MACT program in a creative and flexible manner to ensure
that the standards are practical, make common sense, and
focus on environmental results.
EPA has worked closely with industry and others on each MACT
standard. Where high costs or other problems are
identified, EPA is taking a cooperative and problem-solving
approach. The statute provides a menu of tools EPA is
actively using to smooth the rough edges that can sometimes
occur with a technology-based approach. These include:
- Applicability cutoffs
- Subcategorization
- Emissions averaging
- Breadth of affected source definition
- Compliance schedule beyond three-year compliance date
when environmental benefits warrant it
- Prohibitory (exclusionary) rules in MACT standards
(which serve as limits on potential emissions)
EPA remains committed to working with industry and other
stakeholders in the development of its air toxics rules to
assure common sense approaches can be implemented.
I. THE DEFINITION OF MAJOR SOURCE AND THE APPLICABILITY OF MACT
AND GACT
Issues 2, 3 and 4:
Major sources must be defined with reference to section
112(c) source categories.
MACT for Categories of Major Sources must apply only to co-
located sources of HAPs in a given source category that
together have the potential to exceed the 10/25 tons per
year major source thresholds. MACT for a given major source
category must not extend to co-located area sources or in
co-located major sources in different source categories.
MACT and GACT for Categories of Area Sources -- Area sources
(including area sources co-located with major sources)
should be subject to MACT or GACT for categories of area
sources only after EPA demonstrates that the area source
category presents a threat of adverse effects to human
health or the environment that warrants regulations.
Response:
These three issues concern the definition of major source,
which is the subject of a pending court decision. EPA
agrees that it is important to resolve this issue as soon as
possible because of its broad implications for the section
112 program.
The Agency believes that its definition of major source
makes common sense, is consistent with the law, and
addresses public concerns about air toxics. Under EPA's
definition, the determination of whether a facility is a
major source depends upon total HAP emissions from the
entire facility, not just from equipment within the same
source category. Congress selected the 10/25 tons per year
threshold based on the common sense view that all the
emissions from a plant site contribute to health and
environmental threats.
EPA's program ensures that air toxics controls are required
for all industrial and commercial plant sites that emit
major amounts. This would not be true under the suggested
alternative, which would carve plants into pieces and
consider whether each piece emits major amounts.
Take for example a facility that emits multiple HAPs and is
composed of three 20-ton sources in different source
categories. Under the suggested alternative, this facility
would be considered to be a trio of area sources. It would
be exempt from major source controls although its toxic
emissions would total 60 tons a year -- far above the 25-ton
major source threshold. This would not result in a credible
air toxics program nor satisfy public concerns about toxic
emissions.
With regard to area sources, EPA has made findings under
section 112(c)(3) for the area sources EPA has regulated.
EPA is working to ensure that MACT requirements are
reasonable and cost-effective. The Agency is using tools
available under the statute -- such as applicability
cutoffs, subcategorization and emissions averaging -- to
achieve this result. EPA is willing to explore concepts
such as broader emissions averaging within plant sites to
provide additional flexibility.
Issue 5: New and Existing Source MACT for Categories of Major
Sources - New source MACT for categories of major
sources must only apply to constructed or reconstructed
major sources (i.e., a greenfield major source or the
reconstruction of at least 50% of an existing major
source). Similarly, existing source MACT for
categories of major sources applies to existing major
sources and modified major sources. Section 112(g) is
the gatekeeper that determines whether and where new
and existing source MACT for categories of major
sources apply -- i.e., section 112(g) guides the
identification of major source constructions and
reconstructions to which new source MACT applies, and
major source modifications to which existing source
MACT applies.
Response:
EPA has agreed to discuss the relationship of section 112(g)
to sections 112(d) and 112(j) in upcoming meetings with
litigants on this issue, as well as with other stakeholders.
In EPA's view, for purposes of 112(d) and 112(j) new source
MACT applies when an affected source is constructed or
reconstructed. The scope of the affected source is defined
in each MACT standard, after notice and comment. This
approach provides flexibility to tailor the applicability of
new source MACT to the source category in question.
Although the Agency's interpretation of the statute differs
from the alternative interpretation above, EPA agrees that
new source MACT should be applied to units for which new
source MACT is reasonable. Where appropriate, EPA has
defined the "affected source" broadly, preventing small
changes at existing sources from being subject to new source
MACT. EPA believes that proposed and promulgated MACT
standards would apply new source MACT to appropriate units,
but is willing to consider and discuss any information to
the contrary.
EPA is carefully considering voluminous comments on this
issue that were received during the public comment period on
the proposed section 112(g) rule. The Agency is considering
a very broad definition of major source for purposes of that
rule, which would limit the applicability of new source MACT
for that rule.
Issue 6: Consistency Among Key Section 112 Programs - The three
MACT standard setting provisions - sections 112(d),
(g), and (j) - must be co-extensive. That is, a major
source with a section 112(g) case-by-case MACT
limitation by definition satisfies subsequent 112(d) or
(j) MACT requirements. Likewise, a major source with a
section 112(j) MACT limitation by definition satisfied
subsequent sections 112(d) requirements.
Response:
This issue is part of the ongoing litigation on the section
112(j) rule. EPA will address it in the context of that
litigation.
II. DETERMINING POTENTIAL TO EMIT
Issue 7: Potential to Emit -- All controls and limitations
(including voluntary controls approved by the State)
must be considered when determining the potential to
emit HAPs under section 112 -- not just those that are
federally enforceable.
Response:
This topic is addressed under the potential to emit issues
section.
Issue 8: Fugitive emissions may not be considered for purposes
of determining a source's potential to emit under
section 112 until EPA conducts a section 302(j)
rulemaking.
Response:
This topic is addressed under the fugitive emissions issues
section.
III. MACT STANDARD SETTING ISSUES
Issue 9: The MACT Floor for New Major or Area Sources must be
set at the emissions limitation achieved by the best
controlled similar source in the same source category.
Response:
In general EPA agrees with this issue. While the Clean Air
Act allows EPA to select the best controlled similar source
(without limitation to a source within the regulated source
category), this source is almost always going to be found in
the source category being regulated. EPA is not aware of
situations where it has gone outside the regulated source
category for new source MACT.
Issue 10: The MACT Floor for Existing Major or Area Sources -
First, the MACT floor for existing sources must be set
at the average emissions limitation achieved by all of
the best performing 12 percent of sources in the
relevant source category or, for categories with fewer
than 30 sources, the average emissions limitation
achieved by all of the best performing 5 sources in the
relevant source category. Second, if data is not
available on every source in the category, EPA must
demonstrate that the floor that is calculated on the
basis of the partial data is the same as the floor that
would be calculated if data were available on every
source in the source category. Additionally, EPA must
validate all data used to support a MACT floor
determination to ensure its quality.
Response:
The Clean Air Act states that the MACT floor for existing
sources must be based on the average emission limitation
achieved by the best performing 12% of the sources in the
regulated source category. The term "all" does not appear
in the Act. EPA's approach to determining the MACT floor
was developed after a very open discussion and EPA has not
been litigated over this issue. In each rule, EPA develops
the data used to support the MACT floor and its validity and
use are subject to review and comment.
As stated in the Federal Register notice enunciating EPA's
position on determining the MACT floor (59FR29200), EPA
plans to retain its discretion in setting MACT floors. For
example, the CAA authorizes EPA to establish subcategories
of sources, which results in a separate floor determination
for sources in the subcategory.
Issue 11: The Theoretical "Superfacility" (EPA "Model Plant") --
New and existing source MACT floors are based on the
average emission limitation achieved by major sources
in the relevant source category. In other words, MACT
limitations are not separately calculated for each
emission unit of major sources in the source category
such that only a fictional "superfacility" can comply
without installing additional controls.
Response:
EPA is using the best information it can gather in
developing MACT floors. Usually the best information EPA
can obtain is on an emission unit by emission unit basis.
With this information EPA determines the MACT floor for the
emission unit. If industry representatives believe EPA
should use an emissions database based on plant-wide
estimates to establish MACT floors and then MACT, EPA is
willing to discuss this approach to help affected industries
collect the appropriate data needed for this approach.
IV. ADDITIONAL SECTION 112 IMPLEMENTATION ISSUES
Section 112 General Provisions
Issue 12: The section 112 General Provisions should apply only as
expressly specified in each promulgated MACT standard.
Response:
EPA agrees and is attempting to do this already.
Issue 13: HAPs should be listed by regulation and a procedure
should be provided by which pollutants may be delisted
if an applicant demonstrates that a listed HAP alone,
or in a particular use, does not pose a threat to
public health or the environment. If new HAPs are
added to the list, they must not be subject to
regulation under previously promulgated MACT standards.
Response:
The Clean Air Act contains provisions to delist HAPs from
the list in section 112(c). EPA has developed a set of
procedures and provided those to the public. EPA has used
these procedures to evaluate delisting petitions such as the
pending caprolactam petition as called for under the Act.
As a result, EPA is now planning to delist caprolactam.
With respect to "particular use," EPA believes the Act
provides that HAPs are either covered or not covered under
section 112. However, section 112(c) also provides that a
particular source category can be delisted if the
appropriate findings are made.
With respect to the last question, EPA notes that there has
been no petitions to list new HAPs. EPA will consider
whether existing MACT standards should apply to any newly
listed HAPs as new HAPs are listed. EPA would only consider
applying MACT standards to newly listed HAPs after taking
public comment and making final decisions on the finding
that such application is reasonable and appropriate for
affected sources.
Issue 14: The definition of "affected facility" must be
consistent with the definition of major source to
ensure that the given standard is not applicable to
area sources or other categories of major sources.
Response:
EPA uses the term "affected source" to clearly define which
equipment are affected by the MACT standards. The substance
of this issue is handled under Issues 2, 3, and 4 of this
section.
Issue 15 Existing major sources must not be subject to new
source MACT when modified.
Response:
EPA agrees that existing sources are not subject to new
source MACT when modified. When a large readily segregated
unit or collection of equipment is constructed (readily
identified by the States and the public as a new affected
source), however, this equipment can be defined as a new
source and therefore subject to new source MACT under
section 112(d). Generally EPA has defined "affected
sources" broadly, thus eliminating small changes at existing
sources from being subject to new source MACT. For example
in the Hazardous Organic NESHAP (HON), EPA defines the
chemical manufacturing process unit for purposes of setting
what pieces of equipment are subject to new source MACT
requirements.
Issue 16: Nonapplicability determinations must not be required.
Response:
EPA generally agrees with this issue based on an initial
review of 40 CFR 63.1(b)(3). EPA has discussed this issue
with affected interests and plans to review and, perhaps,
revise this requirement in light of recent discussions on
potential to emit.
Issue 17: Sources must be able to bypass for brief periods during
malfunction while minimizing emissions in the extent
feasible.
Response:
Whether a bypass action is permissible or a violation
depends on the definition of malfunction and the factual
circumstances of the action. The definition in the General
Provisions governs although specific standards may supersede
the General Provisions. If an operator experiences a
sudden, infrequent and not reasonably preventable event,
then activities (such as bypassing control system) are
permissible provided the operator takes action to minimize
emissions. Generally, activities such as bypasses would be
addressed in the startup, shutdown, and malfunction plan.
Issue 18: Startup, shutdown, and malfunction plans are not
applicable requirements that must be included in Title
V operating permits.
Response:
EPA agrees that these plans do not need to be included in a
Title V permit. The requirement to have the plans and the
criteria governing the adequacy of the plans are referenced
from the applicable requirements in the MACT General
Provisions. The plans and actions required by the plans can
be enforced independent of the Title V permit.
Modification Provisions [Section 112(g)]
Issue 19: Section 112(g) must not become effective until 18
months after promulgation of the section 112(g)
regulation or until the relevant State promulgates a
rule to implement section 112(g), whichever is later.
Response:
EPA recognizes that states and industry need lead time to be
able to implement section 112(g). The effective date of the
section 112(g) program already has been delayed. EPA
published an interpretive notice in February indicating that
states and industry do not have to implement section 112(g)
EPA issues a final rule. In developing the final 112(g)
rule, EPA will consider the need for lead time for state
development of section 112(g) programs. EPA is open to
considering a reasonable time period after promulgation.
Issue 20: Section 112(g) must not apply to stationary sources
that are not included in a section 112(c) category of
major sources.
Response:
EPA believes sections 112(c) and 112(g) are meant to apply
broadly to all major sources of toxic air emissions. All
categories that contain major sources are meant to be listed
on the source category list. EPA recognizes the need to
amend the list if it finds sources that are not in listed
categories. In the interim, section 112(g) ensures control
of toxic emissions from constructed, reconstructed, and
modified major sources in the category. The fact that EPA
has inadvertently overlooked a source category should not
mean that citizens lose the protection from toxic emissions
that is provided by section 112(g).
Issue 21: Research and development facilities should be exempt
from section 112(g).
Response:
EPA received many comments expressing this concern during
the public comment period. EPA is working on alternative
approaches to exempting research and development facilities
in the final rule.
Issue 22: Broad and self-implementing exclusions must be provided
to effectuate Congressional intent that only
significant changes should trigger the application of
existing source MACT. An exclusion for operations that
the major source is designed to accommodate is
essential to the workability of section 112. Sources
are "designed to accommodate" any activity that is
permissible under the source's design specifications or
Title V operating permit application or permit.
Response:
The "designed to accommodate" language in the section 112(g)
proposed rule was the result of intensive collaborative
thinking among EPA staff and the Clean Air Act Advisory
Committee. This issue also received voluminous comment
during the public comment period. EPA is considering those
comments as the final rule is developed.
EPA does not believe, however, that it is appropriate to
automatically exempt those changes that are represented only
in a permit application, but not in an approved permit which
has not been reviewed by the state or EPA.
Issue 23: Reasonable emission estimation techniques must be
adopted that realistically assess whether a proposed
change will cause an emissions increase.
Response:
EPA understands the concern that it or a permitting
authority could second-guess the methodology used in a de
minimis determination after the fact, and possibly then
bring enforcement action. EPA intends to address this
concern in the final rule more directly than was done at
proposal. EPA is looking for a way for sources to have more
certainty that their emission estimates will be acceptable.
Issue 24: De minimis emission levels must be established at 10
tons per year unless it is demonstrated that a lower
level is necessary to protect human health or the
environment. Any de minimis level must be measurable.
Response:
At proposal, many de minimis levels were set at 10 tons.
Pollutants of relatively higher toxicity were given lower de
minimis values based upon greater hazard. EPA is carefully
considering comments received on this issue, including the
concern that emissions be measurable, as stated above.
In order to address the concern that small changes not
overwhelm the system, EPA has provided numerous other
exclusions, such as those for raw materials switches
("operations the major source is designed to accommodate")
and those for production rate increases and routine
maintenance, repair, and replacement.
Issue 25: A simple, streamlined offset procedure is required
under section 112(g)(1). Sources only need to submit
an "offset showing" - preapproval is not required.
Sources must be able to claim offset credits for
reductions taken under other programs and sources must
be able to take credit for shutdowns and curtailments.
Response:
Rather than require preconstruction review of offsets, as is
required for case-by-case MACT determinations, the proposal
only requires pre-operation review of offsets. EPA did not
intend that this review be onerous. However in the final
rule, EPA intends to address the concern that the offset
procedures be simpler and more straightforward.
As stated above, EPA is considering adopting a broad
definition of major source that provides maximum flexibility
for offsets. Should EPA do so, the definition would be
linked to an approach that allows only those offsets which
provide additional emission reductions.
Issue 26: Modified major sources must have three years after MACT
is determined to achieve compliance.
Response:
The proposed rule grants the permitting agency/authority to
determine the time need to comply on a case-by-case basis.
The permitting authority has the discretion to allow up to 3
years for compliance. Common sense would suggest that there
are many MACT emission limitation measures, such as source
reduction projects, that may not require 3 years for
compliance.
The new source review program, for example, provides no such
lead time for compliance. MACT standards under section
112(d) require different compliance periods, up to three
years maximum, on a source category by source category
basis. Therefore, EPA believes it is reasonable to grant
the permitting authority discretion to use common sense in
making case-by-case compliance decisions -- just as they can
approve MACT determinations on a case-by-case basis.
Issue 27: EPA has no authority to veto section 112(g)
determinations made by States that have received
section 112 delegation.
Response:
The supplemental title V proposal contains a list of more
environmentally significant permit revisions including
section 112(g) determinations for which EPA will require an
opportunity to review and object to the revision if
appropriate. This does not mean that EPA intends to veto
section 112(g) determinations; but rather is retaining the
right to do so.
It is to the source's advantage to provide an EPA veto
opportunity upfront when making a section 112(g)
determination. This is because the title V operating permit
process provides for EPA veto opportunity when new
requirements are entered into the permit. If that
opportunity has been provided, then the source can more
confidently incorporate 112(g) requirements into its permit.
EPA is also considering ways to reduce the administrative
burden associated with such permit changes.
Issue 28: Case-by-case MACT determinations must be streamlined,
be based on information reasonably available to
sources, and allow the use of MACT for similar sources.
Response:
EPA agrees that case-by-case MACT determinations should be
practical and based on reasonably available information.
EPA is considering comments on its case-by-case MACT
guidance and will address this issue in the final rule.
Section 112(j)
Issues 29 and 30:
Applications for section 112(j) limitations are due 12
months after the section 112(j) deadline (i.e., 30
months after the section 112(e) scheduled promulgation
date). Source category applicability must be defined
before the section 112(j) deadline so that sources have
notice that section 112(j) applies.
Response:
These issues are part of the ongoing litigation on the
section 112(j) rule. EPA does need to understand the issue
better and will address it in the context of the litigation.
In the final section 112(j) rule, EPA committed to sharing
information with sources as the section 112(j) deadline
approaches and information about a source category has been
gathered, or EPA has made a presumptive MACT determination.
EPA intends to work with stakeholders should section 112(j)
ever become a reality for a source category.
EPA'S RESPONSE TO ISSUES RAISED BY INDUSTRY ON
CLEAN AIR ACT IMPLEMENTATION REFORM
Enhanced Monitoring
Issue 1:
EPA's proposed "enhanced monitoring" ("EM") regulations have
a number of serious flaws that have not been adequately
addressed by the Agency.
The proposed program focuses improperly on monitoring
to detect small changes in emissions, which may be the
result of the normal variability associated with the
underlying process, emission control technology, and
analytical methods, rather than on monitoring to detect
large, and environmentally significant, excess
emissions incidents.
The proposed program, which requires development of
complicated and controversial new monitoring
requirements on a case-by-case basis through the Title
V permitting process, would impose huge burdens on
industry and the state; would "gridlock" the permitting
process; and would inevitably lead to the imposition of
inconsistent requirements on similar sources.
The proposed program would impose enormous compliance
costs on industry, that easily could exceed $1
billion/year, with little, if any, environmental
benefit.
Despite Agency claims to the contrary, the proposed
program would increase the stringency of many emission
standards, contrary to law.
The proposed program would severely restrict emissions
trading, averaging and netting, thereby compromising
use of market-based incentives -- a critical tool for
implementation of the 1990 amendments.
Monitoring approaches that would satisfy the criteria
in the proposed rule are simply not available for some
source categories (e.g., fugitive emission sources and
batch processes). For other source categories (e.g.,
those subject to mass limits), companies would be
required to use undemonstrated techniques.
EPA should seek an extension of the deadline to engage in a
meaningful stakeholder dialogue to develop a reasonable EM
program. In order to allow time for this dialogue to
unfold, the Agency must seek a 12 month extension of the
April 30, 1995 court-ordered deadline.
EPA should propose a reasonable EM program with the
following elements:
The Agency should develop an EM program that uses
legislative rulemakings - not the Title V permit
program - as the process for determining EM for any
emission standard that was originally established
through rulemaking.
At most, the Agency should use the current EM
rulemaking to articulate criteria for identifying
emission standards with insufficient monitoring, and
criteria for enhancing them to the point of
sufficiency. The Agency could also use the current
rulemaking to establish a schedule with deadlines for
completing a review of existing standards, under an
appropriate prioritization scheme.
The criteria articulated in this rulemaking should:
Establish as a goal selection of monitoring
techniques that will provide data sufficient to
prevent and detect large excess emission
incidents, which have significant environmental
impact, rather than monitoring techniques to
detect small changes in emissions.
Include adequate safeguards to address costs and
cost-effectiveness (1) by clearly providing for
selection of the least-cost method that satisfies
the criteria, and (2) by providing for rejection
of any monitoring methods as EM that result in
unreasonable costs.
Require use only of demonstrated monitoring
techniques.
Provide clear and unequivocal safeguards to assure
that changes in monitoring methods will not change
the stringency of the standard. These safeguards
would include requiring consideration of the
following: (1) the need for appropriate averaging
times to take into account variability in
emissions; (2) the need for a change in the
numerical expression of standards; and (3) the
need to establish start-up/shutdown/malfunction
exemptions.
Once the criteria and schedule are established, EPA
(for Federal standards) and the states (for state
standards) would apply the criteria, and identify
insufficient monitoring compliance methods. These
standards would be candidates for rulemaking
proceedings to enhance them.
Response:
EPA agrees and has withdrawn from the Office of Management
and Budget its proposed rule for enhanced monitoring. It
has received a 60-day extension of the court-ordered
deadline and intends to seek a further extension of at least
a year after it holds a meeting with interested
stakeholders. EPA plans to issue a Federal Register
notice that announces the process it intends to follow in
reproposing and issuing the final enhanced monitoring rule.
EPA has withdrawn the enhanced monitoring protocols from the
Technology Transfer Network (TTN) computer bulletin board
and in the upcoming Federal Register notice will clarify
that those protocols are no longer applicable.
On May 31, 1995, EPA is meeting with representatives of
industry, states and environmental groups to discuss further
options for developing a new flexible approach for the
enhanced monitoring rule.
EPA hopes to develop an approach that will build on the
requirements of existing rules and ensure that the
environmental result expected from those rules are being
achieved.
One approach EPA is considering would focus on improving
current pollution control equipment operating and
maintenance monitoring requirements. An enhanced operating
and maintenance monitoring protocol would require that a
source owner provide documentation that it has operated and
maintained a pollution control device or process operation
in accordance with established, reliable operating and
maintenance practices and that any necessary corrective
actions have been implemented to ensure that emissions have
been reduced. At the May 31 stakeholders meeting, EPA
anticipates discussing this option as well as any other
options or issues raised by stakeholders. EPA'S RESPONSE TO ISSUES RAISED BY INDUSTRY ON
CLEAN AIR ACT IMPLEMENTATION REFORM
Potential to Emit
Issue 1: Federal Enforceability: EPA should eliminate "Federal
enforceability" in determining a source's potential to
emit because:
-- The requirement has no legal basis.
-- The requirement needlessly forces sources with real-
world maximum emissions potential below the statutory
thresholds to comply with the burdensome requirements
designed for "major" sources or to attempt to render
existing controls and limitations "federally
enforceable" by entering a tedious and costly -- and
often unavailable -- federal documentation process.
Moreover, existing sources face lengthy and costly
delays when making even routine changes because of the
need to create or revise "federally enforceable"
restrictions.
-- The requirement forces states to expend significant
time and resources to develop and administer processes
for non-major sources to render controls and
limitations "federally enforceable."
-- The requirement is unnecessary for effective
enforcement. States and localities can enforce
restrictions imposed by their laws and permits.
Moreover, if a source operates above a statutory
threshold without complying with applicable "major"
source requirements, EPA and citizens have enforcement
tools available.
Response:
EPA is currently in litigation on the federal enforceability
issue. In that litigation EPA has taken the position that
it has legal authority to require federal enforceability.
Equally important, EPA believes that the provision for
federal enforceability makes sense. For sources that have
the capability to emit major amounts, and avoid federal
permits and federal emission reduction requirements by
restricting their operations, EPA believes it is reasonable
to ensure adherence to those restrictions by providing that
they be enforceable by the federal government and citizens.
The requirement for federal enforceability increases the
credibility of the system by giving EPA the opportunity to
address patterns of noncompliance. It also provides
citizens an opportunity to ensure that sources in their
communities are not inappropriately avoiding requirements
that, if complied with, would decrease exposures to
hazardous pollutants.
There are many ways to ensure that the creation of federally
enforceable restrictions does not create a burden on
industry. In a January 25, 1995 guidance memorandum, EPA
identified approaches such as general rules and general
permits that allow restrictions to be created for large
numbers of sources without having to resort to individual
permits. To ensure that states have sufficient time to
implement any needed approaches, EPA has provided a two-year
transition period. Under this transition policy, sources
emitting less than 50 percent of the major source threshold
would not be required to get permits but must only keep
records reflecting their actual emissions. Sources emitting
more than 50 percent of the major source threshold, and for
which there are state permits limiting their emissions to
less than major amounts, can submit a certification
accepting the state limits as federally enforceable.
Issue 2: The transition policy announced by EPA on January 25 is
not an adequate response to the public and private
burdens imposed by the "federal enforceability"
requirement.
Response:
EPA believes that the transition policy eliminates any
short-term administrative burden that would be imposed by
the requirement. The policy does require sources emitting
less than the 50 percent threshold to keep appropriate
records of their operations sufficient to demonstrate that
the 50 percent level is being adhered to. In most cases,
such records will be related to the amount of materials used
or processed and should not require any new recordkeeping
activities. EPA does not intend to second-guess the actual
emissions findings of sources and states. Sources that are
very close to the major source threshold must merely certify
that they have a permit that effectively restricts emissions
and accept the limits in the permit as federally
enforceable.
EPA believes that the various approaches to eliminating the
burden over the longer term (limitations by rule, general
permits, clarifications regarding realistic worst-case
activities) should be in place by the end of the transition
period. EPA is open to reviewing this assessment as the end
of this 2-year period approaches. EPA is also giving
serious consideration to permanently extending the exemption
for sources emitting less than the 50 percent cutoff.
Issue 3: EPA should develop general principles for realistic
determinations of "maximum design capacity" which
recognize inherent physical, operational, and other
restrictions.
Response:
EPA agrees that realistic assumptions of this nature need to
be made and has initiated an effort to evaluate several
categories of small sources (grain elevators, gas stations,
automobile body shops, and emergency generators). EPA plans
to follow up this effort with more general guidance on
principles that can be used to evaluate additional
categories.
Issue 4: EPA should allow sources to rely on objectively
reasonable estimates of potential to emit, and issue
presumptively acceptable methods for estimating
potential emissions.
Response:
EPA agrees that sources should use objective and reasonable
methods, and that a general hierarchy for these methods has
been established. Source-specific testing is generally
preferred. Where no source-specific information is
available or feasible to obtain, tests on similar facilities
or emission factors can be used.
Issue 5: EPA should adopt an enforcement policy which does not
penalize a source when post hoc application of an
updated estimation method results in a determination
that the source's potential to emit, as calculated
today, would exceed an applicable threshold, where
reliance on the prior estimation method was, at the
time, objectively reasonable.
Response:
(Refer to Issue 2 in the Operating Permit Program section
for response to this issue.) EPA'S RESPONSE TO ISSUES RAISED BY INDUSTRY ON CLEAN
AIR ACT IMPLEMENTATION REFORM
Fugitive Emissions
Issue 1: EPA must apply the 302(j) rulemaking requirement across
the board to all Clean Air Act programs that apply to
major sources, including the section 112, title V, PSD,
and nonattainment NSR.
Response:
EPA continues to conduct section 302(j) rulemakings where
required under the Act, but EPA believes section 112 does
not require such a rulemaking. A court decision on this
legal issue should be issued shortly. EPA is interested in
hearing specific concerns about the technical feasibility of
measuring fugitive HAP emissions, and in providing guidance
in this area.
Issue 2: In a section 302(j) rulemaking, EPA must demonstrate
that the benefits of regulating a source of fugitive
emissions would outweigh the costs of such regulation.
Response:
EPA historically has considered economic feasibility in
rulemakings conducted under section 302(j).
Issue 3: EPA should issue guidance regarding the proper
treatment of co-located sources of fugitive emissions
that have not been listed pursuant to section 302(j).
EPA committed to issue this guidance promptly in a
February 10, 1995 motion to the D.C. Circuit.
Response:
EPA has committed to issue this guidance in May 1995.
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