November 2013

Delay of Biomass Carbon Dioxide (CO2) Vacatur

On May 18, 2011 U.S. EPA issued a final action deferring, for a period of three (3) years, the application of Prevention of Significant Deterioration (PSD) and Title V permitting for carbon dioxide (CO₂) emissions from bioenergy and other biogenic stationary sources. Biogenic CO₂ emissions are defined as emissions from a stationary source directly resulting from the combustion or decomposition of biologically-based materials other than fossil fuels and mineral sources of carbon. Common examples include CO₂ from decomposition of waste in landfills, combustion of the biological fraction of municipal solid waste or biosolids, combustion of the biological portion of tire-derived fuel, and combustion of wood, wood waste, forest residue, etc.

In a July 12, 2013 ruling by the U.S. Court of Appeals for the District of Columbia Circuit, the biogenic CO₂ deferral was vacated. This left many open questions such as potential exposure for facilities, or individual projects, that now may retroactively have become major for greenhouse gas (GHG) emissions (inclusive of biogenic CO₂). Would these facilities need to obtain a major source permit for GHGs and would projects that were previously not major for GHGs now need to conduct a Best Available Control Technology (BACT) analysis for GHG emissions?

To complicate matters further, on November 14, 2013 the U.S. Court of Appeals for the District of Columbia Circuit granted a request from the biomass industry to delay the July 12, 2013 vacatur of the biogenic CO₂ deferral, at least until the U.S. Supreme Court rules on an upcoming related GHG permit case. So, for now, the original three (3) year deferral still stands. Suffice it to say, however, that this isn’t the last word on this topic. Stay tuned…

The Affordable Care Act (ACA) and Prevention of Significant Deterioration (PSD)

As a company that specializes in navigating clients through complex air quality permitting – specifically PSD and Non-attainment New Source Review (NNSR), ALL4 is familiar with challenging regulations that don’t always make sense. Understanding the regulations (and many changes), the interpretations and policy memos, and the techniques to minimize the impact of PSD and NNSR on our clients has been the cornerstone of ALL4 since our inception.

As I review health insurance plans and the Affordable Care Act (ACA) and the impact on ALL4 in 2014 and beyond, I find myself analyzing the plans and taking the same systematic approach that we do with PSD and NNSR projects. Over the years our “PSD-type approach” to healthcare has led us to: (1) migrating from one top-rated carrier to another, (2) switching from a preferred provider organization (PPO) model to a high deductible (HD) plan and health savings account (HSA) model, and (3) implementing a HD plan and health reimbursement arrangement (HRA) model. Heck, the health insurance arena and PSD are so similar that they both even have more acronyms than you can remember!!

At ALL4, we strive to be “best in class” and we are extremely proud of the fact that we provide high-end health insurance to our employees and pay 100% of the premiums for both individuals and families. In our current model, we pay not only 100% of the premiums, but also 100% of the applicable deductibles! We believe strongly that we have the top consultants in our business and that we need to compensate them accordingly to be able to continue to provide the level of service to our clients that that they have come to expect. Even though our benefits advisors tell us that we are insane, we have been fortunate to continue to provide this type of benefit by tackling health insurance the same way that we tackle PSD.

However, I am starting to feel like we are bumping up against a PSD or NNSR significant threshold level when it comes to managing costs for health insurance. Under the ACA, our small business of 39 is looking at a 54.6% increase in insurance premiums in 2014 – over $110K per year! After I heard this news and picked myself up off the ground, we started looking at it again using our PSD-type approach and it looks like we can implement another “PSD-avoidance” technique and renew under our current plan in December 2013 to push off the impact of the ACA until December 2014. We can do this for an increase of (only) 14.4%. Over the next 12 months, we will continue to tackle healthcare the same way that we help our clients tackle PSD projects at their facilities… we will track the regulatory process, we will look for creative options to minimize the impact on our operations, and we will implement a plan in December 2014 that provides best in class benefits while controlling costs. I understand our clients’ frustration with PSD and NNSR now more than ever!

Draft Climate Change Adaptation Implementation Plans Issued

The great hockey player Wayne Gretzky once said “I skate to where the puck is going to be, not where it has been.” When it comes to climate change, this is a piece of advice we can all use. As a recent college graduate, I am a part of a young generation that has been raised to anticipate the challenges associated with climate change. I’m fluent in what measures I can take in my personal life to minimize the threat of climate change, and as an ALL4 employee new to environmental consulting, I’m getting acquainted with the ways our country is addressing the threat at a national level, and how the government is adapting to this serious environmental concern.

I recently noted that U.S. EPA’s Program and Regional offices issued draft Climate Change Adaptation Implementation Plans (Implementation Plans). There are 17 draft Implementation Plans in total: 10 for each U.S. EPA Region and seven (7) for each U.S. EPA National Program. Specifically, the plans apply to the following U.S. EPA programs and offices:

Program Implementation Plans

Office of Water
Office of Air and Radiation
Office of Solid Waste and Emergency Response
Office of Chemical Safety and Pollution Prevention
Office of International and Tribal Affairs
Office of Research and Development
Office of Administration and Resource Management

Regional Office Implementation Plans

Region 1
Region 2
Region 3
Region 4
Region 5
Region 6
Region 7
Region 8
Region 9
Region 10

In order to understand what these draft Implementation Plans are and why they’ve been issued, it’s helpful to understand some greenhouse gas (GHG) history. Two (2) months before the issuance of the “Endangerment Finding” in December 2009, updated environmental planning was set in motion by President Obama’s issuance of an Executive Order entitled “Federal Leadership in Environmental, Energy, and Economic Performance” on October 5, 2009. The goal of this Order was to establish a strategy for the Federal Government to increase sustainability and to make GHG emission reductions a priority for Federal agencies. The Order also created a Council on Climate Preparedness and Resilience and a State, Local, and Tribal Leaders Task Force on Climate Preparedness and Resilience. In March 2011, the Chair of the Council on Environmental Quality (CEQ) issued implementing instructions which spelled out the steps Federal Agencies should take to implement the Order. In response to these documents, U.S. EPA published a draft Agency Climate Change Adaptation Plan (Agency Plan) in February 2013, with the intent to finalize the Agency Plan this fall. The draft Agency Plan details the following 10 priority actions that U.S. EPA would take to integrate climate adaptation planning into its activities to ensure its effectiveness under future climatic conditions:

Fulfill Strategic Measures in FY 2011–2015 EPA Strategic Plan
Protect Agency facilities and operations
Factor legal considerations into adaptation efforts
Strengthen adaptive capacity of EPA staff and partners through training
Develop decision-support tools that enable EPA staff and partners to integrate climate adaptation planning into their work
Identify cross-EPA science needs related to climate adaptation
Partner with tribes to increase adaptive capacity
Focus on most vulnerable people and places
Measure and evaluate performance
Develop Program and Regional Office Implementation Plans

Then, most recently on November 4, 2013, U.S. EPA issued the aforementioned draft Implementation Plans which detail how the goals U.S. EPA outlined in the February 2013 draft Agency Plan would be carried out by each U.S. EPA program and region. Public comments on the draft Implementation Plans will be accepted through January 3, 2014.

Are You Prepared? New OSHA Standard Requires Implementation Over The Next 3 Years!

A great deal of misinformation is circulating about how to comply with Occupational Safety and Health Administration (OSHA) now that its Hazard Communication Standard (HCS) has been revised to align with the United Nations’ Globally Harmonized System of Classification and Labeling of Chemicals (GHS). There are a number of important changes in the revised standard that require compliance actions by most companies.

The changes that impact most companies are:

New Training Requirements—Note! Employee Training Deadline is December 1, 2013
Updated Written Programs
New Chemical Classifications
New Labeling Elements
New Safety Data Sheets (SDSs) Format

The program has a “phased-in implementation” through the middle of 2016 and is very high on OSHA’s priority list for compliance. The first critical compliance date is December 1, 2013. By that time, employers must have trained their workers on the new label elements and the updated SDS format. OSHA states that this training is need early in the transition process since workers are already beginning to see the new labels and SDSs on the chemicals in their workplace. Training will help employees know how to get the information they need to better protect themselves from chemical hazards in the workplace during the transition period.

The list below provides a more detailed description of the minimum required topics for training that must be completed by the December deadline:

Training on label elements:

This training must include the type of information the employee would expect to see on the new labels, including the following items.

Product Identifier – How the hazardous chemical is identified. This can be (but is not limited to) the chemical name, code number, or batch number. The manufacturer, importer, or distributor can decide the appropriate product identifier. The same product identifier must be both on the label and in Section 1 of the SDS.
Signal Word – used to indicate the relative level of severity of hazard and to alert the reader to a potential hazard on the label. There are only two signal words, “Danger” and “Warning.” Within a specific hazard class, “Danger” is used for the more severe hazards and “Warning” is used for the less severe hazards. There will only be one signal word on the label no matter how many hazards a chemical may have. If one of the hazards warrants a “Danger” signal word and another warrants a “Warning” signal word, then only “Danger” should appear on the label.
Pictogram – OSHA’s required pictograms must be in the shape of a square set at a point and include a black hazard symbol on a white background with a red frame sufficiently wide enough to be clearly visible. A square red frame set at a point without a hazard symbol is not a pictogram and is not permitted on the label. OSHA has designated eight pictograms under this standard for application to a hazard category.
Hazard Statement(s) – describe the nature of the hazard(s) of a chemical, including the degree of the hazard when appropriate. For example: “Causes damage to kidneys through prolonged or repeated exposure when absorbed through skin.” All of the applicable hazard statements must appear on the label. Hazard statements may be combined where appropriate to reduce redundancies and improve readability. The hazard statements are specific to the hazard classification categories, and chemical users should always see the same statement for the same hazards, no matter what the chemical is or who produces it.
Precautionary Statement(s) – means a phrase that describes recommended measures that should be take to minimize or prevent adverse side effects resulting from exposure to a hazardous chemical or improper storage or handling.
Chemical Manufacturer, Importer or Distributor Information – name, address, and phone number for each product.
Label Use in Workplace – how an employee uses the labels in the workplace. For example, an employee must be able to explain how information on a label can be used to ensure proper storage of hazardous chemicals, as well as how the information on the label might be used to quickly locate information on first aid when needed.
Element Interaction on Product Label – a general understanding of how the elements work together on a label. For example, when a chemical has multiple hazards, different pictograms are used to identify the various hazards. The employee should expect to see the appropriate pictogram for the corresponding hazard class. If there are similar precautionary statements, the one providing the most protective information will be featured on the label.

Training on new format of SDS (formerly known as MSDS):

This training must include the standardized 16-section format and how the information on the label relates to the SDS.

Standardized Format – a 16-section format that includes the type of information found in various sections. For example, the employee should be instructed that according to the new format, Section 8 (Exposure Controls & Personal Protection) will always contain information pertaining to exposure limits, engineering controls, and ways to protect himself.
Label Information and the SDS – how information on the label is related to the SDS. For example, explain that the precautionary statements would be the same on the label and on the SDS.

Overwhelmed? To assist you in meeting this deadline, American Compliance Systems (ACS) will be providing live Webinars! ACS’s Webinars gives you:

Access to live ACS professional staff for related questions. All questions will be compiled, answered, and distributed to participating companies after the Webinar.
Training record and certification for all employees that participate will be made available through our web-based recordkeeping system.

About American Compliance Systems (ACS):

ACS was founded in 1990 to provide products and services to help businesses manage workplace risk and maintain regulatory compliance. With over 22 years experience servicing virtually all market segments we have built a proprietary risk analysis system that complements our highly trained client services team, resulting in an optimal level of customer satisfaction. To field a Client Services Team to accommodate the extensive and varied needs of our client base, we recruit individuals from diverse educational backgrounds, with experience from a broad range of industries. Our proprietary risk analysis system empowers our service team with the most efficient and sophisticated tools available.

Redoing Your (MACT) Floors

More often than not, people will redo the floors in their homes for aesthic reasons, not because of an underlying problem with how they were constructed. In the air quality regulatory world, we routinely deal with a floor that is not the type you walk on, but rather the type that establishes an emission limit and a host of testing, monitoring, recordkeeping, and reporting requirements for a certain set of regulated air pollutants. So where am I going with this?

The Clean Air Act Amendments of 1990 (1990 CAAA) required the U.S. Environmental Protection Agency (U.S. EPA) to regulate emissions of hazardous air pollutants (HAPs) using technology-based standards. The Section 112 standards are known as the National Emissions Standards for Hazardous Air Pollutants (NESHAPs), and are commonly referred to as Maximum Achievable Control Technology, or MACT, standards. When developing a MACT standard for a particular source category, U.S. EPA evaluates the level of emissions currently being achieved by the best-performing similar sources through use of HAP-compliant materials, clean processes, control devices, work practices, or other methods. These emissions levels set a baseline (referred to as the “MACT floor”) for the new standard. At a minimum, a MACT standard must achieve, throughout the industry, a level of emissions control that is at least equivalent to the MACT floor. The MACT floor is established differently for existing sources and new sources (which are defined based on the date when a NESHAP is proposed):

For existing sources, the MACT floor must equal the average emissions limitations currently achieved by the best-performing 12% of sources in that source category, if there are 30 or more existing sources. If there are fewer than 30 existing sources, then the MACT floor must equal the average emissions limitation achieved by the best-performing five sources in the category.
For new sources, the MACT floor must equal the level of emissions control currently achieved by the best-controlled similar source.

This approach has been followed in the past without too much fanfare. However, several of the more recent Section 112 determinations (e.g., the Cement and Boiler MACT) that U.S. EPA has finalized have incoportated a different approach for calculating the floor, which has not always been consistent with the procedures followed in the initial Section 112 determinations. Specifically, an August 20, 2013 ruling by the U.S. Court of Appeals for the District of Columbia Circuit requires U.S. EPA to explain how its use of the upper prediction limit (UPL), rather than the statistical averaging as described above to establish the MACT floor for several standards, satisfies the 1990 CAAA. The Court’s ruling was related specificially to MACT standards for sewage sludge incinerators (SSIs) under Section 129 of the Clean Air Act (CAA); however, the collateral damage of potentially requiring U.S. EPA to redo the MACT floors for this rule could “carry major implications” according to a former U.S. EPA official, impacting standards such as the Utility MACT, Boiler MACT, Portland Cement MACT, and rules for medical waste incinerators. Those challenging the use of the UPL, which is based on a statistical confidence limit such as the 90^th or 99^th percentile, rather than an average, do not believe the approach is in the public’s interest since UPL limits are less stringent than those that would be established using a statistical average or even an upper confidence limit (UCL). Click here for more detailed information related to the the background of MACT and the statistical tools.

A former U.S. EPA official states that under the Utility MACT standard, the mercury limit would be lowered by two-thirds without the UPL methodology. U.S. EPA contends that the use of UPLs is appropriate to account for variability in the performance of emission sources and when a sufficient sample size of emsisions data is not available. However, if U.S. EPA’s explanation of the validity of the UPL does not satisfy the Court, it’s possible that many Section 112 and Section 129 MACT standards might need to be overhauled (i.e., resulting in lower emission limits), which would completely change the course of MACT compliance for the rest of this decade and beyond.

Background on MACT Floor Statistics

Back in August of 2013, the U.S. Court of Appeals for the District of Columbia Circuit made a decision regarding a petition that the National Association of Clean Water Agencies (NACWA) and Sierra Club made to object to the approach that U.S. EPA used to develop maximum achievable control technology (MACT) standards for sewage sludge incinerators that are regulated under Section 129 of the Clean Air Act (CAA). The decision directs U.S. EPA to provide justification for their use of alternate statistical measures for determining the emission limits that sources must meet under Section 112 and Section 129 standards. This focus on the alternate statistical measures could have significant impact on several rules that U.S. EPA has promulgated over the past few years under Sections 112 and 129 of the CAA. This blog post provides some of the background information to help frame the importance of this court decision.

First, it is probably worthwhile to review a couple of basic components to the method used to develop MACT standards. The first item to clarify is around the applicability of MACT in general. Typically MACT is linked to the regulation of hazardous air pollutants (HAPs) under Section 112 of the CAA. But in reality, MACT is a generic term that is equivalent to “…the maximum degree of reduction in emissions…that the Administrator, taking into consideration the cost of achieving such emission reduction, and any non-air quality health and environmental impacts and energy requirements, determines is achievable for new or existing sources (units)…” Since both Section 112 and Section 129 contain the phrasing in the previous sentence, the MACT concept applies to both regulatory programs.

The second key component to review involves how MACT is determined and introduces the statistical concept that should be used to develop the MACT limits. Again, both Section 112 and 129 use the same language to frame the basis for a MACT emission limitation. Section 129(a)(2) of the CAA states “Emission standards for existing units…shall not be less stringent that the average emission limitation achieved by the best performing 12 percent of units in the category.” Section 112(d)(2) contains the same wording but goes just a little further and states that the emission standards “ may be more stringent than the average emission limitation achieved by the best performing 12 percent of units in the category.” Section 112 also includes a provision to address small populations of sources (i.e., fewer than 30 sources). In both Section 112 and 129 the term “average” is used and it is this specific language that is at the core of the DC Circuit Court ruling.

Finally the statistical tools used by U.S. EPA to develop the MACT emission limits are worth reviewing. U.S. EPA has used different approaches to characterize the concept of “average.” In plain English, the average of a population most commonly would be represented by the mean. The mean of a population is the sum of values of the population divided by the number of values. The median of a population is the value that has the same number of values above it as below it and can also be utilized to represent an average. An upper confidence limit (UCL) is the value that, with some assigned degree of certainty (e.g., 95, 99, or 99.9 percent) it can be expected that the mean (i.e., average) of a population will be below. The upper predictive/prediction limit (UPL) is the value that with some assigned degree of certainty it can be expected that the mean of a population that includes future values (i.e., future mean) will be below. There are subtle nuances to these four statistical terms regarding population size and whether the values are distributed normally or log normally. However, in order of lowest to highest, the mean or median value of a population will result in the lowest value while the UPL will result in the highest value. Thus emission limitations that are based on mean/medians will be more stringent and emission limitations that are based on the UPL will be less stringent.

As mentioned in the Mark’s blog post, the statistical tools play an important role in the DC Circuit Court’s ruling. It is the use of the UPL that is specifically at issue in the DC Circuit Court case and secondarily how statistical tools other than an “average” are, or are not, appropriate for developing MACT emission limits.

Prevention of Significant Deterioration (PSD) & the Major Modification

The implementation at the state level of the major New Source Review (NSR) rules that include both prevention of significant deterioration (PSD) and nonattainment new source review (NNSR) have evolved over a long period of time. During the last decade that evolution has been substantially impacted by the “NSR Reform” revisions of 2002; the regulation of particulate matter less than 10 microns (PM₁₀) and particulate matter less than 2.5 microns (PM_2.5); and the seemingly routine changes in form and reductions of national ambient air quality standards (NAAQS) following required reviews. Historically “process” changes in the NSR program were documented via guidance memoranda, policy statements, and precedence made publicly available on the U.S. EPA NSR guidance database. However, formal U.S. EPA guidance related to NSR virtually disappeared since the promulgation of the NSR Reforms of 2002 and has really only appeared again in rare instances as a result of specific permit reviews and/or court decisions. This 4 The Record article is the first in a series of articles related to the NSR regulations that have been promulgated under Section 110 of the Clean Air Act (CAA) and addresses the dreaded PSD major modification.

For almost 30 years now, the term “major modification” has struck fear into the hearts of environmental managers associated with facilities that are classified as “major stationary sources” under the NSR regulations. In many instances, such fear is valid because the air permitting path associated with major modifications can be sufficiently complicated and fraught with uncertainty that the very viability of a given project could be threatened. In this article, ALL4 provides a brief overview of the NSR regulations and describes what a major modification actually is under the PSD regulations.

Questions? Ask the Author

The NSR regulations include both the PSD regulations and the NNSR regulations. PSD applies to new major sources and to major modifications at existing major stationary sources for pollutants where the area the source is located is in attainment or unclassifiable with the NAAQS. NNSR applies to new major sources and to major modifications at existing major stationary sources for a pollutant where the area the source is located is classified as non-attainment with the NAAQS. Health-based NAAQS currently exist for nitrogen dioxide (NO₂), sulfur dioxide (SO₂), PM₁₀, PM_2.5, carbon monoxide (CO), ozone (O₃), and lead (Pb). The NAAQS serve as the “backbone” to the NSR regulations and to state implementation plans (SIPs). The NSR regulations were established to ensure that the NAAQS are attained and maintained even as emissions sources change and facility expansion projects are implemented.

What is a Major Modification?

Major modification is generically defined as “any physical change in or change in the method of operation of a major stationary source that would result in: a significant emissions increase of a regulated NSR pollutant and a significant net emissions increase of that pollutant from the major stationary source” under both programs. The complete definition can be found at 40 CFR §52.21(b)(2). A closer look at the above definition of major modification reveals four key terms that represent the most basic components of the NSR rules. Let’s have a look at each:

What is a Major Stationary Source?

The complete definition of major stationary source can be found at 40 CFR §52.21(b)(1). There is a list of 26 specific facility types that are considered major stationary sources if their potential to emit (PTE) any regulated NSR pollutant is 100 tons per year (or more). For such sources, fugitive emissions must be included when determining PTE. Examples include pulp mills, Portland cement plants, and large fossil fuel fired boilers. For all other source types not included in the list of 26, a PTE of 250 tons per year (excluding fugitive emissions) of any regulated NSR pollutant will classify them as a major stationary source.

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Any Physical Change in or Change in the Method of Operation

It is interesting that this phrase is undefined in the rule. Even more interesting is that the rule defines activities or actions that are not physical changes or changes in the method of operation, including routine maintenance, repair and replacement; increases in operating hours or production rate (so long as such increases are not prohibited by a permit condition); changes in ownership; and several other criteria with limited applicability. It is clear that that this phrase is intended to be broadly applicable thereby necessitating a thorough evaluation of each facility project, from both an operational and a capital expenditure perspective. The demise of several proposed regulatory changes that might have helped clarify certain aspects of what does and does not constitute a modification such as the “Equipment Replacement Provision (ERP)” exclusion and the “Pollution Control Project (PCP)” exclusion can be attributed to the use of the word “any” within the physical change or change in the method of operation language in the rule. In essence according to the DC Circuit Court, ANY means ANY, with no exceptions. With this in mind, many facilities that are subject to Boiler MACT are now discovering that boiler modifications, intended to reduce emissions to comply with Boiler MACT, represent physical changes or changes in the method of operation” necessitating an evaluation of major NSR applicability. Major sources must also be aware that with respect to the possibility of making changes under the routine maintenance repair and replacement provision, there is actually a rigorous evaluation protocol that U.S. EPA uses to determine whether the activity associated with routine maintenance, repair, or replacement is actually “routine” for a given process or industry.

Regulated NSR Pollutant

The complete definition of regulated NSR pollutant can be found at 40 CFR §52.21(b)(50). In general, a regulated NSR pollutant is any pollutant for which a NAAQS has been promulgated (i.e., NO₂, SO₂, PM₁₀, PM_2.5, CO, and Pb). Because ozone is formed in the atmosphere, precursors to ozone formation (i.e., volatile organic compounds (VOC) and nitrogen oxides (NO_X)) are regulated in lieu of ozone. In addition, precursors to the formation of PM_2.5 (i.e., SO₂ and NO_X) are also regulated. The definition also defines condensable PM and includes condensable PM as part of PM₁₀ and PM_2.5 emissions. A new twist in determining NSR applicability became reality as a result of the greenhouse gas (GHG) Tailoring Rule. A provision in the definition of regulated NSR pollutant incorporates pollutants that are “subject to regulation” as defined in 40 CFR §52.21(b)(49) as regulated NSR pollutants. 40 CFR §52.21(b)(49) articulates when and how GHG emissions become subject regulation. In general, if a facility exhibits a GHG PTE of 100,000 tons of carbon dioxide equivalent (CO₂e) and the GHG emissions increase for a given project is 75,000 tons of CO₂e, GHG emissions are subject to regulation and become a regulated NSR pollutant.

Significant Emissions Increase

The complete definition of significant emissions increase can be found at 40 CFR §52.21(b)(40) and states that a significant emissions increase is “… an increase in emissions that is significant (as defined in paragraph (b)(23) of this section) for that pollutant.” So what exactly does that mean? 40 CFR §52.21 (b)(23) specifies the mass of emissions increase that is significant for each regulated NSR pollutant. For NO_X, SO₂, and VOC the significance level is 40 tons per year. For PM_10, the significance level is 15 tons per year. For PM_2.5, 10 tons per year, for CO, 100 tons per year, and for Pb, 0.6 tons per year. Several other pollutants that are regulated under Section 111 of the CAA have significance levels as well including the following; fluorides (3 tons per year), sulfuric acid mist (7 tons per year), hydrogen sulfide (10 tons per year), total reduced sulfur (10 tons per year), and reduced sulfur compounds (10 tons per year). GHG emissions are conspicuously absent from the list of pollutants with corresponding significance levels. However, U.S. EPA has addressed this by including a provision that identifies any emissions increase as significant for a regulated NSR pollutant that is not listed (i.e., individual GHG pollutants). The determination of whether the emissions increases associated with a project are significant is often referred to as Step 1 in the PSD applicability determination process. Of paramount importance in Step 1 is how an actual project is defined (e.g., new, modified, and affected emissions units) because emissions increases must be determined for each type of unit. Note importantly that decreases in emissions are not counted in Step 1. If the emissions increases associated with the project are significant in Step 1, it does not necessarily mean that the project is a major modification. However, it does mean that a netting analysis (Step 2) in the evaluation process will be required to determine if there will be a net emissions increase.

Net Emissions Increase

The complete definition of net emissions increase can be found at 40 CFR §52.21(b)(3). Determining whether a net emissions increase will occur as a result of a project is (i.e., netting analysis or step 2) significantly broadens the scope of the major modification evaluation because significant emission increases of regulated NSR pollutants (determined during step 1) for the project are summed with increases and decreases of regulated NSR pollutant emissions that occurred during a contemporaneous period across the entire stationary source. The contemporaneous period begins the date five (5) years before construction on the particular change commences and ends on the date that the increase from the particular change occurs. There are various rules that apply to the step 2 process. However, the two (2) most important rules specify that contemporaneous emissions increases represent increases in potential emissions and that contemporaneous emissions decreases represent decreases in actual emissions, that are made enforceable. If, after step 2, the increase in a regulated NSR pollutant exceeds a specific significance level for a pollutant, a major modification for that pollutant occurs, thereby triggering PSD applicability.

Conclusions

So now that we have a better understanding of what a major modification is, the next question is how one makes such a determination with regard to a project. There are actually several tests defined within the PSD rules that specify how such determinations are made including the “actual-to-potential” test for new emissions units, the “actual-to-projected-future-actual” test for modified and affected emissions units, and the “hybrid test” for projects involving new, modified, and affected emissions units. The various tests require the calculation of baseline actual emissions (BAE), projected actual emissions (PAE), and excludable emissions for modified and affected emissions units and the calculation of the potential to emit (PTE) for new emissions units. The results of the various tests are used to compare to the significance levels during steps 1 and 2 to determine whether a major modification will occur. A more detailed analysis of the various tests and the required calculations will be the subject of a future 4 The Record article in the NSR series.

A key take away from this article is understanding that at an existing major stationary source, “any physical change in or change in the method of operation” triggers the need to determine whether a major modification will result. “Any physical change” can include actions taken to reduce emissions (e.g., new air pollution control equipment in response to a MACT standard) and fuel changes (e.g., conversion of an oil fired boiler to a natural gas fired boiler) as well as more typical actions taken to improve efficiency and productivity, or to increase production. Such applicability assessments may or may not result in a determination that the project is a major modification subject to NSR permitting. Regardless of the outcome of the NSR applicability assessment, the savvy facility environmental manager will want the results on file.

Comments

Guy VanDoren | July 18, 2018 4:45 pm

Is there a grandfather date for PSD?

Roy Rakiewicz | July 19, 2018 3:59 pm

Thank you for your comment Guy. Unlike some air quality regulations, there are no grandfather provisions in the PSD regulations. PSD applicability for existing major stationary sources is triggered as a result of a major modification, as described in the article. One item of note, the U.S. EPA has revised its policy regarding the calculations used to determine PSD applicability. The revised policy is generally beneficial for facilities considering modifications. Please see Colin McCall’s 4 The Record article dated June 2018 and a related blog post by Nick Leone dated March 15, 2018 on the ALL4 website.