Does My Permit Shield Have Me Covered?
Posted: January 12th, 2012Author: All4 Staff
Major facilities have been living with the 40 Code of Federal Regulations (CFR) Part 70 (or Part 71) Title V operating permit program for over 10 years in most cases and many, if not all, have been through their state’s operating permit renewal program at least one time. One of the components of a Title V operating permit is the presence of a “permit shield.” The permit shield concept was the subject of significant review and discussion during the Part 70 public review process. Read on as we review the history of the permit shield and discuss its relevance.
The permit shield concept was originally delineated in Section 504(f) of the Clean Air Act (CAA) and states that compliance with a permit issued under a Title V program is deemed compliance with the requirements of Section 502 of the CAA, which identifies the requirements for an operating permit program. Section 504(f) additionally states that permitting authorities:
“may also provide that compliance with the permit shall be deemed compliance with other applicable provisions of this Act that relate to the permittee if –
(1) the permit includes the applicable requirements of such provisions, or
(2) the permitting authority in acting on the permit application makes a determination relating to the permittee that such other provisions (which shall be referred to in such determination) are not applicable and the permit includes the determination or a concise summary thereof.”
The permit shield is sometimes confused with the application shield. The application shield, authorized by Section 503(d) of the CAA, provides protection to sources from enforcement action for operating without an operating permit so long as they file a timely and complete operating permit application. Application shields are addressed in §70.7(b).
What is a Permit Shield?
The permit shield as specified in §70.6(f)(1)(i) is based on the presumption that an operating permit issued under an approved Part 70 program will include and identify all applicable air quality requirements that the source is subject to. All such requirements will have been reviewed by the permitting authority during the application process. The permitting authority review would include a determination (or affirmation) of applicability (or non-applicability) for the requirement and further identification of a source’s obligation under the requirement. It would also include the opportunity for public and United States Environmental Protection Agency (U.S. EPA) review. Because the permit includes and identifies all applicable requirements (and specific non-applicable requirements), as long as the source complies with the terms of the operating permit, it is deemed to be in compliance with any applicable air quality requirements. The permit shield does not include applicable requirements that become effective after the operating permit is issued, violations prior to the issuance of an operating permit, misinterpretations of applicable requirements, provisions of Section 303 (emergency orders) and Section 408(a) (acid rain provisions) of the CAA, or information requests under Section 114 of the CAA.
History of a Permit Shield
The permit shield is specifically included in Part 70 at §70.6(f) and the regulation uses the same basic statutory language that is found in Section 504(f) of the CAA. In the preamble to the originally proposed Part 70 rules, U.S. EPA endorsed a “broad” application of the permit shield in which a source was shielded from enforcement for noncompliance with any applicable requirement of the CAA, so long as the source was in compliance with all requirements of its Title V permit (including any applicable requirements that may have been misinterpreted by the applicant). In the final Part 70 rules, U.S. EPA ultimately adopted a “narrow” application of the permit shield in which a source cannot be shielded from applicable requirements that become effective following the issuance of a Title V operating permit or applicable requirements that were misinterpreted or overlooked. The shield applies only to applicable requirements that have been reviewed by the permitting authority and are included and identified in an operating permit issued under an approved Part 70 program. It should be noted that the permit shield as described in §70.6(f) is not a requirement for state operating programs, but is an available option. States are authorized by Section 116 of the CAA to establish requirements that are more stringent than Federal requirements. Excluding the permit shield provisions from a state’s operating permit program could be viewed as being more stringent than Federal requirements. However, ALL4 has not yet encountered any state or local operating permit program that does not include the permit shield provision. §70.6(f) provides for two means of shielding: (1) based on the identification of all applicable air quality requirements, and (2) based on the identification of specific non-applicable air quality requirements. Each approach is discussed below.
Part I of the Permit Shield (Identification of Applicable Requirements)
Part I of the permit shield is provided by the identification of all applicable air quality requirements as stated in §70.6(f)(1)(i):
“ Such applicable requirements are included and are specifically identified in the permit.”
A comprehensive review of applicable air quality requirements is typically completed by the applicant during the preparation of the initial Title V operating permit application for a source. Such a review generally includes a review of state air quality regulations, State Implementation Plans (SIPs) on record with U.S. EPA, permit terms and conditions for emissions units, and all Federal regulations that are or may be applicable to the source. The applicable air quality requirements, as identified by the applicant, are included with the operating permit application. The application is reviewed by the permitting authority, the public, adjoining states (as applicable), and U.S. EPA. The operating permit that is ultimately issued includes all applicable air quality requirements and specifically states that a permit shield is in effect. When applying for renewal of a Title V operating permit, the applicant will typically review the applicable requirements that are identified in the existing Title V permit and will add any new applicable requirements that became effective during the term of the permit and/or remove any requirements that no longer apply. The applicant’s proposed revisions will be included in the Title V operating permit renewal application and the permitting authority will again conduct a review of all applicable (and non-applicable) requirements before reissuance of the operating permit.
Part II of the Permit Shield (Identification of Non-Applicable Requirements)
A permit shield may also be provided under §70.6(f)(1)(ii) if:
“The permitting authority, in acting on the permit application or revision the permitting authority determines in writing that other requirements specifically identified are not applicable to the source, and the permit includes the determination or a concise summary thereof.”
Some sources choose to include such a list of non-applicable requirements with new and renewal Title V operating permit applications with the intent to expand or strengthen the permit shield. Permitting authorities may include a list of non-applicable requirements in an operating permit where the source has requested its inclusion and the permit shield is extended to the specific non-applicable requirements. While the inclusion of such a list does not necessarily strengthen a permit shield from a regulatory perspective, its presence helps to clarify and document the non-applicability of certain existing requirements that could be construed to apply to the source, thereby expanding the shield.
There are several additional benefits to identifying non-applicable requirements and including them in an operating permit application:
- Such a review requires the applicant to approach rule applicability in a different manner (i.e., applicability is evaluated “backwards”), forcing an evaluation of all emissions units by considering the regulation first and then looking at the emissions units that the rule may affect.
- By evaluating and documenting non-applicable requirements that could be construed to be potentially applicable, the applicant provides a valuable due-diligence service for the responsible official who must certify completeness and compliance.
- The regulatory authority understands that the applicant has thoroughly reviewed all potentially applicable air quality requirements, has determined their non-applicability, and has provided justification and documentation for their determination.
- If an applicable requirement was missed in a previous application, or a new applicable requirement made it through the facility’s review process during the term of the permit, it will likely be discovered during the non-applicability review process. This will also provide the opportunity for compliance with the requirement to be verified and, if necessary, mitigation steps may be initiated.
Shield Status of Title V Revisions
The permit shield also applies to major Title V operating permit modifications and to administrative amendments that have been reviewed in accordance with a program that is substantially equivalent to the Part 70 review requirements. For example, changes at a source that have been initiated through a state New Source Review (NSR) program that meets the Part 70 review requirements and are added to a Title V operating permit through an administrative amendment are provided a permit shield. Minor Title V modifications are not provided a permit shield since permit shielding is provided only after public and U.S. EPA review, which does not take place with minor Title V Modifications.
The narrow interpretation of the permit shield as represented in the final Part 70 operating permit regulations provides a modest level of protection to facilities. It extends to applicable air quality requirements that have been identified and included in a Part 70 operating permit and to non-applicable requirements that are specified in a Part 70 operating permit. The permit shield is not extended to applicable requirements that become effective after an operating permit is issued, violations prior to the issuance of an operating permit, misinterpretations of applicable requirements, provisions of Section 303 (emergency orders) and Section 408(a) (acid rain provisions) of the CAA, and information requests under Section 114 of the CAA. The permit shield may be enhanced by identifying a list of non-applicable requirements in an operating permit application and by requesting that the list be included in the operating permit. The inclusion of non-applicable requirements helps to clarify and document the non-applicability of certain existing requirements that could be construed to apply to the source, thereby expanding the shield. The permit shield is especially useful where clarification is made in the operating permit as to which parts of a complex regulatory requirement are applicable or where the requirements are not applicable to the source in question.