Wouldn’t It Be Nice to Have a Permit That Allowed Flexibility?

What is a Flexible Permit?

In U.S. EPA’s own words, “a flexible air permit is a Title V permit that facilitates flexible, market responsive operations at a source through the use of one or more permitting approaches, while ensuring equal or greater environmental protection as achieved by conventional permits.” Translated, a flexible permit generally means that the facility is authorized to initiate modifications without the need to prepare, submit, and obtain permitting authority approval for the modifications, albeit within the “bounds” of the flexible permit. Such bounds include several “common” flexible permitting concepts that are discussed in U.S. EPA’s proposed flexible permit rulemaking (i.e., advanced approvals, permit streamlining, plantwide applicability limits (PALs), etc.).

Proposed Flexibility in Title V and New Source Review Rule Revisions

On September 12, 2007, U.S. EPA proposed changes to the Title V and NSR regulations that, if promulgated, will enhance a facility’s ability to develop a “flexible air permit.”  Many of the proposed flexibility approaches have been tested and evaluated for more than a decade through a U.S. EPA pilot flexible air permitting program. The results of the pilot program are presented in a report titled “Evaluation of the Implementation Experience with Innovative Air Permits” at http://www.epa.gov/ttn/oarpg/t5/memoranda/iap_eier.pdf.  Other flexibility concepts are based on existing U.S. EPA guidance documents such as U.S. EPA’s White Paper No. 3 which became available in 2000.  The comment period on the proposed flexibility rules closed in early January 2008.

Flexible Permit Background

The need for flexible air permits became apparent by the mid-1990s in response to industry concerns.  Many market changes were occurring that required facilities to initiate process modifications.  The modifications were often needed on a schedule that was inconsistent with the usual construction permit processing cycle, especially those changes that were major modifications under New Source Review (NSR).  The result: delays in getting products to market.  U.S. EPA began to work with permitting authorities to develop ways to allow air permit flexibility for facilities without compromising environmental requirements.  U.S. EPA’s initial efforts focused on special programs under which a facility could obtain a flexible air permit (i.e., Project xL and P4), usually in exchange for better or more cost-effective ways of achieving environmental protection.  PALs were an offshoot of these early flexibility initiatives.  Actual PALs later became part of the NSR revisions of 2005.

What U.S. EPA is Proposing

U.S. EPA is proposing flexibility provisions that include both regulatory changes and
reiteration of existing policy regarding flexibility tools that are currently used by state and local permitting authorities in accordance with their implementation plans.  U.S. EPA has chosen not to directly address advanced approvals and permit streamlining in the proposed rulemaking because, in their opinion and experience, many state and local permitting authorities can already use these same concepts within the constraints of their implementation plans.

Alternative Operating Scenarios

The term “alternative operating scenario” (AOS) is proposed to replace the term “operating scenario” as it currently exists in the Part 70 Title V operating permit rules.  Both a definition and usage requirements associated with AOSs are proposed. Most of the AOS flexibility examples provided in the preamble to the proposed rule can also be addressed as compliance options under an applicable requirement (i.e., fuel switching).  From this perspective, it is unclear how an AOS may improve flexibility.  However, there may be opportunities for facilities to use AOS to enhance operating flexibility and the AOS concept as a flexibility tool will be available to facilities when the revisions are promulgated.

Approved Replicable Methodologies

The term “approved replicable methodology” (ARM) is being proposed to facilitate the implementation of advanced approvals (described later) and AOSs under a Title V permit and to reduce the need for permit modifications consistent with the Title V regulations.  Both a definition and usage requirements associated with ARMs are proposed. ARMs are envisioned to streamline the administrative requirements associated with changes that cause a need to recalculate or re-establish a permit term value (i.e., destruction efficiency requirement) that is used in determining compliance with an applicable requirement or in determining the applicability of a requirement. In such cases, facilities are sometimes required to modify their Title V permit in order to change a permit term value. With an ARM in place, the facility has a defined method to obtain and update information consistent with an applicable requirement while avoiding the need to revise the permit to incorporate the new information.

Green Groups

A new term, “green group,” is proposed to be added to the NSR regulations in 40 CFR Parts 51 and 52.  The revisions include a definition of green group as “a group of new or existing emissions activities that is characterized by use of a common, dedicated air pollution control device and that has been designated as a green group by the administrator in a permit issued pursuant to this section (i.e., NSR).”  A green group is considered as a single emissions unit under NSR.  The common control device required for a green group designation would need to meet best available control technology (BACT) or lowest achievable emission rate technology (LAER) and would be subject to a rolling 12-month emission limit, similar to a PAL. The green group limit would be set using the actual baseline emissions of the green group emissions units controlled at a BACT/LAER level and would include future emissions increases. The BACT/LAER level determined at the outset of the green group would remain as BACT/LAER for the 10-year duration of the green group designation.

Advance Approvals

Advance approval is arguably the most beneficial flexibility tool that is available to stationary sources operating under a Title V permit.  Advance approval is the incorporation of terms into a Title V permit which authorize specific future changes without any additional approval (minor NSR) or Title V permit revisions before the source can make the changes.  Without advance approval for minor NSR changes, a permit application must be prepared by the source and be reviewed and approved by the permitting authority before a modification can be made.  When using advance approvals, sources must incorporate changes authorized under minor NSR into their operating permits along with conditions that assure compliance with all associated applicable requirements. The changes can then be implemented at a future date under protection of the permit shield without further review or approval by the permitting authority. Several permitting authorities have authorized the use of “generic” advance approvals within a set of boundary conditions or have advance approved certain categories of changes common to a certain source type. These types of advance approvals have proven to be effective flexibility tools where they have been incorporated into Title V permits in combination with emission caps or PALs.

Streamlining of Applicable Requirements

Permit streamlining is also not directly addressed in the proposed flexible permitting rule revisions but is discussed in the preamble to the proposed rule within the context of flexible permitting. Permit terms and conditions that are related to compliance assurance can be simplified significantly if similar applicable requirements can be streamlined.  In streamlined requirements, compliance terms for an emissions unit and pollutant are based on the most stringent requirement that is applicable to the unit. If compliance with the most stringent limit is achieved, compliance with all less stringent requirements for the same pollutant is assured.  This concept was originally described in U.S. EPA White Paper 2.

Conclusions

The proposed flexible permit rule revisions build upon U.S. EPA’s experience with flexible permits and the PAL rules promulgated in December of 2002.  They also confirm U.S. EPA’s support of permitting flexibility mechanisms. The proposed revisions provide several implementing tools that can facilitate flexible permit terms and conditions in accordance with existing U.S. EPA guidance. Facilities that desire a flexible operating permit will likely need to continue to rely on existing regulatory programs (i.e., PALs), related U.S. EPA guidance (i.e., White Papers 2 and 3), past flexible permit precedence, and actual negotiation of flexible permit terms and conditions with permitting authorities where supported by implementation plans.