WASHINGTON REPORT, JULY 1997
EPA Promulgates Revised Ozone and Particulate
Matter Standards
On July 18, EPA promulgated
final rules revising the National
Ambient Air Quality Standards (NAAQSs) for
both ozone and particulate matter (PM). 62
Fed. Reg. 38,856 and 38,652. The revisions,
which were originally proposed in December
1996, will have far-reaching consequences for
numerous sources throughout the country. In
particular, the revised standards will
substantially increase the number of
nonattainment areas for one or both
pollutants and require states to impose
additional controls on emission sources.
Except for relatively minor changes, the final
standards are essentially the same as the
proposed standards. The standards become
effective on September 16, 1997.
In conjunction with the promulgation
of the final ozone and PM standards, the
President issued a memorandum for the EPA
Administrator calling for the standards to be
implemented so as "to maximize common
sense, flexibility, and cost effectiveness." 62
Fed. Reg. 38,421 (July 18, 1997). Attached to
that memorandum was a document entitled
"Implementation Plan for Revised Air Quality
Standards." That interagency plan provides an
outline of the measures which EPA intends to
use in the future to implement the new ozone
and PM standards. In a separate article in this
Washington Report, we discuss the key
elements of the announced implementation
plan and highlight some of the issues which
may arise in connection with it.
EPA has indicated that it will
subsequently issue various sets of
"implementation" regulations, which will
presumably address key topics such as the
designation and classification of new
nonattainment areas, deadlines by which states
are to submit SIP revisions and planning
documents, and specific procedures for
addressing nonattainment problems and
demonstrating attainment. The Presidential
memorandum directs EPA to promulgate
necessary implementation regulations by
December 31, 1998. Based on those
implementation regulations, states will be
required to revise their SIPs and adopt an array
of specific control measures directly applicable
to sources in order to achieve attainment with
the new NAAQSs.
Below we summarize the principal
features of the new standards.
Revisions of the Ozone
Standards
The final rule revising the ozone
standards will replace the current primary
(health-based) standard for ozone a 1-hour
standard of .12 ppm with an 8-hour standard
of .08 ppm. In addition, the form of the
primary standard will be changed from the
existing "one-expected exceedance" approach
to a "concentration-based" approach. Under
the new approach, an area would be in
attainment with the standard if the fourth
highest daily maximum 8-hour concentration
of ozone during a calendar year, when
averaged over three years, is less than .08 ppm.
(This is a change from EPA's proposed
standard, which would have been based on the
third highest daily maximum concentration.)
In the final rule preamble, EPA states
that it believes the current secondary (welfare-based) ozone standard,
which is identical to the current primary standard, does not
adequately protect vegetation. As a result, the
final rule replaces the current secondary
standard with a revised secondary standard
which is identical in all respects to the revised
primary standard of .08 ppm.
The final rule also addresses the
applicability of the new 8-hour standard to
areas which are currently nonattainment areas
for ozone under the 1-hour standard. The rule
provides that the current 1-hour standard will
remain in effect in each such area until EPA
determines that the area has attained the 1-hour standard.
At that point, the revised 8-hour standard will apply. In addition, the
preamble to the final rule states that, contrary
to EPA's earlier position, the provisions of
Subpart 2 of Part D will remain in effect in
areas not attaining the 1-hour standard until
attainment of that standard has been achieved.
(Subpart 2 divides the current ozone
nonattainment areas into five separate
classifications and prescribes detailed statutory
requirements governing those areas and
sources within those areas.) According to
EPA, once an area has achieved attainment
with the 1-hour standard, the area must take
steps to achieve attainment with the 8-hour
standard under new regulatory requirements
which will be based on the general
nonattainment provisions of Subpart 1.
Revisions of the PM Standards
Under the final rule, EPA will regulate
a new type of particulate matter particles
whose diameter is less than or equal to 2.5
microns (PM-2.5) in addition to continuing
to regulate particles whose diameter is less
than or equal to 10 microns as provided by the
current PM-10 standards. According to EPA,
studies show that finer particles correlate more
closely to adverse health effects.
EPA is establishing two new PM-2.5
primary standards: an annual standard of 15
micrograms per cubic meter ( g/m3) and a 24-hour standard of 65 g/m3. (EPA had
originally proposed to set the 24-hour standard
at 50 g/m3). The annual PM-2.5 standard is
met when the three-year average of annual
arithmetic mean PM-2.5 concentrations from
single or community-oriented air quality
monitors in an area is less than 15 g/m3. The
24-hour standard is met when the three-year
average of the 98th percentile of 24-hour PM-2.5 concentrations is less than 65 g/m3 at each
population-based monitor in the area. The
final rule additionally sets forth a new
reference method for monitoring ambient
concentration of PM-2.5.
With regard to the separate PM-10
standards, the final rule retains the existing
annual PM-10 standard of 50 g/m3 and the 24-hour PM-10 standard of 150 g/m3, except that
the current "one-expected exceedance"
approach for the 24-hour standard is replaced.
The 24-hour PM-10 standard is now based on
the 99th percentile of 24-hour PM-10
concentrations at each monitor within an area.
The final rule also establishes
secondary standards for both PM-2.5 and PM-10 which are identical in all respects to the
corresponding primary standards. EPA
concluded that particulate matter produces
adverse effects on visibility in various
locations and that establishing secondary PM
standards identical to the primary standards, in
conjunction with the implementation of a
regional haze program, will provide adequate
protection against the welfare effects associated
with particulate matter.
EPA's final rule promulgating the PM-2.5 standards was accompanied by two other
related rulemaking notices. The first notice
sets forth a final rule revising the existing
ambient air quality monitoring requirements
for PM-10 and adds provisions for ambient
monitoring of PM-2.5 as measured by the new
reference or an equivalent method. 62 Fed.
Reg. 38,764. The second notice announces the
availability of certain laboratory and field test
data associated with the development of the
new PM-2.5 reference method. 62 Fed. Reg.
38,762.
Judicial Challenges to the
Revised Standards
Certain industry petitioners
immediately filed petitions for review
challenging both sets of standards. American
Trucking Associations, Inc. v. EPA, Nos. 97-1440
and 97-1441 (D.C. Cir.). Those petitions
indicate that the petitioners will raise issues
concerning, among other things, EPA's
compliance with the Small Business
Regulatory Enforcement Fairness Act of 1996.
It is expected that additional petitions for
review will be filed within the 60-day judicial
review period.
EPA Publishes
Implementation Plan for
Revised Ozone and PM
Standards
EPA's final rules promulgating
revised ozone and PM standards
were accompanied by publication of its
"Implementation Plan for Revised Air Quality
Standards." 62 Fed. Reg. 38,421 (July 18,
1997). The Implementation Plan, which was
prepared by an interagency group, sets forth
the basic outline of the scheme which EPA
intends to follow in implementing the new
ozone and PM-2.5 standards. Although that
document is to date the most definitive
statement of EPA's intentions regarding major
implementation issues, there are still many
key points that have not been addressed by the
Agency in any detail.
The Implementation Plan, by its
terms, is to serve as a "road map" for future
implementation of the standards and does not
set forth any binding requirements. Binding
requirements will be established through
various sets of "implementation" regulations.
According to the Presidential memorandum
accompanying the Implementation Plan, those
regulations and any necessary guidance
documents are to be finalized by December 31,
1998.
The Implementation Plan outlines
approaches to implementing the standards
which it characterizes as employing
"regulatory flexibility" and "minimizing
planning and regulatory burdens . . . where air
quality problems are regional, not local, in
nature." For example, with regard to the
revised ozone standard, the Plan asserts that
most areas that are in attainment with the
"old" standard and take prescribed steps in
accordance with a new regional control
strategy would not be required to impose
additional control measures to achieve
attainment with the revised standard.
Similarly, with regard to the new PM-2.5
standard, the Plan indicates that there would
be a five-year period during which EPA would
gather and analyze data before any areas would
be designated as nonattainment areas and states
must begin preparing plans addressing those
areas.
Summary of EPA's Approach
for Ozone Standard
Implementation
Under the July 18 Plan, EPA's
implementation scheme will entail a gradual
phasing out of the "old" 1-hour ozone standard
and will rely heavily on expected overall
reductions from a regional ozone strategy
based on recent recommendations to EPA by
the Ozone Transport Assessment Group
(OTAG). The Implementation Plan indicates
that the "old" 1-hour standard will continue to
apply to areas which have not attained it until
EPA determines that attainment of the "old"
standard has been achieved. Contrary to
earlier statements by EPA, the detailed
provisions of Subpart 2 of Part D governing
ozone nonattainment areas would also
continue to apply during this period. Once
EPA has determined that an area has attained
the "old" standard, the area must take steps to
attain the revised standard in accordance with
requirements which will be established under
the general nonattainment provisions of
Subpart 1 of Part D.
The Plan explains that EPA's ozone
implementation scheme would be premised in
large part on its belief that a large proportion
of the reductions necessary to enable areas to
achieve attainment will result from a new
regional NOx reduction strategy based on
OTAG's recommendations. According to
EPA, the regional strategy, coupled with the
implementation of other existing Clean Air
Act requirements, "will allow the vast
majority of areas that currently meet the
1-hour standard but would not otherwise meet
the new 8-hour standard to achieve healthful
air quality without additional local controls."
A key element of the scheme would be
EPA's creation of a new "transitional"
classification for nonattainment areas pursuant
to section 172(a)(1) of the Act. According to
EPA, this classification would be available for
areas that attain the 1-hour standard but are
designated as nonattainment areas because
they do not attain the new 8-hour standard by
the time that EPA promulgates designations
for the new standard. To qualify for the
classification, an area must participate in the
regional strategy and/or choose to submit
plans earlier than otherwise required, i.e., by
the year 2000 instead of 2003, that address
attainment of the revised standard. The Plan
indicates that EPA will eliminate unnecessary
planning requirements for such areas and that
it "will revise its rules for new source review
(NSR) and conformity so that States will be
able to comply with only minor revisions to
their existing programs in areas classified as
transitional." EPA also states that it "will
reexamine the NSR requirements applicable to
existing nonattainment areas, in order to deal
with issues of fairness among existing and new
nonattainment areas."
Although the Plan indicates that EPA
will be revising existing NSR requirements to
provide additional flexibility for transitional
areas and the Agency has stated elsewhere that
it is considering "hybrid" approaches for
implementing NSR requirements, the Plan
provides no real specifics regarding these
measures or the legal authority supporting
them. In particular, the Plan is silent
regarding how the Agency intends to ensure
that sources in transitional areas are not
subjected to burdensome offset and/or LAER
requirements before attainment is achieved.
Summary of EPA's Approach
for PM-2.5 Standard
Implementation
According to the July 18
Implementation Plan, EPA will not designate
any areas as nonattainment areas for PM-2.5
until 2002 and before that time will complete
"another full scientific review" of the health
effects of fine particulates. During this five-year period,
EPA will establish a nationwide
monitoring network for PM-2.5 so that it can
gather and analyze data needed to designate
areas and develop implementation plans. EPA
intends to provide this five-year period before
any PM-2.5 nonattainment designations are
made by initially designating all areas in the
country as "unclassifiable" pursuant to section
172(a)(1). These designations would be made
in 1999. EPA would justify the
"unclassifiable" designations by maintaining
that, until a nationwide monitoring network
for PM-2.5 has been established and
monitoring data has been obtained, the
Agency and the states lack the necessary
information to designate areas as being either
attainment or nonattainment areas for the new
pollutant.
Those areas which are designated in
2002 as nonattainment areas would have three
years after designation to submit attainment
plans. The July 18 Implementation Plan also
indicates that, pursuant to section 172(a)(2) of
the Act, nonattainment areas would have up
to ten years to come into compliance with the
new standard (with the possibility of two
additional one-year extensions).
OTAG Issues its Final
Recommendations to EPA
On July 8, 1997, the Ozone
Transport Assessment Group
(OTAG) provided to EPA its final
recommendations concerning strategies for
reducing ozone levels in the eastern United
States. OTAG's report focusses primarily on
reducing NOx emissions through regional
strategies involving substantially more
stringent controls on utilities and numerous
"non-utility point sources." According to the
report, utility sources would be required to
reduce NOx emissions by as much as 85%
relative to 1990 rates, and certain other
industrial sources would be required to achieve
generally comparable NOx reductions.
In light of EPA's revision of the ozone
standard on July 18, OTAG's
recommendations will likely take on even
greater significance than originally assumed.
EPA's "Implementation Plan for Revised Air
Quality Standards," which was issued in
conjunction with the revised ozone and PM
standards, states that OTAG's
recommendations will serve as the Agency's
blueprint for developing a scheme to
implement the revised ozone standard. In
particular, EPA has emphasized that regional
cap-and-trade systems recommended by
OTAG will probably be a key part of the new
regional strategy. The Agency has indicated
that ozone nonattainment areas that comply
with a regional strategy based on the OTAG
recommendations would purportedly be able
to avoid most traditional nonattainment
planning requirements.
EPA intends to propose a "SIP call" in
September 1997 to states in the OTAG region.
That SIP call, which would require the states
to submit SIP revisions to address current
ozone nonattainment problems, would be
based in large part on the OTAG
recommendations. EPA intends to finalize the
SIP call in September 1998. Under the statute,
states would then have up to 18 months to
submit necessary SIP revisions.
Formation of OTAG
On March 2, 1995, EPA issued a
memorandum outlining a new phased
approach under which states could meet their
obligations under the 1990 Amendments to
take specific measures to attain the "old"
ozone NAAQS the one-hour standard
currently in effect. Largely in response to that
memorandum, OTAG was created through
the joint efforts of EPA and the
Environmental Council of the States (ECOS).
The group's stated purpose was "to develop
consensus regarding emissions inventories and
the type of regional modeling to be performed,
and to devise national, regional, and local
control strategies" for attaining the ozone
NAAQS.
A total of 37 states plus the District of
Columbia have been members of the
organization. EPA officials actively
participated in all aspects of OTAG's activities
and served as Co-Chairs of some work groups.
Industry and environmental group
representatives participated in the organization
as associate members. Representatives of the
states had the exclusive authority to vote on
approval of OTAG's final recommendations.
Summary of Final
Recommendations
OTAG's final recommendations to
EPA include a wide range of measures
addressing both stationary and mobile sources.
Below we summarize the recommendations
that are most relevant to stationary sources:
Utility NOx Controls Under the
OTAG recommendations, most of the
NOx reductions would come from
more stringent controls on utility
emissions. OTAG recommends a
range of NOx controls for utilities in
the "fine grid" area that would achieve
reductions falling between those
resulting from current Clean Air Act
controls and the less stringent of an
85% reduction from 1990 rates or an
emissions rate of .15 pounds per
million BTUs. Each state would
propose the specific control levels for
utilities within its borders based on the
state's tonnage budget and the other
controls which would be included in
its SIP.
Non-Utility Point Source Control
Levels OTAG recommends that
control levels for large and medium
non-utility stationary sources of NOx
"should be established in a manner
equitable with utility controls." For
purposes of the recommendation, the
Group defines "medium non-utility
point sources" and "large non-utility
point sources." "Medium" sources are
defined as follows:
A boiler > 100 MMBtu/hr and < 250
MMBtu/hr
A reciprocating internal combustion
engine > 4000 hp and < 8000 hp
A turbine > 10,000 hp and < 20,000
hp
Any other source > 1 ton/average
summer day and < 2 tons/ average
summer day
"Large" sources are defined as sources
whose emissions equal or exceed the
upper limits for "medium" sources.
This particular recommendation
would apparently pertain to any
industrial source of NOx -- other than
a utility which falls within the
definitions.
The recommendations set forth
specific "control targets" for the
non-utility point source sector. For
large non-utility point sources, the
emission reduction percentages would
range from 55% to 70% (based on
"uncontrolled emission rates"). The
control level chosen would be related
to the control levels which would be
imposed on utility sources in that
state. For example, if utilities are
required to meet control levels of 55%
(or .35 lb/MMBtu), the control target
for large non-utility point sources
would be 55%. If utilities are required
to meet control levels of 85% (or .15
MMBtu), the control target would be
70%. For medium non-utility point
sources, the control target would be
installation of RACT (or no controls
where utility sources are to meet
control levels of less than 75%).
Trading Program Framework
OTAG identifies two basic approaches
for implementing emissions trading
systems for NOx and recommends
that a joint state/EPA work group be
formed to determine appropriate
provisions for implementing the
approaches. The first approach would
involve establishing a cap-and-trade
program similar to that established for
SOx under the acid rain program. The
second approach would allow sources
to generate credits without setting an
overall cap on emission levels.
OTAG notes that EPA review and
approval of specific state SIP revisions
would be necessary for NOx market
systems based on either approach
developed in response to EPA's SIP
call. OTAG further acknowledges
that states would be responsible for
meeting federal requirements and for
ensuring that the integrity of the
state's emissions budget was
maintained.
In addition to the measures above,
OTAG recommends that EPA take additional
actions with regard to such areas as surface
coatings, various vehicle engines, vehicle
inspection and maintenance programs, low
emission vehicle programs, reformulated
gasoline, and diesel fuel.
Far-reaching Regional Haze
Program Proposed
In conjunction with its promulgation
of revisions to the ozone and PM
standards, the Agency also issued a proposed
rule which would establish a Regional Haze
Program. 62 Fed. Reg. 41,138 (July 31, 1997).
The regional haze proposal would expand
dramatically the depth and breadth of EPA's
existing visibility program. EPA has also
indicated that implementation of the Regional
Haze Program is to be integrated with
implementation of the revised ozone and PM
standards. Based on the proposed rule, it is
clear that the Regional Haze Program has the
potential to cover a broad range of industrial
sources and to impose significant regulatory
requirements on those sources.
The proposal sets forth a projected
timetable under which the new program
would be established and implemented. EPA
indicates that it intends to promulgate the final
Regional Haze Program regulations in
February 1998. Initial SIP revisions would be
due in February 1999. More comprehensive
SIP revisions taking account of the ozone and
PM standards would be due in July 2003, and
periodic SIP revisions would be due each three
years thereafter, if necessary.
Background
Section 169A(a)(1) of the Act sets
forth a national visibility goal that calls for
"the prevention of any future, and the
remedying of any existing, impairment of
visibility in mandatory Class I federal areas
which impairment results from manmade air
pollution." Under section 169A(a)(4), EPA is
to promulgate regulations which "assure . . .
reasonable progress toward meeting the goal"
set forth above. Those regulations are to
require that each state in which a Class I area
is located or whose emissions may cause or
contribute to visibility impairment in such
areas must include measures in its SIP to
address visibility impairment.
EPA's existing visibility regulations,
which were promulgated in 1980, address
visibility impairment that is "reasonably
attributable" to a single source or small group
of sources. Those regulations, which are
sometimes referred to as plume blight
regulations, apply in the 35 states which
contain Class I areas. In promulgating the
1980 visibility regulations, EPA stated that it
was unable to address regional haze impacts,
i.e., impacts from emissions that occur over
broad geographic areas and are transported
long distances, because of a lack of data and
scientific knowledge.
Overview of Regional Haze
Proposal
The major elements of the proposed
new Regional Haze Program are summarized
below:
Expanded applicability of the
visibility program to all states, the
District of Columbia, and certain
territories Because of EPA's
conclusion that pollutants
contributing to visibility impairment
in Class I areas are transported over
long distances, the program would no
longer be limited to those states in
which Class I areas are located.
Establishment of "presumptive
reasonable progress targets" The
proposed regulations specify numeric
targets for visibility improvement
which are to be attained over either a
ten- or fifteen-year period. States
would be required to submit periodic
demonstrations concerning their
progress in meeting the targets.
Development of strategies and control
measures to reduce emissions of
visibility-impairing pollutants
States would be required to develop
enforceable control measures
applicable to sources deemed to be
contributing to regional haze problems
as well as compliance schedules
necessary to meet future reasonable
progress targets.
Requirements for periodic SIP
revisions Within 12 months of
promulgation of the final regulations,
states would be required to submit
initial SIP revisions addressing the
Regional Haze Program. Those
revisions would be required to address,
among other things, the development
of long-term control strategies,
measures to assure that interstate
transport of pollutants will not
interfere with the ability of other
states to protect visibility, and
coordination with Federal Land
Managers (FLMs) for Class I areas.
The proposed regulations would
require that an additional SIP revision
specifically addressing coordination of
the Regional Haze Program with
implementation of the revised
NAAQSs be submitted four years after
the initial revision. That SIP revision
would be expected to contain
enforceable emission limits and
compliance schedules. Thereafter, SIP
revisions addressing "reasonable
further progress" would be required
every three years.
Analysis of sources contributing to
regional haze impairment States
would be required to prepare
inventories of sources believed
to be contributing to visibility
impairment and to analyze
their impacts on regional haze.
In the initial SIP revision,
states would specifically be
required to determine which
existing sources within the
state are potentially subject to
"best available retrofit
technology" (BART)
requirements.
The proposal raises a number of
significant legal and policy questions. For
example, determining the process and criteria
for identifying which specific sources "cause or
contribute to" visibility impairment in Class I
areas can be expected to create a host of issues.
Moreover, because specific "reasonable
progress targets" will ultimately determine the
extent to which states must adopt additional
control measures, the establishment of these
targets and their translation into specific
emissions reduction levels will be critical.
Although the proposal emphasizes EPA's
intention to integrate the Regional Haze
Program with implementation of the new
ozone and PM standards, issues involving this
integration process will be not addressed until
later. Because of the potential for Federal
Land Managers to substantially affect the
implementation of the Regional Haze
Program, issues will likely arise regarding the
precise role which FLMs may play. Finally,
the relationship between the Regional Haze
Program and new source review requirements
must be addressed in more detail. The Act
provides that sources subject to PSD review
are to comply with requirements concerning
the prevention of adverse impacts on air
quality-related values, explicitly including
"visibility," within Class I areas. Because the
new Regional Haze Program will greatly
expand the scope of potential visibility impacts
that are covered, numerous issues may arise
involving the relationship of these two
programs.
The public comment period on the
proposed rule will expire on October 20, 1997.
Stakeholders Seek Consensus
on Part 70 Permit Revisions
Process
In response to a draft rule addressing
Part 70 permit revisions released by
EPA in May, Title V stakeholders have
undertaken extensive efforts to reach a general
consensus on reasonable permit revisions
procedures. It appears that significant progress
is being made, but some significant issues are
still unresolved. We summarize below those
efforts and the status of key Part 70 permit
revisions issues.
On May 14, 1997, EPA released a draft
Part 70 rulemaking package for review and
public comment by interested parties. The
package consisted of three parts: (1) a
memorandum from OAQPS describing the
package with an attachment containing three
additional options developed by EPA for
reducing permit revision delays under the
"middle tier" of the draft rule; (2) a draft
preamble for the final rule; and (3) a marked-up
version of draft rule changes. The draft rule
would create a permit revisions scheme that
differs from EPA's August 31, 1995
supplemental proposal in ways that have
caused great concern for both industry
stakeholders and state and local stakeholders.
In particular, the draft rule would create a
three-tier scheme under which most changes
would fall into the "middle tier" or "minor
revisions tier" and would likely be subjected to
substantial delays under the specified review
procedures.
On May 28, EPA held a general Title
V stakeholders meeting to discuss the
rulemaking package. Discussion at the
meeting focused almost exclusively on the
permit revisions approach included in the draft
rule. Across the board, industry
representatives and state and local
representatives commented negatively on the
new revisions scheme and urged EPA to
simplify the process and to revise significantly
the substance of the draft rule. Industry
representatives emphasized that the types of
changes that fall into the "middle tier" should
be greatly reduced and that "middle tier"
changes should be allowed to take place once
state review has been completed.
In light of the negative comments on
the draft rule, EPA indicated a willingness to
attempt to develop a more acceptable Part 70
permit revisions scheme. In this regard, EPA
convened a small group of stakeholders
consisting of six representatives from industry,
five representatives from state and local
agencies, and one representative from
environmental groups. Industry
representatives and state and local
representatives from this "small stakeholder
group" have met at various times in June and
July to discuss possible approaches to
improving the permit revisions scheme.
In connection with these meetings,
state and local representatives developed an
"Unofficial Draft Alternative" to EPA's
scheme and provided it to industry
representatives. In general, industry
representatives reacted favorably to the basic
concepts in this straw proposal and gave
comments and suggested changes to the state
and local representatives. The starting point
for the three-tier scheme in the straw proposal
is that changes to be made in the "significant
revisions" and "minor revisions" tiers will be
carefully circumscribed, with all other changes
being permissible in the "de minimis revisions"
tier. The de minimis track would require no
specific processing other than a notice to the
permitting agency.
Summary of July 22 Meeting
With EPA
The industry representatives and state
and local representatives held an all-day
meeting with EPA officials on July 22 to
suggest significant changes in the draft rule.
At this meeting, the participants discussed the
straw proposal at length and appeared to make
progress toward resolving some of the key
issues. It was also agreed that another small
stakeholder group meeting with EPA will take
place on September 19. The following are the
highlights of the July 22 meeting:
EPA indicated that it accepts the basic
framework of the straw proposal,
which provides for a three-tier scheme
with "significant revisions" and
"minor revisions" being carefully
circumscribed and all other revisions
being permissible under a catch-all "de
minimis revisions" category.
EPA agreed that public and EPA
review of minor revisions could occur
after state approval of changes
and also that construction and
operation of such changes
could occur once state
approval is given, i.e, "post
hoc" review would be allowed.
EPA indicated that it is receptive to
the concept that a source would not
have liability for Title V permit
changes that result from a "post hoc"
EPA objection where the change is
attributable to EPA's disagreeing with
the permitting authority's judgment as
to the specifics of the particular
requirement at issue, such as periodic
monitoring. Potential liability would
not result until the source had a
reasonable period of time pursuant to
a compliance schedule, where needed,
to make the necessary adjustment. If
EPA's objection addresses the failure
to include an applicable requirement in
a permit and the source had not
complied with the terms that should
have been included in the permit, the
source would have potential liability
from the time that operation of the
change commenced.
The industry participants discussed the
importance of "net outs" being defined
so that they do not include changes
where the project emissions increase
(after considering both project
increases and decreases) is below the
relevant threshold level. The issue is
still unresolved.
EPA indicated that the issue on which
it might be most difficult to reach an
agreement within the Agency, and
with industry and state and local
stakeholders, is the emissions
threshold for determining which
minor NSR changes and PTE limits
should be in the minor revisions track
rather than the de minimis track. The
industry and state position was that
this threshold should be set at about
90% of the major source or major
modification threshold. Some EPA
officials apparently wanted to set the
level as low as 50%.
Another area of major disagreement
with EPA concerns the scope of the
Agency's objection authority. EPA
apparently believes it has the authority
to object to a proposed Title V permit
not only where an applicable
requirement is not included in the
permit but also as to the specifics of
BACT and LAER determinations.
State and local representatives took the
lead in opposing this position, and
industry representatives echoed their
strong disagreement as well.
August 6 Subcommittee Meeting
Permit revision issues were also
addressed at the August 6 meeting of the
Permits/New Source Review/Toxics
Subcommittee of the Clean Air Act Advisory
Committee. The most significant
development at that meeting was that EPA
officials suggested an alternative approach for
determining which changes involving PTE
levels should be regarded as de minimis
revisions rather than minor revisions. Under
this approach, the determination would not
hinge on whether any fixed percent of the
major source threshold level (e.g., 90%) would
be exceeded. Instead, the determination would
be based on (1) whether a control device is
being used and (2) whether the control device
is one which is commonly used and will
function with a predictable efficiency in the
situation presented. According to EPA
officials, if such a control device were being
utilized, no public and EPA review of the
change should be required. Furthermore, the
EPA officials suggested that a similar approach
could also be used for minor NSR changes.
With regard to reductions based on emission
factor calculations, the EPA officials suggested
that, if such calculations have previously been
"blessed" by the permitting authority and
EPA, additional public and EPA review would
be unnecessary. EPA indicated that it will
attempt to flesh out this approach prior to the
September 19 stakeholders meeting and to
prepare tables addressing specific control
devices and predicted efficiencies.
EPA Region IV Vetoes
Proposed Title V Permit
Based on Disagreement With
BACT Determination
In an action that conflicts with EPA's
previously announced policies, EPA
Region IV recently objected to a proposed
Title V permit for a glass manufacturing
facility in Kentucky because the Region
disagreed with the BACT determination made
by the state permitting authority. The
Region's letter of July 30, 1997 to the
Kentucky Division of Air Quality stated,
among other things, that "the [proposed]
permit is not in compliance with the Best
Available Control Technology ("BACT")
requirements under PSD because the BACT
analysis for the proposed flat glass furnace is
legally deficient." The letter went on to list
the perceived deficiencies, which included the
state's rejection of certain NOx control
technologies. The Region's objection was
made pursuant to 40 C.F.R. 70.8(c), which
authorizes EPA to object to a proposed permit
if it is "not . . . in compliance with applicable
requirements or the requirements of [Part
70]."
The July 30 letter outlined the basis for
the Region's conclusion that it was authorized
to scrutinize the state's specific BACT
determination during the Title V review
process. According to the Region, one of the
"applicable requirements" for the facility is the
requirement to obtain a PSD permit
complying with PSD requirements. The
Region explained that "state-issued PSD
permits must conform to the applicable
requirements of the Clean Air Act and the
SIP, and failure to do so may result in
corrective action by EPA." In reviewing the
BACT determination, the Region indicated
that it relied on a "longstanding policy" that a
state must consider all available control
technologies and, in selecting one technology
as BACT, must justify the rejection of more
stringent control options.
Region IV's action is a cause for great
concern among Title V permit applicants
because it may portend that EPA will exercise
its veto power much more expansively than
industry representatives believe is lawful and
EPA itself had previously indicated. The
effect of the objection is to second-guess the
state's specific determination as to what
constitutes BACT for the source in question.
The Region's action conflicts directly
with EPA's own interpretation of 40 C.F.R.
70.8 and its policy statement concerning
how the objection power would be exercised.
In the preamble to the final rule promulgating
Part 70, EPA expressly stated that the purpose
of the section 70.8 review process "is not to
second-guess the results of any State NSR
determination." 57 Fed. Reg. 32,250, 32,289
(July 21, 1992) (emphasis added). EPA further
explained that its review of state PSD permit
determinations would be very limited:
EPA would only be reviewing
whether the State had
conducted a BACT analysis, if
applicable, and whether that
analysis is faithfully
incorporated in the title V
permit. The EPA will not use
its review period to object to
or attempt to revise the State's
BACT determination.
Id. Region IV's letter does not address the
conflict between EPA's objection to the state's
BACT determination and its own
interpretation of its authority stating that it
would not object to a specific BACT
determination.
Under 40 C.F.R. 70.8(c)(4), the
Kentucky Department of Air Quality has 90
days in which to revise and resubmit a
proposed permit in response to EPA's
objection. Otherwise, EPA will issue or deny
a Title V permit.
Reminder: Next Network
Conference to Be Held in
the Spring of 1998
As announced on July 24, an Air
Network Conference will not be
held in November. The clean air
implementation issues that we had expected to
address are not at a stage that would justify
holding a conference this fall. However, a
number of important topics will be "ripe" for
discussion at the Spring 1998 conference,
including a new Compliance Assurance
Monitoring Rule, the negotiation of permit
terms to address the "credible evidence" rule,
the likely issuance of periodic monitoring
guidance, and a new White Paper No. 3.
Please e-mail any comments or questions to the Clean Air Act Information Network.
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