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27.3
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
Office of Air Quality Planning and Standards
Research Triangle Park, North Carolina 27711
SEP 11 1986
SUBJECT: Ozone Control Strategy - Regional Office Review of
Potential in Improvements In New Source Review (NSR)
Regulations
FROM: G. T. Helms, Chief
Control Programs Operations Branch (MD-15)
TO: See Addressees
Attached is a list of NSR "loopholes" that occur in some State
regulations and that are inconsistent with Federal requirements as adopted
in 1980. Closing these loopholes has been proposed as a control measure
under the ozone control strategy to minimize emissions increases that
otherwise might result from new source growth.
This control measure was discussed by a committee of Headquarters and
Regional representatives at the 1985 Regional Workshop in Southern Pines.
From those discussions and other information available to the New Source
Review Section in the Standards Implementation Branch, the attached list of
potential improvements in State NSR regulations has been prepared. Before
attempting to include this list in the national ozone strategy, we are
sending it to the Regional Offices for review and comment, particularly in
regard to the expected benefits from closing the specific loopholes. For
example, it would be helpful if you could relay to us experiences you may
have had regarding the magnitude of emission increases that resulted from
use of one of these loopholes. To assist you in your review, a sample
worksheet is attached to provide a format for your comments. Also, please
feel free to describe additional loopholes that you believe should be
addressed.
Please coordinate your response with the other addressees in your
Region and with your Regional Counsel. Since we are on a tight time frame
for developing ozone strategy, we would like to have your comments by
September 24. If you have any questions, please call David Johnson (FTS
629-5665) or Barb Duletsky (FTS 629-5516).
Attachments
2
Addressees:
Chief, Air Branch, Regions I-X
Marcia Spink, Region I
John Courcier, Region I
Kevin Doering, Region II
Ken Eng, Region II
Eileen Glenn, Region III
Estena McGhee, Region III
Roger Pfaff, Region IV
Burt Frey, Region V
Ron Van Mersbergen, Region V
Donna Ascenzi, Region VI
Tom Diggs, Region VI
Dan Rodriguez, Region VII
Charlie Whitmore Region VII
Lee Hanley, Region VIII
Dale Wells, Region VIII
Wayne Blackard, Region IX
David Jessan, Region IX
Dave Bray, Region X
Ray Nye, Region X
cc: Ron Campbell
Gerald Emison
Greg Foot
Nancy Mayer
Brock Nicholson
Rich Ossias
B. J. Steigerwald
New Source Review (NSR) State Implementation Plan (SIP)
Loopholes Affecting Ozone
- Clean Spot Exemption. This loophole exempts sources that are located
in a 107 designated nonattainment area from NSR requirements if the source
can demonstrate that it does not "affect" the nonattainment problem in an
area. This is sometimes demonstrated by showing that an increase in a
pollutant from a particular source is insignificant when compared to the
areawide nonattainment problem. This type of exemption was removed in the
August 1980 response to the Alabama Power court settlement [40 CFR
51.18(j)(2)].
- General Exemptions. This loophole exempts certain source types (e.g.,
cotton gins) and/or source classes (e.g., reactivated sources) from some or
all NSR requirements. These exemptions apply regardless of the quantity of
emissions generated by the source. Even though section 51.18(j) contains
some exemptions in the definition of major modification [40 CFR
51.18(j)(1)(v)] and major stationary source [40 CFR 51.18(j)(1)(iv)] and NSR
policy allows States to exempt a source from offsets if a growth allowance
is available, some States have added additional (unauthorized) exemptions
that should be removed.
- Vague Offset Requirements. This loophole is the omission of specific,
enforceable, and replicable criteria for approving offsets. These criteria
include a definition of baseline (CMA Exhibit B), a requirement that
reductions must be Federally enforceable (CMA Exhibit A), and a prohibition
on the use of any emission reduction, as an offset, that the State had
previously used to demonstrate attainment [40 CFR 51.18(j)(3)].
- Vague or Incorrect Netting Requirements. This loophole is similar to 3
above but the requirements apply to netting rather than offsetting. Netting
is used to exempt sources from NSR requirements by allowing sources to get
credit from emission reductions within the same source to remain below
certain major source emission cut offs. The requirements for netting should
include an "actual" baseline (CMA Exhibit B), a health and welfare
equivalence (CMA Exhibit A), the lack of a specific contemporaneous
timeframe, and consistency with the reasonable further progress and
attainment demonstrations. Some SIP's have "significant" levels that are
higher than those allowed by Federal requirements [40 CFR 51.18(j)(1)(x) and
(vi)].
- Use of Nonfederally Enforceable Permit Conditions. This loophole
allows sources to use permit conditions that are not federally enforceable
to exempt sources from NSR requirements (CMA Exhibit A). Federal
regulations only allow the use of federally enforceable permit conditions to
limit the potential to emit below the maximum capacity. The proposal to
make operating permits federally enforceable does not close this loophole
[40 CFR 51.18(j)(q)(iii)].
2
- The Omission of Source Responsibility Provisions. This loophole allows
a source to: (1) state that an NSR permit relieves it from complying with
other applicable requirements, and (2) use a federally enforceable permit
condition to exempt a potentially major source from NSR requirements when
the source is constructed and to request a relaxation from the federally
enforceable condition without having to subject the source to NSR
requirements. Federal requirements prohibit both practices. This second
provision has become increasingly important in fuel switching situations and
in times of increased economic activity [40 CFR 51.18(j)(5)].
- Incorrect VOC Definitions. This loophole exempts certain sources from
NSR requirements by excluding certain VOC substances from the emission
calculation used in applicability determinations. These incorrect
definitions include vapor pressure criteria and "Rule 66" exemptions.
Federal requirements only allow the exclusion of organic compounds which EPA
has declared insignificantly photochemically reactive [40 CFR
51.18(j)(3)(ii)(d) and certain Federal Register notices on VOC reactivity].
- Use of Federally Approved Attainment Demonstrations. This loophole
allows the State to use a State developed attainment demonstration even if
the demonstration has not been approved by EPA to determine whether an
offset/netting transaction is consistent with RFP. This is particularly a
problem when EPA has actually determined that the State attainment
demonstration is not approvable because it does not meet Federal attainment
[40 CFR 51.18(j)(3)].
- Use of State Nonattainment Designations. This loophole allows a State
to exempt sources that are located in 107 designated nonattainment areas if
the State designates the area as attainment. The EPA criteria for
redesignating an area as attainment may be more stringent than the State's
criteria [40 CFR 51.18(j)(2)].
- Unclear or Incorrect Definitions. This loophole allows States to
exempt sources from NSR by using less restrictive definitions or more
creative interpretations of vague definitions. The definitions that are
most important for applicability determinations are: stationary source,
actual emissions, allowable emissions, fugitive emissions, commence or begin
construction, building structure or facility (dual source definition issue),
and major stationary source. For correct application of control
requirements the LAER definitions should match the Clean Air Act provisions
[40 CFR 51.18(j)(1)(a)].
IMPROVEMENTS IN NEW SOURCE REVIEW REGULATIONS
Potential
Improvement
(i.e.,
existing
loophole)
|
States with
Deficient
Regulation
|
Example
of a
Deficient
State
Regulation
|
Suggested
Wording
to Correct
Deficiency
|
IMPROVEMENTS IN NEW SOURCE REVIEW REGULATIONS (cont.)
Potential
Emission
Reduction
in
Nonattainment
Areas
(low, medium,
high)
|
Priority
(low,
medium,
or high)
|
Notebook Entries: 15.1; 28.1 |