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Project Title
Integration of Environmental Management Systems into Air Quality Permits

State Agency
Alaska Department of Environmental Conservation (DEC)

Project Contact:
Tom Turner; Air Permits Oil and Gas Coordinator; Alaska Department of Environmental Conservation, 555 Cordova; Anchorage, AK 99501-2617, Phone: (907) 269-8123, Fax: (907) 269-7508, Email: tom_turner@dec.state.ak.us.

Pre-proposal Project Narrative
The Alaska Department of Environmental Conservation (DEC) is in a unique position to fully utilize the Innovation Grant to achieve both the goals of the EPA and the DEC. The DEC is currently re-writing and reorganizing the Air Quality Permit process following Quality Management Principals. New legislation, HB 160, combined with new direction and leadership provided by DEC Commissioner Ernesta Ballard provides a good opportunity to incorporate the next level of innovation into the permit process to achieve these goals. These goals are:

The EPA Innovation Grant will accelerate the process that incorporates Quality Management Principals into the Air Quality Permits Standards through the Environmental Management Systems (EMS) of industry. When businesses require capitalization or funding, they submit a business plan to a commercial bank for a loan. The environmental permit process is similar. In effect, a regulated business submits an Environmental Plan to the agency that oversees the environmental resource "bank.' The environmental permit could include the business's EMS to provide the same process for Air Quality Protection. The combination of EPA's innovation grant, DEC air permits quality management and industry EMS's are ideal to develop and implement the new model for environmental permitting. In addition, Alaska's 229 federally recognized Tribal entities allow for the new permit model to be applied to all sectors of society.

To foster the use of Environmental Management System into the Air Quality Permit Program for industry and native/tribal communities to reduce emissions, protect human health, and improve regulatory compliance.

Background of Air Permit Re-organization to a Quality Management System

Air Quality Workgroup: The Alaska Department of Environmental Conservation (ADEC) created an Air Quality Work Group to develop proposed short-term and long-term recommendations for changes to DEC's air permitting program. The Work Group met four times, with numerous sub-groups meeting by teleconference and electronic-mail.

The Air Permits Work Group consisted of representatives from the oil and gas industry, mining, electrical power, fish processing industries, the military, and citizens organizations It worked by consensus, adopting a list of recommendations without objections.

The Work Group recommended that the State of Alaska retain the responsibility to implement the Clean Air Act Title V operating permit program and Title I new source review permit programs, and continue regulating minor source review through the State's Implementation Plan, (subject to further review) provided that DEC implements measures to improve the efficiency and responsiveness of the air permitting program. The Workgroup recommended:

A) Legislative and regulatory measures that allow DEC to adopt a Federal core Title V program.
B) Legislative and regulatory measures to closely more mimic-the revised federal 40 CFR Part 51 (PSD/NSR Prevention of Significant Deterioration/New Source Review) program and to incorporate the major new source review program reforms adopted by EPA Administrator on December 31, 2002.
C) Minor new source review be expedited and simplified.
D) Permits are timely and predictable.

HB 160 and the Minor Source Program/Permit by Rule
The 2003 Alaska Legislature passed House Bill 160 to implement the recommendations. One element of the HB 160 is the Permit by Rule for the new minor source program. An expedited process will replace the existing program of: Client application, DEC review, public notice, comment/testimony response and final written permit. The new process will have the Client submit an application based on qualifications, send notice, pay permit fees to the DEC and submit compliance records. This is an ideal situation to develop and incorporate Quality Management Systems and EMS's into the air permit process. The applicant has an increased responsibility to adhere to standards without the detailed oversight and assistance of the Department. DEC has the statutory responsibility to protect ambient air quality. A structured approach that harmonizes and integrates the permit process is required. An EMS would be able to satisfy both concerns. A well written EMS would have the air standards in business plans and provide to the Department a clear plan of air quality protection and compliance.

The DEC has begun the process to rewrite the Minor Source program. Contractors have been hired to review federal regulations and to survey what other states charge for permit fees. A vital next step is the minor source program development. The following are the next steps.

A) Defining what information is required for the permit.
B) Designing an on line electronic form.
C) On-line process connected to an electronic data base.
D) Repopulate the form with the information from data base.

The DEC is interested in incorporating an EMS's into the online permit process. This would allow integration and alignment to achieve a timely and predictable permit. There are sectors of industry that have an existing EMS. For example, British Petroleum (BP) requires their sub-contractors to have an EMS. Identifying, understanding and managing the interrelated process between industry EMS's and DEC permit requirements contributes to both organizations effectiveness, efficiency and compliance. To incorporate an EMS into the online permit process, DEC would need to research, develop and design a standardized EMS that is applicable to the system and pragmatic to industry.

Major Source Program:
The major source program for the air quality program requires the current process of client application, Department review, technical analysis report, public notice, comment response, and final permit decision. Often the major source final permit requires specific conditions and operational requirements of the applicant. These permit conditions are based on the factual, scientific approach to a decision. The permit conditions often read like an EMS, outlining types of fuel, operation hours, testing schedules, record keeping, etc. The major source permits could greatly benefit from a standardized EMS in the application process. An EMS would achieve Quality Management Standards, providing a factual, timely and predicable permit process. The increased reliance on factual, scientific principals to adhere to air quality protection places a high level of responsibility on both industry and the Department. Compliance and protection based on factual analysis are part of the EMS process and avoids the "after the fact" conflicts that arise from misunderstanding program expectations. An EMS would be able to provide:

A) Factual and scientific approach to ensure data is reliable and accurate.
B) Analyze information using valid methods.
C) Clear process for communication, Data is accessible to those who need it.
D) Predictability through an EMS template and agreed upon system for operations to industry and the Department.
E) Increase ability to demonstrate and review compliance.
F) Permit Conditions that are clearly part of the operational plan of industry.
G) A consistent approach for continual improvement of Air Quality Standards.

Please note for further information refer to http://www.state.ak.us/dec/dawq/aqm/rewrite.htm Exit Disclaimer

Six Elements of a Good Regulatory Program.

In addition to the Air quality re-organization, The DEC Commissioner, Ernesta Ballard, has clearly outlined the direction of the permit process through the Six Elements of a Good Regulatory Program:

  1. Unambiguous statutory authority
  2. Documented basis of concern
  3. Protective standards
  4. Rational regulatory scheme
  5. Documented compliance
  6. Enforcement

The Six Elements impart purpose and direction to the DEC air permit re-write to develop an innovative and forward thinking process by following the Quality Management System. By incorporating the principals of the Six Elements into an EMS based permit approach, the goals for the Department and EPA are achieved while providing industry with a timely and predicable permit process. The funding of the EPA innovation grant ensures that industry and tribes can adhere to the standards established in the DEC's Six Elements through an EMS Permit. The combination of the Six Element into the Quality Management System of EMS permits are a model that provide for the long term, clear and consistent standards that EPA seeks for the permit process.

Program Criteria:

Target Priority Environmental Areas: The purpose of air quality permits is the protection of public health by emission controls. The relationship between the Department and the permit applicant can be contradictory. Collaboration between the Department and the Applicant can be achieved by having the EMS provide the based for mutual discussion and agreement. Ensuring a balance approached while acknowledging the interdependent relationship of the permit process is fundamental to the Quality Management System of environmental protection. The nature of an EMS is to integrate environmental practices into the standard operations of businesses and native/tribal communities. By implementing an EMS, a business or community might focus on reducing a variety of environmental risks beyond air quality. Submitting an EMS in conjunction or as a substitute to the permit forms, would greatly assist this process with clear, monitoring, emission levels and compliance procedures.

Use of Incentives as a Tool: A primary recommendation of the workgroup is a timely and predicable permit process. An EMS based permit process will assist with achieving this goal, providing an applicant's sense of ownership. Applicants would have incentives to have their own EMS to demonstrated permit conditions and compliance. A permit applicant, whether for the minor or major source program, would submit a written EMS with the application. The EMS becomes the basis of discussion for monitoring, record keeping, reporting, and improvements to compliance with the approved permit. If the EMS has all the elements of the Minor Source program and adheres to Alaska Air Standards the permit is quickly approved. If not, the EMS provides a base for discussion that allows for documentation of concern and rational regulatory scheme. An EMS permit process provides for the quick response (timely) or based document for communication (predictability).

Transferring Innovation: A key element of this project is to incorporate Commissioner Ballard's Six Elements of good permit into the applicant EMS and Quality Management permit process. The integration of an EMS with the Six Elements combines innovative approaches with good regulatory practice. Businesses have increased development and implementation of written EMS's into the operations of their organizations. It is important to get the applicant into the same mindset and ability of the Department's quality management permits. Equally important is for the Department to acknowledge and adapt to industry's progress in EMS based environmental compliance. Correct EMS's provide for the Six Elements of a good permit: emission tracking; steps to mitigate or reduce emission; and complying with regulations/statutes. The innovation in the air quality permit process places a level of responsibility on industry to demonstrate adherence and compliance to the permit process. A methodical and standardized EMS can provide the protective standards, rational scheme and documentation of concern/compliance of the Six Elements. Compliance and protection are part of the EMS process and avoid "after the fact" conflicts that arise from misunderstanding program expectations.

The Innovation Grant would focus on reviewing existing or potential EMS templates. The grant would incorporate the EMS into the forms and procedures from the permit process to provide for a new standard of environmental permitting.

Project Schedule, Measure and Accountability
This project will be developed over a two year time period, building on the permit re-write progress.

Year One
Establish the regulations and statures required for clear responsibility and accountability.

Year Two

Tribal Air Quality Permits
Alaska is unique with 229 Federal Recognized Tribes over a vast area. The majority of these tribes are small in comparison to land based, reservation tribes in the lower 48. The majority of the tribes in Alaska have Fewer than 500 members. The Tribes are generally individual villages, geographically separated, and connected only by water routes, snow routes or small aircraft. There is a mixture of Tribal based traditional councils and Municipal structural entities in the larger villages.

The Tribal communities have all the elements for infrastructure, including small generator based power plants. Power plants within the larger tribal communities would fall under the Minor Source Program. In developing the EMS template the grant would include areas that have high tribal ownership of power generation's plants, ex. Aleutian-Pribiloff Islands. For the Minor Source Template to be successful, it will need to be applicable to all areas of Alaska, including the village based Tribal communities. The grant would provide an element to include Tribal input into the development of an EMS

[Budgetary Information Withheld by U.S. EPA]

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