DOD: Elmendorf Air Force Base

Elmendorf Draft FPA/ENVVEST Proposal

DEPARTMENT OF THE AIR FORCE
PACIFIC AIR FORCES

MEMORANDUM FOR ENVIRONMENTAL PROTECTION AGENCY, REGION 10
ATTENTION: DAVID BRAY, OAQ-107
1200 Sixth Avenue
Seattle, WA 98101

FROM: 3 WG/CV
11530 Q St Ste 200
Elmendorf AFB AK 99506-2850

SUBJECT: ENVVEST Proposal

1. The Air Force is very pleased with your selection of the Elmendorf Air Force Base ENVVEST proposal for continued development in the Project XL process. Attached are the draft Final Project Agreement (FPA) and draft Public Outreach Plan for your review and comment. Some of the specifics for the draft FPA are being developed by a consultant, in a parallel effort to this review. It is anticipated that the completion of your review and the results of the other studies will occur within the next thirty days.

2. It is estimated that sixty days will be required to accomplish the requirements of the draft Public Outreach Plan. Elmendorf will initiate that plan once review comments have been received and incorporated into the FPA. If no new state regulations are required and the results of the Public Outreach Plan are positive, the FPA could be signed in May 1998. We are pleased that this proposed schedule falls within your suggestion of completing the development phase within four to six months.

3. Thank you in advance for your prompt action. Please contact Valerie Payne, Air Quality Program Manager, at (907) 552-9677, with any additional questions or concerns.

RANDY E. HONNET, Colonel, USAF
Vice Commander

Attachments:
1. Draft Final Project Agreement
2. Draft Public Outreach Plan

cc:
Bruce deGrazia, DUSD/ES
Walter Walsh, HQ EPA
John Stone, ADEC (Juneau)
Major Bryan Bodner, HQ USA/ILEVQ
Robert Leong, HQ PACAF/CEV
Jim Washington, AFCEE-CCR/S

FINAL PROJECT AGREEMENT ELMENDORF AIR FORCE BASE AIR QUALITY ENVVEST INITIATIVE

PREAMBLE

This Final Project Agreement (FPA or "Agreement") is prepared in support of President Clinton's Reinventing Environmental Regulation Initiative. This Agreement states the intention of the United States Environmental Protection Agency (EPA), Elmendorf Air Force Base, Alaska ("Elmendorf" or "Base"), and the Alaska Department of Environmental Conservation (ADEC) (collectively hereinafter referred to as "the parties") to carry out a pilot project pursuant to the 1995 Memorandum of Agreement (MOA) between the Department of Defense (DOD) and EPA on Regulatory Reinvention Projects, testing innovative approaches to environmental protection. The program resulting from the MOA is called ENVVEST and represents an initiative to develop new approaches for meeting DOD and EPA responsibilities while achieving better environmental performance at lower cost than anticipated under existing regulatory approaches. The ENVVEST program mirrors and supports EPA's regulatory relief efforts under Project XL.

Under this Agreement, Elmendorf will achieve superirate superior environmental technology through the implementation of an alternative-fuel vehicle program. The Elmendorf initiative follows President Clinton's mandate that regulatory reinvention under the Project XL/ENVVEST program put the focus on progress rather than process. Elmendorf has proposed a phased air emissions reduction program, targeting reduced emissions of carbon monoxide (CO) and oxides of nitrogen (NOx). The EPA and ADEC will, in return, allow Elmendorf the use of innovative means for complying with the Clean Air Act, Title V Federal Operating Permit Program.

I. Overview-Purpose of this Agreement

This Agreement is a joint statement of the parties' intentions with regard to the Elmendorf Air Quality ENVVEST Initiative. This Agreement is not intended to create legal rights or to be a contract or a regulatory action, such as a permit or rule. While it does not give rise to any rights enforceable in a legal action either to compel performance of the Agreement or for damages, it is intended to clearly state the plans of the parties and to represent the firm commitment of each party to carry out the project.

II. Description of the Project

A. General Project Description

According to the 1990 census, the Anchorage Metropolitan Statistical Area (MSA) encompasses 1,698 square miles and a has a reported population of 226,338. Anchorage is the largest city in Alaska, and about half of all Alaskans reside within the Anchorage MSA. Located just north of Anchorage, Alaska, Elmendorf Air Force Base encompasses approximately 13,000 acres and is the largest military installation in Alaska. It is occupied by more than 800 buildings, two runways, more than 150 miles of roads, and more than 6,000 personnel from all branches of the United States and Canadian armed forces. With civilian workers, retirees and their families, the number of people associated with Elmendorf rises to nearly 25,000. Just under a third of the military people live in Elmendorf's 1,644 family housing units and dormitories, while the other families reside off Base. Total economic impact on the Anchorage vicinity is nearly $500 million a year.

The mission of Elmendorf is to: (1) Provide CINCNORAD and USCINCPAC trained and equipped tactical air superiority forces for the defense of North America; (2) provide composite tactical air and airlift forces for contingency operations throughout the Pacific area of responsibility; (3) provide medical care for all forces in Alaska; and (4) host the 11th Air Force Headquarters and other associate units.

Elmendorf, like many other military installations, differs from civilian stationary air pollutant sources, in that the Base hosts and supports a wide variety of functions and activities. These include an operational airfield, residential housing, office buildings, gas stations, utilities, military police and fire departments, public schools, chapels, a hospital, dental clinics, retail stores, and recreational facilities, amongst others. The Base is, in essence, a city.

With the introduction of regulatory reinvention and the creation of Project XL/ENVVEST, Elmendorf recognized an opportunity to propose a pollution prevention program for reductions in air pollutant emissions. The flexibility gained from using EPA guidance, regarding major stationary sources on military installations, allows Elmendorf to improve ambient air quality. The improvement comes through the reinvestment of administrative cost savings, realized from a limited applicability of the Title V permitting program, into pollution prevention initiatives which will benefit the environment.

Title V changed the basic approach to source-specific regulation under the act by requiring each state to develop and implement an operating permit program for all stationary sources of air pollution. One of the purposes of this new program was to consolidate, in a single document, all of the federal and state regulations applicable to a source, to simplify compliance and enforcement. The Alaska Air Quality Control Program, and its implementing regulations at 18 AAC 50, is an EPA approved and federally enforceable stationary source operating permit program, implementing Title V and 40 CFR Part 70 (the Title V supporting regulations). Under the current Title V operating permit scheme, Elmendorf is considered a single stationary source, with a single permit that would regulate all air pollutant emission sources from fence-line to fence-line. The 1996 emissions inventory shows Elmendorf as currently have 104 sources at 42 separate locations. This represents the total number of sources on Base which are considered major or significant, and which have emissions exceeding the limits or definition of an insignificant source. This includes 27 emission sources at seven facilities which exceed the 100 tons per year (TPY) potential to emit (PTE) definition of a major source. In addition to these major and significant sources, there are hundreds of insignificant emission sources to be accounted for under Title V. The cost of compliance under this permitting scenario will be significant and will not allow for any reinvestment opportunity by way of pollution prevention equipment and little potential for emissions reductions, given the Air Force's current appropriations.

Through the Project XL/ENVVEST initiative, Elmendorf will divert money, currently earmarked for compliance with Title V requirements, into efforts to y8ield real and significant emission reductions reflecting superior environmental benefit. Elmendorf will accomplish this through a two-fold exercise of regulatory flexibility by the EPA and ADEC.

First, Elmendorf will be treated as multiple stationary sources through ADEC's adoption and implementation of EPA's policy document, entitled "Major Source Determinations for Military Installations Under the Air Toxics, New Source Review, and Title V Operating Permit Programs for the Clean Air Act", dated August 2, 1996. This guidance recognizes that military installations possess unique characteristics warranting flexibility in the stationary source determination process. Applying the guidance to Elmendorf will result in multiple stationary sources within the confines of the installation.

The second avenue of regulatory flexibility is the use of a mechanism to limit the potential to emit (PTE) of the stationary sources on the base other than the CH&PP. There are various methods of calculating a unit's PTE. For example, the EPA issued guidance in September of 1995 which explained and encouraged adopting an annual use estimate of 500 hours for emergency use generators, absent data demonstrating a more reliable or accurate figure. Elmendorf will apply discretionary use of pre-approved limits, under 18 AAC 50.230, or owner-requested limits, under 18 AAC 225, to demonstrate that emission unit groupings do, in fact, have actual emissions far below the default values of continuous operation, 24 hours per day, 365 days per year.

B. Conformity to the Memorandum of Agreement

The following section addresses criteria for consideration under the DOD/EPA Memorandum of Agreement.

1. Regulatory Flexibility

Information regarding regulatory flexibility is discussed in the preceding section.

In support of this proposal, ADEC, in cooperation with EPA, will exercise regulatory flexibility in the designation of major stationary sources and potential to emit, as they are currently interpreted to apply to Elmendorf and other military installations. Application to other military installations will be evaluated on a case-by-case basis.

2. Cost Savings and Paperwork Reduction

Elmendorf expects to realize considerable cost savings and paperwork reduction through the application of the ENVVEST initiative. Without ENVVEST, Elmendorf would be treated as a single stationary source, from fence-line to fence-line, with a single permit. For this scenario, the total funding requirement programmed through fiscal year 2004 is currently at $2.045M.

Under the alternative scenario of permitting the Elmendorf CH&PP as the only major source, the total funding requirement programmed through fiscal year 2004 would be reduced to $518K.

In this alternative scenario, the total reinvestment opportunity for pollution prevention projects at the CH&PP and for alternative fuel vehicles will amount to $1.527M.

3. Description of Stakeholder Involvement

See attachment titled, "ENVVEST Public Outreach Plan, Elmendorf Air Force Base."

4. Environmental Results: Innovation/Pollution Prevention

The reinvestment of compliance funding into pollution prevention will result in actual reductions of NOx and CO. Reductions to NOx and CO pollution levels on Elmendorf will positively impact the surrounding areas. Although the Base and the Municipality of Anchorage are currently in attainment for NOx, the CH&PP does emit an average of 840 TPY of NOx to the ambient air. An in-depth analysis of emission reduction measures available at the power plant is currently in preparation. The analysis was designed to be a detailed study of combustion modification control measures and the installation of new boilers. The Draft Technical Memorandum for this analysis is due in mid-February 1998. As results of the analysis become available, they will be incorporated by attachment into the FPA.

Anchorage is currently in "moderate" nonattainment for CO emissions, and is under evaluation for reclassification to "serious" nonattainment. Elmendorf's southern boundary borders the Anchorage nonattainment area. The current vehicle fleet at Elmendorf is composed primarily of conventional petroleum-fueled vehicles that fall under the State of Alaska Inspection and Maintenance (I/M) program. Conversion of certain fleet vehicles to bi-fuel capability, using compressed natural gas (CNG) as the alternative fuel, will contribute to reduced CO emissions for Elmendorf and will demonstrate to the general populace that this level of technology is achievable and beneficial.

5. Transferability, Feasibility, Monitoring, Reporting, and Evaluation

a. Transferability

This initiative is a pilot program which implements a new approach to air pollutant source permitting and administrative management. The ultimate goals of this initiative are 1) to reduce air pollution by way of prevention at the source, and 2) to demonstrate the marketability of alternative-fuel vehicles in the Anchorage area. The Elmendorf concept may be transferable to other DOD facilities that have multiple major sources on their installations. Two such installations in Alaska are Fort Richardson and Eielson Air Force Base. A demonstration of the environmental benefits achieved from this approach would be clear justification for the transfer of this type of initiative to virtually all similar DOD installations, or those federal facilities with multiple major sources and a CH&PP. the alternative-fuel vehicle program has the potential for technology transfer to other entities that are interested in a similar program. It will also be useful as a template for DOD installations located near urban areas which are currently considered significant markets for alternative-fuel vehicles.

b. Feasibility

It is estimated that the administrative cost savings realized, through the granting of regulatory relief, will be $1.527M. This savings will be available for investment into pollution prevention at the CH&PP and for the alternative-fuel vehicle program. It is estimated, at this point in time, that the cost distribution will be approximately $500,000 into the CH&PP and $1,000,000 into the alternative-fuel vehicle program. Administratively, the proposal is feasible. Mechanisms are in place to allow for permit and procedural flexibility.

c. Monitoring, Reporting, and Evaluation

It is anticipated that evaluation of the project will be accomplished on several fronts. Emissions from the CH&PP could be quantitatively compared with previous measurement levels to determine the reduction in emitted pollutants. In addition, Elmendorf will work closely with EPA, ADEC, and the Municipality of Anchorage to determine how the CNG technology demonstration and initiatives at Elmendorf can contribute to the overall air quality improvement efforts in the Anchorage area. Elmendorf will continually evaluate the CNG program over the life of the ENVVEST project, in an attempt to demonstrate the viability of alternative-fuel vehicle programs in Anchorage.

The ENVVEST Team will brief stakeholders as the project evolves, in accordance with the Public Outreach Plan. Elmendorf will prepare reports, on a basis agreed to by all stakeholders, which will document progress toward the stated goals of this proposal.

6. Environmental Justice

Environmental Justice, pursuant to Executive Order 12898, is not applicable to this proposal. Unjust or disproportionate environmental impacts will not be realized as a result of this project.

III. Implementation of the Elmendorf Initiative

A. Elmendorf Responsibilities

Elmendorf will implement a phased program, over six years, to reduce emissions of NOx and CO. The initial effort will be through emission reductions from the CH&PP. Details of the program will be specified as results of the reductions analysis, currently under preparation, become available. Immediate reductions should be attainable merely through a modification of operational procedures. The alternative-fuel vehicle program will also be phased over the six-year period, with the construction of the fueling station being accomplished in 1999. Fleet vehicle conversion will also begin at this time.

Preliminary milestones are established, as follows:

1. Elmendorf expects to award a construction contract for the compressed natural gas fueling station by June 1998, with an anticipated completion date of January 1999. During this same time frame, initial modifications to the CH&PP will get underway (recommended modifications will be available upon receipt of reductions analysis report, currently in preparation).

2. By 30 September 2000, and each year thereafter, through 30 September 2004, vehicle conversions and additional modifications to the CH&PP will be initiated and completed (in a phased process, depending on amount available for investment).

B. ADEC Responsibilities

The ADEC will provide technical assistance to Elmendorf regarding opportunities for emission reductions. As the permitting authority for the State of Alaska, ADEC will be responsible for any permit issuance under Title V. ADEC will also be responsible for implementing EPA's guidance documents and for applying alternative methods for calculating the PTE of emission sources at Elmendorf.

C. EPA Responsibilities

EPA will also provide technical and administrative assistance to Elmendorf in their pursuit of this agreement. EPA will review and, as appropriate, approve the regulatory relief approaches adopted by ADEC.

IV. Administration of the Agreement

A. Duration and Renewal of Agreement

It is the intent of the parties that this agreement will result in permanent beneficial results to the air quality program of the Alaska Department of Environmental Conservation. It is also the intent of the parties to establish a consistent approach to assessing major source status of military installations in the State of Alaska. If any party desires to explore further pollution prevention opportunities related to the terms of this agreement, that party may contact the others to recommend and discuss renewal or revision of the terms of this agreement for such purpose.

B. Funding

Upon execution of this Agreement, Elmendorf will redirect, with the assistance of the major command, at HQ PACAF, Title V compliance funds required to implement program emission reduction projects. The following funding strategy has been agreed to:

FY 99....................................................$550,000

FY 00....................................................$170,000

FY 01....................................................$200,000

FY 02....................................................$200,000

FY 03....................................................$207,000

FY 04....................................................$200,000

TOTAL..............................................$1,527,000

All funding commitments by Elmendorf will be subject to approved funding and will be in accordance with the Anti-Deficiency Act (31 U.S.C. 1341). Emission reduction projects will be funded from the funds estimated to be available in the totals identified above. If the costs of implementing the Title V permit for the CH&PP exceed the amount currently estimated, those costs will be deducted from the funds programmed for ENVVEST, in the year where required. All parties agree that administrative costs should be minimized to enhance the benefits of pursuing this initiative.

D. Events Preventing Implementation of Agreement

If at any time during implementation of this FPA, Elmendorf determines and EPA and ADEC concur that any requirement of such agreement cannot be met due to circumstances beyond the control of Elmendorf (including, but not limited to, materially changed site conditions that could not reasonably have been anticipated, insufficient availability of appropriated funds, or the significant failure of an innovative technology) Elmendorf, EPA and ADEC will attempt to negotiate mutually acceptable changes to this FPA.

E. Dispute Resolution

Any dispute that arises with respect to the meaning, application, implementation, interpretation, amendment, termination, or modification of the FPA, or with respect to the Elmendorf implementation of the FPA, the resolution of which is not expressly provided for in the FPA, will in the first instance, be the subject of informal negotiations. To initiate informal negotiations, any signatory which believes it has a dispute with any other party will simultaneously notify all of the parties, in writing, setting forth the matter(s) in dispute. If the dispute cannot be resolved by the parties within 30 days of receipt of such notice, then one or both parties may invoke non-binding mediation by setting forth the nature of the dispute, with a proposal for its resolution, in a letter, and submit it to a three-person dispute resolution committee consisting of one member designated by each party.

F. Public Records and the Administrative Record

Elmendorf will issue, within 30 days of execution of this Agreement, and every six months thereafter, until completion of the air quality initiative, progress reports which documents progress toward goals established by this Agreement. The reports will document equipment changes and replacement, process changes, and other relevant facts which support any assertions of actual emission reductions, or the progress thereof, or successes and benefits achieved through the alternative-fuel vehicle initiative. The reports will be provided to EPA, ADEC, and any interested party that requests such reports. In addition, Elmendorf shall maintain a central records repository to maintain a copy of all ENVVEST related materials.

G. Enforcement

While this Agreement is not legally binding, the requirements of 18 AAC 50, Air Quality Control, are binding and legally enforceable by ADEC, after any rule changes, if necessary, are final. If rule changes are required, upon EPA approval of these requirements into the SIP, they will also be enforceable by EPA and citizens under the Clean Air Act. State and Federal enforceability of the above provisions will remain in effect until such provisions are modified or rescinded by ADEC and approved by EPA.

H. Periodic Review and Evaluation Activities

Each party will review this Agreement, pursuant to the above mentioned milestones. The review will be an evaluation of the progress towards achieving the objectives of this Agreement.

I. Means of Giving Notice

When giving notice with regard to FPA modification or termination, the parties will contact the FPA signatories in writing. Informal communication may be given by phone or in writing to the following contact offices:

William R. Hanson, P.E., Environmental Flight Chief
U.S. Air Force, Elmendorf Air Force Base
3 CES/CEV
22040 Maple Street
Elmendorf AFB AK 99506-3240

Charles E. Findley, Deputy Regional Administrator
United States Environmental Protection Agency, Region 10
1200 Sixth Avenue
Seattle, Washington 98101

John Stone, Air Quality Maintenance
Alaska Department of Environmental Conservation
410 Willoughby Avenue, Suite 105
Juneau, Alaska 99801

J. Effective Date

This Agreement is effective upon the date of the last signature by the parties.

Chuck Clarke
Regional Administrator
United States Environmental Protection Agency, Region 10

Randy E. Honnet, Colonel, USAF
Vice Commander
3rd Wing, Elmendorf Air Force Base

Michelle Brown
Commissioner
Alaska Department of Environmental Conservation

DOD: Elmendorf Air Force Base

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