July 15, 1996

Draft Summary

July 10, 1996 Base Programs Analyses and Policies Work Group Conference Call

I.	OVERVIEW

The Base Programs work group held a conference call on July 10, 1996 to discuss the issue paper on Regulation of Emissions from New and Modified Sources.

II.	PARTICIPANTS

Work group:

Jerry Golden-Chair, Joe Paisie-Chair, Vincent Brisini, Richard Dana, Richard Dworek, Rich Halvey, Dennis Lawler, Brock Nicholson, Bob Palzer, Steve Pezda, Richard Phelps, Jim Salvaggio, Greg Schaefer, Eric Skelton, Jean Vernet, Chuck Mueller for Herb Williams, and Mel Zeldin

Work group members not in attendance:

David Baron, Glen Cass, John Crouch, Jeff Gabriel, Steve Gerritson, Robert Kappelmann, Arthur Lee, Dick Long, Don Pickrell, Jim Ralston, and Conrad Schneider

Tom Helms and Jay Hudson represented the Science and Technical Support (STS) work group.

Beth Friedman, EC/R Incorporated (Environmental Protection Agency (EPA) contractor support)

III.	ACTION ITEMS

1)	Upcoming Calls and Meetings. The next Base Programs conference call is on July 24 scheduled from 11:00 to 12:30 eastern. The next Base Programs face-to-face meeting is on July 29 in advance of the July 30 FACA subcommittee meeting. The July 29 meeting will be in Crystal City, Virginia. The Clean Air Act Advisory Committee (CAAAC) will meet on July 31. There will be a joint meeting between the National and Regional Strategies (NRS) work group and the Science and Technology work group in Washington, D.C. on July 22 and 23.

2)	Joe Paisie will obtain and transmit to members an executive summary of the New Source Review (NSR) simplification package that is currently awaiting publication in the Federal Register.

3)	Mr. Paisie asked for status reports of the issue papers due to be discussed at the July 30 FACA meeting. Mr. Paisie and Mr. Golden need to see revisions by July 24 or 25 at the latest in order to prepare for the meeting. The papers affected are Designations, Population Weighting of Monitors, Too Close to Call, Monitoring Incentives, and Alignment of Boundaries. He also asked members to provide any feedback on the two face-to-face meetings in terms of satisfaction with the facilities, the level of freedom in the discussion, etc.

The following action items should be provided to the Regulation of Emissions from New and Modified Sources issue paper authors.

4)	Steve Pezda will provide information on the failures/problems of NSR.

5)	Richard Phelps will provide information on how to develop an option addressing the section 112 Maximum Achievable Control Technology (MACT) toxics program's effect on new sources.

6)	Jim Salvaggio will provide comments to better characterize the Ozone Transport Assessment Group (OTAG).

IV.	MEETING SUMMARY

New Source Review

Greg Schaefer and Vince Brisini led the discussion on their draft issue paper, Regulation of Emissions from New and Modified Stationary Sources. Mr. Schaefer had already received some feedback on the draft issue paper. He noted that all of the issue papers seemed to have come across initially as advocacy pieces, that the work group's review and comments were of great benefit. He stressed that he hoped that this paper would similarly benefit from this process. One commentor suggested changing the title of the paper to just "New Source Review." Mr. Schaefer requested that commentors provide additional examples from other industries.

There was a discussion of the overall purpose and philosophy of the paper. Joe Paisie suggested that the paper should discuss how the pending changes in the national ambient air quality standards (NAAQS) provide an opportunity to look at what the NSR and Prevention of Significant Deterioration (PSD) programs are designed to accomplish from an air quality perspective and whether changes to these programs are needed to implement the new NAAQS and regional haze programs. He noted that some might wonder, otherwise, why there is a need to address existing programs. Mr. Brisini said that the main difference between the current NAAQS and the future NAAQS is that the new program should embrace regional controls.

Steve Pezda commented that the title of the draft paper has the wrong focus. He said that we are not in the business of regulating emissions. Mr. Brisini feels the title is relevant because the issue is about the nature of achieving and maintaining attainment. Mr. Schaefer noted that anything discussed in the arena of NSR could end up as a regulation.

Mr. Pezda also commented that the discussion in the paper is too one-sided in favor of the successes of NSR. He requested more balance by adding a discussion of the problems of the NSR program. Mr. Brisini and Mr. Schaefer noted that most of the problems with NSR relate to process. Mr. Pezda will provide examples of problems.

Mr. Pezda commented that the paper refers to the New Source Performance Standard (NSPS) program as a relic, but still preserves the program throughout the options. He would like to add an option that examines the discontinuation of the program. Mr. Brisini said the practical effect of eliminating the NSPS program would be negligible on sources subject to Best Available Control Technology (BACT) and Lowest Achievable Emission Rate (LAER) because these standards are typically more stringent than the NSPS. Mr. Schaefer noted that EPA is still spending significant resources on NSPS reviews, which is a cost of the program. Jim Salvaggio noted that some sources subject to NSPS are not subject to BACT or LAER. He suggested adding an option that retains NSPS only for those sources not subject to BACT or LAER. The NSPS program plays a role by leveling the playing field.

Richard Phelps asked to add an option that recognizes the impacts of the section 112 MACT program for hazardous air pollutants, many of which are also ozone and PM-fine precursors. Mr. Schaefer asked him to provide specific comments on this option.

Mr. Salvaggio commented that the background language on OTAG implies that the 37-state group functions as a Commission with voting rights, etc. He would like to change the emphasis to be that OTAG is a cooperative effort to address transport. He will submit specific language to the authors. Mr. Palzer added that the paper should consider that the entire lower 48 states may be implicated in transport as the modeling continues. Mr. Schaefer noted, however, that even with the current OTAG there is not consensus that all of the current OTAG States should be included.

Mr. Pezda suggested that the discussion in each option be expanded by a summary of the pros and cons of the option, particularly cost and timing issues. John Chamberlin agreed that the present paper does not provide a framework for choosing among the options. Mr. Brisini said the choice will be made on whatever is needed to attain the standards. He does not have the resources to do a detailed analysis of national costs, etc., but the group could decide to have EPA do such an analysis. Mr. Pezda agreed that a detailed analysis is not needed at this point, but a qualitative discussion of the pros and cons should be included in the paper. Mr. Schaefer suggested one impact of options 1a versus 1b is a bias against new sources. If new sources are required to install the most expensive controls and obtain offsets, owners and operators may decide to avoid new sources. Mr. Paisie suggested that the discussion should provide a qualitative discussion of the impacts of each of the options.

Dick Dworek suggested adding an option that would provide an incentive for the building of new units that emit less pollution by allowing those sources out of the NSR permitting process. Jean Vernet noted that this sort of incentive is part of the NSR reform package. The NSR reform package is on the Technology Transfer Network (TTN) and is awaiting publication in the Federal Register. Mr. Paisie will locate an executive summary of the package for Base Program members. He noted, however, that in his opinion the reforms are directed toward the current system. The Base Programs charge differs in that the group is looking at the implications of a regional approach. He feels it is appropriate to look at the broad, overall philosophy of the NSR review program in the context of the new standards. Mr. Schaefer agreed. Mr. Palzer and Mr. Paisie suggested that discussion of the NSR reform package should be included in the background to explain the work group's perspective.

Ms. Vernet said the options should include discussion of where offsets should be obtained from in areas of influence (AOIs) and areas of violation (AOVs). Mr. Schaefer agreed this is an important issue. For example, some regions contain numerous sources from which to obtain offsets, while other regions have very few. Mr. Brisini said the regional nature of the problem drives the need to make offsets more broadly available in a variety of units of currency and between pollutants. He suggested the marketable permit concept as a model for this program.

Option 1

Eric Skelton noted that this option refers to attainment and nonattainment. He said the paper should address the AOV/AOI concept instead. He would like to see a discussion clarifying which programs apply in which areas or whether there are uniform requirements across AOVs and AOIs. He feels more specificity is needed. Mr. Brisini suggested that a third type of area is possible, i.e., an attainment area that is neither AOI or AOV. Other members suggested that this type of detail should be included later in the process.

Mr. Palzer suggested that wherever an offset ratio is mentioned, it should be preceded by the term "at least" to indicate a higher ratio might be selected. He also suggested that the thresholds in option 1b should be lowered and that thresholds for particulate matter (PM) fine should be added to reflect the PM-fine and regional haze components. When PM-fines are considered, small sources are more important. The group was reluctant to suggest specific threshold values without detailed analyses beyond the scope of the paper, but did agree to include a qualitative discussion of the need for threshold values and tradeoffs.

Mr. Brisini suggested adding option 1c to accommodate Mr. Salvaggio's suggestion for an option based on an exemption from NSPS in the face of NSR/PSD at the source.

Option 2

Mr. Brisini agreed to expand option 2 to include precursors for regional haze.

Option 3

Mr. Golden said that the option should clearly state that the choice to use offsets rather than following the NSPS/NSR programs is at the discretion of the source.

Mr. Salvaggio said an advantage of this option is that it results in least cost control. A disadvantage is that it lessens the long-term benefits of ensuring that new sources are the best controlled and thereby, improving the overall pollution control capabilities of the nation's industry through gradual turnover. Mr. Golden added that those sources opting for BACT, for example, would allow growth in emissions. Mr. Salvaggio said the presumption of a cap is that one knows the level of emissions that are presumed acceptable.

Option 4

Mr. Salvaggio said the problem with option 4b is that "PSD modeling kills us."

Option 5

Mr. Schaefer said this is another area to work in the idea of AOI/AOV instead of the current attainment/nonattainment language. Mr. Brisini wondered whether an AOI would have the same offset requirement as an AOV. Mr. Paisie said he considered this a policy call, because there is no science to back a decision at this point.

Option 6

Mr. Brisini stressed that option 6 should be viewed as a potential hybrid of features of any of the options.

Meeting Wrap-up

Mr. Paisie asked for status reports of the issue papers due to be discussed at the July 30 FACA meeting and said that he and Mr. Golden need to see revisions by July 24 or 25 at the latest in order to prepare for the meeting. The papers affected are Designations, Population Weighting of Monitors, Too Close to Call, Monitoring Incentives, and Alignment of Boundaries. He also asked members to provide any feedback on the two face-to-face meetings in terms of satisfaction with the facilities, the level of freedom in the discussion, etc.