New Source Review for Stationary Sources of Air Pollution (2006) / Chapter Skim
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2 Regulatory Overview
2 Regulatory Overview
Pages 20-56
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From page 20... ...
The CAA seeks to control emissions of air pollutants to ensure that the NAAQS are attained and maintained and that air quality that is better than the NAAQS is protected. The statute's mechanisms include a pair of programs that together are known as New Source Review (NSR)
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From page 21... ...
The definition covers not only the addition of new emission points to existing sources 1 The CAA does not expressly exempt even very small increases in emissions. But EPA, with court approval, has exempted nonsignificant increases from NSR.
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From page 22... ...
; it provided that some kind of replacements of equipment at existing major stationary sources would be considered routine maintenance, repair, and replacement and hence exempt from NSR. This rule never went into effect, due to a judicial stay, and was vacated by the D.C.
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From page 23... ...
EPA was also obligated to develop New Source Performance Standards (NSPS) , based on levels of emissions that can be achieved using the best demonstrated technology, for categories of new and modified stationary sources whose emissions might endanger public health or welfare.
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From page 24... ...
(It does not apply, however, to emissions of pollutants for which the source's locale does not attain the NAAQS; the Part D NSR program applies to those.) If a source is in one of 28 named categories, it is a major emitting facility if its "potential to emit" any regulated air pollutant is 100 tons/year or more.
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From page 25... ...
The proposed project is subject to the best available control technology for each pollutant emitted in more than de minimis amounts. Effects of the proposed project on the air-quality-related values of Class I areas have been analyzed.
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From page 26... ...
, EPA runs the program itself but delegates its responsibility to the state for most day-by-day decisions; in the rest, EPA runs the program directly. In 2001, EPA estimated that PSD control-technology determinations from 1997 to 2001 eliminated a potential increase of 1.4 million tons of air 3The SO2 increments are stated in the CAA.
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From page 27... ...
REGULATORY OVERVIEW 2 BOX 2-4 PSD Increments Class I Increment (µg/m3) SO2 Annual arithmetic mean 2 24-hr maximum 5 3-hr maximum 25 NO2 Annual arithmetic mean 2.5 PM10 Annual arithmetic mean 4 24-hr maximum 8 Class II SO2 Annual arithmetic mean 20 24-hr maximum 91 3-hr maximum 512 NO2 Annual arithmetic mean 25 PM10 Annual arithmetic mean 17 24-hr maximum 30 Class III PSD increments SO2 Annual arithmetic mean 40 24-hr maximum 182 3-hr maximum 700 NO2 Annual arithmetic mean 50 PM10 Annual arithmetic mean 34 24-hr maximum 60 SOURCE: 40 CFR § 51.166(c)
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From page 28... ...
Part D New Source Review The 1977 CAA amendments included an NSR program for nonattainment areas (those whose air quality does not meet the NAAQS)
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From page 29... ...
NEW SOURCE REVIEW IN THE FRAMEWORk OF THE CLEAN AIR ACT The role of NSR can best be appreciated by outlining the other mechanisms in the act that control emissions from stationary sources: · Under section 110 (42 USC § 7410) , each state must prepare and enforce a SIP for the NAAQS pollutants.
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From page 30... ...
. As summarized above, BACT and LAER emission limits under the NSR programs must be at least as stringent as NSPS.
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From page 31... ...
EPA ordered that the states cut back NOx emissions by 28%, or more than 1 million tons/year, during the April-October period when O3 concentrations are at their highest. (This order is referred to as the "NOx SIP call.")
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From page 32... ...
EPA estimated that NOx emissions would be reduced by 1.5 million tons in 2010 and by 1.8 million tons when fully implemented in 2015 (about 65% below 2002 emission levels)
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From page 33... ...
That would mean a 73% decrease from 2000. Clear Skies would reduce NOx emissions from 5 million tons in 2000 to 2.1 million tons in 2008 and 1.7 million tons in 2018 -- a two-thirds reduction.
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From page 34... ...
Plants where physical or operational changes are occurring occupy a middle ground between new and existing sources. Inserting state-of-the-art technology when a source experiences a change is, at least sometimes, more problematic than including such controls in a new plant.
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From page 35... ...
Those arguments are reflected in the different viewpoints about how the term modification should be defined. Environmental groups argue that a broad definition is needed because of the following: · Health and the environment may be endangered when existing sources increase emissions.
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From page 36... ...
The 1980 rules covered both the "physical or operational change" and the "any increase in emissions" aspects of the congressional definition of modification. The term physical or operational change was defined to exclude "routine maintenance, repair, and replacement," a term that the regulations do not elaborate on.8 An increase in emissions was defined in terms of an increase in actual annual emissions, taking into account contemporaneous increases and decreases in emissions.
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From page 37... ...
As part of the project, WEPCO planned to replace air heaters, steam drums, and other major components on four units. EPA ruled that a PSD permit was required on the grounds that the project did not constitute routine maintenance, repair, and replacement and that it would increase emissions according to the actual-to-potential test.
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From page 38... ...
But the court rejected EPA's argument that the project would increase emissions within the meaning of the NSR programs. The court distinguished between the NSPS program and the NSR programs.
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From page 39... ...
EPA changed the rule to allow electricity-generating sources to use any consecutive 2-year period in the preceding 5 years. In the preamble to the WEPCO rule, EPA promised guidance on what is "routine maintenance, repair, and replacement" (57 Fed.
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From page 40... ...
Enforcement Initiative EPA's 1996 proposal did not discuss which changes constitute routine maintenance, repair, and replacement. That issue became increasingly important in the late 1990s.
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From page 41... ...
Both of the suits brought by environmental groups have been dismissed by the district courts on procedural grounds and are presently on appeal. Several of the actions have been settled, as shown in Table 2-3.9 As the table shows, the settlements, when fully implemented in 2010-2015, will reduce SO2 emissions by more than 650,000 tons/year and NOx emissions by about 250,000 tons/year.
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From page 42... ...
Duke Energy Corp., cert. granted sub.
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From page 43... ...
The company will also install by 2013 selective catalytic reduction technology on 67% of its coal-fired-generation capacity, thereby reducing annual NOx emissions by 66,000 tons more than other then-existing EPA programs required. In addition, the company will surrender to EPA 45,000 allowances per year beginning in 2012 (EPA 2003a)
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From page 44... ...
. EPA enforcement officials have asserted that the cases they are currently pursuing could reduce annual SO2 and NOx emissions in 10 years by 1,750,000 tons and 629,000 tons, respectively (EPA 2004c)
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From page 45... ...
EPA followed up on the recommendation by promulgating new rules in 2002. The 2002 Rule Changes The 2002 rules made the following alterations in EPA's NSR rules: · Sources that are not electricity-generating facilities are allowed to calculate annual emissions before a proposed physical or operational change by averaging annual emissions in any 24-month period within the 10 years immediately before the change.
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From page 46... ...
. The previous rules had no similar provisions.12 · Physical changes at a "clean unit" -- one that meets emission limits that are equal in stringency to those required under the NSR programs-were exempted from needing an NSR permit if the changed unit continues to meet its maximum-allowable emission rate.
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From page 47... ...
· The existing exemption from NSR for PCPs was expanded. This exemption applies when a permitting authority deems the project to be environmentally beneficial, even if it would significantly increase emission of an air pollutant other than the pollutants reduced by the project.
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From page 48... ...
Under the previous approach of comparing prechange actual emissions to postchange potential emissions, a source could avoid NSR by making a binding promise that it would never increase emissions by more than a significant amount over its prechange emissions. Allowing the source instead to compare its actual with its projected-actual emissions is, according to EPA, a simpler method of accomplishing the same result.
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From page 49... ...
EPA suggests that use of PALs will be confined to sources that need to make rapid operational changes and for which it is therefore worthwhile to go through the process of establishing a PAL. In addition, it is unknown how sources with PALs would behave.
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From page 50... ...
. The change -- known as ERP -- defines certain kinds of equipment replacements as "routine maintenance, repair, and replacement" and as therefore not constituting "physical changes or changes in the method of operation." Hence, these replacements do not need NSR permits, even if a significant emission increase can be expected to occur.15 Under the rule, the replacement of components of a process unit with 14The court's decision vacating the PCP exclusion also invalidates the PCP exemption previously made under the WEPCO rule discussed above.
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From page 51... ...
. Further Developments EPA, as discussed in more detail below, proposed in 2005 adoption of an hourly emission test for determining whether a physical or operational change at an electricity-generating facility would increase emissions.
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From page 52... ...
Whether this continues to occur depends on several factors. One important question is whether the courts will accept EPA's argument that the projects in question constitute "physical or operational changes" that "significantly increase emissions" and are therefore modifications that require PSD permits.
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From page 53... ...
There is debate about whether such a project has increased emissions within the CAA's meaning and thus requires an NSR permit. EPA has argued in the enforcement initiative litigation that NSR covers a source that significantly increases annual emissions even if there is no increase in 17The recent decision in U.S.
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From page 54... ...
. Existing electricity-generating facilities would, as in the NSPS program, compare the maximum hourly emissions achievable at that unit during the past 5 years to the maximum hourly emissions achievable at that unit after the change to determine whether an emissions increase would occur.
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From page 55... ...
These allowances would then be available to other sources, perhaps resulting in increases in emissions from those sources that might offset, in part or in whole, the effect of compliance by the source seeking an NSR permit. This has special significance because there will likely be fewer enforcement actions once the definition of routine maintenance becomes more certain as cases are decided; it is reasonable to expect that operators of electricity-generating facilities will adjust their conduct to meet the requirements of that definition.
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From page 56... ...
That is partly because the courts have split over whether the enforcement initiative is in accord with the CAA. This makes it difficult to analyze the effects of changes to the NSR programs.
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