TRANS C Ri FT*&Fn:VK0CEED ING S
U. S. ENVIRONMENTAL PROTECTION AGENCY
Office of Air Quality Planning and Standards
1993 NEW SOURCE REVIEW (NSR)
SIMPLIFICATION
WORKSHOP
Sheraton Inn University Center
Durham, North Carolina
March 17-18, 1993
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NEW SOURCE REVIEW SIMPLIFICATION WORKSHOP
IWPEX
March 17. 1993
ED LILLIS 3
MS. WEGMAN 7
MS. STINSON 13
INTRODUCTIONS 19-30
DISCUSSIONS 30
PROGRESS SUMMARY 81
BOB BLASZCZAK 83
QUESTIONS/COMMENTS 94
NSR PRESENTATIONS
AND DISCUSSIONS 101
QUESTIONS AND
CLARIFICATIONS 146
TYPES OF PROJECTS 165
AUDIENCE QUESTIONS 203
PSD MONITORING 213
QUESTIONS 219
GLOBAL OVERVIEW 225
PAL ISSUES 260
MS. STINSON 316
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NEW SOURCE REVIEW SIMPLIFICATION WORKSHOP
INDEX Continued
March 17. 1993
BENEFITS/CONCERNS 333
AUDIENCE PROS/CONS 354
INCENTIVES/DISINCENTIVES 370
MONITORING AND
ENFORCEMENT ISSUES 382
AUDIENCE QUESTIONS
AND ANSWERS 405
CLOSING 412
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NEW SOURCE REVIEW SIMPLIFICATION WORKSHOP
March 17. 1993
MR. LILLIS: First of all, I
would like to wish everybody a happy St. Patrick's Day.
My name is Ed Lillis, and I am the Chief of the Permits
Programs Branch of the Office of Air Quality, Planning,
and Standards at EPA.
My role today here is to co-chair this workshop with
Lydia Wegman who is Deputy Director of the Office of Air
Quality Planning and Standards. Also, joining us is Mr.
Rob Brenner, Acting Assistant Administrator for the
Office of Air and Radiation, and Rob will serve as the
moderator for tomorrow's discussion on the BACT.
Also, I would like to introduce Barbara Stinson from
the Keystone Center who will assist us as a facilitator.
There are a number of other EPA people who will be
participating in the workshop here, but rather than
introduce them now, I think what we plan to do is to go
around the table as well as the public and.have everybody
introduce themselves. At that time, they will introduce
themselves and identify the roles that they will play.
I would like to thank everybody who has come here
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today to the workshop, not only the participants, the
invited participants, but also the members of the public.
We certainly appreciate your interest in the New Source
Review program and also appreciate the time and the
expense that you have invested in this workshop.
As you probably know, this is the second workshop
on the topic of New Source Review simplification. The
first was held last August in Chapel Hill, and many of
those who are participating with us today were also
involved in that workshop.
We have invited an additional number of people. We
have expanded the roster from about 40 invited people to
about 50.
The purpose of these workshops is to identify
problems and creative solutions to some of the problems
that exist with respect to the New Source Review
program. I think there is a general agreement that the
New Source Review rules are very complicated.
They are very difficult to explain and to understand,
and because of tlrat, they are inconsistently applied.
Because of that, the permitting process can take an
extremely long period of time, and there is a lack of
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certainty on the part of the sources with respect to the
program.
At the last workshop, we heard a number of sources
will do various things because of the concerns with the
program. In some cases, sources do not switch to
cleaner fuels, because that may trigger New, Source
Review. In other cases,'they keep older, less efficient
units running in order to utilize the credits at some future
time, emission credits at some future time. So, in some
cases, the rules seem to work against the purpose of why
they were established.
At this workshop, we would like to continue to
explore problems and possible ways to correct the
program. In addition, we would like to present and get
some feedback on a number of the issues that were
identified at the first workshop.
I hope everyone has received copies of the
materials. We have updated some of the materials that
we faxed to participants, particularly the package on the
plant-wide applicability approach.
You should be aware that this meeting is being
transcribed by a court reporter, and a copy of the
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transcript will be placed in the docket for the New Source
Review simplification rulemaking that we plan to
undertake. For those interested, the docket number is A-
90-37.
In addition to the comments that you make here
today, we will expect or accept commen'ts up to 30 days
after the close of the wbrkshop tomorrow, and you can
comment on things that you heard here or other
independent ideas and comments that you may have.
I do want to indicate that since the last workshop,
EPA has made some changes with respect to New Source
Review rulemaking. I think we mentioned at the last
workshop that we plan to have a rulemaking that would
contain ideas for New Source Review simplification, and
we would also include in that rulemaking some changes
that were required by the Clean Air Act Amendments.
Since that time, we have decided to develop
separate rulemaking packages so that we now have an
independent activity to move forward and finalize the
Clean Air Act requirements that deal with both Part C and
Part D requirements of the Act.
Ideally, we would like to get both of these
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rulemakings done as soon as possible, but our sense is
that the simplification effort will probably...will maybe
get slowed down here or there. So, we do feel that the
States need final guidance with respect to the Clean Air
Act Amendments.
With respect to logistics, you probably have found
the rest rooms are direc.tly across from the room. With
respect to lunch, we have no special arrangements.
Everyone is on their own, but we do hope that everybody
does return fairly promptly at the due time. The agenda
is packed, so we do appreciate your cooperation in
returning promptly after lunch.
With those comments, I would like to turn it over to
Lydia Wegman who will co-chair this workshop. Lydia?
MS.WEGMAN: Thanks, Ed.
I want to thank everybody for coming today. It is a
big job getting down here to Research Triangle Park, and
it is an expense for everyone, and we very much
appreciate the effort everyone has made to come. I am
very gratified by the turnout. It reflects, of course, the
interest in this issue, and we never doubted there was a
lot of interest in the issue, but I am very glad to see you
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all here today.
We have a couple of purposes for this workshop
today. For one, we want to report back on the workshop
we had in August of 92. As you can tell from the
agenda, there are several issues where EPA has
attempted to make some progress on some of the most
immediate problems with the New Source Review rules.
I hope that you will take those as an effort to be
positive and responsive to the concerns that were raised
last August and also feel free to tell us where we can
continue to make improvements. We hope that these will
be aids to making the process work more smoothly, but
we also hope that you will be contributing your ideas in
ways that we can continue to improve what we are
offering today and additional ideas beyond what we have
here today.
The other main goal is to talk about this plant-wide
applicability limit which is our effort to put long-term
improvement into the New Source Review process. I
know that not everybody here agrees with that as the
best solution, and we are looking for some lively
discussion on that one, too.
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Again, we are interested in ideas for ways to
improve that or alternative methods for improving the
New Source Review process over the long haul. I will say
that the afternoon discussion which will focus on that
will be focusing on sort of the longer term issues, and
that is something, as Ed says, that will be part of our
longer-term rulemaking,
So, we have kind of two different goals. One is the
short-term problems of things we can try to fix more
immediately. The other is the longer term problems
which we hope we can fix sooner rather than later but
will probably, realistically, take a good deal more time
just because of the rulemaking process.
In addition, we will be talking about the BACT
process which we tried to avoid talking about in August
and now we feel we really must address. Rob will be
leading that discussion tomorrow morning.
The fourth thing...and again on that, we will be
proposing our views on it and very much want to hear and
I am sure we will hear others' views on it and, again,
ways that that process can be improved over the long
term.
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My fourth goal for today and tomorrow is to try to
determine the best method for continued public
involvement in this process. This is our second very
large meeting, and I will address this again in a few
minutes, but I do want to discuss whether this is the best
means for public involvement or whether there are some
alternative methods that we should be looking at.
I have a couple of ideas which I would like to lay out
and get your responses to. I will be laying those out this
morning, and then perhaps we can all consider over the
next day and a half how it goes and whether some of the
ideas I laid out and your ideas are the best means for
continued public involvement, and we can wrap up
tomorrow afternoon with trying to get a consensus from
the group on what the best mechanism would be.
I do need to mention one thing on the subject of
consensus. This is not a Federal advisory committee. As
a consequence, we are not chartered to seek consensus.
So, while our official goal is not to seek consensus,
I do hope that we can make some progress in reaching
towards agreements on some things, but our official goal
is not consensus.
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I think that is all I wanted to say, and I want to turn
it over to Barbara. Bill, did you have something?
MR. PEDERSEN: Yes, just
for clarification. When you talk about...
MS. STINSON: Bill, can you
speak into a mic?
MR. PEDERSEN: When you
talk about doing this in two stages, would they be two
rulemakings, or would the first stage be guidance and the
second stage be a rulemaking?
MS. WEGMAN: Well, the
two rulemakings, as Ed said, we, first of all, are
combining the Part C and Part D rulemaking into one
package, and then there would be a second rulemaking to
deal with simplification issues. In the simplification bag
of issues, we are looking probably toward issuing policy
guidance for some of the near-term fixes, the ones we are
going to talk about this morning, which may ultimately be
incorporated into the rulemaking on New Source Review
simplification.
MR. PEDERSEN: So,
basically, the topic of this meeting is your second
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package which might be implemented some by guidance
and the rest by a rulemaking?
MS. WEGMAN: That is
correct. We were not planning to talk today, today or
tomorrow, about the Part C and D rulemaking. Now, of
course, if people have questions, we are happy to
address those, but our focus is to try to get the New
Source Review simplification issues, both the short-term
and the longer-term simplification issues.
MR. PEDERSEN: I guess my
one question would be, what will be in the package that
we aren't going to discuss? Will it just be the new offset
ratios, thresholds, and stuff like that?
MS. WEGMAN: Ed, do you
want to address that one?
MR. LILLIS: Yes, I think
that is essentially correct. There are requirements with
respect to lower offsets. There is a de minimis provision.
There are some PSD-related activities with respect to
boundaries of Class I areas and things like that.
MR. PEDERSEN: You know,
this split may not be that easy, since the first rulemaking
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will, in effect, promulgate current policy on accounting
and pollution control exclusion and all the rest.
MS. WEGMAN: Bill, I think
what we would like to do, if you don t mind, is save that
discussion. We are trying to kind of just get things
rolling here, and if we could get into that a little later, I
would appreciate it.
One other thing I want to mention. I think Barbara
will touch on this as well. We do have a very full
agenda, and we do want to allow people a chance to
raise, especially raise new issues. We have several
people here who were not here at our previous workshop,
and we want to make sure they all have an opportunity to
raise issues they may not have had an opportunity to last
August which means there may be a little juggling of the
agenda as we try to allow enough time for that kind of
activity.
But we do Intend to get through the entirety of the
topics we have listed, and I hope we can do so. Barbara
will talk in more detail about the process.
MS. STINSON: Hi. I am
Barbara Stfnson from the Keystone Center, and ( welcome
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all of you back for another round of discussion on New
Source Review source review simplification.
I would like to start today by, first of all, welcoming
everyone to the very tight quarters that we will be in for
today. We apologize for that, but if you can just be
tolerant for today, I think we are going to be able to
expand into this room tomorrow, and we may be
expecting more people tomorrow as well. So, that might
be convenient.
In terms of some of the logistics, we will be taking
breaks regularly throughout the day or at least two
breaks and, of course, lunch. We want to encourage
people to go out to the foyer and this balcony for your
breaks, because there is plenty of room out there, and it
is ours exclusively. So, if you are feeling cramped in
here, that is the place to head.
I would like to run through the agenda and talk
about a few preliminary items that build on what Lydia
ran through in terms of goals. I think she very
appropriately laid out a foundation for our goals and work
together for the next two days, and I guess I want to
emphasize that EPA is really looking forward to all of us
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having a working session here and doing some in-depth
discussion and creating concrete suggestions with the
ideas that may be put forward.
So, we will look forward to getting into our
discussions in some depth.
Primarily, as we are here together today, I think
what you will be able to notice is that EPA has put
forward a lot of ideas, but they have gathered this
session to listen to your input and feedback on those
ideas. So, while we will be having an interactive
exchange amongst everyone, primarily, we want to hear
from you. So, we will keep that in mind as a focus.
I am going to lay out just a couple of ground rules
and ask that you respect the following: First of all, I
think we all know and would agree that the group that we
have here has quite a variety of differing viewpoints on
all the items on our agenda. So, let us start with a
premise of respecting and understanding that there are
going to be different viewpoints expressed here and have
a lot of tolerance for that.
We don't need to get into debates back and forth on
particular points of view. What we do want to do is
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throughout the two days, and right now, I would like to
identify when we think we will be doing that. If there is
a problem with that, if the members of the audience
would like to have more opportunities to speak, then we
can discuss that.
The first one will be at noon today right before
lunch. We will take a period just of 10 to 15 minutes for
each public comment period just before we break.
The second will be at the end of the day at 5:00
o'clock or shortly before there just as we conclude that
discussion.
And we will ask that the members of the public make
their comments in accordance with the topics just
discussed. So, try to stay on point with us.
Tomorrow, again, we will take another public
comment at lunch and then a longer one during the
workshop summary at 2:30. So, that is our plan for
public comment.
I guQss, in closing, I just want to emphasize again
that the agenda is designed to be a tight, full agenda,
and we are going to try to be flexible with it, but,
essentially, we are going to be moving it along at a pretty
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good clip.
So, if you can, keep your attention focused on
creative ideas and problem solving, as I think that is
what we are all most interested in in our discussion, and
I think we will move on to introductions.
Does anyone have any comments o-r questions?
One more logistical item in a little more detail in
terms of lunch, they are offering...there is a restaurant
called Pralines. They are offering a buffet lunch at
$6.50. They offered here to accommodate all of us, they
say, although we don't have a special section set aside.
So, given our location, we are going to encourage that
people do stay here in the hotel and dine in that
restaurant. They also have a full menu, so you can order
from that as well.
Why don't we take the opportunity now to introduce
ourselves. I know most of you know each other, but for
the benefit of all, just please state your name and your
affiliation, and I don't know how to say this, but say it
slowly.
MR. BRENNER: I am Rob
Brenner, and I am the Acting Deputy Assistant
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Administrator for Air and Radiation at EPA.
MR. LILLIS: My name is Ed
Lillis. I am the Chief of the Permits Programs Branch in
the Office of Air Quality Planning and Standards.
MR. SOLOMON: I am David
Solomon. I am the Chief of the New. Source Review
Section. I work directly, under Ed Lillis.
MR. ARMBRUSTER: Dennis
'Armbruster with the State of Michigan Department of
Natural Resources, Air Quality Emissions.
MR. NICKEL: Henry Nickel,
Hunton & Williams. Our firm represents the Utility Air
Regulatory Group.
MR. DANIEL: I am John
Daniel with the Virginia Department of Air Pollution
Control, and I am representing the STAPPA New Source
Review subcommittee and Bob Collin, who is chairman of
the full committee.
MS. ROSS: I am Molly Ross
with the National Park Service's Air Quality Division, and
I thank you for the invitation this time.
MR. THEILER: I am Don
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Theiler. I am the Director of the Bureau of Environmental
Management in the State of Wisconsin.
MS. MCINTIRE: Vivian
Mclntire, Eastman Chemical Company.
MR. MICAI: Tom Micai,
New Jersey State Department of Environmental
Protection and Energy.
MR. PEDERSEN: Bill
Pedersen with the law firm of Perkins Coie.
MR. ROSENBERG: Ernie
Rosenberg, Occidental Petroleum.
MS. SIEGLER: Ellen Siegler,
American Petroleum Institute.
MR. VANMERSBERGEN: Ron
VanMersbergen, EPA Region V.
MR. LEWIS: Bill Lewis,
Morgan, Lewis & Bockius representing the Clean Air
Implementation Project.
MR. AMAR: I am Praveen
Amar with NESCAUM. That is Northeast States for
Coordinated Air Use Management.
MR. KNAUSS: Chuck
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Knauss with the law firm of Swidler & Berlin.
MR. BROOKS: I am Dale
Brooks, an independent consultant, and I am here on
behalf of the Edison Electric Institute.
MR. BARR: Mike Barr of
Poster, Madison & Sutro in San Francisco representing
the National Association of Manufacturers and some
California groups.
MR. BRAY: I am David Bray.
I am Permits Program Manager, EPA Region X in Seattle.
MR. POTTER: Craig Potter
with the law firm of McDermott & Wilhelm.
MR. BURKHART: Bill
Burkhart with Proctor & Gamble.
MR. CARNEY: Mark Carney
with U.S. Generating Company representing Electric
Generation Association.
MR. HAWKINS: David
Hawkins, Natural Resources Defense Council in
Washington, D.C.
MR. PENNA: Dick Penna
with Van Ness, Kobin & Curtis representing the
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Association of International Automobile Manufacturers.
MR. MCAVOY: Dave
McAvoy with Eli Lilly & Company.
MR. MCCLURE: Jack
McClure with Shell Oil representing the Chemical
Manufacturers Association.
MR. MILLER: I am Bruce
Miller. I am the Deputy Division Director of the Bureau
of Pesticides and Toxics Management Division in Region
IV.
MS. SHAVER: I am Chris
Shaver with the Environmental Defense Fund.
MR. SELL: I am Jim Sell
with the National Paint and Coatings Association.
MR. TYNDALL: Bill Tyndall
with the Office of General Counsel of EPA. Greg Foote,
also from the Office of General Counsel, will be joining
us after lunch.
MR. ALDORFER: David Gene
Aldorfer, General Motors, representing the American
Automobile Manufacturers Association.
MR. PAUL: I am John Paul
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with the Regional Air Pollution Control Agency of Dayton,
Ohio.
MR. JORDAN: David
Jordan, Air Pollution Control Section. Indianapolis,
Indiana.
MR. RAHER: Patrick Raher,
Hogan & Hartson.
MR. KNOPES: Chris Knopes,
EPA. OPPE.
MR. KAUFMANN: I am Rob
Kaufmann for the American Forest and Paper Association.
MS. WE6MAN: I am Lydia.
I have already introduced myself.
MS. BEAR FIELD: Andrea
Bear Field, Hunton & Williams.
MR. JOHNSON: Ken
Johnson, Duke Energy Independent Power.
MS. MCINTOSH: Carolynn
Mcintosh, Chevron.
MR. DHARMAVARAM:
Seshu Dharmavaram, DuPont.
MR. DE6E: John Dege from
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Du Pont.
MR. JEWETT: Jim Jewett,
INTEL Corporation.
MS. LUEHRS: Jole Luehrs,
EPA Region VI.
MR. ALDRIDGE: Mike
Aldridge, North Carolina Division of Environmental
Management.
MR. ELTER: Tom Elter,
Niagara Mohawk Power Corporation.
MR. BURNS: Ward Burns,
EPA Region VII.
MR. CRUMPLER: Dennis
Crumpler, EPA New Source Review Section.
MR. DEROECK: Dan
deRoeck, EPA, New Source Review Section.
MR. NOBLE: Eric Noble,
EPA, Operating Permits Section.
MR. O'NEAL: Jesse O'Neal,
contractor for Interstate Natural Gas Association.
MR. LING; Mike Ling, TRC
Environmental.
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MS. LOE: Leslie Loe,
Midwest Research Institute.
MS. RODRIGUEZ: Rosaline
Rodriguez, EPA, Economic Analysis Section.
MR. FELDCAMP: Ira
Feldcamp, Baker & Boggs.
MR. WOOD: Russ Wood,
Virginia Power.
MR. PARTEE: Frank Partee,
Environmental Quality Office, Ford Motor Company.
MR. ATKINSON: Dwight
Atkinson, EPA Policy Office.
MS. POFFENBERGER: Clara
Poffenberger, EPA, Stationary Source Compliance
Division.
MR. SMITH: Tim Smith,
EPA. I am working on the Section 112(g) simplification
project.
MR. BLASZCZAK: Bob
Blaszczak, RACT/BACT/LAER Clearinghouse, EPA.
MR. STANDER: Leo Stander
with Permits Programs Branch.
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MR. SOUTHWtCK: Scott
Southwick, U.S. EPA Region IV.
MS. COOKSON: Nancy
Cookson, Chemical Manufacturers Association.
MR. CROMWELL: Ted
Cromwell, Chemical Manufacturers Association.
MR. PIMERSON: Sammy
Pimerson, State of North Carolina Air Quality Section.
MR. HAWES: Mark Hawes,
North Carolina Division of Environmental Management.
MR. LEVIN: Mike Levin.
Nixon, Hargrave, Devons & Doyle, Washington, D.C. and
former director of EPA's regulatory reform staff from
1979 till '88.
MR. ZBUR: Rick Zbur, Los
Angeles office of Latham & Watkins, representing the
Regulatory Flexibility Group which Is an association of
about 20 businesses that was formed to provide input on
the Reclaim Program which is proposed for the south
coast district.
MS. BLANKENBECLER:
Serita Blankenbecler, Eastman Chemical Company.
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MS. CHAPIN: Deborah
Chapin, Eastman Kodak.
MS. MCKINNEY: Edythe
McKinney, Small Business Ombudsman for Clean Air,
State of North Carolina.
MR. LLOYD: Peter Lloyd,
Division of Environmental Management of North Carolina
MR. HARRELL: KentHarrell,
North Carolirra Division of Environmental Management.
MR. TWISDALE: Jeff
Twisdale, North Carolina Division of Environmental
Management, Air Quality Section.
MR. KEMP: Kris Kemp,
North Carolina Division of Environmental Management.
MR. EVANS: John Evans,
North Carolina Air Permits Branch.
MR. OVERCASH: Dale
Overcash, North Carolina Air Quality Section.
MR. BUTT: Kevin Butt.
Toyota Motor Corporate Services.
MR. WINBERG: Steve
Winberg, Consolidated Natural Gas neadquarters in
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Pittsburgh, Pennsylvania.
MR. GALLINGER: Jon
Gallinger, American Gas Association.
MR. BUNYAK: John Bunyak,
National Park Service.
MR. BLOMLEY: Julian
Blomley, UNOCAL.
MR. VINCE: Bart Vince,
Duke/Fluor Daniel.
MR. EVANS: Ken Evans,
Arizona Public Service Company.
MR. SWINGLE: Roger
Swingle, Solar Turbines.
MR. SLIMAK: Larry Slimak,
American Automobile Manufacturers Association.
MR. SCHAPIRO: Karen
Schapiro, EPA Office of Enforcement.
MS. SMITH: Valerie Smith,
Pennzoil Products Company.
MS. CARVALHO: Donna
Carvalho, Pennzoil.
MR. DUNN: David Dunn,
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Pennzoil.
MR. SEWELL: Mike Sewell,
EPA, New Source Review Section.
MR. WORLEY: Gregg
Worley, EPA Region IV.
MS. SAVAGE: Jacki
Savage, Chrysler Corporation, Environmental and Energy
Affairs.
MS. SCHOBEL: Victoria
Schobel with Inside EPA's Clean Air Report.
MR. LAMASON: Bill
Lamason, New Source Review Section, and I am the
project officer for the New Source Review simplification
rulemaking.
MS. STINSON: Great. We
are going to ask the audience to fill out a form with your
name and affiliation and address. That way, we will have
an accurate record of everyone.
Now, we are going to move into a discussion of
methods for public involvement. As Lydia said before
this is an introductory discussion just to get a few ideas
out there and talk about it generally to understand some
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of people's preliminary thinking about next steps and
other ideas for continuing public involvement on New
Source Review.
MS. WE6MAN: I just want
to do a little opening bit here and then hear your ideas on
this.
I think most of you are aware...and Rob will talk
about this a little more tomorrow...that in January, Bill
Reilly wrote a note to Bill Rosenberg who was then the
AA for Air suggesting that the best way to handle the
concerns that had been raised about the BACT process
was to fold it into our comprehensive resource review
project which is what we are working on today and to
consider the possibility of a regulatory negotiation for
the entire bag of tricks.
I wanted to raise today the concept of regulatory
negotiation to see if anybody here thinks that that is
something that is feasible. I will tell you that EPA is
very skeptical, EPA at my level, staff level, very
skeptical about the possibility of conducting a regulatory
negotiation.
When we look around the table and the audience
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here, and the idea of trying to bring parties together and
have a limited number which you really need for a
successful regulatory negotiation, it seems to me unlikely
that the reg-neg would be the best means of trying to
reach a consensus on the issues that we are dealing with
on New Source Review, but I am, in fact, interested in
hearing your views on whether a reg-neg would be a good
idea.
Some of the other thoughts that I have had on this
is that we could continue the kind of public forum we are
having today, though I suspect after one or perhaps two
more of these, we would have sort of reached the end of
our rope in terms of what can be accomplished in a group
this size.
Part of our goal would be to try, in whatever public
discussion form we choose, is to try to, if not reach
consensus, at least move toward some kind of agreement
as to what the best means are for simplifying the New
Source Review process. I am not confident that this kind
of forum is the best means for doing it, though I am very
much open to your ideas and suggestions.
A third mechanism which I considered is the
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possibility of breaking this kind of group into smaller
work groups to focus on particular issues. For example,
one issue might be the BACT process. One issue might
be the plant-wide applicability limit or alternatives to it.
One group could conceivably focus on environmentally
beneficial projects and pollution control projects and how
to handle those.
This morning, we are going to walk through about
six or seven topics. I don't think each of them would be
appropriate for a work group, but we could conceivably
merge some of them and have one work group work on
three or four of them and one work on another three or
four.
Now, whether the work group concept is feasible I
don't know, and we would have to have representations
from all the interested parties on these work groups. It
just seems to me that having a smaller group focusing on
particular issues might be a more effective way of making
some progress on them.
Any of these options...! think most likely the reg-
neg, but I think any of them will lengthen the process for
rulemaking. The more meetings we have and work group
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activities, the longer it is going to take EPA to develop a
New Source Review simplification package.
There is a tradeoff here in terms of delay, I think, in
pursuing additional public involvement which, to me, is
a tradeoff worth making, since I think the involvement of
people like you here today is really crucial to having
something that will work and be generally accepted by
the community affected by these rules.
I am interested to hear from you on concerns about
delay in the New Source Review simplification process
and the kind of tradeoff at least I imagine there would be
to the extent, you know, we have continued meetings like
these or other forums for public involvement.
So, that is sort of my initial opening pitch here, and
I would like to hear any thoughts anybody in the group
has about whether they think this particular forum is a
good way to do it or anything else.
Pat?
MR. RAHER: I think it is
appropriate that it is St. Patrick's Day to commence.
MS. WEGMAN: You are not
wearing green.
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MR. RAHER: My wife
doesn't allow me. It is not one of my favorite colors.
You know, really. I think all of the Issues you raised
are worth looking at, the alternatives. I think breaking
into the small groups is probably one of the most
productive in terms of trying to save some of that time.
I think many people would agree with me that the time
spent would be better spent in trying to limit issues and
reach consensus than i.t is trying to go through a normal
rulemaking and possibly end up in the unfortunate
position of a lot of people not being happy with multiple
issues.
One of the things I would suggest is that if you
identify those groups and then people decide to
participate in whichever groups they want, it might be
useful if we had a situation where people could, say, on
each of the issues send in three pages of pros and cons
issues that need to be resolved, where they think
consensus exists or does not exist, and then the
facilitator of whatever that group is could try to coalesce
those.
I mean, copies could be available to everybody, but
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got Baptists in some part of the country and Catholics
and Mormons.
And that is really one of the strengths of the issue.
It really is a very rich issue, and I think that is why your
subgroup idea would be an improvement over this format,
but I think that the one that would work the best would
be the model that you have tried for Title V which is to
take a few key people from headquarters or, particularly,
Research Triangle Park where most of the actual
knowledge is about New Source Review and the EPA, and
take it on the road, have this type of a meeting out in the
regions, including headquarters people, regional people.
State people. After all, the State agencies have issued
most of the New Source Review permits that have ever
been issued in this country, and they have a tremendous
amount to say.
I think that is really the strength of that approach as
illustrated by the attendance at this meeting today.
There are a lot of people here from North Carolina. There
aren't any people here from California.
The California agencies may have issued half the
New Source Review permits that have ever been issued in
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the entire country.
And I think from the list of issues that you have
identified, particularly on simplification, that you will
receive a great many more constructive suggestions if
you take this show on the road to all the regions.
MS. WEGMAN: Let me ask,
Mike. We have a budget problem, as you are probably
aware, and there is probably a limited amount of travel
we will be able to do. at least this year, in terms of that
kind of travel, that kind of road show, though it is a very
good idea.
Would you envision that, again, as being a meeting
like this, a large meeting to get public input, and would
you envision that as being the only additional thing we
would do or also breaking into work groups, you know,
after we got further public input on this.
MR. BARR: I think
approaching it serially that way is very constructive with
your resource constraints. I think what you need to do
next is to take it on the road to at least half the regions,
including EPA Region IX, gather more input after you
have had a chance to refine these issue papers based
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upon this meeting, and then perhaps come back and form
some work groups that would look like they would be the
most productive ones to work on particular issues.
I am certainly...I think it is very difficult for you
right now to figure out what work groups you would form
around what issues, which ones would be the most
productive, and I think you will get a lot more of a better
idea of that after this meeting and after you reach out to
the various regions of the country.
MS. STINSON: Other ideas
on this topic? Jim?
MB. SELL: I have seen some
of the telephone teleconferences that EPA has put on in
the last several years, and I don't know whether that
would lend itself to this kind of activity, but if budgetary
constraints are a problem, it seems to me that some of
them might be end run by that kind of a process, maybe
not for all the meetings but perhaps for some of them.
MS. STINSON: Okay,
thanks. Does anybody have other ideas, other opinions
on suggestions you have heard so far? Let's get those
creative juices going in the morning.
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MS. WEGMAN: Welt, I
would be interested to hear from the environmental and
some State folks who might have to serve on two or three
work groups and if any of them have concerns about kind
of the burden that it would place on them if we were to
go through some type of process like that. You don't
have to answer me right now, but that was one of my
concerns.
MS. STINSON: Chris?
MS. SHAVER: One, I agree
I don't think negotiated rulemaking is. going to work at
all. I think there are just too many divergent opinions,
and when you said split into groups, I know in another
committee I am on, I am on six separate subcommittees,
and there is no way you can have that kind of
representation.
I like the idea of moving around the country a bit,
but I think even in those kind of forums, you are still
going to have a room that is substantially full of industry
and maybe State people and not so much representing
public interest organizations, and I think a real need will
need to be made to reach out to folks who may have an
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alternative point of view, because even though they are
a few, they represent many.
MS. STINSON: Ernie?
MR. ROSENBERG: I am not
sure which format it would work best in, but I really think
an effort needs to be made for this to be an education of
the participants outside-of EPA as well as for us to give
points to EPA.
Too often...this may have been the problem with
some of the previous, nevertheless successful, some of
the previous roundtables...the people around it don't
necessarily understand what the core concerns are,
particularly of not simply the New Source Review
Division but the Stationary Source Compliance Division
and Enforcement.
Some time taken at the beginning of a subject to lay
out what the breaks are on the system to the potential
beneficiaries of change, I think, would help make this a
discussion that would be more focused in a way that
could actually generate a change that won't violate the
interests of those groups.
MS. STINSON: John?
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MR. DANIEL: I would just
like to follow up on what Lydia said.
MS. STINSON: Could you
speak into the mic, John? This is John Daniel.
MR. DANIEL: I think most
of the States would be willing to participate in the small
work groups. At least if you are involved in the work and
you are the State that has to carry out the program after
EPA finalizes it, you would feel a lot more comfortable if
you had been a part of the process.
I can't let this opportunity go by without
recognizing the gentleman at the table down there that
signed the infamous memorandum that started this type
of BACT thing.
MS. STINSON: Dave?
MR. HAWKINS: I would also
like to pay tribute to Craig.
Just another point on the separate meetings. I think
it is clear that a smaller number of participants in a
meeting would help us a lot to get issues discussed, but
I don't think it is a problem simply for the environmental
groups. I agree with Chris, it is a problem for us, but I
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think it would be a problem for others, given the
interconnective nature of all these issues. It would be
pretty difficult for diverse and different sets of
individuals to figure out what was going on in all the
other work groups.
So, if you do divide it into groups, I think you should
be thinking of a structure which has substantially
overlapping membership and schedule the meetings so
that folks can attend work group meetings in sequence
rather than have simultaneous meetings that introduce
artificial divisions into issues that are connected and will
remain connected.
MS. STINSON: Maybe an
amendment to that also is, just to add another idea
building on that, making sure there is a strong system for
reporting back to either a larger group or to everyone
who has participated in some one of the forums.
Craig?
MR. POTTER: I was going
to make some comments, but I have to, I guess, after
John's introduction.
I think that the goals here, consensus and
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simplification, are laudable, but I think that this
process...and I think we can see it in some of the
comments...is sort of designed to divide and conquer and
it pits source against source and State against Feds and
creates problems.
I guess that one of the things that I am concerned
about, whether you divide up into subgroups or whether
you go to the States and agree to a five format or
whether you do a reg-neg is what is on the table.
Partially, 1 suffer from not having been here previously.
I have read some of the transcript but not all of it.
And it strikes me that there is a need for some kind
of a Rosetta Stone here. You know, the permitting issue
is such a big part of this. If you look at the sheer
potential for numbers of permits, that is a major, major
issue.
Obviously, we are going the wrong direction in a far
direction in making accountability much more difficult
credible demonstrations and so forth. Enforcement, you
know, you have got all kinds of significant potential now
for smoking guns out there. It is a lot like where we
were after the '87 reauthorization of the Clean Water Act
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in terms of the tying together of permits and
enforcement, and, clearly, EPA holds the cards, and there
are many things that can't happen.
I guess what I have been wondering is, is there any
kind of an outline or is there a thought about an outline
in some kind of a comprehensive fashion? Design values?
Are we going to talk about design values? Is that
appropriate?
I mean, there is a lot of discussion about the
relationship between NOx and VOCs, this study that was
done, the 185(b) situation. There is a separate
requirement under the Clean Air Act to look at. design
values.
That could have a significant potential in leveling
the new playing field. Mr. Barr over here has been
involved in that issue for a long time. A tot of people
have.
We have sort of two objectives inherent in that, the
air quality, health-based issue and how we measure
attainment. And I am not totally clear on what is on the
table.
I have tried to look through the issues in terms of
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the seven or eight things that you identified as potential
fixes, and I think all those are helpful, but if you are
going to deal with education, if you are going to bring
more people into this, if you are going to get the public
involved, you can't just set this in front of everybody as
the complex issue that it is, as Mike said, rich and
complex.
So, if you...
MS. STINSON: So, if I
understand you, Craig, what you are suggesting is that
we need to have more discussion on what is the range of
topics that would be included in any future process, and
I think we do need to do that, and we need to do that in
the course of our two days here.
MR. POTTER: Yes.
MS. STINSON: Thanks.
Rob?
MR. BRENNER: I just
wanted to sort of check my understanding of one of the
concepts Lydia laid out which is the concept of going
with work groups which seems to make a lot of sense to
put some things on three tracks or some number of
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tracks. The three Lydia mentioned seemed to make
sense.
As I understand it, the goal would be to try and have
these groups come up with some specific ideas, hopefully
some creative ones, that we could then lay on the table
perhaps for a larger group like this one or perhaps there
is some other mechanism we could use.
So that the problem, as I understand it, with a large
group like this is that...we will test this over the next
couple days,.but it is often hard to really flesh out a
relatively specific set of proposals. There is just not
enough time to really do that.
So, you need to have some groups meet, and the
problem, Dave, with the concept of having them meet
serially is in order to do that, you probably need to have
them meet for two or three days at a time to really come
up with some fairly specific proposals.
So, although I agree with you that there is this
problem of trying to enable a relatively few number of
States and public interest group type folks to participate
in these things. On the other hand, the tension is you
probably need to have these groups meet long enough to
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MS. STINSON: Molly?
MS. ROSS: Just for the
record, I want it to be known that I am worried about ail
these processes because of the resource limitations.
From the Federal land manager point of view, we have
concerns nationally, and we hopefully are beneficiaries
of all these rules on PSD New Source Review at least,
and it is hard for us to participate in ail those work
groups with shrinking budgets and even shrinking FTEs.
I am a little bit concerned. I think the public
meeting idea, a few wide attempts to get general
information ideas is very good. I think it helps them to
have proposals on the table that we can react to and
continue to have public meetings maybe after those are
proposed.
The small work group idea concerns me, because I
can see us not being in all those groups, yet having an
interest and having to play catch-up, and I am always
worried that it is assumed that we go along with
something or are excluded from something because we
haven't participated in the day-In and day-out discussion.
So, I Just wanted that to be known, because that is
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going to be a problem for us, and we get involved from
the very technical issues that States are involved in to
the very broad issues about what are the general policies
trying to achieve.
MS. ST1NSON: Dave?
MR. ALDORFER: It seems to
me if this group of people in this room can't make this
happen, there is no other group in the country that can.
These are the best people. We are. We need to identify
a process that allows, I think, for some smaller work
groups to do some initializing.
I very much like the idea that any interested party
would have a chance to input something on paper before
those work groups happen, and we certainly need to
identify a process where what the groups come up with
then comes back to the full group for further
consideration.
All of us have probably worked on some similar kind
of vein before where* we have had to trust somebody else
to at least get some balls rolling in an area, and I am
prepared to do that.
MSt STINSQN: That was
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Dave Aldorfer, for the benefit our recorder. Any other
comments at this point?
I think what we are hearing inherent in everyone's
comments is that people are supportive of EPA continuing
a public involvement process of some sort. There are
tremendous resource constraints and limitations for from
really every interest group, and that includes, of course,
people and money resources.
And somehow, you have to structure something that
works around that but that, in some sense, the steps EPA
has taken so far are the right steps and that the people
in this room are a good start, the right group of people,
but somehow that we want to be able to have more in-
depth discussion, perhaps more participation from
individuals on specific topics to develop ideas, et cetera.
So, I think what we should do at this point is take
the thoughts that we have laid out here so far, think
about them, talk amongst yourselves over the next two
days, and we will return to this topic the end of
tomorrow and see if we can't come to some agreement.
One thing logistically that we need to fill out...I
assume you want to mention the comment about forming
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an aovisory committee and the duration, the length, tf
you were to try to formalize this process and meet
regularly, either as subgroups or as a full committee,
then you must go through the FACA process which is a
tremendous time delay, probably, in getting that through
the administration, given some of the messages that we
are getting. That is sort of another factor to keep in
mind if we are thinking on that.
Does anybody from SPA want to make any other
comments?
MS. WEGMAN: The only
think I would like to say is that to the extent we think
the work group idea might be at least part of what we
want to pursue, I would appreciate your thoughts, again,
at tomorrow s session, having heard what you will hear
over today and tomorrow, as to what might be
appropriate topics for the work groups, recognizing the
inierconnectedness of them all, but your thoughts on how
we might break these Issues up if we are going to follow
a work group process at all.
MS. STINSON: And I guess
I would encourage the folks that had the ideas around
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having regional meetings or any of the other things, think
through some of the constraints that you have heard and
problems to that and think through your ideas a little
more and try to flesh that out so we can talk about it
further tomorrow.
Okay, I think we are ready to move into our kind of
orientation and indoctrination for the new invitees. We
have a number of people around the table who were not
able to attend the last meeting or not in the last meeting,
and we would like to give you an opportunity now over
the next half-hour to...my goodness, we are right on
schedule...to offer suggestions of items, ideas, topics
that should be on the agenda for discussion under New
Source Review simplification and also just to ask
questions and gain more thorough understanding of the
history of the development of this process, how we have
gotten to here, either regarding the documents that you
have read or things that you have heard.
This is really an opportunity for catch-up as well as
laying out additional ideas that you may have. So, with
that Introduction, Chris?
MS. SHAVER: I read
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through all the materials that were sent regarding the
last meeting, and I guess it struck me that it seemed to
be a little one-sided in some respects, and I am a little
confused and would like some clarification.
I know we have called this the New Source Review
simplification workshop which seems to be an oxymoron
in and of itself, but are we trying to make the process
simpler and easier to understand and less uncertain which
was the preface, or are we trying to make it easier to get
a permit?
I think that we need to keep in mind that what we
are trying to do is make it more understandable and not
remove some of the protections that are there for good
reasons. The whole point, I think, of the New Source
Review process that has been set up to date is to
encourage and require sources as they modernize to find
ways of removing more and more pollution from the air
and to replace old, dirty facilities with new, clean ones.
That becomes even more important now as we find
that we are barely holding our own in the areas where the
air is already dirty and in the areas where we thought the
air was clean, we are finding it is not clean.
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So, the goal of reducing total pollutant loadings
through the New Source Review process seems to me to
need to be built back in here.
I think it is fine to provide sources with the
flexibility to find the most cost-effective way of
advancing technologies. It is not good to provide them
with the flexibility to be able to avoid doing anything.
I would like, as we go through here, I think the one
thing I found missing is information. There are a lot of
ideas and concepts on how we can change things, but in
terms of what does this mean in the real world, what
effect will this have, will pollution go up or will pollution
go down, that is really the bottom line, and without
having some sense of, you know, of all the permits issued
to date, how would these changes have affected these
things would be real helpful for me.
I think keeping it down to a level of what does this
mean in reality Is important, because we shouldn't lose
sight of what we are trying to accomplish which is
environmental protection, not just making it easier.
MS. STlNSON: Good. Other
comments? Ernie?
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MR. ROSENBERG: I |
basically have two. One is that, frequently, we get
caught up in the abstractions of the New Source Review
process and forget that, in the real world, there is a
finite set of choices that you are making among
technologies and that the differences among those
technologies in terms of degree of control are, relatively
speaking, small, given that you are getting a facility...!
am assuming now that you are first pulling a facility into
the system through the modification or new source
process, that they are not at LAER yet.
So, there is'a tremendous benefit to encouraging
changes, but the system is always focused on the
emission increases.
The other thing I would say is that the States and
industry, I think, have a mutual interest in having the
work load tailored to the importance of the decisions that
are being made. Frequently, now that the definition of
major source has become so low in many areas, many of
the same sources that are going to be concerned and the
same pollutants that are of concern in the. New Soifrce
Review process under PSD and non-attainment are going
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to be controlled by BACT.
The RACT process which was filled with holes in the
past is going to be under much better control and much
better quality assurance oecause of the operating permit
program.
The short and long of all this is that a lot of the
decisions that would be nominally required by EPA under
the existing system are trivial decisions, and there has
got to be a way of short-circuiting the process so that
the preconstruction requirements are tailored to the
importance of the decision and acknowledge the fact you
may already have controls in place that were only
recently put in place.
MS.STINSON: Okay, good.
Sounds like you are getting into some of the stuff that
we definitely want to talk about in depth today.
Let me just remind everyone that this half-hour is
really supposed to be devoted to the folks that weren't
able to be here or weren't here in past meetings. So, I
mean, I am asking anyone else to hold your comments
very brief.
Molly?
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MS. ROSS: Thank you. I
wasn't here before. It is amazing how many invitations
I have gotten since January 20th. I appreciate the
opportunity that I have here to express some of our
interests.
I noticed, in looking at the transcript from the
August meeting, that Class I issues were excluded from
discussion, as were top-down BACT issues and some of
the litigations issues.
Also in reviewing the transcript and some of the
options, 1 know that a lot of the thrust of New Source
Review simplification is to streamline the process j
eliminate unnecessary regulatory red tape, especially
;
where it will make sense in getting good decisions on j
' i
, i
pollution controls.
There are a lot of fears about some of these
proposals that there may be increases in pollution
allowed without th* regulatory oversight that I think was
intended for those kinds of increases in pollution. |
But more broadly, as I sat back and looked at what
we are doing here, I wanted to take this opportunity to
tell you...to bring a little bit of a different perspective to
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it. I feel that I have to be a little bit apologetic about
this, because there are very practical concerns that I
think industry faces in getting permits and a lot of things
that don't make sense when you are looking under the
microscope of a permit review.
But on the other hand, I felt that if industry is
looking to get the process to make more sense to it and
to enable it to do good things, that the environmental
side, in protecting especially Class I resources which is
a very important part of New Source Review, should also
be considered in this process, and maybe together, by
combining these things, we can get a better system for
permit applicants, regulators, and for the protection of
resources.
If you will bear with me for just a minute to
understand our perspective, having worked in this field
for many, many years, I believe that it was the intent of
Congress and pretty well expressed, certainly in PSD New
Source Review, protection of Class I resources, parks,
wildernesses, at cetera is a main purpose of this
legislation and alt these procedures that have developed,
perhaps over-dtvtloped under it.
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And we need to get back to the essence of that.
What I can tell you from the research and monitoring that
has grown up under the auspices of this program is that
we know that the Class I resources are being damaged,
and there is acknowledgement by many States and much
of industry that this is happening.
Whether you look at the very sensitive aquatics that
are in many of these high elevation areas, you see that
some of our, many of our streams are either acidifying or
are thought to be near acidification. This is true in the
East. It has been an issue at Shenandoah and Great
Smokies National Parks and many of the Forest Service
wilderness areas in the East.
Whether you look at visibility, and I highly
recommend the National Academy of Sciences recent
report on protecting visibility that establishes there is
serious degradation from man-made pollution to visibility
throughout our Class I areas that is easily understood
related to pollutants. We know the sources.
Whether you look at vegetation in terms of injury to
sensitive, vegetation, reduction of biodiversity in the
areas of the country that were set aside to protect these
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kinds of resources.
Whether you look at the cultural monuments and
resources of our nation's history, we have good
documentation that these very precious resources of our
natural and cultural heritage are being damaged by air
pollution.
Now, the Clean Air Act has two specific provisions
that address this. One is New Source Review under PSD,
and the other is the visibility protection section under
Part C.
I think it is pretty well known that these sections
are not working effectively to address the problem
currently. Part of it, perhaps, is the way these
provisions -are interpreted. Part of it may be the way
these provisions are implemented.
But what we are interested in is ways to make the
system work more effectively to address these issues.
I have lots of ideas on that, and I know it is adding
broad new issues to this arena, but I think it is incumbent
upon the Federal land managers to raise the issue in this
context, perhaps in the idea of getting win>win kinds of
deals that will help us all in what our various interests
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are.
For one thing, we have, just since 1990, as many of
you know very well, made some adverse impact
determinations in New Source Review. Now often, this
has occurred in situations where the new sources are
putting on wonderful technology, the kind of technology
that we want.
Often, these new sources are willing to do lots of
things in order to get their permits. The problem is they
are adding pollution to areas that already have too much
pollution, and this is the situation in the East and in
isolated areas throughout the rest of the country.
We also have the situation in areas that have pretty
clean background such as the Southwest in many cases
in the Golden Circle of parks, in Alaska...we just had a
recent new source situation up there...where there is not
a great burden of background pollution but a new source
on its own can cause a problem.
As I look at these two different kinds of situations,
I think it is timely to evaluate issues like how do
increments work in each of these situations, are they
protecting Class I areas in each of these different
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situations.
In that regard, in the East, as sources have bumped
up against increment ceilings and, in fact, increment
violations in Class I areas are documented in modeling
provided to the States, tests have been developed to
exculpate a new source from the responsibility for that
increment violation. The significant impact test that
many of you know about is a way that a new source can
get a permit even though there are increment violations
in a Class I area.
As some sources control under the new Clean Air
Act Amendments, we are facing the prospect of
increment expansion which leads us to wonder will
increments be any type of protection in areas like the
East.
There are many other issues under the increment
concept that need to be looked at. We don't have
increments for ozone. A long time ago, there was an
attempt to look at this Set 2 pollutant and see whether
anything could be created in terms of an Increment or
equivalent measure.
Maybe the National Academy of Sciences report on
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rethinking the ozone problem that mentions a special
concern for nitrogen oxide increases in areas where we
have high background VOCs like the biogenic VOCs in the
southeastern forests, may this new scientific information
can help us create a new approach to an ozone increment
in areas where NOx is particularly the problem in these
kinds of rural areas.
The triggering of baseline 15. 16 years after the
1977 amendment is still an issue. We have areas near
Class I parks where the baseline hasn't been triggered, so
we don't get the protection of increments.
There are many more issues, and I don't need to take
more time on that. I am just highlighting some of the
other issues that could be looked at.
MS. STINSON: Molly?
MS. ROSS: Yes?
MS. STINSON: I hate to
interrupt you. but it sounds to me like you are laying out
a tremendous agenda for a discussion of Class I areas,
and what I am hearing from EPA is that they want to hear
around the table, you know, what additional things need
to be considered under simplification, and this sounds
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like a really good one. So, I think that maybe it is a topic
for discussion.
I guess I would ask you a question. Do you have
suggestions for how, in addition to this meeting, kind of
in light of our last discussion about what next steps and
what future meetings, how we might incorporate this?
Any particular suggestions on that?
MS. ROSS: Well, yes, I
think you are right. I think there might need to be
particular attention and a separate discussion on a lot of
these issues.
I think what I could do for this meeting is highlight
very quickly some of the remaining ideas so you at least
have an idea of the scope of what I have been thinking
about, and there are some specific ways that these kinds
of concerns tie into the more limited things that you have
outlined for this meeting, and maybe in two or three more
minutes, I could tie that all together.
MS. STINSON: Okay
MS. ROSS: After
increments, adverse impact determinations are a major
concern of ours. States are rejecting the Federal land
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managers' adverse impact determinations that have been
a long time coming. We just started making these in
1990.
We have asked for offsets, a cushion for growth,
because the air pollution levels in these Class I areas
where we have found adverse impacts is just like
nonattainment. Our resources are suffering effects, and'
we need improvement of the air quality there.
So, we are looking for a cushion for growth from
existing sources putting on additional controls. If
existing sources did this, then we could step back from
these new sources with spanking clean technology.
And we don't care whether the new sources
themselves secure offsets or whether the States help us
in going through the existing sources and helping to find
ways to cut back on existing emissions to provide that
cushion for growth so we can facilitate spanking new
technology on new sources.
We are very concerned, tying it now more into some
of the issues that might be more near
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best when you are anywhere near a Class I area that has
documented concerns.
We are looking for help with the monitoring of our
resources. A iot of the problems come because we have
so many uncertainties about impacts on resources. We
know things are bad. I don't think we know the scope of
the damage to our resources.
And we also are losing funding, government funding,
for continuing monitoring of resources and ambient air in
Class I areas at a time when we need to know this more
than ever, because we want to be able to factor in what
the new Clean Air Act Amendments are going to do as far
as air quality goes in Class I areas.
Tying this directly to the issues here, there are many
of these proposals that talk about we can streamline
something as long as there is no effect on NAAQS or PSD
increments. Federal land managers ad nauseam always
throw into that or adverse effects on air quality-related
values in Class I areas.
We will want special provisions, special, more
protective provisions to make sure that, in areas where
we have adverse impacts, you look at those issues to
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make sure you are not allowing Increases in air pollution
where the pollution is already bad.
And we might be able to agree to some streamlining
and expedited proceedings if we saw that the company,
the source, was going to take an extra step in reducing
the existing levels of emissions so we can Improve the air
quality. You get something if you feel some pain, if you
give something up.
And I guess that is the basic orientation, maybe
tying It back to some of the proposals on the table here,
and thank you for letting me at feast get those out on the
table. I know they will go well beyond this meeting.
MS. STINSON: Good,
thanks.
Dave or Chris, do you have any comments to add
regarding this particular topic or anyone else who is new
to the group that would like to say something? Oavid?
I will go with Dave Jordan first.
MR. JORDAN: I was just
trying to think of what things might have changed in the
last six months from a Stat* and local perspective, and
one thing, I think, that has become much more obvious to
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many of us is that in dealing with nonattainment areas
and trying to get the 15 percent reductions, that is
something that is going to be very difficult for us to do.
And some of these alternatives do have some
implications with respect to that particular part of the
Clean Air Act. So, I think that is something that we want
to keep in mind as we talk about some of these
alternatives is what does this do with respect to our
ability to meet those 15 percent goals within the Clean
Air Act.
MS. WE6MAN: Just to
clarify, to you mean it inhibits your ability to meet the 1 5
percent in some of these proposals?
MR. JORDAN: It could
complicate, I would say, our ability to do that.
MS. WEGMAN: I hope you
will expand on that a little later.
MS. STINSON: Dave? Yes,
I see you guys. Dave, did you want to say something
further?
MR. HAWKINS: Only, to
remind folks that I did bring up a number of the issues
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that Molly has mentioned at the August meeting. At that
time, I said that I didn't feel it necessary to insist that
we have a discussion of those issues at the August
meeting, but I want to make sure that I restate my view
that any discussion of the effectiveness of a New Source
Review program has to address these issues as examples
of the basic question is the New Source Review program
doing the job environmentally.
MS. STINSON: Before we
move on, I just want to remind folks that with this
suggestion of Molly's, we are going to debate and
discuss how and where it is on the agenda in the future
but not do that now. So, limit your remarks to Class I
areas in terms of the new ideas.
Chuck?
MR. KNAUSS: Yes, I was
not here in August and would like to offer a perspective
and perhaps an alternative framework for how to evaluate
NSR applicability in particular.
Something that going through the transcript and in
hearing comments today, continual reference to ,the
reason for having a broad and, many would say, over-
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broad NSR applicability system is to ensure existing
source control.
Well, let s remember the 1990 amendments. RACT
and MACT will be applied now on existing sources, and I
did not see in the transcript and Ernie mentioned briefly
that that orientation, perhaps removing the excuse lor an
over-broad NSR system, was brought to bear.
I would suggest that this kind of paradigm shift for
those that were arguing for a very broad NSR
applicability system be considered.
Along those lines, as we evaluate what activities
should be in or out of the NSR system, I think we should
focus on very specific activities and discuss what types
of incentives the agency or disincentives the agency is
creating for the conduct of plant managers.
It is clear that, just as in the tax code, you can
adjust the behavior of people with incentives. We can do
that also here with this NSR applicability system.
We should, as we get into the last two hours of this
morning and we go through pollution control, something
that concerned me greatly was the orientation- on
motivation that Is in the proposals that were put forth.
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I think we should focus on results, not the motives
behind the performance of particular conduct.
If, in fact, the agency wants to successfully
streamline this system, what greater way of clogging up
the system is there than trying to get into the board
rooms or the bedrooms or the minds of the people
undertaking particular conduct? And the pollution
control document, for example, uses the word "solely" in
the very first sentence, solely for the purpose."
I am very concerned that we are not, instead,
I
focusing on the results of conduct rather than the
j
motives behind it.
MS. STINSON: Mike?
MR. BARR: I would like to
get back briefly on the information point. There is lots
of information out there, particularly in the States and
the local agencies that have issued tens of thousands of
these permits over the years, and, certainly, what it !
i
shows is that there are huge resources devoted to New
Source Review in many parts of the country and, yet, for
not much environmental benefit.
After all, this program applies in the Bay Area, for
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example, the San Francisco Bay Area, to about 2 percent
of the inventory each year, but it accounts for about 100
percent of the growth and the effect on manufacturing in
the 6 million-person, the 6 million-citizen Bay Area.
There is a great deal of effort that goes into it, and
the great irony, these days, is that many of these new
projects are pollution control projects, pollution
prevention projects, and projects to modernize and
recover.
Given our economy, the news from the
manufacturing sector is that, unfortunately, that there
are not many changes in the last six months. We are not
growing, and we are not recovering, and we are not
hiring, and this is part of the problem.
We desperately need permit streamlining, and we
can make New Source Review considerably worse,
particularly in areas of the country where there are
conflicts with Class I areas.
There are huge problems in permitting. We have
seen them in California. There is a huge effort, a bi-
partisan, multi-interest effort going on now to streaml.ine
the permitting process involving the EDF, the Citizens for
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a Better Environment, the Sierra Club, and the NRDC in
the California effort.
And it is very, very important, I think, again, to get
the benefit of those information data bases and that
experience in this process in order to make it as
constructive as possible for everybody.
MS. STINSON: Any other
comments, ideas on new ideas? Chris?
MS. SHAVER: I just wanted
to get back to Molly's point, although I probably have a
bias in favor of almost anything Molly says. Past lives.
The Class I issue, I think, is a very important one,
and I don't think that there is any way that this process
should continue or come to any kind of conclusion
without including to make sure that we are also
considering protection of clean air areas, because
otherwise, you are only dealing with a very small part of
the problem, actually.
And I think, at a minimum, one thing we have
.
learned over the past 20 years now or so in dealing with
air pollution is that it is a lot more difficult to remove an
air pollution problem once you have created it than it is
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to prevent it in the first place, and so much of
everybody's resources are tied up in trying to deal with
intractable problems around the country. At least, we
should spend some time focusing on trying to keep what
we still have left that we haven't destroyed in a
reasonably clean condition, and that may be one of the
better uses of our time.
MS. STINSON: Henry?
MR. NICKEL: Yes, I would
just like say that while I agree with Molly and Chris that
the PSD program focuses on preventing pollution before
it arises, that National Parks play a very important,
central role in that program, we should also keep in mind
that this was not a program to regulate every increase in
emission at existing sources.
I think one of the things that we are going to be
discussing today and one of the things that has been
recognized from the very beginning is that you can
increase emissions at existing sources as a result of
certain activities without triggering New Source Review
So, I think we have to npt be tempted to view
whatever problems we see with those increases as
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something that should be dealt with through the New
Source Review program, and I don't think this is
inconsistent, necessarily, with what Molly was saying,
but we should not try to make the New Source Review
program the beginning and the end of our air program.
We have certain kinds of increases that can take
place, hours of operation, production rate increase, fuel
switching, and to the extent that those create problems,
it may well be that the solution is not to reform the New
Source Review program to get at those existing emissions
increases but. rather, to deal with it under some other
program.
And I think that gets back to Chuck's point, and that
is that we have to.look at what is going to be happening
under the Clean Air Act to see whether or not those
problems will be addressed under other titles.
MS. STINSON: Bill, it looks
like you will have the next to the last word.
MR. PEDERSEN: I just
wanted to say one thing on...
MS. STINSON: Can you pull
your mic just a little closer?
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MR. PEDERSEN: ...on the
Class I issue. 1 read the NAS report. t was a peer
reviewer for it, and two things that it makes crystal clear
are that new sources are not the cause of Ctass I area
problem s -
The cause comes from area source growth, road
growth, and existing sources. You could do anything to
new sources, and you would not either protect the areas
or even arrest deterioration where it is going on.
The second is that in order to get back to where
these areas were 200 years ago, you would have to adopt
revolutionary controls.
Now, i know that there are things to do between
where we are and that status, but when we talk about
Class I areas, we are really in danger of having the tail
wag the dog if we, in effect, make NSR hostage to
solving the Class I area issue.
MS. STINSON: Okay, and I
can see that we have a lively debate that can be had on
this topic, and we want to have that, but we are not
going to have it right now. So., Chris, 1 will take your
comments and ask you guys to rethink whether you need
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to make your comments now or whether it is appropriate
for a later debate.
MS. SHAVER: Actually,
until Bill spoke, I was going to respond to something
Henry said, but let me just say I think you have
mischaracterized the NAS report, and I will let it go at
that.
But Henry's comment brought up something in my
mind we should add which is the idea that New Source
Review is only part of the process, and there are
numerous references in here if we find we have got an
increment problem'or a NAAQS problem, then, hey, there
is a requirement that we revise our State implementation
plan.
The problem with the system, one of the many
problems with the system right now, is that is not
happening. New source permits come in. they show that
they are going to exceed increments, it goes back to the
State, and no action is taken.
There is a requirement on the books that something
be done within 60 day*s, SIPS be revised. That i s * n o t
being enforced.
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I think if we are going to separate out New Source
Review and say it is only part of the system and there is
another protection layer there, then perhaps part of this
process also needs to be what do we need to do to those
back-up systems to make sure that they are working and
that we are not just creating an open door to violations
that have been on the books for a few years and not
corrected.
MS. STINSON: Okay. Bill?
MR. BURKHART: I just want
to add one thing, because I think it is important, and it is
not new, but it is what Ernie said and, I think to some
extent. Chuck. If we really want to simplify this process,
we really have to zero in on those issues that are
important to be able to separate the wheat from the
chaff.
Recently, I spent some time going around the
country and talking and working Title V regulations with
State and local agencies, and I found a lot of the same
feeling there. And speaking as a former regulator, I have
that feeling.
So much of their time and energy is being spent on
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shuffling papers and doing very unnecessary work that
has nothing to do with air quality that unless we can get
away from that, do whatever to really simplify
something, really hone in on what is important and what
we have to do, because I see in a lot of agencies, I see
Title V rules having the same kind of potential to be
doing a whole lot of make-shift work that we shouldn't
be doing.
So, to simplify it, to really focus on what is
important, what is impacting air quality.
MS. STINSON: Good. Well,
I think this has been a helpful discussion. Thanks to
everyone for your comments. I know EPA was taking
detailed notes, and I was. too. Since we are not
recording it up here, we will be cognizant of these other
issues, particularly Class I, but other issues as well for
incorporating them into future discussions.
Any other comments at this point? If not, we are
I
i
going to take a break. We will take 15 minutes. Start
heading back around 10 after 10:00.
(WHEREUPON, a brief recess was taken.)
MR. LILLIS: We would like
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to move into the next portion of the agenda. The next
portion of the agenda deals with progress summary, and
for the next few hours, we hope to cover six or seven
topics that are listed on the agenda.
Let me give an overview of what we are really trying
to do here. At the first workshop, we received an awful
lot of excellent ideas, comments, and suggestions in
terms of how to improve the process.
In addition, we are aware from other surveys that
others have concerns with respect to the New Source
Review program. We have identified six or seven of
these problems that we are aware of, and we wanted to
give some initial reaction to them.
That is not to say by only talking about six or seven
that we have dismissed the other comments that we have
received. A lot of the comments that were identified at
the previous meeting deal with either applicability or deal
with BACT which we will get to later in the day.
There were a number of comments in terms of EPA
revising and clarifying various definitions, and we will
still...those are still on the table, and we do plan to took
at those later on as we develop the new source
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rulemaking.
The first issue we would like to discuss deals with
the BACT/LAER Clearinghouse. This is a concern that is
frequently raised in terms of not being user-friendly and
not having a sufficient amount of information.
EPA has made a number of improvements to the
BACT/LAER Clearinghouse, and we would like to describe
those to you.
The second point here is that one of the comments
that was made a number of times at the first meeting was
the fact that EPA should periodically issue summaries of
control technologies for individual source categories and
perhaps they could be viewed as the presumptive norm in
terms of control technology for a source category.
One of the things that the BACT/LAER
Clearinghouse, one of the improvements that is being
made is the ability for that system to generate a list in
rank order of their stringency, and one of the questions
we have, then, is whether the system, when it is fully
operational, whether that would respond to some of the
recommendations or suggestions that were made at'the
last meeting.
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So, in listening to Bob Blaszczak who manages the
BACT/LAER Clearinghouse...he will be giving a 5 or 10-
minute presentation...! would like you to consider the
changes that are being made and also the utility of that
system in terms of providing the summaries, control
technology summaries which were recommended at the
initial meeting.
With that, I will turn it over to Bob.
MR. BLASZCZAK: Good
morning. Hope you can all hear me. I am Bob Blaszczak.
I am with the RACT/BACT/LAER Clearinghouse. Actually,
the parent organization is the Control Technology Center
which has sort of assumed the Clearinghouse.
We have a brief presentation this morning talking
about some of the improvements that we have made in
the Clearinghouse. We have passed out a one-pager
which sort of summarizes my presentation, and we have
a few overheads that you will be seeing that go along
with it.
I intend to be brief. If you have any questions, feel
free to stop me.
Just briefly, the history of the Clearinghouse, we
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started off as a paper system in the early years in the
'70s and '80s, too. We have graduated to what I call an
unfriendly mainframe system that requires people to
know a particular data base management system language
to access the system and special account numbers and all
the security involved in a mainframe system.
In the spring of '90, we went to a menu-driven
system which started to get a lot of use, and later
because we were told that system, the data base
managed system, would be taken off the mainframe, w e
reevaluated our position and went to a Bulletin Board
system.
So. that is where we are today. We are part of the
OAQPS Technology Transfer Network which is an
umbrella bulletin board for about 12 different boards at
the Office of Air Quality Planning and Standards. We are
one of the many boards on there. It is called BLIS.
Actually, that is our old name, the BACT/LAER
Information System. We kept the old name, BLIS, for our
data base.
We developed a menu, letter K, is BLIS, that is our
system; when we mention data gathering considerations.
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up front, we are highly dependent upon voluntary
submittal of data. That data comes from State and local
agencies, the people actually issuing the permits.
Back in the early '80s in a tot of the regions, they
had the program, and basically all the programs are in
State and local agencies now. So, they are the data
source; there is less of a requirement in the Clean Air Act
with LAER decisions that they be entered in the system.
So, it is a legal requirement that LAER be in there.
8ACT, RACT, and probably case specific as MACT in the
future will also be on there, but that is purely a voluntary
system right no w .
Recent improvements. We mentioned going to the
bulletin board, and that provided us certain advantages,
one of them became very much more accessible to
everyone. Anyone anywhere in the world, not just in the
United States, can tie into the system if they have a
personal computer with a modem for the telephone line
and communications software anywhere in the world. For
the price of the phone call, you can tie into the bulletin
board.
So, we are much more accessible. You don't need
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a special password or a special account. When you
register with a TTN, you do register on the board, and
you provide some personal information and you establish
your own password. There is no charge. The only charge
is the charge for making the phone call.
Bulletin board communication functions. We think
these are kind of important to us, because they allow us
to communicate better with our clients, and the
Clearinghouse is very much concerned that its clients,
that is, initially the State and local agencies but to a
much greater degree now, the private sector wants to
participate, that is second.
Just a standard part of the bulletin board, it allows
you to exchange messages with us. It allows you to get
certain standard documents from us rather easily. For
example, the last publication of the Clearinghouse, the
yearly publications, all the tables are in there for
downloading. You don't have to buy the book anymore.
You can download it.
If you still feel that you need the user's manual, you
can download that right from the board. The standard
documents will download.
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We have designed the system, hopefully, to be a lot
more user friendly which is the next point in my agenda.
You should be able to use the system without an initial
user's manual.
Once you sign on, the screen is thoroughly self-
explanatory. If you get lost at any time, one stroke of
the key gets you to a help screen that tells you what you
can do with at that point or what information you need to
continue.
If there is a need to use a code or a certain
terminology, that is provided on the help screen. So, it
is much more user friendly. A lot of more users use, than
the old system where none of that was available. You
were pretty much stuck with using the user manual.
We improved search and query capabilities. In the
original system, in the original database management
system, you could not do searches. When we moved up to
a menu system, I think there were ten standard searches
you could do. I think we are up to maybe 20 or 24
standard fields you can search on.
The conent system, we allow three different-
searches and three criteria within the search. So, you
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can add up to nine different criteria to carry out the
particular source types or processes you are interested
in. So, that capability has improved quite a bit.
Also, we can do word searches in the text fields.
So, if the codes don't fit or account some of that
information, you can turn to a text where you can just
put a word or part of a word right in there, and it wi||
find it for you.
Much more downloading capabilities. We have six
different standard downloads. Three of them are in
appendix formats from our publication and having to do
with that. I am not going to explain them right now.
There is a new scheduling format by which we are
trying to encourage States to put in data in an early time
frame, actually when the permits get submitted to the
agency. Once they can identify the source, the process
and pollutants they are dealing with, they can enter it
into the system now instead of waiting until the permit
has been issued.
So, while they are deliberating what is happening
they have the ability to put that information in there, and
it can be downloaded.
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We also have a free form format which prints
everything out of the data base and also a spreadsheet
format, a Dbase/Lotus format. So, you can download
your computer, can play with the data, and use the data
any way you want, organizing it any way you want.
There are more fields. In particular, we have added
cost fields, some more standard codes like SIC and SCC
codes. We have fields for AIRS, ID numbers, EPA ID
numbers where you can go to more comprehensive data
base if you need more information, and scheduling
information.
Many of these new fields have not come into use yet
or filled in, because we just came on line in the very end
of '92. So, we are still encouraging our State agencies
to fill in some of those fields.
Our on-screen viewing, you can do searches in
criteria, review the data, and you can go back and
rearrange your criteria and view this information right on
the screen or a summary of the information. You can
generate a file with the information you need and
download it to your computer.
We also have installed the ability to encourage
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States to enter data which has been a problem, getting
all the data that is out there in the system. It used to be
a paper format, and it still can be where they submit on
paper a copy of the determination.
Right now, they can enter data directly into the
system. Right into our data base; they search for part,
because of this system.
A little about the use of the system. The bar chart
on the far right indicates use of the system. The 74 at
the bottom is probably a high number, because we didn't
put a counter on it until May of '90, and that was seven
months after we started the menu-driven system in
mainframe. So, it was an improved system.
My perception is that the actual usage when it was
not menu>driven on the mainframe was probably less than
20 a month. That is just a perception. I couldn't verify
it.
In May, after three months of the menu system, it is
up to 74. By September, the last month we were on the
mainframe system, it was at 127. The actual range was
anywhere from 100 to 200. Our high month was 200 on
the mainframe system.
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In September, it jumped to almost 1000. I think we
are ranging 800 to 1000 people a month since we have
gone to the electronic bulletin board system. In January,
it happened to be 975.
This monthly snapshot gives you an idea of our
efforts to effect a change in the data base and improving
the system, and, hopefully, the success of our efforts
will make it more available and accessible to everyone. i
The pie chart on the right or your right as you face
it indicates who is using the system. Once we put the
counter on, even on the mainframe system, this
distribution didn't change very much.
As you can see. our main clients are State and local
agencies and total only 23 percent of the usage, less
than the Federal agencies. I assume it is EPA. It doesn't
include our staff. We subtract that number out of there.
So, our Clearinghouse staff usage and our contractor
usage is not included in it.
The private settor is two-thirds of our clients that
use the system. They are getting on the system, they are
using the system, they are downloading the information,
because 25 to 30 percent of the people on the system are
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generating files from this, from their searches, and
downloading to their computers. So, we know people ar®
using it and, hopefully, getting good information out of
it.
Planned improvements, we do realize there have
been data quality problems with the system. We are
trying to address that by improving our QA/QC of
incoming data from State agencies. There is also *
considerable effort, a short term by a contractor to fill i"
themissing data. Our New Source Review Section people
have initiated a contract to search out States that have
been delinquent in submitting data for making the
determinations or people who have been slow in
submitting data and try to get that data into the system*
They are also looking at voids in the system in the
data itself where data elements are not filled in and
trying to fill those in.
We are doing that for the most recent data. We are
concentrating on the most recent three years data and
brand new data put into the transient data base, because
that is the most powerful information and determinations
that are made most recently, the new BACT decisions.
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MS. STINSON: If you could,
wind up in the next couple minutes.
MR. BLASZCZAK: Yes.
Statistical analysis, through standardized units as part of
an effort to allow ranking of the information in the
Clearinghouse. By standardizing these, we can allow you
to go into with a few key strokes and list off the
facilities that Ed was talking about to get an idea of what
the best or top five or so BACT or LAER determinations
have been.
We are working with that right now. We hope to
have something up and running by the end of the fiscal
year.
We are also going to start a regulation data base
which reflects all the standards that EPA has out to allow
States to enter critical standards they are issuing,
standards mostly for VOC regs which will allow direct
entry. So, you can go into that data base and not just
look at determinations but what the tightest requirements
are of any Federal or State permit or standard.
Under consideration, we are looking at direct data
transfer from State agencies. I mentioned we are looking
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at potentially an air quality data base which would look
at vehicular problems to some extent. And we have some
access restrictions we had to explore, because of the
non- uses that were happening. We are looking **
software and hardware to reduce that problem.
So, that is about the end of my presentation. I'
anyone has some questions of me, I would love to
respond.
MS. STINSON: Yes,
Praveen?
MR. AMAR: Do you have
independent capability to...
MS. STINSON: Can you
speak into the mic? Sorry.
MR. AMAR: Do you have
capability to independently check the quality assurance
and quality control of the data that comes to you?
MR. BLASZCZAK: We
have...well, part of our contracting responsibilities is to
check it three ways. One is the administrator has a copy
that the State has given to us. Two, that it makes sense*
that it should technically be correct. And, third, that
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they do all the searches in the fields that are relevant so
we can find data once we get it. So, we are initiating
that now.
MR. AMAR: And one more.
I think what could be very useful for this Clearinghouse
not only to have the data and costs from the beginning
but to go back three or four years later to see what
actually it did cost, because one of those controversial
issues there in the beginning was the cost numbers from
industry and regulatory agencies was so different.
So, what you want to do is to go back five years
later and see what it really did, not what was said.
MR. BLASZCZAK: The
actual costs?
MR. AMAR: Yes, but go
back three or four years down the road.
MR. BLASZCZAK: That is a
concern that the data base be a more historical one, that
is; that reflects the conditions that were evaluated and
why-the decision was made. We do have some provisions
for verification that those conditions were actually met
and the source provided in time, but we didn't extend
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what it would cost to do that kind of comparison, the
estimate to do that.
MS. STINSON: Bob, did yo"
have a comment on that?
MR. BRENNER: i just
wanted to flag an issue for tomorrow, because I don'1
think we are going to have time to get into it now, and<
obviously, this tool is going to come up a lot in our
discussion tomorrow.
And that is I would like to hear from some of the
State folks here tomorrow on things we could do to get
more of these determinations into the data base, what
are the things that are hampering you from putting your
determinations into the data base and see if we can
spend some time thinking about how to improve that
process, because I think this will be real important for
any effort to streamline New Source Review or BACT and
LAER in particular.
MS. STINSON: Any other
comments? Mike?
MR. BARR: Just that I yvill
offer the point about the cost data and in practice going
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97
into the system. The feasibility data should also go in
about whether this system, whether the pollution control
actually worked, whether it was reliable, whether the
monitors that went along with it worked reliably.
That type of information would be a very valuable
enhancement to the system. QA/QC is certainly
absolutely essential. The data has to be reliable and
trustworthy and comparable, all the things that a good
Boy Scout system is supposed to be.
But it is a great effort so far, and I think it should be
encouraged tremendously. Obviously, the users are
voting with their fingers and dialing in now, and it really
is an important development in the field.
MS. STINSON: Thanks. I
am going to ask you to limit your comments to questions
of clarification. I think that we probably want to have
the discussion in conjunction with our overall BACT
discussion tomorrow as to what needs to be included or
not.
Did I change anybody's mind? Dave, not going to
change your mind? McAvoy?
MR. MCAVOY: I suppose
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the question I have for clarification is whether there i9
any thought that with this Clearinghouse, we could have
some more general bench marks as to what BACT is for *
particular control device.
I can tell you working within industry, one of the
frustrations that we have, even if we streamline this
process as we discusse'd, is that you are still involved
into a never, never land where you are having case*
specific determinations that are being made across the
country with agencies, and what that does is »t
introduces delay and cost and the companies that don't
have the time being able to fund full-time people to just
dealing with BACT issues.
If we could have something more akin to the NSPS
process where you have some debate over particular
bench marks of control that everyone can look at and
know in advance what the expectation is, I think it would
move the process forward, and I certainly think that
about the cost per time as well as a bench mark is
something that needs to be more predictable.
MS. STINSON: David
Hawkins?
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MR. HAWKINS: This isn't
clarification, but it is quick. I just wanted to say a word
of thanks to the people who put this system on tine. I
have used it, and I think it really holds a lot of promise.
The search and query capabilities really are quite
easy to use, and it really helps you to get an overview of
patterns and trends and issues, and I would encourage
others to call in, although this may be a little like
recommending a good vacation spot that falls into ruin by
overuse.
MS. STINSON: Tom?
MR. MICAt: I guess I have
a question. The upcoming operating permits that were
going to be electronically sent to EPA through the AIRS
format, is there any effort to consolidate that
information with the BACT/LAER Clearinghouse, because
from a State perspective, sending that information twice
is a little bit of a nuisance.
MS. STINSON: Can you
respond to that. Bob?
MR. BLAS2CZAK: There is
no current plan to do that. Initially when we set the
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system up, we found out we had little common data with
theirs, and it actually would be very difficult to set up-
I want to emphasize that we are not in competition
with AIRS. We are more a pointer or a way of finding
particular information on a New Source Review or a
specific MACT/RACT decision.
We are trying to g»t you back to there, where it is
necessary. So, the information is slightly different. W«
are looking at ways of direct exchange of information so
the States don't have to go to AIRS, in sense have to g°
to us, but we are trying to qualify that, the direct data
system, but I don't think in the immediate offing that w«
are going to have anything that is going to take data
directly from AIRS into our system.
MS. STINSON: Mark
Carney?
MR. CARNEY: My question
relates to how you expect to be able to get the data, the
cost data, after these things have been built or actually
purchased. Don't you think that is going to be a littl*
difficult to do. having to go back to the source and get it
at a later date?
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MB. BLASZCZAK: Well,
right now. we don't have that. That was suggested from
the floor, but right now, the cost data we feel we can
provide are for the initial estimates made when the
permit is issued. The only after effects data we have
allowed for is for verification that the source has, in
effect, complied with those BACT and those new source
construction permitting conditions and that the emissions
standards that they described in the permit were, in fact,
met.
So, the suggestion from the floor was to have the
actual data available to compare with the estimated data
for the permits. We would have to go back and address
that.
MS. STINSON: With that,
I think we are going to close this discussion and turn it
over to Dave Solomon for a short discussion and
presentation on accessing NSR information, and we are
going to move into some more substantive
recommendations.
MR. SOLOMON: What I
would like to do now is give a brief overview on some of
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the more immediate follow up problems in regard to some
of the issues that were raised during the first workshop
and essentially the direction that EPA is currently
contemplating in terms of addressing those issues. What
I will do is I will start with a little bit of background with
regard to each of these issues.
In the handout materials sent you, there is a bit on
each, and I am going to be summarizing the information
contained in those few pages.
The first issue is in regard to access to New Source
Review and policy and guidance material. Essentially
the concerns, as we understand them, are that
information is limited in terms of access to the regulated
community or by the regulated community and the
regulated agencies, meaning that the information was
difficult to find.
There was uneven distribution of information
Essentially, there was no system in place to ensure that
State and industries were formally informed of the poliCy
decisions made by EPA.
Timeliness of distribution is an issue raised
applicable to the States' need of the policy up front at
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103
the time when they are seeking permit applications or
making permit decisions and not find out later on after
they have made those decisions.
Essentially, EPA did or still does have a New Source
Review bulletin board in place. However, there were
some difficulties that involved accessing the system.
Special software was needed. It only allowed for
the ability of one user at a time to access the
information.
What we did in order to address the issue was to
now place the New Source Review bulletin board on the
OAQPS TTN. Essentially, this allows for one-stop
shopping along with the BACT/LAER Clearinghouse, the
Clear Air Act Amendments, support center for regulatory
models, the clearinghouse, for emission inventories.
Control Technology Center, these can all be accessed
through the OAQPS Technology Transfer Network, again,
including the New Source Review bulletin board.
This became operational in December of 1992. No
special software is needed. It allows for multiple user
access, plus it also influenced the key word search
capability. That is, you query the system on a key word.
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So, if you are looking for information on increments
BACT, offsets, netting, just highlight the key word, and
it will, literally in a matter of minutes, go through two or
three volumes of paper. It is all electronic media, but the
equivalent paper is about two or three volumes of that
information is contained in memos.
We hope that this implementation of the New Source
Review bulletin board on the TTN will address the
concern that we have heard from both State and local
agencies and the regulated community regarding the bar
to access of New Source Review policy guidance
material. Essentially, as that material is issued from our
office, the day after it is signed by the administrator, the
day it is signed by the office director or the division
director, it goes on that system.
Are there any questions? Yes, David?
MR. HAWKINS: Oo I recall
correctly that the last time I looked at this, I don't
remember that there was a search by date of memo
capability, and if that has been corrected, great, and if
it hasn't, I would recommend you put that on.
MR. SOLOMON: I believe
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105
that the memos come up according to date, so there is a
chronological order to the way the memos are on the
system.
MR. HAWKINS: Yes, but I
think if you have got one memo and it references another
memo, it would be really nice to be able to just search for
it by the date of the memo rather than having to, you
know, get a whole raft of memos using the key word.
MR. SOLOMON: With the
key word search, you would have the capability to
actually put in the date. It would search through the text
of all the memos. I have done that.
Again, this is just a point of information to address
the issue that we have heard Laura address it and try to
address further, and that is to secure a common base of
information that all people have access to in terms of
understanding what EPA's policies are with regard to
issues.
The second issue that we are wrestling with is the
issue of the NSR baseline for existing units. Essentially,
this deals with the implementation of the current
regulations. As we have mentioned, all of the following
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items we will be discussing deal with the implementation
of the current regulations.
Since the simplification effort is a long-term effort
dealing with rulemaking, proposals, final promulgations.
State implementation of those changes, it may not be for
another five or six years before we see a new process in
place.
And what we have done is we have gone through
issues we have heard not only with regard to the overall
concept of implementing NSR but to the specific issues
in implementing the current set of regulations to see
what we could do to, where appropriate, issue policy or
guidance for EPA's current criteria to provide better
understanding and a clearer base of understanding as to
how EPA envisions those regulations working.
Then, the second issue we address is in terms of the
netting baseline for user sources. Currently, EPa
implements what is called an actual to potential test for
new units or modifications to existing major sources,
essentially comparing the actual emissions from a current
unit or operations compared with potential emissions for
the new unit or new operations.
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If the corresponding emission level represents a
significant increase, the new source would be applied
As I mentioned, if any baseline for existing units is an
actual emissions baseline, we get annual emissions, that
is. tons per year based on a two-year period
representative of normal operation.
Historically, EPA has performed to the most two
recent calendar...to the most two recent consecutive 12-
month period prior to the proposed change. I should
mention that the regulations do allow EPA or the
permitting authority the discretion to use another two-
year period if the permitting authority determines that
two-year period is more representative of that source
operation.
Obviously, a big question is how does the source
demonstrate or what is considered to be normal source
operation. Essentially, EPA does not have any specific
overall agency guidance.
We have dealt with this issue on a case-by-case
basis and have provided guidance in terms of the result
of those individual cases, but we have not put that
together in terms of an overall guidance or criteria list
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108
for return to normal source operation.
What we have heard is that this issue of using the
last two years is somewhat arbitrary. Many sources have
therefore requested alternative periods. On a case- by-
case basis, we have allowed in almost all cases a source
to use other than the last two years.
We have heard, though, that this type of evaluation
is very time-consuming to the source, to the permitting
agency very resources intensive, can also add quite a bit
of uncertainty since this evaluation must be done up
front before the source knows if it will be subject to NSr
or has the ability to then have a review and it can be
very contentious in terms of what, indeed, represents
normal operation for the source.
The next slide deals with EPA's proposal for the
course of action that EPA is currently contemplating with
regard to addressing this issue on normal source
operation. The EPA is considering using any two years in
the last five years, that is, five years prior to the
proposed change, not necessarily five years prior to
operation of the unit under evaluation. It is just the last
five years with regard to the proposal that is on the
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109
table, that is, the new unit or the operational change, to
be representative of normal source operation for the
source.
This would apply to all source categories. Right
now, EPA is implementing this as a result of the
rulemaking done last year for the utilities. We would
extend this to all source categories. It would be in the
form of an interim policy memo issued from the Office of
Air Quality Planning and Standards under the director's
signature, and, if necessary, we would follow this up in
the simplification rulemaking.
EPA feels that this is consistent with the
contemporaneous period. That is, the regulations now
define a five-year contemporaneous period for the
discovery of valid increases and decreases which are then
summed up for equation to determine if a proposal
represents an increase.
Again, as I mentioned, it is consistent with the way
EPA currently reviews physical and operational changes
for utility units. It is, in effect, consistent with most of
the case-specific determinations that we in the regions
have made, the guidance that we give to our States in
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trying to look at other time frames to be considered
representative of normal operation.
We feel, also, that it is probably more reflective of
real-world operation, cycles of operation, business
cycles, and that it would add a fair amount of certainty
to the source and to the permitting agency in terms of
EPA's position regarding using an alternate two-year
period.
Therefore, it would hopefully add less Federal
involvement into the baseline decision. We would also
allow the use of other periods outside of the five years as
the current regulations do allow. However, we woul^
look for a very clear and convincing showing that
indeed, these were more representative. Therefore, vv e
are looking at a much higher hurdle for the sources to
claim that outside of the five years is, indeed, more
representative.
I should mention that my counsel advised me that
this is not necessarily a legal concept of clear and
convincing, but we would be looking at sufficient
evidence to argue that, indeed, this was that the use of
a time frame outside of the last five years was truly
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representative of normal source operation.
MS. STINSON: With that,
I think what we would like to do is start with questions
of clarification before we get into comments and
questions, concerns, et cetera.
MR. ROSENBERG: Once you
have determined that you are in the New Source Review
process, I can understand how this will work, but at the
front end, you have a presumptive base to your theory
Is EPA going to change the presumption, or is the source
going to come in and apply for the presumption?
MR. SOLOMON: This could
be to all presumption of finding that the applicant would
be able to use any two consecutive years over the last
five years, and EPA would not second-guess that decision
or that determination. Essentially, the State could with
its own policy choose to use the last two years, but if
the State and the applicant agreed on another two-year
period in the last five, EPA would not object to it.
MR. ROSENBERG: And do...
who could you use the same presumption to make a
negative determination?
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MR. SOLOMON: In terms of
the framework for applicability, that is, the applicant
demonstrating that it is the sources proposing to get out
of review as a qualified increase and demonstrated that
there was a sufficient decrease and quantifying the
baseline for the decrease, the source would be able to
use any two of the last five years, that is, the five years
in front of the proposal, not five years before the
decrease actually occurred.
So, if you have an existing unit now in which yQu
intend to remove from operation and construct a new
unit, you would need to come to the permitting agency
and present any two years over the last five as evidence
of normal operation, and EPA would not intervene Qr
second-guess that as being normal.
MS. STINSON: Mike, did
you have a follow-up to that?
MR. BARR: Just what sorts
of factors you were thinking about considering for the
non-legal clear and convincing.
MR. SOLOMON: That is a
whole different concept. What we are trying to do her©
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is add certainty in terms of the baseline or add more
flexibility.
MR. BARR: Would one of
the factors be something like a longer than five-year
product cycle?
MR. SOLOMON: That is
definitely something that that source should present. We
are not eliminating the fact that a source can present any
two-year period, that is, within the framework of the
general relation; what we want to do is give the source
certainty that if they choose a period of two years from
the last five that EPA will, by default, accept. And
understanding that the State agencies can use the last
two years also. It is their discretion, but in terms of
Federal overview, we can accept two of the last five by
default.
MR. BARR: And are you
finding that companies are adequately keeping their own
internal records and an audit trail of these sorts of
baseline decisions for many purposes?
MR. SOLOMON: I would say
that since the qualification of emissions usually deals
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directly with fuel usage or operational levels or levels of
product being produced, this information is usually
critical to the economics of the source and the operation
of the source that we are going to find it exists. I have
found that cases go back further than five years, but the
information is much more scattered and less reliable
MS. STINSON: Bill Lewis?
MR. LEWIS: I think this js
a real improvement over the current situation. The one
point that I wanted to make is with respect to the issue
papers that you developed as well as your general
comments about how New Source Review works. I think
this is one of the real difficulties that we do face when
we are dealing with New Source Review.
The regulations provide, as I am sure you know, tha^
the comparisons be actual to actual emissions and it does
not provide for actual to potential emissions e x c e p t
under circumstances where the emission units have not
been normal operations.
So, that is kind of a good key issue, and I am willinQ
<3
to think you are probably going to talk about it during thQ
balance of this session this morning. It has sort 0f
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become a general wisdom, conventional wisdom as to
when New Source Review is to be applied, and it has
resulted in a lot of interaction between the agencies in
the West.
MR. SOLOMON: Right, we
understand that issue. There is quite a bit of history,
paper on that issue. What we are trying to do here is
within the authority that we have, in the flexibility we
have, to address certain items that we are understand are
concerns in terms of providing at least the short-term
solution to some of the problems, but we do understand
that issue.
MR. LEWIS: Right. I think
the two are...the changing the baselines is a substantial
improvement, and does eliminate a lot of the potential
discussion that exists on whether the agency sources
that have to consider that.
MR. SOLOMON: The issue
you raise is a much more complex issue and would require
much more detailed policy and would take a little bit of
a longer time to address.
MS. STINSON: Good, okay.
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Chris?
MS. SHAVER: Yes. I had a
couple questions. One, you seem to have provided a way
for the applicant owner or operator to get out of the two
years. Is there any...it seems to be it would be a good
idea to provide the right for the public to complain that
the wrong two-year period was presented on the
presumption that that, at a minimum, ought to be
rebuttable. As it is set up, if somebody wanted to
challenge that, they wouldn't be able to do so, and that
doesn't seem right.
MR. SOLOMON: Thiswould
be a policy with regard to EPA's overview of the State's
decision. Essentially, it is the permitting authority's
decision, and we would not prohibit the State, indeed
from taking the more stringent approach.
All we are doing here is we are just setting EP/\
policy for overview. I think the question becomes one of
what is the public s involvement or what avenue does the
public have when an incorrect decision perhaps is made
MS. SHAVER: Right, that is
the question, and if there is a presumption on your part
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it is going to be difficult for the public to have the ability
to complain.
The other piece of that would be access to
information, and while you were saying there is no
problem and the information is there, another person
from EPA who does a lot of permit reviews, I have
noticed, was nodding and saying the opposite direction,
like no way.
So, if the information.. .again, this is one of those
where you have a New Source Review piece, and then you
are assuming certain other things are available. If we are
going to be relying on any two-year period, then there
ought to be some way to safeguard to make sure the
information is there.
MR. SOLOMON: The
information will have to...as In the current system, the
source will have to document what the actual emissions
were during the two-year period chosen. We are looking
more towards the actual two years that are used rather
than any changes in EPA's criteria for documenting the
actual emission rate achieved over those two years.
MS. STINSON: I think Bill
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wanted to comment.
MR. TYNDALL: Just to
clarify further, there are...
MS. STINSON: Can you get
a little closer to your mic. Bill?
MR. TYNDALL: Sure. |t
would be operating under normal presumption in that any
evidence to the contrary reported to the permitting
authority would be grounds to overcome the presumption
So, it wouldn't just be evidence from the source but
evidence from other people.
And that evidence may contradict the notion that
those highest two years are representative of the
source's normal operations, and that would include
evidence that the sources physical abilities have
deteriorated over time. So, in years 5 and 4, it would
show a much higher capacity than it now has, given low
outputs in two units or something like that.
And as to the information available, this doesn't
really change that situation. The source is going to come
in. Obviously, it has the most information about its own
operations, but it is going to have to make a case of what
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its highest two years have been, and as part of that, the
permitting agency is going to end up with five years
worth of data on what its emissions have been.
And if there are sort of huge discrepancies between
the two years selected and what seems to be the normal
operations of the source, that should be in the evidence
that the permitting authority is going to have and,
therefore, the public is going to have.
You see, that calculation is going to be part of the
ultimate permitting decision, whether it is a decision that
the source doesn't need a permit which would probably
be made in the context of a minor source permit which,
probably in most situations, depending on the size of the
source and the size of the project, would still be subject
to public review, or it is going to be a decision about the
size of the netting or even such things as the size of an
offset, you know, all of which are subject to public
scrutiny at some point in their incorporation into the
permits.
MS. STINSON: Let's keep
this discussion moving and get some more of the
environmental viewpoint. Dave?
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MR. HAWKINS: Well. rr» y
question also relates to the ability of the public to rebut
these presumptions, and Bill's last comments, I think,
point up the concern. The ability of the public to put
forth and question the information presented, obviously,
rests on the ability of the public to know that this is
going on in the first inst-anee.
One question I have is what, if anything, does EP/\
intend to do to require that there be some notice to the
public about the choice of these alternative baselines $Q
that there is a genuine opportunity to raise an issue if
warranted?
Second, as far as EPA's hands-off these
presumptions goes, my question is, can you really deliver
on that hands-off if this issue arises in the context of a
Title V operating permit where there are mandatory
duties for EPA to review operating permit decisions when
so requested by citizens?
MS. STINSON: Can VOu
answer that question?
MR. TYNDALL: Answering
the operating permit side of it first, the question here is
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a question of interpretation of the EPA New Source
Review, and assuming that the proper interpretation is
that you can have such a presumption, then I don't see
providing.. .you are right in the sense of you may or may
not.
It is, of course, a huge question and point of dispute
as to how much we need to have a second bit of the
apple, and it is something we have incorporated into the
Title V permit, but I don't believe that...well, on
something resting on an interpretation that everybody
agrees to, the fundamental issue of whether we can do
that or not would be something I don't think would come
up in the Title V context.
What could come up in the Title V context is if there
is a question as to whether, on the merits of the
individual decision, there has been a mistake or it is
incorrect, and I...you know, I don't think that has been
resolved in the Title V context as to what will happen
with such challenges.
MS. STINSON: Bill, if you
guys want to talk about this further on, I am going to ask
that you take It..
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MR. HAWKINS: Yes, that is
my point, though. I think if you are calling this a
presumption, those words generally mean something that
evidence can be presented to overcome, unless you say
it is a non-rebuttable presumption. If it is a rebuttable
presumption, then in any proceeding that the agency is
required to undertake With respect to a Title V permit
the agency should have to listen to and respond \o
viewpoints challenging that presumption.
MS. STINSON: Okay, good.
I think you raised a good point for the agency to debate
further.
Let's goto Molly.
MS. ROSS: Thanks. I f&q|
so gloomy these days, I wish I could be more positive on
this, but to me, it seems to me that this is a freebie
What we have done, we are exchanging a two-year period
which is fairly certain for now a five-year period in which
i
a lot more gaming can occur.
And you still have some of the uncertainties and
burdens that you are trying to fix, because there is sti||
an opportunity to look for another two-year period
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beyond that five-year period if the agency thinks it might
be more representative which, in many ways,
increases.. .could increase or keep at least the same the
workload of the agency to deal with that.
In a situation like this where maybe there are real
business concerns that this addresses that industry
needs, it would be my t>ias to try to make this change
presumptively more protective so that it would be okay
if you chose the two, if you are netting .actuals to
potentials, the two lowest years within five years. You
get those two years.
EPA will lay off oversight if the State program has
it's rules structured that way as an alternative. If you
end up going with this so-called streamlining that would
help industry, and if that seems to make sense to you,
then from the viewpoint that I presented at the
beginning, I am interested then in finding some other way
that we are going to get that margin of safety and
reductions.
This looks like it has the potential to go the other
way. All the risk is borne on the likelihood that there
will be more pollution rather than less.
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MS. STINSON: Okay, are
there are other comments? Chuck?
MR. KNAUSS: Yes, a
clarifying comment that also gets into some of the issues
Molly just raised, clarifying as to the factors that you
would look at for going beyond five years, because, jn
essence, what you are djoing here...the regulation says a
two-year period preceding. It doesn't say immediately
proceeding. So, that has been your implementation.
Do, for those that see this change as beneficial to
industry, it is because they are comparing it to your
implementation of the regulations, not the words of the
regulations themselves.
So. to go beyond the five years, I would like to know
whether you are looking at economic downturn, consumer
demand for industries that have faced a significant
depressed period of production.
The reason I say this is because our view of t^e
regulations would be that it is any two-year period. |t
could be seven years back. It could be nine years back
So, I guess it is just diametrically opposed to the
comments raised by Molly that this is immediately...
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are starting with a baseline of immediately two years
preceding.
Also, just a comment with respect to what David
Hawkins raised as to the legal hoops we are going to go
through for all the guidance that we are going to be
talking about over the next couple hours and in response
to your first issue, because I thought we were going to
hear about all the issues first and then come back to
them.
Obviously, releasing documents after they have been
issued doesn't cure. It is helpful to us, but it doesn't
cure a problem if they were improperly issued as
regulations in the form of guidance, and I think we all
need to think about, as all these guidance documents are
coming forward, a mechanism with which to evaluate
whether or not something truly is a regulation that
warrants notice and comment.
For example, the fee guidance that came out in late
December, I think, very arguably could be viewed as
regulation. The 112(g) guidance coming out with respect
to Title V, altering the final permit rule.
There may be creative mechanisms as to putting
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draft guidance on the bulletin board for people to
comment upon and force OGC to make some
determination of is this regulation or not as a first cut.
I am not sure of the solution here, but you need to
put out guidance. That is clear. But, obviously, many of
us believe that that guidance crosses the boundary into
regulations often.
MS. STINSON: Okay, good
thanks. Dave?
MR. ALDORFER: I guess |
am picking up a little bit on part of Chuck's point there
and I can appreciate where the change you are proposing
here may be beneficial to industries that are slightly
cyclical. It gives them a little bit more flexibility there
But I don't see where it does much to address the
situation of industries that are deeply cyclical, and w e
are different from industries that are not in the sense
that we have, we simply have to maintain a margin of
spare capacity to be able to produce in a strong market
That constantly gets used against us in the trigger
calculations even when a great deal of the apparent
emission increase would be a function of using more of
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our capacity to meet a stronger market and not the result
of the proposed change we are going to make.
I guess I feel this is one step in the right direction,
but it simply does not go far enough to address the needs
of different industries.
MS. STINSON: Let's get the
EPA regional perspective. Ron?
MR. VANMERSBERGEN: My
question...am I coming through?
MS. STINSON: Yes.
MR. VANMERSBERGEN: My
question relates to the use of the time period older than
five years, and the question is can we, with respect to
the criteria?
Inasmuch as netting that you can construct a source
without going through New Source Review and doing an
air quality analysis, there are possible situations where
an old reduction could have occurred, the ambient air
could have degraded, and then to allow another source to
be built could cause a violation of the standard. Okay?
Can that situation, can the situation of air quality
degradation be a criteria in determining whether or not an
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old reduction is considered acceptable?
MS. STINSON: Good
suggestion or raising an issue. Bruce?
MR. BECKER: I guess my
question sort of revolved around what Dave just said.
While it is a step in the right direction, David, I guess my
question was I presume, that if this New Source Review
simplification group comes out with a new way of doing
business, that would supersede this proposed policy
change.
MR. SOLOMON: Yes. and
the issue that David has raised is more in the realm of
general simplification than it is dealing with the more
immediate demand or more immediate concerns regarding
EPA's implementation of its current regulations.
We realize these are just short-term and interim
concepts that we would be applying with the underlying
goal of eventual long-term perhaps revamping of the
system to address the other needs.
MR. BECKER: I think jn
response, I would like to say I wish we could spend some
time exploring whether the current statute and the
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current regulations really are this restrictive or whether
there is some flexibility within them that we really
haven't tapped into yet. I am not prepared to concede
that this is all we can do at the moment.
MR. SOLOMON: One
concept that we had explored and I would like to take a
minute to throw out to the group is the use of longer
averaging times. That is, the further a source goes back,
the more years it would carry.
So, rather than looking at a two-year average, if the
source went back five years, it would average over five
years. If it went back ten years, it would average over
ten years.
That is to take the lean times in with the good times
to provide really a more overall general picture of the
way this source has operated perhaps as a compromise
regarding the concerns that Molly raised that the source
is going to pick high levels rather than low levels and the
concerns that industry has that perhaps the last two
years or five years would be inappropriate. I would like
to get some feedback on the group on that.
MS. STINSON: Looks like
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your question has raised some comments. Tom?
MR• MICAI: Just listening
to all the different types of suggestions, whatever is
carved out and becomes effective, it sounds like it will
have far-reaching impacts.
I would recommend that you pilot test these
procedures. Select a facility or two facilities, whatever
it may be, go through a pilot test program, and have an
evaluation committee of representatives from all sides
that are represented here.
MS. STINSON: Ernie and
then Dave.
MR. ROSENBERG: The
comment that you made about averaging over various
time frames, that has a superficial appeal, but, in fact
what that means is that during the good years in the
business cycle, you can't meet the demand without goi n a
through New Source Review, because it is the peak that
limits the ability of the source to operate. It is not just
the...
MR. SOLOMON: The
concept would be that if the source has currently a
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couple lean years and wishes to go back to those higher
levels that it would average in both the lean and the high.
If the source currently was operating at a high level, it,
of course, could default to the most recent years.
MR. ROSENBERG: The
approach that you are taking is, in effect, a confiscation
of part of the productive capacity of the plant, because
what you need to be able to do is do your full production
capacity in those years when you can sell it, and if you
are now taking a mean, that means that you won't be
able to use your peak capacity in the good years.
MS. STINSON: Let's take
another comment. Dave Hawkins?
MR.HAWKINS: Wasn'tDon
ahead of me?
MS. STINSON: Well. I
thought.. .did you want to respond to this, Dave? He is
unless you are going to talk about the proposal or the
suggestion of averaging over greater time frames.
MR. THE1LER: I can wait.
MR. HAWKINS: Well, my
comment is broader, and I want to make it at this point.
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because I think the way that the agency staff has
proposed dealing with this issue, I think, presents a
model which I would find very troubling if it became the
model for resolving these NSR issues.
It seems to me that it is important to clarify what
the issue is. first of all. I don x think the issue is the
fact that companies a r 3 unable to present claims that
periods other than the most recent two years are more
representative and be able to get those used as the
baseline.
The argument or the concern has been that pursuing
that avenue of flexibility takes time, and that brings up
what is, I think, the fundamental tension that exists in
almost all of these issues, and that is a tension between
simplicity and flexibility.
And what troubles me about this proposal is that it
basically is letting the companies have it both ways. |t
is letting them have the flexibility, and it is giving them
a presumption.
It seems to me that It is fair and balanced to
basically offer the regulated Industry a choice between a
simple rule that is easy to understand and can be
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demonstrated as a reasonable way of protecting the air
quality safeguards by taking the most current years but
giving them the opportunity, as the current procedure
does, to justify an alternative period by making a
showing that it is more representative.
What is troubling about this proposal is that it
basically has the agency saying well, we aren't going to
put the companies through the hassle of even having to
make that showing. If it is within the last five years, we
will just let them do it.
I think that is an unbalanced approach to resolving
this tension between simplicity and flexibility. It is
letting the company maximize its deductions and letting
it use a streamlined form for doing it.
I think that if you are going to have an outcome
which...and this only operates in one direction and that
is to exclude facilities from New Source Review which
means there will be investments made in equipment that
could and should be controlled by LAER or BACT that will
not be.
The result will be in a nonattainment area that that
piece of equipment will be consuming more of a scarce
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What that does is...and I thought we were here to
talk about this...is it diverts a tremendous amount of the
control effort onto a tiny fraction of the inventory,
precisely the fraction we shouldn't be over-controlling
proportionately, because it represents new investment
and modernization.
And everyone knows that it is existing sources and.
even more, area and mobile sources that are the
relatively under-controlled piece of the inventory.
So, I just don't buy the argument that whenever it
results in less procedure for new sources, it is dubious
It seems to me that the purpose.. .well, if you gQ
back to the law, the purpose of New Source Review is to
control things that lead to actual increases in emissions
Let's take it from the other end. If you are taking a
cap on your future potential so that you can hold them as
low as possible, you will...that is all that can reasonably
be asked of you. You will never be able to take that cap
at a level lower than your expected good year, because
then when you have got your good year, you won't be
able to fulfill it.
So, that is the limit. And if you have actually
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reached a level within the past five or ten years...I
understand why EPA said five years, but the logic doesn't
start there. Isn't that as good a proof as you could want
that the past actuals are, in fact, equal to the future
potential, because you have shown that you have had in
the past a year as good as the one you hope to have in
the future?
MS. STINSON: With that,
I think we have got a pretty good array of perspectives
on the table on that topic. I am going to ask you to move
on and not...yes, next is Don.
MR. THEILER: Thank you.
I did give up my place to David.
A couple of things on this, and this is a question. I
am presuming that if reductions are required of a source
during this five-year period as a result of RACT
regulations or something similar to that that there will be
a concurrent adjustment to any baseline. Is that a safe
statement?
MR. SOLOMON: The source
cannot receive credits for any reductions it would
otherwise have to make under the Act.
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MR. THEILER: Okay, good.
Just wanted to make sure that was still in the system.
The other thing that is important to realize is that
many of our nonattainment area plans are based on
estimates of actual emissions, not emissions in relatively
contemporaneous actual emissions, not emissions that
happened ten years year from a facility.
If we are going to wholesale allow for taking credit
for emissions that have occurred in the distant past for
this, we are going to have a mess on our hands in terms
of the ability of our programs to project what is really
happening in the real world. I think the ability to go back
beyond this five-year period ought to be very limited, and
it should take account of the issues associated with
attainment of the ambient air quality standard, and |
think some of the increment issues that Molly brought up
ought to be accounted for in this as well.
MS. STINSON: Good. And
I think taking the cards that are up, we will take Mi|
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information that the EPA has developed out to the States,
because it is the States that really need to wrestle with
these issues of baseline and auditing and accounting over
time in setting up a reasonable system, and I think they
have had a few years to do that, and I think they are
actually learning some things and doing a pretty good job
of it.
The place where I think we have seen a lot of
disputes is between the States and the EPA regions which
have less experience in making these baseline decisions.
So, in that sense, a little bit more guidance from
headquarters out to the States and the regions
concerning EPA's experience on this subject, I think,
could be very helpful in streamlining the process, perhaps
and avoid the need to issue yet another extremely
detailed, prescriptive guidance or rule change on this
issue which, after all, is a fairly insignificant detail of a
program that doesn't matter much in terms of the
environment.
MS. STINSON: Molly?
MS. ROSS: In response to
Bill Pedersen and something Henry Nickel said earlier, we
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are focusing on New Source Review, and the question is
does New Source Review have to solve all these other
problems.
I would just like to throw out as an overall issue for
all these proposals we are looking at I think there is
basis, certainly when you are modernizing a plant, I think
the New Source Review provisions do allow us to take a
look and make sure that we are not creating additional
pollution problems. And I think the law allows us to do
that.
But there may be better ways to approach all this
that, I think, could be based on the current statute. |
dread to think that we all will have to get into additional
amendments for these issues, but if some of these
proposals before us make crystal clear business sense
then what I need for the kinds of problems that I have
mentioned is additional proposals of how we are going t0
address those existing problems if you don't want us to
address them through the New Source Review approach
And it could be rationalized, then, for a way f0r
perhaps some of the environmental, more environmental
interests to step back from some of these new source
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processes if there is good assurance that we are cutting
back on those emissions in other ways.
MS. STINSON: And that
certainly ties NSR to some of the other programs. Bill, I
am assuming you have already made your comment?
Okay. If you do this, then do this. Goad.
Well, in case peopTe are getting frustrated, I just
want to explain what we are trying to do in this process.
Did you have another comment, Dave?
MR. ALDORFER: Yes. I
would, and it is just to echo. I think the challenge to all
of us is really to try to expand our thinking and keep in
mind what is in the Clean Air Act that is going to address
a lot of these other elements of the situation.
Bill referred to mobile source. I am not sure I would
necessarily agree with him that it is under-controlled, but
that is not the issue here. The thing for everybody to
remember is the 1990 Clean Air Act has in it a very, very
significant additional crank-down on mobile source
emissions that is locked in. It is going to happen. That
is going to help the environment, clearly.
And there are other programs in there that are going
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to affect stationary sources in a similar fashion.
MS. STINSON: Okay. So.
as I was saying, just on a process point, in case peop|e
are getting frustrated, what I am trying to do...and |
described this at the very beginning... is as we go through
these discussions and someone raises a point and
immediately three people want to comment on that
specifically, I think it is most helpful to the discussion
and to EPA who is listening to hear all those comments
on that point and then get back to moving on to other
topics.
So. if anybody has...hello? This thing fades in and
out. If anybody has a problem with that, just let me
know as we are going through. So, signal if you have
something that is directly on point to what someone else
has said.
Okay, we are going to move on.
MR. SOLOMON: To another
simple, non-contentious issue.
MS. STINSON: Yes. this
one should be five or ten minutes.
MR. SOLOMON: Again
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these are focused on the existing regulations to provide
more interim addressing of the concerns and not the
overall grand scheme of where simplification should go or
the NSR context but in the overall framework of the Clean
Air Act.
It deals with the use of prior shutdowns and
curtailments. Under the current regulations, where a
State lacks an approved attainment demonstration,
emission reduction from shutdowns or
curtailments.. .these are other than replacement
units.. .cannot be used as new source offsets unless the
shutdown or curtailment occurs on or after the date the
new source that comes in that needs the offset applies
for an application.
This is what we call a prior shutdown or curtailment,
that is, a shutdown or curtailment that occurs prior to
the application for use of that shutdown credit.
EPA does, under its current regulations, allow for
the use of the'se prior shutdowns in areas with approved
attainment plans as long as the shutdown or curtailment
is otherwise creditable and is represented in the
emissions inventory.
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The issue as we have heard it and understand it,
basically, that there is an undue focus on shutdown
reductions versus other types of reductions that may
occur and are otherwise creditable as offsets, f0r
example, the installation of controls beyond those
otherwise required by the SIP.
That this date, that is, the date of complete
application is arbitrary. Prior or post-shutdowns really
hold no relationship to the attainment demonstration in
terms of when the shutdown actually occurred.
It is unduly restrictive on new source growth in that
it severely limits the pool of potential offsets for new
sources and major modifications. And, essentially, that
the air quality impact or any positive air quality impact
that may result from this policy is questionable, at best
The next slide deals with the EPA's current thinking
in terms of a way of addressing this issue. Essentially
because of the '90 Act Amendments which have
temporarily created a situation unanticipated by the
regulatory scheme for shutdowns adopted by EPA prior to
the Amendments, we are now considering temporarily
lifting the restriction placed on shutdown credits fQr
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areas without approved plans.
The lifting of the restriction could be in the form of
a policy memo. It would only extend to those creditable
shutdowns and curtailments actually occurring during the
time period from the passage of the '90 Act through the
period when the attainment demonstration is due and
possibly extending beyo'nd this date to the date of EPA
approval or disapproval of a timely attainment
demonstration.
Essentially, this would extend from 1990 into
possibly to 1994 or slightly beyond that.
There are some limitations. The reduction would
have to be a reduction in actual emissions, that is, the
shutdown would have to be an actual reduction in
emissions as those emissions were reflected, and those
emissions would have to be reflected in the 1990 base
year inventory, again, a real reduction in emissions.
The level would be the lower of actual or allowable,
and they must be, as all shutdowns must be, otherwise
creditable as offsets. That is, they must be permanent,
quantifiable, and Federally enforceable.
In order for a State to implement this policy, there
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are some milestones the State would have to meet. As
long as the State were meeting these milestones, the
removal of the restriction would be in effect.
It would be subject to the following conditions as
they apply and as they would come due according to the
individual State and the classification of the area: The
State would have to .submit a complete emissions
inventory as required by Section 182(a)(1) of the Act
The State would have to submit complete revisions to its
new source program as required by the Act.
The State must submit the 15 percent reduction plan
required by the Act. This is for moderate and above
areas. That is what the asterisks represent.
And the State submits the attainment demonstration
required by the Act. again, for moderate and above areas
The State would need to be on a schedule for a
timely submittal and, as was the submittal was due, make
that submittal in order for this policy to continue to
remain in effect.
The restriction would, however, be reimposed if the
State failed to make a good faith effort to meet any 0f
these submissions, if the submission was deeme~5
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incomplete, or if the submissions was disapproved by
EPA. If that occurred, then the restriction on the use of
prior shutdown would go back into effect until such time
as the State met the applicable milestone.
And we would like to solicit comment.
MS. STINSON: Let's start
with questions of clarifioation, and just as a reminder to
the audience, we are going to take 15 minutes before we
shut this discussion down before lunch. So, save your
comments if you can.
Also, someone raised the question of whether we are
going through.. .and I guess it wasn't clear, so let's
clarify now. What we would like to do is cover this
discussion and possibly cover switching to natural gas
and add-on pollution controls together.
So. what we do is now take questions of
clarification and comment on use of prior shutdowns,
then move on to a presentation on switching and add-on
pollution controls, then take questions and comments on
that. We will try to do all that before lunch.
So. maybe that puts us to 12:30 or a little longer.
I may be very optimistic here, but we will attempt
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something in that direction. So, that is the format that
I am going to suggest.
Let's start with questions of clarification. Ernie?
MR. ROSENBERG: This is
fairly simple, but what do you have in mind on otherwise
creditable as offsets?
MR. SOLOMON: Otherwise
creditable would be what EPA's current policy is j n
regard to creditability of an offset, that.is, it is real, it js
permanent, it is Federally enforceable, meeting all the
criteria that EPA has previously established for an offset.
There would not be any additional requirement for the
offset to be offered as a prior shutdown.
MS. STINSON: Mike?
worried about the...
closer to your mic,
MR. BARR: Yes, I am really
MS. STINSON: A little
MR. BARR: I am really
worried about the limitation to the inventories. What
right do companies, manufacturers particularly, have to
even know what goes into the inventory much less
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question it? If we give regulatory consequences to the
inventories, aren't we opening a whole new battleground
that is sort of unnecessary?
MR. SOLOMON: The
inventories are used for the attainment planning
purposes, and it would be...I think EPA would have a
concern if the amount of credit given to a reduction was
not consistent with the amount of pollution that the
State was considering in terms of the baseline for the
source.
MR. BARR: Is consistency
a flexible concept?
MR. SOLOMON: I have to
defer to my counsel on that.
MS.STINSON: Consistency
regarding flexibility.
MR. SOLOMON: The
concern here is one of the effect that the shutdown has
in terms of real air quality in the area.
MS. STINSON: Dave?
MR. HAWKINS: Mine is a
comment, not a question of clarification.
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MS. STINSON: Can you
bring your mic up to you?
MR. HAWKINS: I will wait
for other people who have questions for clarification.
Mine is a comment.
MS. STINSON: Looks like
you can kick us off.
MR. HAWKINS: All right.
Well, if the last one was provocative, this one is a stick
in the eye.
This really is, to me. a pretty maddening proposal.
A lot of people feel that the use of prior shutdowns is
nothing but a windfall that impedes progress toward
attainment.
When the EPA current policy was hammered out, it
was hard-fought, and this was the compromise that was
reached, and it was a hard-fought compromise, but it was
put forward at least as representing the needs of the
nonattainment area.
The idea that the passage of the 1 990 Amendments
somehow wipes the slate clean and that we should ignore
the fact that we have had attainment deadlines that have
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been missed since 1970 and that, therefore, we can just
ignore the fact that we are still behind schedule on
meeting our public health goals, that is what is
maddening about this, about the rationale for this.
It makes no policy sense. It is simply a reversal of
the prior decision and one that I would predict would be
fought.
MS. STINSON: Don?
MR. THElLER: I think I frave
to disagree with Dave on this. After reviewing what
David has put up here, I think that, as long as the
elements in the middle of that overlay are followed and
the State has its act together on how to deal with
shutdowns and that is a part of their overall plan, as long
as they have submitted an attainment demonstration and
they don't fall off the wagon by having it disapproved or
anything, they ought to be able to determine how to use
shutdowns.
This is a very contentious issue and a very important
issue for many of us in these severe and serious
nonattainment areas.
MR. HAWKINS: Can I follow
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up?
MS. STINSON: Sure.
MR. HAWKINS: The problem
I have with that is that those as long as statements have
been made for 20 years. It is the same logic that was
used in approving the netting concept in the first place
that the Supreme Court bought, that as long as the air
quality plans can attain the standard by another
mechanism, you don't have to rely on this mechanism.
Well, what happened? The plans weren t adequate,
is anyone here willing to bet next week s salary on the
fact that all of these plans will be* adequate in '94?
MS. STINSON: Any other
comments on this proposal? Mike?
MR. BARR: Just a quick
response. Again, we are dealing with a very r,ny
percentage of the inventory, and a lot of the shutdowns
that we have seen in the last few years have been
accompanied by the loss of many, many thousands Qf
jobs.
The reason this issue is so contentious, particularly
in the industrialized areas of this country, is that this
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may be the only way that they can reindustrialize and
recover. And it is extremely important to find a solution
to this that preserves the ability of this country to
modernize and recover.
MS. STINSON: Molly?
MS. ROSS: I guess the
pollution concerns will exist, continue to exist in a
recovery as well, and that is the perspective I come from.
The orientation I have is based on my experience with
offsets where we have suggested offsets in the
attainment area as a way out of adverse impact
determinations made in New Source Reviews in the
Shenandoah vicinity.
Just to relate to you some of the frustrations with
this, we have, as we are feeling our way of how to deal
with these difficult situations, sat down at the table to
try to get offset deals so that a new source wanting a
permit can basically nullify its contribution to an adverse
impact and get a permit.
And in at least one situation, we accepted, as we
were growing and learning about this offset morass, a
prior shutdown kind of situation that we still are
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wondering whether we got anything that wasn't
otherwise going to happen, and we are still left with
adverse impacts.
Now, we are in a situation where one of the
companies that got that offset to facilitate part of their
permit, in our eyes, is not going to be able to go ahead
probably, with that permit and wants to sell what it
bought that was dubious several years ago, all the more
so no w.
So, from that perspective, I, too, have many
concerns about increasing the use of this kind of pri0r
shutdown notion.
MS. STINSON: Dave?
MR. HAWKINS: Well, I have
a lot of respect for Mike's views on these things, but |
think that I really have to question the implications of
what he has said about the fact that this provision ic
necessary to reindustrialize.
If that is correct, what it means is that there simply
aren't any offsets out there. That is, there are simply n Q
ways of getting additional emission reduction which
means that what Mike is saying is that these places
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aren't going to attain the standards, because if there
aren't any ways of finding emission reductions sufficient
to accommodate well-controlled new sources for offset
purposes, how, in Heaven's sake, are the regulating
agencies going to find the much greater emission
reductions needed to attain the standards?
MS. STINSON: Any other
comments on this issue? I didn't think that would go
without response. Go ahead, Ernie.
MR. ROSENBERG: If Mike
doesn't repeat it each time, I will. You need to look at
what kind of air quality benefit on a national basis you
are really going to be getting for imposing an enormous
amount of pain on the facilities that are in the areas that
need to make modifications in order to meet new market
demands or to start up.
This is a very, very serious issue. We have heard
the windfall argument a number of times.
The attitude seems to be that I would rather avoid
even one case where this thing is used improperly even
it costs discouraging a great number of appropriate
actions that would be useful either to the economy or the
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environment or both.
So, I think the theme that we should be coming back
to frequently is from a national perspective. And you
have to remember here that the State Implementation
Plans can go further, but there is a very important
difference which I will come back to.
But from a national perspective, how much control
are you getting? How much emission reduction can you
really anticipate getting from this thing versus the
amount of resources that the agencies have to apply {Q
the process and the amount of economic grief that you
may be creating?
The issue of technology is not the only issue in New
Source Review, and, frequently, it is not the issue that is
your biggest problem in New Source Review. Your
biggest problem is, frequently, either finding offsets or
having to wait for the entire permit process to gQ
through.. .for the entire permit to go through the entire
process.
If there is a way of avoiding that, and in some
States there is, because they have either express or de
facto ability on the part of a State regulator to let you g0
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ahead and do some things if it is not subject to a direct
Federal mandate.
So, I think we have to keep coming back to a
balancing. We are spending an enormous amount of
resources reviewing fairly routine pieces of paper which
are the source of dispute which, on a national basis,
aren't worth anything.
MS. STINSON: Dave
Jordan?
MR. JORDAN: I just have a
clarifying question about the middle section on the State
milestones.
In looking, for instances, at a severe nonattainment
area at this point in time, would it be eligible for that
area because they have submitted their inventory and
done their part re SIP. or would you have to wait until
they have gone through all four of those steps?
MR. SOLOMON: Our current
thinking would be as long as the State is meeting the
milestone as it came due, we would allow for the use of
prior shutdowns. So. for future milestones, until that is
due, as long as you have met the prior milestones, the
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policy would be in effect.
If you had missed a milestone, then from that time
forward, the State would not be allowed to use until such
time as the milestone was met. And, of course, once
there was formal disapproval of any milestone, then that
would close the door.
So. there would be. an incentive for the State to
make timely submittals in this regard.
MS. STINSON: Craig?
MR. POTTER: I want to go
back to what I said this morning in terms of these issues,
because I think the threads of this debate go back to a
time before the passage of the Clean Air Amendments,
and I think what has happened is the mold has been
broken.
We have established this system of super-
accountability, and we are now kicking it into gear, and
I think that the agency deserves some credit here fQr
trying to put some things on the table that have been
very tough to deal with in the past, i.e., offsets, P r i o ^
shutdowns, and things like that.
I think if we can't make those things work, we are
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in serious trouble. And I think, also, in terms of the
earlier discussion about the incremental effects on
natural resources, for example, clearly, we have those
problems. The question is how much of that problem can
be attributed to New Source Review.
We also clearly have a general trend in terms of
improving air quality in urban areas.
So, the real question here...and everybody has
talked about it, but I think we have to keep going back to
it...is from an air quality point of view, where do we have
flexibility?
That is the reason I mentioned design values. The
uncertainty of meteorology. You know, there are issues
here that are really at the central, pivotal part of this
thing in terms of that question, and it begs the question
not to deal with those in terms of this tension. We keep
talking about tensions between an air quality, health-
based focus and some kind of a more robust approach to
measuring how we improve or don't improve in terms of
air quality.
So, I just want to make sure it doesn't go unsaid
that I think there are some things here that we are talking
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about that we have to talk about if we have got this
system up and going now, which we clearly do.
MS. STINSON: Dave?
MR. HAWKINS: This is what
I hope will be regarded as a positive suggestion, just to
change the pace a little.
One of the big problems with this provision and with
other expansion of netting opportunity is that the
consequence is that a new piece of equipment can be
built without applying LAER control technology. So, you
have got basically an opportunity cost or a commitment
to the inventory that lasts for the life of that facility.
This kind of provision would present far fewer
problems if the result was that the new piece Qf
equipment would be installed with LAER but otherwise
would escape applicability, and that kind of cross-
connection between some of these issues is somethiria
I think, that is important to put on the table.
MR. SOLOMON: Dave, if |
may respond to that, under this provision we are
discussing an offset which means that the new sources
come in and NSR, nonattainment NSR is applicable. The
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source must apply LAER, and depending on the
classification of the area, the offset ratio will be greater
than 1:1 up to 1.5:1.
So, in this case here, it differs from the prior
example in which there is a permit review, there is LAER
requirement, and there is a greater than 1.1:1 offset
ratio. I just wanted to dlarify that point.
MS. STINSON: Where are
we? John Daniel. Can you move your mic close to you,
please?
MR. DANIEL: Yes. Excuse
me, I keep forgetting to do that.
I am going to come down on EPA's side on this one,
because I think the stuff they have laid on us to do in the
middle of that chart up there is going to make sure that
things screwy don't happen.
But I guess I have got another question. I know this
is aimed at VOC offsets, but I hope you all are thinking
about what do you do if you do an urban airshed model
like Virginia is planning to do and it shows you ought to
have NOx reductions instead of VOC reductions and how
you factor that in.
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MS. STINSON: I think that
is a good question to raise. Mike, and then I think we
will take a comment from the public.
to Dave's excellent point, I think, about the effect on air
quality. I think the Bay Area, again, is a good examp|e
20 years ago, we had 60 days over the standard. In the
last 3 years, we have had no violations of the Federal
national ozone standard.
Meanwhile, we have had a program of banking and
trading which has allowed for shutdowns for credits
because we have had an approved plan which has worked
That, I think, is the key answer.
This is one of the few places where we have had a
market incentive, economic incentive program, that many
people could participate in, could follow. There are
monthly reports of the balances in the banks. That ¦
I s
available.
There have been several environmental challenges Qf
the deposits to those banks, and it has been a very oper|
and positive system.
The 1990 Clean Air Act Amendments clearly
MR. BARR: Just to get back
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emphasize market incentives, and this is one of the few
places where they demonstrably work and can work in the
future and, again, greatly facilitate the recovery from the
current recession.
MS. STINSON: In an effort
to assist the public in participating as the discussions go
on...I think this guy is about to bust. Would you identify
yourself?
MR. ZBUR: I am Rick Zbur,
Latham & Watkins in Los Angeles.
I had a question regarding the basis for the
limitation that the shutdown must have occurred after
1990, and I guess I am presuming it is based upon the
provisions in the act that require that the attainment
demonstration and the interim milestones be measured
from a 1990 actual emissions inventory.
MR. SOLOMON: That is
correct.
MR. ZBUR: I guess I have
a sort of a follow-up comment. That outcome. I guess,
in terms of restricting shutdown credits to those that
have been created after 1990 is not a necessary outcome
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from those provisions in the Act.
It seems like you can have a program in which
shutdown credits that were created before 1 990 would
be allowable as long as an area can make an attainment
demonstration measured from an inventory that is actual
from the 1990 period.
MR. SOLOMON: There is
nothing in this policy that would necessarily disallow
that once the State submitted an approved plan and that
approved plan allowed for those type of prior shutdowns
What we are talking about here is an interim lifting
on a potential pool of offsets with the understanding that
since these offsets are being generated from sources'
actual emissions in the '90 base year inventory that there
is an actual at worst case, I guess, neutral impact in
terms of air quality rather than offsets that have been
generated previously and are not being considered now
for planning purposes until the attainment demonstration
shows that the area can account for that growth.
MR.ZBUR: So, basically, a s
long as the attainment demonstration takes into account
the ability to use prior shutdown credits, the policy, as
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proposed, wouldn't prohibit using it.
MR. SOLOMON: Well, don't
forget currently, prior shutdowns are not prohibited if the
attainment demonstration accounts for those prior
shutdowns.
MR. ZBUR: I mean, we have
a case, for example, in the South Coast Air Basin where
the inventory itself does not include the prior shutdown
credits but in which the program does allow use of
shutdown credits that were created before 1990, and I
guess the issue I am trying to get to is as long as the
attainment demonstration would take into account use of
the prior shutdown credits which may not have been
included in the prior inventory, this policy wouldn't
prohibit that.
MR. SOLOMON: Well, once
the ultimate attainment demonstration has been
approved, that is correct.
MS. STINSON : Okay,lthink
we are going to move on now. Again, we will have a
period of comment from observers 15 minutes or so
before we conclude for lunch.
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David, can you present, then, the next two topics
together?
MR. SOLOMON: Well,
actually. I and Bill Tyndall will present the next two
topics, and we will lump them into one topic.
MS. STINSON: Okay, great.
MR. SOLOMON: Basically,
the next two topics discuss what the agency has coined
as being environmentally beneficial types of projects.
We initially broke them into two groups, actually three
groups.
One was fuel switching to natural gas. The "second
one was add-on controls, and the third one was other
types of projects that could be envisioned or classified as
environmentally beneficial, for example, pollution
prevention type of projects. Title VI phase-outs of CFCs,
et cetera.
What I will do is I will give a quick run-down on the
fuel switching as an issue, and then I will let Bill Tyndall
follow up on a general presentation and then open up to
the group in terms of discussion on the pollution control
type projects in general and the issues that we see in
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dealing with those types of projects.
Natural gas switching in general or overall
essentially decreases in both short- and in the long-term
the emissions of sulfur dioxide, particulate matter, and
nitrogen oxides. It almost eliminates sulfur dioxide and
particulate emissions, and if the source is installing good
low NOx burners, it can reduce up to a third or a half
emissions of NOx.
For sources, there is a real incentive, at least at this
point in time, to switch to natural gas. It is a
significantly less costly fuel than oil and coal in most
cases.
However, converting to natural gas can trigger New
Source Review. Essentially, the regulations have what is
called a capable of accommodating test. If the source
under its current configuration and permit is not capable
of accommodating a fuel, then the actual-to-potential
test will apply to determine if the fuel switch is subject
to New Source Review.
In almost all cases, a switch to natural gas will not
trigger review for sulfur dioxide and particulate matter
since the emissions themselves are probably below
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significant levels. However, if the source has not been
operating at a higher or high capacity, there is a real
potential, and this has occurred, for the source to trigger
New Source Review for emissions of nitrogen oxides.
What EPA has done is looked at this issue along with
environmentally beneficial projects and along with
pollution controls in gerweral and has come up with some
ideas that it would like to discuss with the group, have
the group discuss.
In terms of natural gas switching, we are
considering what we call an actual-to-actual test,
essentially, the type of test that we are currently
implementing for utilities, that is. look at the actual
emissions before and after the switch to determine if the
switch is going to in any way affect the operation of the
source and. if it would, what the emission level would
be.
We see the easiest type of testing one in which the
operation of the source essentially is going to be
transparent to the fuel switch, that is. the use of natural
gas is in no way. manner, shape, or form going to giVe
the source an incentive to operate at any higher levels
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and therefore generate greater emissions of any
pollutant.
Essentially, these are some of the safeguards that
we are looking at to prevent actual increases.
The concern we have is the source that has a unit
that essentially it does not operate, decides to use
natural gas, and now .operates that unit and emits
nitrogen oxides where, previously, that unit was either
inoperative or operated minimally.
What we want to do is ensure a pathway for those
type of sources that are operating, switch to natural gas,
almost eliminate S02 particulate emissions, and provide
reductions in NOx to be able to do that without having
necessarily to go through New Source Review if there is
really no environmental gain from that process.
This would include all the activities necessary to the
source to accommodate the fuel switch. However, it
would not extend to other activities going beyond the
fuel switch activities that would enhance efficiencies or .
provide a greater incentive to operate the unit.
Along with the actual-to-actual test, we are also
considering a pollution control type of exclusion which
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Bill will be discussing in a moment as perhaps applicable
to the natural gas fuel switch, that is, subsuming it into
whatever test we happen to apply for pollution control
projects.
I should mention we are currently working on a real
case which involves the retrofitting for natural gas firing
at both coal- and oil-fired boilers at multiple facilities in
various States. EPA is reviewing the sources' position
that this fuel switching will not effect a change in the
operation of the source, and it is quite possible that the
results of this analysis may set a policy precedent for
EPA in terms of dealing with fuel switches from other
sources in the future.
We expect a resolution on this issue, hopefully
within the next month or two.
With that, I would like to turn over the discussion to
Bill Tyndall to present the other issues and concepts jn
regard to environmentally beneficial projects, add-on
controls, and other pollution control types of projects
MR. YYNDALL: Basically
what I am going to be talking about is sort of what David
just talked about but on a much more general basis. |n
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other words, David talked about a very specific situation.
As he mentioned, the type of resolution he is talking
about is driven by a particular case, but lurking behind
that is an issue that the agency has been having to fight
with for a number of years about the extent to which
pollution control projects are covered or should be
covered by New Source Review
As you can see from the bullets, if we start with the
assumption that pollution control projects are
discouraged by New Source Review...I say start with the
assumption. That is sort of a fact-or-myth question. We
certainly receive a lot of complaints along those lines.
If you are a true actual-to-potential zealot, I am sure you
can come up with ways of making a straight pollution
control project subject to New Source Review, and so the
question is, you know, how bad is the problem and what
are the possible solutions.
Again, both David's and my comments are addressed
at an interim period under the existing regulations, and
the question of how these projects might be treated
under a different applicability system should we go to
some sort of new system, obviously, would be handled b»y
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1 7 1
the new system.
So, what we are looking at is trying to decide if
there is a need to put out some sort of interim guidance
on this issue.
Background on this issue is, and many people in this
room are familiar with this directly and personally, the
NSPS regulations have an exclusion that essentially
involves a less environmentally beneficial test. EPA
regulations were written without this exclusion, but EPA
in practice over the last several years, has essentially
given.. .excluded projects on a case-by-case basis that
have essentially brought pollution control projects to
EPA's attention.
Those projects, for the most part, have been
excluded upon a finding that there is no increase in
actual emissions based on comparing the source's actual
emissions or the unit's actual emissions before the
change with the unit and actual emissions after the
change, so, in other words, giving it what we would call
an actual-to-actual test.
Subsequent or at the same time that we have been
doing some of these case-by-case determinations, vve
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have done a rulemaking referred to as the WEPCO
rulemaking which has now put into the regulations a
pollution control exclusion applicable to utilities that
applies to add-on controls and to fuel switching to a less
polluting fuel.
It excludes changes primarily intended to restore
original capacity or to improve efficiency, and it is
subject to two safeguards or two tests. In other words,
if you have a project that meets the definition, you still
have two hurdles.
One is a similar to the NSPS, a less environmentally
beneficial, and that term is basically not really defined in
the rulemaking .
And there also is a second provision that where the
permitting authority determines that the project could
result in an increase in actual emissions, in certain
circumstances, it would be required to force the source
to model those increases to make sure that the NAAQS
and increments and something called visibility
limitations...since we weren't allowed to use air quality-
related values...is protected.
This exclusion in the WEPCO rulemaking applies only
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to utilities. We indicated in the WEPCO rulemaking and
elsewhere that we would continue to, for other
industries, make a determination on a case-by-case basis,
although I think EPA at the staff level is of the sense that
it doesn't really make sense to have this type of
exclusion in one place and not for other sources.
Which, of course, brings us to what is the
rulemaking or what should a pollution control project
exclusion look like, and all I have done here is just
provided some suggestions of how you could draw it. |
won't even attest that all of these are legal, depending
on how they are done.
And they are all interactive. In other words, you
could use a number of these different types of tests.
Certainly, one option is just to define certain projects as
being something that are going to be viewed as pollution
control projects and, without any type of emissions tests
or further safeguards, are going to be excluded, and you
could do that for something that has already been
determined to be a RACT type project or to be certain
specific projects like adding a bag house or something
like that.
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So, I can't help...the lawyer in me says, of course,
that the more you turn this as a straight exclusion, the
more you are going to run into Alabama Power problems.
But that aside, that is certainly one way of creating this
animal.
Second would be to have pollution control projects
meet some sort of emissions test. One possibility is the
general environmentally beneficial test, and an
alternative related to that would be to use the
environmentally beneficial test created in WEPCO but
provide some explanation of what it means.
At one point, EPA testified at a hearing that it meant
that you couldn't have an increase in actual emissions in
a nonattainment area or an increase in potential
emissions in an attainment area, although, again, that
language did not get into the rule.
Emissions factor test, in other words, so long as the
pollution control project doesn't increase the emissions
rate of any pollutant from the unit. A WEPCO test
meaning environmentally beneficial plus some sort of
safeguard provision. If there is a projected actual
emissions increase, then the source would be required to
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model and make other sorts of showings to make sure
that that does not have adverse air quality impacts.
Another option is the one that we have pretty much
been using which is just does the project increase actual
emissions compared to the actual emissions of the
source, in other words, the actual-to-actual test. You
could use sort of what David was describing with natural
gas that it is just not the type of change that we would
expect the unit, or you can use a much more formal
actual-to-actual test where you really ask the source to
come in and provide you with a factual basis for their
projections of the future use of the source.
So, that is sort of the world of options that we have
in front of us. I just listed some projects to illustrate the
implications of these various tests.
A bag house I gave as an example of something that
really should pass almost any test. The straight additi0n
of a bag house shouldn't increase any pollutants. |t
should only result in a decrease, although I am sure we
could all come up...all the technical wizards here couij
come up with some scenario where a bag house couij
increase emissions.
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Low NOx burners installed to comply with RACT
being an example of something that could be fit into a
definitional pollution control project exclusion, but with
that, you run into potential increases in CO or something
like that and in a nonattainment area or they might be at
a significant level.
So, the issue becomes should EPA be turning its
back on a significant net increase in CO which, by its
nature, is not generally a stationary source problem.
Most everyone agrees that most of the locations where
we have CO problems, they are mobile sources, and it is
a very local problem, so why should we care about a CO
increase.
VOC incinerator as a MACT project perhaps, the last
one, something done to comply with the Act that a source
is going to have to do, but it is going to result in a
significant net increase...it is going to result in an
increase in NOx. In Los Angeles, if it has a 10-ton
increase in NOx, that would make it a stationary source
that would be above the stationary source in and of
itself.
So, you could have a project that we would all agree
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needs to be done or is undertaken to comply with the
Act, yet it is going to render an increase in another
collateral pollutant in an amount that either is over our
threshold amounts for stationary sources or over oUr
significant levels and, therefore, trigger New Source
Review under the existing system.
The question, then, is should it be the agency's
policy in (b}{1) to allow those types of projects to take
place without New Source Review or should there be
streamlining of New Source Review.
No decisions have been made on this. As I said, w e
are probably further along in our thinking in dealing with
the very specific project involving natural gas. In terms
of trying to come up with an approach that applies to all
sources and all projects, we are very much interested jn
getting input from all sides on the issue.
I know I have done a lot of talking about this issue
individually with people, and I sometimes think that this
is one where if you got the right people in a room, yQu
really could come up with some sort of model or approach
that everyone finds meets all the requirements
everyone, but that is just my personal opinion, being
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overly optimistic perhaps.
So, saying all that, I will now leave it up for
comments.
MS. STINSON: Why don't
we take questions, if we have any, for clarification on
either the natural gas or pollution control projects. Why
don't we start with Dick
MR. PENNA: I had a more
general comment, I guess. I would say two things. One,
I agree with Bill's final point that this is probably
something that, at least in my view, I think there could
be a fair amount of commonality, and getting people
together in a work group could probably help resolve this.
The other thing is a question, maybe a comment, to
Bill, and that is, would you consider inherently lower
emitting materials, for example, water-based coatings
versus solvent-based coatings or powder coatings to fall
into this category?
MR. TYNDALL: That just
raises a very good, difficult issue that is something that
would have to be resolved. The problem with those sorts'
of changes are that they are the kinds of changes you
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want to both promote and that are inherently linked to
just being a modernizing or a process change type thing
that is not necessarily pollution control project driven
and might be the very kind of change you want to see
subject to New Source Review.
specific example would be, for example, if a vehicle
assembly facility with two coating lines now wanted to
change over to one of these things, what it would
probably have to do is knock out one of those units.
Eventually, it would go through a three-step
process, knocking out a wall or something, building a
new facility to handle this. Once that is on line, then
run...make your modifications, continue to have always
the ability to run those two facilities at one time but go
down, ultimately, away from a use of the solvent-based
coating.
So, you would be doing a lot of construction. Yqu
would be doing a lot of change in equipment, but you
would always be driving those emissions downward.
It seems to me that that is the kind of thing that we
ought to think about as trying to fit into this category
MR. PENNA:
Well,
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MS. STINSON: Dave
M cAvoy?
MR. MCAVOY: I have a
suggestion and an example.
The suggestion is as I first read through the issue
statement, I noticed that we were considering a pollution
control project for add-on control technologies. I think
it would be helpful to make sure that we clarify that that
means add-on control technologies that, in and of
themselves, are sources of pollutants such as the last
example that Bill Tyndall talked about and it is not just
applying to control devices where there is no increase.
That leads me to my example, because Bill had also
asked how bad is the problem. Well, it is quite severe for
our company in Indiana, and it hurts the environment
because we made a decision a couple years ago to take
voluntary control device project at $20 million for two
plant sites in which we would incinerate methylene
chloride fumes voluntarily in order to lower the
emissions.
As we built the units and were going through the
permitting with the State agencies, we learned that the
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volume of air flow that we were getting through these
units was such that you were combusting air and creating
NOx and CO.
So, we had to take restrictions on both of these
units so they are only at about 20 percent of capacity in
order to avoid PSD which then led us into the morass of
PSD permitting and th.e question of what is BACT
because these units have low NOx burners on them
currently.
The decision thus far has been it is not worth our
while to go ahead and take a third project we are thinking
about and build this, and right now, we have these units
with these restrictions when I think it is hurting
everyone.
I might add we have even gone to the point where
we have modeled the emissions, the increase in NOx, and
it doesn't affect...this is in an attainment area...it
doesn't affect the NAAQS adversely. Yet, you would be
achieving a tremendous reduction in air toxics if this
were allowed.
And because WEPCO only applies to utilities. peopje
in Indiana are stymied.
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MS. STINSON: Okay, let's
take some comments from folks we haven't heard from
yet. Rob?
MR. KAUFMANN: I have one
question about the fuel switching exemption being
limited to natural gas. I am wondering whether other
inherently low polluting fuels like biomass fuels might be
added to the list. I am thinking of bark or wood chips or
sander dust or pelletized paper, something like that.
MR.SOLOMON: Rightnow,
we have focused on natural gas, because it was the most
clear example presented to us of a project that appeared
to provide for significant decreases in most pollutants
without the potential to affect the operations of the
source.
But I think the intended purpose of this exercise
here is to get an understanding from the group in terms
of what would probably be the best way to address these
types of projects under NSR in terms of an exclusion or
a special applicability test and then to understand the
spectrum or universe of projects that are out there that
potentially could fall under this type of classification.
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So, at this point in time, yes, we are open to
understanding other types of projects, as was pointed
out, that potentially would reduce emissions from
sources.
MR. KAUFMANN: If I could
have another question, this is sort of a paradigm busting
question, and it is sort of a multi-media situation that my
industry is involved in where we are contemplating a new
process to deal with effluent guidelines where we would
extend the cooking time of wood chips, and by doing
that, we would reduce the need to use chlorine-based
bleaching which would reduce loadings of chlorinated
organics to receiving waters.
But one result of that may be an increased need for
chemical recovery units which, if we did indeed have to
make modifications to these units, we would likely
increase slightly maybe above significance levels sulfUr
dioxide and nitrogen oxides.
I am wondering if EPA is contemplating a multi-
media situation like that as being part of the
environmentally beneficial test.
MS. STINSON: Go ahead.
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Bill.
MR. TYNDALL: The short
answer is yes. I mean, the pollution control project...
MR. SOLOMON: Pollution
prevention.
MR. TYNDALL: Well, it also
would be a pollution control project undertaken in other
media. It wouldn't just be limited to air necessarily.
But also your overall comment raises a very
important point which is that we just don't focus on air
as being the only...and the interplay between air as being
the only thing that counts, that it is also important to
keep track of what the impact of what the exclusion or
whatever comes out of whatever combination is made,
what the impact is on the projects undertaken in other
media.
MS. STINSON: And I think
this is just the kind of direction we want to take this
discussion in. EPA has some ideas here, but they are
really looking for elaboration of what are the problems,
strengths, weaknesses, advantages, disadvantages.
Dennis Armbruster?
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MR. ARMBRUSTER: I would
like to speak to the issue of fuel...
MS. STINSON: Can you
speak a little closer? Yours isn't working well.
MR. ARMBRUSTER: Sure.
Or is it on?
MS. STINSON: It is
probably on. Just...okay.
MR. ARMBRUSTER: I would
like to speak to the fuel switching issue. Regarding the
fuel switching issue, as a regulator, I understand the
need to convert to gas sometimes, and as stated in the
document, sometimes there are economic and
environmental benefits.
I believe it would be beneficial to, under some of the
restrictions noted, to take that out of the New Source
Review realm.
However, I see a significant concern that I a ^
wondering if it has been addressed, whether or not it ha
ci 3
been. My concern is that a company wants to fuel
switch, and the air resources see the benefit of generally
reduced or a reduction pollution emissions.
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What about when that company who first switched
for economic and environmental reasons now wants to
switch back to the original fuel for economic reasons?
How do you handle that when, after a few years, their
resources have seen the benefit, you have done
additional planning, and then the company wants the
right to go back to the original fuel?
MS. STINSON: Good
question. Henry?
MR.NICKEL: Iwouldliketo
make a few observations. Can you hear me?
MS. STINSON: I think we
have a dead mic over here. Shall we try it again? This
ought to be fun.
MR. NICKEL: I would like to
make a few observations about Bill's presentation. The
first thing, and I think we have to keep this in mind
throughout our discussion today, is that the new source
program has always included exclusions from physical or
operational changes.
I think it is important to look at what those
exclusions are all about. Essentially, what they are is
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they are saying that if emissions increases occur as a
result of something that we would reasonably expect
existing facilities to be done like utilizing its full
capacity to meet market conditions or like converting to
an alternative fuel where it is capable of accommodating
or originally built to accommodate that alternative fuel,
that those kinds of things should not be considered
physical or operational changes.
And in the context of pollution controls, it is really
kind of mind boggling to me that we are having this
debate in the sense that of all things that one would
think the Clean Air Act contemplated that people would
do at their existing facilities is install pollution controls.
So, I mean, this, to me. seems to be kind of a slam dunk
type of exclusion.
But moving beyond that, I think there is a second
issue. Exclusions are important if you are going to say
emissions can increase, some emissions can increase.
You don't need exclusions if you are going to say no
emissions can increase. Then I think you have to look at
what the emissions test is.
Again, EPA's rules right now only require actual-to.
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188
potential where a unit has not begun normal operations.
That is the only time it is required.
A suggestion in the paper here that actual-to-
potential would apply to pollution control projects is
something that I have never seen in any agency document
or any agency determination.
So, when we talk about not increasing actual
emissions, it seems to me that we would be doing that
under the rubric of the current law that says when you
install pollution controls, it is not changing the status of
the unit in terms of whether or not it has begun actual
operations.
Third, I think we have to keep in mind the fact that
we have to find a link between whatever we are talking
about here and an increase in emissions. So, it is not
sufficient that we can look into the future and see that a
facility will be operated more, but rather, we have to say
that that additional operation is somehow spurred on by
the particular project in question.
I have seen instances with fuel switches, for
example, that may make it cheaper to operate a unit, but
when you look at the next unit in the loading order, it is
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so much cheaper that it won't change the actual
operations of the unit that is switching to natural gas.
Finally, timing. What we are talking about here if
we subject sources to New Source Review is we are
talking about a process that takes a year or two years
before you can do anything on site.
If you look at people that are facing 1995 RACT
deadlines, it seems to me that it is inconsistent with
fulfilling those obligations under the Clean Air Act. So
again, if there is a pollution problem that we are
concerned about, if we are concerned about CO from
stationary sources, which I don't think we are, going up
marginally, let's address that through the existing
ambient program for CO and not through some strained
interpretation of the New Source Review rules.
MS. STINSON: Did y0u
want to respond to that directly?
MR. TYNDALL: I just had a
question which is...I mean, I basically agree with a lot of
what you said, but it gets to be a little sticky when y o u
talk about what would on the face appear to be pollution
contro.l projects which really can change the way that
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source is going to be operated.
So, in that situation, even taking the interpretation
of our regulations that you are saying, I think we would
be faced with applying an actual-to-potential test.
Two examples I would give real quickly are a
scrubber project at a utility that is then going to be using
that unit differently as part of its plans to comply with
Title IV and a switch to natural gas in which a source
now has a lower cost of production where the energy
source is a very big factor in its production costs and
now it is much cheaper to produce its widgets.
So, is it true that we therefore still don't need to
expect any change in the method of operations or any
change in operations at that unit?
I am just throwing that out.
MR. NICKEL: I would just
like to respond on the utility example. I think, again, the
question is whether you can say as a common sense
matter has this unit begun normal operations. And if you
have a plant that has been a part of the system, has been
operating day in and day out for years and years, and you
put a scrubber on it and it is going to operate a little bit
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more in future years because it is a cleaner unit, I would
say that unit has begun normal operations, and it would
be appropriate under EPA's current rules to use an actual-
to-actual test if you are going to conclude that you are
not going to give it an exclusion.
If you are going to give it an exclusion, then you can
have emissions increases.
MS. STINSON: Let's go to
Pat, and then we will come all the way around.
MR. RAHER: Yes, I would
like to...
MS. STINSON: Just a little
closer maybe.
MR. RAHER: How is that?
MS. STINSON: Good.
MR. RAHER: ...raise from
Bill's standpoint a question. We are always looking at.
as I see this presentation on the add-on issue, and
someone just briefly touched on it, and Bill identified it
as a problem, this whole question of process changes or
material changes.
But if I recall, the head of this agency has said that
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she is very, very concerned about preventing pollution up
front and not addressing add-ons. You know, that is her
second choice.
Now, if that is the case, aren't we doing a
disservice here by not addressing the process changes,
the material changes, and so forth in this program? And
if there is some inherent barrier that I missed in the first
go-around, please let me know right away, but I think it
is incumbent upon us to take a look at that issue if we
are going to be following the mandate of the
administration.
MS. STINSON: Molly?
MS. ROSS: I think this
follows on to Pat's comment. We are all in favor of ways
to prevent pollution and to minimize pollution, and I
certainly want to make that very clear. We like to do
things to encourage more pollution control projects.
I would like to look for more incentives to encourage
that both up front and add-on that wouldn't otherwise be
required by the Act. That might be the kind of thing that
could get us this cushion for growth, margin of safety
that I have alluded to throughout.
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I do have some concerns here that I think we have to
be real careful about. I think that the safeguards we talk
about to assure that we are not getting increases over
time need to be looked at very carefully, and I need the
help of others who know these technical issues better
than I to come up, think creatively, about how those
safeguards can be the best possible.
I think the environmentally beneficial test is, of
course, a concern and the way it has been talked about
in WEPCO is still of concern to us.
Air quality-related values, including visibility. Qf
course, is our concern in attainment areas, and to limit
that to visibility limitations, however that is defined. js
but a small piece of the action and probably the most
controversial aspect of the action. There are a lot of
other air quality-related values that are affected that
need to be looked at.
Bill Tyndall mentioned that, at one time, EPA was
going to say environmentally beneficial was actual
increases in nonattainment areas and potential jn
attainment areas. That concept gives me concern, too,
especially where those attainment areas might h a v e
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identified adverse impact problems from existing levels,
making it analogous to nonattainment or where new
increases are known to have a strong potential for
creating new adverse impact situations, a clean air area
where you are dealing with a pollutant that could cause
a big change in clean air.
I guess that is it for now.
MS. STINSON: Okay. I
know people's stomachs must be grumbling by now. We
»re going to try to take the cards that are up and have
our public comment period and break for lunch.
Bill?
MR. PEDERSEN: Yes, I
would like to...
MS. STINSON: We need
your mic.
MR.PEDERSEN: Ithinkthis
is a fascinating issue, because I think when you think
about it, you can link it up with the PSD accounting
issues that we are going to be talking about this
afternoon, and you can...to do that, I divide pollution
control projects into two types.
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MS. STINSON: A little
closer to your mic. Sorry.
MR. PEDERSEN: There are
the types where you yet some increase in an emission of
one pollutant in return for huge decreases in another, and
those, I think, are pure pollution control projects. But
then there are the emission factor projects where you
have greater efficiency in the use of energy or you have
a process change or you have a different raw material,
and in consequence, your emissions per unit of product
go down.
I detected Bill's passing reference to the lawyer jn
him. and like him, I see potential problems in overloading
the pollution control exclusion too much, plus it has 9ot
sort of an air of ad hoc-ery about it which you don't
know where you are.
It is much cleaner, it is better law and better policy,
to say that these emission factor projects qualify for a
different applicability accounting system than actual-to-
potential. and. in effect, Bill said that. And you Can
set...l suppose that you can package it either as actual-
to-actual or potential-to-potential, but I think the more
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logical packaging is as potential-to-potential, a finding
that you qualify to use potential-to-potential because
there is no realistic prospect that you individually or you
as a class your emissions would increase.
I mean, the focus is on the emission factors, and
then you look secondarily to see whether you might have
been misled by the emission factors. If there is no
reason to think that you were misled by the emissions
factors, you say great, you can net on a potential basis.
That is where the pollution control policy and the
Pollution Control Act are taking us, because they define
pollution control in terms of less effluents per unit of
product or energy efficiency which is the same thing.
So, when you...I am talking a little beyond my brief
here, but it seems to me that this is an avenue not just
for relief from New Source Review for particular classes
of projects but for a change in the accounting system
that has room perhaps for some of those safeguards that
people like Dave Hawkins are talking about.
MS. STINSON: Dale?
MR. BROOKS: I kind of
want to step back a little bit. First of all, it seems to me
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that s n v i r o n m e n t a 11 y beneficial projects, this whole area
is probably an area in which EPA can make the greatest
strides in simplifying the New Source Review process.
But I think we have to look at the wisdom and intent
of the Congress when they passed the 1990
Amendments. I mean, I have heard a lot of talk about
how you get there. A typical example is fuel switching,
let's say, from coal or oil to natural gas. That is how you
get there in a utility power plant.
But more importantly, what the Congress said is that
you have got to reduce SOx and NOx. The Congress said
you have to reduce VOC and NOx emissions from
automobiles by changing the automobile and the fuel.
They said you had to make 95-plus percent reduction in
toxic emissions by installing MACT controls, all of which,
I would say, qualify as environmentally beneficial
projects.
There are also some words in there that were not put
in there casually that talk about net air quality benefits.
If EPA can look at what Congress intended to be
environmentally beneficial projects and not get caught so
much up in the tests that you have to do, we know that
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when a utility power plant reduces its SOx and NOx
emissions, that is environmentally beneficial.
If it wants to expand that capacity and that capacity
is going to be used to fuel cleaner cars, or if the
petroleum industry is doing either oxygenated or
reformulated gasoline, again, provide a fuel to provide
cleaner burning cars, all of those are environmentally
beneficial projects which, I would think, common sense
suggests that they should be excluded from a New Source
Review process.
MS. STINSON: Mike?
MR. BARR: Dave, on the
gas switch real case, I think it will help everybody a lot
to have specific facts to work with. What is the time line
on that?
MR. SOLOMON: We are
working with the source now to gather some specific data
to assure the permitting agency and us that, indeed,
there would be no expected change in operation from the
switch. We are hoping to resolve this issue as quickly as
possible.
MR. BARR: This year? '93,
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you think?
MR. SOLOMON: I would
hope within the next month or two, at the outmost.
MR. BARR: And then, when
do you get the results?
MR. SOLOMON: Excuse me?
MR. BARR: When do you
get the results?
MR. SOLOMON: WeexPect
to get the information we need within the coming weeks
and to act quickly after that. So. I would hope that
whatever the end result is, it would occur and be
available within the next month to two months.
MR. BARR: Great.
And then, on Bill's paper, it is certainly a fact that
in our experience it is extremely frustrating for some
plant to be required to put on a piece of add-on control
technology and then learn they have to get a permit, and
then they can't get the permit. I mean, that really... an d
that is happening as we speak in Los Angeles and other
places in California.
But expanding the idea to cleaner processes and
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cleaner products is very important. It is a very serious
issue. It may mean the difference between attaining
some of the standards on time under the Clean Air Act
Amendments or not.
One of the things, though, just a note of caution, as
these major cleaner projects go through the permit
process right now, it could be very damaging to change
the rules in mid stream. That could be the worst thing of
all.
MS. STINSON: Dave
McAvoy?
MR. MCAVOY: I think one
thing that we have seen in this discussion is that we have
to be clear when we are developing this guidance that we
have to split the control device issues into two camps
like Bill Pedersen was suggesting.
One is when the control device is a source. The
other one is the one that Henry was talking about where
you are not increasing other emissions but you are
putting a control device on and whether or not it affects
or triggers NSR.
If we are to agree with Henry's approach, which I
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do, we still need to have a pollution control exclusion in
guidance for the other types of projects.
Then, my second question is since each day that
goes by, those people who are trying to do these
environmentally beneficial projects are being stymied
what suggestions do you have now for people who want
to move quickly on this and are not utilities?
MR. SOLOMON: I think Bill
and I are going to say the same thing. Essentially, on a
I
i
case-by-case basis, the source should work with the
permitting agency and us. We do review these projects
on a case-by-case basis as with the natural gas switch
and prior utility projects.
So, if there is an issue to bring us in up front, then <
we will work with you to resolve the issue until there is
some overall policy.
MS. STINSON: Chris j
Shaver, it looks like you have the last word.
MS. SHAVER: I think |
remember what it was, but it wasn't meant to be the last
!
word.
One wasjust let me put my vote down in favor or
® n ]
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actual-to-potential test. I didn't have a chance to say
that when the WEPCO rule came out, so let me say it
no w.
I find this whole thing very troubling because, you
know, pollution control is good, but pollution increases,
particularly in nonattainment areas or in sensitive areas
is bad, and how do you reconcile the two and not be
forced to make a choice between the two?
Even though I will grant you up front that conversion
to natural gas is, overall, a very positive thing to do, one
can also view that as a lost opportunity, an opportunity
to convert that plant or to install a solar/thermal
application that would provide part of the power along
with the gas at the same time.
So. there may be ways of reducing pollution at the
same time you are adding pollution controls to
incorporate that pollution prevention philosophy in when
you do pollution control such that you don't have any net
increase in pollution.
I guess that would be my suggestion, of some way
putting a condition on here that there be no increase,
period, and then there may be creative solutions to avoid
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that.
I am definitely speaking out of my brief at this
point, but maybe the idea of getting an offset for, say, if
there is a CO increase associated with something weird
that, you know, you don't even have CO in your plant,
because it is not being emitted otherwise, to allow that
offset to come from elsewhere without going through the
technology review associated with a major increase.
MR. SOLOMON: If I may , | et
me just add something to address one of the issues y0u
raised on the case-specific basis that we have reviewed
involving the application of a control device or a control
strategy. We have to look at the case to ensure that
whatever collateral increase that may occur as a
secondary effect is being dealt with to the greatest
extent possible in terms of mitigating or minimizing that
effect.
MS. STINSON : Okay.good.
Let's take a few minutes now and offer the audience, the
observers, an opportunity to make either any comments
that you have on anything that you have heard so far or
ask questions, questions of clarification. Please identify
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your name and affiliation first.
MR. FELDCAMP: Larry
Feldcamp, Baker & Boggs in Houston.
On the last issue on pollution control projects, we
are in the midst of, in Texas, having a NOx RACT
regulation, and as we calculated, there are probably 132
units, heaters, boilers, more than 250 tons of increase in
CO. You know, PSD, it is 100 tons as the criteria.
We are going to overwhelm the system if we don't
work out a deal to work on this kind of a situation
dealing with PSD exclusion, or you are just not going to
get the permits issued. You are not going to comply with
the date in the regulations.
You also have V0C increases when you put on low-
NOx burners. About a 100 million BTU heater would have
maybe about 2.5 tons of VOC increases, and how are you
going to deal with that in Title I NSR with the 25 tons
over 5 years.
You also have, as you put on SCR control technology
for NOx, you would have ammonia increases, particulate
increases. You have got those kinds of issues.
We are working in Texas. We are about on the third
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or fourth draft. The rule is going to come out in May, but
we are trying to deal with this on a general permit
concept plus a WEPCO fix or type of fix with the kind of
things that have been talked about here.
I think that is the way to go. but that may help set
some precedent.
We are also trying in a generic basis in a separate
rulemaking to deal with the VOC controls with a N O x
increase or any other similar situation.
I wanted to comment on the shutdown issue that
was mentioned earlier. I think we need that. I know in
looking at it in Texas, the reg that we are dealing with
the present policy, I guess, came out around '88 or in the
regulation. We came to the '90 Amendments, you
implement the '90 Amendments with the '92 date on new
source control with the accumulation concept which we
haven't had before and which wasn't contemplated back
in '88.
So. the need for offsets is going to be much greater
than it ever was before, and the only way to comply with
the way the rule is set up is wait till you do the
attainment demonstration in '94. and it just really puts
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everybody in a situation that you c a n ' t... th e re is no way
to comply and have those offsets available until '94.
I think the way EPA has proposed the solution here
is a reasonable solution meeting the intent of what was
intended when they promulgated the rule in 1988.
MS. STINSON: Anyone
else ?
MR. LEVIN: Mike Levin,
Nixon. Hargrave. One request and a couple of comments.
One is I assume we are going to be getting the prints
of these slides which seem to have some data in them
that were not in the updates that were handed out this
morning. Is that correct?
MR. SOLOMON: If you
wish, we can provide copies of the slides, yes.
MR. LEVIN: I think that
would be useful.
Number two, with respect to the shutdown, I agree
with Larry. The issue is really RFP. So long as RFP is
protected as the C M A Settlement indicated, there is no
reason not to allow use of shutdowns prior or otherwise
for offset or, indeed, for other purposes so long as your
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accounting system works, although that is a separate
issue.
Third, with respect to net environmentally
beneficial, I always thought the purpose of that test
both from the WEPCO proceeding analysis, was to allow
tradeoffs in terms of environmental benefits between
different pollutants as well as between different media in
making a discretionary decision as to whether or not a
project was okay.
The initial impetus, as I remember, for that was a
question of whether or not scrubbers for opt -in units or
utility units under Title IV would increase slightly
particulate or other kinds of emissions despite the fact
that they would be producing very large reductions jn
S02, and I assume that that is still everybody's
assumption here.
Finally, we have been talking about ways to shrink
applicability. I think, as a general concept, it is very
important to pursue these regardless of the fact that we
always get lost in the details when we try to implement
them. We are not going to streamline New Source Revievv
if we do not shrink applicability in some kind of
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significant way .
And I agree with all of the other commenters who
have said that New Source Review is not supposed to be
the be-ail or end-all for attaining air quality. It is
essentially a maintenance device, not an attainment
device, although the new Amendments have tweaked that
alittlebit.
Nonattainment is an existing source problem, air
quality problems that are an existing source problem.
That is where the real reductions have to come from, and
EPA has always had a great deal of discretion to
determine the scope of the New Source Review program
by defining what constitutes both a physical change and
what constitutes a triggering increase.
Finally, let me go the other way with one comment.
It is also important or may also be important in some
circumstances to expand applicability.
I am concerned and some of my clients are
concerned to where you have directly competing
industries one sector of which is subject to stringent
New Source Review because they happen to be point
sources and others of which are in direct competition are
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not subject to New Source Review. You have a disparity
which could produce all kinds of environmentally
disadvantageous effects as well as economically
disadvantageous effects.
I have in mind the disparity between how waste to
energy facilities, as one example, are treated for New
Source Review purposes,versus how land fills are treated
in the solid waste area for New Source Review purposes
even though they will be point sources after the final
NSPS and even though there is some data floating around
which indicates that land fills alone are capable of
blowing the NOx increment.
Thank you.
MS. STINSON: Other
comments? Okay, it is lunchtime. Yes, Bruce?
MR. MILLER: I just wanted
to make one comment before we broke for lunch. It may
give...
MS. STINSON: Can you
speak up a little?
MR. MILLER: Yes...thoSe
people who are presenting the applicability issue this
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afternoon something to think about before that starts,
and I will go back to two comments that were made
earlier today, one of which was one participant said when
they read the proceedings of the August workshop, they
weren't sure whether we wanted to exclude certain
sources from New Source Review, whether we wanted to
make the process simpler, or what our objective was.
I would attempt to answer that to say that I think
both, if that was possible, and I would like to make a
suggestion this afternoon when we start. There was
another comment this morning saying lots of times, we
get into the minutia before we frame the issue.
I would like to hear from the people who wrote the
concept people today to start the process, one, how is it
that they change the universe of sources that would be
reviewed under PSD New Source Review and, two, how
that process will be simpler or more difficult as compared
to the present process. Keep it global before we get into
the host of questions that are going to come out of that
session this afternoon.
MS. STINSON: And we are
starting with a presentation this afternoon or when we
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get to that topic. We have got a couple left over from
this morning, but when we start that, I think we can
definitely paint that more of the constellation.
We will come back and try to address the remaining
two issues rather quickly and spend the rest of the
afternoon on the plantwide applicability limits.
Let me propose something for all of you before
people start moving. What we would like to do is ask you
now if it looks like it is going to be necessary to stay
longer than 5:00 o'clock to consider whether people are
willing to do that, 5:30, 6:00 o'clock, probably
something like that. It would make a little longer day
but, hopefully, making use of all the time that we have
here together.
I see nods of heads. Let me know if there is a
problem with that. Otherwise, remember lunch js
downstairs on the first floor if you would like, and come
1
back if you can by a quarter to 2:00. It is now 10 to
1:00. I
(WHEREUPON, a luncheon recess was taken.)
MS. STINSON: I have a fevv
logistical matters. We do have a break scheduled for
t
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3:00 o'clock. We will probably take that break a little bit
later, just depending on how the discussion is going and
how folks are feeling. We will have coffee and sodas out
there throughout the afternoon.
And I would like to suggest that we plan on meeting
at least until 5:30. Depending on how fast things are
rolling at 5:30, even later, potentially.
So, we will have coffee all afternoon. We may even
get into a rolling break situation rather than taking a
formal break, depending on how things are going.
OFF THE RECORD.
Just to let you know, Lydia has stepped out for the
better part of the afternoon. She will be back at 4:00
o'clock and joining us for the rest of the discussion.
What we are going to do now is adjust the agenda
slightly and tell you that Leo Stander has prepared some
material on NSR training. Suffice it to say it is
happening, and the training is described as issue 7 on
page 7 in the handout that came to you prior to this
meeting, and we are hoping that that will answer
questions that you -have.
If you have specific comments about the NSR
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training or additional recommendations, let me suggest
that you talk to Leo Stander personally who actually js
not here right now. He had to take a break this afternoon
for another meeting, but he will be back also around
4:00.
So, we are going to be able to skip that in terms of
our presentation unless there are any objections. I don't
think anybody has a problem with that.
We want to cover the PSD monitoring and then move
into the NSR applicability, the PAL system that has been
developed by EPA.
So, at this point, can we turn it over to David Lutz?
MR. LILLIS: Before David
begins, let me give a little bit of background here with
respect to PSD monitoring.
I think this was one of the issues that was
mentioned or alluded to at the first workshop. | don't
think we got into an awful lot of discussion on this
particular topic.
However, in another survey that the agency has
been involved with with respect to some concerns on the
New Source Review program, preconstruction monitorin
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was raised as a fairly significant issue. Some question
the value of a single monitor in terms of providing data
for preconstruction activities and also the fact that
collecting this information has resulted in delays.
Preconstruction monitoring is required by the
statute, and EPA has issued guidance in terms of how
that can be implemented1. In a lot of cases, sources and
States allow the use of data collected for other purposes.
What we wanted to do was to raise this issue to this
group and get a sense of this issue, whether it is a
significant issue or not, and David Lutz who is involved
in our monitoring branch and the branch that was
involved in developing the PSD monitoring guidelines is
prepared to give a presentation on this.
So, with that, I will turn it over to David Lutz.
MR. LUTZ: My name is
David Lutz. I am with the Monitoring and Reports Branch
of the Technical Support Division of OAQPS.
Ed raised the issues that are before us in terms of
PSD monitoring. I would like to step back a little bit and
go through some of the background as to how we arrived
at our present situation as far as the monitoring data
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rationale goes.
The basis for PSD monitoring stems back to the D.C.
Circuit Court of Appeals decision in December, 1979
when Alabama Power sued Costle, et cetera. The Court
reaffirmed that Section 165(a)(2) of the Clean Air Act
required preconstruction monitoring for PSD. However
they did give some alternatives to say that EPA had the
prerogative to exempt certain de minimis situations from
monitoring.
Based on the de minimis situation. EPA worked with
industry and the States back in 1980 to come up with a
rationale for some companies would have to monitor and
some not, and this was formulated in the PSD monitoring
guideline which was issued in 1980.
Basically, the EPA and the industry position was to
try to require as little monitoring as possible but yet still
be responsive to the D.C. Circuit Court of Appeals
decision .
The Court ruled that data could be used to verify the
accuracy of modeling estimates, since modeling would be
the primary means to track the increments. They also
addressed post-construction monitoring which could h
o ^
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required, although EPA generally does not require post-
construction monitoring unless the potential source
would cause a violation or a concentration near a
violation.
In light of the de minimis situations, EPA exempted
several things. One was if the estimated concentration
was below de minimis monitoring levels, then monitoring
wouldn't be required, or if the emissions were below a
certain cutoff, then monitoring wouldn't be required.
So, EPA tried to use these de minimis exemptions to
get people out of monitoring.
To conserve time. I will skip through some of my
notes. We came up with the PSD monitoring, and the
objective of the PSD monitoring really is to determine the
what effect of emissions from a source are having or will
have on air quality on any area that may be affected by
the source coming in.
And there are two primary data uses that the data
would be used for. Number one is to establish
background air quality concentration in the vicinity of the
proposed source, and the other is to validate and refine
models.
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In the D.C. Circuit Court of Appeals decision, the
Court reaffirmed the Congressional position that it was
never intended that there be no real-world check on
models.
One of the things that EPA worked with was to use
the representative air quality data to exempt from
monitoring, and there were certain conditions -that
representative air quality had to meet. It has to meet a
representative monitoring location that would be
representative of what the source would emit in the area.
It had to meet the data quality objectives in
Appendix B of Part 58, and it had to use continuous or
equivalent instrumentation, and it had to meet the Qa
procedures. And it had to meet certain data recovery
procedures, and the calibration and audits had to be
traced back to an NBS audit.
Also, representative data could be used if it were
collected in the previous three years. It was felt at that
time that data older than three years should not be used
for PSD purposes.
This is a very quick outline as to why we are at the
present situation of requiring monitoring. Ed has
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enumerated some of the concerns that have been
expressed, and if there is enough interest, the whole
issue of PSD monitoring could be readdressed through the
use of a task force.
There are some new ideas and developments in the
monitoring field that have been advanced since 1 980.
Number one would be the use of saturation type
monitors. These are not reference or equivalent, but
there are commercially available now low-cost portable
monitors for PM-10 and CO that could be used.
There are also...EPA has developed passive ozone
monitors that could be set out, and they are extremely
low-cost, and you could use multiples of them to saturate
an area to determine the extent of the problem and then
try to reference that back to a fixed monitor which meets
the reference or equivalent standards.
One other innovative way that monitoring could be
alleviated.. .and one of the concerns has been monitoring
out of season...one of the things that could be done is to
use data from another season of the year and use a
multiplication factor, a conservative multiplication factor
which would ratio the data from a lower concentration
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season to a higher concentration season.
I am not sure that that would work. It would require
some study and looking at a lot of data to come up with
these fudge factors, and it would be based on locale in
the country and latitude.
It would probably work for most things except for
ozone. It is hard to ratio up ozone data collected in the
winter to what may be predicted in the summer due to
meteorological conditions.
I
I guess at this point, Ed and I had talked, we would
\
like to open up the floor for discussion on any concerns
.on PSD monitoring and, if you would like, to express
them verbally now or send them to Ed in a letter. One of
the options is to formulate a task group composed of
representatives from industry and the States such as w e
had in the late '70s to try to see what the extent of the
problem is and how we can address it.
At this point, I would like to open the floor for any
questions regarding PSD monitoring.
MS. STINSON: And once j
again...thank you, David. Once again, let's do take
questions for clarification first, and then we will get into
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your comments and recommendations.
Michael ?
MR. BARR: Yes, I remember
the previous task group, and it seemed to operate pretty
well to produce the 1980 guidance which is clearly out of
date. We have had four assistant administrators and five
acting assistant administrators since then.
I wondered if the people at EPA saw any barriers or
any reason why you couldn't reconvene a task group of
knowledgeable people from industry and environmental
groups and States to work these issues out.
MS. STINSON: I don't know
that EPA needs to respond to that right now, but that
sounds like something...
MR. BARR: Well, the
question is really directed at Rob.
MR. BRENNER: What is it?
MS. STINSON: Aren't you
glad you heard it?
MR. BARR: Are there any
resource constraints to reconstituting the earlier
monitoring task group composed of knowledgeable EPA,
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State, environmental and company people to update the
1980 monitoring guidance which is clearly out of date,
given the nine assistant administrators and acting
assistant administrators we have had since then?
MR. BRENNER: I don't know
that. We would have to look. I mean, certainly we will
put that on our list of things to look at as a result of its
coming up here.
I do have to say that there ate a lot of things that
we probably should do that it is very difficult for us to
accomplish, given that we have this set of court
deadlines and rules that we are struggling to get out in
light of those, and anything that is discretionary like
that, it is a real high hurdle to get it done, but we will go
back and see whether there is some way to do it.
MS. STINSON: Other
questions? Okay, comments? Don?
MR. THIELER: This is one
area where as long as I have been associated with the Air
Program, I have found no useful purpose for the
preconstruction monitoring.
If there is some way we can reconvene a group and
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get something useful out of the concept of
preconstruction monitoring. I would be all in favor of it.
We spend a lot of time trying to figure out ways to
excuse PSD sources from preconstruction monitoring,
because even after we have the data, it is not good for
anything .
MS. STINSON: Molly?
MS. ROSS: This might be
an area where there are some very practical things to
help Class I areas. Certainly, with post-construction
monitoring, we need more information about the impacts
on lots of different resources, lots of different air
quality-related values.
I would like EPA to consider expanding the scope
and definition of what post-construction monitoring could
include to include possibilities for setting up monitoring
of air quality-related values at risk. And we can talk
more maybe in another forum about whether there are
appropriate preconstruction monitoring needs in those
same areas, but maybe if we reduce some areas of
monitoring, we can build up other areas of monitoring
that might be more valuable.
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MS. STINSON: Other
comments? Really? Okay, good. Well, we appreciate
your making the gesture of following us after lunch which
sometimes can be the hardest time to make a
presentation. Of course, if there are other comments
that come up or questions, you can raise them with David
or other members of EPA staff.
I think we are ready to move into plantwide
applicability limits. As I understand it, how we are going
to approach this is David Bray is going to lead the
discussion primarily by opening up with a presentation
following on the suggestion that was made before lunch
that we paint the bigger picture first, and then we will
take some clarifying questions and comments on that in
terms of EPA's background presentation and then look
into the specific issues that are presented in the paper
that EPA issued prior to the meeting.
David?
MR. LILUS: Barbara.
again
MS. STINSON: Of course.
MR. LILLIS: Let me give a
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few introductory remarks here.
Again, this just goes back to the first workshop that
we had, and I think EPA at that time expressed its
opinion that the applicability portion of New Source
Review was one of the most contentious areas and the
most confusing and caused a lot of delays.
We did at that workshop run through five different
options, and I think what we would prefer to do is walk
through the plantwide applicability option. After that,
we would like to go back to some of the other options
.that we presented at the first workshop. We would be
prepared to do that.
But briefly, let me recall what those options were.
We discussed an option with respect to Exhibit B, an
option with respect to a WEPCO test. There were two
options dealing with an NSPS type test, one with netting
and one without netting. And then the fifth option was
l
one that dealt with a plantwide applicability test. |
There was some discussion on each of the options,
but I think as the afternoon wore on, we tended to
gravitate towards this plantwide applicability test. There
were a lot of questions, because at that time, it was a
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fairly conceptual presentation.
One of the things that the attendees asked us to do
was to go back and flesh out this approach. Since that
time, there has been a small work group convened. David
Bray and a few other regional representatives as well as
headquarters representatives have been trying to expand
on what was prepared and presented at the last meeting.
One of the things that we did provide to all of the
invitees is a six- or seven- or eight-page summary 0f
what this approach is.
So, with that, I would like to turn it over to David
Bray. Bruce Miller did ask that we start the discussion
off with some global overview of what it is, and I think
David is going to start that way.
So, with that. I will turn it over to David Bray.
MR. BRAY: As Ed said, this
concept to this point is really the product of a small
working group that spent quite a few hours trying to
flesh it out, identify some of the issues, hammer out
some possible approaches to dealing with those issues,
and we are going to end up focusing on those later.
However, as Bruce requested, what I would like to
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start with is sort of an overview of where we are today,
what the current system is, and then jump ahead past all
of the issues, all the decision making, all of the
implementation concerns or whatever to sort of a picture
of New Source Review year 1998 or whatever time period
it would be and try to just describe how we envision this
system to work .
In our minds, we were looking at trying to come up
with something that was simpler than the current system
for determining what sources would be essentially a
major modification for purposes of PSD and partly a New
Source Review program and something that maybe
actually is even better than the current system for
meeting the Clean Air Act's goals of protecting air
quality.
So, with that starting point, just to make sure
everybody is on the same page on what our current
system is, we have talked about it in passing a little bit
today, but the definition of net emissions increase in
both our SIP rules and our Federal PSD program really
involves about five or six steps.
Not getting into any sort of sideline issues like what
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is a normal operation or whatever, the first thing you
have to do is determine the current actual emissions of
the source, and the rule says two years preceding the
change with all of the caveats for alternative years.
So, you have all the issues and problems with
quantifying actual emissions from an entire plant to
determine the potential to emit after the change. Again
this is not getting into issues like WEPCO where we
might be able to predict future actual.
This is based on truly a plant modification where
there are new units going in, existing units being '
modified, where the physical capacity of the plant is
increased. It is to determine the potential to emit after
the change.
You look at the difference from that, and you
determine what the increase in actual emissions is from
that change. That is hard enough.
Then, the next step is you have got to go and look
at the contemporaneous time period and try to figure out
what all the creditable increases and decreases are for all
the pollutants that you are emitting over that
contemporaneous time period and then sum the change j
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the difference from the change with the contemporaneous
increases and decreases, and lo and behold, you are
either in or out of the permit program, depending on
whether any increase is significant.
This has lots and lots of years of interpretations by
regions, by States, rulemakings, all sorts of things that
have complicated this process beyond what it even says
on paper.
The basic concept that we tried to apply to
designing this plantwide approach was...and I think I can
phrase it in three sort of guiding principles that this work
group or subgroup has worked on. One is that we want
a plantsite applicability limit, a PSEL, plant applicability
limit. There are different acronyms that" have been
thrown out over time, but this plantsite applicability limit
would be tied to the air quality management plan of the
area.
That links it to the goals of the airshed, whether it
is a nonattainment area and is trying to get down to the
standards, or whether it is an attainment area and is
trying to ensure increments and standards aren't
violated, but the PAL would be tied to that air quality
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management plan. i
The second guiding principle was that there must be
some way to verify compliance with the PAL. Like I say,
there are a lot of issues associated with these principles
and we will talk about those later, but there had to be
some means of verifying compliance.
The third principle was that we would provide the
maximum flexibility we could consistent with the first
two principles, that the PAL stayed consistent with the
air quality management plan and that there always
remained some way to verify compliance with the PAL.
So, given tho-se principles, the approach that we
came up with is that there would be a plantwide
applicability limit established for each pollutant that the
source emits.
That since all these sources are going to be Title V
sources.. .they are all major to start with and. therefore
in the Title V program... that the Title V operating permit
would be the appropriate place to record these limits
We wouldn't create a new compliance mechanism.' we j
wouldn't add anything more to the system from that
standpoint, that the PAL would go into the Title v
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operating permit.
And, of course, Title V already has its own
requirements for monitoring and recording and certifying
compliance with applicable requirements which a PAL
would be as part of a SIP New Source Review PSD
permitting program.
Then, basically, the changes that don't increase the
PAL, whether they be physical changes, new
construction, operational changes or whatever, those
things would not be subject to the major source
permitting program requirements. As long as you could
do the changes, implement the changes without
increasing the PAL, those would not be subject.
One of the other things that we did consider and
have looked at here is that there is no intention in this
program to change the existing requirements of
110(A)(2)(c) that require States to have a program to
regulate the construction and modification of all
stationary sources and no subsequent changes to our
current regulations in 51, 160 to 164 for what we have
always called the minor source New Source Review
programs.
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Then, physical changes and non-exempt changes
that would increase the PAL would be subject to PSD o r
New Source Review as appropriate, depending on the
pollutant you emit and where you are located.
So. that is, I guess in general, the concept, and
before we get into the specific issues associated with
doing a number of these things, I want to open it up fQr
clarifying questions if there is anybody with any question
specifically on sort of how this system would work in the
year 1998 if we put such a system in place.
MS. STINSON: Don?
MR. THIELER: Could you
just summarize what the difference between what this
system is and the existing system we are under? | have
a hard time identifying the key points where this js a
significant change from our existing system.
MR. BRAY: The existing
system, at least the way it is being implemented with
respect to the actuals-to-potentials test, you look at the
actual emissions of the plant based on its actual
operation and actual emission factors, materials be in
produced, whatever, and after the change, you compare
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it to the potential to emit based on 8760 hours of
operation, their maximum legal limits, physical capacity
of the plant.
And to net out a review at that point, you may have
to get more reductions from your plant than you have
been emitting to actually get to that point.
The PAL program,-by establishing a cap at some
level, the only amount of reductions you need to net out
a review are exactly what increase you would have from
your new or expanded unit, because as long as you could
stay below the PAL, that is all you would have to show.
You don't get into the contemporaneous time period.
It doesn't matter when you made reductions. You know,
once the cap is set, all of those things are preserved, and
you know exactly what amount you have to get.
It doesn't vary from year to year based on
production. You don't have to worry about having four
or five down years in which you can't get out of the
program, because you don't have reductions you can
make. All of those things go away with the PAL
approach.
MS. STINSON: Mike?
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MR. BARR: A similar
question. Dave, could all or most of a PAL program be
constructed by a State under the current EPA New Source
Review rules?
MR. BRAY: There are
clearly some potential ways of doing it. I mean, the
Oregon program which was designed and approved back
in the early '80s, you know, is essentially a PAL
approach. It has some problems that have been identified
in implementation over the years, and some of the
changes like the Clean Air Act Amendments for serious
and above areas would affect the Oregon program if it
had such serious areas.
So, there would be some things that would have to
be factored into a program now under the new Clean Air
Act requirements, but there are some possibilities there.
MS. STINSON: Tom?
MR. MICAI: To establish a
PAL, what level of detail of information is needed to
establish a PAL for a site? Is it something similar to Part
70 operating permit requirements, or is there something
i
less than that?
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MR. BRAY: I think that is
one of the things we will be getting into real shortly on
the elements of establishing a PAL and components of
that.
MS. STINSON: Bill Lewis?
MR. LEWIS: Dave, I w a nt t o
ask the question again about how this really is simpler
than the current system and how it would work. Just
take as an example a situation where you are setting a
PAL. You say you would set it initially at actual
emissions, and then you want to add a new unit.
If you want to add a new unit, I assume that if you
want to put that into your existing system, you would
have to reduce your emissions by the potential to emit of
the new unit which is essentially what the system is
today. You would still have to come up with a way to net
out against your potential to emit of the new unit as it is
under the current system, it seems to me anyway.
MR. BRAY: Well, you would
be netting out the permitted level of that new unit.
MR. LEWIS: Which
obviously is what you could do under the current system
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as well.
MR. BRAY: Right, but under
the current system, you also have to net out all the other
creditable increases that have occurred during the five-
year period, and you may have to take additional
restrictions, Federally enforceable restrictions, on other
parts of your plant to get credit for those reductions.
This already has everything in the cap. and,
therefore, you have a much easier way of quantifying
what reductions you need as well as, hopefully with the
Title V program, providing some better mechanisms for !
doing that even than we have today. ,
MR. LEWIS: Well, this may
be getting into a fairly complicated analysis, but
generally speaking with respect to new projects, EPA's
view historically has been that if you didn't increase your
emissions that you didn't have to do the five-year
contemporaneous period analysis.
MR. BRAY: Well, no. The
old Kathleen Bennett memo was that if your project
increased emissions by more than a significant amount
then you did it. |
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MR. LEWIS: Right.
MR. BRAY: This would
change that concept, too. Even if your project went up
by 50 or 60 tons from your project, you would be able to
count other reductions in and net out of review.
MS. STINSON: Dave
Aldorf er?
MR. ALDORFER: A
procedural point. Dave. As you go through your
explanation, could you highlight where today's paper is
different than the one that several of us had a chance to
read earlier?
MR. BRAY: Actually, I
probably need Bill Lamison to do that, because he is the
actual author of the written version of the paper, and he
knows better than I do which paragraphs tweaked where.
MS. STINSON: While he is
looking for that, Mark Carney?
MR. CARNEY: Dave, would
you have a PAL, then, for all criteria pollutants as well as
any toxic pollutants, too?
MR. BRAY: Well, toxic
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pollutants isn't an issue on the table yet. This is just
looking at the PSD and New Source Review.
I know Tim Smith is hanging around here wondering
how this might affect is 112(g) program, but right now,
it would only be those pollutants subject to
nonattainment area review and PSD review. We are not
looking at whether it can or will interact with 112(g).
MS. STINSON: Bill?
MR. TYNDALL: David, I may
not have understood your answer, but isn't it possible in
response to the question about a new unit that, basically,
under the sort of simplest version of this that if the
source were willing to take the new unit and stay under
the cap, that that is the end of the transaction? There is
no netting.
There is no...there would be, perhaps, minor source
New Source Review, depending on the State
requirements, but the point being that so long as the
source stays under the cap, from a Federal point of view
we are indifferent to what happens there.
MR. BRAY: That is correct
with the one possible caveat of maybe needing to change i
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some of the requirements for verifying compliance,
depending on how the cap is written.
If, for example, it is a power plant it is a sulfur
dioxide cap and there are CEMs on all units, there
wouldn't be any reason to do anything further than have
the new unit get a minor source permit and have the Title
V permit that is issued for that new unit have appropriate
CEMs on it as well.
The cap would be verified by the total of all the
units, including the new one, and there wouldn't be any
further review or action no that trade.
MR. TYNDALL: And one
other small clarifying point would be that, again, in the
simplest version, we would allow a source to have shut
down something, and we would be indifferent to when
they used that excess capacity later on under their cap,
but at some point, we may run into an Alabama Power
problem regarding keeping these emission reductions and
increases contemporaneous with each other.
MR. BRAY: Right, and we
do have a proposal and some issues on that coming up in
the discussion.
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— ¦ — — 239
MR. TYNDALL: Okay.
MS. STINSON: Okay, Henry
Nickel.
MR. NICKEL: I just in
looking at this proposal, isn t one of the consequences of
this proposal that sources that accept the PAL based on
past actual emissions will either.be precluded from or
have to actually get permit changes under controlled
conditions if they want to increase their hours of
operation or production rate, changes which under the
current system would be excluded, the emission changes
would be excluded from review?
In other words, people could increase their hours of
operation as long as, you know, that fell within the scope
of that particular exclusion. Now, with the PAL system,
you will not be able to do that either at all or without
further permit proceedings. Is that correct?
MR. BRAY: That is one of
the possible outcomes of this, and it is one of the issues
that we are looking at as to what extent and what
freedom will there be for increasing the PAL in manners
that don't involve new construction, plant capacity
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expansion, that stayed consistent with the SIP control
strategies. And that may be something that can be done
initially in setting the PAL as opposed to defaulting to
actuals, or it can be done later at either the initiative of
the State or the source.
Again, that is something that does come up on our
agenda for further discu-ssion later.
MS. STINSON: Pat Raher?
MR. RAHER: A point of
clarification. As you see the PAL operating, once the
limits are set and whatever enforcement mechanism there
is in order to assure that the limits are being attained
every year, a source would have no filing requirements
whatsoever with the State or the Fed other than the
minor source issues, but other than that, they could
basically operate as they wish as long as at the end of
the year, they were on the hook for making sure the PAL
limits haan t been exceeded?
MR. BRAY: I think we are
definitely close to that. There are two programs that do
interact with this, of course. One is the New Source
Review program, minor New Source Review where a State
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would be looking at new construction and modifications
to make sure they stayed consistent with SIP limits and
ambient standards.
And then Title V. of course, has a lot of procedures
dealing with permit modifications, off-permit changes
and those types of things that would interact with this
So, there may be certain Title V hoops that could come
into play, depending on how your permit is written.
That is a scenario that we do have a lot more work
to look at and try and figure out what interactions are
going to occur through that program.
MS.STINSON: DonTheiler?
MR. THEILER: Two
questions. One is, as this is envisioned, is this
envisioned to be a system that is optional on a facility by
facility basis? In other words, if the source and the
State elect to get into it, they can do it. Otherwise, you
stay with the existing system. Or would it be required
for all major sources within an air quality region? That
is the first question.
The second is, if a source is then in a PAL, is it then
that any increase, no matter how small, would trigger
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New Source Review?
MR. BRAY: Okay, let me
answer that, the first question first. It is definitely an
issue that we are looking at. We have narrowed it down
to, I think, a recommendation that it couldn't be done on
a source-by-source basis, because the system would
clearly not function from the standpoint of PALs being
adequate to ensure attainment and maintenance and
consistency with the SIP if some sources weren't
constrained. How would you evaluate whether.one PAL
was good enough or not without the other sources being
in the system?
So, we have pretty much dropped that out of the
possible realm of approaches, but we are still debating on
whether or not it is something that would be mandatory
and all States would have to go over to it, whether it
would be optional, whether it could be instituted on, for
example, a nonattainment area-by-nonattainment area
basis as the control strategies are developed and the
source's emission level as projected as part of that
control strategy demonstration.
Those are all issues that are on the table for
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discussion and recommendation.
The second question was?
MR. THEILER: Was the
increase. There is no de minimis?
MR. BRAY: Again, that is
another area that there needs to be decisions made on
.whether it would continue some sort of de minimis
approach or some sort of exclusions. The tentative
recommendation of the subgroup is that there would be
no such de minimis levels, that any increase over the PAL
would trigger New Source Review for that amount of
increase.
And that would deal with one of the issues that has
always caused some air quality problems which is the
slow growth that can occur which is not reviewed under
the permit programs.
MS. STINSON: Dave
Hawkins?
MR. HAWKINS: I have a
question about how this program would interact with air
quality redes i gnat ions, and if you have monitoring
showing apparent attainment but these PAL limits are
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significantly greater than the actual emissions at the
time that that monitoring is being conducted, how would
that affect an area's ability to redesignate?
And the second question I have is, are increases in
a PAL limit changes that would require a permit revision
under EPA's permit program rules?
MR. BRAY: I think the first
question, I don't think the PAL approach would do
anything to affect the current 107 requirements for the
demonstration needed for redesignation. I mean, clearly,
the requirement there is that the State or local agency
has to show that the emission reductions were actually
caused by the control strategy.
I don't think it weakens in any way and, in fact,
probably improves the existing situation where generic
SIP limits are. you know, up. a lot of times way above
actual emissions from sources. This would not change in
any way the requirement to show that the SIP really does
result in attainment and it is not actual emissions or
meteorology flukes that have resulted in the low emission
levels.
The second question is yes, that the tentative
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recommendation of the work group is that any increase in
the PAL that is not done through a New Source Review
permitting process would be a significant modification
under the Title V program and would get reviewed in that
arena. That is, again, something that will be discussed
and coming up a little later.
MS. STINSON: Mike Barr?
MR. BARR: How, if a PAL
was set on the basis of actual emissions, how would that
adversely affect an area's air quality attainment
demonstration for attainment status? In that
circumstance, why couldn't an individual source elect a
PAL?
MR. BRAY: I guess if it
elected the PAL at the actual emissions level. I mean,
that is an option we haven't discussed or looked at, but
there is a possibility there.
It would have difficulty demonstrating a higher PAL
without an overall area-wide analysis and a
demonstration that everything together would protect
standards or increments.
MS. STINSON: John Daniel?
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MR. DANIEL: Dave, I guess
my concern about this system, and 1 hope you will tell me
I am wrong, but I can foresee it being used as a
mechanism for somebody shutting down an old
uncontrolled unit of some kind and putting in a brand
new, improved, modified, uncontrolled unit, and that
gives me some concern,. because when a new unit goes
in, it ought to have state-of-the-art controls on it.
MR. BRAY: Shouldn ' t it get
the Baldridge Award if it does that?
MR. DANIEL: Well, if you
put controls on the new unit, then it would make room for
itself to do something else in that facility later on, but I
can't see taking out an old uncontrolled boiler and
putting in a new uncontrolled boiler, for example, at a
facility. I have a got a real problem with that.
MS. STINSON: So, we are
getting into comments, and over-arching comments are
good, but don't forget we are going to get into
discussion of the specific areas which may clarify some
of your concerns.
MR. BRAY: And this is one
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of the areas that we do have...there is a lot of differing
opinions even within EPA on. you know, to what extent
this would change or create more opportunities like that
than the current system, because the current system still
allows for that. I mean, if you get the right amount of
netting credits, you can still put in an uncontrolled
system if it is not subject to NSPS or M ACT or some
other requirement that applies regardless of the
permitting program.
MS. STINSON: Bill?
MR. PEDERSEN: I would
like to really question this tentative conclusion that you
can have an all-PAL system but you can't have individual
sources with caps in the netting system.
It seems to me that even taking the paper at face
value, it would take years to implement, to write and
issue the emission caps. I mean, I think we will be
coming back to some of these issues in different modes
as we go on. but is everyone going to be in limbo during
that process of issuing while some sources have caps and
others don't?
And I think it will become apparent as we discuss
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this issue that the only way it is ever going to happen, if
it is going to happen, is for it to grow up gradually, sort
of organically, through the workings of other Clean Air
Act programs which means that if you want it, you have
got to create room for it to grow up gradually and
organically.
Finally, it would be a change from the current
system that I can't see any warrant for. The current
rules...I mean, Mike was sort of suggesting this...allow
you to have a cap, allow the agency to presume that your
source-specific allowables are your actuals, and some
sources, although not nearly as many as you would think
from reading the regulations, do, in fact, operate that
way today, and I haven't heard that anyone is
discontented with that.
In terms of your own matrix, the only way you can
get a cap in advance of all these air quality
demonstrations is to come in at your actuals. Well, what
is wrong with that? Why couldn't you have five sources
in at their actuals if they so wished and the rest under
some other system.
And then if you have an air quality demonstration.
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what is wrong with sources plugging themselves into that
demonstration in a cap format and thereby each one
individually being entitled to use the cap?
MS.STINSON: Leslie Ritts?
If you can, introduce yourself and your affiliation for
folks.
MS. RITTS: I am Leslie
Ritts with Chadborn & Parks, and I am...
MS. STINSON: Can you
speak a little closer to the mic?
MS. RITTS: ...counsel to
the NEDA project. I also provide air counseling
assistance to AFPA, the American Forest and Paper
Association.
My question really goes to the policy of this, and
some people might accuse me of sounding like John
Quarles on this issue on NSR, but aren t you putting the
cart before the horse? Isn't the PAL system really the
way to solve your air quality management problems, not
the New Source Review problems? Have you analyzed
this under Title I?
MR. BRAY: Well, again. |
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think the approach here is that the PALs would be set at
the appropriate levels that the air quality management
system has already decided on. Clearly, in nonattainment
areas, the Clean Air Act has set up a process and a
program for doing all the air quality analysis work that
would be the necessary foot or foundation for putting
PALs in effect in those areas.
In the attainment areas, there really hasn't been an
effort since 77 to really fulfill the requirements of 160
to really go out and find out if you have got controls that
would protect increments.
And that is why one of the major issues to be
discussed is what approaches and what methods would
we use to set PALs in those areas. And you are right.
Maybe it is putting the cart before the horse, but the
horse was supposed to have been out there years ago and
hasn't been.
MS. STINSON: If you would
like to think about that, Leslie, and elaborate for yourself
why and how it strikes you that way.
Chuck?
MR. KNAUSS: Yes, there
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was an earlier comment about the existing exclusion and
the hours of operation. I would like ask the relationship
of this to an exclusion we talked about just before lunch
which is pollution control, in particular, for example, if
you are putting on a MACT-required incinerator and you
have a NOx increase.
I noted in your initial goals simplification as
determining applicability. I think we also had as an
objective this morning, at least by many, that NSR is
currently overbroad. And I would like to know in
particular now, particularly with pollution control, how
you see this as not perpetuating that overbroadness.
MR. BRAY: Well, I guess we
hadn't reached the point yet of deciding one way or the
other whether we would add additional exclusions, I
mean, what elements would be valid exclusions from this
system for raising the cap without going through New
Source Review.
We clearly have proposed some approaches for
raising the cap for certain changes that wouldn't trigger
New Source Review. For example, your just
straightforward increases in hours of operation that
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would be reviewed as an increase in emissions to see if
it is consistent with the SIP, but it wouldn't trigger New
Source Review.
Pollution control projects and things are in that
category of things we are still looking at for how we
would want to treat, whether that is a New Source
Review action or simply, a cap increase.
MS. STINSON: Chris
Shaver?
MS. SHAVER: The way I see
it, I mean, this is basically a bubble except that the cap
may be different than your actual emissions in a
nonattainment area. It may be lower than what you have
right now, because you need to reduce.
As a result of getting offsetting, so to speak,
emissions within your plant, you can avoid a technology-
based requirement related to New Source Review.
Are there any protections going to be built into the
system, then, maybe other than the definition of source,
to avoid that same concept then being extended beyond
the plant boundaries? I don't know whether that would
be good or bad, but the idea of a source being able to go
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somewhere else and get someone else to reduce their
cap, PAL cap, so-that they can avoid installing pollution
control when they build, is that the next step here?
MR. BRAY: That is
definitely not anything we have looked at. I mean,
clearly, the definition of source and what a major
modification to a sourcer is would restrain inter-source
trading unless there are some major changes to the whole
approach, but that has not been envisioned in -any way.
MS. STINSON: Ernie?
MR. ROSENBERG: I just had
a clarification question. I am not sure, Dave, were
you...Dave Hawkins, were you asking about what the
permit requirements would be if the PAL cap was broken
or just simply internal caps were moved around?
MR. HAWKINS: | Was
asking about a proposal to increase the cap.
MR. ROSENBERG: What
would be the answer on a change that didn t break the
facility-wide cap but that it, in effect, traded internally?
MR. BRAY: Okay. I think-
that I didn't mention that. If the internal action involved
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new construction or modification of the units within the
plant, then there is a chance it would be subject to
existing State minor New Source Review programs for
review and approval of that construction.
Changes that weren't subject to that program
requirement would be done through the Title V processes,
either as off-permit activities that would go in at renewal
or minor permit, significant, depending on what the
change is and what the implications are.
And that program will sort of trump everything else
from the standpoint of changes to enforceable conditions
in the permit, and whatever changes need to be done
would be done in accordance with whatever part of that
program applies to you.
MR. HAWKINS: Dave
Hawkins?
MR. HAWKINS: A c o u p I e o f
questions about the incentives that may spin out of this
system.
On the question of allowing this program to be
implemented on a source-by-source basis, is there a
problem of a preferential selection factor operating so
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that those sources that anticipate no increases in actual
emissions over some future period would opt in and all
the other ones would stay out. and you wouldn't get the
benefits of capping emission increases on the ones that
you really wanted to cap emission increases on? That is
the first question .
The second question is with respect to having a PAL
limit based on something higher than actual. Does that
create an incentive for facilities to go before the State
agencies or EPA and argue for even more lenient limits
than they might normally argue for in order to maximize
their PAL limits?
MR. BRAY: I think we are
starting to get into the specific issue of the next section.
MS. STINSON : Okay. Well,
let's take a last few comments, and. John, I was going to
let you ask your question, if you would like.
MR. PAUL: Well, mine is
pretty close to that. I see an advantage for existing
sources to establish a PAL on an allowable basis and'tie
up future growth. Obviously, that advantage wouldn't be
there for a greenfield source.
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Also, I wonder if we take away...essentially, we are
taking away offset ratios and other things for existing
plants on modifications. Therefore, we are not offsetting
minor source growth.
So, the way, you know, I as a local regulator see
this, is it always a zero sum game. If you take it away
from one place, we hav-e got to make it up somewhere
else. So, I just wanted to make that comment.
MS. STINSON: Jack
Mc CI u re ?
MR. MCCLURE: Just one
clarification question. Do you envision that the cap
would be reviewed upon renewal of a Title V permit, or
would this be under constant review or what?
MR. BRAY: That i s o n e o f
the issues that is on the table here, as Bill mentioned, on
the contemporaneity issue about Alabama Power. Should
the cap be reviewed at some five-year renewal cycle like
the Title V program, and, if so, if we review it, what do
we intend to do at that review? And there are a number
of options at that point. We will get to those as well.
MS. STINSON: Dick?
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MR. PENNA: This is a
follow-up to the question that Chuck had asked earlier,
that is. if there is a pollution prevention exemption
folded into this thing and you do have an increase, say,
in NOX, now is that going to be handled under Title V ?
MS. STINSON: Dave?
MR. MCA V O Y: I have a
clarifying question. It seems like in talking about this,
you are assuming that minor New Source Review
permitting Will be used to track all these changes. I am
wondering. Several States are looking at integrating
their minor New Source Review with Title V operational
flexibility. In fact. EPA encouraged that in their
preamble.
I am wondering, would you allow this plantwide PAL
limit approach to take place for operational changes
where the only tracking would be seven-day advance
notices? If not, are you considering the fact that States
may be coming up with some novel approaches to what
their construction programs have been in the past?
MS. STINSON: Another
topic for discussion, or did you want to respond?
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MR. BRAY: That i s g o i n g t o
be covered a little bit later, not to the exact point that
you brought up, but yes, I think the seven-day notice
concept and things are some of the issues that we were
looking at for implementing changes under the cap. To
what extent that laps over into different approaches to
minor source New Source Review is something we hadn't
discussed.
Like I say, the presumption in setting this up is that
this program per se wouldn't change any of the existing
minor New Source Review requirements. Whether there
are other things out there that are entertaining changes
to those, we would have to look at that and how it would
work with this.
MS. STINSON: Mike?
MR. BARR: Yes, I think that
it would be helpful for EPA to look at some of the
incentives and disincentives created by this system,
particularly as compared to the current system which has
a tendency to encourage plants to either use their
emissions or lose them which is certainly
counterproductive to environmental goals.
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But my question, Dave, is whether you have looked
at some of the actual practice in areas that have
experimented with all or most of a PAL type system to
see whether there have been barriers or incentives for
new plants, modernizations, et cetera.
MR. BRAY: Well. I myself
am not too familiar with anything outside of the Oregon
program. The experience with the Oregon program which
set all the PALs at actual emissions baseline levels, to my
knowledge, has not been an extremely adverse impact on
industry's modifications and expansions.
Part of that may be due to the fact that Oregon has
very few nonattainment areas, and they are very small in
size, and there is not a whole universe of sources, you
know, going through the nonattainment area rules and, of
course, the lower size threshold levels that the new
Clean Air Act will be bringing into play.
So, experience elsewhere may be somewhat
different than the Oregon program, but sources have
found generally that their actual emissions baseline has
provided a lot of opportunities for reductions to stay
below their caps.
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MS. STINSON: Okay, let's
take your question, Bill, and then we will move on to
more specific PAL issues.
MR. LEWIS: I just have one
observation. As we talk about this, it seems to me it is
becoming fairly clear that this really is more of an air
quality management approach than a substitute for the
New Source Review program as we currently have it.
And as I listen to the discussion, John Paul's
concern is the fact that the caps will be set at potential
emissions. My concern for a lot of my clients is that it
will be set at actual emissions. And Dave Hawkins was
expressing concerns about what kind of advantages we
would get for improving air quality in areas by capping
emissions on sources that want to grow.
All of those issues, really, are related to air quality
management much more so than they are New Source
Review as the Clean Air Act currently envisions it.
MS. STINSON: Okay. With
that, let me point out that I think that people have raised
a number of interesting questions, things that form and
shape our discussion this afternoon. So, keep track of
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the questions that you posed and make sure that we get
back to the ones that you consider to be relevant after
we go through our next period of presentation.
Dave?
MR. BRAY: We sort of
lumped all of these issues into four categories, and I
think almost everything that everybody has thrown out
falls into these, and this is sort of the outline of the
direction we will go through them.
Issues in establishing the PALS, both the baselines
for determining the initial PAL and approaches for
changing them. There are issues of practical
enforceability, what sort of additional requirements may
need to be imposed to ensure that compliance with the
PALs can be verified.
And the demonstrations, air quality demonstrations
and whatever, that would be needed if PALs are set or
changed at a later date to levels that are different than
that which is currently envisioned by the control
strategies.
The second main area of issues are changes that are
not subject to major source PSD New Source Review
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physical changes that would be done under the cap,
operational changes, operational flexibility, exclusions,
emissions trading both within SIP programs and written
directly into the permit, and, again, the adjustments to
PALs that don't involve a type of change that we would
consider to be a new source permitting activity.
Issues involved with changes that would be subject
to PSD New Source Review, and this gets to the concepts
of what exclusions there might be for pollution control
projects. Federally mandated fuel switches, definitions of
significance or de minimis levels and whether there
should be any, interaction with Section 182 requirements
for serious and above ozone areas and how PAL might or
might not work with those programs.
Then, finally, interface with Title V and what sort of
Title V baggage might come along with doing any of these
changes, both under and above the PAL.
So, this basically, this outline from here on out.
really follows the outline in the paper that you have. So,
there is a detailed discussion of these things in the
paper, and, hopefully, you read the previous version even
though there is the new one you have just gotten, and
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Bill can kick in when he wants to on identifying any
significant changes.
MR. LAMASON: ljust would
make a general comment about the paper. To my best
recollection, several drafts back is the one you got from
the one you have in front of you today in terms of what
I have been working on but it is my best recollection
most of the changes are editorial, trying to improve the
readability, perhaps more accurately convey the sense of
the group.
There is only one area, looking back at the paper
that I am aware of that we might have made a substantive
change, and if we get to that point, I will raise it at that
time.
MS. STINSON: Thank you
for that process recommendation.
MR. LAMASON: I will try
next time.
MR. BRAY: I guess the
general requirements issue we have pretty well discussed
here. The concept was that the PALs would be
established consistent with the air quality maintenance
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objectives of the area, the air quality planning objectives
for the area.
They would clearly be trumped or...I don't know if
trumped is the right word, but in setting the PAL's
compliance with all applicable requirements for the
source that otherwise exist out there, SIP limits, RACT,
previous BACT determinations, NSPS, MACT standards,
whatever, would be factored into the determination of
the PAL, and there are just some general ideas that go
along with coming up with the number.
For discussion purposes, we have broken the
process or the issues related to establishing PALs into
those for nonattainment areas and for attainment areas,
primarily because, of course, the air quality management
objectives are substantially different.
Nonattainment areas are starting out with the
presumption that there is too much emissions in the
airshed anyway, too much from the actual emissions that
are going into the air, and that the State or local agency
has the responsibility of figuring out the best mix of
controls and the best level of emissions for all of the
sources contributing to the problem.
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The PAL would be established essentially at the end
result or at the end of that process. Once the air quality
management objectives are determined, once the amount
of emissions at all sources would be allowed to
contribute to the airshed, the PAL for the major sources
in this program would be based off of their projections in
the inventory or in the control strategy.
Now, of course, that creates some issues with
respect to what do we do before a control strategy is
developed, you know, should there be...can the PAL
program still function in that time period?
And the paper goes through some of the options that
we have looked at there for using a default to the '90
baseline emission inventory that was prepared, or if an
emission inventory is underway using the number in a
preliminary inventory, or if there is no inventory yet
defaulting to an actual emissions baseline, highest two
out of five or something like that.
So, all of those issues are discussed here, and we
definitely want to hear concerns and ideas and
recommendations on them. Let me run through all of the
issues, and then we will open it up here.
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For sources in attainment areas, because the
statutory direction is to ensure good air quality stays
good up to a certain extent with the PSD increments sort
of capping the amount of degradation, we felt there was
a lot more flexibility for State and local agencies to make
decisions on air quality management.
That includes how much degradation they want to
allow from existing sources versus how much room for
growth they want to have, and exactly what process or
timing they use to go through this type of approach in
deciding whether caps should be based at current actual
or source-by-source or area-by area levels above the
current actuals.
So, we in this paper provided for a number of
opportunities and a number of approaches for setting
them, all of which tie back to the basic issue of making
sure that those levels, those PALs. whatever they are set
at are consistent with the protection of standards and
increments.
We looked at the resource burdens and things that
would be associated with trying to do area-wide
demonstrations or even source-specific demonstrations
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and felt that maybe a good approach, sort of an
administrative compromise, would be to allow for the
system to default to current actual emissions, essentially
the same sort of highest two out of five approach that
Dave talked about earlier for our current system.
And that would be somewhat of a level playing field
transition from the currejnt program to the new program
and then allow...essentially set up a system so that those
initial PALs could be adjusted by the State agency or
local agency or the source through the appropriate
modeling demonstrations.
That would ease the initial burden of getting into the
system but still provide the flexibility for sources to
increase their PALs up to their physical potential to emit
or something in between current actuals and physical
potential depending upon what their needs are.
But again, there are a lot of issues there on the
demonstrations, a lot of issues for State and local
agencies in air quality management decisions, because
you are sort of forced at this point to make a public
policy call as to whether or not you would be willing to
allow the whole increment to be tied up by the existing
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sources, whether you want to provide a certain amount
of growth for new greenfield facilities coming into the
area, or whether you want to just leave it where it is and
let the only growth that occurs be growth through the
permitting processes.
New greenfield sources we thought were pretty
straightforward. This is one area where we didn't find
too much controversy in that, of course, there is no
existing source. Therefore, there can be no cap and
nothing to trade against.
Those new major sources that went through the PSD
or Part D permitting program would have the cap
established as part of that New Source Review process,
and that would transition into the operating permit
whenever that is issued by the permitting authority.
Enforceability, of course, is a bugaboo area,
because what we are working with is, you know, all sorts
of pollutants that are emitting from all different types of
processes and release points by plants that range from,
you know, a major source that is simply an unmanned
natural gas compressor or pump station to the
pharmaceutical and chemical industries.
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Enforceability is something that we talk about more
in terms of policy as opposed to practical
recommendations at this point, because every source, I
think, will be different. The opportunities for emissions
monitoring and process monitoring, surrogates for those,
all of those would probably have to be determined on a
case-by-case basis simply because it is going to be
difficult to put anything down on paper that we could say
applied to everybody other than the principles for what
we are looking for.
Again here, the resource burden on the industry as
to what might be required, the issue of whether or not we
need sub-PALs, you know groups that individual units
with their own caps or groups of units with caps if that
is really what is needed to ensure that you can verify
compliance, all of those issues are things that we are
still discussing and want to hear input on.
MS. STINSON: Did you have
a question?
M R. MILLER* Barbara
would it be possible to, as we go through one area, to
take questions on that area? Because I think it is going
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to get really complex if we go through all these issues.
For example, could we ask questions on establishing
the limits?
MS. STINSON: Sure.
MR. MILLER: And then ask
questions on enforceability rather than fitting every area
in at the end?
MR. BRAY: F i r e a w a y .
MR. MILLER: I want to
make sure I understand how your PAL limits are
established for attainment areas.
As I read this paper, I came away with the
presumption that the State has to make a decision as to
whether it is going to establish the plant limits on
actuals or whether, if it is going to use something other
than the actuals, how much of the allowable increment it
is going to reserve for the sources in a particular airshed
and who is going to get what.
Is that correct, first of all?
MR. BRAY: Yes, I think that
is correct. I mean, the decision initially would have to be
made by them as to which approach they would want to
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go with.
The presumption that we took into this...and maybe
it is a little bit with blinders on...is that the current
system, the current requirements that have been out
there under 51:166(a) is that States have been managing
the increment to date, and the current actual emissions
of sources, you know, w-ould essentially be a rebuttable
presumption, but we would presume that that is adequate
to protect increments, and if they want to go into the
system at that level, we wouldn't require any further
analysis for those attainment areas.
But to the extent they want to go above those
levels, at that point, we would look at some sort of
demonstration to show that that level of emissions would
not violate increments or standards.
MR. MILLER: Well, | see
incredible problems...
MS. STINSON: Can you
move a little closer to your mic, Bruce?
MR. MILLER: I see very
large problems both ways. I guess if they do it at actual
I see the problem that was one of the things I thought
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from the August meeting we were trying to avoid which
is that people don't want to constrain their ability to
grow in the future, you know, in order to get out of PSD
or New Source...PSD in this case.. .review .
So, that wouldn't be accomplished, you know is
what I am trying to say, under any circumstance.
If you take the second approach, we talked to our
States about this, and their concern is you have asked
them to go...if this is New Source Review or PSD
simplification, you have asked them to go through
political hell deciding who it is that is going to get what
part of the increment forever more in order to avoid the
kind of problems that we have seen with sources that we
would prefer not to get sucked into the process that
somehow do get out of it.
So, under either scenario...! guess it works a little
better for nonattainment areas, but for attainment areas,
it seems to me like whichever approach you take, you
have got a major stumbling block.
MR. BRAY: I guess the
question becomes is if the opportunity is there for a
source to go above that actual baseline with some
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demonstration that is palatable and that increase would
not trigger New Source Review, would not subject them
to BACT and the PSD program for increasing the cap just
to accommodate their existing physical potential, would
that ameliorate that concern? Could we get the program
on the ground and running by starting with the current
actuals but having a system there that would allow for
that to be increased?
I mean it takes the political heat off the States,
because they don't have to be the one deciding. They
could let it be a first come, first serve queue system
approach.
MR. MILLER: I mean, David,
I am not sure it does, because if you start with that
presumption, the source is not in any way protected that
it has any growth which it has under the present system.
I just can't...I mean, there are a thousand industry
people here, but...I am not sure that I need to speak to
whether they would be willing to give that away. At
least our States don't think they would be. As a result,
they think there would be a lot of political heat if you
want to this kind of system.
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MS. STINSON: I think at
this point I want to remind us that we are not going to
solve the problems that we raise here probably. What we
are trying to do is shape the agenda and give the agency
some advice to the question which is does this system
even warrant further investigation, does it have some
positive aspects, some- useful ones, does it not, et
cetera.
So, that being kind of the...I think that is the shape
of the questions that we are trying to address in our
discussion.
Let me ask, Don, is that current? Did you have a
comment?
MR. THEILER: That is
current.
MS. STINSON: Okay.
MR. THEILER: I mean, it is
old, but it is current.
MS. STINSON: Now it is
really old. Thank you for waiting.
MR. THEILER: Sure. The
point I would like to make is for nonattainment areas.
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Using anything except actuals will establish a PAL, it
seems to me, and I can't envision how it would possibly
work, given the situations we are facing.
It could work in S02 nonattainment areas. It could
work, possibly. in particulate nonattainment areas, but
when you are dealing with ozone which is the big ticket
item these days, you have to deal with actual.
And then establishing PALs based on actual, |
cannot believe the people around this table would sit still
for it for one minute. 1 have dealt with this for 12 years
in Wisconsin, and any time you talk about capping
existing sources at their existing levels of emissions and
not allow them to utilize their capacity given their
allowable emission rates, every.time that comes up, they
say take my first born. You are not going to do that.
I can't imagine that the people around this table
would sit still for a PAL based on actuals in
nonattainment areas. And if you base it on potentials,
you are going to destroy our plans for attainment.
I don't see that it can work at all in nonattainment
areas.
MS. STINSON: Okay.
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Clearly, we have got some sticky problems here. Let's go
to Molly .
MS. ROSS: Just to
complicate it a little bit further, and maybe some of you
can expect this comment from things I have already
talked about, we are talking in attainment areas. We
would also like a consideration that should be there now
that I think is implied, and that is that we are not just
talking about increments and NAAQS; we are also talking
about adverse impacts on resources which is a qualifier
to increments.
A final thought on that is I don't see the bright
line...
MS. STINSON: Can you
speak a little closer to your mic?
MS. ROSS: Yes. Idon'tsee
the bright line between New Source Review and air
quality management plans that has been suggested,
starting with the PSD purpose of it is a system to help
get to, actual or potential adverse effects
notwithstanding, attainment or maintenance of NAAQS.
So, that just, I know, complicates all these issues a
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little bit more.
MS. STINSON: John Paul?
MR. PAUL: Well, I wanted
to agree with Don Theiler. I think SO this works real
well. In particulate, it would work real well. In ozone,
it would not.
Our biggest concern is over controls.
And let me also say, Dave, that, you know, |
appreciate the fact that you guys had a very hard project
and that putting a lot of time into that and then bringing
it before a group and getting nothing but rejection would
be very, you know, disheartening. So, I...
MS. STINSON: Well, it is
not done yet.
MR. PAUL: Well, but my
point is that, you know, we need to structure our
comments so that they are helpful.
One thing that strikes me is that all of the questions
that we hear and the comments that we hear, very rarely
is there a question or a comment with regard to control
equipment or with regard to air quality, but so many of
the questions, comments, concerns, complaints have to
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do with the procedures, with the paperwork.
And I think that is what we need to simplify is the
paperwork. You know that we want good controls on
new sources. We want the air quality to be protected,
and we need to simplify the process to get at those
objectives but not to exempt sources from those
objectives.
MS. STINSON: Dave
Jordan?
MR. JORDAN: Two
questions. One for in a nonattainment area when you
talk about an approved plan. For an area that is going
through redesignation, that would be the maintenance
plan then ?
MR. BRAY: Correct.
MR. JORDAN: Okay. Now,
let's look at an attainment area, then, and in establishing
a PAL...this is kind of a hypothetical question. In
establishing a PAL for a source that would want to go
higher than what its actual emissions are, do you run the
risk in doing that analysis that you can, modeling, find an
air quality problem with existing actual emissions?
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MR. BRAY: That is a risk
you always have anytime you do a detailed study
modeling or monitoring.
MR. JORDAN: But I am
saying in going through the PAL, you are establishing a
process where you are setting a baseline where you may
not even have a source that is contemplating doing
anything.
MR. BRAY: Yes. I mean,
like I said, our default approach was built around the
presumption that, you know, we just went through all the
air quality designations under the Act.
The States under the SIP are supposed to have been
keeping track of increment consumption, and we would
use a rebuttal presumptive approach that everything is
okay out there right now, but as soon as you get into the
further demonstrations or further analyses, you may find
that it is not the case, and you may find a new
nonattainment problem that will get kicked into the Part
D program. There is always that chance.
MS. STINSON: Vivian?
MS. MCINTIRE: Yes. I was
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waiting for clarification and perhaps it will come later,
but we have talked about increment, and I am curious,
are we talking about the same increment in PSO that we
now have?
And how do you treat sources who have turned in
PSD applications and consumed a certain portion of that
allowable increment? Is it now free game? I mean, do
you have to give up that increment and go back to your
actual, or how do you plan on treating the current
increment system?
MR. BRAY: Definitely no
one envisioned that it would change the existing
increment system. The increments are established in the
Act or by EPA rulemaking, hopefully soon, for PM-10.
Sources that have PSD permits were reviewed and were
permitted in compliance with that.
We do in the paper discuss, you know, allowing
sources to default to their PSD permit if that is a recent
permit issued in that last five-year period instead of
using their actual emissions.
One of the issues that is in there that we have
looked at is what about really old PSD permits and
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sources that really don't have a current analysis of air
quality impacts, and should those get their PSD permit
allowable, or should those be based on an actual
emissions default until that analysis is reevaluated?
MS. MCINTIRE: But in the
increment system, you assumed a baseline at some point.
MR. BRAY: Right.
MS. MCINTIRE: And only
things permitted after that baseline consumed increment.
MR. BRAY: N o , a 11 e m i s s i o n
increases and decreases from all sources consumed
increment after that.
MS. MCINTIRE: Right, but
you had a permitted level and not actual, and now. it
seems to me that you are kind of changing the rules of
the game with increments. Perhaps I just don't
understand.
MR. BRAY: Well, it is not
so much we are changing the rules of the game. We are
looking at maybe having a reevaluation of whether or not
that source should still be allowed to have its fun
permitted level if it has never actually emitted at that.
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because its actual emissions are what are affecting
current air quality and would need numbers that might be
reviewed for a new PSD source coming into the area
rather than their permitted emissions.
MS. STINSON: Bill
Pedersen?
MR. PEDERSEN: I do think
that we need to sort out the New Source Review
consequences of caps, because I think that there may be
a trend for other reasons to more caps under the new
Clean Air Act. and it would be too bad not to treat them
appropriately.
But I think this discussion is making crystal clear
that caps are not a means of New Source Review reform,
that as Leslie said, they are an air quality management
tool.
You know, you can look at the two ways of setting
the PALs that have been proposed, one before you have
your air quality demonstration and the other after.
The rules that are proposed for setting the PAL
before the air quality demonstration is in would leave
sources much, much worse then they are under the
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present rules, because your past actuals which are just
a rule for doing your arithmetic now would be converted
into legally binding limits.
So, you would lose your ability to change your
production rate or hours of operations. You would lose
your fuel switch ability.
In addition, in those cases where the current law
allows you to use an accounting system other than
actual-to-potential now would be wiped out and there
are two that are pretty important. One, as we have
heard, is for a unit that has begun normal operations.
And I know those words are frowned upon, but, in
fact, our legal title to make that argument is impeccable.
And the other is a source that has netted out already
to bring in a unit and has accepted an allowable cap on a
unit in order to bring in an equal amount of actual
emissions. That allowable unit has already been cashed
out as actuals and should be your baseline.
Plus, I don't see any practical or legal way, two
separate things, that EPA can come close to compelling
sources to accept caps, particularly in the year.
I agree, if your cap is consistent with your
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attainment demonstration or your PSD demonstration, it
should be whatever numbers are consistent, but how
many issues are buried under that? I mean, we are just
beginning to surface them, and the economic incentive
program will, as you can see. Two surface. One, with a
cap, can you use a longer averaging time, a 30-day
averaging time?
Another, with a cap-based attainment system, can
you have the allowables greater than the actuals,
because the allowables will always be greater than the
actuals and rely on their moving in lock-step to get you
down to attainment?
If we are going to have a cap-based system, there
are many other issues that could be addressed, but they
should be addressed as cap issues ana not as New Source
Review reform issues.
As I say, I am not against caps. I think that they are
coming to some greater extent, but we won't have these
issues of air quality management even answered by 1998
much less have cap systems that embody them.
MS. STINSON: Dave
Hawkins?
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MR. HAWKINS: I just
wanted to reiterate the concern expressed by John Daniel
that the fact is that this system would allow large new
facilities to be built and to be built without incorporating
state-of-the-art pollution controls. I think the comment
was made that that could happen under the current
system. That is true, and to the extent that is a correct
observation, in my view that indicates one of the big
flaws in the current system, and it shouldn't be off the
table.
That is a problem with the netting out of review as
far as we are concerned, that it can permit -the
construction of new facilities with long lives remaining
that are poorly controlled. And by doing so, it interferes
with one of the premises of the' 1970 law that introduced
the concept of new source controls which is a reduction
in loadings over time as you turn over the industrial
plants of the United States and replace dirtier facilities
with cleaner facilities.
I think it is important to not ignore that benefit and
to just assume it away or to assume it is not a subject for
discussion, because that is a very important defect in
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parts of the existing system and one that would be
solidified with this system.
MS. STINSON: Mike Barr?
MR. BARR: I think what the
discussion shows more clearly than anything else is that
it is risky for EPA to float new ideas, particularly ones
that are creative or significantly different from the
current regulations.
And I would like to again thank, as I have before,
Dave Bray and everybody at EPA who has been willing to
take the risk of putting an idea like this on the table,
because it is an extremely creative one, and it is one
which promises significant benefits to everyone with an
interest in air quality control. New Source Review, and
the entire Title I of the Clean Air Act.
The word imagination was mentioned before and
some discussion of first born from industry. Well, in
California, we are down to our last born, and we are
trying to protect our grandmother, and that is about
where we are.
And this is a good solution in a State that has that
type of a problem. Setting a cap in a nonattainment area
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at an actual level and solving New Source Review within
that cap is a very functional, creative, effective solution
to that type of a problem.
I would challenge every State or regulatory official
to take it seriously and find out a little bit about it. It
may involve a few more administrative resources, but,
you know, the objective- of the Clean Air Act is not to
save administrative resources, obviously, and the price
of the cap to industry may be doing a bit more monitoring
and having a bit more staff and revealing a bit more to
the public so that the public can audit these caps
effectively and so that everybody can be assured that the
environmental benefits are achieved.
But they do have significant benefits in terms of the
economy, and I think it is extremely important to
preserve that option.
I think that the various suggestions we have in the
paper show that there is room for improvement of the
current New Source Review and other systems. There is
also room for making it worse which is why we do need
to get into the details of it significantly more.
Therefore, I would suggest that as a way...I would
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strongly suggest to EPA as a way to get a broader cross-
section and a more effective review of this based upon
actual experience with actual caps in actual areas that it
be put into a more balanced option paper type approach
and handed out to the States and any interested parties
everywhere for comment, specifically comment based
upon experience and examples with cap or PAL type
systems.
MS. STINSON: When you
say option paper, Mike, what do you mean?
MR. BARR: Well, it is an
expansion of this paper but with more of the results of
the discussion, the pros, the cons, the different ways of
solving and approaching issues like practical
enforceability which I hope we get into a little while.
There are a number of different options that have
pros and cons and that, I think, are worthy of
consideration and certainly could be, I think, fleshed out
a lot more based upon the real experience that has
occurred with these types of permits out there in the real
world.
MS. STINSON: If I
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understand your suggestion correctly, you are suggesting
further elaboration on the paper that is presented here,
possibly including some experience reference to options,
et cetera. based on that experience but then
dissemination to States and folks with experience to try
to get more specific feedback?
MR. BARR: Right.
MS. STINSON: Okay. Let's
take a few other comments. Dave McAvoy?
MR. MCAVOY: I, too. think
there is some merit with this approach, and I am
wondering. Dave, we have heard a lot of hypothetical
ideas about the impact of this, but haven t you in Oregon
at least tried to carry this beyond the drawing board, and
I am curious, if you have, what choices you have made
with the attainment areas in your State.
MR. BRAY: Well, actually,
the choices were made by Oregon, but yes, the Oregon
program was developed in 81 and approved by EPA in
83. At that time, the decision that they made was that
they were going to cap all the sources at their...and they
went back in time to their baseline actual emissions.
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So, they went back to the PSD baseline date of '78
for all of the attainment areas. They went back to their
'7 8-'79 emission inventories for their original
nonattainment areas under the 77 Act.
So, those were capped by rule at that time, and the
specific number was incorporated into the State's
operating permits as those permits came up for renewal
over a five-year period.
So, they dealt both with the sort of public policy
decision that they would essentially cap everybody at the
basis for their control strategies, both attainment and
nonattainment, and that they phased it in, essentially,
over a five-year period by putting them in the permits
when they came up for renewal or when the source was
ready to do some sort of permit change.
if the source was ready to do a New Source Review
action, then the came in with, at that time, on a source-
specific basis with their calculations of their baseline
actual emissions so that that number could be
established, and then they would either net out a review
or find themselves subject to PSD or New Source Review
at the time.
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MR. MCAVOY: And what
have the results been in Oregon? Has this proven to be
an unworkable system or a workable one?
MR. BRAY: It is a great
experience. It is a very workable system. Sources either
net out a review or they go through PSD New Source
Reviev Like I say, New Source Review hasn't been a big
issue t because there are so few major sources in New
Source Review areas.
On the other hand, the Oregon program covers every
source in the State, basically, down to those that emit
less than 1 ton per year, and all of those are going
through either State New Source Review for minor
sources or major source review based on their caps.
It seems to be functioning pretty well there. They
do have a provision for increasing the cap. Sources can
come in and do demonstrations.
In nonattainment areas, to increase the cap, they
have to get an offset. They don't go through LAER or
New Source Review, but they do have to offset that
increase so that it stays consistent with the plan. |n
attainment areas, they have to demonstrate standards
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and increments and visibility impact.
There have been some implementation problems
which there always are with new programs. I know the
Sierra Club sued them a year ago and won a case not on
the merits of the rule. The rules were not found to be
deficient, but the State s implementation of the rules for
certain sources was found to be in error which is, you
know, not something that doesn't occur a lot of places
with complicated rules. Every once in a while, you miss
one.
But other than that, the program is running and has
been running well for years.
MS. STINSON: Let's take a
couple more comments. John, you have been waiting a
while.
MR. DANIEL: I guess my
concern is in the air quality demonstration area, and I
guess that means modeling. I would have to agree with
Don that*, ceriainly for nonattainment areas, you have got
to use actual emissions. If you get into attainment
areas, you can probably use something different than
that.
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But when you get into complex terrain, I am
wondering who is going to pay for that air quality
demonstration, because if you don't have existing met
data that you can use...I just found out yesterday that to
run a met tower for a year, depending on what you need,
is going to cost $1 10,000 to $260,000, plus you have
got to run the model after you do that.
I think you will have a real uproar in complex terrain
if you try and deal with something like that.
We have got one place in southwest Virginia where
we can't even get meteorologists to agree on where to
put a met tower that would be representative.
So, I think EPA has got some real creative thinking
to deal with on that, how are they going to tackle that,
that situation.
MS.STINSON: DonTheiler?
MR. THEILER: Just want to
make sure my position is clear. This is an innovative
idea; it is not "necessarily a new idea. I think some of us
have been struggling with it for a long time.
I favor it, as long as it is based on actual emissions
for nonattainment areas. I am just giving you the benefit
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of some of my scars associated with dealing with this
issue.
I think it is a good idea if people can live with it,
and if Michael has already gone through all of his
children down to his grandma, he has got some
experience with it as well.
MS. STINSON: Henry?
MR. NICKEL: Perhaps from
the perspective of someone who is still representing
people that have children, I share the concerns that
others have raised about the fact that we are really
talking about an air management issue here, and I would
like to just kind of follow up on what John just said.
I think, really, with this program, you are talking
about going back to square one with the Clean Air Act
ambient standards programs and PSD programs. You are
talking about remodeling everybody. You are talking
about establishing emission limits that don't exist today
on virtually every source.
That may not be true in California, but it certainly is
true in other parts of the country.
You have all of the problems not only with rugged
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terrain but also with some people using the screening
model that works for them. They will take a limit on that
basis, but someone else feels that the model is overly
conservative, and they have got to go through a model
validation study.
I think that this program has the potential for taking
years and years to be implemented and to tie it to the
New Source Review program, I think, could create chaos
and really would not serve, you know, the ends that we
are talking about.
The final observation I would make is that it is clear
from its inception, it is clear from the Alabama Power
decision that the New Source Review program does not
address all changes that produce emissions increases. It
does not address all new sources of emissions increases.
It addresses a set group of sources and changes, and
I think that this program goes way, way beyond that.
That isn't to say that some of the things that you
are trying to get at in this program aren't legitimate
subjects of concern and attention in terms of how we
administer our SIPs and how we evaluate the
effectiveness of the SIPs, but I think it is very troubling
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to me to see this as something that would take over the
current New Source Review program.
MS. STINSON: Rob?
MR. BRENNER: Well, I
really want to echo the comments that Don Theiler made.
I guess I went into this discussion fairly skeptical
regarding this concept, because I didn't realize until we
got into this how much thought and how much
experience, really, this is based on.
And it strikes me as consistent with a lot of what
else has happened, both in the Act and in trying to figure
out creative ways to implement the Act which is you look
for ways to establish an overall environmental goal or
target and then, by assuring that there is some overall
target that you have some way of measuring whether you
are there, within those constraints, you try and give
sources as much flexibility as possible.
This is very much in line with that kind of approach.
I would say, as we continue the discussion on it, it would
be very helpful to have folks chime in with if this kind of
approach, for example, in the case we have just been
talking about, the use of actuals in nonattainment areas.
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—— — 297
is not an acceptable constraint, is not an acceptable way
of making sure that your overall environmental goal is
met, what is another way to establish that balance?
Because it just doesn't seem very likely we are going
to be able to step in here and create a whole lot of
flexibility without, on the other end, being able to say
well, we put something in place to make people feel like
they are confident that at the end of the day there is
some sort of what we call accountability, some "sort of
measure to ensure that we are continuing to make the
progress we need to make.
So, one way, I think, to continue to make some
progress in this discussion is to see if there are some
other approaches for assuring continued progress.
MS. STINSON: And I am
going to suggest that what we do is take the comments
related to the presentation we have had so far which |
believe, is everybody but Bill's comment and then break
for a brief time. Let us regroup a little bit and
specifically answer this question, getting at what are the
components of this that do make sense and in what kinds
of circumstances like what Mike alluded to in California
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And then, if not this program, then what?
MR. PEDERSEN: Can I speak
to that now?
MS. STINSON: Sure.
MR. PEDERSEN: I a m i n
favor of something like that personally, but in my mind,
the focus...
MS. STINSON: Something
like what?
MR. PEDERSEN: Looking at
how you would solve these problems, but I would say it
really isn't so much of a New Source Review effort as it
is an air quality management effort.
If EPA has decided that caps are the way to go for
air quality management, then you have questions about
the relationship between the cap limits and the
attainment limits, how and to what extent the caps
consume increments, to what extent the caps really will
be one-stop shopping so that your RACT, MACT, et
cetera limits can be subsumed under the cap.
That would be a very interesting discussion, but I
think I would have a concern that making this NSR reform
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effort drive it would mean that there would be other parts
of your program that weren't brought in, and we would
find six months from now that they had different ideas.
MS. STINSON: Molly?
MS. ROSS: And I guess I
would have a concern about going forward with this New
Source Review without tying it to these other things, and
that was the message I tried to present this morning.
New sources are affected by what is out there.
They are affected by NAAQS. Existing sources affect
NAAQS that affect new sources. Same with increments
and same with adverse impacts on air quality-related
values, including visibility.
So, it is hard to deal with one without the other.
The advantage...! want to thank Michael Barr for
changing things around and presenting some positive
things, and I really appreciate what he brings to this
discussion.
I think this is a very complicated issue for all of us
because it threatens all of our interests in one way or
another, and it is difficult for us to consider hovy we are
being affected by it, but. again, to try to stand back to
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get that perspective on it, in the attainment areas which
is an area that I know perhaps a little bit better, this kind
of program gives you the cushion for growth that you
might need.
And if, as a policy...and I think this is John Quarles'
policy as well...you want to do what you can to
encourage new sources, then this might be the quid pro
quo for getting some of that.
The tough issues I see are the ones that Dave
Hawkins has raised and John Daniel. What about the
technology forcing aspect of the Act?
And I think that we have to think long and hard
about how we are going to continue to force technology,
because I don't think even with a wonderful new system
all our air pollution problems will go away, and we will
need to have better technology down the road.
MS. STINSON: Mark
Carney?
MR. CARNEY: Yes, I would
suggest that maybe, taking off on what Mike said, that
instead of going back and writing this in a paper and then
putting it out for public comment is we go back to the
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people that have already had some lessons learned here,
Oregon, for example, and bring up all these issues and
ask them all those questions. Obviously, they have had
to run into these issues unless they had no nonattainment
areas or they had no new sources or, you know, they
wereu t worried about new technology on other sources.
So, I think that would be a good way to learn what
everybody else or Oregon specifically or any of the other
States that have also run into that issue and use that
before we put her out for everybody else to make
comments on.
MS. STINSON:* Another
process suggestion. Chris?
MS. SHAVER: Yes, I just
want to ditto more or less what Mike Barr and Molly just
said in terms of the whole system. I am concerned that
there are people that seem to be gun shy because we are
trying to develop something that looks like it could have
applicability to other parts of the program and actually
try to integrate.New Source Review with the rest of the
system which, I think, is exactly what is needed here.
Otherwise, you just have everybody pointing at each
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other saying it is mobile sources, it is new sources, it is
existing sources, and until we find some way of getting
everybody under the same umbrella and holding them to
the same rules, we are going to be in the same stalemate
we are in right no w.
Along those lines, I think telling people where they
need to get and when they need to be there and giving
them the flexibility to find the most cost-effective way
of doing it-is the only way we are going to advance
technology in this area.
On a more nit-picky point, though, on the for
attainment areas the use of allowable emissions,
assuming the source modeled it. very few sources have
done cumulative increment modeling using allowable
emissions from sources in PSD areas, particularly with
respect to Class I areas, and when that is done, often
violations are found.
So, I would want to see that caveated not that they
just modeled their own impact within their significant
impact area but that a cumulative modeling analysis was
done that showed compliance with increment.
Otherwise, you have a provision for raising their limit.
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You don't have one for lowering it if we now have an
incremental scheme.
MS. STINSON: Bill Lewis?
MR. LEWIS: I wanted to
pick up on what Mark was talking about. It seems to me
we could learn a lot from what the Oregon program has
done, and one question I have is how they have treated
individual emissions units and whether they have
established limits for each of those units and had
continuous monitoring for all of those units and how that
has worked, if they have.
MR. BRAY: I guess the
prime area of challenge in the Sierra Club lawsuit last
year or a year and a half ago was the practical
enforceability. That was one of the main areas of
concern. That was one of the main findings against the
State in that suit was that the State hadn't done what its
rule said with respect to ensuring that there were the
right conditions and permits to ensure practical
enforceability.
So, what the State is doing in response to that
decision is going back over time and updating permits to
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include either unit-specific requirements if that was the
only approach that they could do. A lot of them have
groups of units. There will be a subcap for like all of the
combustion sources, all the boilers in a plant, or things
of that type in there with appropriate monitoring
requirements to be able to certify compliance.
But that was one of the failings of the Oregon
program. It sort of went from conceptually a nice
document on paper to the implementation process over
five to ten years in which, basically, plantwide, single
number ton-per-year caps were written in the permits
without appropriate mechanisms for determining
compliance.
So", that is a main area of concern. Enforceability is
a main area that we do have on the list here for
discussion, but that is part of the practical issues of this
thing.
MR. LEWIS: Just to follow
up, it seems to me that one of the things that that points
out is how long it takes to implement such a program like
this, even in a State such as Oregon which doesn't have
the industry that is in many States.
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Also, I just wanted to pick up as to what my view is
about this, lest anyone misunderstand. I think that this
has some potential as an optional approach, as an
approach for air quality management in areas that need it
and addressing things such as maybe even visibility
issues and other issues.
But as a national policy for New Source Review
uniformly carried out throughout the country, that is
what I personally am raising real concerns about.
MS. STINSON: Ron?
MR. VANMERSBERGEN: I
think I would like to say a few things here just to take a
little bit of the heat off of Dave. There are some of us
also that are guilty of coming up with this, and I share
some of the guilt. I will take my share of the
responsibility for that.
I think we should take a look at our thought with
respect to air quality management tools. We can t totally
separate New Source Review and air quality management.
I think the Clean Air Act makes it rather plain that we are
in air quality management. We have offset ratios up to
1.3:1. That is air quality management.
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We have BACT requirements which means that you
do the best control technology you can within that area
preserving economic growth room. Okay, that is air
quality management.
We have reasonable further progress. That means
that we have to move-towards the standards. You cannot
issue a nonattainment area permit without the RFP being
met. Okay, that is air quality management.
So, I think it is a little unfair to denigrate this
presentation because it does have air quality management
implications, and those implications we have to deal with
when we develop this. We wanted to be assured that we
are not violating any of these air quality management
implications, so we had to deal with some of those.
Now, with respect to...the next comment is with
respect to the control technology. If we are not too
liberal with allowing the PAL to be continually ratcheted
upward, we will generate underneath a market-based type
system air control technology, but if you have a certain
amount of growth room underneath your PAL and you
want to grow more, you may have to do some type of
control.
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Of course, the industry itself would be in the best
position to exercise that.kind of control rather than EPA
dictate it through a BACT/LAER type of situation. So.
that will be there. It might not express itself
immediately, but it would express itself when that
growth margin underneath the cap or PAL is used up.
Thank y.o u .
MS. STINSON: Leslie?
MS. RITTS: I wanted to
clarify my original question to Dave and...
MS. STINSON: Just a little
closer to your mic, if you don't mind.
MS. RITTSi Okay...clarify
my question to Dave originally and point out what my
objection is about trying to fix air quality management
with New Source Review.
Perhaps you have considered where the
transportation control management is and the mobile
sources are and this whole picture so that there is some
equity between what people have to give up in terms of
New Source Review caps and attaining the standards, but
that isn't evident in the presentation, and that was what
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my question was.
Are you going to get some...are you going to create
caps for mobile sources, and what happens to
transportation control management where the really
tough political decisions are?
MR. BRAY: Well, I think the
concept that we have for nonattainment areas was that
the freedom would still be there the way it is today for
State or local agencies to figure out what best mix of
controls does the job for them.
If that is, you know, extremely tough transportation
plans or whether they still want to take, you know, the
last bite out of the apple for the industrial sources in
their airshed, this would not infringe upon that or do
anything to that current flexibility, but the cap would be
set at the end of the process that they go through to
come up with that strategy at the level that they decide. j
And that process is a public process. Everybody
gets a chance to weigh in during that decision making at
the State or local agency level as to who gets controlled
and how much to achieve the standards.
This cap would iust reflect that. It wouldn't direct
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309
it in any way. It wouldn't impose any additional
requirements on that. It would just reflect what comes
out of that process.
MS. RITTS: But if the
baselines are set on 1990 actuals as suggested in the
discussion of the nonattainment portion of this
document, then that is rtot true, because it doesn't...it
should be allowable.
MR. BRAY: That is what we
are saying. It is not the actual inventory. It is the
numbers in the air quality demonstration.
The actuals was a default that might occur in the
intervening period between when...if this program kicked
in...actually, because of the timing and everybody has
pointed out that this couldn't happen for quite a few
years, hopefully, all of the first round of planning under
the Clean Air Act will be completed, and we will have
attainment demonstrations in.
And the first round of caps for nonattainment areas
could come right out of the demonstration numbers and
not ever default to the actuals.
The actuals might occur down the road under new
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scenarios, either areas that get bumped up and have to
go back through the planning process or new-found
nonattainment areas, but the timing on this is such that,
hopefully, all those plans will be in and approved by the
time anything would start.
MS. STINSON: Dave
Hawkins and then Chris..
MR. HAWKINS: I just
wanted to ask again the question I had asked earlier
about the optional programs, because that idea of their
being case-by-case or source-by-source options has come
up again, and maybe to put a sharper point on it, it seems
to me that with an optional system, you have all sorts of
opportunities for the air quality objectives of the area to
not be met.
For example, a source that is under the cap
essentially is allowed to use its unused production
capacity either temporarily or permanently to relax
emission limits at other pieces of equipment at the
facility. Or a source that, for a variety of reasons.. .take
a multi-plant company that decides to shift production
from one to another, it could reduce production at a
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31 1
facility under the cap and take advantage of the head
room created and relax emission limits at some other
piece of equipment at that plant.
Now, if the reduced production was going to another
facility that was also under the cap, you would say fine,
everything is consistent. But in an optional program, it
doesn't have to go to another facility that is-under the
cap. It can go to another facility that isn t under a cap
in which case you would wind up with a net emission
increase for the area with that kind of transaction.
MS. STINSON: Okay, we
are going to take the two cards that are up and have one
more comment and take a break. Chris?
MS. SHAVER: Let me just
follow up on Dave's real quick which is to say I don't
think the system would work, either, unless all the
sources are under it. I think there would be too much
room for screwing around.
But at the same time, I think technology has
advanced, computerized mechanisms have advanced to
the point where, you know, we don't have people out
there reading smoke anymore. We have ways to monitor
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things. We have ways to keep track of things. This is a
fairly, I would think, simple computer programming thing
to figure out what people are doing on a daily, monthly,
yearly basis.
But more importantly. I wanted to follow up on
Leslie's comment about, you know, what about
transportation and mobile sources. I am working with the
Denver plan right now, and the transportation sector is
held to an emissions budget.
It is not an emissions allowance, because you don't
apply it to each individual source, although we are
starting to think about emission licenses for each car,
but they do have a cap that they are under, if they
exceed that, every time a new highway project is built,
they have to show that they are under that.
So, there is something set up there. Maybe this
system is only fair and equitable if not just all the
stationary sources are in it but there are tight and
enforceable emission budgets applied to the other sectors
as well so you are managing the whole problem.
MS. RITTS: It would be
interesting to hear more about how that budget is
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313
allocated, because that might get to this air quality
issue.
MS. STINSON: I am sorry,
Leslie, they can't catch you without the mic.
MS. RITTS: Maybe Chris
after the break can elaborate more on how that budget is
allocated, and the same-with Mike, between the sources,
because that would go 3 lot to the air quality
management concern that I have where you keep taking
a pound of flesh out of the industrial sources and growth
and modernization.
MS. STINSON: DonTheiler?
MR. THEILER: f think Chris
covered the point that I was going to make. The mobile
sources are dealt with in a cap type situation with the
conformity regulations.
Your second question as to how the allocation is
made between the different sectors, that is done on a
case-by-case basis in each nonattainment area based on
the politics of that particular area.
MS. STINSON: I think Bill
Lamason is going to make a few concluding remarks for
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this portion of our discussion.
MR. LAMASON: I w a n t t o
thank everyone for their excellent discussion here. We
have had a lot of good discussion, trying to be positive
about it.
Quite frankly, it probably played out along the lines
I thought it might, because I think in any new program
you try to put forward and then measure it against the 1 5
and 20 years of policy related to preconstruction
permitting and trying to answer all those questions up
front for the new program, that is a difficult task, and
believe me, the subgroup that worked on it...and I will
share a part of the blame for this or credit or whatever
results for putting together this prototype.. .we wrestled
with a lot of these questions.
We haven't agreed on a number of them because of
time constraints in trying to pull together a prototype,
and the prototype was meant to foster discussion which
it obviously has.
It doesn't mean that EPA is bound to it. That is why
it says EPA staff draft.. Our management can walk away
from it at any time, but...and they may do so quickly. I
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hope not. I hope that there is enough to proceed with
consideration of this option.
We have talked to other programs. We have talked
to the Oregon folks. It is unfortunate that Wendy Sims
could not be here. We have had a number of conference
calls with her in trying to consider some of the Oregon
|
program elements and • what we might put into our
prototype.
We are aware of another local agency, and there is,
of course, one source that has sort of broken some
i
ground in this area, and we have looked at that. I
|
We would be happy to hear about any other j
examples, either source-specific or programs where j
I
people are doing this or thinking of doing this, because j
I think that obviously helps our effort. J
I guess to close, I don't know what we are going to
do. The EPA folks are probably going to huddle here
during the break and decide how we are going to proceed
here. I personally would like to maybe see some more
discussion and maybe let Dave touch a few points before
we move on.
But again, I want to thank you for your discussion,
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and I will let Barbara take the mic back over so we can all
go to the break.
MS. STINSON: Dave, did
you want to make those points now?
MR. BRAY: No, I was just
going to leave it up here during the break.
MS. STINSON: Okay, it
looks like EPA has been thinking about pros and cons
before they came in here. Let's take 15 minutes and be
back at 4:10.
(WHEREUPON, a brief recess was taken.)
MS. STINSON: If you can,
grab anybody else you see out there. Are people still out
there?
Okay, I think that amongst this group that you saw
gathered up here, we have a strategy to recommend
anyway, and we want to get your comments on this.
What we would like to suggest is...I guess, first of
all, what I would like to say is that it sounds to me like
there is a lot of genuine appreciation in this group for the
work that EPA has done in putting together a straw
person, straw man that is solid enough to take the kinds
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317 |
of detailed comments, pros, cons, et cetera, that they
have gotten.
So, it is obvious a lot of work has gone into that,
and I can tell people appreciate that.
It sounds like also that it is not concluded where to
really go from here in terms of the group's opinion. I
don't think people are ready to completely trash the idea.
So, what we are thinking is it might be useful to go
ahead and have Dave present the remainder, very briefly
some of the remaining points that he was going to make
and ending with what he is calling a slide that has pros |
and cons on it. And we are also thinking of it as not just
pros and cons of this program but kind of benefits and
concerns.
What we would like to do is start with the list has,
is going to put up, and elaborate on it. Some people's
pros are going to be other people's cons, et cetera, but
that is exactly the kind of stuff we want to flesh out and
try to get a bigger picture of where we come down on
this and look at how do we minimize the cons in this kind
of system.
And that may actually take us into the other options
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the other four options that were presented and discussed
in August.
So, from there, we will have to determine where to
go, but does that sound like an appropriate procedure to
get us through the next hour or so on this topic? Is that
yes, no, maybe?
AUDIENCE: Sounds good.
MS. STINSON: Okay, great.
Take us away.
MR. BRAY: There was one
issue left on this slide that we really hadn't touched on
very much, and that is the issue of enforceability. There
is a paper attached as part of the two attachments to the
proposal or concept paper that you got that talks about
practical enforceability.
The thoughts from the group there, as I mentioned
earlier, were that the form of the PAL and any unit-
specific or groups of units or whatever would have to be
tailored and customized to the specific, source that it
applies to and that, again, the monitoring and record
keeping and reporting requirements, essentially, would be
those that come out of Title V more than anything else.
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Clearly, if the PAL Is part of the New Source Review
program or, as some other people have mentioned, maybe
part of an overall air quality management program in the
SIP, that is an applicable requirement, and under Title V
sources are going to be obligated to have some means of
being able to certify every six months that they are,
indeed, in compliance with that requirement and whether
it has been continuous or non-continuous and all the
other elements that Title V brings into that.
So, we sort of don't envision this program itself
carrying a lot of specifics on this but letting the existing
programs or existing Title V requirements and things
bring into play those monitoring and reporting and
certification requirements, again because all of these
sources are Title V sources and would be in that program
anyway.
So, any specific issues or thoughts on that before
we jump to the last two slides?
MS. STINSON: Why don't
you go ahead?
MR. BRAY: Okay. Again
all of these things are discussed in detail in the package
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so I am really not going to spend a whole lot of time
mentioning them but just to point out that these are
things that we have been thinking about, things that are
definitely issues in designing a program like this.
This basically just sort of bullet points those types
of things that we are looking at that would be considered
changes to the plant or changes to the PAL that wouldn't
trigger major New Source Review.
And that would be changes to unit-specific emission
limits and thing under the cap. If there are needs for
unit-specific requirements, those could be adjusted to
provide operating flexibility without triggering New
Source Review as long as the cap doesn't increase.
The process for adjusting PALs upward which is sort
of one of the key elements of being able to get into the
program easily using current actuals, the adjustment
upwards with the right demonstrations would not be
something that would trigger New Source Review.
There could be changes underneath the PAL that
would affect what we call the ambient footprint of the
source. Shifts in emissions between low stacks and high
stacks and those types of changes could affect the air
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quality impact that was the underlying presumption of
the SIP control strategy, and there does need to be some
mechanism within the system that allows the State and
local agencies to have a check on that.
The changes would have to somehow...that there be
an opportunity or be a process for getting a review of
those if the changes were dramatic.
One of the things we were thinking about in that
area was using the modeling guideline out of the
Emissions Trading Policy Statement that talks about
trades that are, you know, lower stack versus higher
within 250 meters of each other, those types of criteria
that would be able to be used to minimize the type of
demonstration that would be necessary for most changes.
Clearly, alternating operating scenarios, alternative
operating scenarios would be something that would be
easily accommodated in this system. The things
envisioned by Title V would be able to be handled.
Looking at what happens to the PAL if there are new
regulations, new MACT standards, new RACT
requirements from CTGs promulgated by EPA down the
road, and how it would be adjusted and what mechanism
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and what time would be opportune for changing that.
One of the big issues and fairly contentious even
within EPA is the issue of whether control technology
should be required for new and reconstructed units that
aren't subject to PSD or Part D review, again bringing up
the same issue Dave and other people have raised here on
the control technology forcing requirements of the Act
and if that should somehow be merged into this program
or whether that is something that can be left to State and
local agencies.
Somebody did mention and I should point out that
Oregon does have a control technology requirement for
all new and modified units. They call it highest and best
practicable treatment and control.
Other States have best available technology or best
available control technology requirements that function
completely independent of the major source New Source
Review programs.
And then the final issue was this idea of
contemporaneity and the periodic review of the P AI s, and
we do throw out a couple options in the paper for just
basically taking...one option would be taking a look at
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323
that PAL every five years during the Title V renewal
process and make sure that it is still consistent with the
control strategies for the area.
Another option would be to actually adjust the PAL
based on what the source has been doing over the last
five years. So, those are issues or thoughts that are still
under consideration.
Final slide, then, is those type of changes that we
would consider to be subject to major source New Source
Review. First of all, it basically says any increase above
the PAL that was not otherwise provided for like
adjustments to initial PALs would undergo full PSD New
Source Review.
Some of the things that we need to look at are
whether there should be any waivers or exclusions or de
minimis levels that would be embodied into this system.
And the final thing that was mentioned earlier was
the interaction with the additional, more stringent
requirements for serious and above ozone nonattainment
areas which may trump this program or may be able to be
made to work with it.
So, I guess we will throw...just in a short time of
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thinking about it, we sort of threw up these three pros
and three cons, and like I say, depending on your point of
view, they may be cons or pros.
Clearly, any sort of cap system which becomes the
basis for determining whether you have got a New Source
Review action will provide certainty, much more certainty
than the existing system, because it is on paper.
I mean, nobody can argue that this is the number, if
you don't go above it, you are not subject. If you have
to go above it, if your change requires you to go above
that, you are subject to New Source Review.
And you get out of all the uncertainties of trying to
figure out what actions went on in a contemporaneous
period and what your baseline was and whether your
change is enough to move you from any sort of actuals-
to-actuals test to have to look at actuals-to-potential.
All those uncertainties disappear, and control agencies,
the permit engineers, the applicant, and everybody knows
exactly what it means to be a major modification.
This will eliminate, if we go with the no de minimis
concept, it would eliminate unreviewed emissions
increases. Clearly, if the increase is done as an initial
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plant site adjustment, it gets reviewed. If it is an
increase resulting from a modification, it gets reviewed.
There isn't the potential that the existing system
has for continuing minor source growth creep with the 39
ton, 39 ton, 39 ton unreviewed modifications.
The other benefit from both the control agency and
the source side is that m.any actions which are now major
source permit actions would be done through the minor
New Source Review process which is a much less
burdensome process with respect to both the types of
technical demonstrations needed as well as the
administrative process.
Looking at some of the cons we identified...and this
one Bruce, I know, has raised and other p eopi e ... th a t
establishing initial PALs wilt take some work, both work
from a policy decision standpoint as well as potentially
a lot of work on the technical side both by the sources
subject to the program and the control agencies
implementing them.
Clearly, from the source side, operational changes
which you might otherwise be able to do today would
have to be reviewed under the PAL, not necessarily
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reviewed as New Source Review action but at least
reviewed for consistency with the SIP's ability to meet
the air quality objectives.
Another con might be that there could be some minor
New Source Review programs out there that would have
to be revised to make sure they are consistent with Clean
Air Act and EPA's requirements so that those
construction activities that would get out of major New
Source Review with this process will be reviewed for
their impact on ambient air quality standards and possible
changes to the source s tootprint.
So, with that. I am going to sit down, and Bill is
going to take over as scribe.
MS. STINSON: David is
going to join our discussion.
MR. BRAY: Yes, I am going
to join the discussion. I am not going to lead it anymore.
MS. STINSON: And let me
just suggest what we do is focus for a little bit on the,
quote, benefits or concerns or pros and cons of this
system as it has been laid out and discussed so far.
Now, we don't want to be entirely repetitive here,
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but what we want to do is try to recapture briefly, if we
can, some of the points that were brought up, the major
points that were brought up by individuals in terms of,
you know, what you see as the strengths and weaknesses
of this approach.
Go ahead.
MR. BRENNER: I think it
would be useful to keep the pros and cons up there, if we
can. I think that is a good starter for us if you could
leave up that one page. Thanks, Dave.
MS. STINSON : If somebody
can give Bill Lamason a hand in taping up, I imagine at
some point along here, he is going to be writing pretty
fast. And we know he can do that.
So, we will post these and then kind of take a look
at where we are after we brainstorm here for a little bit.
Let's start with John Paul.
MR. PAUL: Obviously, our
concern is the lack of a requirement for a control
technology on new or reconstructed units, and I was
going to ask the question. You talked about how that
was debated, and do we want to ask any questions now?
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Can we ask the question what is wrong with requiring
control technology?
I don't understand why that is not a part of the
system. Why was it rejected? What reasons did this
group come up with for leaving that out of the system?
MS. STINSON: Because we
never did really come b-ack and debate that, did we, or
get the answer to that.
MR. PAUL: Right.
MS. STINSON: Why don't
we go ahead and do that, and if we get too deep into that
with these, then we are going to ruin our kind of
brainstorming mentality here, but why don't we answer
that one and then see if we can go forward.
MR. BRENNER: Do you want
to take it, Oave? Bill Tyndall should answer this one,
but...
MR. BRAY: Well, I...you
can answer, Greg .
MS. STINSON: We have
three people that want to answer it, and nobody is
speaking. Okay, Greg.
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MR. FOOTE: Let me take a
shot at that. I think the short of it is that it comes down
to the question of baseline and increases over baseline.
To the extent that the cap system evolves into one
in which the changes take place below the cap. they, in
traditional NSR terms, would be viewed as not being an
emissions increase, and absent an emissions increase,
you would not have formal NSR applying, and absent
formal NSR applying, it is not clear what the legal basis
would be to require BACT or LAER.
Now, there are some ways to get around that that
we have discussed internally. I don't know that it is
worthwhile going into those now, but suffice it to say
that there are some concerns growing out of Alabama
Power and just generally our legal view of how the law
constrains us here that do affect how we would proceed
there.
MS. STINSON: Okay.
MR. FOOTE: But just to
finish, we*do recognize that that is a concern, and I don't
think that EPA is prepared to say well, we just don't care
about getting control technology on here. I think
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probably the big picture here is a desire in terms of the
overall goals here to have added flexibility on emissions
accounting and maneuverability within a cap in exchange
for having control technology put on new or
reconstructed units, and it is the getting from here to
there that is a bit complicated.
MS. STINSON: Dave?
MR. ALDORFER: The idea of
starting in nonattainment areas with some snapshot of
actual emissions raises again the concern I think I
expressed this morning. How does an industry that is
tied to fairly deep cyclical swings in the economy
preserve some ability to utilize capacity that has been
bought and paid for and installed if the snapshot is taken
when it is in a low period?
MS. STINSON: So.
economics...
MR. ALDORFER: The
implicit picture at the moment seems to be you have lost
it. You know, you have got to do some type of additional
control in order to be able to get the ability to recapture
that, and I guess I would like a little more clarification of
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how that would work.
MS. STINSON: So, for the
purpose of describing.. .go ahead.
MR. LAMASON: I think it is
lack of flexibility in a nonattainment area where the
baseline for the source is based on actual emissions. So,
it is lack of flexibility with actual emissions in
nonattainment areas.
And that is one of the points we did wrestle with,
Dave, even last week as to where we would come down
on that or might come down on it. and the thinking was
where an attainment demonstration is based on actual
emissions and the PAL is based on actual emissions, you
do have a real problem.
What do you do about allowing that source to go by
that PAL without impacting the...which might impact the
attainment demonstration, and the sense was well, you
could...it came down to two choices, essentially.
You could require offsets for the increase but not
require major New Source Review. You have got a layer.
Or the State may try to revise the attainment
demonstration to accommodate that.
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But that is just a couple. There might be many other
options.
I guess one of the things I heard before the break
was this prototype gives a sense that this is the only way
we might do that, and I present that caveat again that we
try to keep our minds open as to how we might get
around some of these problems, but I will put your issue
up as lack of flexibility for actual baselines in
nonattainment areas.
MR. SOLOMON: Could I
maybe rephrase that, the issue? If I understand you
correctly, David, I think what you may be saying is the
fact that the purpose of the NSR program is to bring
under review those physical and operational changes that
cause emissions increases, and if you are a source and
you are out there and you are proposing no physical or
operational change whatsoever, what is the rationale or
the reason or the need in order to impose more
restrictions on the source's operation?
MR. ALDORFER: Yes, that
is basically it. You know, I may have a plant that was
bought and paid for and built for 250,000 jobs a year,
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and it is going along in today's economy at 130,000,
140,000, 1 50,000. Two years from now, there is
demand for 200,000. What do I do?
MR. SOLOMON: And it is a
very valid point, because under the current system, if you
do not propose any physical or operational change and all
you were doing is to increase your production rates, you
would not be subject. And I believe this is the point that
Henry Nickel has brought across many times.
MR. ALDORFER: So long as
you stay within your permit limits.
MR.SOLOMON: Ithinkthat
is a given
set the permit limits.
MR. ALDORFER: Well, they
MR. SOLOMON: Yes.
MS. STINS ON : Let's move,
then. I think we are going to shift gears a little bit and
stay with the mode of trying <° generate some of the
benefits and concerns, spend just like ten minutes
getting ideas out there and not do the cross discussion
but yet come back to all of these once we get them out.
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Chuck?
MR. KNAUSS: Yes, this is
just a carry-on to that point. There is an alternative
mechanism, of course, which would be maximum
potential, and the flip side of that is how you would, for
a lot of sources with PALs set at maximum potential or
some level higher than preceding year or two years
actual, how you would for many sources in an area do an
appropriate scaling so that you could still come in and do
your RFP but it is an alternative mechanism to doing the
actual analysis that was described.
MS. STINSON: Ernie?
MR. ROSENBERG: I think I
have a pro potentially for this and, in part, a response to
the technology question is that both EPA and the States
and local agencies are being asked under the Clean Air
Act and other programs, for that matter, to do much more
than they are really going to get done on time and to get
done well.
Every time you put in a loop that requires State or
local approval. Federal permit renewal or revision, you
are eating resources. So, as a consequence, you need to
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be thinking about what am I getting for it.
We spend much, much too much time in the air
programs more than any other shuffling paper back and
forth and not enough time bringing people into the
system who aren t in the system and enforcing what is in
it.
A mechanism that allows you to curtail review,
particularly in cases where you are not taking a step back
or have any risk of stepping back from an attainment
demonstration, seems to me to be a good idea.
That doesn't mean there aren't a lot of
implementation issues here, but the idea of reducing the
number of up-front requirements for affirmative approval,
I think, is very important.
MS. STINSON: So. need
options for curtailing review, need opportunities.
Okay, next one? Mike?
MR. BARR: One of the real
pros is that it avoids the deeply flawed prescriptive
technology review that we have got now with New Source
Review, and the mirror image, again a real pro of this
system, is that it provides a very powerful incentive for
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seeking the most cost-effective means of reducing
emissions from new emissions units such as pollution
prevention or even alternative processes.
MS. STINSON: So, avoiding
the prescriptive approach of the current NSR system
and...
MR. BARR: To technology
review, yes.
MS. STINSON: Right, and
also it favors and encourages seeking the most cost-
effective methods.
MR. BARR: Yes, it gets the
State and local agencies out of the business of figuring
out what the best pollution control technology is for
processes that are so complicated and so varied and
changing continuously.
MS. STINSON: Molly?
MS. ROSS: I mentioned
earlier that it can provide a cushion for growth for new
sources where you are up against increments or up
against adverse impacts on air quality-related values.
MS. STINSON: Don?
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MR. THEILER: A con in this
process will be the problem and the difficulty of
establishing fair actual emissions which, in fact, take
account of what the baseline is for a particular source in
the immediate past if you are dealing with actuals.
If you just look at the problems that the South Coast
has had trying to set baselines for the reclaim program or
the problems of setting the baselines for the acid rain
program, I think you will see the difficulty of determining
what actual emissions actually are.
MS. STINSON: John?
MR. PAUL: We have a
concern that the PALshaveto be SIP revisions, and those
take a lot of resources to prepare and a lot of resources
to review. I know we had some bubbles in 1982 that
were in the Federal Register as rejections in 1 989.
MR. BRAY: Let me respond
to that real quick, because I think maybe part of the
handout that was sent out originally may have made a
misimpression on that.
I don't think there was any intention here for each
and every PAL that is established to have to be reviewed
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by EPA and approved as a SIP revision. The concept was
more that the rule that requires a PAL would be approved
by EPA as part of a new New Source Review program, but
just like a BACT limit that goes into a permit or any other
permit requirement, that PAL that is established later in
a permit would be automatically part of the SIP and
Federally enforceable.
The concept paper that went out that mentioned
that, in some cases, there might be a need for a SIP
revision would be triggered only when the change in the
PAL was completely contrary to an already-approved SIP
in a manner that would essentially require that SIP to
have to be revised, but that would be the exception to
the case more than anything else.
It would be like if you already had an S02 strategy
for a source with a specific batch of limits and a cap and
you wanted to change that SIP at a later time, you may
have to go through a SIP revision as well as the PAL
adjustment.
MS. STINSON: Ernie?
MR. ROSENBERG: I was just
going to add to the comment about looking back at the
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old bubbles.
One of the real problems with the bubbles and with
a lot of the innovative things that were tried under the
old SIPs was the difficulty of establishing not just what
the actuals were but what the allowables were.
Under this system, frankly, you get most of this just
by having the operating permit program, but certainly
under this system, you have a well-defined allowable.
You know exactly what you are trading. You know
exactly what you are expecting, and you know what to
put in your inventory.
So, it seems to me that the old...that this actually
would respond to those, and I don't want to sound like
too much of a cheerleader for it, because there are some
real problems if you are going to use actuals as the
baseline, but I do think you have to look at what the pros
are. And different sources have different priorities.
There will be some industries in which simply the
time it would take to go through a permit review is their
major problem. They are willing to put on the best
technology. That is not their problem, but they will be
doing things even after they have LAER in place that
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would normally qualify as a modification or might qualify
as a modification.
For other facilities, the cost of control can't be
borne in a given timeframe, and they need a safety valve
to get out of the system.
There are a lot of different interests out there. If
this is not made too prescriptive and too rigid, you can
accommodate a lot of the pain that would be imposed by
the Clean Air Act by the reduction of the size of what a
major source is. by the expansion geographically of the
nonattainment areas.
You accomplish a lot of things to that, and that will
enure to the benefit of the Act. We talk about these
things around here like it is really going to happen. When
it gets to the States, particularly the State legislatures,
they will look at you like you are insane.
So, to the degree we can take the political pressure
off the Act, even at the cost perhaps of some
hypothetical controls that we might have been able to
get, you will actually get what the Act requires
implemented.
Remember 1977, we really thought that what that
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Act required would be implemented, and it got to the
States, and they wouldn't even buy IM which is one of
the most least painful aspects of the Act.
MS. STINSON: Okay. Ron?
Do you need help capsulizing that? Give him five words
or less, Ernie.
MR. ROSENBERG: Allows a
flexible response to different kinds of plants' problems,
different industries' problems.
MS. STINSON: This is a
pro. Okay, Ron.
MR. VANMERSBERGEN :
Okay, my five-word summary would be prevents air
resource hogging. Okay?
MS. STINSON: A good
intro.
MR. VANMERSBERGEN: If
we...and I am not sure what side this would be a pro for.
Maybe both sides. It is a double win.
What I envision is that if we have a limited amount
of air quality resource that is available, if one industry
has tied up much of that resource in anticipation of a
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future market increase, that prevents another industry
from using that resource and employing those people.
So, for some industry, it would be a con and some would
be a pro.
So, if this system is implemented, I think we have
that as a pro.
MS. STINSON: John?
MR. DANIEL: I think the
biggest...
please, if you don't mind.
MS. STINSON: Your mic.
MR. DANIEL: Oh, yes.
Excuse me. I keep forgetting about that.
MS. STINSON: We forget
about those mics.
MR. DANIEL: Thanks for
reminding me.
I think the biggest difficulty and I would have to put
it on the con side is making that air quality
demonstration to determine what the PAL limit is'going
to be.
MS. STINSON: Making AQ
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demonstration.
343
1
MR. DANIEL: A resource
concern.
MR. DANIEL: Absolutely.
MS. STINSON: Resource
concern, yes.
MR. RAHER: Could I ask a
question?
MS. STINSON: Sure.
MR. RAHER: I have heard
that now a couple of times, John,, and I guess I am trying
to develop in my own mind why it is going to be any
harder than it is under just the normal Act where you
have got to go ahead and demonstrate reasonable
progress.
I mean, if the State is going to have to say here is
where we are in 1990 and here is where we have got to
be in '96, there is not going to be any no pain solution to
that. I mean, there is a lot of pain in that, and it is a
very difficult political problem, and it exists because of
the way the Act is written and what is going to be
demanded.
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Now...
MS. STINSON: Let's
cogitate on that for a minute, because we don't want to
get too much into debating back and forth, because we
want to do that on just about all of these. So, that is a
good point, and let's move on to the next one.
Rob?
MR. KAUFMANN: I just
wanted to follow on to something that Mike Barr said
about the pros of this system. It seems that once a
source has a PAL, that it is to the source's advantage to
tweak its processes and tweak its add-on controls to the
maximum efficiency possible so that it has a little bit of
flexibility to operate in the future.
But I guess I could also view that as a con. If you
are an extremely well-controlled source and you have an
actual based PAL, then you have no flexibility, and what
is the incentive for you to be in this system at all?
MS. STINSON: I am giving
Bill a chance to catch up here. Vivian? Maybe give your
five-word sound bite first?
MS. MCINTIRE: All right.
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Basically, for Industry, I can see this will lead to more |
frequent review rather than less, and picking up on Ron's
comment, if you are a well-controlled source, particularly
in nonattainment areas where you are going to ratchet
down at 15 percent by 1996 and another 3 percent per
year till you become attainment, there will be no
flexibility. j
So, I can see that if you want to make any increase
in emissions, there will be no buffer there, and you will
trigger this New Source Review more frequently than
under the current system.
MS. STINSON: More
frequent review rather than less. Bill?
MR. PEDERSEN: I think in
this particular context, the biggest con is that it is a
fundamental change in how the Clean Air Act is
implemented which will require the participation of all
parts of OAQPS and will take a long time.
I fully agree that in the larger context when it has
actually happened, that could be a pro, but in the shorter
context, in the context of fixing something that is broke
now, it Is nothing but a con.
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MS. STINSON: Okay, add
fundamental change also. Mark Carney?
MR. CARNEY: I Think w e
had talked about this earlier, the political implications of
making the air quality management decision. I mean,
what percentage do you reserve for new growth for
greenfield sources that'don't have an existing PAL and,
you know, the fact that the increment is not there
anymore?
MS. STINSON: So, as a
con, the difficulty of the political implications of the air
quality management decisions. Dave Hawkins?
MR. HAWKINS: I would put
down as a con the fact that it rewards poorly controlled
sources. The more pollution you can associate with your
source, the better off you are which seems like a con in
terms of the incentives that we are trying to stimulate.
MS. STINSON: How are we
doing, Bill?
MR. LAMASON: Got it.
MS. STINSON: Good,
recording madly here. Chuck?
I
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MR. KNAUSS: Just briefly,
loss of the current exclusions, hours of operation and,
potentially, pollution control, since we haven't resolved
that.
MS. STINSON: Right.
MR. KNAUSS: But,
certainly, the hours of operation and production rate
would be gone.
MS. STINSON: Mike?
MR. BARR: This is a pro.
It provides an incentive for improved monitoring and
reporting rather than just command and control
monitoring.
MR. LAMASON: Incentive
for monitoring ?
MR. BARR: Incentive for
improved plant monitoring.
MS. STINSON: Vivian and
Bill, do you have new points?
MR. LAMASON: I was just
going to add to Mike's point.
MS. STINSON: Other Bill.
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Go ahead.
MR. LEWIS: It seems to me
that that is sort of a two-edged sword. It does provide
that incentive, but on the other hand, it also creates an
incentive for monitoring of very small emissions units in
order to demonstrate that you are within the PAL which
could and would be extraordinarily expensive.
MS. STINSON: So, it also
creates kind of a flip side of the coin in that it creates
incentives for monitoring of very small emission units.
Ron ?
MR. VANMERSBERG EN :
When we talked about the con of being subject to a lot of
political pressures, there is a pro side of that, too. That
is the side of fairness.
If the PAL is established up front with the public
involved, then we are going to have fairness in
distributing the air quality resource to the various
industries. So, I think that is a...fairness is a pro for
this.
MS. STINSON: Other
comments? Other benefits that you see of the system as
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it is currently devised? Other major concerns perhaps
that you raised earlier that we have not recorded up
here? Vivian?
MS. MCINTIRE: Yes, in the
pros on the chart, it lists certainty as one of the pros. I
would also say this program looks like it leads to
uncertainty if, every five years, there is going to be a
review, and I am not sure how that will be factored into
what the source can plan on doing in a five-year plan.
MS. STINSON: So, the
uncertainty of a five-year review as a con. Yes?
MR. MCAVOY: I think
another pro is that it provides more consistency with
some of the Title V operating permit rule requirements,
especially with regard to trading of emissions and notice
if you exceed emissions allowable.
MS. STINSON: Consistency
with Title V. Tom?
MR. MICAI: This may go
along with the Title V requirements, so I think it is the
dual-edged sword here. That is a definite pro.
The con part of it is that there is no streamlining
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here. There is still the paperwork mechanism that needs
to be dealt with at the State level. It seems like it is
being shifted over to the State level, and I don't think
that is manageable. Doesn't seem to be manageable.
MS. STINSON: So. the
problem of this not actually simplifying potentially, and
you still have the same amount of paperwork, potentially,
but shifting to the States. Mike?
MR. BARR: A con that rises
to the level of a fatal flaw of this current proposal.. .you
said current.
MS. STINSON: Fatal? I
don't kno w.
MR. BARR: No, it is beyond
fatal flaw...would be the retention of any unit-specific
emissions limitations.
MS. STINSON: Retention of
unit-specific...do people need him to elaborate on that?
AUDIENCE: Yes.
MS. STINSON: Yes.
MR. BARR: The current
proposal, as I read it...maybe Dave can clarify it...is that
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there would be a cap set on the overall plant, but for,
quote, practical enforcement reasons, there would be
subcaps retained, either unit-specific or some groups of
units. That would render this concept entirely nugatory,
in the words of the Vice President. He uses big words.
MS. STINSON: Nugatory,
okay. So...
MR. TYNDALL: Could I
clarify that?
MS. STINSON: Yes.
MR. TYNDALL: There
wasn't an intention to say that in all cases and all
circumstances that there would be unit-by-unit emission
caps. It really just...you go back to the fundamental rule
that the cap itself has to be Federally enforceable under
the existing court restrictions on that concept, and the
notion would be that the restrictions placed on a source
would be as minimal as possible that allow us to be able
to ascertain on, you know, a practical basis that the
source is in compliance with the cap.
MR. BARR: Yes, the
workable caps certainly in California have certainly unit-
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specific record keeping and monitoring requirements, and
if that is the proposal that is on the table, then this
proposal has the unbelievable advantage of eliminating
unit-specific emission levels.
MS. STINSON: Henry?
MR. NICKEL: Just to show
that I can always see the other side of a coin, I would set
as a con the inconsistency with Title V.
I think that what I see in this program is something
that almost renders irrelevant all of the Title I
requirements that are on the books and causes the permit
issuer to potentially set a whole new set of emission
limits for that source.
And, again, this idea of unit-specific, I certainly
read the current proposal as contemplating some form of
unit-specific emission limits, emission limits that are
based upon or consistent with the averaging time of the
ambient standards which is a hotly debated issue.
In other words, I see in Title V a program that is a
fairly routine program. It just incorporates what is out
there in terms of existing legal requirements.
I see with this program something that requires a
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tremendous amount of information, the exercise of
discretion. and the generation of new information which,
I think, will tend to greatly complicate and delay the Title
V permit process.
MS. STINSON: At this
point...oop, one more card. Dave and then Dave Jordan.
MR. JORDAN: This is one
that you can list as either a pro or a con, depending on
your point of view, and that is in looking at attainment
areas, particularly where we have not done rigorous air
quality demonstrations in the past, we may uncover air
quality problems with existing sources at existing
emission levels.
MS. ROSS: You will.
MR. JORDAN: Yes, we will.
MS. STINSON: It is a con if
you don't solve the problem.
MS. ROSS: Can we put
increment tracking in that?
MS. STINSON: Adding
increment tracking. You got that, Bill?
MR. LAMASON: Yes.
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MS. STINSON: Okay. Dave
Hawkins?
MR. HAWKINS: Well, as a
pro, the acronym is a friendlier sounding one than most
under the Clean Air Act.
MS. STINSON: Coming up
with a positive statement.
MR. HAWKINS: I do have a
con, though, and that is that enforcement of a plantwide
cap, I think, is a practical impossibility. The resources
that it would take to actually determine compliance from
a large multi-unit facility, I think, would be beyond the
resources and energy level of most air pollution control
agencies.
MS. STINSON: Okay, and I
think it is true for a lot of these.
I want to open up now to the audience to offer pros
and cons in addition to this, and thank you for your
patience in listening to this now three-hour discussion.
We didn't give you an opportunity to comment before the
break, but if you can add your two cents in now, we
would appreciate it.
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Well, somebody complained that we oic'ii't have
enough public comment, so somebody better make a
comment. Maybe we have just been so effective in this
process...all right, here is one.
MS. MCINTOSH: Let me
just say a little bit about...oh, I am Carolynn Mcintosh.
I work for Chevron.
Up until about two years ago, I was in charge of
environmental compliance for a large refinery in
California, and this refinery had over 900 individual
permits, and we had a cap, thank goodness.
As a matter of fact, I am learning a lot about New
Source Review here. I have never had to deal with it
before, because I was under a cap in this refinery.
But what I would like to say is that in terms of
enforceability, we found it very workable. We had to
work very closely with our local air district and with the
inspector who was in our facility regularly, but what we
found was we set up a fairly workable monitoring system
that was all plugged into...the date was plugged into a
computer, and we had to report monthly to the air
district.
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That meant that we had a full-time technician that
did nothing but work with the equipment and with the
reporting which may sound to industry like it was fairly
onerous, but the flexibility that it gave us...when you
think about having over 900 permits and when you think
about a major refinery that is daily modifying something,
building a new source, tearing a new source down, the
amount of work that a New Source Review program would
have been for us would have been just staggering in
comparison to the work that we had in just offsetting or
netting out of NSR under the cap.
There were a lot of provisions for ratcheting down
the cap. It wasn't like we had sort of a license to pollute
once the cap was originally set. The cap was set at
actual emissions in addition to which we got a little bit
of fat set initially by adding a little more offsets than we
needed to get a little bit of room under the cap when we
started.
However, the cap was ratcheted down as...for
example, when the air district passed new RACT rules,
then we ratcheted our cap down accordingly.
When we built a new source and we needed to take
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one of the older sources that was under the cap and kind
of trade the emissions of the new source with the old
source that was under the cap, we couldn't take full
credit for that old source. We had to RACT adjust the
emissions from that old source.
So, there was a lot of provision in this cap to make
sure that the local air agency would force some sort of
ratcheting down of the cap gradually over time so that we
weren't forever allowed to emit at our 1980 levels.
But it was a very workable system, and I think that
the air agency and ourselves both found it much less
onerous than having to use NSR as often as we would
have had to.
MS. STINSON: This is
northern California. Any other comments? Okay,
demonstrated or worthy of examining specific cases.
MR. ZBUR: I won't add a
pro or con, but given that I was the one that was
complaining, I do want to take the opportunity to actually
make a comment on the idea itself.
I wanted to echo Mike Barr's comments from earlier
today. These types of programs, while they may not be
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appropriate for all areas of the country, are crucial in
areas where the costs of control have become as great as
they have in southern California, and these types of
facility-type caps, while they may not be the appropriate
in cases in which the main attainment strategy is a sort
of a command and control type strategy, they are
important, I think, in areas where the area is shifting to
sort of a market based type strategy.
If, in fact, concepts like facility-wide permits, even
if they were based on actual emissions which is. in fact,
the proposal that is being pursued in southern California
are not permitted, they kill programs like the reclaim
program, because getting out of source-specific limits is
an essential element of an attainment strategy. Source-
specific limits in the New Source Review context as an
attainment strategy is necessary for the market based
type attainment strategy that the reclaim represents.
So, while it may not be appropriate in all cases, I
guess, you know, the message that I want to convey is
that I hope that EPA will not drop pursuing these types of
programs as an option for certain areas.
And while it may be something that is not...it may
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not be something that you want to pursue independently
in the context of a command and control attainment
strategy, it needs to be an option for those areas that are
moving towards market based strategies as it looks like
we probably will in southern California.
MS. STINSON: Richard
Zbur. Sorry.
MR. ZBUR: Rick Zbur with
Latham & Watkins in Los Angeles.
MR. LEVIN: I guess this is
a con, despite my background. Mike Levin.
Any reform that requires a system to be redone
before you can implement it is going to fail, and the
question is how do you figure out how to implement the
important pieces of this without having to redo the entire
air quality management system.
So, I guess my five-word bite would be can't be
implemented as reform as currently structured.
MS. STINSON: Anybody
else? Okay. I think where we are is having a host of
pros and cons up here and some of them as corollaries, I
would like to suggest that we pick a couple to revisit, it
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is kind of hard to read them the way that they are up
there, but rather than trying to go back to all of them,
let's pick two or three, maybe four, that are hot enough
to talk about a bit further.
Bill, did you have a suggestion?
MR. PEDERSEN: Yes.
Before we do that, I would like to see if people are
interested in broadening the focus. I mean...
MS. STINSON: A little
closer to your mic.
MR. PEDERSEN: What this
is becoming is really a discussion of the PAL approach
and not a discussion of New Source Review reform. We
talked about a lot this morning that could be done a lot
quicker and would have some bang for the buck in terms
of New Source Review reform.
And I think we should have a matrix that allows us
to discuss both what can be done in the near term to
actually change New Source Review and what might
happen to New Source Review many years from now in
some areas of the country under this approach.
And I think that, as that matrix, we should look at a
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potential-to-potential netting system which already has
come up in at least two different guises here.
MS. STINSON: Okay, Bill?
MR. PEDERSEN: Yes?
MS. STINSON: Before we
move into that suggestion, let me just say that we are
definitely going to revisit in some way how to deal with
the options that were presented and discussed this
morning, and that is a discussion for tomorrow as to how
the agency should proceed on all those topics.
So, we do want to spend this time focusing on the
PAL system. And, again, it is kind of in the context of
asking the question well, what if you were going to try to
make this work? What are some of the cons, what are
some of the pros, and how do we address the cons?
So, that is the structure of this discussion, and, you
know, it is in the abstract at this point. It is to give the
agency information and clarification on the work they
have already done.
Is that okay if we proceed if we proceed that way?
MR. PEDERSEN: Okay.
MS.STINSON: Okay, good.
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So, looking at all that we have spread up here, I would
like to select three or four of the major cons or the cons
that you think would be worthwhile for more kind of the
interactive discussion people wanted to start as we were
moving through this process.
Bill, do you have your mic there?
MR. LAMASON: This Bill?
Yes.
MS. STIN-SON: That Bill.
Can you just quickly read through the ones that are cons
so people can refresh their memories?
MR. LAMASON: Okay. I
have got lack of control technology required on new
units.
The PAL limits changes in operations.
The...sorry, can't read my own writing. Higher
PALs...l am not sure. I will come back to that one after
I have figured it out.
MS. STINSON: F i n e .
Whoever's that is can help you.
MR. LAMASON: It. is the
third one we talked about, higher PALs with air quality;
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consistency
MS. STINSON:
Consistency, yes.
MR. LAMASON: Okay.
Actuals baseline, how should it be determined. There is
some concern about how we would determine actuals
baseline.
PALs may trigger SIP revisions.
Making air quality demonstrations as a resource
concern, particularly for the States.
Well-controlled sources that may have no
flexibilities, particularly in nonattainment areas and may
trigger more New Source Review in those cases.
Time needed for changing the program.
The policy implications and difficulties of increment
allocation.
Disincentives for control of existing sources.
Incentives or tendency to require monitoring for
small emissions units.
Uncertainty of a five-year review period for the PAL.
Possibly not a true simplification, particularly in
terms of the State paperwork required.
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It is getting hard to read as we worked down here.
Let's see how far this will go. Unit-specific PALs may be
necessary.
Inconsistency with Title V. PAL may require more
information than Title V.
A possible pro or con, discovery of nonattainment
and/or increment problems as the PALs are established.
Enforcement of the PAL may not be practical.
And the last comment was can't be implemented as
the current prototype is structured.
Those are the cons.
MS. STINSON: The last two
are kind of similar. Anybody have a suggestion for top
five? Let's say top three. Leslie?
MS. RITTS: Monitoring
necessary for Federal enforceability.
MS. STINSON: Another
one?
MR. LAMASON: Can you
mark that one, Dennis?
MR. BARR: Yes, I want to
get into this enforceability. There are a lot of myths
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there.
MS. STINSON: Monitoring
and enforceability. What else? Combine those two?
Yes, that would be good.
MR. KNAUSS: Basel i n e
determinations.
MS. STINSON: What did
you say?
determinations
And one more?
MR. KNAUSS: Baseline
MS. STINSON: Baseline
MR. AMAR: The issue with
the SIP attainment demonstrations.
MR. LAMASON: The
possible nonattainment problems or the discovery of
previously unknown nonattainment areas and increment
problems? Sort of two spins on that.
MS. STINSON: Praveen?
MR. AMAR: With respect to
SIP nonattainment demonstrations.
MS STINSON:
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Nonattainment demonstrations and the difficulty.
MR. LAMASGN: i think it is
this one down there.
MS. STINSON: Okay.
Molly, did you have something you wanted to add?
MS. ROSS: I think it is
going to be covered.
MS. STINSON: Okay.
MR. BRENNER: I guess it
would be helpful to me to hear a discussion of whether
compared to the current system, is this an incentive or a
disincentive to control existing sources. In other words,
I have heard both.
I have heard the claim that this would cause existing
sources not to control, because they want to preserve
their PAL limit, and I have also heard this woutd cause
them to control, because they want to create a cushion
to begin to be able to make changes. So, I will call it a
pro and con, but it is just something that we need to
understand to proceed.
MS. STINSON: Incentives
an disincentives. Yes. Molly?
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MS. ROSS: Maybe it is
worth my trying to say, because it is a kind of
preliminary comment like Rob's which is like several
things discussed this morning, I view this as something
that could benefit industry in the way that I think Michael
Barr has talked about and some of the California have
talked about.
And I am looking at it as a way that might enhance
environmental protection which goes directly to baseline
issues and things like that and ratcheting down as
problems are discovered.
So, kind of my approach to this whole thing is
dependent on that item.
MS. STINSON: Chuck?
MR.KNAUSS: Thisquestion
goes back to something I said earlier this morning.
Instead of disincentives for control of existing sources,
1990 Amendments will be controlling existing sources,
and it seems like we are still operating, many people
around the table, as if existing sources are just...as I
said earlier, that is an excuse for an over-broad NSR. I
am just curious as to why there is this drive toward
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368
setting up something to force existing source control that
is already covered under the Act.
MS. STINSON: Okay, it
sounds like we are going to move right into the
discussion which is good, and, Rob, you can respond to
that, but I just want to clarify. We are going to try to
touch on monitoring arid enforcement, baseline issues,
attainment demonstrations for SIPs and the difficulties
around that, and then whether this program is actually an
incentive or disincentive and how all that plays out.
That is a lot to cover but again, we don't have to
cover all aspects of it. It is just enough to illuminate for
the agency where do we go from here, and that is a
question all of you should be having in your minds,
because we are going to ask for your recommendations
tomorrow .
Where do you recommend the agency go from here in
addressing further development of this system or looking
at something completely different, et cetera? So,
thinking along those lines, we are going to try to cover
these four topics in the next 45 minutes and be out of
here by 6:00 o'clock. Is that okay? Okay, good.
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~ 369 1
i
MR. BRENNER: I bring that
up Chuck, in the context that I think one of the
frustrations that a lot of people who...well, really all of
us dealing with air quality feel is that we all understand
there is this sort of effort underway to try and figure out
when it comes to modifications who has existing rights
to emit and how do you sort of come up with an equitable
allocation of those rights and then how do you get people
to offset increases in emissions elsewhere.
It is the issue that, I think it was, Ron brought up
earlier in terms of air quality. It is an air quality
management issue, and the problem is we don't have a
good way to get at that right now. It is sort of who can
figure out what emission rights they really need to have
and which ones they don't
If this would change the system and create a system
where people have an incentive to just go out and make
the reductions in order to create room for themselves to
grow, that is an advantage for air quality management.
We sort of find out who has the ability to make
reductions. And it is an advantage to the person who
makes it, because they then have quicker time to market
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370
or to make their modifications.
That is what I am trying to get at, and that is why it
is of use and not necessarily because it is a substitute
for some other set of programs out there.
MS. STINSON: Ron?
MR. VANMERSBERGEN:
With respect to the incentives for pollution control, I
think that is just a matter of the timing. There would be
a tendency prior to a PAL being set to allow your control
to be fairly lax such that you build up a little bit of base
there, but then after a PAL has been set, the incentive
would be the other way to keep your growth margin
maximum.
So, I am not so sure there is a lot of occasion for
discussion on that issue. Of course, I have been wrong
before, I believe.
MS. STINSON: So, sticking
with incentives and disincentives as a topic for the next
few minutes, Chris?
MS.SHAVER: ljustwanted
to respond to what Chuck had to say. With respect to
existing sources, the Act, in many cases, only requires
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in
reasonably available controls when a more cost-effective
I
solution for existing sources might be to put on best or j
lowest achievable type pollution control equipment rather
than having to do something else, and if they are aware
that that provides them with some saleable or usable
commodity, maybe they would move in that direction
which would make further progress.
I know we have lost some opportunities in Denver
because power plants installed 50 percent control, that
is all they need, when you could have done 70 or 90 and
bought some space for growth.
MR. KNAUSS: Right. What
I was referring to was situations where you may be
forced to go that route and, in particular, discouraging
activities that would lead to additional emission
reductions in total.
MS. STINSON: Pat?
MR. RAHER: I guess in
terms of incentives, it seems to me that the person from
Chevron and Mike as well have identified the fact that
this sort of exists already in some form and Chevron
specifically out in the Bay Area. If we are going to ask
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372
about creativity, it is my impression that it does create
a tremendous incentive besides the required reductions,
that there is an incentive to maximize controls, to use
different methodologies and technology.
And I just, you know, I don't think we should
overlook people who have actually carried out this kind
of a program. It may be helpful if we are trying to
answer Rob's question just to ask somebody who has
actually lived through it, you know, whether or not it
created an incentive or whether it was just a command
and control.
MS. STINSON: Mike Barr?
MR. BARR: One of the great
incentives that I mentioned before under the current
statute is to try to keep your actual emissions up so that
you don't get hurt by the apples and oranges accounting
system under the current system, and it is very clear,
answering your suggestion, Pat, that these types of
caps...
And it is not just Chevron, but it is half a dozen or
more plants in different industries throughout the area
and really, in truth, throughout California, and if you
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looked hard enough, I think you would find PAL type
permits a lot. They have a tendency to creep in,
particularly where they will do a lot of good.
The actual usage of the plantwide cap goes down a
lot. It is well below. Even if the PAL is set on the actual
emissions during a representative baseline era, the
emissions go down.
Really, in that way, it provides a very tangible and
documentable benefit to the environment that perhaps
could not have been achieved through a command and
control system.
In that sense, I think the incentives and
disincentives really need to be evaluated area-by-area
and almost source-by-source, and that is why I think this
system should retain a considerable option for different
States, different areas, different sources to opt into the
system.
MS. STINSON: Before w e
take Henry's comment, I just want to suggest that if we
can hear from environmental perspectives, Dave and
Molly, if you from a Federal agency perspective and Chris
have anything you want to offer on this, we are going to
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wind this discussion up and move on to the next topic.
Henry?
MR. NICKEL: I just wanted
to say, and this really kind of follows on what Mike just
said, that, you know, when I looked at this proposal and
started thinking through it, it seemed to me that it really
is incredibly factual dependent upon what you assume for
those sources.
It will be attractive to those people that operate
facilities that are just about, you know, at 100 percent.
It will be particularly attractive to people that are
operating facilities that are at 100 percent and they have
got a pollution control program underway that will be
reducing or a process change that is going to be
reducing.
For people that have facilities that are at half their
capacity, they have bought the whole thing, they are
ready and raring to go to increase emissions, this will be
something that will create tremendous problems for them.
So, you know, I really can't emphasize more the
importance of understanding that this isn't the answer to
all problems, and it does create real problems, depending
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upon what the factual context is, and it could create
problems from David's perspective. I mean, I am
not...but it is all factual dependent.
The second thing I want to say is I don't think we
really can divorce any regime that deals applicability
issues from what the answers are to those questions
tomorrow. Just as important as what do I do in terms of
calculating my actual emissions and what are the
consequences of increasing and when are you gbing to
say I have increased are the questions of what are the
things that I can do without worrying about this process.
You know, how those issues are resolved can have
a very major impact on, you know, how you perceive this
program or any of the other alternatives we are talking
about.
MS. STINSON: Chris?
MS. SHAVER: Yes, I think
the difficulty here is really not knowing, just as Henry
said, which way are things going to go, will this
encourage people to do something more stringent and
more cost-effective, or will people hoard emissions. And
only the economists can answer that question, and then
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we all know how much faith we might put in their
predictions. It should work.
I think what might be useful since that does create
some discomfort is whether there are any sweeteners or
incentives that can be created within the system to push
people in the direction of doing more as opposed to doing
less, and I am not sure* what those would be, but to
address the issue of, you know, whether a source that is
very well controlled, you know, is going to end up
suffering here. Maybe some basic level of baseline
emissions that people have to start with so that there
isn't that messing around. I don't even know.
But there may be ways of nudging things the right
way.
MS. STINSON: Dave
Hawkins?
MR. HAWKINS: Well, this
proposal allows PALs to be set at levels above actuals,
and I think that creates a number of incentives or
worsens incentives that may potentially exist in the
current system. It creates, as I said before, the incentive
to go out and try to get your best deal on allowable
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emission limits in order to give yourself the growth
cushion that way .
And that kind of gaming is really hard to argue is
producing any kind of environmental benefit. It is
occupying the time of the sources, it is occupying the
time of the control agencies, and it is introducing
questionable control strategies.
I think, you know, if you wind up having a system
which encourages consortia to go out and invest in
photochemical grid modeling in order to try to
demonstrate that they can have a higher allowable
emission limit, you are totally overloading the system,
and you are going to produce a result that is not going to
be compatible with achieving air quality goals.
MS. STINSON : Okay, good.
With that comment, then, I would like to shift our
discussion, and why don't we take up the, I don't know,
monitoring enforcement next? Okay, a decisive
statement coming next.
MR. BURKHART: This is one
of my big bugaboos in terms of I hear that you can't
enforce bubbles.
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You know, I have dealt with a lot of agencies, and
they can understand offsets, and they will let you reduce
and then apply it over here, or they will let you net out a
New Source Review. They have limits on specific things,
but if you want to take four things and put it under a
bubble, they say you can t enforce that.
I am a relatively simple-minded person, but I believe
that you can enforce it just as easily as you can enforce
an individual limit. I think where it is applicable and
where I can use it...and there are some instances where
it really needs to be used. I mean, some places need VOC
reductions so badly that they want to call each in that I
use on the line an emissions unit, and they say every time
I increase it, I will trigger their New Source Review so
they can ratchet down on me.
I say well, why don't you let me put those five inc
under a bubble and knock on my door and say gee, we
need a 10 percent reduction from you guys. Let me
figure out how to do that.
But you can enforce bubbles. I guess I would like to
hear from those who say you can't enforce a bubble and
then try to understand that better.
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379
MS. STINSON: I know w e
have some viewpoints on that around this table. David?
MR. HAWKINS: I certainly
think there are some bubbles that are enforceable, but I
also think there are many which, as a practical matter,
become impossible to enforce. It is just a matter...the
principal difficulty that I would point to is the
requirement for simultaneous assessment of compliance
from a large number of emitting units.
In a traditional enforcement compliance
dispute.. .and you always have to examine these things
from what happens if you are in court, because that is
when the test of whether you have got an adequate
compliance system is going to be most extreme.
In a traditional enforcement setting where there is
believed to be a piece of equipment with which there is
a compliance problem, you may be involved with one data
set and one piece of equipment that requires one
inspection or one series of inspections, and you have got,
as I said, one data set which can be the subject of
dispute if you get into litigation.
If you are in a plantwide compliance situation with
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380
nothing having a particular limit...
MS. STINSON: Just a little
closer to your mic.
MR. HAWKINS: Yes. If you
are in a plantwide compliance system where every
individual piece of emitting equipment lacks an individual
limit, then you cannot bnri9 an enforcement case with
respect to any single piece of equipment. Your only
possible enforcement action is something that covers all
of the equipment which requires a simultaneous
determination of the compliance status of a constant
period of time of all of these pieces of equipment,
introducing multiple data sets each of which can be
challenged, each of which can be quibbled with, greatly
increasing the probability of missing data that
complicates the enforcement determination, and all of
these things can and will make a real difference in the
willingness of the control agencies to undertake the
effort.
You know, I don't know if there are any enforcement
personnel from a control agency here that can speak to
this, but I am interested in the automated data system
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handling approach that was mentioned at Chevron, and I
am particularly interested from the standpoint of whether
that is a data system that is available to citizen
organizations as well so that they can retain their ability
which they have under the Clean Air Act for citizen
enforcement and what the implications are for that.
MS. STINSON: We should
get an answer to that question before the day is over.
Mike?
MR. BARR: I think part of
the answer is that modern technology can add up the
emissions of lots of different units simultaneously and
actually print them out on a piece of paper that can be
read and audited and released to the public after it is
q uality assured .
The simultaneous enforcement of a large number of
units is already an issue within certain source categories
and certain types of units like valves and flanges that are
often treated as a single unit, and there can be tens of
thousands of those in a large refinery or chemical plant.
That is already being handled. That is already being
enforced on a simultaneous basis. It really isn't any step
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382
at all more difficult to enforce simultaneous limits
against 50 tanks or 10 furnaces. It just is not a
significant issue in practice.
MS. STINSON: Other
monitoring and enforcement issues to raise? Go ahead
MR. BURKHART: I just want
to add to that I really do believe down the road, while a
lot of us don't realize this. Title V is going to drive us to
do more of that automation than we have ever imagined
right now. It is the only way we are ever going to be able
to manage what is going on at the sites.
Because right now we are interested in sources and
emissions. When we start really dealing with how we are
going to manage all that data, give it to the agency, this
stuff is going to have to be automated. I think that is
even going to push us further in that direction.
MS. STINSON: Leslie?
MS. RITTS: Well. I do think
that monitoring all those sites or keeping track of all of
those sites is an issue, and the issue really is how you do
it. If you can use record keeping and keep track of what
comes in and what goes out and do material balances, it
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is less of a problem than if you have to adapt all of these
units to instrumental monitoring or parametric
monitoring.
That is one of the problems we are facing right now
with enhanced monitoring rule development. So, I think
this is necessary to caveat. Yes, you can monitor a
bubble, but will it make David happy or the compliance
people. That is the issue.
MS. STINSON: Other
issues? Henry?
MR. NICKEL: I would just
say that, you know, another issue here is averaging time,
and the averaging time can be critical to whether or not
any kind of bubbling scheme is feasible. One of the
questions, obviously, that is raised by the proposal is the
idea or the suggestion that there would be shorter-term
averaging times as a part of this program.
I suppose I would say that the shorter the averaging
time, the more difficult it may be to manage a bubble.
MS. STINSON: Monitoring
and enforcement. Other concerns to raise?
Observations? Yes, Ellen?
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MS. SIEGLER: I share Mike
Barr's concern about the possibility of unit-specific
limits. I think that could seriously undermine any kind of
a program like this PAL program.
And I guess I didn't feel very comforted at the
response that he got which was that this is going to be
a case-by-case decision. It is sort of like saying you
have to agree to play a card game and then we will let
you turn over your card, and it is either an ace or a 2. I
don't think that that is a satisfactory way of addressing
that issue.
MS. STINSON: Let's move
on. How about the constellation of baseline issues that
were raised? Again, we are looking for people's
comments. Imagine that you are trying to adjust the
system to accommodate the concerns that people raised
around this.
MR. BRENNER: It sounded
to me, just to help get this started, that there were two
issues that I had jotted down here. One was, can you
determine them? How do you go about determining?
How hard is that to do?
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And the other was this concern that if you really
asked States and sources to deal with these issues
explicitly...! will go too far here, but say that there was
a concern that the system might blow up if they had to
deal with all of this explicitly.
MS. STINSON: Sort of the
i
States' capability to manage that. Yes?
MR. PENNA: I think the
snapshot issue that Dave Aldorfer raised earlier is going
to be critical here, because even if you are not a
cyclical.. .even if you are not in a cyclical industry, the
snapshot may be taken at a time when you are down,
because you are changing product.
There has to be some way of trying to accommodate
that, and that then starts getting into the problems that
David and other people have raised that you are really not
talking about actuals.
Another problem that you face is what about a
facility that is ramping up so that it has been permitted,
it has gone through BACT or LAER and is in the process
of ramping up to its full production but happens to be,
say, at a 25 percent point at the particular time you draw
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the line?
It seems to me that you have got to have some kind
of mechanism, and there is currently in the regulations
that kind of mechanism, but if that isn't built into this,
you have yourself a hell of a problem.
MS. STINSON: So if
anybody has any ideas how to deal with the ramp up
problem and dealing with getting away from actual and
cyclical nature... Dick, did you have an idea?
MR. PENNA: No, I was
going to...the existing regulations take care of the ramp
up problem, and I would hope that that would be the
approach that you would take in this scheme, but what do
you do...I am not sure what you do about the facility that
is in down time, you know, because of product change-
over or something like that. How do you accommodate
that?
I guess that is a variation of the point that Dave
Aldorfer raised about the company that is in a cycle.
MS. STINSON: Leslie?
MS. RITTS: I think also an
issue...
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MS. STINSON: Just a little
closer.
MS. RITTS: Sorry.. .issue
with the good actor who has done the pollution
prevention and made process changes before this system
gets implemented. There has to be some accommodation
for them so that they don't lose it.
MS. STINSON: Okay. Who
do we have there? Is that Bill Tyndall?
MR. TYNOALL: To respond
a little bit, we have looked at these issues and certainly
thought about baseline adjustments and both for someone
who has gone through New Source Review recently and
is ramping up and also already has very good technology
in place and also for the source that, due to voluntary
actions or other programs, has got very good controls in
place and the sort of comparative fairness at putting that
source at some actual levels and putting another source
that has basically no controls at their actual levels.
It boils down to...you know, our vision would be
that this is all part of what has to be worked out by the
State in trying to implement the program, and maybe that
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is assigning to the State more than they want to bite off
This is certainly an issue out in Los Angeles in terms
of reclaim, and it is just something.. .you know, it is part
of having to implement the program is you have to deal
with issues like this, and they are wrestling with these
very types of adjustments right now. We will see
whether reclaim ever comes out of it.
MS. STINSON: Ron?
MR. VANMERSBERGEN:
This problem somewhat reminds me of the heart surgeon
who wants to be doing a transplant, and the patient isn't
sick enough at this point to do a transplant. The risk of
a transplant is much more severe than the patient's
present situation. So, you have to wait until the patient
gets sick enough to do the transplant and deny the
benefit of the transplant.
And that is similar to a situation like this. In Los
Angeles where the air pollution problem became so
severe, some of these problems, the pain wasn't so great
compared with the severity of the problem.
So, we may have to sort of decide or wait with the
implementation of this until the pain of it
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becomes.. .elevates to the right level.
MS. STINSON: A severe
heart problem.
MR. VANMERSBERGEN:
guess I am pretty pessimistic about the solution on this,
trying to be fair to the source that is well controlled at
the present time or the kind of source that GM has. They
have got a lot of capacity that they have paid for but are
not able to use it. I think it is going to be hard to work
that out.
MS. STINSON: Bill?
MR. PEDERSEN: One
response to what Bill Tyndall said about we gave it to the
States and it is their problem. I think one thing that EPA
could do that would be useful would be to acknowledge
that since allowables will always be inherently higher
than actuals, if you have to meet a certain actual level,
you can credit a legitimate scaling factor I know there
are also illegitimate scaling factors, in your attainment
demonstration, and, in fact, I think that you have put
that on the table in your economic incentive rule proposal
where you »ay that some of the actuals can be...of the
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allowables can be greater than the actuals as long as it
is consistent with the attainment plan.
MS. STINSON: Other
issues, baseline issues? What about this question of
States' capacity to determine the baseline? Any more
elaboration on that? David?
MR. JORDAN: I think some
of the question on capacity is going to get into how the
baseline is established. If we are establishing baseline
on the basis of actuals, that may be one question versus
doing it on the basis of potential emit where there is a
very detailed, site-specific air quality type of analysis
needed.
Another thing going along with that, if we are doing
things on the basis of the potential to emit, there are
some pollutants, VOC and NOx, where we don't have a
good ability to predict what the impact of operating at a
higher level might mean in terms of air quality.
MS. STINSON: Yes, Dennis?
MR. ARMBRUSTER: I do see
the resources as a problem. I* realize we are not dealing
with it now, but down the road, this is...
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MS. STINSON: Just a little
closer.
MR. ARMBRUSTER: Down
the road, this is really going to open up a large resource
problem. In doing the modeling and everybody kind of
scrambling for whether it is the actuals or potentials, I
see it as a tremendous resource problem and one that is
likely to get very political.
It is hard to say what the resources will be- Right
now, I see it as a tremendous burden, and it probably will
be three or four years down the road, too.
MS. STINSON: Henry?
MR. NICKEL: Yes, I think
that, you know, you may have the answers to these
questions in nonattainment areas where you have just
completed your inventory and everyone has fought with
you about, you know, what the numbers should be. But
this program, of course, goes everywhere, to all the
nonattainment areas.
There is little question that anyone that comes in
there that had a bad* you know, last year and the ye*r
before is going to be putting together the case to the
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State that, you know, it should be, you know, the year 5
and 6 or 7 and 8 or whatever. So that I think that there
really is a potential here for committing a lot of State
resources.
MS. STINSON: Mike?
MR. BARR: Yes, I think the
pressure on me existing system is getting so great in
some areas that that has a tendency to produce the
resources necessary to reform it, and this certainly isn't
the only way in which New Source Review can be
reformed, but it is one of the ways that most of the
interests that are concerned about New Source Review
can get something out of it.
MS. STINSON: Molly?
MS. ROSS: I probably
should make explicit something that has been in the back
of my mind as we have discussed this all day and that is
the New Source Review situation in a State like Virginia
with Shenandoah National Park where we found adverse
impacts on new sources...this was a good seating
arrangement here...and there are a lot of problems with
all parties trying to work out these issues, and we are all
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recognizing that the problem we are dealing with is from
the existing sources overwhelmingly, and everyone is
struggling to find a way to address that.
So, I am looking at this, and my interest in it is
figuring out is this a reasonable way to address that
problem. That could be one of the advantages of it, but
it all depends on how the particulars are worked out.
MS. STINSON: How it is
structured. Okay, good. Let's move to attainment
demonstrations and the problems and struggles around
attainment demonstrations for SIPs. Do we need to
characterize it further? Spark some ideas?
Again, some of the strengths and weaknesses of the
problems inherent in this system regarding this issue,
particularly if you are thinking about, you know, how to
address the concerns if you were to try to structure
something to implement.
Chris?
MS. SHAVER: I think this
was listed as a con on the sheets, and there is no way '
can see as a con the fact that we might discover that we
are violating standards in different places or we have
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exceeded the increments that have been set aside to
protect the environment. I think that is only a positive
thing.
Not only that, regardless of what is done here for
New Source Review purposes, something needs to be
done to make sure those analyses occur anyway up to and
including litigation at this point, but I have been struck
by the number of States who don't even consider tracking
increment as a day-to-day thing they are supposed to be
doing. They don't even know how.
I mean, we have been under this program for 15, 16
years. It is not being done, and when States are told
well, what is the cumulative effect, they say oh, you
mean we are supposed to be keeping track of that?
Something is wrong, and it needs to be fixed
regardless. So, it is definitely a pro in my mind.
MS. STINSON: Okay.
MR. BURKHART: Well, let
me ask a question. Is this the issue, David, that you
brought up about how we are going to make these
demonstrations if we are using allowable emissions?
MS. STINSON: Bill, can you
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talk into your mic? I am sorry.
MR. BURKHART: I am sorry.
I am just trying to make sure I understand the issue on
the table.
MS. STINSON: Is your mic
on ?
MR. HAWKINS: This is a
different issue. This is the fact that there is a mismatch
between the assumptions of the consistency of existing
limits with either ambient standards or PSD increment
consumption, and we have...Chris is saying that the
States have not taken seriously their responsibility to
track increment consumption as a general matter, and if
there is some thorough analysis of the situation, that will
be identified as a problem, and it will be clear that the
increment has been broken.
MS. STINSON: Mike?
MR. BARR: I think this also
gets back to the issue of the contribution of the mobile
source sector and how this program does relate to overall
attainment planning. If you think there is a mismatch
possible here, you can't believe the mismatch when the
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entire mobile source inventory is understated by a factor
of 2, and even that is within the error bars.
I think there does need to be careful thought given
to how this program fits within the overall plan. I think
it, again, reveals that New Source Review is only a very
small issue compared to everything else, particularly the
mobile source inventory-which is so problematic which
also suggests maybe we are running out of gas at the end
of the day.
MS. STINSON: This is
possible. John?
MR. DANIEL: I just want to
respond to what Chris and Molly were saying. I guess my
concern, again, is modeling is so bloody complicated and
so bloody conservative. Even if you predict the
violation, you may or may not have one, and we have got
situations where we have got monitors out there that
show levels, you know, maybe 10 percent of the standard
and yet if you run a model, you may predict and exceed
this.
You know, that is screwy, and it is going to take an
awful lot of resources to straighten that out.
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MS. SHAVER: Can I just
respond briefly?
MS. STINSON: Sure.
MS. SHAVER: The only
problem I have with what you said, John, is regardless of
what the models or the monitors say, in the State of
Virginia in the case of Shenandoah and probably
elsewhere in the State, if you look, you have serious
adverse effects occurring to all kinds of resources. That
is the problem w« are trying to correct. I mean, the
standards are just there as a gauge of that when the
reality hits you something should be done regardless of
the models or the monitors.
MS. STINSON: Dave
Aldorf er?
MR. ALDORFER: I just kind
of have to respond to what Mr. Barr just said. I don't
personally know that mobile source inventories are
underestimated by a factor of 2. I don't know that he
knows it. I am willing to concede that there is probably
some uncertainty there.
MR. BARR: You don't
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believe the Tunnel Study, Dave?
MR. ALDORFER: I am off my
reservation with the mobile source stuff, but the fact
remains that, you know, if we are concerned about how
this program would work in ozone nonattainment areas,
most of us are very well aware that point sources to
which this would apply are a fairly small slice of the total
emission inventory, and all of the segments of it have the
uncertainty associated with them.
It kind of brings me back to, you know, are we going
to be able to solve all our air quality . management
problems that we have across this country border to
border and coast to coast by this kind of a program that
just applies to stationary sources? I don't think so.
MS. STINSON : DickPenna?
MR. PENNA: I think there
at least several of us in this room, including the person
immediately on my right and Bill Pedersen who have had
over the years a fair number of scars dealing with the
problem of transportation control measures. That is what
Mike is talking about. That is what Dave is talking
about. Leslie talked about that earlier.
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What this discussion demonstrates to me very
explicitly is we are talking about an air quality
management program. We really are not talking
specifically about New Source Review.
This is...new sources and stationary sources and
mobile sources, you can argue about their relative
contribution from now until midnight tonight and not get
a resolution of it, but when you start down that slope of
trying to allocate between mobile and stationary sources,
you have got a hell of a problem on your hands. I just
don't know how the control agencies are going to be able
to work that issue out in any kind of equitable manner.
MS. STINSON: Dave
Hawkins?
MR. HAWKINS: Well, I think
that Mike Barr and Dave Aldorfer have both made good
points, as well as Dick, and what is interesting to me
about the last three comments is that I think it is an
excellent preview of the modeling wars that we would
see in trying to establish these individual PAL caps.
People will come in and say stationary source, point
source, as a category, is a small contributor to this
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area's nonattainment problem. My particular industrial
category is an even smaller contributor. What is more,
my particular plant that we are here arguing about is
smaller still, and there is no way in the world that you
can say that the 40 percent higher cap that I want for my
facility is going to make that much of a difference in your
modeling of attainment.
The tools aren't there to withstand that kind of
upward pressure. I mean, there is a beautiful incentive
system operating in establishing these caps. Everyone
wants to maximize their cap.
It is the old system of putting as many sheep on the
village commons as you possibly can. You know, no one
benefits from taking his or her sheep off the commons,
and the commons certainly doesn't benefit from the
incentives created by that system.
And the tools aren't there to defend against the self-
interest of each one of these facilities trying to get the
largest possible cap.
MS. STINSON: Molly?
MS. ROSS: Playing right off
of that, we are interested in getting reductions from all
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these places, and it suddenly hit me late in the day that
we have got an ecosystem of regulation out there where
everything is hitched to everything else, and you can't
talk about New Source Review very well separately from
all these other problems. What we are eventually
interested in are impacts which are not capable of
modeling for all the reasons that we are talking about and
have talked about, in most cases, back to very small
contributors. So, it is hard to devise a program on that
basis.
But I think we have gotten to a very interesting
point, because I am interested in looking at all these
ways of how we can get a system that will make some air
quality benefits, real ones, for environmental protection.
MS. STINSON: Dave Bray?
MR. BRAY: I was going to
say this discussion comes around to something Bill and I
were talking about earlier. I think he described it as the
tail wagging the dog.
In a sense, this whole issue of setting caps would be
a moot point if there were perfect SIPs out there. If
there were control programs established everywhere that
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met alt the Clean Air objectives, you would just pull the
number out of those' programs, and the decision would
have already been made as to who is controlled, who the
contributors are, what are the appropriate levels, and it
wouldn't be an issue.
I think, you know, as Bill said, sort of we are putting
the cart before the hors? here in sort of backloading the
program and setting up a system that requires these
decisions to be made for purposes of New Source Review
when they probably should have already been made for
purposes of SIP planning and air quality maintenance and
PSD and so forth.
So, it does sort of turn things around a little bit and
force the system to go to where it probably always
should have been, but maybe it needs to do that.
MS. STINSON: Bill
Pedersen?
MR. PEDERSEN: Yes, I
don't understand why the problems Dave Hawkins
suggests under a cap system would not equally arise
under a non-cap system when sources...presumably, an
area will model its ozone attainment needs and then
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sources will wonder what limit they got and, presumably/
will do their best to get a high limit.
MS. STINSON: Dave?
MR. HAWKINS: Well, I think
it exacerbates it. Sources that are subject to a
substantial control reduction as a result of a
photochemical grid model are going to come in and argue.
That is for sure.
But this cap approach exacerbates that situation,
because the reason that they are going to argue against
a substantial reduction is because of the one-time costs
of putting into place the controls to bring their emissions
do wn.
But this adds to it another liability which is once
their cap is set at that lower level, it inhibits their ability
to go up, and it inhibits their ability to plan for
expansion. So, the stakes are multiplied, and they are
multiplied significantly.
MS. STINSON: Leslie?
MS. RITTS: Not only does
it inhibit your ability to go up, but I come back to
something that John Calcagni said in August. He kept
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returning^ to this point, and I think we haven't dwelt on
it enough today, and that is just room for future growth.
Having been involved in the early '80s trying to set
up some of these growth programs in Middlesex County
and other areas around the country with their reg reform
staff, I mean, then it was a very, very tough thing to get
people to actually commit in their air quality planning to
future growth, and it will be impossible when you have
all of this pressure to get what air quality exists which
everyone already has claims on and claims plus on.
MS. STINSON: Chuck?
MR. KNAUSS: Several
people have mentioned the constellation of issues and
how they are interconnected here in the last few minutes,
and I think that is right, and it something that should be
discussed over the next probably fairly lengthy period of
time. I hope tomorrow morning we could also get back to
the specific tasks, perhaps work groups, on immediate
reform and help that we discussed this morning with
respect to exclusions and the baseline calculation and the
accounting system and what can be done in the short
term to help the NSR process in addition to these longer-
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term issues.
MS. STINSON: With that,
I am going to ask members of the audience if you have
any comments or reflections on the four areas of concern
that we have talked about in the last 45 minutes.
MR. BURNS: I am Ward
Burns with EPA Region VII.
If you have a sourcewide cap and you have to show
that they are out of compliance on a mass-of-pollutant
per hour basis or something of that nature, you may use
parameter monitoring to indicate compliance, but a lot of
times, you get down to having to do a reference method
test to determine compliance.
It doesn't take very many stacks before that
becomesimpossible.
MS. STINSON: Yes?
MR. ZBUR: Rick Zbur with
Latham & Watkins.
Because it is the end of the day, I will only make a
comment on the enforcement issues that were raised. We
have been thinking a lot about that in the context of
enforcement issues relating to enforcing facility caps in
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the context of the reclaim program. Really, I think the
issue that Dave raised is not the one that has been the
most troubling to us.
I mean, the issue with respect to whether or not you
can aggregate and measure emissions from the various
sources within a unit is not really the problem that we
have been facing in terms of the enforcement system. I
mean, essentially...and the way that that has been dealt
with has been through the lengthening of the averaging
period that is beirrg proposed to not one that would focus
on a daily basis but on an annual one.
When that is the case and you are measuring against
an annual period, it allows sources to, on a periodic basis
over the course of the year, have time to aggregate their
emissions sources and measure them against an annual
average period.
The bigger issue, I think, that we have been having
trouble with on the enforcement side has really been one
that is raised when you have a trading system that is in
place which is not part of the type of proposal
necessarily or independently that is being discussed this
morning, and those issues arose in the VOC inventory
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where you just have concerns about inconsistency with
respect to different types of emission factors being used
at the same sources.
So, you have concerns about whether you are
trading apples and apples in a trading system, but if you
don't have the trading issues involved, I think it is less
of an issue, because as long as you are consistent within
a facility over time, you should be able to have a valid
enforcement system, you know, to enforce against some
type of facility cap.
The issue that you raised with respect to the
concern about whether or not you can enforce source-
specific limits has been one that has received a lot of
debate. Essentially, that issue is one in which the
concern is do you have to show that, in fact, what you
have been assuming as your emission factor is actually
accurate at every source.
The way that the South Coast District, I think, is
intending to address that is through expanding their
ability to enforce record keeping violations so that while
it may be more difficult to enforce an emissions
violation, it would become easier to enforce a record
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408
keeping violation and make sure that the enforcement
system had some type of integrity. I won't go into more
detail.
MS. STINSON: Other public
comments? Okay. I guess we would like to close by
posing a few questions and to tell you how we want to
proceed tomorrow.
The first question following directly from this
discussion, given these concerns and the problems
around these concerns, can any of the options that were
presented and discussed in August address them? Think
about this discussion in terms of the other options. We
will ask that you do that overnight.
Then, consider the follow-up question which is,
where does EPA go from here on this PAL system?
Develop it further? Look at other options? Consider
combinations? We need your ideas and guidance on that
tomorrow.
So, that is kind of the next step out. Then, if you
take the next concentric circle out. it is, of course, we
need to discuss process-wise where does the agency go
in general from here in terms of gaining additional input
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409
of yours in this overall process of developing
simplification rules.
And let me ask that people try to get together and
talk about this this evening. Try to generate some
specific ideas around this. EPA, the EPA staff and myself
are going to meet over lunch tomorrow to talk on this
third question about overall what type of process is
appropriate from here following on this morning's
discussion, and we would really like to get some other
developed ideas out in kind of a brainstorming session
tomorrow.
We are thinking about doing that after lunch, just
after lunch, which leads me to ask another question
which is are folks going to be able to stay through 3:00
o'clock in general? How many folks are we going to lose
at 1:00 o'clock or 12:00 o'clock when we break for
lunch? Are we going to lose anybody?
MR. BRENNER: For the BACT
discussion?
MS. STINSON: Okay, let's
take a big step backwards. The suggestion was raised
that we have an explicit time set aside to talk about the
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process next steps that is not the very last thing on the
agenda. So, we were planning on doing that kind of
along with the workshop summary at 2:30. We are
thinking of taking a half-hour to do that right after lunch,
and as people start dribbling out, we will have addressed
that. You will know where we stand.
Meanwhile. I am checking in to see are people going
to have to...how many folks are we going to lose at 2:00
o'clock? And 3:00 o'clock? Everybody, okay.
Did you want to add something?
MR. BRENNER: No, I think
that covers it. We are pretty much on a track to take a
run at completing the BACT issues by lunch so that the
afternoon is really devoted to what have we learned from
the workshop and next steps.
So, that will be a lot of pressure on us tomorrow
morning in dealing with BACT, but I think that is the right
way to do it, that we can have a pretty constructive
discussion on next steps, given everything that was laid
out today.
MS. STINSON: And maybe
the way to think about it is after lunch, the discussion
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41 1
we are going to have is next steps on the PAL system,
next steps on BACT which is kind of the 1:00 o'clock slot
as it is listed now, and then next steps on all of the
specific recommendations for specific points that were
brought up this morning in the comment and feedback.
So, really three topics.
MS. ROSS: Is it possible to
start at 8:00 rather than 8:30?
MS. STINSON: Yes, it is.
I know Lydia won't be able to be here at that time, but
does anybody have a problem starting at 8:00 o'clock?
Is that better?
Larry, is it any problem having the room at 8:00
o'clock? Do people want to start at 8:00 o'clock? Would
you rather have 8:30?
MS. STINSON: Let's go at
8:00 and make sure we have plenty of time.
Okay, any other suggestions, comments? Yes,
Henry ?
MR. NICKEL: Oh, no, I was
just taking my name off.
MS. STINSON: Don'ttouch
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that. Bruce, one more comment?
MR. MILLER: We are not
constrained to just the options that were presented at the
last meeting.
MS. STINSON: That is
right. This is a good point. In terms of talking about
PAL tomorrow, you want to ask the question can these
other options address it, but also can some other option
that has never been discussed before address it. So,
totally new ideas.
We will see you here tomorrow at 8:00, and if you
want, meet downstairs at 6:30.
(WHEREUPON, the Meeting was recessed at 6:05 p.m.)
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413
CAPTION
The Meeting in the matter, on the date, and at the
time and place set out on the title page hereof.
It was requested that the Meeting be taken by the
reporter and that same be reduced to typewritten form.
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414
CERTIFICATE OF REPORTER
STATE OF VIRGINIA AT LARGE:
I, IAN M. RODWAY, Notary Public for the State of
Virginia at Large, do hereby certify that the foregoing
was reported by stenographic and mechanical means, which
matter was held on the date, and at the time and place
set out on the title page hereof and that the foregoing
constitutes a true and accurate transcript of same.
I further certify that I am not related to any of
the parties, nor am I an employee of or related to any of
the attorneys representing the parties, and I have no
financial interest in the outcome of this matter.
GIVEN under my hand and Notarial seal this ?firh
day of Apri 1 1993.
My Commission Expires:
January 10, 199 6
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