Improving  EPA's Performance
with Program  Evaluation
Evaluation of Implementation Experiences with Innovative Air Permits:
Results of the U.S. EPA Flexible Permit Implementation Review
                                                                                Series No. 7
By continuously evaluating its programs, EPA is able to capitalize on lessons learned and incorporate that
experience into other programs. This enables the Agency to streamline and modernize its operations while promoting
continuous improvement and supporting innovation. This series of short sheets on program evaluation is intended
to share both the results and benefits of evaluations conducted across the Agency, and share lessons learned
about evaluation methodologies in this evolving discipline. For more information contact EPA's Evaluation Support
Division at
           At a Glance
Evaluation Purpose
To evaluate implementation experience with
flexible permits.
Evaluation Type
Performance/Outcome Evaluation
Publication Date
November 2002
Office of Air Quality Planning and Standards,
Office of Policy, Economics and Innovation,
Office of Policy Analysis and Review,
Office of General Counsel,
Office of Enforcement and Compliance
Mike Trutna, OAQPS (919) 541-5345
Dave Dellarco, OPEI (206) 553-4978
                    Background:  Why was an evaluation

                    Over the last several years, EPA and several State and local
                    permitting authorities have worked with several companies to
                    develop innovative approaches to air permitting.  EPA and the
                    States launched flexible permitting pilots to increase operational
                    flexibility while ensuring environmental protection.  Permit
                    developers sought to encourage and facilitate emissions reductions
                    and pollution prevention with the flexible permits.  The permits
                    were also designed to reduce the administrative "friction"—costs,
                    time, delay, uncertainty, and risk—associated with making certain
                    types of  operational and equipment changes.  Additionally,
                    permitting authorities desired to reduce the resources needed for
                    case-by-case applicability determinations and for the approval
                    process of minor and major New Source Review (NSR) permit
                    applications and other permitting amendments.  Permitting
                    authorities designed these "flexible permits" within the existing
                    regulatory framework (i.e., approaches were not precluded under
                    any relevant  Federal or State regulation) to address all applicable
                    air requirements.

                                                         NATIONAL CENTER FOR
                                                         ENVIRONMENTAL INNOVATION

As interest in flexible air permitting increased, so did
concerns, both internal and external, as to whether the
permits actually worked, achieved environmental
reductions, and were enforceable.  In response to these
critical questions and concerns, EPA saw the need to
evaluate its implementation  experience with flexible
permits developed under such pilot efforts as EPAs
Pollution Prevention in Permitting Program (P4) and
State  innovation activities.  Particular interest has
focused on flexible permitting techniques such as plant-
wide emissions  limits (e.g.,  plant-wide applicability
limits, or PALs; potential-to-emit caps). In response
to this  need, EPA launched the Flexible Permit
Implementation Review to conduct in-depth reviews
of six flexible permits developed since 1993.

Basic Evaluation Approach:  How
did they do it?
The evaluation process comprised five steps, outlined
Step I:   Develop the Flexible Permit Review
          Framework, which  includes specific
          evaluation questions  grouped into eight
          areas of inquiry, to structure the six permit
Step II:   Develop evaluation criteria to select six
          permit pilot programs that would be the
          subject of this review.
Step III:  Collect data by conducting off-site research
          and pre-site visit  conference calls.
Step IV:  Conduct on-site  visits to the permitted
          source and the permitting authority  to
          obtain data necessary to complete the
          Flexible Permit Review  Framework;
          conduct a quality  assurance review of data
          to ensure the  accuracy  of  information
          catalogued in the Flexible Permit Review
Step V:  Prepare  Permit Review Reports (findings
          and recommendations).
Evaluation Results:  What was
• The  flexible   permits  facilitated   and
  encouraged   emissions   reductions    and
  pollution prevention.  The companies with flexible
  permits significantly reduced actual plant-wide
  emissions and/or emissions per unit of production
  (e.g.,  those sources with  at least five years of
  implementation experience under  the flexible
  permits  achieved a  35 percent to 85 percent
  reduction in annual emissions of volatile organic
  compounds, which contribute to the formation of
  ground-level ozone).  In addition, provisions
  allowing advance approval for certain changes
  reduced the  administrative costs associated with
  pollution prevention, making pollution prevention
  more  attractive for companies  to undertake.  The
  terms of several flexible permits  encouraged
  pollution prevention through explicit pollution
  prevention program, reporting, and performance
• The flexible permits worked as intended, assuring
  appropriate  environmental protection under all
  applicable requirements.  EPA found that  the
  monitoring,  recordkeeping,  and reporting
  approaches established in the permits were
  sufficient to assure compliance with all applicable
  requirements, including those associated with the
  advance-approved changes. EPA independently
     Approach for this Evaluation
Step I
Develop Flexible Permit Review Framework
Step II
Select Flexible Permit Pilots for Review
Step III
Collect Data
Step IV
Conduct Interviews/On-site Visits and QA of Monitory
Prepare/Compile Report Findings & Recommendations

   verified the ability to determine compliance with
   the permits using actual emissions  and monitoring
   data and procedures required by the  permits.  In
   addition, most of the flexible permits provided
   equivalent  or greater information  available to the
   public when compared to conventional permits,
   although the flexible permits shifted the timing,
   type, and format of information.  The  flexible
   permits typically required more comprehensive and
   frequent emissions monitoring,  reporting, and
•  Companies and permitting authorities experienced
   significant benefits from the flexible permits.
   Companies with flexible permits experienced
   significant  financial benefits.  In most cases, the
   flexible permits enabled the companies to respond
   to new market opportunities  and to  save several
   hundred hours in staff time needed to negotiate and
   prepare individual construction permit applications.
   The  flexible  permits saved  State and  local
   permitting authorities  staff time associated with
   processing case-by-case construction  permit
   applications,  enabling them to reduce permitting
   backlogs  and  focus resources  on  higher
   environmental priorities.  All of the permitting
   authorities  reported that they  "would do it again"
   with the particular sources and that they hope to
   use  flexible  permitting approaches with other
   appropriate sources  again in the future.

Evaluation Outcome:  What
happened as a result?
Begun  in March 2001, and published in November
2002, the report and  its findings are being used:  (1) to
inform the NSR Improvement Rulemaking—the final
evaluation report was included as part of the official
docket and was used  in confirming that the PALs
emissions caps are workable; (2) to inform an internal
dialogue about the development of the  Agency's P4
policy; (3) as  guidance for how the  Agency should
operate and  improve existing and  future flexible
permitting pilots; and  (4)  as a teaching tool for
permitting authorities about flexible permits.
United States
Environmental Protection
Office of Policy,
Economics and Innovation
      June 2003