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U.S. ENVIRONMENTAL PROTECTION AGENCY
OFFICE OF INSPECTOR GENERAL
Improving air quality
EPA Should Conduct More
Oversight of Synthetic-
Minor-Source Permitting to
Assure Permits Adhere to
EPA Guidance
Report No. 21-P-0175
July 8, 2021
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Report Contributors: Seth Gerhart
Erica Hauck
Richard Jones
Renee McGhee-Lenart
Abbreviations
CAA
Clean Air Act
CAA CMS
Clean Air Act Stationary Source Compliance Monitoring Strategy
CDPHE
Colorado Department of Public Health and Environment
C.F.R.
Code of Federal Regulations
ECD
Enclosed Combustion Device
EPA
U.S. Environmental Protection Agency
ICIS
Integrated Compliance Information System
NSPS
New Source Performance Standards
OAQPS
Office of Air Quality, Planning, and Standards
OAR
Office of Air and Radiation
ODEQ
Oklahoma Department of Environmental Quality
OIG
Office of Inspector General
TPY
Tons Per Year
VOC
Volatile Organic Compounds
Cover Photos: Enclosed combustion devices, a type of pollution control equipment often
covered by synthetic-minor-source permitting limitations, at natural gas
extraction facilities. (EPA photos)
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x-^tD ST/lf.
• U.S. Environmental Protection Agency 21-P-0175
§ mmj \ Office of Inspector General July 8 2021
U32J1
At a Glance
Why We Did This Audit
We conducted this audit to
determine whether the
U.S. Environmental Protection
Agency and state and local
agencies provide sufficient
oversight to assure that
synthetic-minor sources of air
emissions comply with the
limits in their air permits.
Synthetic-minor sources are
facilities that agree to
restrictions in their permits to
reduce their actual emissions
below major-source thresholds
to avoid being major sources of
air pollution under Clean Air Act
permitting programs. Major
sources are the largest emitters
of air pollution and are subject
to stringent permitting and
compliance requirements.
This audit addresses the
following:
• Improving air quality.
This audit addresses a top
EPA management challenge:
• Overseeing states
implementing EPA programs.
EPA Should Conduct More Oversight of Synthetic-
Minor-Source Permitting to Assure Permits Adhere to
EPA Guidance
What We Found
While the EPA oversees state and local Without clear and
compliance monitoring for synthetic-minor-source enforceable limitations in
permits, the EPA conducts only limited oversight synthetic-minor-source
of the permits themselves. The EPA has issued permits, facilities may
guidance to state and local agencies to develop emit excess pollution that
enforceable permit limitations in synthetic-minor- would otherwise subject
source permits, but the Agency does not review . the more stringent
.. r. ,, 0 . .... requirements of the Clean
permits to assure the agencies meet this ^ Act major.source
guidance. permitting programs.
We reviewed 16 natural gas extraction industry synthetic-minor-source permits
from Colorado and Oklahoma and found that many of the permit limitations did
not adhere to the EPA's guidance. For example, in those permits, we found that
102 of 529 permit limits did not have sufficient information within the permit or the
permit's supporting documentation to determine whether the limits were
technically accurate. We also found that 26 limits did not specify the method for
assessing compliance. In addition, 55 limits did not have sufficient monitoring
requirements to determine whether the facility's assumed pollution reduction from
pollution control devices was being achieved. This could result in a synthetic-
minor facility emitting pollutants at or above major-source levels without being
detected.
In addition, we found that the EPA had not communicated several key
expectations for synthetic-minor-source permitting to state and local agencies via
guidance. Further, Oklahoma does not allow the public to participate in its
permitting process for certain synthetic-minor-source permits, as required by
EPA regulations. EPA staff said this may be the case in other states as well.
Recommendations and Planned Agency Corrective Actions
Address inquiries to our public
affairs office at (202) 566-2391 or
OIG WEBCOMMENTS@epa.gov.
We recommend that the EPA (1) develop and implement an oversight plan for
synthetic-minor-source permitting; (2) update its practical enforceability guidance;
(3) assess EPA studies and other relevant information on enclosed combustion
devices during its next review of applicable regulations to determine whether
revisions to monitoring, record-keeping, and reporting requirements are needed;
(4) develop and issue new guidance that includes key EPA expectations for
synthetic-minor-source permitting; and (5) take steps to assure that all states
adhere to public participation requirements for synthetic-minor permits. All
recommendations are resolved with corrective actions pending.
List of OIG reports.
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
THE INSPECTOR GENERAL
July 8, 2021
MEMORANDUM
SUBJECT: EPA Should Conduct More Oversight of Synthetic-Minor-Source Permitting to Assure
Permits Adhere to EPA Guidance
Report No. 21-P-0175
This is our report on the subject audit conducted by the Office of Inspector General of the
U.S. Environmental Protection Agency. The project number for this audit was OA&E-FY19-0093. This
report contains findings that describe the problems the OIG has identified and corrective actions the OIG
recommends. Final determinations on matters in this report will be made by EPA managers in accordance
with established audit resolution procedures.
The Office of Air and Radiation is responsible for the recommendations presented in this report.
In accordance with EPA Manual 2750, your office provided acceptable planned corrective actions in
response to all five OIG recommendations. All recommendations are resolved, and no final response to
this report is required. If you submit a response, however, it will be posted on the OIG's website, along
with our memorandum commenting on your response. Your response should be provided as an Adobe
PDF file that complies with the accessibility requirements of Section 508 of the Rehabilitation Act of
1973, as amended. The final response should not contain data that you do not want to be released to the
public; if your response contains such data, you should identify the data for redaction or removal along
with corresponding justification.
FROM
Sean W. O'Donnell
TO
Joseph Goffman, Acting Assistant Administrator
Office of Air and Radiation
We will post this report to our website at www.epa.gov/oig.
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EPA Should Conduct More Oversight
of Synthetic-Minor-Source Permitting
to Assure Permits Adhere to EPA Guidance
21-P-0175
Table of C
Chapters
1 Introduction 1
Purpose 1
Background 1
Responsible Offices 4
Scope and Methodology 4
2 EPA Should Conduct Additional Oversight to Assure That
Synthetic-Minor-Source Permits Meet Guidance 6
EPA Policy Requires Oversight of Permitting Programs 6
EPA Conducts Oversight of Compliance Monitoring Activities
at Synthetic-Minor Sources to Assure Facilities Comply with Permits... 7
EPA Conducts Limited Oversight of Synthetic-Minor-Source Permits 7
Many Permits Reviewed Did Not Adhere to EPA Guidance on
Practical Enforceability 8
Conclusions 17
Recommendations 17
Agency Response and OIG Assessment 18
3 EPA Has Not Clearly Communicated Key Synthetic-Minor-Source
Permitting Expectations in Official Guidance 20
Key Expectations Have Not Been Clearly Communicated in
Official Guidance 20
Without Clear Guidance, States May Adopt Their Own Practices 21
Conclusions 21
Recommendation 22
Agency Response and OIG Assessment 22
4 ODEQ Does Not Currently Include Synthetic-Minor-Source Permits
in Its Public Participation Process 23
EPA Regulations Require Opportunity for Public Review and
Comment on Synthetic-Minor-Source Permits 23
ODEQ Does Not Currently Provide Opportunity for Public Review
and Comment on Individual Synthetic-Minor-Source Permits 23
Lack of Public Participation Precludes Citizen Input on Facility Permits 24
Conclusions 24
Recommendation 24
Agency Response and OIG Assessment 25
-continued--
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EPA Should Conduct More Oversight
of Synthetic-Minor-Source Permitting
to Assure Permits Adhere to EPA Guidance
21-P-0175
Status of Recommendations and Potential Monetary Benefits 26
Appendices
A CAA Major-Source-Permitting Programs 27
B Internal Control Assessment 28
C Details on Scope and Methodology 29
D Background on Natural Gas Extraction Industry 32
E Case Study: Synthetic-Minor-Source Permitting in Wood
Biomass Industry 34
F Agency Response to Draft Report 35
G Agency Response to Revised Recommendation 3 39
H Distribution 40
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Chapter 1
Introduction
Purpose
The Office of Inspector General
for the U.S. Environmental
Protection Agency conducted
this audit to determine whether
the EPA and state and local
agencies provide sufficient
oversight to assure that
synthetic-minor sources of air
emissions comply with the
limits in their air permits. Specifically, we focused on emission, operational, and
production limits in the permits.
Background
The Clean Air Act, or CAA, permitting programs cover three types of facilities:
• Major sources, which are facilities that emit regulated pollutants over
certain levels measured by tons per year or TPY, referred to as major-
source thresholds. Major-source thresholds differ by permitting program
and type of pollutant.
• True-minor sources, which are facilities that have the potential to emit
regulated pollutants below major-source thresholds.
• Synthetic-minor sources, which are facilities that have the potential to
emit regulated pollutants at or above major-source thresholds but that
agree to enforceable restrictions to limit their emissions below these
thresholds to avoid being
subject to more stringent
major-source
requirements.1 Such
enforceable restrictions,
also called limitations,
are included in a
facility's air permit.
Top Management Challenge
This audit addresses the following top management
challenge for the Agency, as identified in OIG Report
No. 20-N-0231, EPA's FYs 2020-2021 Top
Management Challenges, issued July 21, 2020:
• Overseeing states implementing EPA programs.
Enforceable restrictions or limitations are
conditions in air permits. If a facility does not
adhere to its limitations, the state, local, or tribal
permitting agency or the EPA may take
administrative, civil, or criminal enforcement
actions. This includes issuing a notice of violation,
an order for the facility to come into compliance, or
a fine. Citizens may also file a civil action suit
against a facility for permit limitations violations.
1 Synthetic-minor sources are referred to as "synthetic" because they would be major sources if not for their
enforceable permit restrictions. Thus, they have "synthetically" become a minor source by accepting those
restrictions.
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Examples of enforceable restrictions are limiting a facility's operating
hours or operating pollution control equipment to reduce emissions to a
specified level. Figure 1 illustrates how a potential major source may
choose to accept enforceable permit restrictions to avoid major-source
permitting requirements.
Figure 1: New facility chooses to accept enforceable restrictions to avoid major-source-permitting
requirements
I ^ ^ \ Enforceable\ I
/ restriction /
Potential major source Synthetic-minor source
Source: EPA OIG analysis of enforceable permit restrictions. (EPA OIG image)
By implementing enforceable permit restrictions on their potential to emit
regulated pollutants, synthetic-minor sources can avoid certain costly
requirements of CAA permitting programs that apply to major sources. These
programs include Title V, Nonattainment New Source Review, and Prevention of
Significant Deterioration. Appendix A summarizes these permitting programs and
the corresponding levels of emissions that make a facility a major source under
each program.
Based on data in the EPA's Integrated Compliance Information System for Air,
known as ICIS-Air, there were 27,498 synthetic-minor sources and 12,282 major
sources operating in the United States in 2019. The ratio of synthetic-minor
sources to major sources has changed slightly over the last decade, with the
proportion of synthetic-minor sources being 2 percent higher in 2019 than in 2011
and major sources being 2 percent lower.
State and local agencies conduct most permitting and oversight activities of
synthetic-minor sources through permitting programs that have been approved by
the EPA. This includes developing or writing facilities' specific permit
limitations, as well conducting activities such as inspections to assure that
facilities are in compliance with their permit limitations. The EPA is responsible
for overseeing state and local agencies' permitting programs through support and
evaluation activities by clearly describing objectives and expectations, such as
21-P-0175
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through guidance documents, to increase state and local agencies' ability to
successfully implement program requirements.
Some synthetic-minor sources operate under a general permit rather than an
individual, facility-specific permit. A general permit is a single permit that
establishes terms and conditions that all facilities subject to that permit must
comply with. The establishment of a general permit provides for emission
limitations in a one-time permitting process and thus avoids the need to issue
separate permits for each facility operating under the general permit. A state or
local agency may develop general permits for a specific industry when there are a
large number of facilities within that industry that need to be permitted.
Types of Synthetic-Minor-Permit Limitations
There are several types of limitations that can be used in a permit to restrict a
synthetic minor's potential to emit below major-source thresholds. These include:
• Emission limits, which are restrictions over a given period of time on the
amount of a pollutant that may be emitted from a source into the outside
air.
• Production limits, which are restrictions on the amount of final product
that can be manufactured or otherwise produced at a source.
• Operational limits, which include all other restrictions on the manner in
which a source is run, including hours of operation, amount of raw
material consumed, fuel combusted, or conditions that specify that the
source must install and maintain add-on controls that operate at a specified
emission rate or efficiency.
It is important to assure that the limitations in synthetic-minor-source permits are
clear and enforceable and that synthetic-minor sources comply with these
limitations. If a synthetic-minor-source permit did not have permit limitations, the
facility would be considered a major source and subject to the more stringent
requirements of the major-source permitting programs. Although these facilities
are not major sources, they may still be significant emitters of regulated
pollutants. This is particularly the case for synthetic minors considered to be
SM-80 sources, which are a subset of synthetic-minor facilities that emit or have
the potential to emit pollutants at 80 percent or more of major-source thresholds.
EPA Guidance on Synthetic-Minor Sources
The EPA has issued guidance for state agencies to use in developing synthetic-
minor-source permits. Of particular importance in the guidance are two related
concepts:
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• Federal enforceability refers to whether the limitations placed on a
source's potential to emit are enforceable by the EPA and private citizens
as a legal and practical matter, thereby providing the public with credible
assurances that otherwise major sources are not avoiding applicable CAA
requirements.
• Practical enforceability refers to whether the permit provisions readily
allow regulators to assess a facility's compliance with its permit
limitations.
The EPA has also issued guidance for conducting compliance monitoring
activities at synthetic minors considered to be SM-80 sources. The EPA's
2016 Clean Air Act Stationary Source Compliance Monitoring Strategy, known as
the CAA CMS, describes the recommended frequency of full compliance
evaluations at SM-80 sources, as well as the activities that inspectors should
complete to assess compliance during full compliance evaluations.
Responsible Offices
Within the Office of Air and Radiation, or the OAR, the Office of Air Quality,
Planning, and Standards, known as the OAQPS, is responsible for developing
regulations and guidance related to air permitting, as well as providing high-level
oversight of state and local air permitting programs. The Office of Enforcement
and Compliance Assurance is responsible for developing guidance for state and
local agencies to use in conducting compliance monitoring at permitted sources of
air pollution and for overseeing state and local compliance monitoring programs.
The EPA regions are also responsible for overseeing state and local air permitting
and compliance monitoring programs.
Scope and Methodology
We conducted this performance audit from November 2019 to April 2021 in
accordance with generally accepted government auditing standards. Those
standards require that we plan and perform the audit to obtain sufficient,
appropriate evidence to provide a reasonable basis for our findings and
conclusions based on our audit objective. We believe that the evidence obtained
provides a reasonable basis for our findings and conclusions based on our audit
objective.
As detailed in Appendix B, we assessed the internal controls necessary to satisfy
our audit objective.2 In particular, we assessed the internal control components
and underlying principles—as outlined in the U.S. Government Accountability
2 An entity designs, implements, and operates internal controls to achieve its objectives related to operations,
reporting, and compliance. The U.S. Government Accountability Office sets internal control standards for federal
entities in GAO-14-704G, Standards for Internal Control in the Federal Government (also known as the Green
Book), issued September 10, 2014.
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Office's Green Book—significant to our audit objective. Any internal control
deficiencies we found are discussed in this report. Because our audit was limited
to the internal control components and underlying principles deemed significant
to our audit objective, our audit may not have disclosed all internal control
deficiencies that may have existed at the time of the audit.
To address our objective, we reviewed EPA policies and guidance related to
synthetic-minor-source permitting and compliance monitoring. We also
interviewed staff and managers in the OAQPS and the Office of Enforcement and
Compliance Assurance.
We also reviewed synthetic-minor facilities in the natural gas extraction sector to
assess whether synthetic-minor-source permit limitations and provisions adhered
to EPA guidance and whether the facilities' inspections were consistent with EPA
guidance. Specifically, we reviewed eight facilities in Oklahoma in Region 6 and
eight facilities in Colorado in Region 8. We selected these states because they
have among the highest number of synthetic-minor facilities in the natural gas
extraction industry, according to the 2017 National Emissions Inventory. For each
of the 16 facilities, we reviewed each active permit and the associated technical
support documentation, referred to as the permit record, to assess whether permit
limitations and associated provisions adhered to EPA guidance on synthetic-
minor-source permitting. This included a total of 30 permits covering the
16 facilities. In total, we reviewed 523 limits, including:
• 310 unit-specific emission limits.
• 42 facilitywide emission limits.
• 171 production and operation limits.
For each of the 16 facilities, we also reviewed documentation related to full
compliance evaluations conducted at the facilities to determine whether the
facilities were inspected in accordance with EPA guidance on compliance
monitoring activities.
We interviewed staff and managers from the OAQPS; the Office of Enforcement
and Compliance Assurance; Regions 6 and 8; the Colorado Department of Public
Health and Environment, known as CDPHE; and the Oklahoma Department of
Environmental Quality, known as ODEQ.
Appendix C provides more details on our scope and methodology. Appendix D
provides background information on the natural gas extraction industry.
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Chapter 2
EPA Should Conduct Additional Oversight to Assure
That Synthetic-Minor-Source Permits Meet Guidance
While the EPA oversees compliance monitoring activities at synthetic-minor
facilities to assure that facilities comply with their permits, the EPA conducts
minimal oversight of the permits themselves. The EPA has issued guidance for
state and local agencies to use in developing synthetic-minor-source permit
limitations to assure that the limits are enforceable as a practical matter, but the
EPA does not assess whether state and local agencies have developed permit
limits in accordance with this guidance. We found that 23 of the 30 synthetic-
minor-source permits we reviewed in the natural gas extraction industry did not
adhere to all elements of the EPA's guidance on practical enforceability. In cases
where practical enforceability guidance was not met due to insufficient
monitoring requirements, it could be more difficult to detect when a synthetic-
minor source has violated its permit limitations or is actually emitting pollutants
at a major-source level. The EPA should increase its oversight of synthetic-minor-
source permits to better assure that limits adhere to EPA guidance and are
practically enforceable.
EPA Policy Requires Oversight of Permitting Programs
Under the 1984 EPA Policy on Oversight of Delegated Environmental Programs,
the Agency is responsible for overseeing state and local programs. The policy
states that EPA oversight of delegated state programs should, among other things,
enhance state capabilities to administer sound environmental protection programs
through increased communication and a combination of support and evaluation
activities. In addition, the policy calls for the EPA to clearly describe objectives
and expectations for state environmental programs to increase the ability of state
agencies to successfully implement program requirements and to increase the
EPA's ability to provide appropriate assistance and evaluation. Examples of tools
provided in the EPA's policy include detailed, up-front guidance on how program
work should be performed.
In December 2020, the EPA issued its National Permitting Oversight Policy. The
policy states that the EPA is responsible for ensuring permits and permitting
programs conform with applicable laws and regulations. Additionally, the policy
states that the EPA's regular oversight of permits and permitting programs is
designed to identify and resolve emerging issues collaboratively with the
permitting authority, such as a state or local agency, long before the issues pose a
significant risk to the effectiveness of the program. This way, the EPA can avoid
invoking procedures to withdraw program delegation, authorization, or approval.
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EPA Conducts Oversight of Compliance Monitoring Activities at
Synthetic-Minor Sources to Assure Facilities Comply with Permits
The Office of Enforcement and Compliance Assurance oversees state and local
compliance monitoring activities including at SM-80s. According to the CAA
CMS, states should conduct a full compliance evaluation of each SM-80 source
once every five fiscal years and report the data to the ICIS-Air database.
Office of Enforcement and Compliance Assurance staff said that the EPA
regional offices meet regularly with state and local agencies, and one of the issues
they discuss is whether state and local agencies are having any problems meeting
the requirements of the CAA CMS. Further, Office of Enforcement and
Compliance Assurance staff receive a monthly CAA CMS report that identifies
sources that are overdue for a compliance evaluation and contact the responsible
EPA regional office for resolution.
The EPA regional offices audit state performance against CAA CMS goals
through the State Review Framework reviews, which are completed every five
years for each state. The following State Review Framework metrics are relevant
to overseeing synthetic-minor sources: full compliance evaluation coverage of
SM-80s, documentation of full compliance evaluation elements, and timeliness of
high-priority violation determination and identification.
We found that Colorado and Oklahoma conducted compliance monitoring
activities at the synthetic-minor natural gas production facilities we reviewed in
accordance with the CAA CMS. All the facilities we reviewed had at least one full
compliance evaluation conducted by the state between fiscal years 2015 and 2020,
in accordance with the CAA CMS. In addition, reports from states' full compliance
evaluations show that the CDPHE and the ODEQ generally included all activities
that are supposed to be conducted during such evaluations. Further, compliance
monitoring reports contained all the elements required by the CAA CMS.
EPA Conducts Limited Oversight of Synthetic-Minor-Source Permits
The EPA developed numerous guidance documents in the late 1980s and
throughout the 1990s for state and local agencies to use in developing synthetic-
minor-source permit limits so that the limits are practically enforceable. The
guidance, however, has not been consolidated and lacks clarity on how to
effectively limit facilities' potential to emit air pollution. In fiscal year 2020, the
OAQPS issued training slides, titled "Setting Enforceable Potential to Emit Limits
in Permits," that present important criteria from various EPA guidance
documents. These slides were intended to promote consistency in how state and
local agencies develop synthetic-minor-source permit limits, but they are not
considered to be official guidance.
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Neither EPA headquarters nor regional offices conduct regular or routine
evaluations or review synthetic-minor-source permits and the limitations adopted
by facilities to avoid major source status. The OAQPS only reviews synthetic-
minor-source-permit limitations in cases where a Title V permit under review
contains such limitations. This may occur when the Agency receives a petition to
review a specific Title V permit. Title V permits are issued for major sources and
some minor sources of air pollution and impose certain record-keeping and
reporting requirements on facilities. Synthetic-minor limitations may be included
in some Title V permits if the facility is a major source for some pollutants and a
synthetic-minor source for other pollutants. Beyond Title V permits, OAQPS staff
stated that they do not review synthetic-minor limitations, and the office does not
receive synthetic-minor-source permits from the state and local agencies.
Region 8 staff told us that they do not oversee minor sources, synthetic or
otherwise, because that is not considered to be one of their responsibilities.
According to Region 8 staff, EPA headquarters has directed regions to focus their
oversight activities on major sources. The only Region 8 responsibilities that
relate to synthetic-minor oversight are (1) reviewing State Implementation Plans
to modify state permitting programs
and (2) assisting states with A state Implementation Plan is an EPA-approved
problems or issues, such as ones P|an that is made UP of various air P°""ti°n
, , , , • control measures and activities that a state will
brought up during a permit s public . , . . , ,
° . , . , implement to meet certain air quality standards,
comment period or in the media.
Region 6 staff told us that the region does not routinely review synthetic-minor-
source permits but that states notify the region when a synthetic-minor-source
permit is released for public comment. Region 6 does not focus on synthetic-
minor permits but may review a permit if the media reports a problem with the
permit, the state received a significant comment on the permit, or a citizen
complains about the permit.
Many Permits Reviewed Did Not Adhere to EPA Guidance on Practical
Enforceability
EPA guidance on practical enforceability states that a permit's provisions should
specify:
• A technically accurate limitation and the portions of the source subject to
the limitation.
• The time period for the limitation, such as hourly, daily, monthly, or
annually. A rolling annual limit, for example, is based on 12 consecutive
months rather than a calendar year. When the month changes, the most
recent prior 12 months, regardless of the calendar year, are used to
determine compliance.
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• The method to determine compliance, including appropriate monitoring,
record-keeping, and reporting. Examples of this include monitoring and
maintaining records on a facility's hours of operation and the amount of
product produced.
We identified instances for each of these three elements where permits did not
adhere to the EPA's guidance. Practical enforceability is key to permitting
because it helps assure that a permit's provisions are written in such a way that
regulators and citizens can assess a facility's compliance with its permit
limitations. This helps assure that synthetic-minor-source facilities are not
actually emitting pollution at major-source levels.
Many Synthetic-Minor-Source Permits or Permit Records Reviewed
Did Not Include Sufficient Documentation to Verify Technical
Accuracy of Limitations
To assure a synthetic-minor-source permit is practically enforceable, the state or
local agency must establish technically accurate permit limitations that include the
portions of the facility subject to the limitation. A technically accurate permit
limitation is one that is "sound," "appropriate," and based on the most
representative data available. We have concluded, based on EPA guidance and
interviews with EPA staff, that in order for a reviewer to determine whether a
limit is technically accurate, the permit or permit record should include
information that supports the different elements that are relied upon to determine
the limitation.
The technical accuracy of emission limits that rely on pollution control
equipment, such as an enclosed combustion device—known as an ECD—or an
engine catalyst system, is verifiable when the permit or permit record includes
supporting information about the specific control equipment used. ECDs are
intended to reduce volatile organic compounds, known as VOC, and hazardous air
pollutant emissions that are known or suspected to cause cancer and other serious
health problems. Engine catalyst systems are intended to reduce nitrogen oxides
and carbon monoxide emissions.
These pollution control devices are included in air permits with an associated
control efficiency, which can vary depending on the specific equipment and
pollution control device used. The control efficiency is the percent of pollution
emission reduction obtained from pollution control equipment. For example, the
CDPHE generally assumes that ECDs reduce VOC and hazardous air pollutant
emissions with a 95 percent control efficiency. For the technical accuracy of
emission limits that rely on ECDs and engine catalysts to be verifiable, the
assumption that the device obtains a specific control efficiency should be
supported in the permit or permit record. Based on EPA guidance and interviews,
such support could include emissions data from compliance tests, other source
tests, or equipment vendor emissions data and guarantees.
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Limits Reviewed Lacked Sufficient Supporting Documentation
In the permits we reviewed, 96 of the 523 limits were not adequately
supported by documentation, such as underlying information about pollution
control equipment with an assumed control efficiency, in the permit or permit
record. This lack of critical supporting information prevented us from
determining whether the limits contained errors and properly prevented the
synthetic-minor source from operating at major-source levels.
Of the 96 limits that lacked adequate support, 35 relied on assumed control
efficiencies from pollution control equipment designed to restrict emissions,
such as ECDs and engine catalysts. In 20 of these 35 cases, the assumed
control efficiency was 95 percent or greater, but neither the permit nor permit
record provided documentation to support this assumption. Specifically, the
permit and permit record did not include a manufacturer's guarantee of
control efficiency, testing data, model inputs, or other information that could
be used to validate this control efficiency assumption. Staff and managers
from the CDPHE told us that the 95 percent control assumption efficiency for
ECDs is based on the manufacturer's guaranteed control efficiency and
anecdotal field testing in Colorado, but we found no support in the permit or
permit record for that assumption in these cases.
We found that 41 of the 96 limits could not be verified because there was
insufficient underlying support for the basis of the emission factor used.
An emission factor is a representative value designed to relate the quantity of
a pollutant released to the atmosphere with an activity associated with the
release of that pollutant. Such factors facilitate the estimation of emissions
from various sources of air pollution. For example, one permit simply cited
"Conservative [Texas Commission on Environmental Quality] ... emission
factors" as the source of the emission factor, but there was no other citation in
the permit or permit record that would allow a third party to identify what the
emission factor is based on or where to find that information.
Information on which permit limits are based needs to be as complete and
transparent as possible so that permit writers, the public, and the EPA can
assess whether pollution reductions are likely to occur as intended. Not
providing sufficient underlying support for what permit limits are based upon
undermines the ability to conduct such an assessment.
Instruction on Documentation Has Not Been Clearly Communicated in
EPA Guidance
EPA guidance from the 1980s and 1990s does not provide permitting
authorities with instruction on what supporting information should be
included in the permit or permit record. The guidance is decades old, not
specific to any particular industry or synthetic-minor-source permitting,
21-P-0175
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contained within multiple discrete documents, and, in one case, only available
in draft form. The training slides that the EPA developed in fiscal year 2020
present criteria from various guidance documents. It also provides information
and examples of technically accurate limitations that are not included in prior
guidance. The EPA, however, has not updated its guidance documents to
include, or expand upon, the information in the training.
In addition, we found that OAQPS permitting staff and managers have
expectations for assuring limits are practically enforceable, but those
expectations have not been clearly communicated to state agencies. For
example, during one interview, OAQPS staff and managers told us that
supporting documentation, such as a manufacturer specification sheet for an
ECD, should be contained within the permit record. This expectation is not
stated in any formal guidance document.
Some Synthetic-Minor-Source Permit Limits Did Not Include Time
Period That Was Consistent with EPA Guidance
To assure a synthetic-minor-source permit is practically enforceable, the permit
must specify a time period for the limitation—generally, hourly, daily, or
monthly—but not exceed an annual limit on a 12-month rolling basis. The time
periods for all limits should readily allow for demonstration of compliance.
The time periods associated with 25 of the 523 permit limits we reviewed did not
adhere to EPA guidance. Of the 25 permit limits, 11 were for facilities in
Colorado. We found nine emission limits in one permit that were annual limits
with no rolling monthly averages. The CDPHE told us that this was a permit-
writer error rather than a systemic issue in Colorado permitting. We agree with
that assessment, given that we did not find any evidence to contradict this
explanation. Separate from this permit-writer error, two Colorado permits
contained an operational limit for which the time period did not adhere to EPA
guidance.
We found that 14 of the annual emission limits in the Oklahoma permits we
reviewed did not adhere to EPA guidance on time periods. In these cases, the
permits did not clearly state that the emission limits were to be based on a
12-month rolling total or provide corresponding short-term limits, such as pounds
per hour, that would make the limit easier to enforce. The permit writers used a
template that labeled annual emission limits as TPY rather than on a rolling
annual basis.
It is more difficult for inspectors to determine compliance with limits that have
longer time periods. For example, EPA guidance explains that an inspector could
not verify compliance for an emissions unit with only monthly and annual
production, operational, or emission limits if the inspection occurred at any time
except at the end of a month. Further, if there is a compliance problem, such as
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excess emissions from a particular piece of equipment, longer time periods could
mean that the issue is not detected by the facility or an inspector until months
after the problem began. The sooner a violation is identified, the less likely excess
emissions will occur.
Some Synthetic-Minor-Source Permits Did Not Specify Method to
Determine Compliance with Certain Limitations or Lacked Sufficient
Monitoring Requirements
The final component of establishing a practically enforceable limit requires the
permit writer to specify the method to determine compliance, including appropriate
monitoring, record-keeping, and reporting requirements, for each limit in the
permit. Based on 1990 draft EPA guidance, limitations must be easily measurable
and allow no subjectivity in their compliance determinations. In particular, when
permits include a requirement to operate a control device at a particular control
efficiency level, the permits should also contain monitoring requirements for the
specific parameters cited in the permit or those which ensure the efficiency of the
unit as required in the permit. A parameter, such as temperature, is a key indicator
of system performance that is correlated with the control efficiency obtained by the
pollution control device. Such requirements allow a permitting agency to
instantaneously verify a source's compliance with its limits.
In Oklahoma, 26 Permit Limits Lacked Specified Method to Determine
Compliance
For 26 of the 230 limits we reviewed in Oklahoma permits, the permits did
not specify a method for determining compliance. The majority of these 26
limits are VOC emission limits associated with engines in a permit that does
not require VOC emissions testing. Other limits are based, in part, on
production limits, such as limits on throughput. The production limits are
required to be tracked and monitored monthly, but the permits did not clearly
explain how monthly tracking of production limits demonstrates compliance
with emission limits. In these instances, the connection between the
production limits and the emission limits were not described.
Vague permitting conditions, such as unclear or missing statements on the
method for determining compliance, can allow facilities unintended flexibility.
For example, a facility may discover that its typical method for determining
compliance with an emission limit generates emissions estimates in excess of
the emission limit during a compliance period. If the method of compliance is
not stated, the facility has the option to use a more favorable estimation
technique that may not show the facility has exceeded its permit limit.
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Fifty-Five Limits Did Not Contain Sufficient Monitoring Requirements to
Assure That Assumed Control Efficiency Was Being Met
Based on the permits we reviewed, synthetic-minor-source permits often rely
on the assumed control efficiencies of add-on control devices, such as an ECD
or engine catalyst system, to achieve emission reductions below major-source
thresholds. For 55 of the 523 permit limits we reviewed, we found that the
permit lacked sufficient direct testing or parametric monitoring to assure that
the assumed control efficiency of control devices was being met.
Parametric monitoring measures key indicators of system performance that
are correlated with the control efficiency obtained by the pollution control
device. These parameters are generally operational or design parameters of the
process or the air pollution control device that are known to affect the
emissions levels from the process or the control. An example of a potential
way to conduct parametric monitoring for ECDs is measuring combustion
chamber temperature, as this is considered to be a design parameter that
impacts ECD combustion efficiency. Examples of parametric monitoring for
engine catalysts include measuring temperature, changes in pressure, and the
presence of oxygen.
Figure 2 shows how the assumed control efficiency of a control device, such
as an ECD, reduces a facility's potential to emit below major-source
thresholds, based on one of the permits we reviewed. In this example, a
facility emits 1,127 tons of VOC if it operates for an entire year, which would
subject the facility to major-source requirements. Facility management may
choose to install an add-on control with an assumed 95 percent VOC control
efficiency, which would theoretically reduce the facility's emissions to
56 tons of VOC per year. If the facility emits less than 100 tons of VOC per
year, it would be considered a synthetic-minor-source and would not have to
follow major-source requirements. If the ECD did not achieve 95 percent
VOC control efficiency, the facility could be emitting at major-source levels
without having to follow major-source requirements.
Figure 2: How permitting authorities may use a 95 percent control efficiency assumption for an
emissions control device to reduce potential emissions
Reduced by 95%
Source: OIG analysis of potential VOC emission reduction from a pollution control device. (EPA OIG image)
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Fifty emission limits we reviewed were established based on an ECD
operating at a 95 percent or greater control efficiency. Most of the applicable
permits included requirements to periodically verify that a pilot light was
operating and to check for visible emissions. The pilot light is necessary to
combust waste gas flowing to the combustion device and is the difference
between achieving a 0 percent (no pilot) and potential 95 percent control.
Visible emissions indicate incomplete combustion and demonstrate that the
device is not operating correctly. Verifying that the pilot light is operating and
checking for visible emissions may indicate whether an ECD is operating
properly, but we conclude that these are not parametric measures that
accurately show what control efficiency the device is actually achieving.
Thus, these measures do not assure that the device is continuously meeting its
assumed control efficiency of 95 percent.
In addition, many emission limits we reviewed were established based on an
engine catalyst operating at a specific control efficiency. While reviewing
Colorado permits containing engine catalysts, we found that facilities were
required to conduct daily, weekly, or monthly parametric monitoring,
depending on the parameter being monitored and the facilities" permitted
emissions. This was in addition to quarterly or semiannual engine emissions
testing. Therefore, these facilities were subject to emissions testing and
frequent parametric monitoring to help assure the assumed control efficiency
of the catalyst was being met.
Facilities operating under Oklahoma's general permit, on the other hand, were
required to conduct quarterly testing and to install parametric monitoring
equipment, but the general permit did not require frequent parametric
monitoring. The Oklahoma individual permits we reviewed did not contain
monitoring or record-keeping requirements beyond quarterly testing. While
quarterly testing assures that catalyst systems are operating as intended four
times per year, the lack of frequent parametric monitoring means that
short-term excess emissions from engines may go undetected.
Challenges Exist to Parametric Monitoring
Significant challenges exist to direct testing and parametric monitoring of
ECDs. Natural gas extraction facilities tend to be in remote, unmanned
locations and may be far from an adequate power source necessary to run
monitoring equipment. Further, testing and monitoring can be expensive,
difficult, and unsafe given the design of ECDs and their placement at natural
gas extraction facilities. The EPA is aware of these challenges and is studying
alternatives to existing compliance methods in EPA Region 8.3 In the
meantime, the EPA has pointed to the New Source Performance Standards,
3 The study Region 8 is conducting is called Measuring Enclosed Combustion Device Emissions Using Portable
Analyzers - Phase 1: Test Summaries. The EPA is conducting this research in conjunction with the Wyoming
Department of Environmental Quality.
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known as the NSPS, that cover sources in the natural gas extraction industry
as containing visible emissions and pilot light monitoring as the existing
requirements for assuring compliance with the assumed control efficiency.4
EPA staff stated that they would not expect states to have more stringent
requirements than what is in EPA regulations.
The standards reflect the "best system of emission reduction" which the EPA
determines has been adequately demonstrated. They are subject to revisions
given the potential for process improvements and technology advances that
would alter the best system of emission reduction. CAA Section 111(b)(1)(B)
requires the EPA to review and, if appropriate, revise the NSPS at least every
eight years unless the EPA administrator determines that the review is not
appropriate in light of readily available information on the efficacy of the
standard.
The NSPS in 40 C.F.R. Part 60 Subpart OOOO were due for review under
CAA section 111(b)(1)(B) in 2020. The Agency has not reviewed the
standards because it has been engaged in reconsideration and revisions of
Subparts OOOO and OOOOa standards. EPA staff also told us that the EPA
has until 2024 to review the standards in Subpart OOOOa and that, since the
types of sources regulated by Subparts OOOO and OOOOa are within the
same industry sector, a review of Subpart OOOOa could be planned and
executed to also include review of Subpart OOOO.
Lack of Parametric Monitoring Could Result in Unidentified Violations
of Permit Limitations
Ultimately, when there is no monitoring associated with a limitation or when the
monitoring is insufficient to describe the actual control efficiency of a control
device, the state may not be able to obtain sufficient evidence to determine
whether a limitation is being violated. In addition, depending on the severity of
a violation, the facility could unknowingly be operating as a major source.
Region 8, in conjunction with the Wyoming Department of Environmental
Quality, is conducting a study to better understand ECDs and develop an
alternative method for demonstrating compliance with permitted control
efficiency requirements. Preliminary results from this ongoing study, along
with results from a 2014 EPA study, indicate that the control efficiency of
these devices can vary and that the devices may fall far below their assumed
95 percent efficiency for unknown periods of time.5 In the 2014 study, EPA
4 40 C.F.R. Part 60 Subparts OOOO and OOOOa. The title of 40 C.F.R. Part 60 Subpart OOOO is "Standards of
Performance for Crude Oil and Natural Gas Production, Transmission and Distribution for which Construction,
Modification or Reconstruction Commenced After August 23, 2011, and on or before September 18, 2015." The
title of 40 C.F.R. Part 60 Subpart OOOOa is "Standards of Performance for Crude Oil and Natural Gas Facilities for
which Construction, Modification or Reconstruction Commenced After September 18, 2015."
5 The title of the 2014 study is Advancing Understanding of Emissions from Oil and Natural Gas Production
Operations to Support EPA 'sAir Quality Modeling of Ozone Non-Attainment Areas.
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researchers found that an ECD at one of the eight sites they studied was
operating at a 60 percent control efficiency.
If a facility's actual control efficiency falls below the assumed control
efficiency, it could cause the facility to unknowingly exceed its permit limits
and become a major source of emissions. As an example, for one facility we
reviewed, if only one of the four permitted ECDs malfunctioned and achieved
a maximum 60 percent control efficiency for approximately six days, the
facility would violate its permit limits and become a major source of
emissions. The violation may not be detected without sufficient monitoring.
This is depicted in Figure 3.
If the facility experiences a small malfunction, such as a 94 versus a
95 percent control efficiency over the majority of the compliance period, the
facility could become a major source of emissions, perhaps without being
detected. The CDPHE told us that facility-conducted field testing in Colorado
shows ECDs meet a 95 percent control efficiency most of the time.
Figure 3: How a facility could become a major source of emissions based on an ECD malfunction3
100.01 TPYVOC
95.05 TPY VOC
Major source threshold = 100 TYP
VOC
Synthetic
Minor
Emissions
Six-day
malfunction
Major Source
Emissions
Permitted operation Potential operation
ECD at 95% ECD at 94.44%
average control efficiency average control efficiency
Source: OIG analysis of potential VOC emission increases due to a short-term ECD malfunction. (EPA OIG image)
a Example is based on a hypothetical situation where a short-term malfunction at one of the facilities we reviewed
could result in an ECD control efficiency of 60 percent and cause the facility to release major-source levels of
emissions. Values are rounded. Emissions presented in the above columns are based on multiple pieces of
permitted equipment, with a malfunction at only one piece of permitted equipment.
Appendix E provides a case study of the wood biomass industry, in which
synthetic-minor facilities without sufficient monitoring requirements were
found to be emitting pollution over major source thresholds.
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Conclusions
The EPA is responsible for overseeing state and local permitting and compliance
monitoring activities. The EPA oversees state and local compliance monitoring
activities for synthetic-minor sources through the CAA CMS and State Review
Framework reviews, but it conducts limited oversight of state and local synthetic-
minor-source permitting. Neither EPA headquarters nor EPA regional offices
regularly review synthetic-minor-source permitting. Existing guidance for
establishing synthetic-minor-source permits is dated, scattered across numerous
documents, and lacks clarity on how to effectively limit the potential to emit.
In our reviews of Colorado and Oklahoma synthetic-minor-source permits, we
found that state and local agencies are largely meeting EPA expectations for
compliance monitoring, but many synthetic-minor-source permit limits do not
adhere to EPA guidance on practical enforceability. In particular, the Agency
should provide better guidance on how state and local agencies can establish limits
that are technically accurate. For synthetic-minor-source permits in the natural gas
extraction sector, the Agency should place additional emphasis on how state and
local agencies can assure that assumed control efficiencies from pollution control
devices are being achieved.
Recommendations
We recommend that the assistant administrator for Air and Radiation:
1. Update Agency guidance on practical enforceability to more clearly
describe how the technical accuracy of a permit limit should be supported
and documented. In updating such guidance, the Office of Air and
Radiation should consult and collaborate with the Office of Enforcement
and Compliance Assurance, the Office of General Counsel, and the EPA
regions.
2. In consultation with the EPA regions, develop and implement an oversight
plan to include:
a. An initial review of a sample of synthetic-minor-source permits in
different industries that are issued by state, local, and tribal
agencies to assess whether the permits adhere to EPA guidance on
practical enforceability, including limits that are technically
accurate; have appropriate time periods; and include sufficient
monitoring, record-keeping, and reporting requirements.
b. A periodic review of a sample of synthetic-minor-source permits to
occur, at a minimum, once every five years.
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c. Procedures to resolve any permitting deficiencies identified during
the initial and periodic reviews.
3. Assess recent EPA studies of enclosed combustion device performance
and compliance monitoring and other relevant information during the next
statutorily required review of 40 C.F.R Part 60 Subparts OOOO and
0000a to determine whether revisions are needed to monitoring,
record-keeping, and reporting requirements for enclosed combustion
devices to assure continuous compliance with associated limits, and revise
the regulatory requirements as appropriate.
Agency Response and OIG Assessment
The Agency agreed with all three recommendations and provided acceptable
corrective actions and completion dates. The recommendations are resolved with
corrective actions pending. The Agency's full response is in Appendix F.
For Recommendation 1, the OAR will update Agency guidance on the practical
enforceability of permit limitations, including, but not limited to, the EPA's
June 13, 1989 Guidance on Limiting Potential to Emit in New Source Permitting,
to describe how the technical accuracy of a permit limit should be supported and
documented. In updating its guidance, the OAR will consult and collaborate with
the Office of Enforcement and Compliance Assurance, the Office of General
Counsel, and the EPA regions. We agree that these planned actions address our
recommendation. Recommendation 1 is resolved with corrective actions pending.
For Recommendation 2, the OAR, in consultation with EPA regional offices, will
develop and implement an oversight plan for synthetic-minor-source permits in
accordance with statutory and EPA regulatory requirements. The OAR's plan will
include the specific elements identified in Recommendation 2. We agree that these
planned actions address our recommendation. Recommendation 2 is resolved with
corrective actions pending.
For Recommendation 3, we initially recommended that the OAR develop technical
support information for natural gas production facilities that includes defining the
parameters upon which the control efficiency for ECDs is based and methods for
measuring those specific parameters so that permitting authorities can verify
compliance with permit limits. The OAR agreed that monitoring, record-keeping,
and reporting requirements associated with synthetic-minor permit emission
limitations serve to ensure that the established enforceable limits are being met and
are important to meet the ongoing compliance requirement in EPA regulations. The
OAR also agreed that facilities under synthetic-minor status should generate
records to demonstrate continuous compliance with permit emission limits.
The OAR disagreed with the OIG's implication in the original recommendation
that inadequate technical information regarding monitoring, record-keeping, and
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reporting for ECDs was an impediment to verifying emission limits associated
with the oil and gas industry. The OAR pointed to federal regulations in 40 C.F.R
Part 60 Subparts OOOO and OOOOa and 40 C.F.R Part 63 Subpart HH as
evidence that properties related to effective combustion are well-understood and
depend on gas composition, gas flow, residence time in the combustion zone, and
the continuous presence of a pilot light to ensure ignition. The OAR further
pointed to Subpart OOOOa requirements for initial testing of ECDs by the owner
or operator—or a certification test by the manufacturer—for continuously
monitoring for a pilot flame, for monthly visible emissions testing, and for
continuously monitoring gas flow to the unit for certain ECDs.
The OAR was amenable to revising the existing monitoring, record-keeping, and
reporting requirements for pollution control equipment at oil and gas facilities if
new data and information warrant changes. The OAR cited the statutorily
mandated technology review for the NSPS under Subpart OOOOa, to occur by
2024, as an appropriate time to determine whether additional or different
monitoring requirements for ECDs are necessary, practicable, and cost-effective.
After reviewing the cited regulations, we still believe that the EPA has not
presented adequate technical information to assure that permitting authorities can
continuously verify compliance with ECD-related emission limitations. As noted
in our report, verifying that the pilot light is operating and checking ECDs
periodically for visible emissions are not compliance actions that accurately
demonstrate the assumed control efficiency is being met on a continuous basis. In
addition, monitoring the flow rate does not guarantee the assumed control
efficiency is being met.
We acknowledge that there may be cost and logistical constraints, such as a lack
of electricity at some oil and gas production facilities, which make continuous
compliance monitoring difficult. Further, the Region 8 study is ongoing, and it
may be inappropriate for the EPA to issue supplemental technical information or
guidance prior to obtaining complete data or when the applicable NSPS is not
under review. Therefore, we agree with the EPA that the upcoming review of
standards under Subparts 0000 or OOOOa is an appropriate time to reconsider
the monitoring, record-keeping, and reporting requirements for ECDs. As such,
we have revised Recommendation 3 to focus on the EPA's review of EPA studies
and other relevant information during the statutorily mandated review in 2024.
The Agency concurred with our revised recommendation and provided an
acceptable proposed corrective action plan and planned completion date. The
planned completion date is the date by which the Agency plans to initiate its
statutorily required review of 40 C.F.R Part 60 Subparts 0000 and OOOOa. The
Agency's full response to the revised recommendation is in Appendix G.
Recommendation 3 is considered resolved with corrective actions pending.
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Chapter 3
EPA Has Not Clearly Communicated Key
Synthetic-Minor-Source Permitting Expectations
in Official Guidance
We found that the EPA has several key expectations for synthetic-minor-source
permitting that are not clearly communicated in official guidance. EPA policy
requires the Agency to clearly describe objectives and expectations for state
environmental programs, such as permitting. Without clear guidance, states may
develop their own practices that do not align with EPA expectations.
Key Expectations Have Not Been Clearly Communicated in Official
Guidance
The EPA Policy on Oversight of Delegated Environmental Programs states that
the EPA must clearly describe objectives and expectations for state environmental
programs to increase the ability of state agencies to successfully implement
program requirements and to increase the ability of the EPA to provide
appropriate assistance and evaluation. One way this can be accomplished is by
providing detailed, up-front guidance on how program work should be performed.
We found through discussions with OAQPS staff and managers that the EPA has
key expectations for synthetic-minor-source permitting that it has not clearly
communicated to state and local agencies in official guidance, such as:
• The terms of a synthetic-minor limitation, such as the limit itself and the
methods for demonstrating compliance with the limit, should be in the
permit itself. These terms, along with calculations necessary to
demonstrate compliance with synthetic-minor limits, need to be included
in the permit or incorporated by reference from another source. It would
also be appropriate to include calculations and model inputs used to
estimate the potential to emit or to set an emission limit in the permit
record, such as the permit's technical support documentation.
• Regarding the technical accuracy of limits that depend on pollution control
equipment, the vendor or manufacturer information and specifications for
the control equipment should be part of the permit record. One way to
better assure that a pollution control device obtains its intended pollution
reductions over time is to require a source to follow the manufacturer
specifications.
• Synthetic-minor-source permits for facilities with emergency generators,
which are devices that are intended to serve solely as backup sources of
power in the event of a loss of the normal power source, should include a
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limitation for the emergency generator as part of the permit. OAQPS staff
stated that an emergency generator would be expected to operate
approximately 500 hours under worst-case conditions. Permitting
authorities should include this figure when assessing the facility's
potential to emit calculations. For a synthetic-minor source permit that
contains emission sources other than the emergency generator, the
permitting authority should include the emergency generator in the permit
itself and establish corresponding limits, such as an emission limit and an
operational limitation. For example, the facility may not operate the
emergency generator for more than 500 hours per year.
These expectations have not been clearly communicated in official guidance, in
part because the EPA has not prioritized revising guidance documents to include
the Agency's expectations. The 2020 training slides discussed in Chapter 2
include most aspects of the first two expectations, but they are not official
guidance.
Without Clear Guidance, States May Adopt Their Own Practices
In the absence of clear, national guidance, state and local permitting programs
may develop their own practices for addressing these issues, which do not align
with EPA expectations. For example, based on the permits we reviewed and
discussions with CDPHE staff, Colorado does not include emergency generators
in the permits themselves or establish corresponding emission or operational
limits unless the generator's potential emissions put the facility over the major
source threshold.
Conclusions
As part of its oversight of state and local environmental programs, the EPA
should clearly describe objectives and expectations so that state and local
agencies can successfully implement program requirements. During our audit,
EPA staff and managers described to us expectations regarding three important
aspects of synthetic-minor-source permitting that are not currently reflected in
EPA guidance documents. Rather than updating guidance from the 1980s and
1990s to formalize these expectations, the EPA has developed training materials
for state and local agencies. Given the importance of establishing effective limits
on the potential to emit—that is, limits that are both federally and practically
enforceable—the EPA should communicate all key expectations through formal
guidance. Without clear guidance, states may adopt their own practices that do not
adhere to EPA expectations or assure synthetic-minor-source permit
enforceability.
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Recommendation
We recommend that the assistant administrator for Air and Radiation:
4. Revise the Agency's guidance to communicate its key expectations for
synthetic-minor-source permitting to state and local agencies.
Agency Response and OIG Assessment
The Agency agreed with Recommendation 4 and provided an acceptable corrective
action and completion date. The OAR will revise the Agency's guidance to include
the key expectations above and may, at least in part, integrate this work with the
updates to guidance on practical enforceability in response to Recommendation 1.
The recommendation is resolved with corrective actions pending. The Agency's
full response is in Appendix F.
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Chapter 4
ODEQ Does Not Currently Include Synthetic-Minor-
Source Permits in Its Public Participation Process
The ODEQ does not currently issue its individual synthetic-minor-source permits
for public comment before they are finalized, as required by EPA regulations.
Staff in the EPA's OAQPS told us that this may be the case for other state and
local agencies as well. ODEQ staff told us that Oklahoma's legislature passed
new state rules that will require public comment on synthetic-minor-source
permits and that these rules will go into effect in September 2021. Although this
deficiency is being addressed in Oklahoma, the EPA has not ensured that all states
include public participation in their synthetic-minor-source permitting process.
Without the opportunity to review permit materials and provide comments on
proposed synthetic-minor-source permits, citizens are deprived of the ability to
assess information and provide input on facilities that may impact air quality
where they live. The EPA should regularly confirm that states adhere to
requirements on public participation for synthetic-minor-source permits.
EPA Regulations Require Opportunity for Public Review and
Comment on Synthetic-Minor-Source Permits
EPA regulations require certain permitting information to be available to the
public for review and comment, generally for 30 days. Per 40 C.F.R. § 51.161,
permitting authorities must make the following information public:
• Information submitted by owners and operators.
• An analysis of the effect of the construction or modification of the facility
on ambient air quality.
• The permitting authority's proposed approval or disapproval of the permit.
Staff from both Region 6 and the OAQPS told us that these requirements apply to
synthetic-minor-source permits, and EPA guidance states that public participation
is a central tenet of federal enforceability.
ODEQ Does Not Currently Provide Opportunity for Public Review and
Comment on Individual Synthetic-Minor-Source Permits
The ODEQ does not currently issue its individual, facility-specific synthetic-
minor-source permits for public comment before they are finalized because
Oklahoma's current regulations lack such a requirement. Region 6 staff told us
that the region is aware of this issue and has communicated with the ODEQ about
the need to revise this in Oklahoma's state permitting rules. In November 2020,
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ODEQ staff told us that the state's air advisory council had approved new state
rules to require an opportunity for public comment. In June 2021, ODEQ staff
told us that the rules had been passed by the state legislature and will be going
into effect on September 15, 2021. OAQPS staff told us that they are aware that
lack of public participation for synthetic-minor sources may be a problem in other
states as well.
Lack of Public Participation Precludes Citizen Input on Facility Permits
Synthetic-minor permit limitations are intended to limit emissions from facilities
and, as such, have an impact on local air quality. Public participation
requirements are intended to assure that citizens have the ability to provide input
on the permit limitations, the pollutants that are emitted, and the quantity of
emissions that will affect their communities. Not providing the opportunity to
review permit materials and provide comments on proposed synthetic-minor-
source permits hinders citizens' ability to weigh in on facilities that may impact
air quality where they live.
Conclusions
The ODEQ is not currently adhering to EPA regulations that require state and
local environmental programs to allow public review of and comment on
proposed synthetic-minor-source permits, and this may be the case in other states
as well. These requirements were established by the EPA to allow citizens the
opportunity to analyze and understand environmental impacts in their
communities. Individual synthetic-minor-source permits were approved by the
ODEQ without any forewarning or input from the citizens who may be impacted
by the permitted emissions. This lack of public participation can undermine
permit quality and limits the opportunity for citizens to weigh in on facilities that
may be located in their communities. The EPA should work with all state, local,
and tribal agencies that do not provide the opportunity for public comment on
synthetic-minor-source permits to assure opportunities for public participation, as
required by law.
Recommendation
We recommend that the assistant administrator for Air and Radiation:
5. Identify all state, local, and tribal agencies in which Clean Air Act permit
program implementation fails to adhere to the public participation
requirements for synthetic-minor-source permit issuance and take
appropriate steps to assure the identified states adhere to the public
participation requirements.
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Agency Response and OIG Assessment
The Agency agreed with Recommendation 5 and provided acceptable corrective
actions and completion dates. The OAR, with EPA regional office support, will
identify state, local, and tribal agencies whose program regulations do not meet the
public participation requirements contained in the applicable EPA regulations and
guidance with respect to synthetic-minor-source permitting. For the identified
agencies, the OAR will take appropriate corrective steps, potentially to include
informal engagement. The recommendation is resolved with corrective actions
pending. The Agency's full response is in Appendix F.
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Status of Recommendations and
Potential Monetary Benefits
RECOMMENDATIONS
Potential
Planned Monetary
Rec. Page Completion Benefits
No. No. Subject Status1 Action Official Date (In $000s)
17 Update Agency guidance on practical enforceability to more
clearly describe how the technical accuracy of a permit limit
should be supported and documented. In updating such
guidance, the Office of Air and Radiation should consult and
collaborate with the Office of Enforcement and Compliance
Assurance, the Office of General Counsel, and the EPA regions.
17 In consultation with the EPA regions, develop and implement an
oversight plan to include:
a. An initial review of a sample of synthetic-minor-source
permits in different industries that are issued by state,
local, and tribal agencies to assess whether the permits
adhere to EPA guidance on practical enforceability,
including limits that are technically accurate; have
appropriate time periods; and include sufficient monitoring,
record-keeping, and reporting requirements.
b. A periodic review of a sample of synthetic-minor-source
permits to occur, at a minimum, once every five years.
c. Procedures to resolve any permitting deficiencies identified
during the initial and periodic reviews.
Assistant Administrator for 10/31/23
Air and Radiation
Assistant Administrator for 10/31 /24
Air and Radiation
18 Assess recent EPA studies of enclosed combustion device
performance and compliance monitoring and other relevant
information during the next statutorily required review of 40
C.F.R Part 60 Subparts OOOO and OOOOa to determine
whether revisions are needed to monitoring, record-keeping, and
reporting requirements for enclosed combustion devices to
assure continuous compliance with associated limits, and revise
the regulatory requirements as appropriate.
22 Revise the Agency's guidance to communicate its key
expectations for synthetic-minor-source permitting to state and
local agencies.
24 Identify all state, local, and tribal agencies in which Clean Air Act
permit program implementation fails to adhere to the public
participation requirements for synthetic-minor-source permit
issuance and take appropriate steps to assure the identified
states adhere to the public participation requirements.
Assistant Administrator for
Air and Radiation
12/31/24
Assistant Administrator for
Air and Radiation
Assistant Administrator for
Air and Radiation
10/31/24
12/31/23
1 C = Corrective action completed.
R = Recommendation resolved with corrective action pending.
U = Recommendation unresolved with resolution efforts in progress.
21-P-0175 26
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Appendix A
CAA Major-Source-Permitting Programs
The CAA major-source-permitting programs are Title V, Nonattainment New Source Review,
and Prevention of Significant Deterioration. The requirements and major-source thresholds vary
by program, and Nonattainment New Source Review and Prevention of Significant Deterioration
permitting depend upon whether the area in which the source is located complies with National
Ambient Air Quality Standards. These health-based standards are set by the EPA for certain
pollutants so that the level of the pollutant in the air is protective of human health and the
environment. Areas that comply with these standards are known as attainment areas, while areas
that do not comply are known as nonattainment areas. The table below summarizes these
permitting programs and the corresponding levels of emissions that make a facility a major
source under each program.
Table A-1: CAA programs and their corresponding major-source thresholds of air emissions
Summary of program
and requirements*
Major-source threshold
Pollutants covered
Title V permitting
Permitting program for all
operating major sources
of air pollution. Title V
permits contain all CAA
requirements to which a
facility is subject and
impose certain monitoring,
reporting, and record-
keeping requirements.
100 TPY of a regulated
pollutant, but can be lower
in nonattainment areas for
the pollutant for which the
area is in nonattainment;
25 TPY of total hazardous
air pollutants; and 10 TPY
of a single hazardous air
pollutant.
VOC, NOx, CO, SO2, NO2,
PM2.5, and PM10, lead, and
hazardous air pollutants,
such as benzene,
formaldehyde, and
n-hexane.
NNSR permitting
Permitting program for
new or modified major
sources in areas that are
in nonattainment with the
NAAQS. NNSR permits
require sources to install
control equipment that
obtains the lowest
achievable emission rate
to reduce emissions.
100 TPY of a regulated
pollutant, but can be lower
depending on the severity
of the air quality problem
in the nonattainment area.
Ozone (including VOC
and NOx, which react in
the atmosphere to form
ozone), CO, SO2, NO2,
PM2.5, PM10, and lead.
PSD permitting
Permitting program for
new or modified major
sources in areas that are
in attainment with the
NAAQS. PSD permits
require sources to use the
best available control
technology to limit
emissions.
250 TPY of a regulated
pollutant, except for
facilities within 28 specific
industries for which the
threshold is 100 TPY.
Ozone (including VOC
and NOx, which react in
the atmosphere to form
ozone), CO, SO2, NO2,
PM2.5, PM10, lead,
hydrogen sulfide, and
sulfuric acid.
Source: OIG summary of EPA information. (EPA OIG table)
"This table is intended for summary purposes and does not include all requirements of the permitting programs.
Note: CO is carbon monoxide, NAAQS is National Ambient Air Quality Standards, NNSR is Nonattainment New
Source Review, NO2 is nitrogen dioxide, NOx is nitrogen oxides, PM is particulate matter, PSD is Prevention of
Significant Deterioration, and SO2 is sulfur dioxide.
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Appendix B
Internal Control Assessment
This table identifies which internal control components and underlying principles are significant
to our audit objective.
Which internal control components are
significant to the audit objective?
Which internal control principles are sianificant to the audit
objective?
X
Control Environment
The foundation for an internal control
system. It provides the discipline and
structure to help an entity achieve its
objectives.
1. The oversight body and management should demonstrate
a commitment to integrity and ethical values.
X
2. The oversight body should oversee the entity's internal
control system.
3. Management should establish an organizational structure,
assign responsibilities, and delegate authority to achieve
the entity's objectives.
4. Management should demonstrate a commitment to
recruit, develop, and retain competent individuals.
5. Management should evaluate performance and hold
individuals accountable for their internal control
responsibilities.
X
Risk Assessment
Management assesses the risks facing the
entity as it seeks to achieve its objectives.
This assessment provides the basis for
developing appropriate risk responses.
X
6. Management should define objectives clearly to enable
the identification of risks and define risk tolerances.
X
7. Management should identify, analyze, and respond to
risks related to achieving the defined objectives.
8. Management should consider the potential for fraud when
identifying, analyzing, and responding to risks.
X
9. Management should identify, analyze, and respond to
significant changes that could impact the internal control
system.
X
Control Activities
The actions management establishes
through policies and procedures to achieve
objectives and respond to risks in the
internal control system, which includes the
entity's information system.
X
10. Management should design control activities to achieve
objectives and respond to risks.
11. Management should design the entity's information
system and related control activities to achieve objectives
and respond to risks.
X
12. Management should implement control activities through
policies.
X
Information and Communication
The quality information management and
personnel communicate and use to support
the internal control system.
13. Management should use quality information to achieve
the entity's objectives.
14. Management should internally communicate the
necessary quality information to achieve the entity's
objectives.
X
15. Management should externally communicate the
necessary quality information to achieve the entity's
objectives.
X
Monitoring
Activities management establishes and
operates to assess the quality of
performance overtime and promptly
resolve the findings of audits and other
reviews.
X
16. Management should establish and operate monitoring
activities to monitor the internal control system and
evaluate the results.
X
17. Management should remediate identified internal control
deficiencies on a timely basis.
Source: Based on internal control components and principles outlined in GAO-14-704G, Standards for Internal
Control in the Federal Government (also known as the "Green Book"), issued September 10, 2014.
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Appendix C
Details on Scope and Methodology
To address our objective, we reviewed EPA policies and guidance related to synthetic-minor-
source permitting and compliance monitoring. We also interviewed staff and managers in the
OAQPS and the Office of Enforcement and Compliance Assurance.
We reviewed synthetic-minor facilities in the natural gas extraction sector to assess whether
synthetic-minor-source permit limitations and provisions adhered to EPA guidance and whether
the facilities' inspections were consistent with EPA guidance. The natural gas extraction sector is
covered by the North American Industry Classification System Code 211130 and involves
activities related to the production of natural gas. To select this industry, we used data from the
EPA's ICIS-Air database and the National Emissions Inventory. This selection was based on the
natural gas extraction sector's disproportionally high (1) cumulative emissions from synthetic-
minor sources, (2) number of synthetic-minor facilities within the industry, and (3) prevalence of
synthetic minor emissions in areas with relatively poor air quality. Anecdotal statements from
permitting and compliance subject matter experts also supported the selection of this industry.
Background information on the natural gas extraction industry is included in Appendix D.
Figures C-l and C-2 provide more information about the selection of the natural gas extraction
sector for review.
Figure C-1: Top five industries with the most permitted synthetic-minor sources in 2019
Displayed
facilities
2,220^H2,212
1,990
Other
facilities
731 725
Natural gas Crude Asphalt paving Pipeline Lessors of
extraction petroleum mixture and transportation residential
extraction block of natural gas buildings and
manufacturing dwellings
Source: OIG analysis of data from ICIS-Air and the EPA's Enforcement and Compliance History Online
database. (EPA OIG image)
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Figure C-2: Percentage of synthetic-minor sources compared to
major sources in natural gas extraction industry3
2019 national
total:
l2,464 natural gasj
Major sources
10%
Source: OIG analysis of data from ICIS-Air and the EPA's Enforcement and
Compliance History Online database. (EPA OIG image)
a Analysis does not include true-minor sources because those data are not
required to be submitted to the EPA.
We selected a judgmental sample of two states from which to review natural gas extraction
permits. Specifically, we selected to review permits in Colorado and Oklahoma because these
states have among the highest number of synthetic-minor facilities in the natural gas extraction
industry, according to the 2017 National Emissions Inventory. These states also contain among
the most synthetic-minor facilities with actual emissions that potentially exceed major-source
thresholds, according to the 2017 National Emissions Inventory. According to ICIS-Air and the
EPA's Enforcement and Compliance History Online database, Colorado had 859 facilities
identified as synthetic-minor sources in the natural gas extraction industry in 2019, and
Oklahoma had 999. Figure C-3 shows the percentage of synthetic-minor sources in Oklahoma
and Colorado that are in the natural gas extraction industry compared to other industries.
21-P-0175 30
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Figure C-3: Percentage of Oklahoma and Colorado synthetic-minor sources in natural gas
extraction industry compared to other industries
2019 Oklahoma total
3,728 synthetic-minor
sources
Natural gas
extraction
Other
industries
2019 Colorado total
1,597 synthetic-minor
sources
Oklahoma
Colorado
Source: OIG analysis of data from ICIS-Airand the EPA's Enforcement and Compliance History Online database.
Data are based on state-submitted information. (EPA OIG image)
In each of these states, we randomly selected eight natural gas extraction facilities that are
characterized as SM-80s in ICIS-Air for in-depth review. In Colorado, we selected facilities
operating in the Denver and Northern Front Range—located north of Denver and east of the
Rocky Mountains—metropolitan areas where the air does not meet EPA air quality standards for
ozone. Natural gas extraction facilities contribute to ground-level ozone formation by emitting
VOC and nitrogen oxides, which react in sunlight to form ozone. Breathing elevated
concentrations of ozone can trigger a variety of health problems, including chest pain, coughing,
throat irritation, and airway inflammation. It also can reduce lung function and harm lung
tissue. Ozone can worsen bronchitis, emphysema, and asthma, leading to the need for increased
medical care. Oklahoma does not have any areas where the air does not meet the EPA's
standards for ozone.
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Appendix D
Background on Natural Gas Extraction Industry
The natural gas extraction industry includes the production of natural gas. This includes
well-production sites, where natural gas is extracted from the ground. It also includes compressor
stations, which help maintain the pressure of the gas and move the gas from the individual
well-production sites to natural gas processing plants and ultimately the end user. The facilities
we reviewed include both well-production sites and compressor stations. Figure D-l shows
where well-production sites and compressor stations are located within the overall natural gas
lifecycle—from extraction to distribution to the end user.
Figure D-1: Natural gas industry from production to distribution
Producing Wells
Catherine! Lines
ransmission Lines
Compressor
Stations
n Processing Plant
A /
-*11.:
LNG or Propane/Air Plant
Large Volume Customer
.cj?
Underground
Storage
Distribution Mains (Lines) _
/Xg'W
American Gas
Association
Picture courtesy of American Gas Association
Reaulator/Mel
City Gate
(Rag u lators/Matsrs)
Residential
Customers
Commercial
Customer
Source: American Gas Association. (American Gas Association image)
Natural gas production facilities emit several types of pollutants, including VOC, nitrogen
oxides, carbon monoxide, and hazardous air pollutants. VOC and nitrogen oxides interact in
sunlight to form ground-level ozone. Breathing elevated concentrations of ozone can trigger a
variety of health problems, including chest pain, coughing, throat irritation, and airway
inflammation. It also can reduce lung function and harm lung tissue. Ozone can worsen
bronchitis, emphysema, and asthma, leading to a need for increased medical care. Hazardous air
pollutants are toxic pollutants known or suspected to cause cancer or other serious health
problems.
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Colorado and Oklahoma are both among the ten states with the highest amount of natural gas
extraction and production. In 2019, Colorado produced 1,988,714 cubic feet of natural gas, while
Oklahoma produced 3,175,008 cubic feet.
Based on EPA data, the proportion of synthetic-minor sources compared to major sources in top
natural gas producing states was 9 percent higher in 2019 than in 2011, while it remained
relatively constant in states that are not top producers of natural gas. This is shown in
Figure D-2. This shift could be an indication that more facilities in the natural gas production
industry are choosing to implement synthetic-minor limits to avoid major-source permitting
requirements than in other industrial sectors.
Figure D-2; Proportion of synthetic-minors and major-sources in top natural gas producing states
versus all other states between 2011 and 2019a
01
100%
90%
« 80%
i 70%
re 60%
01
a 50%
o
E
O
40%
30%
§¦ 20%
10%
0%
Major sources
proportion
Synthetic-minor sources
proportion
Top natural gas
states 2011-2019
trend » 9%
Other states
2011-2019
trend » 0%
2011
2012
2013
2014
2015
2016
2017
2018
2019
Source: OIG analysis of data from ICIS-Air and the U.S. Energy Information Agency. (EPA OIG image)
a The top ten natural gas producing states, based on our analysis of data from the U.S. Energy Information
Administration, include Alaska, Arkansas, Colorado, Louisiana, New Mexico, Ohio, Oklahoma,
Pennsylvania, West Virginia, and Wyoming. The analysis does not cover states or U.S. territories that have
no synthetic-minor sources identified in ICIS-Air. Although Texas is atop natural gas producing state, it was
not included in the analysis for this reason.
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Appendix E
Case Study: Synthetic-Minor-Source Permitting
in Wood Biomass Industry
*•
• •
-•
. •' >
•
• . *V
- -
•••
•
•
• • •
• •
•
• «•*
Source: Biomass manufacturing in the United
States as of August 2020, including facilities
operating (green), under construction or
planned (yellow), and temporarily not in
operation (red). (U.S. Energy Information
Administration image)
As detailed in its 2018 report, Dirty Deception: How the Wood Biomass Industry Skirts the Clean Air Act,
the nonprofit organization Environmental Integrity Project examined air permits and emission
information in federal and state records for 21 wood pellet plants in the United States. Wood pellet
facilities convert trees into pellets to be burned for electricity. The Environmental Integrity Project found
that seven out of 21 facilities violated their permit
limits by releasing too much pollution, while another
four plants had state-issued permits that failed to
require necessary pollution-control equipment. The
report explains that most wood pellet facilities are
permitted as synthetic-minor sources under the
EPA's Prevention of Significant Deterioration
permitting program, but they only have a blanket
emission limit in their permits, such as "the facility
shall emit less than 249 TPY of VOCs," rather than an
actual production limit that is directly associated with
emissions. An EPA guidance document from 1989
cites a 1988 court decision, United States vs.
Louisiana-Pacific Corporation, which found that
blanket limits are not enforceable as a practical
matter. The Environmental Integrity Project
concluded that many large wood pellet plants were in fact exceeding their 249 TPY
limits because many units emitted much more VOC than states and the industry
anticipated.
OAQPS and EPA regional staff confirmed to us that there are potential problems
with permitting wood biomass sources and that the industry is under increased
scrutiny on a national level. OAQPS staff explained that the wood peilet industry is
an emerging industry, so the emissions and emissions sources are not well
understood. For example, a Region 6 branch chief explained that an issue with these
facilities has been the use of unproven emission factors to characterize emissions
from pellet coolers. The branch chief said that Louisiana's Department of
Environmental Quality reprocessed two permits after further testing and is
requiring the facilities to obtain major-source permits. One OAQPS staff person
suggested that states could make synthetic-minor permits, including those for wood
pellet facilities, more enforceable by requiring source-specific stack testing to
confirm expected emissions. In order for a reviewer to know whether the permitted
emission limit is enforceable, the staff person said, the permit must include a way to
measure emissions.
Wood pellets.
(U.S. General
Services
Administration
photo)
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^eos7^
; O i
iwi
rv
Appendix F
Agency Response to Draft Report
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
% V|V- ® WASHINGTON. D.C. 20460
*1 proT^
May 28. 2021
OFFICE OF
AIR AND RADIATION
MEMORANDUM
SUBJECT: EPA Response to OIG Draft Report titled: "EPA Should Conduct More Oversight
of Synthetic-Minor-Source Permitting to Assure Permits Adhere to EPA Guidance"
- Project No. OA&E-FF/B9-0093. April 29. 2021
FROM: Joseph Gi
Acting As1
Office of Ai
in
TO: Renee McGfcee-Lenart
Acting Air Director
Office of the Inspector General
The Office of Air and Radiation (OAR) welcomes the opportunity to provide comment on the
draft report titled: "EPA Should Conduct More Oversight of Synthetic-Minor-Source Permitting
to Assure Permits Adhere to EPA Guidance " and its recommendations. Based on our review, we
find the draft report to be factually accurate overall. Our responses to the draft report
recommendations are provided below.
OIG Recommendation 1: Update Agency guidance on practical enforceability to more
clearlydescribe how the technical accuracy of a permit limit should be supported and
documented. In updating such guidance, the Office of Air and Radiation should consult and
collaborate with theOffice of Enforcement and Compliance Assurance, the Office of General
Counsel, and the EPA regions.
Response 1: OAR concurs with this recommendation. OAR will update Agency guidance on
the practical enforceability of limitations, including but not limited to EPA's June 13, 1989
Guidance on Limiting Potential to Emit in New Source Permitting, to describe how the
technical accuracy of a permit limit should be supported and documented. Specifically, the
updated guidance will address the practical enforceability of limitations on potential to emit.
In updating our guidance, we will consult and collaborate with the Office of Enforcement and
Compliance Assurance, the Office of General Counsel, and the EPA regions.
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Planned Completion Date: October 2023
OIG Recommendation 2: In consultation with the EPA regions, develop and implement an
oversight plan to include:
• An initial review of a sample of synthetic-minor-source permits in different industries
that are issued by state, local, and tribal agencies to assess whether the permits adhere
toEPA guidance on practical enforceability, including limits that are technically
accurate; have appropriate time periods; and include sufficient monitoring,
recordkeeping, and reporting requirements.
• A periodic review of a sample of synthetic-minor-source permits to occur, at a
minimum,once every five years.
• Procedures to resolve any permitting deficiencies identified during the initial and
periodicreviews.
Response 2: OAR concurs with this recommendation. In consultation with EPA Regional
offices, OAR will develop and implement an oversight plan in accordance with current
statutoryand EPA regulatory requirements and, as appropriate, including the specific elements
identified.
Planned Completion Dates:
1. Develop plan: April 2024
2. Complete initial review: October 2024
OIG Recommendation 3: Develop technical support information for natural gas
production facilities that includes defining the parameters upon which the control
efficiency for enclosedcombustion devices is based and methods for measuring those
specific parameters so that permitting authorities can verify compliance with permit limits.
Response 3: We agree with the OIG that monitoring, recordkeeping and reporting
requirements(MRR) associated with synthetic minor permit emission limitations serve to
ensure that the established enforceable limits are being met and are important to meet the
ongoing compliance requirement in the CAA. We also agree with the OIG that facilities
under synthetic minor statusshould generate records to demonstrate continuous compliance
with permit emission limits.
However, the OIG's recommendation implies that the impediment to verifying compliance
with emission limits associated with the oil and gas industry is inadequate technical
information regarding MRR permit conditions for pollution control equipment for use by
permitting authorities. We disagree that permit authorities do not have the technical tools to
effectively establish appropriate MRR in synthetic minor permits. As described below, the
technical supportinformation in existing air rules fully addresses the need identified by the
OIG.
Federal regulations covering air emissions from oil and gas facilities (40 CFR part 60
subparts OOOO and OOOOa (NSPS OOOO and 0000a) and 40 CFR part 63 subpart HH
(NESHAP HH)) contain provisions requiring control of VOC and HAP at these facilities.
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Combustion, including enclosed combustors for the natural gas production segment, is a
common control option to meet these provisions. As we discussed with the OIG during
interviews and reiterated in our written response to the initial draft report, the properties
related to effective combustion are well-understood and depend on gas composition, gas
flow, residence time in the combustionzone, and the continuous presence of a pilot light to
ensure ignition. These parameters are not unique to the natural gas production sector and are
standard across multiple rules in a number ofindustries. To ensure proper use and efficacy of
combustion control devices by oil and gas facilities, each subpart covering the industry
contains targeted MRR requirements. For example,to ensure high combustion efficiency,
NSPS OOOOa requires initial testing of enclosed combustion devices by the owner or
operator or a certification test by the manufacturer; periodically, the combustor must be
retested by the owner, or the owner may continuously monitor the gas flow to the unit.
Additionally, owners and operators must continuously monitorfor the presence of a pilot
flame and ensure residence time in the combustion zone through design analysis. On a
monthly basis, the operator must perform a visible emissions test with Method 22 of
appendix A-7 to part 60 to detect smoke, which would indicate less than 95 percent control
efficiency.
Continuous Monitoring Systems (CMS), consisting of both continuous emissions monitoring
systems and continuous parameter monitoring systems, create continuous electronic data
recordsthat can be used to verify continuous compliance. These systems rely on site
infrastructure such as shelters, electricity on site, and data acquisition systems. In the oil and
gas industry, not all production sites are electrified for support equipment. Well pads and
related sites are often powered by the gas itself, through pneumatic pumps and pneumatic
controllers. This lack of electrification of all sites limits the blanket use of CMS for
continuous compliance.
Looking ahead, OAR is open to revising the existing MRR requirements and adding others if
future data demonstrate a need for further action. EPA is currently reviewing NSPS OOOOa
under Executive Order 13990. The scope of the action and the timeline for compliance with
this EO foreclose EPA's ability to consider additional monitoring provisions in this NSPS to
address enclosed combustor compliance assurance issues beyond existing MRR requirements.
However, as more data and information become available, and the required technology
reviews for both NSPS OOOOa and NESHAP HH approach, EPA may receive data and
information that can be analyzed to determine whether additional or different monitoring
requirements for these devices are necessary, practicable, and cost effective. In the meantime,
by maintaining enforcement of existing MRR requirements and addressing other
recommendations stated in the draft report, EPA will be assisting permitting authorities to
establish permit parameters that meet the practical enforceability requirements for synthetic
permit limitations.
OIG Recommendation 4: Revise the Agency's guidance to communicate its key
expectationsfor synthetic-minor-source permitting to state and local agencies.
Response 4: OAR concurs with this recommendation. OAR will revise the Agency's guidance
tocommunicate its key expectations for synthetic-minor-source permitting to state and local
agencies. This will include an expectation that synthetic minor permit terms and conditions
21-P-0175
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ensure that the potential to emit of the source is less than the applicable major source threshold
by meeting legal and practical enforceability criteria. Our work related to this recommendation
may, at least in part, be integrated with the updated guidance on practical enforceability in
response to OIG Recommendation 1.
Planned Completion Date: October 2024
OIG Recommendation 5: Identify all state, local and tribal agencies in which state Clean Air
Act permit program implementation fails to adhere to the public participation requirements for
synthetic-minor-source permit issuance and take appropriate steps to assure the identified states
adhere to the public participation requirements.
Response 5: OAR concurs with this recommendation. With EPA Regional office support, OAR
will identify state, local and tribal agencies whose program regulations, including but not limited
to minor new source review and federally enforceable state operating permit program regulations
and corresponding practices, do not meet the public participation requirements contained in the
applicable EPA regulations, e.g., 40 CFR 51.161, and guidance with respect to synthetic minor
source permitting. For the identified agencies, OAR will take appropriate corrective steps, which
may include constructive, informal engagement.
Planned Completion Dates:
1. Identify target agencies and program regulations with public participation requirement
deficiencies: July 2022
2. Take appropriate steps to resolve identified deficiencies: December 2023
If you have any questions regarding this response, please contact JoLynn Collins, OAQPS Audit
Coordinator, at (919) 541-5671.
cc: James Hatfield
Betsy Shaw
Peter Tsirigotis
Mike Koerber
Grant Peacock
Scott Mathias
Penny Lassiter
Raj Rao
Cheryl Vetter
Peter Keller
Jodi Howard
Elineth Torres
Matt Witosky
Gerri Garwood
JoLynn Collins
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Appendix G
Agency Response to Revised Recommendation 3
^ UN|TED STATES ENVIRONMENTAL protection agency
WASHINGTON, D C. 20460
r4lpncrfl^ June 21. 2021
OFFICE OF
AIR AND RADIATION
MEMORANDUM
SUBJECT: EPA Revised Response tp OIG Draft Report titled: "EPA Should Conduct More
Oversight of Syntheti
-------
Appendix H
Distribution
The Administrator
Deputy Administrator
Chief of Staff, Office of the Administrator
Deputy Chief of Staff, Office of the Administrator
Assistant Administrator for Air and Radiation
Assistant Administrator for Enforcement and Compliance Assurance
Regional Administrators, Regions 1-10
Agency Follow-Up Official (the CFO)
Agency Follow-Up Coordinator
General Counsel
Associate Administrator for Congressional and Intergovernmental Relations
Associate Administrator for Public Affairs
Principal Deputy Assistant Administrator for Air and Radiation
Principal Deputy Assistant Administrator for Enforcement and Compliance Assurance
Deputy Assistant Administrator for Stationary Sources, Office of Air and Radiation
Deputy Assistant Administrator for Mobile Sources, Office of Air and Radiation
Deputy Assistant Administrator for Air and Radiation
Deputy Regional Administrators, Regions 1-10
Director, Office of Air Quality Planning and Standards, Office of Air and Radiation
Director, Office of Compliance, Office of Enforcement and Compliance Assurance
Director, Office of Regional Operations
Director, Office of Continuous Improvement, Office of the Chief Financial Officer
Audit Follow-Up Coordinator, Office of the Administrator
Audit Follow-Up Coordinators, Office of Air and Radiation
Audit Follow-Up Coordinator, Office of Enforcement and Compliance Assurance
Audit Liaison, Office of Air Quality Planning and Standards, Office of Air and Radiation
Audit Follow-Up Coordinator, Office of General Counsel
Audit Follow-Up Coordinators, Regions 1-10
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