***Counsel:***

May 7, 2007

**Attention: Docket ID No. EPA-HQ-OAR-2001-0004**

Air and Radiation Docket and Information Center

Environmental Protection Agency

Mail Code: **6102T**

1200 Pennsylvania Avenue, N.W.

Washington, D.C. 20460

[**a-and-r-docket@epa.gov**](mailto:a-and-r-docket@epa.gov)

[**Sutton.Lisa@epa.gov**](mailto:Sutton.Lisa@epa.gov)

> **Re: Comments on the** **Proposed Revisions** **to the Reasonable
> Possibility and Recordkeeping Provisions of the Prevention of
> Significant Deterioration (PSD) and Nonattainment New Source Review
> (NSR) requirements 72 Fed. Reg. 10445 (March 8, 2007)**

Dear Ms. Sutton:

The National Environmental Development Association's Clean Air Project
is a coalition of manufacturing companies operating facilities across
the country. These entities will be affected if EPA adopts the proposed
"reasonable possibility" standard because they own and operate major
Clean Air Act sources subject to PSD/NSR permitting. NEDA/CAP also was a
party in *New York v. EPA,* 413 F.3d 3 (D.C. Cir. 2005) ("NY1"). As you
know, in that case, the Court of Appeals remanded the portion of the
2002 NSR Reform Rule, 67 Fed. Reg. (Dec. 31, 2002), to the Agency with
the following direction:

> *"Because EPA has failed to explain how it can ensure NSR compliance
> without the relevant data, we will remand for it either to provide an
> acceptable explanation for its 'reasonable possibility' standard or to
> devise an appropriately supported alternative."*

*\
Id. at* 35-36. EPA's March 8, 2007 notice responds to this Court mandate
by proposing options for determining the circumstances under which a
change would have a reasonable possibility of significantly increasing
emissions, a "percentage increase trigger" and a "potential emissions
trigger."

1.  **[NEDA/CAP Submits That Existing Emissions Information Available To
    Air Pollution Control Authorities Makes A Reasonable Possibility
    Standard Rule Unnecessary.]{.underline}**

The Court in *NY1* did not determine that the "reasonable possibility
standard" was illegal, and it did not require EPA to create new
regulatory requirements to define the standard. Instead, the Court
simply acknowledged that the NSR Reform rule was complicated and
directed the Agency to respond to its concerns regarding the Agency's
ability to enforce NSR if there was a reasonable possibility that a
project or "modification" of an existing source could circumvent NSR
preconstruction review. We thought it was unfortunate, therefore, that
the March 8^th^ Notice does not respond to the Court's invitation to
present a case for why additional rulemaking was not needed to prevent
NSR circumvention. NEDA/CAP's members think it is important to respond
to the Court's invitation by addressing the existing recordkeeping and
reporting obligations that sources already have under the Clean Air Act,
which would alert pollution control authorities and the public to
possible circumvention of NSR, without additional recordkeeping and
reporting.

a.  [EPA and state pollution control authorities already require "major
    sources" to provide regulators with substantial emissions
    information that could be used to identify non-NSR projects that
    cause significant emissions increases.]{.underline}

Air pollution authorities are literally bombarded with emissions
information from regulated "major" air pollution control sources that
are subject to the NSR review regulations. This information includes
Title V operating permit applications and federal and state
preconstruction permit applications that detail the emissions equipment
in a plant. In nearly all jurisdictions, authorities must receive notice
from a source before any physical changes (other than routine
maintenance, repair and replacement) are made at a facility, even if
federal NSR review is not required because a project is too small to
trigger NSR. Also, every one-to-two years jurisdictions[^1] generally
require sources to submit emissions inventories identifying process
equipment and the actual emissions from those units in the prior year.
This information is used by the State to compute annual permit program
emission fees to be paid by "major sources" and for local ambient air
quality planning. Emission inventories are required for sources in
federal nonattainment areas under the Clean Air Act. These emission
inventories can be used easily to determine if emission increases occur
from a facility, even though not all of the reports will pinpoint
without additional information from the source which equipment caused
the increase.

Additional recordkeeping and reporting obligations ballooned following
implementation of the 1990 Clean Air Act Amendments, and the
requirements make NEDA/CAP question further whether additional
recordkeeping and reporting requirements are necessary to assure NSR
compliance. In addition to emissions data in the reports, notices, and
applications discussed above, major sources are subject to periodic
monitoring and recordkeeping requirements for every individual
applicable requirement included in the source's permit. See, 71 FR 75422
Dec. 15, 2006. Large emissions equipment also is subject to additional
monitoring and recordkeeping under the "compliance assurance monitoring
(CAM)" regulations. 40 CFR Part 64. Monitoring compliance data includes
logs of operations, visible emissions and instrumental opacity readings,
stack test reports, analytically generated mass balances, strip charts
from continuous direct emissions and parametric monitors. Also the
designated representative at each plant must sign an annual compliance
certification and submit semiannual reports identifying deviations and
violations of every applicable standard to which a source is subject.
*Id.* In addition, federal and state regulations include frequently
duplicative requirements for excess emissions reporting within 24-48
hours following possible excursions.

b.  [Business information also is readily available to regulators to
    enforce the existing reasonable possibility test.]{.underline}

Clean Air Act records and other publicly available information on
production levels and growth in various industrial sectors can be
utilized by authorities to determine if unexplained actual emissions
increases are occurring at a source that might have constructed,
installed, or modified equipment without NSR review. In fact, this
publicly available data provided EPA enforcement officials with the
information to initiate dozens of NSR enforcement investigations
throughout the 1990s, and is regularly used by non-governmental
organizations with monitoring reports and emissions inventories to
monitor compliance with NSR and other Clean Air Act requirements. Once
an EPA Clean Air Act investigation is launched, the agency has extremely
broad authority under section 114 of the Clean Air Act to obtain
business records pertaining to emissions from a facility. On this basis,
NEDA/CAP questions whether additional recordkeeping and reporting of
emissions data regulated to the variety of changes that take place in a
plant is either necessary to further regulate NSR or if it will possibly
just confuse regulatory officials and the public.

2.  **[If EPA Believes Existing Emissions Reporting Is Not Sufficient To
    Detect Violations, Then The Agency Should Adopt A Reasonable
    Possibility Standard That Is Easy To Administer And Transparent To
    The Public.]{.underline}**

    a.  [EPA should not adopt the "potential emissions trigger"
        standard]{.underline}.

NEDA/CAP strongly objects to the "potential emissions trigger" option as
the agency intended the test to be administered. Agency officials
clarified to NEDA/CAP that it meant for the option to be based on
subtracting actual emissions from potential project emissions. Under
this proposed standard, an operator would conclude that there is a
reasonable possibility that a change will result in a significant
emissions increase if the increase in the post-change "potential to
emit" over the pre-change actual emissions equals or exceeds NSR
significance levels (even though the source opts to base its
determination as to whether NSR applies on projected actual emissions)."
*Id.* at 10450.

If EPA feels that it must require additional recordkeeping and reporting
for certain modifications that carry a risk of resulting in significant
increases in actual emissions, it is important for the Agency to adopt
an easily administered test that is transparent to operators,
regulators, and the public. EPA's second option, which is based on two
separate calculations of "actual historical" emissions and then a
comparison of "actual emissions" with "potential emissions" that the
project could emit if it were run up to design capacity fails both
criteria because it is too complicated. Moreover, the "emissions
increase" that is predicted by comparing "actuals-to-potentials" is a
hypothetical, not a real value, that does not correlate to whether there
is risk that a change will result in significant emissions.

Moreover, NEDA/CAP has demonstrated in many prior sets of NSR comments
that this comparison almost always exceeds significance levels, but has
little relationship with operation of a process or other source after a
modification is made. Hence, we believe that a potentially large number
of projects could be drawn into the reporting and recordkeeping
requirements under such a standard, draining administrative resources
and the public's interest in monitoring projects that have no
possibility of exceeding significance levels. The NSR program's goal
should not be for any added complexity in emissions calculations, and
therefore, a test that does not involve multiple math problems will be
far easier to administer, understand, and track.

> b\. [NEDA/CAP believes that the reasonable possibility standard could
> be administered easily if it were based on projected actual emissions
> increases alone and the relevant NSR significance level.]{.underline}

EPA's March 8^th^ Notice indicates that the Agency's preference would be
to adopt a reasonable possibility standard trigger based on 50% of a
NSR-regulated pollutant's significance level. Under this proposed
standard, an operator would conclude that there is a reasonable
possibility that a change will result in a significant emissions
increase, and thus trigger recordkeeping/reporting requirements, if the
change's "projected emissions increase" equals or exceeds 50% of the
applicable NSR significance level for a NSR-regulated pollutant. The
Agency proposes to use 50% of the significance level to trigger
reporting and recordkeeping, but it concedes that there may be a basis
for using another percentage.

NEDA/CAP prefers the "significant increase trigger" to the "potential
emissions trigger," because the reasonable possibility test should be
based on the same actual emissions calculation and assumptions,
including historical demand that the source used to project actual
emissions increases. Emissions of the equipment after the change then
can be monitored and evaluated by the source against emissions
projections and demand. In contrast, EPA's proposed second option, the
"potential emissions trigger" is an artificial measure that has no
relationship with either the emissions that the source "projects,"
historical assumptions about production and demand, or any direct
bearing on the recordkeeping and reporting of emissions that a source
will have to do if it "trips" the trigger. Therefore, NEDA/CAP urges EPA
to "keep it simple" and use the future projected emissions of a project
as the basis for determining whether additional recordkeeping and
reporting is necessary.[^2]

c.  [EPA should select a percentage trigger of 75-90% or the relevant
    significance level.]{.underline}

NEDA/CAP members see no advantage to basing the standard on 50% instead
of a higher value, and we urge the Agency to adopt a reasonable
possibility standard based on no less than 75 of "significance levels."
50% of "significance levels" is a very conservative value that could
potentially sweep a large number of insignificant changes into a
regulatory program already riddled with redundant recordkeeping. As the
Agency acknowledges in the Notice, significance levels are already
extremely low. *Id. at p.*10449. Those levels already reflect a
ultra-cautious judgment by the Agency as to the impact of new projects
on ambient air quality. Moreover, since this standard would apparently
not allow the source to reduce or "net" emission decreases against the
increase from a project, there is additional conservatism that supports
the use of a higher percentage of the significance level as a trigger.
Second, there is a greater likelihood that a project could trigger NSR
the closer it is to the significance level for a particular pollutant,
particularly if only projected emissions increases are considered
without reducing those increases by contemporaneous decreases from other
sources. While NEDA/CAP's members believe that 90% also would provide a
suitable basis for determining that there is risk that a project could
emit more than significance levels, and thereby support the need
additional recordkeeping and monitoring for the project, NEDA/CAP urges
EPA not to adopt a lower value than 75% because a lower value would
affect a far greater number of projects that do not have the probability
of triggering NSR.

> d\. [EPA needs to exclude maintenance projects from the reasonable
> possibility standard in its final action.]{.underline}

Manufacturers have special concerns about equipment maintenance projects
being subjected to the reasonable possibility standard. This could
create confusion and might require much expanded and expensive
recordkeeping, and worse, emissions calculations that are not kept at
the present for maintenance projects. Therefore, it is important if EPA
adopts a "reasonable possibility" standard for the Agency to expressly
clarify that routine maintenance including but not limited to "like
kind" replacements are not included because they are exempt from the
definition of "modification."

3.  **[If EPA Adopts Any Reasonable Possibility Standard, It Should Make
    The Recordkeeping And Reporting Requirements Simple And Allow Use Of
    Annual Title V Compliance Reports To Certify That A Project Did Not
    Result In A Significant Emissions Increase.]{.underline}**

    a.  [Pre-change records should be maintained on-site, and not
        submitted unless requested.]{.underline}

        The proposal provides that if a change or project has a
        reasonable possibility of resulting in significant emissions, a
        source must: (1) keep records that are created before
        construction (description of the project, identification of
        emissions units affected by the project, and a description of
        the applicability calculation); and (2) monitor emissions,
        calculate annual emissions and maintain records of emissions for
        5 years (or 10 years in certain cases) once the change is
        completed. If the change's annual emissions exceeded the
        baseline by a significant amount and differ from projections
        that are the basis for not applying NSR, a source would be
        required to report emissions from the change and should not need
        to provide annual emissions reports concerning the project that
        was undertaken. Otherwise the source could certify in its annual
        Title V compliance report that actual emissions from the project
        did not exceed significance levels during this period.

    b.  [Post-change emissions only should be provided if requested
        following notification of a state or federal authority that
        actual emissions have exceeded the threshold
        amounts.]{.underline}

NEDA/CAP agrees that reporting associated with the reasonable
possibility standard should be limited to instances when it appears from
emissions records that there could be an increase in emissions that
exceeds significance levels resulting from a change. We believe that
this requirement can be implemented under existing reporting
requirements in the Title V state and federal permit programs. Such
emissions increases should not, however, be labeled either deviations or
violations, but should be earmarked for further investigation.
Importantly, amendment of the operating permit should not be required,
and it should be sufficient for such reporting to take place as part of
the annual Title V reports.

\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*

***[In conclusion]{.underline}*,** NEDA/CAP believes that sources and
air pollution control authorities already have adequate means to
determine if projects have resulted in increased emissions and
circumvented NSR. Sources that implement such projects also have an
immense interest in monitoring emissions to prevent pollutants from
exceeding those levels and in maintaining documentation regarding pre-
and post-change emissions. If the Agency believes that the Court cannot
be satisfied with an explanation of these existing records and the
arsenal of information gathering tools that he Agency has, then NEDA/CAP
recommends adopting EPA's preferred option but increasing the percentage
threshold up to 90% or adopting an alternative option based on whether
the potential emissions from the project by themselves meet or exceed
significance levels.

NEDA/CAP appreciates this opportunity to comment on the proposed
standard. If you have any questions, please call me at 571-970-3721.

> Sincerely,
>
> ![](media/image1.jpeg){width="2.5833333333333335in"
> height="0.6770833333333334in"}
>
> Leslie Ritts, Counsel to NEDA/CAP

[^1]: / In a few states like Indiana, smaller sources may only be
    required to submit an emission inventory every three years.

[^2]: / EPA also might consider applying a two-step RP standard that
    would catch projects with a risk of circumventing NSR without
    sweeping projects with little risk of exceeding NSR applicability
    levels into burdensome new recordkeeping requirements. Under this
    test, the operator would look at whether capacity/PTE of the
    affected equipment increased as a result of the change (comparing
    potential before the project to potential after the project).  If it
    did, then the operator would look at the projected actual emissions
    to see if they exceeded a set percentage (*e.g.*, 75%) of relevant
    significance levels. If so, the operator would keep records.  If the
    "projected actual emissions" were not above the percentage, no
    additional recordkeeping would be necessary. This two-step risk
    standard, which depends on whether or not capacity of the affected
    source has the potential to increase, seems as if it might be a more
    reasonable basis to be concerned that a project could circumvent NSR
    by increasing its actual emissions beyond significance levels after
    the source becomes operational.