From: Topham.Nathan@epamail.epa.gov

Sent: Wednesday, October 26, 2011 4:00 PM

To: Cortney_Higgins@omb.eop.gov

Cc: French.Chuck@epamail.epa.gov; Hanzel, Veronica; Laney, Michael N.; 

Vetter.Rick@epamail.epa.gov

Subject: E.O. 12866 Review NESHAP Primary Lead Processing Final AQ-43 - EPA Policy 

Memo

Attachments: pteguid.pdf

Hi Cortney, 

Here is the memo re: "once in always in" that you requested. 

Nathan Topham 

Environmental Engineer 

US EPA/OAQPS/SPPD/MIG 

Phone - (919)541-0483
May 16, 1995

MEMORANDUM

SUBJECT: Potential to Emit for MACT Standards -- Guidance on

Timing Issues 

FROM: John S. Seitz, Director

Office of Air Quality Planning and Standards (MD-10)

TO: Linda Murphy, Region I

Conrad Simon, Region II

Thomas Maslany, Region III

Winston Smith, Region IV

David Kee, Region V

Stanley Meiberg, Region VI

William Spratlin, Region VII

Patricia Hull, Region VIII

David Howekamp, Region IX

Jim McCormick, Region X

Section 112 of the Clean Air Act distinguishes between major

sources and area sources of hazardous air pollutants. Although

maximum achievable control technology (MACT) is required for all

major sources of hazardous air pollutants, lesser controls or no

controls may be required of area sources in a particular

industry. In addition, whether a facility is a major or area

source of hazardous air pollutants may affect the applicability

of other CAA requirements -- such as when or whether the facility

is required to obtain a Title V operating permit.

The purpose of this memo is to clarify when a major source

of hazardous air pollutants can become an area source -- by

obtaining federally enforceable limits on its potential to emit -

- rather than comply with major source requirements. Timing

questions are important to address now because several MACT

standards have been promulgated and because an increasing number

of sources are nearing deadlines for submitting Title V operating

permit applications. The EPA recently provided guidance on how
facilities can obtain federally enforceable limits on their

potential to emit hazardous and criteria air pollutants in a

January 25, 1995, memo from me to you.
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STATUTORY AND REGULATORY BACKGROUND 

Section 112 of the Act defines a "major source" as "any

stationary source or group of stationary sources located within a

contiguous area and under common control that emits or has the

potential to emit considering controls, in the aggregate, 10 tons

per year or more of any hazardous air pollutant or 25 tons per

year or more of any combination of hazardous air pollutants..." 

The term "potential to emit" is defined in the section 112

general provisions (40 CFR Part 63.2) as “ the maximum capacity

of a stationary source to emit a pollutant under its physical or

operational design,” considering controls and limitations that

are federally enforceable. This definition is consistent with

definitions in regulations for the new source review and Title V

permit programs.

SCOPE OF TODAY'S GUIDANCE

 EPA has received a number of requests for clarification

concerning when facilities may limit their potential to emit to

avoid applicability of major source requirements of promulgated

MACT standards. Most of these issues are not explicitly

addressed by the section 112 general provisions nor by MACT

standards themselves. Therefore, EPA is providing this guidance

for MACT standards based on the Agency's interpretation of the

relevant statutory language.

Today's guidance addresses three issues:

! By what date must a facility limit its potential to emit if

it wishes to avoid major source requirements of a MACT

standard?

! Is a facility that is required to comply with a MACT

standard permanently subject to that standard?

! In the case of facilities with two or more sources in

different source categories: If such a facility is a major

source for purposes of one MACT standard, is the facility

necessarily a major source for purposes of subsequently

promulgated MACT standards?

EPA plans to follow this guidance memorandum with rulemaking

actions to address these issues. The Agency intends to include

provisions on potential to emit timing in future MACT rules and

amendments to the section 112 general provisions. The EPA

believes that the structure of section 112 strongly suggests

certain outer limits for when a source may avoid a standard

through a limit on its potential to emit. However, EPA also
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believes the statute may be flexible enough to allow the Agency 
5

to reach different results through rulemaking. In forthcoming

rulemaking, EPA will be considering alternative approaches that

could garner additional environmental benefits and provide

additional flexibility to small sources.

TIMING FOR OBTAINING POTENTIAL TO EMIT RESTRICTIONS:

GUIDANCE FOR PROMULGATED STANDARDS

Existing sources

Today's guidance clarifies that facilities may switch to

area source status at any time until the "first compliance date"

of the standard. The "first compliance date" is defined as the

first date a source must comply with an emission limitation or

other substantive regulatory requirement (i.e., leak detection

and repair programs, work practice measures, housekeeping

measures, etc..., but not a notice requirement) in the applicable

MACT standard. By that date, to avoid being in violation, a

major source must either comply with the standard, or obtain and

comply with federally enforceable limits ensuring that actual and

potential emissions are below major source thresholds. 

The Act does not directly address a deadline for a source to

avoid requirements applicable to major sources through a

reduction of potential to emit. However, a result that is 

consistent with the language and structure of the Act is that

sources should not be allowed to avoid compliance with a standard

after the compliance date, even through a reduction in potential

to emit. In the absence of a rulemaking record supporting a

different result, EPA believes that once a source is required to

install controls or take other measures to comply with a MACT

standard, it should not be able to substitute different controls

or measures that happen to bring the source below major source

levels. 

Moreover, while some standards have multiple, staggered

compliance dates, these requirements are intended to function in

an integrated manner to meet the statutory goals for that source

category. For such a standard, the relevant date for purposes of

this policy is the first substantive compliance date. While the

Act may permit exceptions to these general rules, any such

exceptions will need to be developed through rulemaking.

Some have read the Act to require an even earlier deadline,

namely, the date of standard promulgation. EPA believes this

result is not as strongly compelled by the statute. It is

reasonable to presume that Congress intended a source to have

some opportunity to avoid a standard by becoming an area source

once it has been identified as subject in a promulgated standard. 
6
7

The compliance date deadline approach would give small

emitters (i.e. facilities with actual emissions below the major

threshold) time to limit their potential emissions rather than

comply with major source requirements. Under this approach, a

facility will have the same amount of time to comply whether it

chooses to meet the standard or limit its potential to emit. 

This compliance date approach for existing sources is also

reasonable because it recognizes the circumstances that exist

regarding MACT standards issued to date. States are in the

process of developing additional mechanisms that can provide

federally enforceable limits to sources. In addition, EPA rules

have not previously specified when facilities may switch from

major to area-source status to avoid MACT applicability. It

would be inequitable to hold sources to a promulgation date

deadline absent clear advance notice to sources of the full

significance of that date. Although the Act gives EPA discretion

to designate a deadline earlier than the first compliance date,

this is most appropriately done through rulemaking in a manner

that gives adequate notice to the regulated community. By

contrast, any source should presume that the compliance date is

the final date to establish its status as an area source, at

least for purposes of that standard.

For clarity, the Agency wishes to note that as long as a

facility does not qualify for treatment as an area source, the

facility must comply with any applicable major source requirement

under the Clean Air Act. Facilities in need to comply with

additional limits to qualify as area sources will need to plan

ahead to obtain the limits before compliance deadlines for major

source requirements. Facilities should consult with State and

local air agencies concerning the timing of any necessary

submittal.

New sources

Section 112 requires new sources to comply with a MACT

standard upon startup or no later than the promulgation date of

the standard, whichever is later. As a legal matter, to avoid

being in violation, a "potential" major source must either comply

with MACT or obtain and comply with federally enforceable limits

by this statutory deadline.

 Therefore, the Agency advises that any new facility that

would be a major source in the absence of federally enforceable

limits must obtain and comply with such limits no later than the

promulgation date of the standard or the date of startup of the

source, whichever is later. For the same reasons articulated

below with regard to existing sources, a new source that is major
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at the time of promulgation or startup will remain major for

purposes of that standard. 
9

Once In, Always In Interpretation

EPA is today clarifying that facilities that are major

sources for HAPs on the "first compliance date" are required to

comply permanently with the MACT standard to ensure that maximum

achievable reductions in toxic emissions are achieved and

maintained.

EPA believes that this once in, always in policy follows

most naturally from the language and structure of the statute. 

In many cases, application of MACT will reduce a major emitter's

emissions to levels substantially below the major thresholds. 

Without a once in, always in policy, these facilities could

"backslide" from MACT control levels by obtaining potential-toemit limits, escaping applicability of the MACT standard, and

increasing emissions to the major-source threshold (10/25 tons

per year). Thus, the maximum achievable emissions reductions

that Congress mandated for major sources would not be achieved. 

A once in, always in policy ensures that MACT emissions

reductions are permanent, and that the health and environmental

protection provided by MACT standards is not undermined. 

Example: A facility has potential emissions of 100

tons/year. After compliance with the applicable MACT

standard, which requires a 99 percent emissions reduction,

the facility's total potential emissions would be 1

ton/year. Under today's guidance, that facility could not

subsequently operate with emissions exceeding the maximum

achievable control technology emission level. The facility

could not escape continued applicability of the MACT

standard by obtaining "area source" status through

limitations on emissions up to the 10/25 ton per year major

source thresholds.

Additionally, the Act requires all major sources to obtain a

Part 70 operating permit. Section 501(2) provides that any

source that is major under section 112 will also be major under

title V. It follows that a source that is major for purposes of

any MACT standard will be subject to title V as a major source.

As clarification, most MACT standards explicitly require

operating permits for major sources. However, this principle

applies regardless of whether it is specified in the particular

standard. Therefore, a source required to comply with MACT

requirements applicable to major sources will also be required to

obtain a Part 70 permit for that MACT requirement.

APPLICABILITY OF MULTIPLE MACT STANDARDS TO A SINGLE FACILITY

A facility that is subject to a MACT standard is not
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necessarily a major source for future MACT standards. For

example, if after compliance with a MACT standard, a source's

potential to emit is less than the 10/25 tons per year

applicability level, the EPA will consider the facility an area

source for purposes of a subsequent standard.

EXAMPLE: A facility has degreasing operations which emit 30

tons per year of HAP. The same facility also has the

potential to emit 5 tons/year of HAP from the coating of

miscellaneous metal parts. After complying with the

Halogenated Solvent Cleaning MACT, the maximum potential

emissions from degreasing operations is 3 tons per year. 

The total federally enforceable potential emissions from

this facility would now be 8 tons per year which meets the

definition for an "area source." Therefore, this facility

would not be subject to the major source requirements of the

future miscellaneous metal parts MACT standard. 

It should be noted that EPA has authority to require

additional reductions in toxic emissions from sources that avoid

MACT requirements through reductions in potential to emit. 

Section 112(f), the residual risk program, requires EPA to

evaluate the risk and to promulgate additional standards for each

category or subcategory of major sources, and allows EPA

discretion to do the same for area sources, where there is not an

ample margin of safety to protect public health within 8 years

after promulgation of the MACT standard. The EPA will consider

whether residual risk standards are appropriate for sources

complying with MACT standards or potential to emit limits. 

In addition, EPA is committed to implementation of the urban

area source program as required in Section 112(c)(3) of the CAA. 

This program requires EPA to issue air toxics standards for area

sources representing 90 percent of the area source emissions of

the 30 hazardous air pollutants that present the greatest threat

to public health in the largest number of urban areas. Together,

the Residual Risk Standards and the Urban Area Source Standards

ensure protection of public health beyond that achieved by

implementation of the MACT standards for major sources.