UNITED STATES ENVIRONMENTAL PROTECTION AGENCY WASHINGTON, D.C. 20460



# JAN 4 2012

OFFICE OF AIR AND RADIATION

Mr. Robert Ukeiley 435R Chestnut Street, Suite 1 Berea, Kentucky 40403

Dear Mr. Ukeiley:

The Environmental Protection Agency has reviewed the July 28, 2010 petition (Petition) you submitted
on behalfofthe Sierra Club requesting that the EPA initiate rulemaking to designate air quality models for ozone and fme particles (PM2

.5) for use by all major sources applying for a prevention ofsignificant deterioration (PSD) permit. The Administrator asked that I respond on her behalf. In light ofour review, the EPA believes it is appropriate to engage in a rulemaking process to consider whether updates to EPA's Guideline onAir QualityModels as published as Appendix W of40 CFR Part 51 (Appendix W)
are warranted. Therefore, the EPA is granting the Petition to engage in rulemaking to evaluate updates to Appendix Wand, as appropriate, incorporate new analytical techniques or models for ozone and secondary PM2.5. This is not to suggest that the EPA agrees with the specific contentions and allegations in the Petition; however, the EPA will take the information in the Petition under advisement in the rulemaking process.
The EPA has initiated actions that will support rulemaking to address modeling and technical analysis of
ozone and PM2.5 within Appendix W, including scheduling the 10th Conference on Air Quality Modeling in March 2012 where we intend to discuss methods for addressing ozone and secondary PM2.5 impacts; and beginning work on a draft guidance for PM2.5 permit modeling, both ofwhich are described in more detail below. These guidelines are periodically revised to ensure that new model developments orregulatory requirements are incorporated.

The EPA will use the existing process and procedures under Section 320 ofthe Clean Air Act (CAA) to complete the appropriate rulemaking process to update Appendix W in response to this Petition. Section 320 requires the EPA to conduct a conference on air quality modeling at least every three years and give special attention to appropriate modeling necessary for carrying out the provisions in Part C ofTitle I of the CAA relating to PSD. The EPA has used these conferences to develop standardized air quality modeling procedures particularly in connection with PSD permitting. The EPA's Guideline was originally published in Apri11978. Section 165(e)(3)(D) ofthe CAA requires the Administrator to adopt regulations specifying with "reasonable particularity each air quality model or models to be used under specified sets ofconditions for purposes ofthis part." To carry outthese requirements, in June 1978, the Guideline onAir QualityModels was incorporated by reference in regulations promulgated for PSD [40 CFR 51.24].43 FR26388,26398 (June 19, 1978); 51 FR 32176 (Sept. 1986); 53 FR 392 (Jan. 6, 1988). The 1990 CAA Amendments provided for continued authority to conduct air quality modeling

Internet Address (URL) • http.//wwwepa.gov Recycled/Recyclable' Printed with Vegetable Oil Based Inks on 100% Postconsumer. Process Chlorine Free Recycled Paperconferences and associated revisions to Appendix W that form the basis for the EPA's continuing efforts to prescribe with "reasonable particularity" air quality models, and meteorological and emission data bases, suitable for modelingNational Ambient Air Quality Standards (NAAQS) and increments. See CAA § 320,42 U.S.C. §7620.

The EPA most recently used this process to update Appendix W with provisions that incorporated two
new dispersion models. The 7th Conference onAir Quality Modeling was held in June 2000 with the purpose ofreceiving comments onthe EPA'sproposedrule from April 2000 to add several new modeling techniques to Appendix W. Based onpublic comments from this conference, Appendix W was substantially revised throughnotice and comment rulemaking with a final rule inApril 2003 that adopted the CALPUFF model for long range transport to address impacts on federal Class 1 areas and a subsequent final rule inNovember 2005 thatreplacedthe Industrial Source Complex (ISC3) model with the

### AMS/EPA Regulatory

### MODel (AERMOD) for near-field regulatory assessments.
The complex chemistry ofozone and secondary formation ofPM2.5 are well-documented and have historically presented significant challenges to the designation ofparticularmodels for assessing the impacts ofindividual stationary sources onthe formation ofthese air pollutants (NARSTO, 2000; NARSTO, 2004; Seinfeld andPandis, 1998; Cohan and Napelenok, 2011). Because ofthese considerations, the EPNsjudgment in the pasthas beenthat it was nottechnically sound to designate with particularity specific models that must be used to assess the impacts ofa single source on ozone concentrations.! Instead, the EPA has chosento satisfy the requirements ofSection 165(e) (3) (D) ofthe CAA through a process ofdetermining particularmodels or other analytical techniques that shouldbe used on a case-by-case basis. As stated in Section 5.2.I.c ofAppendix W, the "[c]hoice ofmethods used to assess the impact ofan individual source depends onthe nature ofthe source and its emissions." Under this guideline, the appropriate methods are determined in consultation with the EPA Regional Office on a case-by-case basis. 40 C.F.R. Part 51, Appendix W, section 5.2.l.c. A modeling protocol shouldbe developed and approved by the EPA Regional Office, the state/local agency, and the applicant to ensure that the analysis conducted will conform to the recommendations, requirements, and principles ofAppendix W. 40 C.F.R. Part 51, Appendix W, section 3.2.2. Giventhe complexities ofozone formation, this case-byMcase consultation process has been as reasonably particular asthe EPA consideredjustified in the past. Appendix W section 5.2.2 provides similar direction for such a case-bycase consultationprocess in addressing secondary PM2.5 and encourages control agencies with jurisdiction over areas having potential air quality issues related to secondary PM2.5 to use models which integrate chemical and physical processes important to the formation, transport, and decay ofsulfates and nitrates, such as Models-3/CMAQ.
However, recent advances inphotochemical modeling science suggest that 

### itmay now be reasonable for the EPAto provide more specific, generally-applicable guidelines that identifyparticular analytical techniques ormodels that may be used under specific circumstances for assessing the impacts ofan individual source on ozone concentrations and on the secondary formation ofPM2.s. These advances haveresulted in some methods that may allowfor tracking the formation and transport ofozone and secondary PM2.5 impacts from specific emissions sources and calculatingthe contribution ofsources and

1We note that this technicaljudgmenthas no effect onthe obligation ofsources subject to PSD to conduct a source impact analysis and demonstrate that a proposed source ormodification will not cause orcontributeto a violation ofanyNAAQS orapplicable increment. 40 CFR 5I.166(k); 52.21(k). That is, the inclusion ofa process rather than a specificpreferred model in Appendix W does not relieve the
source ofthe requirement to make this demonstration, which necessarily involves an analysis. 2precursors to ozone and PM2.S at individual receptor locations. In fact, the EPA engaged the modeling community on these developments at the 9th Conference onAir Quality Modeling in October 2008 by devoting a session to photochemical modeling with instrumented techniques such as "source apportionment" to promote understanding oftheir emerging capabilities by the regulatory modeling community.

The EPA has scheduledthe 10th Conference onAir Quality Modeling for March 13-15, 2012, in Research Triangle Park, North Carolina. We intend to issue the FederalRegister notice announcing the conference inearly 2012 which will outline the agenda with the topic ofchemistry models and related techniques for addressing impacts ofozone and secondary PM2.S being a major session and focus ofthe EPA's efforts to engage the regulatory modeling community. This modeling conference will serve as the initial venue for gaining public input to begin the rulemaking process ofupdating Appendix W. As was the case inpromulgating new dispersion models (CALPUFF and AERMOD) in 2003 and 2005, the EPA expects to form a similar workgroup to conductthe necessary evaluations and inter-comparisons of technical approaches and models to inform the rulemaking process andprovide sufficient technical justification for those technical approaches and/or models that are ultimately determined to be appropriate for incorporation into Appendix W. This workgroup will be critical in informing the rulemaking process, and the reports and other findings will be made publicly available and be central to discussion at future modeling conferences. Consistentwith thepast practice described earlier, the EPA expects such discussionto occur atthe 11 th Conference on Air Quality Modeling with consideration of the specifics ofthe EPA's proposedrule to update Appendix W.
Furthermore, as this complex rulemaking process proceeds, the EPA will be taking additional steps in the interim to enhance understanding ofacceptable techniques for evaluating impacts ofindividual
source emissions on ozone concentrations and secondary PM2.S formation. The EPA is preparing and will be seeking input on 

### draft guidance for PM2

.Spermitmodeling that we intend to release for public commentinmid-January 2012. This guidance is necessary in the interim to inform case-by-case determination ofappropriate methods as sources should nowconduct a PM2.s-based analysis underNSR and PSD to demonstrate compliance with the PM2

.SNAAQS rather thanrelying upon a PMIO-based analysis in accordance with past EPA guidance. 76 FR28646, 28648, 28659 (May 18, 2011); Memorandum from Director ofOffice ofAir Quality Planning and Standards, "Modeling Procedures for DemonstratingCompliance with PM2.S NAAQS" (March 23, 2010). In addition, withrespect to both
ozone and PM2.S, the EPAwillalso be taking steps to emphasize the importance ofthe existing consultationprocess and to provide greater clarity to"states and the regulated community regarding our expectations for a complete and successful process ofconsulting withthe EPA's Regional Offices pursuantto Appendix W sections 5.2.1.c and 5.2.2.1.c to identifY the most appropriate analytical techniques to 

### be used on a case.,.by-case basis for addressingthe impacts ofindividual sources on ozone concentrations and secondary 

### PM 2

.Sformation.
The Petition also suggests that the EPA should take the positionthat 

### itneitherhas nor will use a "significance" test as part ofthe PSD compliance demonstration for the ozone NAAQS. The Petition further implies thatthe Petitionerinterprets significance levels to be inconsistent with EPA's PSD regulations at 40 CFR 52.21 

### (k) because that regulation refers to proposed sources or modifications that
cause or contribute to a violation, but does not include the word "significantly" as a modifier for "cause
or contribute to a violation." Petition at 13. The EPA has not established a significant impact level (SIL) for ozone inits regulations (40 CFR 51.l65(b), 51.l66(k) (2), 52.21(k) (2)) or identified a specific SIL for ozone in any guidance. However, footnote 1to sections 51.166(1) (5) 

### (1) ofthe EPA's regulations says the following: "No de minimis 

### air quality level is provided for ozone. However, any net emission

3increase of 100 tons peryear or more ofvolatile organic compounds ornitrogen oxides subject to PSD would be required to perform an ambient impact analysis, including the gathering ofair quality data" The EPA included a similar note in a guidance listing Significant Impact Levels. The 1990 NSR Workshop Manual, page C.28 footnote b says the following withrespect to the then-applicable one-hour
ozone NAAQS: "No significant ambient impact concentration has been established. Instead, any net emissions increase of 100 tons per year ofVOC subjectto PSD would be required to perform an ambient impact analysis." Based on these statements, this 100 tons per year (TPy) value has been used by somepermitting authorities in a manner similar to a SIL to assess whether a detailed air quality analysis should be conducted for ozone. While these statements suggest a less rigorous analysis may be appropriate for sources emitting less 

### than 100 TPY ofthese precursors, they have notbeenrevisited by the EPA since the promulgation ofthe 8-hour ozoneNAAQS and do notreflect a categorical conclusion by the EPAthat every source emitting less than 100 TPY ofNOx orVOCs will not cause or contribute to a violation ofthe current ozone NAAQS. The EPA believes 

### itunlikely a source emitting belowthese levels would contribute to such a violation ofthe 8-hour ozoneNAAQS, butconsultation with an EPA Regional Office should still be conducted in accordance with section 5.2.1.c. ofAppendix W when reviewing an application for sources with emissions ofthese ozone precursors below 100 TPY.

The EPA will take the Petition's recommendation regarding the appropriateness ofa significance level for the NAAQS compliance demonstration for ozone under advisement. Nevertheless, EPA believes it generally has authorityto use significance levels and that use ofsuch levels canbe consistent withthe PSD requirements. For example, ifmodeling becomes appliedmore routinely as part ofthe required NAAQS compliance demonstration for ozone, we believe that itmay become appropriate to define a SIL for ozone to help facilitate that demonstration. The EPA recently promulgated a SIL for PM2

.sand explained inthataction why we believe the CAA does not preclude the EPA from establishing significance valuesto effectively implementthe PSD requirement to demonstrate that a source's emissions will not cause orcontribute to a violation ofa NAAQS orPSD increment. 75 FR 65864, October 20,2010. The Petition also states that "ifthe EPA insists on setting a significance level, it shouldbeno more than 0.3 parts perbillion." The EPA will take this recommendation under advisement
as we consider whether to establish a SIL or similar value for ozone. Finally, the Petitionrequestedthatthe EPA finalize the proposed PM2.5 increments (72 FR 54112, September 21,2007). The EPApromulgatedthe final rule in 2010 (75 FR 65864, October 20,2010) to establish several components for making PSD permitting determinations for PM2.5 including increments, SILs, and a significant monitoring concentration. This final rule became effective on December 20, 2010.
Thus, for the reasons set forth above, the EPA grants the Petition for rulemaking as described inthis response. We appreciate your interest inthese matters and look forward to your contributions to the upcoming 10th modeling conference and subsequent rulemaking process. Sincerely,

inaMcCarthy Assistant Administrator

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