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OAR Box 1778 

Prepped by Ollie Stewart 

Document Number: 

212) ll-J-5 

Docket Number: 

A-90-06 

Printed 10/28/2008 9:51:01 AM Sheet 212 of 276 
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MONDAY, JUNE 19, 1978"5 

PART V 

ENVIRONMENTAL 

PROTECTION 

AGENCY -. - - *-« 

L'L ^am LA .. t j££'iS2£*H

 ; 

1977 CLEAN AIR ACT; 

PREVENTION OF 

SIGNIFICANT AIR 

QUALITY 

DETERIORATION 

State Implementation Plans; 

Requirements 

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26394 iHSULATIONS 

- a 

EPA has included the sh©r£-fc@rm criteria of pounds- per day @F ps? to®? fc@ 

-•>nsure that seasonal OF iateF)M£8@at 

. eration of sources ^&Ma EMWQ'SIB-

'icanE short-term emissisas will be 

subject to review. Industries which 

commented uniformly felt that the 

Agency was without legal ability t@ implement the short-term criteria, The 

act does not, however. 

use of short-term criteria aad. 

seems to require thei? uso te 

cases where short-term tassmeagg 

and N-AAQS" have bees sseaMtetefl, 

The- short-term criteria we«yM aote 

apply under the regsalsti©ag ^ISieFQ a© 

counterpart increment OF staadaM 

had been established. Sfcata ageaey 

commeats agreed that start-te^i eri«-

teria would b® aa importa&g cadi aGge3= 

sary saechasLssa t© assM te S&G prate©-

tion of short-term increments a&$ a&> 

tional ambieat air quality s£&Ma?ds. 

v. ottaaai issss?^©Krs 

The regulations promasleotedl today 

Incorporate several othei? re^te? exemptions. These esemptiaas will 

streamline the. review prasss o® that 

the review will focus oa thes3 osnarees 

of real air quality sigaifieaaeG. 

The exemptions aye effesfcivo oaly 

when the pubUs has beesa afforded aa 

opportunity to eommeat ©a aay matsrial determinations. Als©„ prssssttoa of 

increment is ass?*red by, ftest, &@S allowing a review esemptiea that might 

affect a ci&m l area ©F as a?eo where 

-i applicable inesMmeat is Jsae's&i t@ be 

olated and. seeoad, by 22PA (a? tas 

jtate when implemeafcias &W3>1 periodically reviewiag the agEgscate ate 

quality impacts of unre^le^-M sotsseei. 

Such periodic reviews of aessBSate impacts, as mentioned abowQi shaffl fee 

subject to public coramaaS aad aa ©p= 

portunity for public heasiag. Ad^M@®= 

ally, the relevant impass ©2 esafestaas 

of all previously uarev4e^7G^l SMSgvS) 

must be Included in the EQvhQZ/ <af asy 

source subject to am&ie®6 afc? tepasS 

pleratioa, S^lasisas. occurring for less 

fchas 2 yeass &&. one. location would 

generally be considered, temporary. 

sage;? periods of time 

considered to be tempor 

Under tho firsfe es^ag«^@®, as©' 

major source subject ta nfiaaotgatesiGiafi 

offset requirements fop a- mr&MMns 

pollutant which would Jboagisvsft a© eieo® 

air area is not sufejest t® JI32Q) ffQ^fe'cy 

for that polluting,. Wsn&sn <&& s&sk o 

source would be pointier ®&Q a@s>o&= 

tainriient requiremsats asaaMl teg@sa 

LAER. a limitatioa m®i?9 otMsgeaS 

than BACT, and wouald eaows tha£ 

the source would not eosafisfeaiSs 

violation of any 

Since the sourceclean air area, ambieag review wossld 

be unnecessary to forestall aay sigaMicant detertoratlogk 

Temporary sourees are a2s® esemgt 

from, full PSD review, sia@a. thefe ambient air impacts are short-Mved„ Temporary emissions include, but arQ a©6 

limited to. thesa from a pilst. plaafe, 

portable faciliey, coasameetea ©B est® a £&afe 

rary (such aa the emissions, related to 

the constructioa of power plants or 

other Iargs $ousces)» but should be 

deals with oa a esse-by-case basis. Addi^©aaUy, oae@ a portable facility has 

received a PSO permit. It. may relocate 

wlthsut uadsss@iag PSD revtewr Pro-

®Ma&> ThsS 6&o ssiasee notifies the revle'olSag agsEsy oi such relocation 30 

- £S5T3 ia v/l-vrrrs&rio th©. proposed- relocafclesa rjQ-islA fe^e§6 a©- class I area and 

n© CJJSQ ^7£IGS73 thQ iasement is known 

emissions from the 

!!sM a®6 exceed allowable 

eMssi@a& 

T&Q Aseas^s p?@p@8ed PSD regulaUvm ste-gs-el thag. if. aa emitting unit 

a sss^gs ^er@ modified so as to 

emissions by 250 

•SB @s? yea? (10® tons for certain 

the unit be reavailable control 

evea if accompanying 

within the sourca 

totally O££SG-J the new emiasiona. IndiMstff peysicHs' eritisized this proposal 

as oa \m&i2h,®zi2£& extension of the 

situations where no 

sssaias air quality would 

essMa Mtos a earefixl review of the 

icatlon" ln the PSD 

snd consideration 

of ths p©t@a&al ai? quality effects of 

isfe§s@®ree p@Hutaafc tradeoffs, the 

Afroa@y has Resided t© adopt a regular 

iQ-ty? scheme that ia part accommodatea iadtasaoT's esps^sed concerns. 

T&Q s@o$2iM,@m apply the definition 

®2'lxwM$gMMm(° t@ fehe entire source 

(pJk3a6J„ •(JJUSE!, She result that if net 

sssafajfegQtn &@goi g^@ source do not InersosQ wfeciii. cm Gs&rting imit la re-

•wm$s&, i<Mt zmmai would not require 

fjsffi ^LSS> FS\7I!Q^7. This exemption 

W®BM a@S fe og^asE^le as to BACT In 

sJteJ»g5o«3 •tjMjso cv- aiajor »•"•»<*••> is 

oSaiGia £© ©i? So irseenstructed at a 

smsssm, wlfiioffiiQ!? fea© addition Is to reptesa gssssteisa gss^aetion capacity* or 

"S^Q Agss@y feeMe^es that this ap-

£F@Q@& is eeiasisteae- with Congreaa* 

ESQ ©2 6&G ee^Mi "^©^108^0^ ln se&-

ttim .^.eei2KC3. Ia. adopting that see6i@E!, @a9 of ihe November 1977 ."techste i aad esaformiag amendments", to 

t&s IBTS ameadmeats^. Congreaa said 

mra hsnoriag the conference 

eoaf ormlng the. termlnolQrjy/'Zs its mo ia seeSSon 111, the provfe!(3H oa ne-rrr sous,

se performance 

standards. At the time the conferees 

and at the time 

amendments- were enin section 111_ 

by EPA regulaGDUSSQ owners and opersilicatlon of new 

s©T!22f@Q pejjTiQsmoaos standards to 

changed existing facilities whose emissions would increase, if that increase 

were totally offset elsewhere in the 

source. Although the SPA interpreta-

-ion was overturned by a United 

States court of appeals in early 1973 

(ASARCO V. EPA, 11 ERC 1129 (D.C. 

Cir.)). there is no reason to believe 

that the Congress in late 1977 did not 

regard the definition, which had existed as law since 1975, as being wellsuited to its purposes ia the PSD program. 

Under the regmMiaaa, source 

owners or operators wh© claim to be 

undertaking a modiilcattoB exempt 

from the PSD program because of intrasource tradeoffs wiM typically not 

be allowed to obtaia credit for reducing emissions from staess while Increasing emissions from ?e®f monitors 

or other low-ie^el emission points. 

Staelc and nonstasis emissions generally have very different impacts on air 

quality in areas near a source. Since 

the PSD program is i<imatsly concerned with effects oa air quality, EPA 

does not feel bound to apply mechanically the vn-AEARCO esse definition 

of "modification" in seetioa 111. a section directed tomrd technology, so as 

to frustrate the air quality protection 

purpose of PSD. 

The effects of treating "modifications" as discussed above will be that 

modifications to existing facilities will 

not require installation of best available control technology determined on 

a case-by-case basis, if ths owner or 

operator demonstrates that zero net 

emissions would attend the change. 

The delay and espgnse tavolved in 

those determinations will, therefore, 

be avoided. Any applicable new source 

performance standards will, however,. 

apply to modified facilities in accordance with the ASARCO decision. 

The Administeasor intends to use 

the following criteria, in determining 

whether a no net increase exemption 

for a modified facility from the BACT 

requirement would apply: (1) All emission reductions from sources included 

in the baseline will be credited tn 

terms of actual emissions using reasonable assumptions for operating 

conditions, except in two eases. Where 

a SIP reviaios was pending as of 

August 7, 1977. the applicable SEP as 

later relaxed would represent the baseline for crediting emi^ioa reduction. 

Changes in allowable emissions will, 

also be used to credit reductions from 

major construction which commenced 

before January S, 197S. but was not 

yet operating b^ Augiast 7, 1977. For* 

emission reductions from major construction previously approved to consume portions of an increment, allowable emissions as expressed in the PSD 

permit will be the basis for determining reduction credit. (2) All reductions 

must be enforceable (£.&.» contained in 

the permit) and proposed ia cosjunePEsaaad. cs©88?on, v@t cs, w®, US—MOHDAV, JUNI W, twn 
''Lf-~f

 Federal Register / Vol. 44. No. 173 / Wednesday. September 5. 1979 / Proposed Rules 

- • - _ _ . — .. . __ - _ — ,_ . _ . . 

5193S 

creditable emission reductions to those 

: at the same time as the 

lion increases being offset This, 

ever, would undercut the incentive 

to upgrade controls, since it is not 

always possible for a source owner to 

effect the necessary reductions at 

exactly the right time. Although the term 

"contemporaneous'' appears to preclude 

a formal, open-ended banking system 

for previously-achieved emission 

reductions et the same source, it is not 

so limited as to require simultaneous 

offsetting. Requiring sources to continue 

operation of obsolete equipment simply 

to preserve offset credit makes little 

econpmic or air quality sense. 

To provide some latitude for crediting 

emission reductions. EPA is proposing to 

credit any reported reduction that would 

occur after the effective date of the 

promulgated regulations but before the 

proposed emission increases are 

scheduled to occur. For shutdowns and 

curtailments occurring before these 

regulations are promulgated, offset 

credit may be retained if the source files 

a notice within 90 days after 

promulgation recording the previous 

shutdown or curtailment A follow-up 

notice would also be required to 

document the construction schedule for 

th&jncrease to be offset and to ensure 

ge applicable offsets are 

eable under the SIP. Failure to 

' such a timetable or to comply 

with it will prevent use of the earlier 

emission reductions to offset that 

increase. This, in turn, may require the 

affected owner or operator to obtain a 

NSR permit. 

3. Emission Offset Baseline. • 

Additional guidance is necessary on 

how to determine if proposed emission 

reductions at a stationary source are 

sufficient in type and amount to offset 

prospective emission increases at the 

same source, assuming the changes are 

contemporaneous. The basic rule 

contained in the regulations is that a 

new increase in a source's potential to 

emit occurs whenever the sum of 

increases minus the sum of the 

decreases is greater than zero. The size 

of the increase or decrease for a 

particular emission unit is generally 

determined by the difference between 

the unit's potential to emit before and 

after tbe change or series of changes. 

As mentioned in "Potential To Emit" 

-he Administrator believes that potential 

r missions of an existing source can be 

no greater than its actual emission 

rapacity. If a source is no longer 

i!ly able to operate at its 

l a design capacity, its potential 

fis limited accordingly. For a 

ource physically constrained from 

operating at maximum capacity, offset 

credit wUl be based on its potential 

emissions, taking into account physical 

constraints on operation at mavirmim 

capacity. For example, an obsolete unit 

which has been shut down for several 

years due to severe operational 

difficulties would not offer any offset 

credit to new construction. If potential 

emission calculations did not account 

for physical incapabilities inherent in -

the operation of existing sources, a 

source could offset new usable 

production capacity with old unusable 

production capacity and thereby avoid 

preconstruction review. A common 

result would be significant and 

unreviewed increases in actual 

emissions. If this were permitted, 

increments and standards could be 

severely impacted or even exceeded. 

This policy continues a philosophy 

which was implicit in several 

requirements of the a»*.«H-ig PSD 

regulations and offset ruling. For 

example, under existing regulations and 

today's proposal a source's operation 

over a one- to two-year period is 

considered in calculating tha size of an 

emission reduction. If a source has not 

been operating at full capacity for a 

significant part of the one- to two-year 

period, it is considered to be physically 

incapable of operating at full capacity 

and its emission reduction credit will be 

calculated based on its operation for tha 

one- to two-year period. A sourca owner 

or operator/nsy overcome the 

presumption of physical incapability if 

he shows that it was not physical 

incapability tbat caused the low 

production rates. 

Physical incapability includes 

situations where ons part of an existing 

source cannot be used at its full 

capacity because its capacity is larger 

relative to the rest of tha assodatad 

units, and therefore its output is limited 

by the capacity of the other units. In 

addition, if a plan is unsafe for a certain 

.level of operation or has obsolete or 

wom-oot components which cannot be 

rootinely replaced, its potential to emit 

would be limited by these conditions. 

Under the proposal emission 

reductions must be reported to the 

permitting authority to receive future 

offset credit (see "Notification"). EPA 

would accordingly allow full credit for a 

systematic phase-down or production 

curtailment at a sourca if it is reported 

in advance to the permitting authority. -

Industry would be allowed to phase in 

orderly growth without running highly 

polluting, obsolete units at full 

operation, simply to accrue ••••»•*•a-iT'iT' 

offset credit 

An adjustment to the potential 

emissions rule is needed in a casa where 

potential emissions are greater than 

allowable emissions, in such a case, no 

credit may be taken for reducing 

potential emissions down to allowable 

emissions. This adjustment is needed to 

implement Congress' intent as 

interpreted in Alabama Power, that 

offsets should be permitted as an. 

incentive to upgrade air pollution 

controls. Slip op. at 21. Where tha 

Improvement in control technology 

would be legally required under the SIP. 

the source should not be permitted to 

take credit for making the legally 

required decrease. This approach 

appears in the offset ruling, which was. 

endorsed by Congress. The 1977 

Amendments provide that the emissions 

baseline for calculating offsets under the 

ruling must be the state plan 

.requirement in effect at the tima tha 

source applies for a permit Sea section 

129(a)(1) of the 1977 Amendments (not* 

under 42 US.C 7502(a)(1)). 

In addition, allowing offset credit far 

independently required reductions ' 

would make it difficult for tha SIP to 

reduce total emissions in an area what* 

standards or increments are violated. IC 

such offsets were allowed, a source that 

came into compliance with a required 

emission limitation could then usa tha 

same reduction to offset increaaa* in 

emitting capacity such that no net 

increase would occur. Total emissions 

for the source would remain tha sam* 

and the violation would still exist Th* 

proposed regulations would avoid this 

unacceptable result by prohibiting tha 

sourca from taking credit for such a 

reduction. 

"Allowable emissions" are defined as 

the most stringent of (1) any new source 

performance standard or standard for 

hazardous pollutants applicable to th* 

.construction under review,* (2) 

applicable SIP emission limits, or (3) the 

emission rate specified as an 

enforceable permit condition. Where 

there are any enforceable emission 

limits that must be complied with in the 

' future, and which are different from tb* 

limit currently required, the most 

stringentof the present and future 

emission limitations is used in 

determining the allowable emissions. 

To continue existing* regulations and 

policies, the Administrator intends that 

each candidate reduction meet all of tha 

following criteria: 

(1) It must be enforceable under tha 

applicable SIP. either through a SIP 

' H m tha applicable patfonnanca standard or 

standard far hazardous pollutaais ratet to tha 

standard that a particular sourcs la subfacl to and 

not now standards or ravtsiona ci axisttaf 

standards which affact tha rslavant soviet category 

but that woald not apply to tha particular aoorca.