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# OAR Box 1875 Prepped byOllie Stewart



### Document

Number: 

# 82 ) ll-F-29 Docket Number: 

# A-90-1 9

Printed 12/1/200811:12:49AM

Sheet 82 of 86

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## A-90-1 9 ll-F-2 9

DATE : Octobe r 22 , 199 2 (a.m. ) SUBJECT : Revise d Languag e fo r Complementar yLega l Theor y FROM : Ala n Eckert , EPA/OG C TO : Davi d Rivkin , Offic e o f th e Vic e Presiden t

Counci l o n Economi c Competitivenes s
Se e attached .P. 3

SPPc+e . k.ijt'u/ O
Octobe r 22 , 199 2 O

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EPA' s propose d rul e allow s a n averaging approac hfo r HON

covere d portion s o f a plant . se e pp . . EPAi s als o soliciting commen t o n a broade r averaging alternative , a s se t fort hbelow . Significantly , thi s latte r averaging scheme i s no t being propose d a s an alternative t o th e averaging approach , describe d above . Rather , th e tw o approache s ar e entirel y complementary . However , becaus e th e lega l issue s pose d b yth e broadej f averaging scheme diffe r appreciabl yfro mthos e implicate d b yth e mor e narro waveraging proposal , EPAbelieve s tha t a separat e discussio n o f th e forme r i s warranted . Th e broad averaging alternativ e relie s upo n a lega l theory whic hvtaul

d permi t complianc e wit hth e HONMAC T standar d (or , fo r tha t metter , wit han yothe r MAC T standard t o b e develope d b yEPA ) b yaveraging emission s frompoint s locate d anywher e withi na n entir e contiguou s facility , whic hcontain s HON-covere d processing units . Thi s alternativ e woul d differentiat e betwee nth e ter m "sourc e i n a categoryo r subcategory, " use d i n Sectio n 112(d) , an d th e ter m

"source, " use d i n sectio n 112(i) . T o begi n with , i t i s a mdxi mo f statutoryconstructio ntha t th e us e o f differen t word s tyCongres s i n two differen t subsection s i s no t accidenta l an d reflect s wel l thought-ou t Congressiona l intent . [cit e Sutherland] . Specifically , fo r purpose s o f establishing emissicn s standard s unde r subsectio n 112(d) , Congres s expecte d EP At o identif yspecifi c productio n lines , piece s o f equipment , etc. , locate d withi n majo r stationarysource s o r are a sources , an d t o trea t thema s source s onl yfo r th e purpose s o f subsection s 112(d)(3)(A ) an

d (B) , i.e. . fo r th e purpose s o f determining wha t i s th e averag e emissio n limitatio nachieve d b yth e bes t perfomin g twelv e percen t o f existing source s o r averag e emissio n limitatio n achieve d b yth e five bes t performing sources . Sinc e th e ter msourc e wa s use d i n subsectio n112(d ) fo r a distinc t an d uniqu e purpose , th e relevan t statutorylanguag e contain s a qualifying se t o f word s - "i n a categoryo r subcategory " - appende d t o th e wor d "source. " Significantly , i n subsectio n112(i) , th e relevan t statutory languag e contain s th e ter m "source " —a fac t tha t woul d allow EPAt o conclude , fo r purpose s o f subsectio n112(i) , tha t a sourc e whic hmus t achiev e complianc e i s a "majo r source " whic h encompasse s an entir e plant . See , e.g. , Chevron . U.S.A . Inc. . v . NRDC . 46 7 U.S . 837(1984) . Thi s reading i s supporte d b yth e fac t tha t tn e definition s o f statutoryterms , se t fort hi n subsectio n 112(a) , contai n th e traditiona l definition s o f suc hterm s a s "majo r source, " stationarysource, " etc . unde r thi s construction , th e statutorylanguag e "an yemission s standard , limitat)ion , o r regulatio n promulgate d unde r thi s [112 ] sectio n

sooi a © _.S*S T G6/*0/T TP. 4

an d applicabl e t o a source " describe s al l o f th e existin g MAC T standards , establishe d unde r subsectio n 112(d) , an d applicabl e t o a source , whic hcontain s withi n i t "source s i n a categor yo r subcategory " fi.e. . productio n lines , piece s o f equipment , etc. ) covere d bysuc hMAC T standards . EP Aals o note s that , i n it s "earl yreductions " rule , i t adopte d a plant-wid e definitio n o f source . Se e 5 6 P R2734 2 (Jun e 13 , 1^91 ) —a n earl yindicatio n tha t th e agenc ybelieve d tha t a n entir e contiguou s facilit ycoul d b e considere d t o b e a sourc e fo r purpose s o f qualifying > fo r a 6 yea r extensio n o f th e MAC T complianc e deadlines . EP Ai s mindfu l o f th e fac t tha t i t ha s traditionall yenjoye d wid e latitud e i n comin g u p wit hdivers e definition s o f th e ter m"source, " dependin g o n wha t regulator y objective s wer e implicated , and EPA' s considerabl e discretio ni n thi s are a ha s bee n affirme d byth e courts . Chevro n U.S.A . Inc. . v , NRIJ>C , 46 7 U.S . 83 7 (1984) . EP Asolicit s commen t o n th e lega l authorit yt o adop t thi s approach , and als o request s commen t o n implementatio n considerations . Unde r th e broade r averagin g approach , EP Awoul d mak e n o change s i n th e wa yi t ha s identifie d categorie s an d subcategorie s o f source s i n th e HO Nand devise d appropriat e emissio n standard s fo r them , no r i n th e wa yi t woul d prescrib e futur e emissio n standard s fo r othe r emissio n categorie s o r subcategories . Fo r complianc e purposes , however , i f a n owne r o r operato r doe s no t wis ht o contro l a particula r HON-covere d emissio n poin t t o th e leve l tha t woul d resul t i n complianc e wit hth e relevan t HO N emissio n standard , th e extr a emission s fro mtha t poin t coul d b e offse t byemission s reduction s greate r tha n wha t i s require d by an ystandar d the n i n effec t unde r Sectio n 11 2 a t on e o r mor e othe r emissio n point s withi n th e entir e stationar ysource . I n addition , emission s averagin g woul d b e allowe d acros s al l th e emissio n point s withi n th e entir e plant , includin g th e SOCM I sourc e categor ya s wel l a s point s no t ye t covere d byanyMAC T standard . -=i s such , emission s fro mproces s vents , wastewate r operations , storag e vessel s and transfe r operation s coul d b e average d amon g themselve s o r wit hothe r emissio n point s withi n th e entir e stationar ysource , i n orde r t o provid e a s muc h flexibilit ya s possible . However , a distinctio n woul d b e mad e betwee n emissio n point s physicall ysimila r t o emissio n point s covere d unde r th e HO No r anyothe r MAC T an d al l othe r emissio n points . Fo r th e former , t o participat e i n th e averagin g scheme , the ymus t compl ywit hwhateve r complianc e routine s hav e bee n establishe d unde r th e SOCM I HO No r othe r relevan t MACT . Fo r th e latter , t o participat e i n averaging , th e sourc e mus t petitio n EP A t o establis ha n appropriat e complianc e routine . T o b e sure , onc e EP Aestablishe s suc ha complianc e routin e fo r anyne wtyp e o f emissio n point , al l simila r emissio n point s locate d withi n any source s ca n participat e i n th e averaging , s o lon g a s the yus e th e

900 0 © is:s TSC/tO/T TP. 5

EPA-approve d complianc e routine . EP Asolicit s commen t als o o n ho wi t woul d verif yth e baselin e fo r unregulate d emissio n points , an d h<j> wi t woul d structur e th e averaging complianc e proces s t o assur e th e standard a s a whol e remain s enforceable . On e possibilit yt o conside r woul d b e t o us e th e averag e emission s fro m_buc hemissio n point s ove r some representativ e time perio d a s thei r I baselines . Commen t i s als o specificall yrequeste d onlega l authorit yfor , an

d policyimplication s of , including ne wan d existing source s i n th e same average . Whil e equipmen t leak s ar e include d i n SOCM I sources , the y cannot : a t thi s time b e include d i nemission s averages . Equipmen t leak s ar e no t include d because : (l ) th e negotiate d standar d doe s no t requir e an

yfixe d performanc e level ; an d (2 ) n o practica l metho< i currentl yexist s t o verif yperformance . Unde r thi s alternative , EPAwoul d expeditiousl ydevelop method s t o assign allowabl e emissio n level s t o particula r leak point s o r group s o f leak points , an

d woul d similarl ydevelop method s fo r calculating emission s fro

memissio n point s no t regulated , b yth e HON . Th e Administrato r seek s commen t o nmean s t o verif yan d documen t th e emissio n performanc e level s achieve d fo r situation s wher e equipmen t leak s ar e include d i nan average . Commenter s shoul d includ e a descriptio n o f th e complianc e verificatio nprocedur e tha t woul d b e use d an d wha t dat a need s t o b e supplie d t o suppor t th e suggeste d system . Comment s ar e als o requeste d o ntype s o f non-SOCM I emissio n point s tha t migh t b e include d i nbroade r averages . 

# I, Jnder th e broade r approach , emissio nreduction s from emissio n point s no t covere d b yth e HO

Nwoul d b e usabl e t o generat e credits , subjec t t o th e previousl ydiscusse d limitation s an d aiji ylimitation s adde d i n an yothe r MAC T standard applicabl e t o th e relevan t emissio n points . Credit s coul d b e generate d a t an ytim e fromnon-HONemissio npoint s unti l theybecome subjec t t o a ijlAC

T standard . Whe n theybecome subjec t t o a MAC T standard , th e futur e valu e o f reduction s a t thos e emissio npoint s woul d b e governe d b

yth e emissio n standard s require d b yth e ne wMACT . State i differently , th e offset s availabl e fro m suc hpoint s woul d hav e tL o b e recompute d using th e newbaselin e establishe d fo r them. ! Eac hfutur e MAC T standard mus t contai na floo r calculation . T o th e exten t tha t point s covere d b ythes e late r standard s hav e alread ybee ncontrolle d fo r purpose s o f participating i n an averaging scheme , tha t relate s t o th e complianc e wit han earlie r standard , th e floo r fo r th e late r standard mayb e more—stringent . A s futur e MAC T standard s ar e adopted , EP

Awoul d attemp t t o maximiz e averaging opportunitie s an d therefor e minimiz e complianc e delay s an d costs . ripAbelieve s tha t th e broad averaging scheme , describe d above , provide s significan t polic ybenefits . T o begi n with , i t woul d enabl e source s t o achiev e th e same environmenta l gains , a s unde r th e mor e narro waveraging proposal , bu t a t significantl y

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reduce d costs . Second , establishing MAC T standard s wit ha facility-wid e averaging progra mcoul d resul t i n th e MAC T "floor " fo r fiitur

e standard s being tighte r thanwoul d hav e bee nth e cas e i f th e emissio n point s outsid e o f th e alread ycovere d MAC T categorie s woul d hav e staye d uncontrolled . Last , bu t no t least , EP Abe'lieve s tha t th e utilizatio no f th e broad averaging scheme mayre1 sui t i n th e discoveryo f emissio npoint s withi n facilitie s tha t otherwis e migh t hav e bee noverlooke d b yEP Aan d stat e regulators . . Afacto r tha t mus t b e considere d i nimplementing thi s approac hi s tha t i t woul d requir e a determinatio no f th e permissibilit yo f allowing average s t o emi t a differen t combiriatio

n o f pollutant s thansource s tha t mee t MAC T withou t averaging . Thi s concer n i s alread ybeing evaluate d fo r VO C HAP s i n th e SOCM I sourc e category . Th e alternativ e approac hmigh t furthe r complicat e thi s issu e b yadding dissimila r categorie s (e.g. , industria l cooling towers ) emitting dissimila r pollutant s (e.g. , chromium) . sinc e th e HONcurrentl yaddresse s onl yorgani c HAPs , significan t change s woul d b e necessaryt o accommodat e non vo c HAP controls . T o b e sure , thi s concern coul d b e resolve d b y limiting trading unde r th e broad averaging proposa l t o onl y organi c HAP s alread ycovere d b

ya MAC T standard , bu t emitte d anywher e withi n th e fenceline . A s nonorgani c HAP s become covere d b ysubsequen t MAC T standard s EP Awil l develop averaging regime s covering suc hpollutants .
Th e following languag e wil l b e added t o th e preamble , bu t no t include d i n th e discussio no f the broade r averaging approach : Anothe r issu e tha t come s u p i n th e contex t o f th e HON relate s t o calculatio n o f residua l ris k unde r sectio n112(f) . Shoul d residua l ris k b e calculate d on a plantwid e basis , o n a sourc e categorybasis , o r on th e basi s o f th e combinatio n o f emissio n point s use d fo r complianc e wit hth e emission s average ? Alternatively , i s ther e some othe r reasonabl e alternativ e t o calculatio n o f residua l risk ?

800 ® 6S : S T Z6/J0/T T