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OAR Box 1875 

Prepped by Ollie Stewart 

Document Number: 

79) ll-F-26 

Docket Number: 

A-90-19 

Printed 12/1/2008 11:12:49 AM Sheet 79 of 86 
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A-90-19 

ll-F-26 

Notes (attached) from 10/20/92 conversation between A. Eckert, 

EPA:OGC and D. Rivkin, Office of the Vice President, Council on 

Economic Competitiveness. Alan Eckert's notes from the telephone 

conversation were made on a copy of the markup forwarded to 

D. Rivkin on 10/20/92 (Item No. II-F-25). Subject: Markup of 

draft language for complementary legal theory. 

!99e 

EPA AIR DOCKET 
P.3_ 

October 20, 1992 

David Rivkin: 

iHere's a markup of your lengthy preamble insert, which does 

two things: first, it conforms it to the agreement you reached 

with iRay (a copy of which is attached). Second, it incorporates 

changes OAQPS developed to make it technically accurate. Please 

let m© know if you have any problem with these revisions. 

Alan Eckert 

OPTIONH, FORM 99 (7-90) 

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EPA's proposed Brule allows an averaging approach for HON -

fcbverled portions of la plant, gee pp. - EPA is alsoApaa^p&aiog 

a broader averaging^pgepsGal, as set forth below. Significantly, 

this Latter averaging scheme is not being proposed as an 

alternative to the averaging approach, described above. Rather, 

the tvo approaches are entirely complementary. However, because 

the legal issues posed by the broader*averaging scheme differ 

appreciably from those implicated by the more narrow averaging 

proposal, EPA believes that a separate discussion of the former 

is warranted,. 

oMSHo')aMii^.m> Oy, ^ 

rhe broad averaging proposal relies upon the* legal theary<£s*^ 

dovel-ppdid' \J$ LlAUl, which would permit compliance with the HON MACT 

standard (or, for that matter, with-any other MACT standard to be 

developed by EPA) by averaging emissions from points located 

anywhere within an entire contiguous facility, which contains 

HON-civered processing unit6. ErA '-believes that this apfeHFoach—ier-' 

legally-pormiaoiblc under section 113 of the Clean Air Act. 

frm^ niijianrn rf IIP P unl i 111T1 nVtr n'Tnll In iii lirnfrl-w pnljry 

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i/n/3. atf&Air.a.'h-fcs *wXkJ <Xn0frn:*d*iJ*-* 

imvlng ,carefully analysed Caption 112 and its legislative 

hlctoiY/

 EFA ' concluded that thaio lis a irtifference- between the 

term 'source in a category or subcategory," used in Section 112 

2,nd the term "source," used in Section 112 (i) . n?o bagip 

with7^|^|^Ct^^^J3Tjt;hat tho use of differont- words by congress -An-

^tve—su-bse^Llons wa"b noL accidental and refloated a wellfy: 

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thought?-otrfe Congressional intent, ^ffieolfff cite. Specifically, for *s*g 

purposes of establishing emissions'standards under subsection 112 

(d), Congress expected EPA to identify specific production lines, 

pieced of equipment, etc., located within major stationary 

sources or area sources, and to treat them as sources only for 

the pdrposes of subsections 112 (d)(3)(A) and (B), i.eT. for the 

purposes of determining what are the average emission limitations 

achieved by the best performing twelve percent of existing A 

sourceb or average emission limitations achieved by the five best 

performing sources, since the term source was used in the 

subsection 112 (d) for a distinct and unique purpose, the 

relevant statutory language contains a qualifying set of words -

"in a category or subcategory" - appended to the word "source." 

significantly, in subsection 112 (i), the relevant statutory 

language contains the term "source" — a fact that,^Etfft~=few*a<ies£&&T 

clearly reflected—the congressional—intont frhat> for purposes of /?JJ 

caning^which encompasses an entire plant. At . wi,i]d <3^fe«, 

jye lmlbful Cu liat ueveigl g^UlaLluiiD HIMTP-BP A defined thfISL-L&JL& > i-nm. /->.<? 

aourcol to include an entire facility-. This reading is supported 

by the I fact that the definitions of statutory terms, set forth in 

subsection 112 (a) , contain the traditional definitions of such 

terms as "major source", "stationary source", etc. Under t**e- ffas 

ErA't* •'llatutoir^ construction, the statutory language "any 

emissions standard, limitation, or regulation promulgated under 

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this [112] section and applicable to a^s^urce" describes all of 

the existing MACT standards, established under subsection 112 

(d), and applicable to a source, which contains within it 

"sources in a category or subcategory" fj.eT. production lines, 

pieces of equipment, ejfcc..) covered by such MACT standards. 

-£PA a3n9o notes that^—lulu "ttariy roductions" rulfr;—i^-

adopt-^d -a planL-widte definition uf suuxcu. 

(June! 13-,—t9^3r)—*-on early-indication that thu agency believed 

gee SC—FR 37,, 342 

tha^-an ent i ge-cottfcigue; consider^ to be 

jagt^^pj L2JH. EPA also, is mindful of the fact that it has 

traditionally enjoyed wide latitude in coming up with diverse 

definitions of the term "source," depending on what regulatory 

objectives were implicated. This ebngreon ip well aware of thie 

£*et^-jand EPA's considerable discretion ln this area has been 

artirmea oy the courts7^ noceh?_cito<%. m Liie pieuent inotanoo, 

EPA brili-sveo that -the -statutory analysis do-scribed ahnvp, can 

sustained -under the Sirst xnimu o£ Lhbt Chevron analysis* 

Alternatively,- this legai theory can ba supported by thewoighti of chevron discrotioni—availablo te EPA under Soot ion iiaf 

,, tfndeivirfesr broado-averaging approach, EPA would make no 

'<***• changes iT. the way it has identified categories and subcategories 

of soiirces in the HON and devised appropriate emission standards 

for them, nor in the way it would prescribe future emission 

standairds for other emission categories or subcategories. For 

compliance purposes, however, if an owner or operator does not. 

wish tio control a particular HON^covered emission point to the 

level that would result in the compliance with the relevant HON 

emission standard, the extra emissions from that point could be 

offset! by emissions reductions greater than what is required by 

any stiandard then in effect under Section 112 at one or more 

other iemission points within the entire stationary source, in 

additijon, emissions averaging would be allowed across all the 

emissibn points within the entire plant, including the SOCMI 

sourcei category as well as points not yet covered by any HACT 

standalrd. 

Ak such, emissions from process vents, wastewater operation, 

storage vessels and transfer operations could be averaged among 

themselves or with other emissions points within the entire 

stationary source, in order to provide as much flexibility as 

possible. However, distinction would be made between emission 

pointsi physically similar to emission points covered under the 

HON or! any other MACT and all other emission points. For the 

former* to participate in the averaging scheme, they must comply 

with whatever compliance routines have been established under the 

SOCMI HON or other relevant MACT. For the latter, to participate 

in averaging, the source must petition EPA to establish an 

appropriate compliance routine. To be sure, once EPA establishes 

such ai compliance routine for any new type of an emission point, 

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all sjimilar emissions points located within any sources cari 

participate in the averaging, so long as they use the EPAapprojved compliance routine. EPA solicits comment also on how it 

would! verify the baseline for unregulated emission points, and 

how ijt would structure the averaging compliance process to assure 

the standard as a whole remains enforceable. One possibility to 

consiaer would be to use the average emissions from such emission 

. pointb over some representative time period a6 their baselines. 6»w»n/,i7 ^ 

Spe<<J/iLc<JOL( taqj^aiid on Is^-cJ cXuXiujniki fi?*-, o,nd paUc--r .*i.p4M*£zn-.s tp; \>nciv<Ur-d n&>%-' &s&toJZiJ7wij y$oit-t-e^, ; w 

sartw, a^^ft, explained abcw^o, while equipment le*ks are included into 

soc$Kj sources, they caijno? at this time be inoJ^uded in emissions 

averagV. Under this a iterative, EPA would cxpe&itioucly develop 

methods ro assign allowable emission levels to parfci^ular leak 

points or groups of leak points^^^-and., even .without awaiting for 

any individualsjietitions, would sim'i-iarly develop method&xfor 

calculating emissions from types of enii^sion points not regelated 

by HON. 

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irnder the broad/-^averaging approach, emission reductions from 

emissions points not covered by the HON vould be usable to 

generate credits, subject to the previously discussed limitations 

and any limitations added in any other MACT standard applicable 

to the relevant emission points. Credits could be generated at 

any time from non-HON emission points until they become subject 

to a !^CT standard. When they become subject to a MACT standard, 

the fiiture value of reductions at those emission points would be 

goverrted by the emission standards required by the new MACT, 

Stated differently, the offsets available from such points would 

have to be recomputed using the new baseline established for 

them. ; Each future MACT standard must contain a floor 

calculation. To the extent that points covered by these later 

standards haveCbeerP alre"adyAcontrolled for the purposes of 

participating in an averaging scheme, that relates to the 

compliance with an earlier standard, the floor for the later 

'standaircTXbx be more stringent. As future MACT standards are 

adopted, EPA would attempt to maximize averaging opportunities 

and therefore minimize compliance delays and costs. 

IJPA believes that the broad averaging scheme, described 

above,! provides significant policy benefits. To begin with, it 

would jenable sources to achieve the same environmental gains, as 

under jthemore narrow averaging proposal, but at significantly 

"~reaucejd costs, second,A-by inducing oourcoa to'.makc coct--

gffeetjive reduct lone throughout onti-ro facil it.ii.es~,—EPA would -beire—a bettor position to establish sub&equont MACTgt In fact-?—ifl-

-al-1 cajcoo, when such MACTB are established -under sub«ocfejktfuJJL2---- ^ 

fd^-r the MACT " floor"^wou^sr^r~ttgIit:e tighterr tha thann otherwis otherwisee wouId~hav would 'havee ^ ^y /^ - , 

been tihe case if the emission points outside of the already 

coverejd MACT categories would have stayed uncontrolled. .Last, 

but not least, EPA believes that the utilization of the broad 

averaging scheme may result in the discovery of emission points 

within! facilities that otherwise might have been overlooked by 

EPA anla stateregulators. /Th4s- last—peint- io— supnQrted__i2y-JClie— 

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Insert A 

While equipment leaks/are included in SOCMI sources, they 

cannot at this time be included in emissions averages. Equipment 

leaks;are not included because: (l) the negotiated standard does 

not require any fixed performance level; and (2) no practical 

method currently exists^to verify performance. Under this 

alternative, EPA wouldy(develop methods to assign allowable 

emission levels to particular leak points or groups of leak 

points, and would similarly develop methods for calculating 

emissions from emission points not regulated by the HON. The 

Administrator seeks comment on means to verify and document the 

emission performance levels achieved for situations where 

equipment leaks are included in an average. Commenters should 

include a description of the compliance verification procedure 

that would be used and what data needs to be supplied to support 

the suggested system. Comments are also requested on types of 

non-scjCMi emission points that might be included in broader 

averagjes. 

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:*ay, set forth below is the appropriate language for the 

last Substantive language insert. It is as follows: 

regarding 

under 

related 

j' (ii) Information reasonably similar to information 

emissions averaging required by any standard proposed 

section 112. The Administrator may request any reasonably 

supplemental information within 30 days after 

submission." 

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''insert B 

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Several factors must be considered in implementing this 

ilterniative approach. First, the averaging approach allows 

Lnclusjion of points that will be regulated by subsequent MACT 

standards. In calculating residual risk under section 112(f), 

shouldj all points in the initial average be included in one risk 

fcalculjation even though some of those points will not be subject 

to thej standards under 112(d) until a later date? 

Sjecond, it would require a determination on the 

permisjsibility of interpollutant trades. This concern is already 

being evaluated for VQCHAPs in the SOCMI source category. The 

alternative approach wSStgeT further complicate this issue by 

adding! dissimilar categories (e.g., industrial cooling towers) 

emitting dissimilar pollutants (e.g., chromium). since the HON 

currently addresses only organic HAPs significant changes would 

be necfessary to accommodate non-VOC HAP controls. 

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