U N I T ED S T AT E S EN V IRON M ENTAL PRO T ECTI O N A G EN C Y

RE G ION IX AIR D I VIS I ON

T ec hnic a l S uppo r t D o c u ment

for

EPA ’ s R ulem a king f o r the C a l i fo r nia S tate

I mp l e m e ntation P lan

r e g a rdi n g

P la ce r Coun t y Air P ol l ut i on Control Dis t ri c t

Rule 515

, “ Stationary Rail Yard Control Emission

Reduction Credits ”

P r e p a r e d b y : N a n c y L e vin

September 4 , 20152 R U LE IDENTI F IC A T I ON

Ag e n c y: P la ce r Coun t y Air P ol l ut i on Control Dis t ri c t

( PC A P CD)

Cur re n t S I P Ap p r ov e d Ru l e : None

Prior Submittal/ Withdrawal : Rule 515 “ Stationary Rail Yard Control Emission

Reduction Credits ”

Adopt e d: October 9, 2008

S ubm i t t e d: December 23, 2008

Withdrawn: August 11, 2014

Sub m it t al Sub j e c t t o th i s TS D : Rule 515 “ Stationary Rail Yard Control Emission

Reduction Credits”

Adopt e d: February 19, 2015

S ubm i t t e d: June 26, 2015

Completeness Determination : August 13, 2015

BA C K G ROU N D :

Und e r Se c t i on 107 ( d ) of the Cl ea n Air A c t (C A A ) , EPA has d e si g n a t e d P la ce r Coun t y

(p a rti a l) non a t t a in m e nt f or the following th r e e N a t i on a l Amb i e nt Air Qu a l i t y S tand a rds

( N A A QS): 1

- ho u r ozone, 1997 8

- hour o z on e

, a nd 2006 PM 2

. 5 . T h is a r e a is re g ulat e d b y

the P la ce r Coun t y Air P ol l ut i on Control Di s tri c t ( P CAP CD )

. N e w or mod i fi e d major

s tationa r y so u r c e s sub je c t to P CAP C D’s Fe d e r a l N e w Sour c e R e view ( N S R) p r o g r a m

m ust obtain e m i ss i on r e du c t i ons to of f

s e t emission i n c r ease s prior to constru c t in g su c h

sour ce s

. 1 The purpose of Rule 515 is to provide owners or operators of a rail yard a

mechanism for quantifying, certifying, and banking emission reduction credits (ERC)

from the installation and use of a control device that reduces emissions from locomotive

engines in rail yards. There is currently one rail yard in the District , the Union Pacific

J.R. Davis Yard

. Approval of Rule 515 into the SIP would allow these ERCs to be used

as offsets under PCAPCD's New Source Review (NSR) rule. 2 Existing PCAPCD Rule

504 “Emiss ion Reduction Credits” (Adopted 9

- 21

- 93, Amended 11

- 03

- 94, 8

- 12

- 10)

governs the banking and transfer of ERCs, and Rule 502 “New Source Review” governs

the use of ERCs. These two rules are not the subject of this rulemaking action.

1 Ru le 50 2 N e w S o u r ce R e v i e w ( A dop ted 1 1

- 12

- 74

, A m e n d ed 0 5

- 24

- 77

, 0 6

- 19

- 79

, 0 9

- 21

- 93

, 1 1

- 03

- 94

, 08

-

09

- 01

, 1 2

- 09

- 04

, r esci n d ed a n d r e

- a dop ted 2

- 11

- 10

, a m e n d ed 1 0

- 13

- 11 ) h as b e en a ppro v ed i n to t h e SIP

( Se p t e m b er 24

, 2 01 3

, 7 8 FR 584 6 0)

. Ru le 50 2 r e q u ires t h e u s e o f f e d e r al l y e n f or c e ab le E m i s s i o n R e d u cti o n

C r e d its ( E R Cs )

. Ru le 515

, if a p p ro v e d

, w o u ld pr ov i d e f o r t h e g e n e r ati o n o f f e d e r al l y enforceable E R C s

.

2 Ru le 51 5 w ou ld pro v i d e f o r t h e g e n e r ati o n o f f e d e r al l y enforceable E R C s to a ddr ess m or e s tri n g e n t state

o f

f s et r e q u ir e m e n t s f o r po ll u t a n ts su c h as P M 10 a n d C O, e v e n t h o u g h P C A P C D i s in f e d e r al attai n m e n t f o r

P M 10 a n d C O. See Atta ch m e n t 3.3 R U LE S U MM A R Y:

Rule 515 establishes standards, the administrative process

, and enforceable procedures

for calculating creditable emission reductions of volatile organic compounds (VOC),

nitrogen oxides (NOx), carbon monoxide (CO), particulate matter of 10 microns or less

(PM10), and sulfur oxides (SOx) created through the installation and use of a control

devi ce for locomotive engines in rail yards . Once an ERC certificate has been issued by

the Air Pollution Control Officer (APCO), the ERCs may be used as offsets to meet

federal or state NSR requirements

.

Under Rule 515, o wners or operators of rail yards are eligible to apply for ERCs if

they install stationary emission control equipment in rail yards or other locations

where locomotive diesel engines may be running while the locomotive remains

stationary in a defined location. They must first obtain a pe rmit that includes

enforceable conditions to ensure compliance with the specific rule requir e ments

. Rule

515 specifies that actual emission reductions must be real, surplus, enforceable,

permanent, and quantifiable. Continuous monitors must be used to meas ure inlet and

outlet emissions of the control device to determine the amount of emissions reduced

. The rule prohibits PM10 and/or PM2.5 ERCs from being used to provide offsets for

diesel particulate matter.

Owners and operators are subject to monitoring, testing, recordkeeping

, and reporting

requirements. (See section 500). Applicants must provide an analysis of historical

locomotive activity to support emission calculations, and a “reasonable expectation

that a specific amount of emission reductions can be achieved on an on

- going basis,

taking into account lower than expected activity level, and other factors.” (See

section 401.3). Applicants must also take into account expected future emission

reductions as the fleet is upgraded with lower

- pollutant emit ting locomotives. (See

section 401.4).

E P A R EVIEW CRIT E RI A :

EPA g e n e r a l l y c o n side r s thr e e c rit e ria in e v a luating state a nd loc a l prohibito r y rul e s for

a ppro v a l i nto t he S I P

. F or this rul e maki n g

, we a r e c onsid e ri n g two a ddi t ional c rit e ri a

.

1. En f or c e a bi l i t y

- Se c t i on 110 (a ) of the C A A r e qui r e s e nfo r cea b l e S I P r e qui r e ments.

S e v e r a l E P A g uidan c e d o c uments a re u s e d to ev a luate rule e n fo r c ea bi l i t y

, including the “ B lueboo k ” ( Issu e s R e la t ing t o V O C R e gula t ion C utpo i nts,

D e f

i c ien c ies, and C l ari f

ication t o App e ndix D

, N ov e mber 24, 1978, 52 F R 45044)

a nd EPA R e g ion I X ’ s G u idance Do c u m e nt f or C orre c t i ng Com m on V O C and

Oth e r Rule De f

i c ie n c ies ( Au g ust 21, 2001, the “ L i t t l e B luebook ” )

.

2. Non

- in t e r f e r e n c e

- CAA §110(l) pro h ib i ts E P A f r om app r oving a n y S I P revis i on

that would in t e r fe r e with a n y a ppl i ca ble r e quir e m e nt con ce rni n g a t t a in m e nt a nd

r e a son a b l e fu r th e r p r o g re ss (R F P ) or a n y oth e r a p pl i ca ble re qui r e ment of t he CA A

.4 I n a ddi t ion, C AA §193 p r ohib i ts t he mod i fi ca t i on of a n y S I P

- a ppro v e d c o n trol

r e quir e ment in e f f

e c t be f ore Nov e mb e r 15, 1990, in a non a t t a in m e nt a r e a

.

3. S trin g e n c y

- S ec t i on 18 2 (b ) (2) o f the CAA r e qui r e s ce r t a in S I P rul e s to a p p l y

R ea son a b l y Av a i l a ble C o ntrol T ec hnol o g y (R A C T ). O ther s e c t i ons of the A c t

r e quire oth e r c ontrol l e v e ls.

4. N e w Sour c e R e view

– Se c t i on 173 (c ) of the C A A a nd 40 C F R P a rt 51, A p p e ndix

S

, “ Emiss i on O f fs e t I nte r pr e tative Rul i ng” r e qui r e ce rt a in sou r ce s to obtain

e m i ss i on r e du c t i ons to of f

s e t inc r e a s e d e m i ss i ons f r om new pro j ec t s

.

5. E c onom i c I n c e nt i ve P rog ra ms

- EPA publish e d the g ui d a n ce

, “ I mprovi n g Air

Qu a l i t y with E c onom i c In c e nt i ve P r o g r a ms” on J a nu a r y 2001 ( EP A

- 452/ R

- 01

- 001).This g uida n c e a pp l ies to dis c r e t i on a r y e c o n om i c inc e nt i ve pr o g r a ms ( E I P s )

a nd r e p r e s e nts t he a g e n c y ’ s in t e r p r e tation of w h a t E I P s shou l d c ontain in o rd e r to

me e t t he r e qui r e ments of the CA A

. B e ca u s e th i s guid a n c e is no n

- bind i n g a nd do e s

not r e pr e s e nt fin a l a g e n c y a c t i on, EPA is us i ng t h e g ui d a n c e a s a n in i t i a l sc re e n to

d e te r m i ne wh e t h e r pot e n t ial a ppro va bi l i t y is s u e s a ris e

.

E P A EV A LU A TION:

Rule 515 c omp l ies w i t h the e v a luation c rit e ria a s discuss e d bri e f l y b e low.

1. En f or c e a bi l i t y

– T h e a pp l ic a bi l i t y a nd r e quir e men t s of Rule 515 a re g e n e r a l l y c l e a r

a nd c onsistent with the Bluebook a nd other r e lev a nt E P A g ui d a n c e reg a rd i ng

e nfo r c ea bi l i t y

. Rule 515 i n c ludes re f e r e n ce s to ot h e r P C AP C D r ules. W e e v a luat e d

the r e f e r e n ce d rul e s to d e te r m i ne the p u rpose of the r e fer e n ce

, w h e ther the r ules

we r e S I P a ppr o v e d, a nd wh e t h e r the ru l e s a f f

e c ted the c rit e ri a , st a nd a rds, a nd

p r o ce d u r e s f o r g e n e r a t i ng v a l i d ER C s und e r Rule 51 5

. W e d e te r m i n e d that these

r e f e r e n ce s did not a f fec t t he a ppro va bi l i t y of the r ule.

2. Non

- in t e r f e r e n c e

– Rule 515 do e s not r e pla c e a n y e x is t ing rule c urr e nt l y in the

S I P

. In addition, Rule 515 only provides a mechanism to generate credits for

new emission reductions, and other requirements in Rule 515 and elsewhere

ensure that these emission reductions are greater than any emission increases

associated with use of the ERCs. Therefore, approval of this rule will not

in t e r fe re with a n y a ppl i ca b l e r e quir e ment c on c e rning a t t a in m e nt and rea so n a ble

fu r ther pr o gr e ss ( R F P ) or a n y other a ppl i ca ble r e qui r e ment of the CA A

.

3. S trin g e n c y

– None o f th e se CAA s ec t i ons a pp l y to Rule 51 5

, so s t rin g e n c y i s not

b e ing us e d to ev a luate S I P a p p rov a bi l ity

.

4. N e w Sour c e R e view

– E m i ss i on r e du c t i ons to be us e d a s NSR of f

s e ts m ust be

surplus, e nfo r c ea ble, q u a nt i fi a ble, a nd p e r m a n e nt

. The surplus criterion5 includes being consistent with the emissions inventory estimates for the

Roseville Rail Yard in any attainment plan for the area

.

Rule 51 5 me e ts t he qu a n t ifi ca t i on c rit e ri on b e c a use it includ e s a methodology to

qu a nt if y e m i ss i o n s a nd e m i ss i on r e du c t i ons in S ec t i ons 404 (Quantification

Protocol) and 405 ( Emission Reduction Credit Adjustments of Calculated Credits)

that will provide replicable quantification

.

The e m i ss i on r e du c t i ons will be p e rm a n e nt a nd e nf o rc ea ble b e ca use t h e own e r of

the rail yard , who h a s b e e n is s u e d a n ERC und e r Rule 5 15

, is subject to violations

for failure to comply with any provision of the rule or any permit condition (See

section 406.1)

.

5. E c onom i c I n c e nt i ve P rog ra m

- S e v e r a l fund a m e ntal p r inciples d e s c rib e d in the

g uida n c e include in te grity ( c r e di t s a re b a s e d upon e m i ss i on r e du c t i ons whi c h a re

surplus, e nfo r c ea ble, q u a nt i fi a ble, a nd p e r m a n e nt )

, e qui t y

, a nd e nvironme n tal

b e n e fit. The in te g ri t y pr i n c ip l e is the s a me a s tho s e d e s c ri b e d und e r NSR

e v a luation and d e s c rib e d abov e . This rule g e n e r a t e s e m i ss i ons of f

s e ts for the N S R

prog ra m and d o e s not r a i se a n y e qui t y is s u e s that a re dif f

e r e nt f r om t he N S R

prog ra m i n g e n e r a l. The e nvironme n tal b e n e fit h a s b ee n a dd r e ssed in the required

o f

f

s e t r a t i o d e fin e d b y the NSR pro g r a m.

E P A A C TION:

EPA s t a ff r ec om m e nds full a p p r ov a l of the submi t ted v e r sion of Rule 515 b eca use it

c omp l ies with all r e lev a nt CAA re quir e ments a nd is c onsistent with EPA ’ s g uida n c e f o r

NSR a nd e c onom i c inc e nt i ve pr o g ra m s

.

RE F EREN C E S :

1. “ I ssues Rel a t i n g to VOC R e g ulation C utpo i nts, D e fi c ien c ies, a nd D e viatio n s,”

( a .k. a

., B luebook) EPA O A QP S , M a y 25, 1988 ( w e b c i t a t i on).

2. “ Guid a n c e Do c ument f o r Correc t i n g Com m on V O C & Oth e r Rule D e fi c ie n c ies,”

( a .k. a

., L i t t l e B l u e book )

, EPA R e g ion 9, A u g ust 2 1, 2001

( ht t p: / /ww w

. e p a

. g ov/r e g i on09/ai r /s i ps/ l i t t leblu e book2001.pd f ).

AT T A C HMENT S :

1. PCAPCD Rule 51 5 , “ Stationary Rail Yard Control Emission Reduction Credits ,”

a dopted on October 9, 2008 and submitted by CARB to EPA on December 23,

2008

.

2. “ I m p rovi n g Air Q u a l i t y with E c onom i c I n ce nt i ve P ro g r a ms,” J a nu a r y 20 0 1, EP A

452/ R

- 01

- 001 (c ov e r onl y ; te x t at

ht t p: / /ww w

. e p a

. g ov/ t tn c a aa 1/ t 1/ m e ta/m1201.h t m l ).6 3. M e mo d a ted September 4, 2015 f r om N a n c y L e vi n, EPA Rul e s O f fi ce , to

pr o pos e d rul e making fil e , “ P CAP C D Attainment S tatus a nd ER C s

. ”7 AT T A C HMENT 3

M E M ORA N D U M

Da te : September 4, 2015

Sub j e c t: P CAP C D Attainment S tatus & ER C s

F r o m : N a n c y L e vi n, EPA R e g ion 9 Air Division, R ules Of f ic e

, A I R

- 4

To: F i l e for P ropos e d R u lem a king on P CAP C D Rule 515

I f P CAP C D Rule 515 is a ppro ve d in t o the S I P , it will pro v ide f o r the g e n e r a t i on of

f

e d e r a l l y

- enforceable Emiss i on R e du c t i on Cr e di t s ( ER Cs ) for V O C, N Ox

, P M 10

, P M 2

. 5 , CO, a nd S O x

. P CAP CD ’s a t t a in m e nt s t a tus va r ies d e p e ndi n g on the pollu ta nt.

The following d e s c rib e s the a r e a ’s current f e d e r a l attainment s tatus, a s w e ll a s wh e re a n d

how th e se ER C s ca n be us e d. This a n a l y sis tak e s in t o a cc ou n t t he f a c t t h a t P CAP C D

m a y b e in f e d e r a l attainment (e

. g

., wh e re no o f f

s e ts a re r e q u ir e d for f e d e r a l N e w So u r c e

R e vi e w ( NS R ) ) y e t sour c e s in t he a r e a m a y be subj e c t t o more stringent st a te o f fs e t

r e quir e ments e mbedd e d in t he S I P

- a p p rov e d NSR rul e . The mo r e stringent st a te

re qui r e m e nts a r e t y pic a l l y i m plem e nted b y h a ving a low e r e m i ss i ons thr e shold for

r e qu i ring of f

s e ts.

VOC and NOx ( 1

- h o u r a n d 8

- h o u r Ozone N A A Q S )

 P CAP C D is classified as f e d e r a l non a t t a in m e nt for the 1

- hour a nd 8

- hour o z on e

NAAQS

.  V O C a nd N O x a re p r ec u r sors to o z on e

.  Therefore, V O C a nd NOx ER C s ca n be us e d for sources located

wi t hin t he P la ce r C oun t y o z one non a t t a in m e nt a r e a or oth e r fe d e r a l

nonattai n ment a r e a s if c e rt a in co n di t ions a re met

.  Th e se V O C a nd NOx E R Cs c ould also be us e d to m ee t more stringent st a te V O C

a nd NOx of f

s e t r e quir e m e nts e mbedd e d in P CAP C D ’ s NSR rul e

.

P M 10

 P CAP C D is classified as f e d e r a l attainment f or the P M1 0 NAAQS

.  B e c a use the s e P M 1 0 E R C s a re b e i n g g e n e r a ted in a n a r e a t h a t i s in f e d e r a l

a t t a in m e nt, under the C A A, th e se P M 1 0 E RCs ca nnot be us e d a s NSR of f

s e ts

i n a n y f e d e r a l nonattainme n t a re a

.  Th e se P M 1 0 E RCs c ould be us e d to m ee t m ore str i n g e nt s t a te P M 1 0

of

f

s e t r e quir e ments e m b e dd e d in P CA P CD’s N S R rul e or in a n y other

a r e a in acc o rd a n c e with state la w

.

P M 2 .5

 P ortions of P CAP C D a re c lassifi e d a s f e d e r a l no n a t t a in m e nt for the PM 2

. 5

NAAQS

. B e c a use t h e se P M 2 .5 ER C s a re b e ing g e n e r a t e d in an a r e a t h a t i s

f

e d e r a l nonattainment, u nd e r the CA A , the s e P M 2 .5 E RCs ca n be us e d a s P M2

. 58 of

f

s e ts i n P la ce r Coun t y or oth e r fe d e r a l nonattai n ment a r e a s if c e rt a in co n di t ions

a re met.

 Th e se P M 2 .5 ER C s c ould also be us e d to m ee t m ore str i n g e nt s t a te

P M 2 .5 of f

s e t r e quir e ments e m b e dd e d in P CAP CD ’s N S R rul e

.

CO

 P CAP C D ( a nd the e nt i re stat e ) is classified as f e d e r a l attainm e nt for CO.

 The CO E RCs c ould be us e d to m ee t m ore stri n g e nt s t a te o f fs e t r e qu i r e me n ts

e mbedd e d in P CAP CD ’s N S R rule or in a n y other a r e a in acc o rd a n c e with state

la w

.

S O X

 P CAP C D is classified as f e d e r a l attainment f or SO x

.  S O X is a p rec ursor to both PM1 0 a nd P M 2

. 5

.  B e c a use P CAP C D is i n f e d e r a l a t t a in m e nt for P M 10

, the SOx ER C s c ould b e

us e d for more stri n g e nt s t a te o f f

s e t r e qui r e ments in P CAP C D, but c a nnot be us e d

a s P M 1 0 of f

s e ts in a n y f e d e r a l P M 1 0 non a t t a in m e nt a re a.

 B e c a use P CAP C D is a f e d e r a l non a t t a in m e nt a r e a for P M 2

. 5 , the S O x ER C s

c ould be us e d a s P M 2 .5 of f

s e ts i f the Distri c t ob t a ins SIP a ppro va l of t h e

a ppro p ri a te P M 2

. 5 to S O x i n te rpol l utant o f fs e t r a t i os.

NOx

 P CAP C D is classified as f e d e r a l attainment f or N O x

.  NO x is a p r e c ursor to P M 2

. 5

.  B e c a use P CAP C D is a f e d e r a l non a t t a in m e nt a r e a for PM 2

. 5 , the NO x ER C s

c ould be us e d a s P M 2 .5 of f

s e ts i f the Distri c t ob t a ins SIP a ppro va l of t h e

a ppro p ri a te P M 2

. 5 to NO x in t e rpollut a nt of f

s e t r a t i os.