Environmental Quality PSD/NNSR SIPRevision Requests

FROM: Gerallyn Duke

Office of Permits and Air Toxics

Air Protection Division

TO: Kathleen Cox, Associate Director

Office of Permits and Air Toxics

Approval and Promulgation of Air Quality Implementation Plans;

Delaware; Prevention of Significant Deterioration and Nonattainment New Source Review;

Fine Particulate Matter (PM25)

I. BackgroundEPA is proposing to approve a State Implementation Plan (SIP) revision submitted by the State of

Delaware on March 14, 2012. This SIP revision pertaining to Delaware’s Prevention of SignificantDeterioration (PSD) and nonattainment New Source Review (NSR) programs incorporates

preconstruction permitting requirements for fine particulate matter (PM2.5)into the Delaware SIP.

In addition, EPA is proposing to approve SIP revisions and portions of SIP submissions submitted

by the State of Delaware on December 13, 2007, March 12, 2008, September 19, 2008, September

16, 2009, April 1, 2010 and October 17, 2011 for the purpose of determining that Delaware has

met its statutory obligations that relate to the PSD requirements under section 11 0(a)(2)(D)(i)(II)

for the 1997 PM25 and ozone NAAQS and the 2006 PM2.5NAAQS, as well as sections

11 0(a)(2)(C), (D)(i)(II), and (J) for the 2008 lead NAAQS. EPA is approving these revisions in

accordance with the requirements ofthe Clean Air Act (CAA).

IL Summary of Action

The March 2012 SIP revision submitted by Delaware consists of amendments to the general

provisions of 7 DE Admin. Code 1125, Requirements for Preconstruction Review. The revision

fulfills the federal program requirements established by the 2008 NSR PM2.5Rule. The

amendments establish the major source threshold, significant emission rate and offset ratios for

PM25,establish nitrogen oxides (NO) and sulfur dioxide (SO 2)as precursors to PM2.5,and

establish the allowance for interpollutant trading for offsets and NSR applicability to PM2.5

precursor pollutants, pursuant to the May 2008 NSR PM2.5Rule. Delaware’s proposed SIP

revision does not include the “grandfathering” nor the presumptively approvable interpollutant
Section 1 (General Provisions), and also include revisions to Section 2 (Emission Offset Provisions)

and Section 3 (Prevention of Significant Deterioration of Air Quality) under 7 DE Admin. Code

1125 — Requirements for Preconstruction Review. The amendments establish Significant Impact

Levels (SILs) for PM2,5(See Section 3.9) pursuant to the October 2010 PSD PM2,5Rule. We are

proposing to take no action at this time with regard to that specific provision in the SIP revision.

Finally, some changes to Delaware’s rules that do not relate to PM2.5also were included in theMarch 2012 SIP revision. Since Delaware did not request EPA to take action on those particular

changes, we are not doing so’.

III. Analysis

A. PM2.5Fine particles in the atmosphere are made up of a complex mixture of components. Commonconstituents include sulfate (SO 4);nitrate (NO 3); ammonium; elemental carbon; a great

variety of organic compounds; and inorganic material (including metals, dust, sea salt, and othertrace elements) generally referred to as “crustal” material, although it may contain material fromother sources. Airborne particulate matter (PM) with a nominal aerodynamic diameter of 2.5

micrometers or less (a micrometer is one-millionth of a meter, and 2.5 micrometers is less than oneseventh the average width of a human hair) are considered to be “fine particles” and are

also known as PM2.5 “Primary” particles are emitted directly into the air as a solid or liquid

particle (e.g., elemental carbon from diesel engines or fire activities, or condensable organic

particles from gasoline engines). “Secondary” particles (e.g., sulfate and nitrate) form in the

atmosphere as a result of various chemical reactions.

The health effects associated with exposure to PM2.5include potential aggravation ofrespiratory

and cardiovascular disease (i.e., lung disease, decreased lung function asthma attacks and certaincardiovascular issues). Epidemiological studies have indicated a correlation between elevated

PM2.5levels and premature mortality. Groups considered especially sensitive to PM2,5exposureinclude older adults, children, and individuals with heart and lung diseases. For more details

regarding health effects and PM2.5see EPA’s Web site at http.vYt’wwepa.gow”oar/particiepoliution/

(see heading “Health and Welfare”).On July 18, 1997, EPA revised the NAAQS for PM to add new standards for fine particles, using

PM2.5as the indicator. Previously, EPA used PM10 (inhalable particles smaller than or equal to 10

micrometers in diameter) as the indicator for the PM NAAQS. EPA established health-based

‘See Guidelinesfor Preparing Letters Submitting State Implementation Plans (SIPs) to EPA andfor Preparing Public

Noticesfor SIPs, from Janet McCabe and Becky Weber to Air Division Directors, Regions 1-10 dated November 22,

2011.

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the existing annual PM2.5NAAQS of 15 j.tg/m 3(71 FR 61236).

1. Implementation of NSR Requirements for PM25 — the NSR PM2.5Rule

On October 23, 1997, the Agency issued a guidance document written by John Seitz entitled

“Interim Implementation of New Source Review Requirements for PM25”(Seitz Memo). The Seitz

Memo was designed to help states implement NSR requirements pertaining to the new PM2.5

NAAQS in light oftechnical difficulties posed by PM2.5at that time. Specifically, the Seitz Memo

stated: “PM10may properly be used as a surrogate for PM2.5in meeting NSR requirements until

these difficulties are resolved.”EPA also issued a guidance document entitled “Implementation ofNew Source ReviewRequirements in PM2.5Nonattainment Areas” (the “2005 PM2.5Nonattainment NSR Guidance”), on

April 5, 2005, the date that EPA’s PM2.5nonattainment area designations became effective for the

1997 NAAQS. This memorandum provided guidance on the implementation ofthe nonattainment

major NSR provisions in PM2.5nonattainment areas in the interim period between the effective date

ofthe PM2.5nonattainment area designations (April 5, 2005) and EPA’s promulgation of final

PM2.5nonattainment NSR regulations. Besides re-affirming the continuation ofthe PM10 SurrogatePolicy for PM2.5attainment areas set forth in the Seitz Memo, the 2005 PM2.5nonattainment NSR

Guidance recommended that until EPA promulgated the PM2.5major NSR regulations, “Statesshould use a PM10 nonattainment major NSR program as a surrogate to address the requirements of

nonattainment major NSR for the PM2.5NAAQS.”

On May 16, 2008, EPA finalized a rule (the NSR PM2.5Rule) to implement the 1997 PM2.5

NAAQS, including changes to the NSR program (73 FR 28321). The 2008 NSR PM2.5Rule

revised the NSR program requirements to establish the framework for implementing

preconstruction permit review for the PM2.5NAAQS in both attainment and nonattainment areas.

The 2008 NSR PM2.5Rule required that major stationary sources seeking permits must directly

satisfy the PM2.5requirements, as of the effective date ofthe rule, rather than relying on PM10 as asurrogate, with two exceptions. The first exception was a “grandfathering” provision in the Federal

PSD program at 40 CFR 52.2 1(i)(1)(xi). This grandfathering provision applied to sources that had

applied for, but had not yet received, a final and effective PSD permit before the July 15, 2008,effective date ofthe May 2008 final rule. The second exception was that states with SIP-approved

PSD programs could continue to implement the Seitz Memo’s PM10 Surrogate Policy for up to

three years (until May 2011) or until the individual revised state PSD programs for PM2.5are

approved by EPA, whichever came first. For additional information on the NSR PM2.5Rule, see 73

FR 28321. On February 11, 2010, EPA proposed to repeal the grandfathering provision for PM2.5

contained in the federal PSD program at 40 CFR 52.21(i)(1)(xi) and to end early the PM10

Surrogate Policy applicable in states that have a SIP-approved PSD program (75 FR 6827). In

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establish significant emission rates for direct PM2.5and precursor pollutants (including SO2and

NOx); (3) establish PM2.5emission offsets; and (4) require states to account for gases that condenseto form particles (condensables) in PM2.5emission limits.Additionally, the 2008 final rule authorized states to adopt provisions in their nonattainment NSR

rules that would allow major stationary sources and major modifications locating in areas

designated nonattainment for PM2.5to offset emissions increases of direct PM2.5emissions orPM2.5precursors with reductions of either direct PM2.5emissions or PM2.5precursors in

accordance with offset ratios contained in the approved SIP for the applicable nonattainment area.

The inclusion, in whole or in part, ofthe interpollutant offset provisions for PM2.5is discretionary

on the part of the states. In the preamble to the 2008 final rule, EPA included preferred or

presumptive offset ratios, applicable to specific PM2.5precursors that states may adopt in

conjunction with the new interpollutant offset provisions for PM2.5and for which the state could

rely on the EPA’s technical work to demonstrate the adequacy of the ratios for use in any PM2.5

non attainment area. Alternatively, the preamble indicated that states may adopt their own ratios,

subject to the EPA’s approval, that would have to be substantiated by modeling or other technicaldemonstrations ofthe net air quality benefit for ambient PM2.5concentrations.

The preferred ratios were subsequently the subject of a petition for reconsideration, which the

Administrator granted. EPA continues to support the basic policy that sources may offset

increases in emissions of direct PM2.5or of any PM2.5precursor in a PM2.5nonattainment area

with actual emissions reductions in direct PM2.5or PM2.5precursors in accordance with offset

ratios as approved in the SIP for the applicable nonattainment area. However, we no longer

consider the preferred ratios set forth in the preamble to the 2008 final rule for PM2.5NSR

implementation to be presumptively approvable. Instead, any ratio involving PM2.5precursors

adopted by the state for use in the interpollutant offset program for PM2.5nonattainnient areas

must be accompanied by a technical demonstration that shows the net air quality benefits ofsuchratio for the PM2.5nonattainnient area in which it will be applied.

2. PSD PM2.5RuleOn October 20, 2010 (75 FR 64865), EPA promulgated the final “Prevention of SignificantDeterioration (PSD) for Particulate Matter less than 2.5 Micrometers (PM2.s) — Increments,

Significant Impact Levels (SILs) and Significant Monitoring Concentration (SMC)” (PSD PM2.5

Rule). That rulemaking finalized certain program provisions under the regulations to prevent

significant deterioration of air quality due to emissions ofPM2.5(i.e., under the PM2.5PSD

regulations). This final rule supplemented the final implementation rule for PM2.5,known as the

Clean Air Fine Particle Implementation Rule (CAFPIR) that we promulgated on April 25, 2007 (72

FR 20586), and the PM2.5NSR Implementation Rule that we promulgated on May 16, 2008 (73

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An increment is the maximum allowable level of ambient pollutant concentration increase that is

allowed to occur above the applicable baseline concentration in a particular area. As such, an

increment defines “significant deterioration.” The October 2010 rulemaking established increments

for PM2.5pursuant to the legal authority contained in section 166(a) ofthe CAA for pollutants for

which NAAQS are promulgated after 1977. As discussed in that final rulemaking action, theincrements for PM2.5became applicable on October 20, 2011 in order to comply with section 166(b)

ofthe Act. This final rule did not revoke the annual increments for PM10 as proposed under Option

1 in the 2007 notice of proposed rulemaking. Thus, we retained the 24-hour and annual PM10

increments in addition to adding PM25increments.b. Significant Impact Levels (SILs)

The October 2010 rulemaking also established SILs for PM2.5for evaluating the impact a proposed

new source or modification may have on the NAAQS and PSD increments for PM25.It is EPA’s

longstanding policy to allow the use ofthe SILs as de minimis thresholds under the NSR programsat 40 CFR 5 1.165(b) and part 51, Appendix S, to determine whether the predicted ambient impact

resulting from the emissions increase at a proposed major new stationary source or modification is

considered to cause or contribute to a violation ofthe NAAQS. We have also allowed the SILs

under the PSD program to determine: (1) When a proposed source’s ambient impacts warrant a

comprehensive (cumulative) source impact analysis; (2) the size of the impact area within which theair quality analysis is completed, and (3) whether the emissions increase from a proposed new

major stationary source or major modification is considered to cause or contribute to a violation of

any NAAQS. The SILs for PM2.5were developed by scaling the existing PM10 SILs using a PM25-

to-PM 10NAAQS ratio.

c. Significant Monitoring Concentration (SMC)

Finally, the October 2010 rulemaking established the SMC for PM2.5as 4 jig/m 3PM2.5(24-hour

average). EPA and its delegated reviewing authorities use the PM2.5SMC to determine when it may

be appropriate to exempt a proposed new major stationary source or major modification from the

ambient monitoring data requirements under the PSD rules. Similarly, states with EPA-approved

PSD programs that adopt the SMC for PM2.5may use the SMC, once it is part of an approved SIP,to determine when it may be appropriate to exempt a particular major stationary source or major

modification from the monitoring requirements under their State PSD programs (See 40 CFR

51.1 66(i)(5)).

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that litigation, the EPA has requested that the Court remand and vacate the regulatory text in the

EPA’s PSD regulations at paragraph (k)(2) so that the EPA can make necessary rulemaking

revisions to that text.

In light of EPA’s request for remand and vacatur and our acknowledgement ofthe need to revise

the regulatory text presently contained at paragraph (k)(2) ofsections 5 1.166 and 52.21, we do not

believe that it is appropriate at this time to approve that portion ofthe State’s SIP revision that

contains the affected regulatory text in the State’s PSD regulations, specifically new Section 3.9 of7 DE Admin. Code 1125. Instead, we are taking no action at this time with regard to that specific

provision contained in the SIP revision.

B. InfrastructureWhenever a new or revised NAAQS is promulgated, section 110(a) ofthe CAA imposesobligations upon states to submit SIP revisions that provide for the implementation, maintenance,

and enforcement ofthe new or revised NAAQS within three years following the promulgation ofsuch NAAQS - the so called infrastructure SIP revisions. Although states typically have met many

ofthe basic program elements required in section 11 0(a)(2) through earlier SIP submissions in

connection with previous PM standards, states (including all the EPA Region 3 states) were still

required to submit SIP revisions that address section 11 0(a)(2) for the 1997 and 2006 PM2.5

NAAQS.

In addition to the March 2012 SIP submission, Delaware has previously submitted proposed SIP

revisions, dated December 13, 2007, September 19, 2008, September 16, 20092, and April 1, 2010,

addressing requirements set forth in CAA section 11 0(a)(2) for the ozone NAAQS, including those

1 10(a)(2) requirements related to Delaware’s PSD and NSR permitting program. Because these

SIP submissions addressed Delaware’s compliance with CAA section 1 10(a)(2), these SIPsubmissions are referred to as Infrastructure SIP submissions. These submissions collectively

addressed numerous obligations pursuant to 11 0(a)(2), including portions of 11 0(a)(2)(C), (D)(i)(II)and (J) relating to Delaware’s PSD permit program for the ozone NAAQS.On August 4, 2011, EPA took final action on all portions ofthe December 2007, September 2008and September 2009 submittals except for the portions that addressed the obligations set forth in

1 10(a)(2)(C), (D)(i)(II) and (J) relating to Delaware’s PSD Permit Program for the 1997 ozone

NAAQS. See 76 FR 47068. On September 20, 2011, EPA took final action on the portions ofthe

submittal dated April 1, 2010 pertaining to the CAA section of 11 0(a)(2)(C) and (J) relating to

Delaware’s PSD Permit Program for the 1997 ozone NAAQS. See 76 FR 58120. By today’s

action, EPA is addressing the portion of Delaware’s December 2007, September 2008, September

2 Received September 21, 2009

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PM2.5NAAQS. Each ofthese submissions addressed numerous obligations pursuant to 1 10(a)(2),including portions of 11 0(a)(2)(C), (D)(i)(II) and (J) relating to Delaware’s PSD permit program for

the 1997 PM2.5 NAAQS. On August 4, 2011, EPA took final action on all portions ofthese

submittals except for the portions that addressed the obligations set forth in 11 0(a)(2)(D)(i)(II)

relating to Delaware’s PSD Permit Program. See 76 FR 47068. By today’s action, EPA is

addressing the portions of Delaware’s December 2007, March 2008, and September 2009

submissions which pertain to the obligations set forth at CAA sections 11 0(a)(2)(D)(i)(II) relating

to Delaware’s PSD permit program for the 1997 PM2.5NAAQS.By letter on September 16, 2009, Delaware also addressed several requirements of CAA section

1 10(a)(2), including 1 10(a)(2)(D)(i)(II), for the 2006 PM2.5 NAAQS. On August 4, 2011, EPA

took final action on all portions ofthis submittal except for the portion that addressed the

obligations set forth in 11 0(a)(2)(D)(i)(II) relating to Delaware’s PSD Permit Program for the 2006

PM2.5NAAQS. By today’s action, EPA is addressing the portions of Delaware’s September 2009

submittal which address the obligations set forth at CAA section 11 0(a)(2)(D)(i)(II) relating to the

Delaware PSD permit program for the 2006 PM2.5NAAQS. Based on the September 2009

submission, EPA is making a determination that Delaware has met its obligations relating to the

PSD permit program pursuant to CAA section 11 0(a)(2)(D)(i)(II) for the 2006 PM2.5 NAAQS.

Finally, on October 17, 2011, Delaware submitted an Infrastructure SIP to address how its SIP

meets CAA section 11 0(a)(2) required for the 2008 lead NAAQS. Unlike PM25,there have been

no new PSD program requirements associated with the 2008 lead NAAQS. This submission

addressed numerous obligations pursuant to 11 0(a)(2), including portions of 11 0(a)(2)(C), (D)(i)(II)and (J) relating to Delaware’s PSD permit program for the 2008 lead NAAQS. Based on thissubmittal as well as all ofthe above described submissions, EPA is making the determination that

Delaware has met its obligations related to the PSD permit program pursuant to sections

11 0(a)(2)(C), (D)(i)(II) and (J) for the 2008 lead NAAQS.

Section 110(a)(2)(C) ofthe CAA requires each state’s implementation plan to “include a program

to provide for the enforcement ofthe measures described in [CAA Section 110(a)(2)(A)], and

regulation ofthe modification and construction of any stationary source within the areas covered bythe plan as necessary to ensure that national ambient air quality standards are achieved, including a•

permit program as required in parts C [PSDJ, and D [nonattainment NSR].” Similarly, CAA

Section 1 10(a)(2)(J) requires that, for each NAAQS, the State’s SIP “meet the applicable

requirements of. . . . part C of [Subchapter I] (relating to prevention ofsignificant deterioration of

air quality. . . ).“ With the addition ofthe PM2.5requirements described above, Delaware’s

nonattainment NSR and PSD programs contain all ofthe emission limitations and control measures

and other program elements required by 40 CFR 51.165 and 40 CFR 51.166 related to the lead

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pollution in violation of: (1) Any national ambient air quality standard in any air quality control

region (emphasis added).” The requirements set forth at 40 CFR 51.1 66(k)( 1) are consistent with,

and sufficient to meet, the requirements set forth at CAA Section 1 10(D)(i)(II).

In Delaware, the equivalent requirement is codified at 7 DE Admin. Code 1125. This requirementis incorporated into the Delaware SIP and is applicable to the 1997 ozone and PM2.5NAAQS and

the 2006 PM2.5NAAQS. Therefore, the previously approved SIP revisions, together with the

incorporation ofthe PM2.5requirements described above and the relevant portions of Delaware’s

December 2007, March 2008, September 2008, September 2009, and April 1, 2010 Infrastructure

SIP submittals, support the finding that Delaware has met its statutory obligations under CAASection 11 0(a)(2)(D)(i)(II) for the 1997 ozone and PM2.5NAAQS and for the 2006 PM2.5NAAQS.Similarly, because Delaware’s October 2011 SIP revision includes a provision that is consistent

with 40 CFR 51.166(k) and that is sufficient to meet the requirements set forth at CAA Section

11 0(a)(2)(D)(i)(II) for the 2008 lead NAAQS, Delaware has demonstrated that it has met the

portions of CAA Section 11 0(a)(2)(D)(i)(II) which pertain to its PSD permit program for the 2008

lead NAAQS.IV. Recommended Agency ActionI find that the proposed revisions are consistent with Federal regulations, and incorporate required

program elements into Delaware’s PSD and nonattainment NSR programs. Additionally, I find that

the March 14, 2012 submittal, in conjunction with the previously submitted infrastructure SIP

revisions support a finding that Delaware has met its obligations with respect to CAA section

11 0(a)(2) as discussed above. Therefore I recommend approval ofthe proposed revisions to the

Delaware SIP.

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