P.1 

OAR Box 1875 

Prepped by Ollie Stewart 

Document Number: 

78) ll-F-25 

Docket Number: 

A-90-19 

Printed 12/1/200811:12:49 AM Sheet 78 of 86 
P.2 

OCT-21 - 1C;D3 OAQPS/DC FAX NO. 202 

A-90-19 

ll-F-25 

October 20, 1992 

David Rivkin: 

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

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

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

changes OAQPS developed to make it technically accurate. Please 

let me know if you have any problem with these revisions. 

Alan Eckert 

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P.3 

OCT-21-92 WED 10:53 OAQPS/DC FAX NO. 2022600451 P. 03 

EPA's proposed 

covered portions of 

a broader averaging, 

rule allows an averaging approach for HON -

a plant. £££ pp. . EPA is also^p»«p©ft&ag 

proposal, as set forth below. Significantly, 

this latter averaging echame is not being proposed as an 

alternative to the averaging approach, described above. Rathor, 

the two approaches are entirely complimentary. However, because 

the legal issues posed by the broader*averaging scheme differ 

appreciably from those implicated by th« more narrow averaging 

proposal, EPA believes that a separate discussion of the former 

is warranted. 

The broad averaging propooal relies upon tk» legal theory£j^ 

dovclu'p^U"D,y Ututr which would permit compliance with the HON KACT 

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

developed by EPA) by averaging emlesions from points located 

anywhere within an entire contiguous facility, which contains 

HON-covered processing units. ErA'believes that this approach jc • 

legally permi-qolblc under saction—112-of the clean Air ftct» 

TTTTtrniflmanrc nf T>10 m M mmlfl HITH rif%n11 -in ill 'o'rahlq poliry 

oensequencesv 

Having ^udieru-lly- analysed Sootlon 1 » and its lagialatlve1 

hiotory^ -EPA, concluded that there ie a difference- between the 

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

(d), and the term "source,*1 used in Section 112 (i). T O begin. 

with, ErA believea that tho uco-of different wordc by eongraog in 

these two oubawotluiB' Wdb. uut accidental and-roflooted a wellthought-out Congressional intent.—noadc cite Specifically, for 

purposes of establishing emissions standards under subsection 112 

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

pieces of equipment, etc., located within major stationary 

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

the purposes of subsections 112 (d) (3) (A) and (B), %.*._. for the 

purposes of determining what are the average emission limitations 

achieved by the best performing twelve percent of existing ^ 

sources or average emission limitations achieved by the five beet 

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." 

*icuJd ollo-» £PA ft, acrtiudw* 

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

language contains the term "source" — a fact that^EFft hellouur.j 

oloarly reflcotod tho oongreeeional—Intent that) for purposes of 

subsection 112 (i), -the-fcggW3=geugcg .was to be used An its. 

traditional moaning^which encompasses an ontiro plant. It woul<y. 

be lmluful Lu 11.all oevegcrlrutittulLrLloHij ulmu CPA dof4n«d thl frtrin 

wurco to include an onfclra facility. This reading is supported 

by the fact that the definitions of statutory terns, set forth in 

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

terms as "major source", "stationary source", etc. Under the- /Vv's 

EPA' 3-J Lu Lu toj>y construction, the statutory language "any 

emissions standard, limitation, or regulation promulgated under 

f 
P.4 

OCT-21-92 WED 10:54 OAQPS/DC FAX NO. 2022600451 P.04 

this (112] section and applicable to a source" describes al l of 

the existin g MACT standards, established under subsection 112-

(d), and applicable to a source, vhich contains within i t 

"sources in a category or subcategory" (j_.e._. production lines; 

piece s of equipment, e_£c..) covered by such MACT standards. 

-EPA n^oo n^too «>*»L, tn 1L» "KAi-ly reductions" rule , i t 

adopted—a planl-wifltf definltion'-uf auatitf^—sej S<>" FR 37> -3*2 -

fJunc 13, 1001) an eail y indication that the agcney believed 

that an entir e rronlri jii""1'* fnHIH'y ^*"i«* »»» r»r.nm'^nraVi t-n h» W_.. 

•flougee fur purposes of, compliance wi-th the requirements ofjucLicm 113 > EPA also, is mindful of the fact that i t haa 

traditionall y enjoyed wide latitude in coming up with divers e 

definition s of the term "source,- depending on what regulatory 

objective s were implicated. This cangreoo io vei l aware of thkfi. 

fact^. and EPA's considerable discretion In this area has been 

CWZT airirmad by the courts."^ hoed* eifcocu. In Uie present liietancoj 

- • EPA believe s that tho .statutory analysis described ahmrp, ran he 

mintiftiBea undar tho firflL piunu of1 UIB Chevron analysis^ 

Alternatively> this lega l theory can be aupported by tho ful l 

weight of Chevron dlccrotion, available to-BPA under Sect ion 113-. 

cVW ac&cJZ OirrsnisJ- ov> ushiM»r adcpk*r\ <£ i ^ fcutoookr- QAVUgX**] yafA4<xccK 

^ • tJnder*-«e~ broada-averaging approach, EPA would make no 

TM*"—changes in the way. it has identified categories and subcategories 

of sources in the HON and devised appropriate emission standards 

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

standards for other emission categories or subcategories. For 

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

wish to .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 standard then £n effect under Section 112 at one or more 

other emission points within the entire stationary source. In 

addition, emissions averaging would be allowed across all the 

emission points within the entire plant, including the SOCMI 

source category aa well as points not yet covered by any MACT 

standard. 

As 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 

points 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 a compliance routine for any new type of an emission point. 
P.5 

OCT-21-92 WED 10:55 OAQPS/DC FAX NO. 2022600451 P,05 

all similar emissions points located within any sources can 

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

would verify the baseline for unregulated emission points, and 

how it would structure the averaging compliance process to assure 

the standard as a whole remains enforceable. One possibility to 

consider would be to use the average emissions from such emission 

. points over some representative time period as their baselines. &**n*J-}r +/& 

<ipexJ^e<Jd*f yzeftatid »o U^aJ OuuJtinotuXt fet^, (ww potU*^ u*f>U<:*farv <r, VncWirw rvuM una WIXAM ja^ct* ^ fa^ 

son*. av<^f X.a explained ahaqo., while equipment, leaks are included into 

SOcki sources, they carjnoj at this time be irtoluded in emissions 

average- Under this alternative, EPA would expeditiously develop 

• ii . methods to assign allowable emission levels to particular leak 

los**4"'* points or groups of leak points>>and# even .without awaiting for 

any individuai^petitions, would sim^arly develop methods-vfor 

calculating emissions from types of emission points not regelated 

by HON. 

w 

Under the broad^^ averaging approach, emission reductions from 

emissions points not covered by the HON would be usable to 

generate credits, subject to the previously, discussed limitations 

and any limitations added in any other MACT standard applicable 

to the releyant emission points. Credits could be generated at 

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

to a MACT standard. When they become subject to a MACT standard, 

the future value of reductions at those emission points would be 

governed 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 haveCfc^ejp already* controlled for the purposes of 

participating in an averaging scheme, that relates to the 

compliance with an earlier standard, the floor for the later 

fnwf standard*©* be nor*" stringent. As future MACT standards are 

adopted, EPA would attempt to maximize averaging opportunities 

and therefore minimize'compliance delays and costs. 

EPA believes that the broad averaging scheme, described 

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

would enable sources to achieve the same environmental gains, as 

under the more narrow averaging proposal, but at significantly 

f reduced costs, second,'^ by inducing sources to.make oouteffeotive reductlono throughout entire facilities, EPA would bein a-toettor position to establish subsequent MACTa.—In faetT—&a~ 

•all oaces, when auch ItACTc are-established undog quboaotinnj T ? - ^ 

' fd^. the MACT "floor"^would.ba tighter than otherwise would have ,"£•, 

been the case if the emission points outside of the already %„, ^ 

covered MACT categories would have stayed uncontrolled. Last, ^j ^ 

but not least, EPA believes that the utilization of the broad <£. 

averaging schema may result in the discovery of emission points 'y 

within facilities that otherwise might have been overlooked by 

EPA and eta te"regulators..J This last point is supported by the S. 

\ (^positive experience with the broad averaging schemes in the State A 

1 )% ^M 

e^feU^Kj m* C T ^ndc^s -vJtL <K ^JLtu-^cL a^^Uu, & ^< X 

7

t\ 
P.6 

OCT-21-92 WED 10:56 OAQPS/DC FAX NO. 2022600451 P,06 

/ 

of California. 

Ray, set forth below is the appropriate language for the 

last substantive language insert. It is as follows: 

"(ii) Information reasonably similar to information 

regarding emissions averaging required by any standard proposed 

under Section 112. The Administrator may request any reasonably 

related supplemental information within 30 days after 

submission." 

ta:S*J~£). 
P.7 

OCT-21-92 WED 10:56 OAQPS/DC FAX NO. 2022600451 P. 07 

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 would 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-SOCMI emission points that might be included in broader 

averages. 
P.8 

OCT-21-92 WED 10 = 57 OAQPS/DC FAX NO. 2022600451 P. 08 

insert B 

Several factors must be considered in implementing this 

alternative approach. First, the averaging approach allows 

inclusion of points that will be regulated by subsequent MACT 

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

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

calculation even though some of those points will not be subject 

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

Second, it would require a determination on the 

permissibility of interpollutant trades. This concern is already 

being evaluated for VOC HAPs in the SOCMI source category. The 

alternative approach would 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 necessary to accommodate non-VOC HAP controls.