TEXAS CHEMICAL COUNCIL

1402 Nueces Street • Austin, Texas 78701-1586 • (512)646-6400 • Fax (512)646-6420

November 23, 2009

Mr. Stan ley M. Spruie ll

Air Permits Section (6PD-R)

U.S. Environmental Protection Agency

1445 Ross Avenue, Suite 1200

Dallas, Texas 75202-2733

RE: Docket ID No. EPA-R06-0AR-2005-TX-0032

Docket ID No. EPA-R06-0AR-2006-0133

Docket ID No. EPA-R06-0AR-2005-TX-0025

Dear Mr. Spruiell:

On beha lf ofthc Texas Chemical Council crCC), please find enclosed comments on the

following three proposa ls issued by the U.S. Environmental Protection Agency (EPA) in the

Federal Register on September 23,2009:

• Docket 1D No. EPA-R06-0AR-2005-TX-0032: Approval and Promulgation of

Implemcntation Plans; Texas; Revisions to the New Source Review (NSR) State

Implementation Plan (SIP); Flexible Permits.'

• Docke t ID No. EPA-R06-0 AR-2006-0133: Approval and Promulgation of

Implemcntation Plans; Texas; Revisions to the New Source Review (NSR) State

Implementation Plan (SIP); Prevention of Significant Deterioration (PSD),

Nonattainment NSR (NNSR) for the 1997 8-Hour Ozone Standard, NSR Reform, and a

Standard Permit.2

• Docket ID No. EPA-R06-0AR-2005-TX-0025 : Approval and Promulgation of

Implemen tation Plans; Texas; Revisions to the New Source Review (NSR) State

Implementation Plan (SIP); Modification of Existing Qualified Facilities Program and

General Definitions.

3

I 74 Fed. Reg. 48480-48495 (September 23,2009).

' 74 Fed. Reg. 48467-48478 (September 23, 2009).

, 74 Fed. Reg. 48450-48467 (September 23, 2009).
TCC is a statewide trade association representing over 70 chemical manufacturers with more

than 200 Texas facilities . Our industry has invested more than $50 billion in physical assets in

the state and pays over $1 billion annually in state and local taxes. TCC's members provide

approximately 70,000 direct jobs and over 400,000 indirect jobs to Texans across the state . TCC

member companies manufacture products that improve the quality of life for all Americans. The

products manufactured in Texas account for 60 percent ofthe U.S. chemical production, which

go into millions of consumer products. Chemicals are the state 's largest export with over $30

billion each year.

TCC has a keen interest in ensuring that the Texas air permitting programs are ultimately

approved by EPA as our member companies utilize or are subject to the permitting programs and

requirements that EPA is proposing to disapprove through its rulemakings. Thank you in

advance for consideration ofthese comments. Please do not hesitate to contact me at (512) 646-

6403 or wisdom@txchemcouncil.org if you need additional information.

Yours respectfully,

Christina T. Wisdom

Vice President & General Counse l
Comments of the Texas Chemical Couucil

Docket ID No. EPA-R06-0AR-2005-TX-0032

Docket ID No. EPA-R06-0AR-2006-0133

Docket ID No. EPA-R06-0AR-2005-TX-0025

Proposed on September 23, 2009

74 Fed. Reg. 48450 - 48495

I. I NTRODUCTION

In three proposals that were published in the Federal Register on September 23,2009, the U.S.

Environmental Protection Agency (EPA) proposed to disapprove numerous Texas Commission

on Environmental Quality (TCEQ) State Implementation Plan (SIP) revision submittals which

date back 15 years ago to 1994. The effect ofsuch widespread disapproval could be to nullify

existing Texas air permitting programs such as the state Flexible Permits and Qualified Facilities

Programs and certain state-issued Standard Permit s, in addition to threatening the viabilit y of the

state's ex isting Prevention of Significant Deterioration (PSD) program and New Source Review

(NSR) Reform initiatives. EPA stated that all three actions should be read together "because the

permit s issued under these State programs are the vehicles for regulating a significant universe of

thc air emissions from sources in Texas and thus directly impact the ability ofthe State to

achieve and maintain attainment ofthe National Ambient Air Quality Standards (NAAQS) and

to protect the health ofthe communities where these sources are 10cated.,,1

It would be irresponsible and short-sighted for the programs to be analyzed in a vacuum, apart

from a thorough and detailed analysis of thc dramatic improvements that have occurred in air

quality in Texas over the past 15 years, particularly in the Houston-Galveston-Brazoria (HGB)

nonattainment area, where the majority ofTCC members operate. With regard to the NAAQS

for ozone, it is important to first highlight the contributors to nitrogen oxide (NO,) emissions in

the area. In the HBG nonattainment area, 55% of NO, emissions come from on and off-road

mobile sources, 35% are from point sources, and 10% are from area sources.' Notwithstanding

the chemical industry's lesser role to mobile sources in the contribution ofNO, emissions in the

HGB nonattainment area, TCC member companies have worked with other industrial partners to

invest more than $3 billion since 200 1 to achieve an 80 percent reduction of NO, from point

sources. A critical factor in this accomplishment is TCEQ's commitment to reduce emissions

through a robust air permitt ing process. For example, the Flexible Permits Program allows for

voluntary and mandatory permitting requirements for previously grandfathcred facilities. This

program has resulted in over 260,000 tons of reductions in actual emissions from otherwise

I 74 Fed . Reg. at 48483.

2 Data recei ved from TCEQ's 2009 11GB NOx Emiss ions Inventor y.

I
unregulated grandfathered facilities either through the addition of controls or the shutdown of

these facilities.' Additionally, in the HGB nonatlainment area, the design values for both the 1-

hour and 8-hour ozone standards have been dropping steadily between 1999 and 2009 from 203

parts per billion (ppb) to 127 ppb, and from 118 ppb to 84 ppb, respectively." Similar

improvements have been obtained in all parts ofTexas. Decreases in air emissions ofthis

magnitude in the midst ofrapid popula tion growth are remarkable accomplishments in improved

air quality that must not be ignored,

Furthermore, the Houston area has the most extensive air monitoring network in the country. By

2008, almost all the monitors in Houston were in attainment with the 0.08 parts per million

(ppm) 8-hour ozone standard. With regard to emissions of volatile organic compounds (YOCs) ,

in 2008 no monitors in Harris County were above the long-term effects screening level for

benzene, and all monitors in the Houston area showed a decrease in average benzene

concentrations from 2005-2008.5 The TCEQ also maintains an Air Pollutant Watch List

(APWL), which is a list of areas in Texas where specific pollutants are measured at levels of

concern. The purpose of the APWL is to heighten public awareness in areas of concern for

interested parties, encourage efforts to reduce emissions, enable TCEQ to most effectively

manage its resources and assist in the review of air permits. Currently, there are 12 APWL areas

in II Texa s countie s. Over the past two years, six pollutants have been removed from the

APWL, and seven more pollutants in five APWL areas arc proposed to be removed later this

year. Again, improvement in air quality ofthis magnitude in a state with increasing population

and a sound economy is an impressive achievement to say the least.

II. THE FLEXIIIL E PERMITS PROGRAM

In the proposed rule, EPA proposes disapproval of the Texas Flexible Permits Program for

failure to meet the requirements for a substitute Major NSR SIP revision. In addition to the

program's alleged failures to protect Major NSR SIP requirements, EPA states that it cannot find

that the program, as a Minor NSR SIP program, will ensure protection ofthe NAAQS and

noninterference with the Texas SIP control strategies and reasonable further progress (RFP).

TCC supports full approval ofthe state's Flexible Permits Program. Contrary to EPA's

allegations, the Texas Flexible Permits Program is a robust, legally defensible program that is

intended to add operational flexibility through the use of emission caps, certain control

technol ogy and other operational practices to achieve emission reductions with the ultimate goal

J TCEQ Update of Air Quality in Texas, presented by Susana Hildebrand, P.E., TCEQ Chief Engineer, October 30,

2009.

, Id.

, Id.

2
of having a well-controlled facility after the final cap is implemented. To that end , a Flexible

Permit is an alternative to the traditional Minor NSR authori zation6

and is not a mechanism used

to determine federal NSR applicability, such as PSD or nonattainment. The Program does not

allow new stationary sources to construct without a Major NSR permit if a determination is made

that one is necessary.

As clearly stated in TCEQ's Flexible Permits Program rules, if a facility applying for a Flexible

Permit is located in a nonattainment area , the facility shall comply with all applicable

requirements concerning nonattainment review. ' Likewise, if a facilit y applying for a Flexible

Permit is located in an attainme nt area , the facility shall comply with all applicable PSD

requirements." Federal applicability determinations arc conducted according to federal rules and

requirements, including determining baseline emissions, the proj ect emissions increase, and the

net emissions increa se. Under the Program, Best Available Control Technology (BA CT) is used

to establish the applicable caps," and the review includes a NAAQS analysis ifPSD is

triggcred.! " Additionally, the review includes lowest achievable emission s rate (LAER) control

techn ology and the use of offsets if nonattainment review is triggered.II The Flexible Permits

Program tran sparently requires that an NSR applicability dete rmination be made, and the

Program is not structured to circumvent Major NSR SIP requirements.

EPA has also noted the following specific issues with the Texas Flexible Permits Program.

TCC' s response follows each of the noted concerns .

• EPA states that thc Program is inconsistent with thc intent that Flexible Permits will

only apply to minor sources, existing grandfathcrcd sources and to minor

modifications. In light of that analysis, EPA examined thc program as an equivalent to

a Major NSR Program and determined that it was an inadequate equivalent. EPA also

stated that there are no provisions in the Program that require a Major NSR

applicability determination prior to construction and/or modification. 12

First, the federal Clean Air Act and the corre sponding regulations are virtually silent on

specific direction to the states as to how each state's minor NSR program is to be con structed

6 30 TAC § 11 6.710(a).

7 30 TAC § 116.711(8).

'30 TAC § 116.711(9).

9 30 TAC § 11 6.716(a)(I ).

10 30 TAC § 116.161.

11 30 TAC §§ 116.150(0)(1)-(4), 116.1 51(0)(1)-(4).

1274 Fed. Reg. at 48482.

3
and implemented.13 That said, states are given significant flexibility in the implementation of

such programs. Notably, EPA recently recognized the importance ofthis necessary

flexibility in the federal Flexible Air Permitting Rule.

14 In Texas, for example, this

flexibility has served as the cornerstone for a success ful air permitting program that has

resulted in tremendous environmental benefit.

TCEQ rules allow for the usc of a Flexible Permit for minor source facilities at a major

source site. TCEQ rules state that "[a] person may obtain a flexible permit which allows for

physical and operational changes as provided by this subchapter as an alternative to obtaining

a new source review permit under §11 6.11 0... A person may obta in a flexible permit under

§116.711ofthis title for a facility, group of facilities, or account before any actual work is

begun...,,1 5 A review of §116.1 10 (under Subchapter B, New Source Review Permits) lists

the Flexible Permit as one of many permitting options required before work is begun on ((

facility, and notably, the Flexib le Permit is listed among the other minor source permitting

options, such as Permits by Rule and Standard Permits. As noted above, §11 6.711 requires

that facilities are subject to nonattainment and PSD review as applicable. It is clear that

TCEQ's rules do not intend for the Flexible Permits Program to serve as an equivalent to a

Major NSR Program. It is also evident that TCEQ rules require a Majo r NSR appli cability

determination prior to construction and/or modification.

• EPA states that the Texas definition of " modification" is not clearly at least as stringent

as th e definition of " modification" in EPA's Major NSR SIP rules. EPA believes that

the state ha s failed to submit a demonstration showing how its usc of "modification" is

at least as stringent as the federal definition of "modifieation.,,1 6

TCEQ rules prov ide two separate "modification" definitions. Briefly, a "major

modification" 17 is a project action that triggers federa l NSR review (PSD or Nonattainment).

In contrast, the TCEQ 's minor source program uses the definiti on of "modification of an

existing facility" 18 to determ ine if a proposed change triggers minor NSR review, and the

13 CAA § I I0(a)(2)(C); 40 CFR §§ 5 I.160 -51. I64.

" 74 Fed . Reg. 5 I4 I8-5 1440 (Oc tobe r 6, 2009).

15 30 TAC § I 16.710(a) (emphasis added).

16 74 Fed. Reg. aI48488-48489.

17 30 TAC § 116.12(18), defined as "a physical change 0 1' change in the method of operation of a major stationary

source that causes a significant project emissions increase of a federally regulated new source reviewpollutant, and

a significant net emissions increase of a federally regulatednew source review pollutant which triggers federal

review, such as PSD or nonattainment review."

18 30 TAC § 116.10( 1I), defi ned as "a physica l change 01' change in the method of operalion of a fac ility whic h

causes all increasein the amount ofany air contaminantemitted by the facility into theatmosphere or results in an

emissionof any aircontaminant not previously emitted."

4
scope ofthe change is not limited to pollutants that are federally regulated. TCEQ has

explicitly stated that the Flexible Permits Program rules and the definition of "modification

of an existing facility" do not act as a shield for federal NSR permitting." Again, the

Program requires a review offederal NSR applicability steps." For projects that trigger

federal review, all required demonstrations, such as BACT, de minimislNAAQS modeling,

increment modeling, and toxicological modeling are conducted. For projects that trigger

nonattainment review, LAER and offsets are required." It is therefore difficult to ascertain

how EPA can allege that the state's definition of "modification" is not at least as stringent as

the federal definition.

• EPA is concerned that thc definition of "account" may result in an emissions cap that

could apply to multiple major stationary sources, thus circumventing Major NSR

t ti , 22 prccons rue IOn review,

EPA notes that the Texas SIP defines the term "account" to "include an entire company site,

which could include more than one plant and certainly more than one stationary source ...

Accordingly, under a Flexible Permit, a single emissions limitation in the emission cap could

apply to major stationary sources, and if emissions remain below the emissions limitations in

the emission cap, Major NSR preconstruction review is not triggered.t'':'

Under TCEQ's rules, the term "account" means "all sources that are aggregated as a site.,,24

Under Texas law, the term "source" means "a point of origin of air contaminants, whether

privately or publicly owned or opcrated.?" When analyzed, it is clear that the term

"account" could not include more than one plant or more than one stationary source as EPA

has interpreted the Texas definitions. An account is clearly limited to the source or site.

Furthermore, the Program does not circumvent Major NSR preconstruction review. A

Flexible Permit is a Minor NSR permit authorization that is utilized in some cases to cover

minor source facilities at a major source site. Where facilities or pieces of equipment are

authorized under a PSD andlor Nonattainment permit, those federal requirements still apply.

19 Letter from Richard Hyde, Director, TCEQ Air Permits Division to Jeff Robinson, Chief, EPA Air Permits

Section, August 30, 2007.

20 30 TAC § 116.711(8) and (9).

21 Letter from R. Hyde to 1. Robinson , August 30, 2007 .

22 74 Fed. Reg. at 48489.

23 td.

"30 TAC § 101.1(1).

25 TEX. H EALTH & SAFETY CODE § 382.003(12).

5
No facilities located at the source are exempt from federal permitting requirements, including

Major NSR preconstruction review where applicable.

Flexibl e Permits usually co ntain two emissions caps - an initial emission s cap and a final

emissions cap. The initial emissions cap is the starting point prior to any physical or

operational changes and is based on the controls in place at the time the Flexible Permit is

first issued. The final emissions cap applie s after all control upgrade s have been pnt into

place and is based on the application of BACT to all facilities contributing to an emissions

cap.26 Additi onally, interim caps are sometimes utili zed, which provide emissions limits at

various stages between the implementation ofthe initial emissions cap and the final

emISSIOns cap.

Flexib le Permits also use individual emissions limitations for each pollutant not covered by

an emissio ns cap for facilities covered by the Flexible Penllit.27 Individual emissions

limitations may also be used in conjunction with the emissions cap when it is necessary to

ensure protection ofthe NAAQS. Specific emission limits that an individual facilit y cannot

exceed may also be established to ensure that federal permitting requirements are not

circumvented.i" Finally, all Flexible Permits require permit hold ers to comply with state and

federal rules, regulations and commission orders, and conditions as precedent to the granting

ofthe permit.i"

• EPA states that the Flexible Permits Program fails to adequately show how emissions

increases arc calculated for the entire major stationary source if the source is subject to

two different permitting regulations - the state Flexible Permits Program regulations

and federal Major NSR SIP ,·egulations.

JO

In the proposal, EPA remarks that not all emission points, units faciliti es, major stationary

sources, minor mod ifications to an existing major stationary source, and so forth, at a site are

required to be included in the source's Flexible Permit. Notably, EPA acknowledges that this

is not perse inconsi stent with the Clean Air Act and EPA's Major NSR SIP requirements."

However, EPA expressed its concern that the Program fails to explain how physical and

operational changes that occur under a Flexible Permit emissions cap arc evaluated for Major

NSR applicability.

26 Letter from R. Hyde toJ. Robinson, August 30, 2007; see also 30 TAC § 116.716(a).

27 30 TAC §§ 11 6.715(b) and 11 6.716(b).

"30 TAC § 11 6.715(c)(I ) and (d).

29 30 TAC § 11 6.7 15(c)(10).

3D 74 Fed. Reg. at 48489.

31 Id.

6
Again, the permitting authorization method used at a source does not exempt any ofthe

facilities located at that source from federal permitting requirements. If a source has a

flexibl e permit that does not contain all thc facilities located at that source and a project

within the flexible permit triggers netting, all facilities (under the cap and outside the cap) at

thc source are evaluated to determine whethe r a net significant emissions increase at the

source has occurred. If the resulting net emissions increase is significant, federal NSR is

triggered."

• EPA is concerned that thc Flexibl e Permits Program would authorize cxisting

allowable, rather than actual emissions, to bc used to determine applicability in

violation of the Clean Air' Act and thc Major NSR SIP requtrcmcntsr"

Flexible Permit emission caps arc based on allowable emissions. The final emission caps arc

based on the application ofBACT at the time the Flexible Permit is created. In man y

situations, the application of BACT to the facilities subject to the emission cap results in an

allowable that is lower than the pre-change actual emissions, If netting is required, and the

netting analysis reveals an emissions increase, then the project is considered a major

modification and the appropri ate federa l NSR program is triggered."

When TCEQ is evalu ating emissions increases on a project level, the Program requires the

use of actual baseline emissions to determine whether a project will result in an increase that

triggers NSR applicability.

• EP A is concerned with thc adequacy of the recordkccping, reporting, tracking and

monitoring requirements of th c Flexible Permits Program."

TCEQ' s Flexible Permits Program rules contain recordkeeping requirements and also specify

that add itional requirements may be specified in special conditions attached to the Flexible

Penn it.36 Generally, these special conditions may include compliance stack testing, periodic

stack testing, continuou s emissions monitoring (CEMS) where appropriate and other

parametric monitorin g requirements, along with recordke eping to ensure that the permit

holder can comply with the emission caps and BACT.37 Because there is a significant

" Letter from R. Hyde to J. Robinson, August 30, 2007.

" 74 r ed. Reg. at 48490.

" Letter from R. Hyde to J. Robinson, August 30, 2007.

" 74 r ed. Reg. 48490.

" 30 TAC §§ 11 6.7 15(c)(6) and (d).

37 Letter from R. Hyde to J. Robinson, August 30, 2007.

7
difference in the types ofsources that apply for a Flexible Permit, it is difficult for the TCEQ

to impl ement rulemaking to incorporate every type ofrecordkeeping, monitoring and

tracki ng requirements that may appl y. Attempting to incorporate these variable components

into one comprehensive rule could severely limit TCEQ's ability to adequately implement

the se requirements.

• EPA finds that the publie participation aspects of thc Flexible Permits Program arc

'Imar equatc.38

TCEQ Executive Director Mark Vickery has already indicated to EPA that he will present to

the commission in December 2009 a propo sed public participation rulemaking as permitted

under existing statutory authority to address EPA 's concerusr" That said, any future changes

in the public participation aspects of the Program should apply pro spectively and should have

no effect on existing permits.

• Under Minor NSR source review, EPA states that the Flexible Permits Program lacks

the specific procedures necessary to determine how the source 01' state will calculate the

emissions cap, determine the coverage of a Flexible Permit, and establish individual

emissions limitations fOI' each site. Furthermore, EPA is not clear on what the process

is and how the emissions cap is adjusted for the addition of new facilities. Finally, EPA

statcs that the Program needs more detailed monitoring, recordkeeping and reporting

requirements to ensure that the emission caps and/or the individual emission limitations

are enforceable,

The Flexible Permit is an optional alternative permitting tool that may be used by a source to

authorize a facility, group of facilitie s or an entire account site (i.e., a source). There is

nothi ng in the Flexible Permits Program that shields a source from federal permitting

requ irements, The emission caps are based on the application ofBACT and reviews of the

model ing/health effects data. The monitoring, testing and recordkeeping tools are used to

help ensure that a minor source does not become a major source. For control technology

protection, the Flexible Permit rules state that the existing level of control may not be

reduced for any facilit y, and the emissions from all facilities contained in a Flexible Permi t

are included in either an emission cap or an individual emission limitation .

4o

" 74 FecI. Reg. at 48491.

J9 Lett er from Mark Vickery, TCEQ Executi ve Direct or to Gina McCa rthy, Assistant Adm inistrator, EPA Office of

Air and Rad iation , October 23, 2009, p. 3.

. mLett er from R. llyde to 1. Robinson , Au gust 30, 2007.

8
III. NSR REFORM

In thc proposed rules, EPA is proposing disapproval of submittals from TCEQ to revise the

Texas Majo r and Minor NSR SIP. Specifically, EPA has expressed concerns with Texas rules as

thcy relate to PSD Review, Nonattainment Review, plantwide applicability limitations (PALs)

and state-issued Standard Permits for Pollution Control Projects (PCPs).

TCC supports full approval ofthe state's NSR reform SIP submittals. EPA's specific concerns

and TCC's responses are below:

• With regard to PSD review, EPA disapproves of the state definition ofBAeT. EPA

also disapproves of the state's rules because they do not strictly comply with Clean Air

Act requirements that a facility may not be constructed unless it will comply with

BACT Iimits. 41

EPA states that "the State PSD SIP must both require BACT and apply the federal definition

ofBACT (or one that is more stringent) to be approved.,,42 In a recent Ictter to EPA, Mr.

Vickery committed to EPA that TCEQ will addre ss the definition of BACT through an

upcoming rulemaking.'? Although TCC believe s that the state 's application of BACT is

consistent with federal requirements as explained in detail below, we support this TCEQ

initiative to update the definition of BACT. That said, any future changes in the BACT

definiti on should apply prospectively and should have no effect on existing permits.

EPA's proposal to disapprove this rule is based in part on false distinctions between what it

refers to as "PSD BACT" and "Minor NSR BACT." Assuming such distinctions, EPA

concl udes that the Texas rules fail to clearly apply the "PSD definition of BACT" to all

actions subject to PSD, and converse ly fails to delimit the minor NSR definition to activities

triggering only minor NSR. But there are no distinctions, legal or practical, in Texas BACT

reviews.

Texas law does not create two different types of permits, one called a minor NSR permit and

one called a PSD pennit. There is only one kind of pre-construction permit described in the

Texas Clean Air Act, a "preconstruction permit" under Texas Health & Safety Code §

382.05 18. The issuance of all such permits is conditioned on use of "best ava ilable control

technology":

" 74 Fed. Reg. at 48472.

" )d.

" Letter from M. Vickery to G. McCarthy, October 23, 2009 .

9
"( b) The commissio n shall grant within a reasonable time a permit or permit amendme nt

to construct or modify a facility if, from the information available to the commi ssion,

including information presented at any hearing held under Section 382.056(k), the

commission finds:

(I) the proposed facility for which a permit, permit amendment, or a special

permit is sought will use at least the best available contr ol technology,

considering the technic al practicability and economi c reasonableness ofreducing

or eliminating the emissions resulting from the facilit y; and

(2) no indication that the emissions from the facility will contravene the intent of

this chapter, including protection ofthe public's health and physical propcrty.T "

One can search the entire Texas Clean Air Act-which is the sole authority under which

TCEQ can issue any permits-and find no mention ofPSO at all; again, the governing law

establishes the need for BACT for all permits, major or minor. And the gove rning statute

does not define BACT beyond its own terms, leaving substantia l degrees offreedom for

TCEQ to compel the best available control technology. TCEQ' s implementing rules also do

not further define BACT at all, eithe r, other than to emphasize the need for giving

"consideration .. . to the technical practicability and the economic reasonableness of reducin g

or elimi nating emissions from the facility.,,45

Texas accomplishes the PSO reviews requ ired by Part C of Subtitle I ofthe federal Clean Air

Act by including various applicability provisions in its rules, but the only effect of

"triggering" PSO review is to require an increment analysis (the "significant deterioration"

review) for all precons truction permits for I'SO projects. Again, BACT reviews are

universal, and do not depend on triggering PSO. (This is one ofthe great strengths of

Texas's permitting program, not a weakness). The nature ofthe BACT review does n't

change depending on whether the application triggers I'SO : TCEQ determines BACT using

its 3-tiered process regardless ofthe size of project under review.

EPA is conditioning its approval on TCEQ adoption of precisely the same definiti on of

BACT that EPA has chosen. But EPA has no foundation for that condition as further

outlined in the five following points.

" TEX. HEAI:rJ1 &. SAFETY CODE § 382.05 I 8(b).

"30TAC§ 11 6.10(3).

10
I. EPA May not Condition Approval ofTcxas's Permitting Programs on Adherence

to Spccific Definitions

SIP approva l of a PSD program is conditioned on accomplishing some very general statutory

objectives, as outlined in Section I65(a) of the federal Clean Air Act, including mech anisms

to ensure that each propo sed major source or modification is subject to the best available

control technology." Congress expressl y left the particulars to each state." Not even EPA's

rules describin g its expectations for approvable SIPs mandate adoption of the exact

defini tions: Variations are allowed "if the State specifically demonstrates that the submitted

definition is more stringent, or at least as stringent, in all respects" as those adopted by

EPA.

48 TCEQ of course has made that demonstration in its various SIP submittals over the

years, but mostly by decades of actual BACT determinations made pursuant to its definition.

EPA has not identified even one TCEQ BACT determination that yielded an inadequate

result because ofthe different definitions,

In fact, EPA has agreed that the TCEQ BACT review process is perfectly adequate. When

EPA granted Texas's PSD program complet e SIP approval in 1992, EPA accepted comp lete

exclusion ofthe federal control technology review provisions (codified at 40 CFR 52.210)):

" [B]ecause the [Texas Air Control Board] claimed that the Texas Clean Air Act and the

existing State regulations have provisions for application of BACT as stringent as the

Federa l requirements in reviewing the permit applicatio ns. The EPA review ofthe Texas

Clean Air Act and Regu lation VI (Sections 11 6.3(a)(3) through 116.3(a)(5)) have indeed

revealed that existi ng TACB permit requirements meet the provisions ofthe Federal PSD

regulations...,,49

The final rule approving the Texas PSD program affirmed that incorporation of the federal

control technology review provision "not necessary for approval of the Texas Program.,, 50

2. Definitio ns Do Not Deter mine Str ingency

The stringency of BACT determin ations are not determined by definitions, anyway. Even

the far wordier "federa l definition" is but a litany of factors that go into what is inevitably a

4. CAA § 165(a)(4): 42 U.S.C. § 7475(a)(4).

"CAA § 10 1(a)(3); 42 U.S.c. § 7401(a)(3).

.rs 40 CFR § 51.166(b).

49 54 f ed. Reg. 52823, 52824-25 (Dec. 22, (989).

'° 57 f ed. Reg. 28093-94 (June 24, 1992).

II
highly discretion-laden determination. A more "spec ific" defin ition, it may truly bc argued,

has the effect of being less stringent, because it limits the factors to bc considered. Absent a

definition of BACT beyond its own self-description, TCEQ is free to be even stricter than the

wordier federal definit ion. Again, the proposed disapproval fails to identi fy even one

determination that (a) depended on the definition applied, and (b) yielded a determination

less strict than would resulted from application ofthe "federal definition."

3. El'A Itself Does Not Follow the "Federal Definition"

EPA is in a difficult position to insist on word-for-word adoption when it does not itself

follow the federal definition. The definition EPA would impose on the states is not the one

that Congress prescribes. Thc following shows the changes needed to the EPA rule in order

to conform it to the statute:

(12) Best available control technology means an emissions limitation (including a visible

emission standard) based on the maximum degree ofreduction for each pollutant subject

to regulation under Act which would be emitted from any proposed major stationary

source or major modification which the Administrator, on a case-by-case basis, taking

into account energy, environmental, and economic impacts and other costs, determines is

achievab le for such source or modification through application of prod uction processes or

available methods, systems, and techn iques, including fuel cleaning or treatment or

innova tive fuel combustion techniques for control of such pollutant. In no event shall

application of best availab le control technology result in emissions of any pollutant which

would exceed the emissions allowed by any applicable standard under 40 CFR parts 60

and 61. If the Admi nistrator determines that technological or economic limitations on the

application of measurement methodology to a particular emissions unit wou ld make the

imposition of an emissions standard infeasi ble, a design, equipment, work practice,

operational standard, or combination thereof, may be prescribed instead to satisfy the

requirement for the application of best available control technology. Such standard shall,

to the degree possible, set forth the emissions reduction achievable by implementation of

such design, equipment, work practic e or operation, and shall provide for compliance by

means which achieve equivalent results.

Which federal definition would EPA like Texas to follow, the one in its rule or the one in its

governing statute? In what way does either " federal definition" necessarily require BACT

determinations any more strict than the Texas definition?

12
4. The Pro pos ed Disapproval Draws on Distinctions With out Differenc es

The defin ition is designed to identify relevant factors that go into what is ultimately a highly

discretion-laden determination. No matter the definition, the objective is the same. And no

matter the definitions, the resources consulted for each BACT determination are the same. In

Texa s, for example, all BACT determinations are made using its 3-tier process, which

elaborates in detai l how TCEQ makes the determinations. All reviews are based on

consideration of national determinations codified in the RACT/BACT/LAER Cleari nghouse,

EPA has agreed that this process yields results equivalent to its top-down approach, which

itself is not compelled by any defin ition. In both cases, responsible agencies make

discreti onary determinations based on aggressive efforts to ensure that ncw technologie s are

applied when thcy become available to new sources. Pharisaical parsing over defin itions

does not accomplish sound BACT determinations, which instead result from good faith

efforts by responsible regulators.

5. To the Vel')' Extent There Were Differences in Result Based on Definition, EPA

Would be Prohibited front Disapproving the Definition

EPA presumes withou t proof a difference in result arising out of TCEQ's BACT defi nition.

But, regardless, EPA cannot elect to approve the broader reach ofthc Texas program (e.g.,

application of BACT to all sources), but disapprove what it perceives to be a lesser definition

of BACT. States are the prima ry architects oftheir implementation plans, and EPA is not

free to change the state' s choices by selective approvals of interrelated elements."

st An unbroken line of cases, starting with Bethlehem Steel Corp. v. Gorsuch, 742 F.2d 1028 (7th Cir. 1984), holds

that the Clean Air Act, placing in the states the "primary responsibility" for protecting air quality, does not allow

EPA change the stringency of the plan as developed by the state; EPA may only approve or disapprove what the

state submits. In one case rejecting EPA's decision to approve a sulfur dioxide limit but not the averaging

conventions that were part ofthe rule, Judge Posner offered words that counsels against using the SIP machete with

which EPA proposes to hack apart Texas's air quality permitting program:

.. . nothing in the Act or in any cases we have found suggests that the EPA, when asked to

approve a revised plan, can, without pausing to decide whether a limitation in the plan that its

authors may have thought critical to its soundness has any merit at all, approve the plan minus

the limitation. The plan might be vastly better with than without the limitation, and the agency

cannot determine that without examining the limitation. Even if it is not vastly better, section

I to(a)(3)(A) requires the Administrator to approve a revised plan, limitations and all, if he

determines that it meets the requirements of the Clean Air Act; and he cannot make that

determination ifhe refuses to evaluate the limitations.

Indiana & Michigan Electric Co. \'. u.s. Environmental Protection Agel/cy , 733 F.2d 489, 49 1 (7th Cir.

13
Accordingly, thc extent to which EPA wou ld make any substantive changes in TCEQ's

permitting program by selectively disapproving its BACT definition is the very extent to

which it is forbidden to disapprove it. EPA must either accept the permit program or rejcc t it

in its entirety, and not cut it to pieces so that it looks like a ransom note.

• With regard to Nonattainment Review, El'A disapproves the state rules because they

require affirmative regulatory action by the EPA before the l-hour ozone major

nonattainment NSR requirements come into effect in the Texas I-hour ozonc

nonattainment areas.

52

EPA points to the D.C. Circuit Court decision in South Coast Air Quality Management

District v. EPA, where the court vacated federal rules that waived obligations under thc

revoked I-hour standard for NSR.53 EPA states that the effect of this portion ofthe court's

ruling is to restore major nonattainment NSR applicability thresholds and emission offsets

pursuant to classifications previously in effect for areas designated nonattainment for the 1-

hour ozone standard.I" In response to the court's ruling in South Coast, EPA has stated on

numerous occasions that it would go forward with rulemaking to implement thc I-h our ozone

requirements." Therefore, it is reasonabl e for TCEQ to understand that some EPA action is

necessary before it proceeds with appropriate rule changes to reinstate thc major

nonattainment NSR applicability thresholds and emission offset requirements, and this is not

a rational basis upon which to justify disapproving the state's rules.

• Also with regard to Nonattainment Review, EI'A disapproves of the Texas rule

submissions because they are not clear as to when and where an NSR applicability

d .. I' 56 ctcrnunation app res.

EI'A states that the Clean Air Act and NSR SIP rules require that an applicability

determination regarding whether Major NSR applies for a pollutant should be based upon the

attainment or nonattainment designation of thc area in which the source is located on the date

ofissuance of the Major NSR permit. TCEQ rules state that the nonattainment NSR

requirements apply on the permit issuance date for all facilities located in a nonattainmcnt

1984);see also Concerned Citizens ofBridesburg v, EPA, 836 F.2d 777, 78 \ (3d Cir. 1987) ("Because the slates

have primary responsibility for achieving air quality standards, the EPA has limited authority to reject a SIP.").

" 74 Fed. Reg. at 48473.

" 472 F.3d 882 (D.C. Cir. 2006), reh'g denied 489 F.3d 1245 (2007).

" 74 Fed. Reg. at 48473.

" 73 Fed. Reg. 22896, 22897 (April 28, 2008); 73 Fed. Reg. 38353, 38354 (July 7, 2008); 74 Fed. Reg. 2936, 294 \

(January \6, 2009); 74 Fed. Reg. 25 \53, 25154 (May 27, 2009).

"74 Fed. Reg. a148473.

14
area on the effectiv e date of the rules.

57 For those facilities located in areas that arc

designated nonattainment areas afte r the effective date ofthe rules, the nonattainmcnt NSR

requirements appl y the day the application is admi nistratively complete. The day the

application is determined to be administrativel y complete occurs prior to the issuance da te of

the permit. Therefore, the state's rules arc more stringent than the federal rules in this regard.

• EPA sta tes that it has many conce rns with TCEQ 's implementation of th e federal PAL

program. Firs t, EPA disapproves th e Texas SIP sub mit tals becau se th ey fail to limit

applica bility of a PAL only to an existing maj or stationary so urce.i"

Federa l rules state PALs are ava ilable only for existing major stationary sources because they

arc based on a source's act ual cmissions.i" TCEQ rules specify that any application for a

PAL permit or a PAL permit amendment must include calc ulations ofthe baseline actual

emission s with supporting documentation.i" A new stationary source wou ld not have this

documentation to submit. It is clear that the state's rules limit the applicability of a PAL to

an existing major stationary source.

• Second, EPA rejects thc state's PAL SIP submittals because there are no provisions

that relate to PAL re-openings, nor is there a mandate that failure to usc a monitoring

syste m that meets the federal requirements renders the PAL invalid.

61

A PAL issued under state rules is effective for 10 years.

62 The state's rules prov ide for the

reva lidation ofthe data used to establish the PAL poll utant at least once every five years."

There are also regulatory procedures in place for the amendments or alterations of a PAL. M

Finally, the state' s rules specify that a source's PAL monitoring system that utili zes a CEMS

to monitor PAL pollutant emissions must comply with applicable specifications found in40

Cr R Part 60, Appendix B.

65

"30 TAC § 11 6.150(0)(1).

" 74 Fed. Reg. at 48474.

,. 40 CFR §§ 51.165(0(1)(i) and 5 1.166(w)( I)(i).

60 30 TAC § 116.182(2).

61 74 Fed. Reg. 0148474. 62 30 TAC § 116.186(b)(7).

OJ 30 TA C § 116.186(b)(9). 61 30 TA C § 116.192.

6S 30 TA C § 11 6.186(e)(2)8)(I ).

15
• Third, EPA disapproves the Texas SIP submittals because the Texas rules provide for

an emissions cap that may not acconnt for all of thc emissions of a pollutant at the

major stationary source. According to EPA, inclnsion of all thc emissions nnits subject

to the enforceable PAL limit is essential. EPA statcs that the Texas submittal is unci em'

as to whether the PAL would apply to all of thc emission units at the entire major

stationary source and therefore appears to be less stringent than the federal rulcs.

66

TCEQ's PAL rules clearl y state that "the plant-wide applicability limit (PAL) will impose an

annual emissio n limitation in tons per year, that is enforceable for all facilities included in the

PAL.,,67 The PAL program is not comparable to the Texas Flexible Perm it Program, which

may apply to only certain facilities at a source,

• Fourth, EPA rejects thc public participation aspect of thc state's PAL progrllln.

68

TCEQ Executive Director Mark Vickery has already indicated to EPA that he will present to

the commission in December 2009 a proposed public participation rulemaking as permitted

under existing statutory authority to address EPA's concerns.f" That said, any future changes

in the publi c participation aspects of the Program should apply prospectively and should have

no effect on existing permits.

• EI'A also states that the term "baselin e actual emissions" does not require thc inclusion

of emissions resulting from startups, shutdowns and malfunctions. Further, definition

omits reference to the "average ratc.,,70

TCEQ does not regulate malfunction emissions. Rather, TCEQ is in the process of

authorizi ng maintenance, startup and shutdown (MSS) emissions for chemical plants. Unde r

TCEQ's rules, baseline actual emissions include emissions events or emissions historica lly

exempted under 30 TAC Chapter 101 to the extent they have been authori zed or are being

authorized. " These emissions include MSS emissions to the extent they are verifiable. MSS

emissions that are not verifiab le are treated as unauthorized and have a baseline emissions

rate of zero. Therefore, it appears that in this regard, the state's program is at least as

stringent as the federal program.

66 74 f ed. Reg. a148474 .

67 30 TAC § 11 6.186(a).

68 74 fed. Reg. at 48474.

69 Letter from Mark Vickery, TCEQ Executive Director to Gina McCarlhy, Assistant Administrator, EPA Office of

Air and Radiation, October 23, 2009, p. 3.

70 74 f ed. Reg. at 48475.

71 30 TAC § 116.12(3)(E).

16
The rate TCEQ uses to determine baseline actual emissions is not inconsistent with federal

rules simply because the term "average" is omitted. A complete reading of the Texas rules

reveals that an average emission rate is being used to determine the baseline actual emission

ratc.

72

• EPA statcs that the definition of the term "facility" is not clcar.73

Specifically, EPA notes that " [t]he submitted NNSR non-PAL rules do not explicitly limit

the definition of ' facility' to an 'emissions unit' as do the submitted PSD non-PAL rulcs.74

Under the state's statutes and rules, the term "facility" is defined as "a discrete or identifiable

structure, device, item, equipment, or enclosure that constitutes or contains a stationary

source, including appurtenances other than emission contro l equipment. A mine, quarry,

well test or road is not considered to be a facility.':" The definition of " facility" is so broad

that is requires every possible source of air contaminants to obtain some type of approva l

from TCEQ.

Under the state's definiti ons for the Title V Federal Operating Program, the state similarly

defines the term "emissions unit" as "a discrete or identifiable structure, device, item,

equipment, or enclosure that constitutes or contains a point of origin of air pollutants,

including appurtenanccs.?" Thus, the term " facility" is equivalent to the term "emissions

unit."

• Finally, EPA expressed concerns with the statc's Standard Permit for PCPs.

Specifically, EPA states that the PCP Standard Permit is not limited in its applicability

to a single category of industrial sources, but to a broad class of pollution control

teehniqucs at all source categories. According to EPA, an individual Standard Permit

must be limited to a single source category. ~P A also expresses its concern that thc

rules allow for the TCEQ Executive Director to exercise his discretion in making casespecific determinations in individual cases in lieu of generic enforceable requirements."

The Standard Permit is a minor NSR permitting too!' Similar to all other minor NSR

permitting programs, the state has wide discretion in its implementation ofthe program.

72 30 TAC § 11 6.12(3).

7J 74 Fed. Reg. at 48475.

" Id.

"30 TAC § 11 6.10(6); TEX. HEALTH& SAFEWCODE § 382.003(6).

76 30 TAC § 122.10(8).

77 74 Fed. Reg. at 48475.

17
There is no federal requirement that limits the usc of a Standard Permit to a single source

category. The only statute that governs EPA approval ofthe Standard Permit as a SIP

revision is the following general obligation under the federal Clean Air Act:

"Each [SIP] shall - ...

(C) include a program to provide for ... regulation of the modification and construction

of any stationary source within the areas covered by the plan as necessary to assure that

national ambient air quality standards are achieved, including a permit progra m as

. d i C I D ,,78 reqUIre 111 parts anc ...

EPA docs not and cannot question that TCEQ's minor NSR program, including the Standard

Permit for PCPs, provides for the regulation of any stationary source as necessary to assure

that the NAAQ S arc achieved. Furthermore, Parts C (PSD) and D (nonattairunent NSR) are

not impli cated because PCP Standard Permits are expressly made unavailable to the maj or

sources and major modifications that are subject to Parts C and D. Finally, there is also no

EPA rule that governs approvable Standard Permits. EPA's proposed disapprov al fails to

identify a plausible reason why the PCP Standard Permit fails to meet federal requirements.

Moreover, the discretion provided to the TCEQ Executive Director under the state's rules is

intended to provide the Executive Director the flexibility to refuse to authorize a Standard

Permit in those cases where he determines there are health effects concerns or the potential to

exceed the NAAQS.79 The discretion granted the Executive Director in this respect is an

important permitting tool that is necessary to effec tively protect the environment and is not a

sound basis for disapproval ofthis minor NSR permitting tool.

IV. QUALIFIEO FACILITIES

Finally, EPA has proposed to disapprove revisions to the SIP submitted by TCEQ that relate to

the Mod ification of Existing Qualified Facilities because the Program does not meet the NSR

SIP requirements nor does it meet the NSR SIP requirements for a substitute Major NSR SIP

revision. EPA also expresses general concern that it is not clear that the Qualified Facilities

Program is intended to apply only to minor sources,

TCC supports full approval ofthe Texas Qualified Facilities Program. Similar to the Flexible

Permits Program, the Qualified Facilities Program is not intended to shield a source from major

78 CAA § II O(a)(2)(C); 42 U.S.C. § 741O(a)(2)(C).

79 30 TAC § 116.617(3)(B).

18
NSR permitting requirements. Similar to the Flexible Permits Program, the Qualified Facilities

Program is a robust, federally enforceable program. Authorized by the Texas Clean Air Aet,80

the state's Qualified Facil ities Program promotes flexibility and allows sources to make certain

types of changes without triggering federal NSR permitting requirements. Iffederal NSR is

triggered, a facility cannot be a qualified facility. The definition of a qualified facility makes it

clear that a qualified facilit y is an existing facility." Under TCEQ's rules, a qualified facility

may make a physical change in or change the operation ofthat facility as long as the change does

not result in a net increase in allowable emissions of any air contaminant and does not result in

the emission of any air contaminant not previously emitted. Add itionally, the facility must be

using equipment at least as effect ive as the BACT required by the commission.V

EPA outlined the following concerns with the state's Qualified Facilities Program, and TCC's

responses follow:

• EPA states that the Qualified Facilities Program is not clearly limited to Minor NSR ,

the Program has no regulatory provisions clearly prohibiting the use of the Program to

circumvent the Major NSR SIP requirements, and the Program docs not require that

first an applicability determination must be made whether th e construction or

modification is subject to Ma jor NSn,83

TCC views this criticism as lacking merit. The Qualified Facilities Program is a minor NSR

program, TCEQ 's rules clearly require sources making changes under the Program to submi t

specific documentation, includi ng "sufficient information as necessary to show that the

project will comply with § 116.150 and §116.151 ofthis title (relating to Nonattainmen t

Review) and §§116.160-116.163 ofthis title (relating to Prevention of Significant

Deterioration Review) and with Subchapter C ofthis chapter (relating to Hazardous Air

Pollutants: Regulations Govern ing Constructed or Reconstructed Major Sources (FCAA

§11 2(g), 40 CFR Part 63)).,,84 Furthermore, TCEQ's rules also state that nothing in the rules

governing the Program sha ll limit the applicability of any federal requirement."

.0 TEX. HEALTH & SAFETY CODE § 382.0512 (2009).

81 30 TAC § 116.10( 16).

82 30 TAC § 1\6.IO(lI)(E).

" 74 Fed. Reg. at 48451-48452.

"30TAC § 116.117(a)(4).

"30 TAC § 116.117(d).

19
• In th e proposal, EPA requests comment on "whether its understanding of Texas law is

correct for the definition of 'facility." ,86

Accordi ng to EPA, " the State uses a 'dual definiti on ' for the term 'facility.' It is our

understanding of State law, that a 'facility' can be an 'emissions unit,' i.e., any part ofa

stationary source that emits or may have the potential to emit any air contaminant. A

'facility ' also can be a piece of equipm ent, which is smaller than an 'emissions unit.' A

'facility' can be a 'major stationary source' as defined by Federal law. A 'facility' under

State law can be more than one 'major stationary source.",87

Under the state's statutes and rules, the term "facility" is defined as "a discrete or identifiable

structure , device, item, equipment, or enclosure that constitutes or contains a statio nary

source, includ ing appurte nances othe r than emission control equipment. A mine, quarry,

well test or road is not considered to be a faeility.,,88 The definition of " facility" is so broad

that is requires every possible source of air contaminants to obtain some type of approva l

from TCEQ.

Under the state's definiti ons for the Title V Federal Operating Program, the state similarly

defines the term "emissions unit" as "a discrete or identifiable structure, device , item,

equipment, or enclosure that constitutes or contains a point of origin of air pollutants,

including appurtenances.t'f" Thus, the term " facility" is equivalent to the term "emissions

unit" for purposes ofthe Qualified Facilities Program.

• EPA criticizes the Qualified Facilities Program because it docs not include a

requirement to make Major NSR applicability determinations based on actual

emissions and on emissions increases and decreases (nett ing) that occur within a major

stationary source.90

TCEQ's rules state that in order to make a change at a qualified facility, the owner or

operator must demonstrate that the change does not result in a net increase in allowable

emissions of any air contaminant previously authorized under state minor source review."

Persons making changes to a qualified facility must comply with all requirements relatin g to

documentation and notification of changes to Qualified Facilities and rules relating to pre86 74 Fed. Reg. at 48455.

87 74 Fed. Reg. at 48455.

" 30 TAC § 1t6 .10(6); TEX. H EAJ:I'H & SAFETY COilE§ 382.003(6).

89 30 TAC § 122.10(8).

90 74 Fed. Reg. at 48459.

9130TAC § 116. 11 6(e)(t ).

20
change qualification.Y Furthermore, the rules state that the ex isting level of cont rol may not

bc lessened for a qualifi ed facility.93 The program is not circumventing any federal

requirements for major sta tionary sources.

• Under the Qnalified Facilities Program, EPA also proposes to disapprove the definition

ofIlACT.94

EPA states that "the State PSO SIP must both require BACT and apply the federal definition

ofBACT (or one that is more stringent) to be approved.t'" In a recent letter to EPA, Mr.

Vickery committed to EPA that TCEQ will address the defin ition of BACT through an

upcom ing rulemaking.f" Although TCC believes that the state's application of BACT is

consistent with federal requi rements as explained in detail below, we support this TCEQ

initiative to update the definiti on ofBACT. That said, any future changes in the BACT

definition should apply pros pectively and shou ld have no effect on ex isting permits.

EPA's proposal to disapprove this rule is based in part on false distinctions between what it

refers to as "PSO BACT" and "Minor NSR BACT." Assuming such distinctions, EPA

concludes that the Texas rules fail to clearly apply the "PSO definition ofBACT" to all

actions subject to PSO, and conversely fails to delimit the minor NSR definition to activitie s

triggering only minor NSR. But there are no distinctions, legal or practical, in Texas BACT

reviews,

Texas law does not create two different types of pennits, one called a minor NSR permit and

one called a PSO permit. There is only one kind of pre-construction permit descri bed in the

Texas Clea n Air Act, a "preconstruction permit" under Texas Health & Safety Code §

382.0518. The issuance of all such perm its is conditioned on use of "best available control

technology" :

" (b) The commission shall grant within a reasonable time a perm it or permit amendment

to construct or modify a facility if, from the information avail able to the commission,

including information presented at any hearing held under Section 382.056(k), the

commission finds:

(I) the proposed facility for which a perm it, permit amendment, or a spec ial

permit is sought will use at least the best ava ilable control technology,

91 30 TAC § 116.116(e)(4).

9J 30 TAC § 116.116(e)(8).

" 74 Fed. Reg. at 48463.

cs Jd.

96 Letter from M. Vickery to G. McCarthy, October 23,2009.

2 1
considering the technical practicability and economic reasonableness ofreducing

or elimin ating the emissions resulting from the facility; and

(2) no indication that the emissions from the facility will contravene the intent of

this chapter, including protection of the public's health and physical propcrty.'.97

One can search the entire Texas Clean Air Act- which is the sole authority under which

TCEQ can issue any permits-and find no mention of PSD at all; again, the governing law

establishes the need for BACT for all permits, major or minor. And the governing statute

does not define BACT beyond its own terms, leaving substantial degrees of freedom for

TCEQ to compel the best available control technology. TCEQ' s implementing rules also do

not further define BACT at all, either, other than to emphasize the need for giving

"consideration ... to the technical practicability and the economic reasonableness ofreducing

or eliminating emissions from the facility.',98

Texas accom plishes the PSD reviews required by Part C of Subtitle I of the federa l Clean Air

Act by including various applicability provisions in its rules, but the only effect of

"triggering" PSD review is to require an increment analysis (the "significant deteri oration"

review) for all precon struct ion permits for PSD projects. Again, BACT reviews are

universal, and do not depend on triggering PSD. (Th is is one of the great strengths of

Texas's permitting program, not a weakness). The nature ofthe BACT review doesn 't

change depending on whether the application triggers PSD: TCEQ determines BACT using

its 3-tiered process rega rdless of the size of project under review.

EPA is conditioning its approval on TCEQ adoption of precisely the same definition of

BACT that EPA has chosen. But EPA has no foundation for that condition as further

outlined in the five following points.

1. EPA May not Condition Approval of Texas's Permitting Programs on Adherence

to Specific Definitions

SIP approval of a PSD program is conditioned on accomplishing some very general statutory

objectives, as outlined in Section I65(a) of the federal Clean Air Act, including mechanisms

to ensure that each proposed major source or modification is subject to the best available

control technology.f" Congress expressly left the particulars to each state.100 Not even

EPA's rules describing its expectations for approvable SIPs mandate adoption ofthe exac t

97 TEX. HE,\I.TH& SAFETY CODE § 382.0518(b).

oa 30 TAC § 116.10(3).

99 CAA § 165(0)(4); 42 U.S.c. § 7475(0)(4).

100 CAA § 10 1(0)(3); 42 U.S.C. § 740 1(0)(3).

22
definitions: Variations are allowed " if the State specifically demonstrates that the submitted

definition is more stringent, or at least as stringent, in all respects" as those adopted by

EPA.10I TCEQ of course has made that demonstration in its various SIP submittals over the

years, but mostly by decades of actual BACT determinations made pursuant to its definition.

EPA has not identified even one TCEQ BACT determination that yielded an inadequate

resu lt because ofthe different defin itions.

In fact, EPA has agree d that the TCEQ BACT review process is perfeetly adequate. When

EPA granted Texas's PSD program complete SIP approval iu 1992, EPA accepted complete

exclusion ofthe federa l control technology review provisions (codified at 40 CFR 52.2 10)):

"[Bjecause the [Texas Air Control Board] claimed that the Texas Clean Air Act and the

existing State regulations have provisions for application of BACT as stringent as the

Federal requirements in reviewing the permit applications. The EPA review ofthe Tex as

Clean Air Act and Regulation VI (Sections I l 6.3(a)(3) through 116.3(a)(5)) have indeed

revea led that existing TACI3 permit requirements meet the provisions ofthe Federal PSD

I · ,, 102regu ations...

The final rule approving the Texas PSD program affirmed that incorporation ofthe federal

control technology review provision "not necessary for approval ofthe Texas Program.,,103

2. Definitions Do Not Determine Stri ngency

The stringency ofBACT de terminations are not determined by definitions, anyway. Even

the far wordier " federal definition" is but a litany of factors tha t go into what is inevitably a

highly discretion-laden determination. A more "specific" definition, it may truly be argued,

has the effect of being less stringent, because it limits the factors to be considered. Absent a

definition of BACT beyond its own self-description, TCEQ is free to be even stricter than the

wordier federal definition. Again, the proposed disapproval fails to identify even one

determination that (a) depeuded on the definition applie d, and (b) yielded a determ ination

less strict than would resulted from application of the " federal definition."

10 ' 40 e FR § 51.166(b).

102 54 Fed. Reg. 52823, 52824-25 (Dec . 22, 1989).

'0' 57 Fed. Reg. 28093-94 (June 24, 1992).

23
3. EPA Itself Docs Not Follow the "Federal Definition"

EPA is in a diffi cult position to insist on word-for-word adoption when it does not itself

follow the federal definition. The definition EPA would impose on the states is not the one

that Congress prescribes. The following shows the changes needed to the EPA rule in order

to conform it to the statute:

(12) Best available control technology means an emissions limitation (including a visible

emission standard) based on the maximum degree ofreduction for each pollutant subject

to regulation und er Act which would be emitted from any proposed major stationary

source or major modification which the Administrator, on a case-by-case basis, taking

into account energy, environmental, and economic impacts and other costs, determines is

achievable for such source or mod ification through application of production processes 0 1'

available methods, systems, and techn iques , including fuel cleaning 01' treatment 01'

innovative fuel combustion techniques for control ofsuch pollutant. In no event shall

application of best available control technology result in emissions of any pollutant which

would exceed the emissions allowed by any applicable standard under 40 CrR parts 60

and 61. Ifthe Administrator determines that technological 01' ceonomic limitations on the

appl ication of measurement methodology to a particular emissions unit would make the

imposition of an emissions standard infeasible. ia design, equipment, work practice,

operational standard, or combination thereof, may be prescribed instead to satisfy the

requirement for the application of best available control technology. Such standard shall,

to the degree possible, set forth the emissions reduction achievable by implementation of

such de sign, equipment, work practice or operation, and shall provide for compliance by

means which achieve equivalent results.

Which fede ral definition would EPA like Texas to follow, the one in its rule 01' the one in its

governing statute? In what way does either "federal definition" necessarily require BACT

determinations any more strict than the Texas definition?

4. The Proposed Disappr oval Draws on Distin cti on s Witho ut Differences

The definition is designed to identify relevant factors that go into what is ultimately a highly

discretion-laden determination. No matter the definition , the objective is the same. And no

matter the definitions, the resources consulted for each BACT determination are the same. In

Texas, for example, all BACT determinations are made using its 3-tier process, which

elaborates in detail how TCEQ makes the determinations. All reviews are based on

consideration of national dete rminations codified in the RACT/BACT/LAER Clearinghouse.

EPA has agreed that this proc ess yields results equivalent to its top-down approach, wh ich

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itself is not compelled by any definition. In both cases, responsible agencies make

discretionary determinations based on aggressive efforts to ensure that new technologies arc

applied when they become available to new sources. Pharisaical parsing over definitions

docs not accomplish sound BACT determinations, which instead result from good faith

efforts by respon sible regulators.

S. To the Very Extent There Were Differences in Result Based on Definition, EPA

Would bc Prohibited from Disapproving the Definition

EPA presumes without proof a difference in result arising out ofTCEQ 's BACT definition.

But, regardle ss, EPA cannot elect to approve the broader reach of the Texa s program (e.g.,

application ofBACT to all sources), but disapprove what it perceives to be a lesser definition

ofBACT. States are the primary architects oftheir implementation plans, and EPA is not

free to change the state 's choices by selective approvals of interrelated elements,104

Accordingly, the extent to which EPA would make any substantive changes in TCEQ 's

permitting program by selectively disapproving its BACT definition is the very extent to

which it is forbidden to disapprove it. EPA must either accept the permit program or reject it

in its entirety, and not cut it to pieces so that it looks like a ransom note .

101 An unbroken line of cases, starting with Bethlehem Steel Corp. v. Gorsuch, 742 F.2d 1028 (7th Cir. 1984), hold s

. that the Clean Air Act, pla cing in the states the "p rim ary responsibility" for protecting air quality, does not allow

EPA change the stringen cy ofthe plan as developed by the state; EPA may only approve or d isapprove what the

state submits. In one case rejecting EPA 's decision to approve a su lfur dioxide limit but not the avera ging

con ven tion s that wer e part of the rule, Judge Posner offered words that counsels against using the StP machete with

whi ch EPA proposes to hack apart Texas ' s air quality permitting program:

.. . nothin g in the Act or in any cases we have found suggests that the EPA, when asked to

approve a revised plan , can, without pausing to decide whether a limitation in the plan that its

authors may have thought critical to its soun dnes s ha s any merit at all, approve the pl an minu s

the limitation. Th e plan might be vastly better with than without the limitation, and the age ncy

cannot determine that without ex amining the limitation. Eve n if it is not vastly better, secti on

t 10(a)(3)(A) requires the Administrat or to approve a revised plan , limit ations and all , if he

determines that it meets the req uirements ofthe Clean Air Act; and he cannot make that

determination if he refu ses to evaluate the limitations.

Indiana & Michigan Electric Co. v. U. S. Environmental Protection Agency, 733 F.2d 489 , 49 1 (7th Cir.

1984);see also Concerned Citizens ofBridesburg v. EPA, 836 F.2d 777, 781 (3d Cir. 1987) ("Beeause the states

have primary responsibility for achieving air quality standards, the EPA has limited authority to rej ect a SIP.").

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• EPA proposes to approve the definitions of "grandfuthered facility," "maximum

allowable emissions ratc table," and "ncw facility."I05

TCC supports EPA's approval ofthese definitions in the Texas rules.

V. CONCLUSION

In conclusion, TCC supports full EPA approval ofthe Texas Flexible Permits Program, the

Texas Qualified Facilities Program and the SIP submittals related to NSR Reform. The SIP

revisions submitted to EPA by TCEQ over the last 15 years serve as a critical component to a

robust and legally-enforceable Texas air permitting program. Texas should not be punished for

EPA's failure to uphold its legal obligation to evaluate and approve the state's SIP revision

submittals within the statutory period outlined in the federal Clean Air Act. Throughout the

proposed disapprovals, EPA offers little or no legally justifiable reason to disapprove these

Texas air permitting programs. This is unfortunate given the enormity of EPA's proposed action

and the impact that it will have on this country's largest industrial state. The SIP revision

submittals related to these programs are at least as stringent as the applicable federal

requirements and should be fully approved.

10' 74 Fed. Reg. at 48463.

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