Staff Report

Proposed Amended Rule 1325 – Federal PM2.5 New Source Review Program

December 2014 

Deputy Executive Officer 

Planning, Rule Development, and Area Sources 

Elaine Chang, Dr.PH 

Assistant Deputy Executive Officer 

Planning, Rule Development, and Area Sources 

Philip M. Fine, Ph.D.

Planning and Rules Manager

Planning, Rule Development, and Area Sources 

Naveen Berry 

AUTHORS: Cynthia Carter AQ Specialist 

Mike Morris AQ Specialist 

REVIEWED BY: Robert Pease Program Supervisor 

William Wong Principal Deputy District Counsel 

CONTRIBUTOR: Daniel Cervantes Student Intern 

SOUTH COAST AIR QUALITY MANAGEMENT DISTRICT
SOUTH COAST AIR QUALITY MANAGEMENT DISTRICT

GOVERNING BOARD

CHAIRMAN: DR. WILLIAM A. BURKE

Speaker of the Assembly Appointee

VICE CHAIRMAN: DENNIS YATES

Mayor, Chino

Cities of San Bernardino

MEMBERS:

MICHAEL D. ANTONOVICH 

Supervisor, Fifth District

County of Los Angeles

BEN BENOIT

Mayor Pro Tem, Wildomar

Cities of Riverside County

JOHN J. BENOIT

Supervisor, Fourth District

County of Riverside

JOE BUSCAINO

Councilmember, Fifteenth District

City of Los Angeles 

MICHAEL A. CACCIOTTI

Councilmember, South Pasadena

Cities of Los Angeles County/Eastern Region

JOSIE GONZALES

Supervisor, Fifth District

County of San Bernardino

JOSEPH K. LYOU, Ph. D.

Governor’s Appointee

JUDITH MITCHELL

Mayor, Rolling Hills Estates

Cities of Los Angeles County/Western Region

SHAWN NELSON

Supervisor, Fourth District

County of Orange

DR. CLARK E. PARKER, SR.

Senate Rules Appointee

MIGUEL A. PULIDO

Mayor, Santa Ana

Cities of Orange County

EXECUTIVE OFFICER: BARRY R. WALLERSTEIN, D. ENV.
TABLE OF CONTENTS

SECTION PAGE

Introduction......................................................................................................................................1

Regulatory History...........................................................................................................................1

Proposed Modifications to Rule 1325..............................................................................................2

Emission Impact Assessment...........................................................................................................3

Socioeconomic Impact Assessment.................................................................................................4

Cost and Cost-Effectiveness................................................................................................................... 4

Incremental Cost-Effectiveness.............................................................................................................. 4

California Environmental Quality Act (CEQA) ............................................................................. 4

Comparative Analysis......................................................................................................................5

Public Process..................................................................................................................................5

EPA Comments and Responses.......................................................................................................5

Comment Letter Received Subsequent to October 24.....................................................................8
Staff Report

Proposed Amended Rule 1325 Page 1 December 2014

INTRODUCTION

In March 2014, U.S. Environmental Protection Agency (EPA) reviewed Rule 1325 – Federal 

PM2.5 New Source Review Program for State Implementation Plan approvability and notified 

SCAQMD that there were corrections needed in the rule even though the rule incorporates by 

reference federal regulations. The specific changes are described below under Regulatory 

History.

REGULATORY HISTORY

Rule 1325 was adopted June 3, 2011 to incorporate U.S. EPA’s requirements for PM2.5 into 

Regulation XIII – New Source Review. The rule mirrors federal requirements which include 

the definition of major source, significant emissions rate, offset ratios, and the applicability 

requirements of LAER, facility compliance, offsets, and control of PM2.5 precursors. The 

rule is applicable to major polluting facilities, which are defined by rule as sources with 

actual emissions, or the potential to emit, 100 tons per year or more of PM2.5 or its 

precursors. 

With respect to precursors, NOx and SOx are considered PM2.5 precursors in all cases. 

Under U.S. EPA’s earlier guidance, VOC and ammonia were presumed not to be precursors 

required to be subject to PM2.5 NSR rules. Under a 2013 court discussiondecision, U.S. 

EPA has been required to apply PM10-specific provisions of the CAA to PM2.5. Therefore, 

U.S. EPA asked staff to address § 189 (e) of the CAA, under which all precursors, including 

ammonia and VOC are subject to the PM10 requirements of the CAA unless U.S. EPA 

determines that such sources do not contribute significantly to PM10 levels (here, PM2.5 

levels) which exceed the standard.

On March 10, 2014, U.S. EPA specified three desired clarifications with respect to the Clean 

Air Act. The specific clarifications described by U.S. EPA are as follows:

1. While Rule 1325 (c)(1)(B) states that offsets are required, it does not contain any specific 

requirements that ensure that the offsets meet federal requirements, ie.:

a) That the offsets are in effect by the time of permit issuance and enforceable by the 

time the source commences operation; 

b) That the offsets are based on real reductions in actual emissions; and 

c) That emission reductions must be surplus to other Part D offset requirements

(CAA § 173(c)). 

2. The definition of Regulated NSR Pollutant needs to include any language to satisfy the 

provision in 40 CFR 51.165 (a)(1)(xxxvii)(D). To correct this, SCAQMD must add 
Staff Report

Proposed Amended Rule 1325 Page 2 December 2014

substantially equivalent language to either the definition of Regulated NSR Pollutant or 

the definition of PM2.5.

3. There are no provisions to implement the enforcement procedures of 40 CFR 51.165 

(a)(5)(i) to provide that issuance of an approval to construct shall not relieve any owner 

or operator of the responsibility to comply fully with applicable provisions of the plan 

and any other requirements under local, State or Federal law. 

(Staff is treating this comment as pertaining to permits. It should also be noted that all 

SCAQMD permits have contained this language for decades, but there is no specific rule 

provision so stating).

In response to their request, SCAQMD staff has proposed amendments to the rule to address 

the U.S. EPA comments.

PROPOSED MODIFICATIONS TO RULE 1325

Applicability (a)

A clarification is included to specify that the rule applies to PM2.5 and its precursors. 

Definitions (b)

(b)(3) - Lowest Achievable Emission Rate (LAER)

The definition for (LAER) will be deleted as 40 CFR 51.165 is already referenced in the 

rule.

(b)(7) – PM2.5

The definition for PM2.5 has been modified to indicate that gaseous emissions which 

condense to form PM2.5 at ambient temperatures are also to be included as PM2.5. The 

rule section which contains applicable testing requirements is also specified. This 

amendment addresses the second issue identified by U.S. EPA in their March 10, 2104 

correspondence.

However, staff’s analysis concluded that all of the applicable sources (Major Polluting 

Facilities actual or potential to emit 100 tons or greater per year of VOC or ammonia) 

make up a small fraction of the overall contribution of gaseous emissions contributing to 

ambient levels of PM2.5. As shown in Table 1 below, all of the Major Polluting 

Facilities’ VOC or ammonia emissions contribute less than two percent of the overall

contributions from these potential precursors. Furthermore, both VOC and ammonia

emissions are subject to BACT under the existing NSR at a zero threshold, so those 

emissions will still be minimized. VOC emissions are also required to be offset when a 
Staff Report

Proposed Amended Rule 1325 Page 3 December 2014

new or modified source has the potential to emit four tons per year or more of VOC, 

which is well below the PM2.5 rule level that would require offsets. So the only practical 

difference is that any new or modified source of 100 tons per year or more of ammonia 

will not need offsets. It is staff’s opinion that this showing comports with the 

requirements of Section 189 (e) of the CAA, such that EPA should find that VOC and 

ammonia are not required to be treated as precursors of PM2.5 under this rule.

Table 1 – Gaseous Emissions Contributions

Pollutant

All Sources

(tons per day)

Major Polluting Facilities

(tons per day)

Relative 

Contribution

Ammonia 991 1.72 1.7%

VOC 4513 8.02 1.8%

1. ARB Almanac 2013 – Appendix B: County Level Emissions and Air Quality by Air Basin; County Emission Trends 

and Forecasts 2012 Emissions

2. 2013 SCAQMD Annual Emission Reporting

3. 2012 AQMP - Appendix III: Base and Future Year Emission Inventory; 2014 Annual Average Emissions by Source 

Category in South Coast Air Basin

Requirements (c)(3)

A provision is included to specify that approval to construct does not relieve owners and 

operators of the responsibility to comply fully with applicable provisions of the permit and 

other requirements under local, State or Federal law. This amendment addresses the third 

issue identified by U.S. EPA in their March 10, 2014 correspondence.

Exclusions (i) 

Rule 1315 – Federal New Source Review Tracking System is included to denote that the 

provisions in Rule 1315 do not apply to Rule 1325. The provision that stated that Rule 1325 

applied as opposed to other Regulation XIII rules was removed. The removal clarifies that 

Rules 1306 – Emission Calculations and 1309 – Emission Reduction Credits and Short Term 

Credits apply, which addresses the first issue identified by U.S. EPA in their March 10, 2014 

correspondence, i.e. that the program specifically require offsets to meet federal CAA 

requirements, because Rules 1309 and 1306 include these requirements.

Minor corrections of typographical errors are also included in the proposed amended rule.
Staff Report

Proposed Amended Rule 1325 Page 4 December 2014

EMISSION IMPACT ASSESSMENT

The proposed amendments are administrative in nature and will not impact the emission 

inventory nor result in any emission reductions. 

SOCIOECONOMIC IMPACT ASSESSMENT

The proposed amendments to Rule 1325 do not significantly affect air quality or emission 

limitations and therefore a socioeconomic impact analysis pursuant to California Health and 

Safety Code Sections 40440.8 and 40728.5 is not required.

Cost and Cost-Effectiveness

The proposed amendments will not result in additional costs to industry. Since there is no 

additional cost and no change in emissions, cost effectiveness is not applicable. 

Incremental Cost-Effectiveness

Under Health and Safety Code Section 40920.6, the SCAQMD is required to perform an 

incremental cost analysis when adopting a Best Available Retrofit Control Technology 

(BARCT) rule or feasible measure required by the California Clean Air Act. To perform this 

analysis, the SCAQMD must (1) identify one or more control options achieving the emission 

reduction objectives for the proposed rule, (2) determine the cost effectiveness for each 

option, and (3) calculate the incremental cost effectiveness for each option. To determine 

incremental costs, the SCAQMD must “calculate the difference in the dollar costs divided by 

the difference in the emission reduction potentials between each progressively more stringent 

potential control option as compared to the next less expensive control option.”

Proposed Amended Rule 1325 addresses administrative issues identified by the U.S. EPA. 

The proposed amended rule does not implement a BARCT rule or a feasible measure 

required by the California Clean Air Act. Thus an incremental cost analysis is not required. 

CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA)

The SCAQMD has reviewed the proposed project pursuant to CEQA Guidelines §15002 

(k)(1) - General Concepts, the first step of a three-step process for deciding which document 

to prepare for a project subject to CEQA. The SCAQMD has determined that that it can be 

seen with certainty that there is no possibility that the proposed project may have any 

significant effects on the environment, and is therefore, exempt pursuant to CEQA 

Guidelines §15061 - Review for Exemption, paragraph (b)(3) – “general rule” exemption.
Staff Report

Proposed Amended Rule 1325 Page 5 December 2014

A Notice of Exemption has been prepared pursuant to CEQA Guidelines §15062 - Notice of 

Exemption. If the proposed project is approved, the Notice of Exemption will be filed with 

the county clerks of Los Angeles, Orange, Riverside and San Bernardino counties.

COMPARATIVE ANALYSIS

A comparative analysis is not applicable for Proposed Amended Rule 1325 as the SCAQMD

is adopting the federal mandated requirements for PM2.5 NSR. Proposed Rule 1325 does not 

impose a new emissions limitation or standard or make an existing emissions limitation or 

standard more stringent.

PUBLIC PROCESS

A public consultation meeting was held on September 23, 2014. Written comments on the 

proposal were requested by October 8, 2014. As of October 24, 2014, no comments had 

been received. A comment letter was received on October 28, 2014 and staff responses are 

shown on page 12 of this staff report in the “Comment Letter 1“ section.

EPA COMMENTS AND RESPONSES

The following comments and SCAQMD staff responses address the concerns of U.S. EPA 

staff, included in their March 10, 2014 e-mail. 

Comment: Although Rule 1325 Section (c)(1)(B) states offsets are required, it does 

not contain any specific requirements that ensure these emissions offsets 

are in effect by the time of permit issuance and enforceable by the time the 

source commences operation, as required by CAA section 173(c)(1). Thus, 

we find Rule 1325 is deficient with respect to the CAA 173(c)(1) 

requirement that the rule contain provisions to ensure offsets are in effect 

by the time of permit issuance and enforceable by the time the source 

commences operation.

Comment: Although Rule 1325 Section (c)(1)(B) states that offsets are required, it 

does not contain any specific requirements that ensure these offsets are 

based on real reductions in actual emissions as required by CAA section 

173(c)(1). Thus, we find Rule 1325 deficient with respect to the CAA 

173(c)(1) provision that requires emission increases to be offset by real 

reductions in actual emissions.
Staff Report

Proposed Amended Rule 1325 Page 6 December 2014

Comment: Rule 1325 does not contain any specific requirements that satisfy CAA 

173(c)(2) which essentially states that emissions reductions must be 

surplus to other part D requirements. Thus, we find Rule 1325 is deficient 

with respect to the CAA 173(c)(2) requirement that the rule contain 

provisions to prevent emissions reductions otherwise required by the Act 

from being credited for purposes of satisfying the part D offset 

requirements.

Staff Response: Staff has proposed to revise the “Exclusion” section of the current rule 

by removing the provision that Rule 1325 applied and other provisions 

of Regulation XIII rules did not. Furthermore, staff is adding a 

reference to Rule 1315 – Federal New Source Review Tracking System 

in the “Exclusion” section.

Comment: Definitions which contain language which is either identical or equivalent 

to that found in CAA Sections 169, 169A(g) and 171, and in 40 CFR 

51.100 and 51.165(a)(1).

The definition of Regulated NSR Pollutant is deficient because it does not 

include any language to satisfy the provision in 51.165 (a)(1)(xxxvii)(D) 

which states: 

“PM2.5 emissions and PM10 emissions shall include gaseous emissions 

from a source or activity which condense to form particulate matter at 

ambient temperatures. On or after January 1, 2011 (or any earlier date 

established in the upcoming rulemaking codifying test methods), such 

condensable particulate matter shall be accounted for in applicability 

determinations and in establishing emissions limitations for PM2.5 and 

PM10 in nonattainment major NSR permits. Compliance with emissions 

limitations for PM2.5 and PM10 issued prior to this date shall not be based 

on condensable particulate matter unless required by the terms and 

conditions of the permit or the applicable implementation plan. 

Applicability determinations made prior to this date without accounting 

for condensable particulate matter shall not be considered in violation of 

this section unless the applicable implementation plan required 

condensable particulate matter to be included.” 
Staff Report

Proposed Amended Rule 1325 Page 7 December 2014

To correct the above deficiency, SCAQMD must add substantially

equivalent language to either the definition of Regulated NSR Pollutant or 

the definition of PM2.5.

Staff Response: Staff has modified the definition of PM2.5 to address this concern by 

adding “Gaseous emissions which condense to form PM2.5 at ambient 

temperatures shall also be included as PM2.5.” 

Comment: Provisions to implement the enforcement procedures of 40 CFR 

51.165(a)(5)(i) to provide that issuance of an approval to construct shall 

not relieve any owner or operator of the responsibility to comply fully 

with applicable provisions of the plan and any other requirements under 

local, State or Federal law. We could not find any provisions in Rule 1325 

to satisfy this requirement. Thus, we find Rule 1325 deficient with respect 

to the requirements of 40 CFR 51.165(a)(5)(i).

Staff Response: Staff is proposing a new provision under 1325 (c)(3) to denote that 

approval to construct shall not relieve any owner or operator of the 

responsibility to comply fully with applicable provisions of the plan and 

any other requirements under local, State or Federal law.
C O M M E N T L E T T E R 1

Western States Petroleum Association

October 28, 2014
Staff Report

Proposed Amended Rule 1325 Page 8 December 2014

Credible Solutions • Responsive Service • Since 1907

Patty Senecal

Manager, Southern California Region and Infrastructure Issues

VIA ELECTRONIC MAIL

October 28, 2014

Mr. Mike Morris

South Coast Air Quality Management District

21865 Copley Drive

Diamond Bar, CA 91765

Re: Proposed Rule 1325, Federal PM2.5 New Source Review Program

Mr. Mike Morris:

Western States Petroleum Association (WSPA) is a non-profit trade association representing twenty-six 

companies that explore for, produce, refine, transport and market petroleum, petroleum products,

natural gas and other energy supplies in California, Arizona, Nevada, Oregon, and Washington. WSPA

member companies operate petroleum refineries and other facilities in the South Coast Air Basin which

is the reason for the following comments.

This comment letter is being submitted regarding the proposed amendment to Rule 1325 – Federal

PM2.5 New Source Review Program, dated 4 September 2014. The purpose of the amendment is to

incorporate corrections to the Rule recently recommended by the U.S. Environmental Protection

Agency (EPA) regarding offset requirements, the definitions for Regulated NSR Pollutant and 

PM2.5, and enforcement procedures. Specifically, this amendment would modify the definition for

PM2.5 to include “gaseous emissions that condense to form PM2.5 at ambient temperatures.” WSPA is

concerned that proposed change of this definition may create confusion in the proposed rule regarding

what is included as condensable PM2.5; as opposed to precursor emissions, and in what physical 

state the mass of such emissions are to be quantified.

The South Coast Air Quality Management District (SCAQMD) adopted Rule 1325 – Federal

PM2.5 New Source Review Program on 3 June 2011 to incorporate U.S. EPA requirements for PM2.5

into its New Source Review (NSR) regulations. The rule applies to major polluting facilities and

incorporates federal requirements regarding the definition of major source, significant emission rates,

offset ratios, and the applicability requirements of LAER, facility compliance, offsets, and control of

PM2.5 precursors. Major polluting facilities are defined by rule as sources with actual emissions, or

the potential to emit, 100 tons per year or more of PM2.5 or its precursors.
Proposed Amended Rule 1325 Page 9 December 2014

In March 2014, the U.S. EPA reviewed Rule 1325 for State Implementation Plan

approvability and specified three corrections with respect to the Clean Air Act. These are as 

follows:

1) Though offsets are required by Rule 1325(c)(1)(B), no specific language ensures that

the offsets meet federal requirements. Therefore requirements that offsets are in effect by 

the time of permit issuance, based on real reductions in actual emissions, and are

surplus to other Part D offset requirements should be included in the Rule.

2) The definition of Regulation NSR Pollutant or PM2.5 must include language to

satisfy the provision in 40 CFR 51.165(a)(1)(xxxvii)(D), which states that

emissions of PM2.5 shall include gaseous emissions that condense to form 

particulate matter at ambient temperatures.

3) Provisions to ensure that issuance of an approval to construct shall not relieve any

owner or operator of the responsibility to comply fully with applicable provisions

of the plan any other requirements under local, State, or Federal law should be 

included in the rule as per 40 CFR 51.165(a)(5)(i).

To address the second correction, SCAQMD has proposed to amend the definition for PM2.5 

to include gaseous emissions that condense to form PM2.5 at ambient temperatures. However,

the rule does not specify which emissions are to be considered as condensable PM2.5, as 

opposed to precursors, and in what physical state those emissions are to be measured. There is

potential for double counting between precursor emissions and condensable PM2.5 emissions,

specifically a double counting of NOx and SOx which could be counted in a gaseous state 

as precursors as well as in solid-state ammonium salts as condensable PM2.5.

WSPA recommends that SCAQMD incorporate a new definition for “Condensable PM2.5”

in Proposed Rule 1325, which would explicitly be limited to semi-volatile organic compounds

that condense at ambient temperatures as well as ammonia. Language in the rule should also

clarify that Condensable PM2.5 emissions shall be quantified in their gaseous state in order to

avoid double counting, with semi-volatile organic compounds quantified as methane, and that

Condensable PM2.5 emissions shall exclude NOX and SOX by definition. With the addition

of a definition for Condensable PM2.5, it is recommended that the definition for PM2.5 be

revised to indicate that PM2.5 includes Condensable PM2.5 emissions as defined in the Rule,

rather than any “gaseous emissions” that condense form PM2.5 at ambient temperatures.

Lastly, WSPA recommends that the discussion regarding the definition of PM2.5 be revised in

the Staff Report for Proposed Rule 1325. This discussion should reflect the recommendations

herein regarding a separate definition for Condensable PM2.5. This discussion also needs to be

revised to include the fact that the U.S. EPA is defining volatile organic compounds and 

ammonia as condensable PM2.5.

Thank you in advance for your consideration of these comments and recommendations. 

Sincerely,

1-1

1-2

1-3
Proposed Amended Rule 1325 Page 10 December 2014

Response to Comments

1-1 Rule 1325 implements federal requirements for major sources of PM 2.5 and its 

precursors. Precursors to PM 2.5 are NOx and SOx as detailed in definition (b)(8). 

To implement federal requirements, the rule mirrors US EPA language and by and 

large incorporates 40 CFR 51.165. The proposed amendments do not change the 

definition of precursors nor change the test method. To wit, the test method that 

existed prior to this amendment has not been changed nor have the compounds 

considered to be condensable PM2.5. The test method in the rule is the US EPA 

required test method for PM 2.5.

The test method for PM2.5 includes condensables as those compounds that condense 

to form particulate matter at ambient temperatures as specified in the WSPA letter 

Item #2. This was addressed by EPA through the recent revision to EPA Method 202 

to include, among other changes, collection of the sample at ambient temperatures. 

Gaseous emissions such as NOx and SOx are measured separately. EPA has 

determined that Method 202 shall be used to determine emissions that are considered 

as directly emitted PM and that the gaseous precursors are measured by a different 

test method and considered independently under the rule. As each pollutant is 

addressed by itself concerning the applicability of Rule 1325, there should not be any 

double counting of pollutants. 

1-2 The definition for PM 2.5 is as requested by US EPA. PM 2.5 emissions are defined 

as those measured by the US EPA reference test method.

1-3 Condensable emissions are those that are measured by the US EPA test method as 

specified in section (h) of the rule. There are no specific requirements in the rule for 

VOC or ammonia as neither is considered a precursor to PM 2.5 as noted in response 

to comment 1-1.