ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 52 [EPA-RIO-OAR-2011-0767, FRLApproval and Promulgation ofImplementation Plans; Oregon: New Source Review I Prevention ofSignificant Deterioration Rule Revisions and Air Quality Pennit Streamlining Rule Revisions
AGENCY: Environmental Protection Agency (EPA).
ACTION: Proposed rule. SUMMARY: EPA is proposing to approve a portion ofthe State Implementation Plan (SIP) revision submittedbythe State ofOregon for the purpose ofaddressing the third element ofthe interstate transport provisions ofClean Air Act (CAA or the Act) section 11O(a)(2)(D)(i)(II) for the 1997 8-hour ozone National Ambient Air Quality Standards (NAAQS or standards) and the 1997 and 2006 fine particulatematter (PM2.s) NAAQS. Thethird element ofCAA section 110(a)(2)(D)(i)(II) requires that a State not interfere with any other State'srequired measures to prevent significant deterioration (PSD) ofits air quality.
EPA is also proposing to approve numerous revisions to the Oregon SIP that were submitted to EPA bythe State ofOregon on October 8, 2008; October 10, 2008; March 17, 2009; June 23,2010; December 22,2010 and May 5,2011. The revisions include updating Oregon's new sourcereview (NSR) rules to be consistent with current Federal regulations andstreamlining Oregon's air qualityrules byclarifying requirements, removing duplicative rules, and correcting errors. The revisions were submitted in accordance with the requirements of section 110 and part D ofthe Act ).
DATES: Comments must bereceived on orbefore [insert date 30 days after publication 

### in the Federal Register].
ADDRESSES: Submit your comments, identifiedbyDocket ID No. EPA-RlO-0AR-201l-0767, by any ofthe following methods: • www.regulations.gov: Follow the on-line instructions for submitting comments. • Email: RIO-Public Comments@epa.gov • Mail: Scott Hedges, EPA Region 10, Office ofAir, Waste and Toxics (AWT-107), 1200 Sixth Avenue, Suite 900, Seattle WA, 98101 • Hand Delivery I Courier: EPA Region 10, 1200 Sixth Avenue, Suite 900, SeattleWA, 98101. Attention: Scott Hedges, Office ofAir, Waste and Toxics, AWT
- 107. Such deliveries are only accepted during normal hours ofoperation, and special arrangements should be made for deliveries ofboxed information. 

### Instructions: Direct your comments to Docket ID No. EPA-RlO-0AR-2011-0767. EPA's policyis that all comments received will be included inthe public docket without change and maybemade available online at www.regulations.gov, including any personal information provided, unless the comment includes information claimed tobe Confidential Business Information (CBI) orother information whose disclosure is restricted by statute. Do not submit informationthat you consider to be CBI orotherwise protected through www.regulations.gov or 2e-maiL The www.regulations.gov website is an "anonymous access" system, which means EPA will not know your identity orcontact information unless you provide it in the body ofyour comment. Ifyou send an e-mail comment directly to EPA without going through www.regulations.gov your e-mail address will be automatically captured and included as part of the commentthat is placed in the public docket and made available on the Internet. Ifyou submit an electronic comment, EPA recommends that you include your name and other contact information in the body ofyour comment and with any disk or CD-ROM you submit. IfEPA cannotread your comment due to technical difficulties and cannot contact you for clarification, EPA may not be able to consideryour comment. Electronic files should avoid the use ofspecial characters, any form ofencryption, and befree ofany defects or viruses. Docket: All documents in the docket are listed in the www.regulations.gov index. Although listed inthe index, some information is not publicly available, e.g., CBI orother information whose disclosure is restricted bystatute. Certain othermaterial, such as copyrighted material, is not placed on the Internet and will be publicly available only in hard copy. Publicly available docket materials are available either electronically in www.regulations.gov orin hard copy during normal business hours at the Office ofAir, Waste and Toxics, EPA Region 10,1200 Sixth Avenue, Seattle WA, 98101.
FOR FURTHER INFORMATION CONTACT: Scott Hedges at telephone number: (206) 553-0296, e-mail address: hedges.scott@epa.gov, orthe above EPA, Region 10 address.
SUPPLEMENTARY INFORMATION: Throughout this document wherever "we", "us"or "our" are used, we mean EPA. Information is organized as follows: 3

### Table ofContents I. Purpose ofProposed Action II. Oregon SIP Revisions A. Third PSD Element ofOregon's Interstate Transport SIP for the 1997 Ozone and 1997 and 2006 PM2 .5 NAAQS B. How Oregon's NSRlPSD Permitting Program Meets Federal Requirements 1. Oregon's NSRlPSD Rule Revisions 2. Analysis ofOregon's NSRlPSD Revisions C. Agricultural Operations (as specified in OregonRevised Statute 468A.020) D. Permitting Rule Corrections, Clarifications and Streamlining 1. Rule Revisions in the October 10,2008 SIP Submittal 2. Rule Revisions in the March 17,2009 SIP Submittal 3. Rule Revisions in the June 23, 2010 SIP Submittal E. Significant Changes to Oregon's SIP III. EPA's Proposed Action A. Rules to Approve into SIP B. Rules on which No Action is Taken IV. Statutory and Executive Order Reviews 

### I. Purpose ofProposed Action
EPA proposes to approve a portion ofOregon's Interstate Transport SIP revision for the 1997 8-hourozone and 1997 and 2006 PM2.5 NAAQS submittedbythe Oregon Department of Quality (ODEQ) onJune 23, 2010, and December 22, 2010.' Specifically, we are proposing to approve the portionofthe plan that addresses the third element ofsection 11O(a)(2)(D)(i), interference with any other State'srequired measures to PSD ofits air quality with respect to these NAAQS. OnJune 9, 2011, EPA approved elements one and two ofCAA section 11O(a)(2)(D)(i): (1) significant contribution to nonattainment oftheseNAAQS in any other State, and (2) interference with maintenance ofthese NAAQS by any other State (76 FR 33650).

I See transmittal letters dated June 23, 2010, from Joni Hammond, DeputyDirector, ODEQ, and December 22, 2010, from DickPedersen, Director, ODEQ, to Dennis McLerran, Regional Administrator, EPA Region 10. 4In addition, on July 5, 20II, EPA approved the SIP for the fourth element ofCAA section 11O(a)(2)(D)(i) found the SIP to be adequate for element four: interference with any other State's required measures to protect visibility (76 FR 38997).
EPA is also proposingto approve multiple revisions to Oregon's SIP that were submitted to EPAbyODEQ onOctober 8,2008, October 10,2008, March 17,2009, June 23,2010, December 22,2010, and May 5,2011. The revisions update Oregon's NSR rules to be consistent with Federal requirements byregulating PM2.5 and precursorpollutants, as well as adding greenhouse gases (OHOs) to the list ofpollutants whose emissions are subject to control under the State's NSRpermittingprocess and establishes a threshold for such regulation. Approval of the State's OHOpermitting regulations is proposed to beaccompaniedbya simultaneous withdrawal ofthe Federal Implementation Plan (FIP) that EPA promulgated on December 9, 2010 (75 FR 82246). EPA also proposes to approve changes to Oregon's Plant Site Emissions Limit (PSEL) program which address the method for establishingbaseline emissions and adopt a threshold or significant emission rate of 10 tons per year ofPM2.5 as a significant change at an existing facility. Other SIP rule changes that areproposed for approval in this action streamline and clarifythe State's air qualityrules that are unrelated to NSR and remove duplicative or outdated requirements (such as the removal ofunused basic permit categories that are covered under the general permittingprovisions ofthe Oregon Administrative Rules (OAR). The SIP submittals, described in greater detail inthis Notice, revise and amend OAR, chapter 340, divisions 200,202,204,206,209,210,214,216,222,224,225,228, 234, and 236, currently in the federally approved Oregon SIP (CFR part 52, subpart MM), and add portions ofOAR chapter 340, division 208 to the Federal approved Oregon SIP. Theproposed SIP revisions are 5explained inmore detail below along with ourevaluation ofhowthese rules comply with the requirements for SIPs and the basis for ourproposed action.
II. Oregon SIP Revisions
Table 1provides a list ofeach SIP submittalsby ODEQ (by submittal date, and subject) evaluated in this proposed action. Theparagraphs that follow Table 1 include further information for each SIP submittal including a summaryofthe submittal with relevantbackground information and analysis to support our action.
Table 

### 1: ODEQ SIP Submittals Addressed in this Action2

Date ofSubmittal Subject 10108/2008 Statutory Agricultural Operations Exemption 10/1012008 Permit Streamlining Rules (RepealedRules in Italics) i 0311712009 Plant Site Emission Limit (PSEL) Rule

06/23/2010 (Report oninterstate transport ofPM2.5 and ozone added to submittal on 12/221201 0) Infrastructure SIP Rule Changes 05/0512011 NSR, PM2.5, and GHG Permitting Rule Updates

Title I ofthe CAA, as amendedbyCongress in 1990, specifies the general requirements for States to submit SIPs to attain and/ormaintain the NAAQS and EPA's actions regarding approval ofthose SIPs. With this action we are proposing approval ofthe third element of

2 EPA is not proposing to take action on each ofthe regulatory provisions that were included in the five SIP submissions identified in Table 1. Only the SIP revisions and implementing regulations specifically identified in Table 2 are being proposed for action in today's notice. 6Oregon's InterstateTransport SIP revision for the 1997 8-hour ozone and 1997 and 2006 PM2.5 NAAQS related to PSD.
EPA last approved the OregonmajorNSRrules (which encompass PSD and part D NSR) onDecember 17,2002 (published January 22,2003,68 FR 2891). That approval acted on a July 1, 2001, comprehensive version ofOregon's NSRrules submitted to EPA on June 26, 2001, prior to the 2002 NSR Refonn Rules (published onDecember 31,2002, effective date March 3,2003). Since the approval ofthe State's July 2001 rules, ODEQ has submitted several NSRJPSD rule revisions for incorporation into the federally approved SIP including, mostrecently, the changes needed for thepennitting ofPM2.5 andGHGs under ODEQ's majorNSRprogram. The regulations which areproposed for approval inthis action accordingly include PSD pennitting of PM2.5 and GHGs and nonattainment NSRpennitting ofPM2.5. Finally, EPA is also proposingto approve multiple SIP submittals containing ODEQ rule revisions that effectuate structural reorganizations ofthe Oregon code. Theserules havebeen clarified and streamlined with duplicative and outdated requirements removed. Further background for each oneis provided in the section below. 

### A. Third PSD Element ofOregon's Interstate Transport SIP for the 1997 Ozone and 1997 and 2006 

### PM2.5 NAAQS

7OnJuly 18, 1997, EPA promulgated the 1997 8-hour ozone3 NAAQS and the 1997 PMZ .5 NAAQS4, Additionallyon December 18, 2006, EPA revised the 1997 24-hour PMZ.5 standard. 5 Today'sproposed actions relate to these revised standards (the 1997 8-hour ozone NAAQS and the 1997 and 2006 PMZ .5NAAQS).
Section 110(a)(I) ofthe CAA requires States to submit SIPs to address a new orrevised NAAQS within three years after promulgation ofsuch standards, or within such shorterperiod as EPA mayprescribe. Section 11O(a)(2) lists the elements that such new SIPs must address, as applicable, including section 11O(a)(2)(D)(i) whichpertains to interstate transport ofcertain emissions. On August 15, 2006, and September 25,2009, respectively, EPA issued guidance for States making submissions to meet the requirements ofsection 11O(a)(2)(D)(i) for the 1997 8­ hour ozone and 1997 PMz.5 standards (2006 Guidance)6 and for the 2006 PMZ.5 standards (2009 Guidance). 7

3 See 62 FR 38856. The level ofthe 1997 8-hour ozone NAAQS is 0.08 parts permillion (ppm). 40 CFR part 50.10. The 8-hour ozone standard is met when the 3-year average ofthe annual 4th highest daily maximum 8-hour ozone concentrations is 0.08 ppm orless (i.e., less than 0.085 ppm based onthe rounding convention in 40 CFR part 50, appendix I). This 3-year average is referred to as the "design value." 4 See 62 FR 38652. The level ofthe 1997 PM2.5NAAQS are 15.0 Ilgim3 (annual arithmetic mean concentration) and 65 Ilgim3 (24-hour average concentration). 40 CFRpart 50.7. The annual standard is met when the 3-yearaverage of the annual mean concentrations is 15.0 Ilgim3 orless (i.e., less than 15.05 Ilgim3 based on the rounding convention in 40 CFR part 50, appendix N section4.3). The 24-hour standard is met when the 3-year average annual 98th percentile of24-hourconcentrations is 65 Ilgim3 or less (i.e., less than 65.5 llg/m3 based on the rounding convention in 40 CFR part40 appendix N section 4.3). Id. These 3-year averages are referred to as the annual PM1.5 and 24-hour PM2.5 "design values," respectively. 5 See 71 FR 61144 . In 2006, the 24-hour PM2.5NAAQS standard was changed from 65 llg/m3 to 35 Ilgim3 (24­ hour average concentration). The annual PM2.5 standard was not changed. 40 CFR 50.13. 6 Memorandum from William T. Harnett entitled "Guidance for State Implementation Plan (SIP) Submissions to Meet Current Outstanding Obligations Under Section 110(a)(2)(D)(i) for the 8-hour ozone and PM2.5 National Ambient Air Quality Standards," August 15, 2006. 7 Memorandum from William T. Harnett entitled "Guidance SIP Elements Required Under Sections llO(a)(l) and (2) for the 24-hour Particle (PM2.5) National Ambient Air Quality Standards (NAAQS)," September 25,2009.


### 8The interstate transport SIP provisions in section 110(a)(2)(D)(i) (also called "good neighbor" provisions) require each State to submit a SIP that contains provisions that prohibit emissions that adversely affect another State in the ways contemplated in the statute. Section 110(a)(2)(D)(i) identifies four distinct elements related to the evaluation ofimpacts ofinterstate transport ofair pollutants. In this rulemaking EPA is addressing thethird element in this subsection. The third element ofsection 110(a)(2)(D)(i) requires a SIP to contain adequate provisions prohibiting emissions that interfere with any other State's required measures to prevent significant deterioration ofits air quality.
As a part ofits SIP submittal addressing interstatetransport, ODEQ submitted an analysis entitled "Oregon SIP Infrastructure for Addressing the InterstateTransport ofOzone and Fine ParticulateMatter", dated November 5, 2009, to EPA onDecember22,2010. 8 EPA believes that ODEQ's submission is consistent with EPA's recommendations inboth the 2006 and 2009 Guidance, when evaluated in conjunction with the NSRlPSD rule revisions that EPA proposes to approve intoday's action. EPA'sproposed approval ofOregon's SIP submission for purposes of meeting the requirements ofsection 110(a)(2)(D)(i) is contingent upon the final approval ofthe NSRlPSD rule revisions also included in this proposed action. (In addition to this section, see sections II. C through E ofthis action for a discussion ofthe rulerevisions proposed for approval.)
EPA proposes to find thatthe Oregon SIP (40 CFR 52 subpart MM), as amended by today's proposed action, includes the requirements underthe CAA necessary to avoid

8 This interstate transport report was inadvertently left out ofthe original June 23, 2010, SIP submittal. 9interference with another State's SIP measures for preventing significant deterioration ofair quality.Oregon has no EPA designated 8-hour ozone nonattainment areas, and has two designated 24-hour PM2 .5 nonattainment areas (Klamath Falls and Oakridge). For most ofthe State, ODEQ permits new major industrial sources through the PSD program for these pollutants. ODEQ's major NSRrules (division 224- which includes both nonattainment NSR and PSD rule provisions), as reflected in the rules proposed for incorporation into the SIP in today's action, ensure that the programs for PSD in other States are notjeopardizedbynew orexpanding industrial sources. Specifically, all new industrial sources and major modifications to existing industrial sources in attainment areas are subject to ODEQ PSD rules requiringpre-construction review, air quality analysis, the application ofany required emission control technology, and airpermitting. All new sources and major modifications in nonattainment areas are subject to the nonattainment New Source Review provisions ofthese rules, including LAER, offsets, and net airquality benefit. ODEQ's PSD program directly regulates PM2 .5 meeting the requirements ofNSRlPSD and also includes procedures to address Phase-II requirements ofthe final rule to implement the 8-HourOzone NAAQS.
EPA believes that Oregon's regulatory and SIP revision for the 1997 8-hourozone NAAQS that makes NOx aprecursor for ozone for PSD purposes and the PSD revision for the 1997 and 2006 PM2 .5 NAAQS that makes S02 and NOx precursors for PM2.5 for PSD purposes, taken together with the otherrevised PSD rule revisions that EPA proposes to approve in this action, satisfy the requirements ofthe third element ofsection 110(a)(2)(D)(i) for the 1997 8­ hour ozoneNAAQS and the 1997 and 2006 PM2 .5NAAQS. That is; these provisions ensure that 10there will beno interference with any other State's required PSD measures because Oregon's SIP, as proposed for approval inthis action, will meet current CAArequirements for PSD.


### B. How Oregon's NSRlPSD Permitting Program Meets Federal Requirements Parts C and D oftitle I ofthe CAA, 42 U.S.C. 7470-7515, set forth preconstruction review and permittingprograms applicable to new and modified stationary sources ofair pollutants regulated under the CAA, known ,as "majorNew Source Review" or "majorNSR." The majorNSR programs ofthe CAA include a combination ofair qualityplanning and air pollution control technologyprogram requirements. States adopt major NSR programs as part of their SIP. Part C is the "Prevention ofSignificant Deterioration" or "PSD"program, which applies in areas that meet the NAAQS (i.e., "attainment" areas) as well as in areas for which there is insufficient information to determine whether the areameets the NAAQS (i.e., "unclassifiable" areas). Part D is the "Nonattainment New Source Review" orthe "NNSR" program, which applies in areas that are not in attainment ofthe NAAQS (i.e., "nonattainment areas"). EPA regulations implementing these programs are contained in40 CFR 51.165, 51.166, 52.21,52.24, and part 51, appendix S.
On December 31, 2002, EPApublished final rule changes to the PSD and NNSR programs (67 FR 80186) and on November 7, 2003, EPA published a notice offinal action on the reconsideration ofthe December 31, 2002 final rule changes (68 FR 63021). In the November 7, 2003 final action, EPA added a definition of"replacementunit," and clarified an issue regardingplantwide applicability limitations (PALs). TheDecember 31, 2002 and the November 7, 2003, final actions, are collectively referred to as the "2002 NSRReform Rules." 11The 2002 NSR Reform Rules made changes to five areas ofthe majorNSRprograms related to physical and operational changes at existing major stationary sources. In summary, the 2002 rules: (1) provide a new method for determining baseline actual emissions; (2) adopt an actual-to-projected-actual methodology for determining whether a major modification has occurred; (3) allow major stationary sources to complywith PALs to avoid having a significant emissions increase that triggers the requirements ofthe majorNSR program; (4) provide a new applicabilityprovision for emissions units that are designated clean units; and (5) exclude pollution control projects (PCPs) from the definition of "physical change or change in the method ofoperation."
After the 2002 NSR Reform Rules were finalized and effective (March 3, 2003), various petitioners challenged numerous aspects ofthe 2002 NSRReform Rules, along with portions of EPA's 1980NSR rules (45 FR 5276, August 7, 1980). OnJune 24,2005, the DC Circuit Court issued a decision onthe challenges to the 2002 NSR Reform Rules. SeeNew York v. United States, 413 F.3d 3 (DC Cir. 2005). In summary, the DC Circuit Court vacated portions ofthe 2002 NSR Reform Rules pertaining to clean units and PCPs, remanded a portion ofthe rules regardingrecordkeeping (40 CFR 52.21(r)(6) and 40 CFR 51.166(r)(6)), and either upheld ordid not comment on the otherprovisions included as part ofthe 2002 NSR Reform Rules. On June 13, 2007 (72 FR 32526), EPA took final action to revise the 2002 NSR Reform Rules to remove from Federal law all provisions pertainingto clean units and the PCP exemption that were vacated bythe D.C. Circuit Court.

12The 2002 NSR Refonn Rules require that State agencies adopt and submit revisions to their SIP pennittingprograms implementingthe minimumprogram elements ofthe 2002 NSR Refonn Rules no laterthanJanuary2,2006. To meet this requirement, ODEQ submitted an NSRrefonn equivalency demonstration report on December 22,2005.
1. Oregon's NSRlPSD Rule Revisions
EPA last approved the Oregonmajor NSR rules addressing part D NSR and PSD on December 17, 2002 (published January22, 2003, 68 FR 2891). This approval acted on a July 1, 2001, comprehensive version ofOregon's NSRrules submitted to EPA on June 26,2001.
On May 5,2011, ODEQ submitted a series ofrule changes as revisions to the Oregon SIP. These rule changes are necessary to align its rules with significant changes made to EPA's airquality pennittingregulations, includingthe 2002 NSR Refonn Rules (published on December 31, 2002, effective date March 3, 2003), and the pennitting ofPM2,5 and OHO emissions. The SIP submittal covers revisions to OAR chapter 340, divisions 200,202,216,224, 225, and 228.
Therule revisions include the adoption ofa threshold or significant emission rate of 10 tons peryear ofPM2,5 as a significant change at an existing facility. Facilities would trigger NSRlPSD pennitting only ifa physical or operational change increased emissions above this threshold. Therule revisions also include the adoption oflevels to detennine ifadditional



### 13ambient air quality analysis is required, track the cumulative impact ofemissions growth in areas that meet air quality standards, and determine ifpreconstruction monitoringis required for PM2.5.
The May 5,2011, SIP submittal also includes rules to allow the permitting ofGHG emissions under Oregon's NSRlPSD program. Oregon's definition of"federal major source" is almost identical to EPA's definition of"major stationary source" and as such, Oregon has tailored its PSD rules in a manner identical to EPA's withrespect to major sources ofGHG emissions. That is, for a "federal major source" to be "major" for GHGs under the Oregon PSD program, it must have the potential to emit GHGs equal to orgreaterthan 100,000 tons per year on a carbon dioxide equivalent (C02e) basis and a potential to emit GHGs equal to or greater than 1001250 tons per year on a mass basis.9 However, as discussed above, Oregon's definition of"major modification" is substantially different than (but equivalent to) EPA's definition of "majormodification" so Oregon has tailored its PSD rule in a different mannerin order to producethe same outcome withrespect to major modifications for GHGs as EPA's Tailoring Rule.
In order for Oregon's PSEL-based definition to have the same effect as EPA's definition of"majormodification" with respect to GHG emissions (Le., an increase greater than 75,000 tons per year on a C02ebasis and an increase greaterthan "zero" on a mass basis), Oregon's rule requires the establishment ofPSELs on a C02ebasis and an increase in the PSEL ofmore than 75,000 tons per year on a C02ebasis, before a "major modification" under the Oregonrules will

9 Carbon dioxide equivalent orC02e is a unit ofmeasurement that allows the effect ofdifferent GHGs to be compared using carbon dioxide as a standard unit for reference. 14have occurred.to This approach is consistent with how the Oregon program defines major modifications for all other NSRregulated pollutants and results in the same outcome as EPA's Tailoring Rule with respect to major modifications for OHO emissions.
EPA proposes to find that these provisions are consistent with EPA's OHO Tailoring Rule and is proposing to approve this OHO PSD permittingrevision into the Oregon SIP providing Oregonwith the authority to issue PSD permits addressing OHO emissions. In addition, EPA will rescind the FIP codified in 40 CFR 52.1987(d) that ensures the availability of a PSD-permitting authority for OHO-emitting sources in Oregon once this proposed actionhas been approved into the Oregon SIP. Additionallythe May5,2011, SIP submittal includes rule changes providing small-scale local energyprojects more flexibility in obtaining reductions to offset proposed emission increases.
EPAhas reviewed these amendments to the ODEQ rules and, as discussed below, has determined that theymeet EPA's requirements under sections 110, part C and part D oftitle I of the CAA. EPA is therefore proposingto approve them as revisions to the Oregon SIP.
2. Analysis ofOregon's NSRJPSD Revisions

10 Oregon's rules use the terms "significant emission threshold" or "significant emissionrate (SER)" for GHG PSD permitting purposes. However, these terms do not have the same meaning as "significant" as used in the context of EPA'sPSD regulation at 40 C.F.R. 51.166. EPA has not established a significant emission rate for GHGs under40 C.F.R. 51.166(b)(23)(i). Oregon's PSELPSD permitting program establishes a GHG threshold of75,000 C02e to tailor the application ofits PSD permitting program in a manner similar to EPA's GHG Tailoring Rule. 15In 1982, EPA approved Oregon's Major NSRJPSD program as equivalent to, ormore stringent than, EPA's NSRJPSD regulations (47 FR 35191, August 13, 1982). Oregon's program includes a Major NSR rule that covers non-attainment NSR and PSD applicabilityprovisions as well as a separatebutrelated PSEL (plant-wide cap) rule. The PSELrule employs a similar, though not identical, approach to EPA's PALprogram and was in fact identified as 'an example 'ofa State program successfully using a PAL concept during EPA's development ofits PAL regulations.
In the December 31, 2002, preamble to its 2002 NSR Reform Rules, EPA discussed potential state PALregulatoryprograms that could differ from the Federal rules while still affording equivalent effectiveness as an NSRJPSD program. The 2002 NSRReformrules did not include specific requirements for an area-wide PAL program. However, the Agency did provide that "[i]fa State currentlyhas orwants to pursue an area-wide PAL program, then it must demonstrate that its program is equivalent to ormore stringent than our final [PAL] rules."I! Lateron, EPA affirmed that fI[elver since our current NSRregulations were adopted in 1980, wehave taken the position that Statesmay meet the requirements ofpart 51 'with different but equivalent regulations.' 45 FR 52676. Several states have, indeed, implemented programs that work everybit as well as ourownbase programs, yet depart substantially from the basic framework established in ourrules. A good example is Oregon, where the SIP-approved 1167 FR 80221 (December 31,2002).

16program requires all major sources to obtain plantwidepermits not unlike the PALs that we are finalizing today... " 12 Oregon's NSRlPSD program differs from the Federal program in several ways. Itdoesn't subject the same sources and modifications to majorNSR as would EPA'srules. The program has lower major source thresholds for sources in nonattainment areas and maintenance areas, so smaller new sources and changes to smaller existing sources are subject to review. Theprogram also requires fugitive emissions to beincluded in the applicability determination for all new sources and modifications to existing sources. However, as mentioned, the program also utilizes a PSEL approach to defining majormodifications ratherthan a contemporaneous net emissions increase approach as does EPA's main (non PAL alternative) NSRreform approach.
The effect ofOregon's PSEL approach is that, generally, changes which would be subject to review under the PAL provisions in the 2002 NSRReform Rules are subject under Oregon's rules. However, there are some differences between the Oregon rules and EPA's rules that, generally, result in Oregon's programbeingmore protective. For example, when a major modification is permitted, BACT and/or LAER is required for more new and modified emission units than under EPA's PAL rules. Oregon's rules require BACT/LAER for all new and modified units, notjust significant and majorunits, as well as defining what constitutes a modified unit morebroadly than EPA's rules. In addition, changes which would result in increased emissions, but would notbeconsidered modifications under either the Oregon rules or

12 67 FR 80241. 17EPA's reform rules are still reviewed for compliance with ambient standards and PSD increments under Oregon's PSELprogram. Overall, EPA has determined that Oregon's PSD program for reviewing and controlling emissions from new and modified sources is at least as strict as EPA's program. Wehave reviewed Oregon's NSRJPSD program and ODEQ's recent rule revisions included in today's proposed action, and have determined that the NSRJPSD program meets the current requirements in 40 CFR 51.165 and 51.166. Accordingly, EPA proposes in this action to approve the specified changes into the federally approved SIP.


### C. Agricultural Operations (as specified in Oregon Revised Statute468A.020)

The CAA does not provide an exemption for agricultural operations while, prior to 2007, Oregon's State law exempted most agricultural operations from airquality regulations. To address this discrepancy, the 2007 Oregon Legislature (in accordance with Oregon Senate Bill 235) updated Oregon's air quality law (Oregon Revised Statute (ORS) 468.020 and 468A.020) to be consistent with the Federal CAA enabling the regulation ofair emissions from agricultural sources ifnecessary to implement the Federal CAA. The Oregon Environmental Quality Commission in tum adopted rule amendments to OAR 340-200-0030, 340-210-0205, and 340­ 264-0040 to align these rules with ORS 468A.020 and to make revisions to Oregon's SIP and the Oregon title V operating permit program. The revisions to OAR 340-200-0030,340-210-0205, and 340-264-0040 were submitted to EPA by ODEQ on October 8, 2008. OAR rules now allow
18agricultural air qualitypollution sources to beregulated in Oregon as necessaryto meet CAA requirements.

EPA believes that the revised ORS 468A.020 (in conjunction withthe corresponding revisions to the OAR 340-200-0030, 340-210-0205, and 340-264-0040) meet CAA requirements and, therefore, wepropose to incorporatetheserevised OARprovisions into the federally approved Oregon SIP.



### D. Permitting Rule Corrections, Clarifications and Streamlining

EPA is proposingto take action on portions ofthe following three SIP submittals by ODEQ that correct previous errors, provide clarification and streamline air qualitypermitting rules in the State ofOregon. Theserules are described with additional specificity in section E of this notice.
1. Rule Revisions in the October 10, 2008, SIP Submittal
In 2001, ODEQ streamlined the Air Quality Program's permittingprogram which was previously approved byEPA. In 2007, ODEQ's rulemaking further streamlined and updated the permitting process by clarifying requirements, eliminating duplicative and conflicting standards; keeping rules in line with Federal requirements, and correcting errors. This rulemaking package was submitted by 19ODEQ to EPA as a SIP revision on October 10, 2008. The SIP submittal covers revisions to OAR chapter 340, divisions 200, 208, 209, 214, 216, 218, 228, 232, 234 and 236 and EPA is proposing to approve incorporation ofthese provisions into the federally approved SIP. The rule revisions in the October 10, 2008 SIP submittal: 1) Add the chemical HFE-7300 to a list ofcompounds exempt from the definition of volatile organic compounds (VOC), or ground-level ozone precursors to be consistent with Federal regulations; 2) Revise Excess Emissions rules to address the factors which ODEQ will take into consideration to determine how it will exercise its enforcementdiscretion with respect to excess emissions incidents meeting specified criteria; 3) Delete unused Basic Permit categories in the Air Contaminant Discharge Permit (ACDP) rules that have been replaced byother permit categories; 4) Update, correct errors, and clarify general permits for asphalt plants, boilers, concrete plants, rock crushers, and wood products facilities (These changes clarify monitoring, reporting and compliance procedures in division 216 (ACDPs) and include a provision that facilities with ACDPs maynotbe operated ifthe permit expires oris terminated, unless a timelyrenewal application has been submitted or another type ofpermit has been issued. The revisions also clarifythat for facilities with title V or ACDPs, requirements established inprecedingpermits remain in effect unless specifically modified orterminated.); 205) Change the averaging time in the sulfur dioxide standards for fuel-burning equipment from two hours to three hours to align with Federal standards (refer to section D, division 228 ofthis proposal- Requirements for Fuel Burning Equipment and Fuel Sulfur Content
- for a complete discussion oftherevised averaging time ofthe sulfur dioxide emission standards); 6) Add a requirement for priornotification for those seekingto avail themselves of the exemption allowing a higher (currently SIP-approved) emission rate for burning salt laden wood waste; 7) SIP-strengtheningmeasures that replace outdated regulations governing wigwam burners with a state-wideprohibition ontheir use; 8) Streamline the kraft pulp mill rules (in division 234) by clarifyingpermitting and compliance determinations, and eliminating unnecessary reporting, which includes removing a Director's discretion reference in the definition of"Daily Arithmetic Average" allowing alternatives to emission limits, testing ormonitoring methods without prior EPA approval, removing a section on submission ofplans for construction and modification because general permitting regulations in division 210 address these requirements, removing a section requiring use ofobsolete sodium ion probe, as well as claritying Federal New Source Performance Standards requirements that apply to kraft pulp mills;
219) Specifies average hourly emission rate calculation procedures and measurement methods for board products manufacturing.
These changes clarify, correct and update Oregon's existing rules to be consistent with Federal regulations as well as streamlinethe permittingprocess and are proposed for approval into the SIP.
It should also benoted that on November 5, 1999, ODEQ submitted a completerule renumbering to EPA for approval. On January 22, 2003 (68 FR 2891), we approved most of these new divisions but at that time did not take action on division 208 (Visible Emissions and Nuisance Requirements). We are now proposing to approve rules 0010 (Definitions), 0100 (Visible Emissions, Applicability), 0110 (Visible Emissions,Visible Air Contaminant Limitations), 0200 (Fugitive Emissions Requirements, Applicability) and 0210 (Fugitive Emissions Requirements) ofdivision 208 into the Oregon SIP which will replace division 21, rules 015, 050, 055, and 060. Additionally, we are proposing to approve Oregon's current excess emission rules (division 214, rules 0300 through 0360) into the Oregon SIP. Upon approval, these division 214 rules will replace the federally-approved division 28 which will be removed from the SIP. EPA finds that the division 214 rules included in the October 10,2008, SIP submittal conform to Federal guidance related to excess emissions, and proposes to incorporatethese rules into the SIP. Oregon's excess emission provisions specifythe factors that the State will take into account regarding the exercise ofits enforcement discretion in response to excess emissions.

22Finally, on January 18,2007, EPA added 1,1,1,2,2,3,4,5,5,5-decafluoro-3-methoxy-4­ trifluoromethyl-pentane (also known as HFE-7300) to the list ofcompoundsI3 which are excluded from the definition ofVOC on the basis that these compounds make a negligible contribution to tropospheric ozone fonnation (72 FR 2193
- 2196). Exempting HFE-7300 from the definition of VOC in OAR 340-200-0020 is consistent with Federal regulations.

. 2. Rule Revisions in the March 17,2009, SIP Submittal
The Stationary Source PSELrule (OAR chapter 340, division 222) sets limits on emissions ofspecified regulated air pollutants. Theprimary purpose ofestablishing a PSEL is to assure compliance with ambient air standards and PSD increments, which regulate criteriapollutants (i.e., particulate matter, ground-level ozone, carbon monoxide, sulfur oxides, nitrogen oxides, and lead).
The March 17, 2009, SIP submittal exempts**pollut~nts** regulated bythe Accidental Release Prevention rules and the Early Reduction High Risk Pollutant rules from regulation under the PSEL rule. These pollutants were erroneously included in ODEQ'sprevious rule and have subsequentlybeenremoved. The Accidental Release Prevention rule (OAR-244-0230) was established to require businesses storing large quantities ofhazardous materials to have a Risk Management Plan to prevent the accidental release ofthose regulated substances. The Early Reduction High Risk Pollutants rules (OAR 340-244-0120) are used to allow a sourceto make early voluntary emissionreductions oflisted chemicals in orderto be allowed greater flexibility

13 See 40 CFR 51.1OO(s). 23later when complying with new Federal regulations. These programs are not implemented through the PSEL rule and do not depend onthat rule for implementation.
3. Rule Revisions in theJune 23,2010, SIP Submittal
Sections 11O(a)(I) and (2) ofthe Federal CAA requires States to submit changes to SIP interstate transport provisions to EPA for approval. The rule revisions submitted to EPA onJune 23,2010, are needed to update Oregon's SIP and meet EPA infrastructure requirements. The SIP submittal covers revisions to OAR chapter 340, divisions 200, 202, 204, and 206.
Theserule revisions include provisions necessary to address changes to the NAAQS for PM2.5, ozone and lead. Specificallytheserevisions add PM2 .5 to the list ofregulated air pollutants so that Oregon no longerneeds to rely on a surrogacy policy; include PM2.5 thresholds for significant harm, PM2.5 levels for triggering alerts, warnings, and emergencies (developed by ODEQ pursuant to therequirements of40 CFR 51.151); include PM2 .5 non-attainment area boundarydescriptions for the cities ofKlamath Falls and Oakridge; and, in accordance with EPA regulations, exempt dimethyl carbonate and propylene carbonate from the definition ofVOC. On February 20,2009, EPA added dimethyl carbonate and propylene carbonate to the list of compounds (40 CFR 51.100(s)) which are excluded from the definition ofVOC onthe basis that these compounds make a negligible contribution to tropospheric ozone formation (74 FR 3437­ 3441). Exempting dimethyl carbonate and propylene carbonate from the definition ofVOC in OAR 340-200-0020 will make Oregon rule consistent with Federal regulations.

24E. Significant Changes to Oregon's SIP
The docket to today's proposed action includes a technical support document which describes in more detail the substantive changes to the Oregon rules that have been submitted by ODEQ as revisions to the SIP, EPA's evaluation ofthe changes, and the basis for EPA's action.
A summary ofsignificant regulatory changes proposed for incOIporation into the SIP under today's proposal are providedbelow.
DIVISION 200 GENERAL AIRPOLLUTION PROCEDURES AND DEFINITIONS This division includes ODEQ's general air quality definitions (rule 0020), a list of abbreviations and acronyms (rule 0025), general exceptions (rule 0030), provisions for compliance schedules (rule 0050), and rules for conflicts ofinterest and makeup ofboards (rules 0100 to 0120). ODEQ has revised the method ofsettingthe starting emission level, ornettingbasis, for counting emission changes for new and expanding facilities when they are initiallypermitted. Underthe current SIP, to ensure that Oregon'sNSRJPSD program is protective, companies are required to evaluate the air quality effects that would occurifa new or expanded facility operated at its capacity. Once this level is approved, it is added to a facility's nettingbasis even though the facility maynever actually operate at that level. This unrealisticallyhigh starting emission level could allow a future expansion to avoid NSRJPSD. To prevent this, ODEQ has added a process to reset the nettingbasis once a new or expanded facility has been operating for 25

### up to 10 or 15 years to establish a realistic level. This applies to major OHO sources that were permittedbutnot yet operatingbefore the OHOrules were adopted and to future NSRlPSD sources. Theprocess will not limit the ability ofa facility to operate permitted equipment, but will prevent use ofthe added nettingbasis until the level is reset.
General Definitions 340-200-0020 Actualemissions - The rule revision adds provisions in definition ofactual emissions for sources that had not begun normal operation during thebaselineperiod but were approved orpermitted to construct and operate. Oregon revised its major source permitting program byreducing the nettingbasis from potential to emit (PTE) down to the highest actual emissions at the end ofthe baselineperiod for sources approved under division 224. This will be required before any future netting can take place and will prevent sources from netting out ofNSRlPSD. Sources that reduce actual emissions becauseofvoluntary controls will not lose that portion ofthe netting basis. This reduction will not affect the PSEL so sources with NSRlPSD permits will be able to utilize permitted emission units 

### up to their permitted PTE without going through NSRlPSD again. ODEQ also revised its major source permitting programbyreducing the netting basis from PTE down to the highest actual emissions in the last 10 years since the date ofpermit issuance for sources permitted under division 224 (MajorNSR which includes PSD).
Therevision to the definition ofactual emissions also adds 1) a provision for sources that had not begun normal operation but were permitted under division 224 to reset actual emissions, 2) a provisionto reduce PTE to actual emissions for sources that had not begun normal operationsbutwerepermitted to construct and operateunder division 224,3) a provision to 

### 26reduce PTE to actual emissions for sources permitted under division 224 or approved under division 210 (Stationary Source Notification Requirements) after thebaseline period, and 4) adds aggregate insignificant emissions threshold for PM2.5 in PM2.5 nonattainment areas. This makes PM2.5 consistent with the PM10 threshold, which is 5% ofthe significant emission rate (SER) of5 tons in Medford and othernonattainment areas in olderrules. Aggregate insignificant emissions - Therevision to the definition ofaggregate insignificant emissions adds an emissions threshold for GHG. The de minimis level for GHG is set at the State ofOregon GHG reporting threshold (2,756 tons C02e).
BaselineEmission Rate - The revised definition for baseline emission rate does not include a specific rate for PM2.5 because PM2.5 will be ratioed to PMIO forboth nettingbasis and PSEL. The revised definition includes a baseline emission rate for GHG with the first permit action after July 1, 2011, since that is when GHG sources are required to getpermits for GHGs alone.
Therevised definition further adds a provision for recalculating thebaseline emission rate ifactual emissions are reset in accordance with the definition ofactual emissions. Therevised definition also adds a provision for freezing onlytheproductionbasis used to establish the baseline emission rate, not the entirebaseline emission rate.
Biomass - Therevised rule adds a definition ofbiomass and defers carbon dioxide (C02) emissions from biomass in accordance with EPA's July 2011 deferral. The application ofthe

27PSD and title V permittingrequirements to C02 emissions from bioenergy and otherbiogenic stationary sources has been deferred for a period of3 years.
Criteria Pollutant
- Therevised rule adds PM2.5 to the definition ofcriteriapollutant.
FederalMajor Source - Therevised rule adds a GHG threshold of 100,qOO tons C02eper year to definition ofFederal Major Source consistent with EPA's GHG Tailoring Rule and includes fugitive emissions in the definition ofmajormodification. This inclusion clarifies that fugitive emissions mustbe included in the major NSR applicability. The GHG threshold in 340-200­ 0020(55) is consistent with the requirements in the GHG Tailoring Rule. MajorModification
- The definition ofmajormodificationhas been revised. The revised definition adds a provision stating that majormodifications for precursors are also major modifications for ozone and PM2.s. Thisrevision aligns the definition with EPA rules. The revised definition also specifies 1) that a major modification is triggered ifthe PSEL exceeds the netting basis, 2) thetype ofaccumulation ofphysical changes and changes in operation that trigger a majormodification, 3) that fugitive emissions must be included in the major NSR applicability, 4) that emissions increases from the increased use ofequipment permitted or approved to construct are not included in majormodification applicability, and 5) when sources would triggerNSR with only a 1ton/year increase.
The revised definition ofmajormodification also states that the portion ofthe netting basis and PSEL that was based onPTE because the source had not bebrun normal operations must 

### 28be excluded from majormodification applicabilityuntil it is reset and deletes the exception for PCPs thathas been removed from Federal regulations. Major Source - The revised major source definition states that fugitive emissions must be included in determining whether ornot a source is considered major. The revised definition also indicates that PTE calculations must include emissions increases due to the new ormodified source. NettingBasis - Therevised nettingbasis definition states that the initial netting basis and PSEL for PM25 and GHG will be established with the first permitting action issued after July 1,2011, provided the permitting action involved a public notice period thatbegan afterJuly 1, 2011 (i.e., when major GHG sources will berequired to obtain permits).
The revised definition also adds a provision that the initial netting basis and PSEL for PM2.5 will bethe PM2.5 fraction ofthe PMIO netting basis and PSEL. ODEQ treats PM2.5 and PM 10 in a comparable manner since PM2 .5 is a subset ofPMIO, which is a pollutant already addressed by the existing permittingrules. As a result, a facility's PM2 .5 fraction will be determined and used to calculate permitted levels for PM2 .5. This approach incorporates PM2.5 at this time as ifit had been part ofthe program all along; allowingpreviously approved expansions to continue to operate and new expansions to bereviewed consistent with State and Federal requirements. It also avoids the need to select a unique baselineperiod for counting changes in PM2.5 emissions towards triggering NSRlPSD. Becausethe PM 10 SER is 

### 15 tons/year and the PM2.5 SERis 10 tons/year, sources could retroactively trigger the PM2.5 SER because ofpast 29approved increases in PMIO. As a result, ODEQ may conduct a one time 5 ton true up to eliminatethis possibility.
Therevised definition also sets the initial source-specific PSEL for a source with a PTE greaterthan orequal to the SER to beequal to the PM2.5 fraction ofthe PMIO PSEL. The revision further clarifies when the nettingbasis is zero and when changes to the netting basis are effective and adds a provision to reduce the nettingbasis from PTE for sources permitted under OAR 340-224 (Major NSR) after thebaselineperiod. Opacity and Source Test Thereference to Director's discretion to allow alternatives to emission limits, testing ormonitoring methods in Federal rules orthe SIP withoutprior EPA approval has been deleted from the definitions ofopacity and source test. 

### PM2.5
- Therevised PM2.5 definition adds EPA's new reference test methods and adds a provision for PM2 .5 precursors. This definition is consistent with EPA's rules for purposes of title V and NSR. RegulatedPollutant The revised definition for regulated pollutant includes precursors and GHGs and clarifies that onlyregulated pollutants with significant emissions are subject to NSR.
The revised definitions discussed above are consistent with the EPA definition in 40 CFR 51. 165(a)(1) and 51.166(b). Exceptions 340-200-0030 30Therule was revised to clarifythat the statutory exemption for agricultural operations and equipmentdo not apply to the extent necessary to implement the CAA. This allows agricultural operations and equipmentto beregulated as necessary in Oregon to meet CAA requirements.
Division 200 Tables
The Significant Air Quality Impact, Significant Emission Rates, De minimis Emission Levels, and Generic PSEL tables (Tables 1 through 5) in divisionhave also beenrevised. The tables add: 1) EPA-adopted PM2.5 significant impact levels; 2) EPA-adopted SERs for GHG, direct PM2.5, PM2.5 precursors and VOC precursors; 3) de minimis levels for GHG, for PM2.5 in the Medford AQMA, and for direct PM2.5; and 4) a generic PSEL for PM2.5 and GHG. The de minimis level for GHG has been set at the State ofOregon GHG reportingthreshold. Thede minimis levels for PM2.5 are consistent with PMIO and the generic PSEL for GHG is based on proposed SERminus 1000 tpy. In addition, the generic PSEL for PM2.5 is based on the proposed SERminus 1tpy, consistent with other criteriapollutants.
DIVISION 202 AMBIENT AIR QUALITY STANDARDS AND PSD INCREMENTS
This division contains the State ambient air quality standards and the PSD increments.
Definitions 340-202-0010
31Baseline Calculation
- The revised definition clarifies that actual emission increases from any source ormodification (notjust major sources and majormodifications) on which construction commenced afterJanuary 6,1975, cannot be included in the baseline calculation. 

### It also adds the baseline concentration for PMIO inthe Medford-Ashland AQMA from the definition in division 225 (Air QualityAnalysis Requirements) and the baseline concentration year for PM2.5 that is set onthe year when ambient monitoring was done and when the increment was proposed.
Ambient Air Quality Standards for Suspended Particulate Matter 340-202-0060, Ozone 340-202-0090 and Lead 340-202-0130
The revised rules update the Oregon's ambient air quality standards to be consistent with Federal NAAQS by adding the 2006 annual average and 24-hour Federal standards for PM2.5, the 2008 8-hour Federal standard for ozone and the 2010 one-hour Federal standard for lead.
DIVISION 204 DESIGNATION OF AIR QUALITY AREAS
This division identifies the carbon monoxide, PMIO, and ozone nonattainment areas in the State ofOregon. Designation ofNonattainment Areas 340-204-0030

32Therule was revised to add two PM2 .5 nonattainment areas, Klamath Falls and Oakridge, that were designated by EPA to not be in attainment ofthe 2006 24-hour PM2 .5 NAAQS (74 FR 58688, November 13, 2009).


### DIVISION 206 AIR POLLUTION EMERGENCIES
This division establishes criteria for identifying and declaring airpollution episodes at levels below the level ofsignificantharm. The division was revised to add a significant harm level for PM2.5 of350.5 Jig/m3 (24-hour average), an airpollutant alert level for PM2 .5 of 140.5 Jig/m3 (24-hour average), an air pollution warning level of210.5 !lg/m3 (24-hour average) for PM.2.5, and an air pollutant emergencylevel of280.5 Jig/m3 (2-hour average) for PM2.5.


### DIVISION 214 STATIONARY SOURCE REPORTING REQUIREMENTS
This division contains ODEQ's provisions for reporting and recordkeeping, information requests (section 114 authority), credible evidence, business confidentiality, emission statements, and excess emissions. 

### Excess Emissions and Emergency Provisions 340-214-0300 through 0360 (Formally in Division 28)
The applicability ofthe Excess Emissions and Emergency Provisions rule has been revised to align with EPA policyregarding applicability, planned start-up and shutdown, schedule maintenance, other excess emissions, enforcement action criteria, and affirmative 33defensebyclarifying that the affinnative defense ofemergency does not take away ODEQ's enforcement discretion, but is relevant when evaluating a violation to detennine the level of penalty. It also clarifies that excess emission reports must include whether a source followed approved procedures for startup, shutdown ormaintenance activity when applicable and consolidates and further describes criteria for demonstrating emergency as an affinnative defense. The rule revisions are consistent with EPA policy as specified in 1999 memorandumby

DIVISION 216 AIR CONTAMINANT DISCHARGE PERMITS
This division is the ODEQ federally-enforceable State Operating Pennit program, and is also the administrative pennit mechanism used to implement the notice ofconstruction and major NSR programs. The revisions to the rules in division 216 clarify that facilities with ACDPs maynot be operated ifthe pennit expires or is tenninated, unless a timelyrenewal application has been submitted or another type ofpennit has been issued. Therevisions also clarifythat for facilities with title V orACDPs, requirements established in preceding pennits remain in effect unless specifically modified or tenninated.

14 Memorandum from Steven A. Herman entitled "State Implementation Plans: Policy Regarding Excess Emissions During Malfunctions, Startup, and Shutdown, September 20, 1999.



### 34

### In addition, the following unused Basic PelTIlit categories currently in the Oregon SIP have been deleted from this rule and, following this action, are proposed to beremoved from the SIP: 1) Wood Furniture and Fixtures more than 5,000 but less than 25,000 board feet/maximum 8hour input 2) Flour, Blended and/or Prepared and Associated Grain Elevators more than 2,000 but less than 10,000 tons per year throughput. 3) Grain Elevators used for intelTIlediate storage more than 1,000 but less than 10,000 tons/year throughput. 4) Millwork (including kitchen cabinets and structural wood members) more than 5,000 but less than 25,000 bd. ft.lmaximum 8hour input. 5) Non-Ferrous Metal Foundries more than one ton/yr. but less than 100 tons/yr. of metal charged. 6) Pesticide Manufacturing more than 1,000 tons/yr. but less than 5,000 tons/yr. 7) Sawmills and/or Planing Mills more than 5,000 but less than 25,000 board feet/maximum 8 hour finished product. 8) Seed Cleaning and Associated Grain Elevators more than 1,000 but less than 5,000 tons peryear throughput. 9) Bakeries, Commercial bakingmore than 500 tons ofdough per year. 10) Cereal Preparations and Associated Grain Elevators more than 2,000 but less than 10,000 tons peryear throughput.



### 3511) Coffee Roasters roasting morethan 6 tons coffeebeans in a year, butless than 30 tons/yr.
In 2001, ODEQ instituted 19 Basic Permit categories to track small airemission sources. ODEQ intended that basicpermits function as a registration, ormeans to track sources with potential to grow orrequire a different type ofpermit and to triggercontrol requirements. The purpose was to anticipate emission increases and reduce potential for source violations. Because no basicpermits have been issued in the above categories, removing these categories does not result in termination ofany existingpermits. A general provision in the ODEQ's ACDP rules (division 216) ensures that any facility with significant emissions is regulated through a permit.
The rule revision also delegates authority to Lane Regional Air ProtectionAgencyto implement ACDP and Oregon title V operatingpermit programs for regulation ofPM2.5 and GHG within its area of jurisdiction. It also adds: 1) PM2.5 and GHGs to pollutant-based source categories requiring ACDPs, 2) a 5 ton PM2.5 threshold for requiring a permit in nonattainment areas to provide more protection for the area through source surveillance, and 3) a 100,000 ton GHG C02e threshold for GHGpermitting, consistent with the GHG tailoring rule. These rule revisions are proposed for approval into the SIP.


### DIVISION 224 MAJORNEW SOURCE REVIEW
This division contains the ODEQ major sourcepermit to construct programs as required by title J, parts C and D oftheAct. Itrequires an ACDP prior to beginning construction on a newmajor source ormajormodification 36This division applies to new major sources and major modifications and requires that no owneroroperatorbegin actual construction without first havingreceived an ACDP and having satisfied the requirements ofdivision 224.

The division includes the procedural requirements for the NSRprogram, including specifying the information thatmust be submitted in a permit application, the time period for which the approval to construct is valid, the obligation to comply with all applicable requirements, and the time period that the new ormodified source can operate without applying for a title V operatingpermit, and when a title V operating permitmust berevised before commencing construction or operation. Thedivision also includes the procedures for processing permit applications.

The division also includes the substantiverequirements which mustbemet for approval ofa new major source or major modification. These include the requirement that the owner or operator must demonstrate the ability ofthe source to complywith all applicable requirements.
ODEQ'smajor source permit to construct program as revised in division 224 complies with EPA'srequirements in 40 CFR 51.165 through 51.166 and ensures that new and modified major 

### 37sources will not cause or contribute to violations ofanyNAAQS. Therefore, EPA proposes to approve these provisions into the Oregon SIP.
Applicability and General Prohibitions 340-224-0010
The rule revision clarifies that division 224 (Major NSR) applies to the regulated pollutant for which the area is designated nonattainment ormaintenance within nonattainment and maintenance areas, as well as to the regulated pollutant for which the area is designated attainment orunclassified within attainment and unclassifiable areas. Italso adds applicability requirements for GHG PSD permitting ofsources that have already triggered NSR/PSD for other pollutants and that are major for GHGs and trigger PSD. This is consistent with EPA's Tailoring Rule for purposes oftitle V and PSD. Requirements for Sources in Nonattainment Areas 340-224-0050

The rule revision adds requirements for PM2.5 precursors to sources in designated PM2.5 nonattainment areas (Le., Oakridge and Klamath Falls). It also clarifies that LAER applies to each emissions unit that emits thenonattainmentpollutant orprecursornot included inthe most



### 38recent nettingbasis or included in the most recent netting basis but has beenmodified to increase actual emissions.
Requirements for Sources in Maintenance Areas 340-224-0060

Therule revision adds precursors to the list ofpollutants subject to BACTin maintenance
areas. It clarifies that BACT applies to each emissions unit that emits themaintenance pollutant
orprecursornot included in themostrecent nettingbasis orincluded inthe mostrecent netting basisbuthas beenmodified to increase actual emissions.

Prevention ofSignificant Deterioration Requirements in Attainment or Unclassified Areas 340-224-0070

The rulerevision: 1) adds precursors to the BACT requirement, 2) clarifies that BACT applies to each emissions unitthat emits the nonattainmentpollutant orprecursor not included in themostrecent nettingbasis, oris included in the mostrecent nettingbasisbuthas been modified to increase actual emissions, 3) indicates thatthe required air quality analysis is for the pollutant with increases above the SERover thenettingbasis, and 4) adds a provision that increases above the SERfor direct PM2 .5 orPM2.5 precursors also trigger an analysis ofPM2 .5. 39DIVISION 225 AIR QUALITYANALYSIS REQUIREMENTS

This division contains all ofthe modeling, monitoring, impact analysis, and net air qualitybenefitrequirements that arenecessaryto ensure ambient air qualityrequirements are met inthe permittingprocess. The division also includes provisions which specify the technical information and processes to be used in air quality impact analyses.

Theprovisions for demonstrating net air qualitybenefit in therevisions to division 225 complywith the CAA and EPA's requirements for emission offsets (section 173 ofthe Act, 40 CFR 5 1. 1 65(a) and 40 CFRpart 51, appendix S, Emission Offset Interpretative Ruling). EPA is therefore proposing to approve these provisions as complyingwith part D ofthe CAA.

Definitions 340-225-0020

Baseline Concentration - Therevised baseline concentration definition adds a baseline concentration year of2007 for PM2.5 consistent with EPAregulations. The definition ofbaseline concentration is consistent with EPA's definitions in 40 CFR 5 1.165(a) and 51.166(b).

40Requirements for Analysis and Demonstrating Compliance in Maintenance Areas 340-225­ 0045 and PSD Class I, II and III Areas 340-225-0050 and 0060

Therulerevisions clarify that a single source impact analysis is sufficient to show compliance with standards and increments for onlythepollutants that trigger PSD, and that a single source impact analysis is for emission increases equal to or greater than a significant emission rate above the netting basis dueto theproposed source ormodification. Therevisions also add a PM2 .5significant monitoring concentration of4 jlg/m3 as specified in EPA's PM2.5 NSRJPSD implementing rule for use in determining the need for preconstruction monitoring ofa proposed source ormodification in a PSD Class II and 

### III area Requirements for Demonstrating a Net Air Quality Benefit 340-225-0090

The rule revision adds PM2 .5to the list ofpollutants for non-ozone areas and adds PM2.5 precursor, S02 and NO K offset ratios for non-ozone areas. Theseoffset ratios are based on levels established byEPA. The revision also indicates that precursoremissions can beused to offset direct PM2 .5and vice versa. We are taking no action onthese interpollutant offset ratios for PM2.5 at this time to give Oregon time to provide a demonstration that these interpollutant offset

41ratios are NAAQS protective in Oregon or alternatively revise these ratios in accordance with the July 21,2011, memorandumby EPA that revises the Federal interpollutant offset policy. IS
Therule revision further adds an alternativeprovision for small scale local energy projects (and related infrastructure) located in nonattainment and maintenance areas indicating that the net air qualitybenefit requirement is satisfied ifthe nonattainrnent ormaintenance pollutant emissions are offset using the offset ratios specified in this rule, provided that the proposed major source ormajor modification does not cause orcontribute to a violation ofthe NAAQS or otherwise pose a material threat to compliance with air quality standards in the
nonattainment area. The State ofOregon House Bill 2952 amended ORS 468A.040 to add an exception for small scale local energyprojects regarding net air qualitybenefit.

DIVISION 228 REQUIREMENTS FOR FUEL BURNING EQUIPMENT AND FUEL SULFUR CONTENT

l5 In a memorandum from Gina McCarthy, EPA Assistant Administrator, entitled "RevisedPolicy to Address Reconsideration ofInterpollutantTrading Provisions for Fine Particles (PM25),"July, 21, 2011, EPArevised its policyoriginally set forth inthe 2008 PM2 ,5 New Source Review Implementations Rule (the 2008 fmal rule, 73 FR 28321,) concerning the development and adoption ofinterpollutant trading (offset) provisions for PM2 .5 under state nonattainment areaNSRprograms for PM2.5. As a result ofourreconsideration ofthe policy, EPA no longer supports the ratios provided in the preamble to the 2008 final rule aspresumptively approvable ratios for adoption in SIPs containing nonattainment NSRprograms for PM2.5. This revised policy does not affect the EPArule provisions that allow states to adopt as part oftheir nonattainment NSRprograms for PM2.5appropriately supported interpollutant offset provisions involving PM2,5 precursors. 42This division provides sulfur content offuel requirements and general emission standards for fuel burning equipment.


### SulfurDioxide Standards 340-228-0200 To be consistent with Federal emission standards and the reference source test method, the averaging time for sulfur dioxide emission standards for fuel-burning equipment in this rule has been changed from two hours to three hours. As part oftheirJune 23,2010, SIP submittal, ODEQ provided a demonstration that this rule change will have no discernable effect onthe air quality or on the stringency oftheirrevised emission standard. EPA has reviewed ODEQ's demonstration and has determined that the revised rule will not interfere with the attainment or maintenance ofthe NAAQS for sulfur dioxide. Therefore, EPA proposes to approve these regulations.


### DIVISION 234 EMISSION STANDARDS FORWOOD PRODUCTS INDUSTRIES The division establishes emission standards and monitoring and reporting requirements for wigwam waste burners, kraftpulp mills, neutral sulfite semi-chemical (NSSC) pulp mills, sulfite pulp mills, and board products industries (veneer, plywood, particleboard, hardboard).


### Definitions 340-234-0010

43Wigwam Waste Burner - The definition ofwigwam wasteburnerhas been revised. The outdated regulations governing the use ofwigwam wasteburnershavebeen deleted and a prohibition statewidehas been added.
III. EPA's Proposed Action
Consistent with the discussion above, EPA proposes to approve most ofthe submitted SIP provisions and to take no action on certain otherprovisions, as discussed below. This action will result inproposed changes to the Oregon SIP in 40 CFR part 52, subpart MM.
A. Rules to Approve into SIP
EPA proposes to approve into the Oregon SIP at 40 CFR part 52, subpart MM, the following revisions to chapter 

### 340 ofthe OAR listed in Table 

### 2. It is important to note that in those instances where ODEQ submitted multiple revisions to a single rule ofchapter 

### 340 ofthe OAR, the most recent version ofthat rule (based on State effective date) is proposed to be incorporated into the SIP since it supersedes all previous revisions.
Table 

### 2

# . 

# .ODEQ Regu

### I .. fIons f:or

### P roposedApprovaI State TitlelSubject State Explanation Citation Effective Date OAR340-200
- General Air Pollution Procedures and Definition 

### 0010 Purpose and Applicability 11/8/2007 

### 0020 General Air**Qualit~** Definitions 

## 1511 120ii 

### 0025 Abbreviations and Acronyms 

### 011 0030 Exceptions 9117/2008 OAR 340-202
- Ambient Air Quality Standards and PSD Increments 

### 0010 Definitions 5/1/2011 44 

## I0060 Suspended Particulate Matter 5/112011 0090 Ozone 512112010 0130 Ambient Air Quality Standard for Lead 512112010 0 AmbientAir Increments 5/1/2011 OAR340-204 - Designation ofAir Quality Areas 0010 Definitions 5/2112010 0030 Designation ofNonattainment Areas 5/2112010 OAR340-206 - Air Pollution Emergencies 0010 Introduction 512112010 0030 Episode Stage Criteria for Air Pollution Emergencies 5/21/2010 OAR340-208 - Visible Emissions and Nuisance Requirements 0010 Definitions 11/8/2007 0100 Visible Emissions, Applicability 111812007 0110 Visible Air Contaminant Limitations 1118/2007 0200 Fugitive Emission Requirements, Applicability 111812007 0210 Fugitive Emission Requirements, Requirements 111812007 OAR340-209 - Public Participation 0040 Public Notice Information 1118/2007 0070 i Hearings and Meeting Procedures 1118/2007 0080 Issuance or Denial ofa Permit 11/8/2007 OAR340-210 - Notice ofConstruction and Approval ofPlans 0205 Applicability 9/17/2008 OAR340-214 - Stationary Source Reportin2 Requirements 0010 Definitions 11/812007 0300 (Formally

OAR340-28­

1400) Purpose and Applicability

, 111812007

0310 (Formally

OAR340-28­

1410) Planned Startup and Shutdown 1118/2007

0320 ! (Formally 

## I OAR340-28­ Scheduled Maintenance 111812007

451420) 0330 (Fonnally

OAR340-28­

1430) Upsets and Breakdowns 11/8/2007

0340 (Fonnally

OAR340-28­

1440) Reporting Requirements 11/8/2007

0350 (Fonnally

OAR340-28­

1450) Enforcement Action Criteria 11/8/2007

0360 Emergency as an Affinnative Defense 11/8/2007 OAR 340-216 - Air Contaminant Discharge Permits 0020 and Table 1 Applicability 5/1/2011

0040 Application Requirements 5/1/2011 0060 General ACDPs 5/1/2011 0064 Simple ACDPs 5/1/2011 0082 Tennination or Revocation ofan ACDP 11/8/2007 OAR 340-222 - Stationary Source Plant Site Emission Limits 0020 Applicability 8/29/2008 OAR 340-224 Major New Source Review 0010 Applicability and General Prohibitions 5/1/2011 0050 Requirements for Sources in Nonattainment Areas 5/1/2011 0060 Requirements for Sources in Maintenance Areas 5/1/2011 0070 Prevention ofSignificant Deterioration Requirements for Sources in Attainment or Unclassified Areas 5/1/2011
OAR 340-225 - Air Qualit) Analysis Requirements 0020 Definitions 5/1/2011 0030 Procedural Requirements 5/1/2011 0045 Requirements for Analysis in Maintenance Areas 5/1/2011 0050 Requirements for Analysis in PSD Class II and Class III Areas 5/1/2011 46I

I 0060 Requirements for Demonstrating 511/2011 Compliance with Standards and Increments in PSD Class I Areas 0090
i

# h Requirements for Demonstrating a NetAir Quality Benefit 511/2011 

### 'rat EPA is not taking action onthe interpollutant offset 

### ios provided in 0090(2)(a)(C)

. OAR340-228 - Requirements for Fuel Burning Equipment and Fuel Sulfur Content Definitions 11/812007 0020 111812007 Sulfur Dioxide Standards 0200 Grain Loading Standards 0210 111812007 OAR340-232 - Emission Standards for VOC Sources 0010 Introduction 111812007 OAR340-234 - Emission Standards for Wood Products Industries Definitions 111812007 0100 0010 Wigwam 1118/2007**~'** Waste Burners Statement of Policy and Applicability

___--+

____.. Wigwam 111812007 Rule repealed, . Waste Burners - Authorization to remove from SIP Operate a Wigwam Burner 0120 0110 Wigwam 111812007 Rule repealed, Waste Burners Emission and . remove from SIP Operation Standardsfor Wigwam Waste Burners 0130 Rule repealed, Wigwam 111812007 Waste Burners - Monitoring and remove from SIP I 

### I Reporting Wigwam 1118/2007 0140 I Waste Burners Existing 

## I i Administrative Agency Orders I**~------~--------** 0210 Kraft Pulp Mills
- Emission I 1118/2007 Limitations I Rule repealed, Specifications KraftPulpMills
- Plans and 111812007 0230 i remove from SIP 111812007 0240 Kraft Pulp Mills Monitoring 1118/2007**t--_O_25_0_-+-_Kr~a_ft_P:-u-:!,-lp-=-rv1i1ls** - Reporting i Rule repealed, 0260 KraftPulpMills
- Upset , 111812007 I remove from SIP Conditions Board Product Industries
- 11118/2007 Applicability and General Provisions 0500 I 0510 Board Product Industries
­ 111812007 Veneer and Plywood I 

### 47Manufacturing Operations 0520 Board Product Industries
­ Particleboard and Manufacturing Operations 11/812007 0530 Board Product Industries
­ Hardboard Manufacturing Operations 1118/2007 OAR340-236 - Emission Standards for Specific Sources 0010 Definitions 1118/2007 0410 Hot Asphalt Plants -Control Facilities Required 11/812007 OAR 340-264 - Rules for Open Burning 0040 Exemptions, Statewide 9117/2008
B. Rules on which No Action is Taken
The following provisions were included in the SIP submittals discussed above. However, EPA is not proposingto approve these provisions.
OAR 340-200-0040
- State ofOregon Clean Air Act Implementation Plan OAR 340-215
- Greenhouse Gas Reporting Requirements OAR 340-218 (0010, 0020, 0040, 0050, 0120, 0150, 0180, 0190 and 0250)
- Oregon Title V Operating Permits OAR 340-228
- Requirements for Fuel Burning Equipment and Fuel Sulfur Content, Mercury Rules (0672 Emission Caps, 0673 Monitoring Requirements for the HgEmission Standards, 0676 Heat Input Determinations 0674, 0676 Coal Sampling and Analysis, and 0678 HgMass Emissions Measurement Prior to Any Control Devices 0678) OAR 340-228
- Requirements for Fuel BurningEquipment and Fuel Sulfur Content Federal Acid Rain Program (0300) 48OAR 340-230
- Incinerator Regulations OAR 340-234-0010
- Standards for Wood Products Industries
- EPA is not acting on references to total reduced sulfur from smelt dissolving tanks, sewers, drains, categorically insignificant activities, and wastewatertreatment facilities inthe revised definition ofother sources.
IV. Statutory and Executive Order Reviews
Under the CAA, the Administrator is required to approve a SIP submission that complies withthe provisions ofthe Act and applicable Federal regulations. 42 U.S.C. 741O(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria ofthe CAA. Accordingly, this proposed action merely approves state law as meeting Federal requirements and does not impose additional requirements beyond those imposed by state law. Forthat reason, this proposed action: • is not a "significant regulatory action" subject to review bythe Office ofManagement and Budget underExecutive Order 12866 (58 FR 51735, October4,1993); • does not impose an information collection burden under the provisions ofthe Paperwork Reduction Act (44 U.S.C. 3501 et seq.); • is certified as nothaving a significant economic impact on a substantial number ofsmall entities under the Regulatory FlexibilityAct (5 U.S.C. 601 etseq.); • does not contain any unfunded mandate or significantlyoruniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Public Law 104-4);

49• does not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999); • is not an economically significantregulatory action based onhealth or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997); • is not a significant regulatory action subject to Executive Order 13211 (66 FR28355, May 22,2001); • is not subject to requirements ofSection 12(d) ofthe National TechnologyTransfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application ofthose requirements would beinconsistent with the CAA; and • does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).
In addition, this rule does not have tribal implications as specified byExecutive Order 13175 (65 FR 67249, November 9, 2000), because the SIP is not approved to applyin Indian countrylocated in the state, and EPA notes that it will not impose substantial direct costs on tribal governments orpreempt tribal law. List ofSubjects in 40 CFR Part 52
Environmental protection, Airpollution control, Intergovernmental relations, Lead, Nitrogen dioxide, Ozone, Particulate matter, Reporting and recordkeeping requirements, Sulfur oxides, Volatile organic compounds. 50Dated:

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51