1 

### Technical Support Document

Approval and Promulgation of Impleme ntation Plans; Oregon: New Source Review / Prevention of Significant Deterioration Rule Revisions and Air Quality Permit Streamlining Rule Revisions

Federal Register Proposal, September 2011

Docket # EPA-R10-OAR-2011-0767

A. OCTOBER 10, 2008 SIP SUBMITTAL BY ODEQ

Overview of Rule Revisions

1. General Definitions The rule changes relocate several definitions to the General Air Quality Definitions section to make it clear that they apply to all air quality ru les. Revisions to the definition of “particulate matter” improve the cross reference to Ore gon Department of Environmental Quality’s (ODEQ) Air Quality Source Sampling Manual and specify test methods.

2. Delisting HFE-7300 as a VOC The rule changes add HFE-7300 to the list of co mpounds exempt from the definition of volatile organic compounds (VOC). According to EPA research, this substance has negligible reactivity and very low potent ial to form ground-level ozone or smog. HFE-7300 has a variety of potential uses including as a heat-transfer fluid and in coating, cleaning, and lubricating applications.

3. Revisions to make Title V procedural rules consistent with federal Part 70 requirements, and improve administration EPA is not acting on the Title V permitting ru les (OAR 340-218) because Title V permitting rules are not part of the SIP.

4. Revisions to make Excess Emissions rules co nsistent with federal Part 70 requirements In its 2006 Title V Program Review, EPA identif ied several deficiencies in ODEQ’s Excess

Emissions rules. Revisions to these rules achiev e two main objectives. First, they clarify that the affirmative defense of emergency does not take away ODEQ’s enforcement discretion, but is relevant when evaluating a vi olation to determine the level of penalty. Second, the revisions consolidate the notification and reporting requi rements and the criteria for demonstrating emergency as an affirmative defense. The revi sions make ODEQ’s rule s consistent with 40 CFR part 70 requirements and also EPA SIP guida nce. The EPA SIP guidance is contained in a2 September 20, 1999 memorandum titled “State Implementation Plans: Policy Regarding Excess Emissions During Malfunctions, Startup, and Shutdown” from Steven A. Herman, Assistant for Enforcement and Compliance Assu rance, and Robert Perciasepe, Assistant

Administrator for Air and Radiation.

5. Changes to Basic Permit Categories The rule changes streamline the Air Contaminant Discharg e Permit (ACDP) program by eliminating basic permit categories with limite d potential for environmental harm. In 2001, ODEQ instituted 19 Basic Permit categories to track small air emission sources. ODEQ intended that basic permits function as a registra tion, or means to track sources with potential to grow or require a different type of permit and to trigger control requirements. The purpose was to anticipate emission increases and redu ce potential for source violations. The existence of unused basic permit categorie s results in lack of clarity about whether various small

facilities must obtain basic ACDPs. Deleti ng the unused permit categories eliminates confusion and align the rules with current program implementation. To date, ODEQ has only issued basic permits to sour ce categories that required ACDPs before the 2001 rulemaking. Because no basic permits have been issued in the several categories proposed for repeal, this

action does not result in termina tion of any existing permits. A general provision in the ACDP rules ensures that any facility with significant emissions is regulated through a permit. OAR 340-216-0020 Table 1 (B)(75) requires permits fo r all sources not otherwise listed with emissions of five or more tons a year of PM 10 in a PM 10 non-attainment or maintenance area, or 10 or more tons of any single criteria po llutant in any part of the state.

6. Update and Renewal of General Permits fo r Rock Crushers, Ready Mix Concrete Plants, Asphalt Plants, Sawmills/Plywood/Veneer Plants, and Boilers ODEQ adopted by reference updates and corrections to several categories of general permits. Since these permits were originally issued in 2001, ODEQ has identified va rious errors in need of correction. These changes clarify monitoring, reporting an d compliance procedures.

7. SO 2 Averaging To align with federal standards, ODEQ change d the averaging time in the sulfur dioxide standards for fuel-burning equipment from two to three hours. The averaging time is the period during which measurements are ta ken to determine compliance with a standard. Measurements of a pollutant are averaged for comparison to the standard. Currently, some facilities must demonstrate compliance with both two and thre e hour averaging periods . The rule change simplifies compliance determinations by eliminating duplicative standards.

8. Salt Laden Wood Exception This rule change adds a requirement that th e existing salt laden wood waste exemption is applicable only upon prior notice to ODEQ. When burned, salt laden wood has higher emissions than “standard” wood. High salt content is caused by floating logs in salt water as a means of transportation. While this was a common pr actice 30 years ago, it is now a rare event.

9. Utility Mercury Rule Corrections3 EPA is not acting on these mercury rules because the Clean Air Mercury Rule was vacated and mercury is not part of the SIP.

10. Revisions to Incinerator Rules Revisions to the incinerator rules clarify and consolidate definitions and clarify the requirements for operating crematory incinerators . EPA is not acting on these incinerator rules because the rules are covered under section 111(d ) of the CAA (Standards of performance for existing sources; remaining useful life of source).

11. Wigwam Prohibition Because wigwam waste burners cannot be ope rated in compliance with other air quality regulations, ODEQ repealed outdated regulatio ns governing wigwam burners and prohibit their use statewide. These revisions specify that wigwam waste bur ner emissions not be subtracted from the netting basis in rare cases where wigwam burners were actually operated at facilities during the baseline period.

12. Revisions to Kraft Pulp Mill Rules ODEQ adopted the Kraft Pulp Mill rules in 1973. Since then, EPA has promulgated New Source Performance Standards (NSPS) for Kraft Pulp Mills. Process units at some mills were modified after the NSPS applicability date, ma king those units subject to the NSPS. ODEQ revised their Kraft Pulp Mill rules to clarify NS PS requirements that apply to these mills. The revisions also simplify permitting and compliance determinations and eliminate unnecessary reporting.

13. Simplified Emission Standards for Plywood, Particleboard and Hardboard Manufacturing Operations The rule revisions clarify emission requireme nts for plywood, particleboard and hardboard manufacturing facilities by sp ecifying uniform measurements and compliance methods.

14. Changes to Emission Standards for Specific Industries The rule changes consolidate definitions and clar ify them for consistency with other divisions.

Description of Substantive Rule Revisions Submitted October 10, 2008

DIVISION 200 GENERAL AIR POLLUTION PROCEDURES AND DEFINITIONS

This division contains ODEQ’s general air quality definitions (rule 0020), a list of abbreviations and acronyms (rule 0025), general exceptions (rule 0030), provisions for adopting and submitting the Oregon SIP (rule 0040), provisions for comp liance schedules (rule 0050), and rules for conflicts of interest and makeup of boards (rules 0100 to 0120).

The following is a discussion and evaluati on of the noteworthy division changes:

1) General Definitions 340-200-00204 Ambient Air - Relocates definition and clarifies exclusio n for areas to which the general public has

no access.

Opacity - Relocates definitions to th e general rto apply to all air quality rules in divisions 200 through 268. Deletes reference to Director’s discretion to allow alternatives to emission limits, testing or monitoring methods in federal rules or the State Implem entation Plan without prior EPA approval.

Particulate Matter - Clarifies cross reference to Source Sa mpling Manual, clarifies test methods.

Source Test - Deletes reference to Director’s discretion to allow alternatives to emission limits, testing or monitoring methods in federal rules or the State Implementation Plan without EPA approval.

Volatile Organic Compounds - Delists HFE-7300 as a VOC and adds HFE-7300 to the list of volatile organic compounds that are not subject to regulati on as ozone forming compounds because of a very low tendency to re act with sunlight to form ozone.

DIVISION 208 VISIBLE EMISSI ONS AND NUISANCE REQUIREMENTS

This division (currently not in the SIP) cont ains the visible and fugitive emission, and nuisance control requirements for Oregon. On November 5, 1999, ODEQ submitted a complete rule renumbering to EPA for approval. On January 22, 2003 (68 FR 2891), EPA approved most of

these new divisions but at that time did not ta ke action on division 208 (V isible Emissions and Nuisance Requirements). We are now proposi ng to approve rules 0010 (Definitions), 0100 (Visible Emissions, Applicab ility), 0110 (Visible Emissi ons,Visible Air Contaminant Limitations), 0200 (Fugitive Emissions Requi rements, Applicability) and 0210 (Fugitive Emissions Requirements) of division 208 into the Oregon SIP which will replace division 21, rules 015, 050, 055, and 060.

DIVISION 209 PUBLIC PARTICIPATION

.

This division contains the public participation procedures and requirement s for issuing permits. The permitting program rules assign permit actions to the appropriate public participation procedures established in this division.

1) Public Notice Information 340-209-0040 and Issuance or Denial of a Permit 340-209-0080

Adds that public notices of proposed air contam inant discharge permit and Title V permit actions will include a description of procedures for ma king comments and requesting hearings. For added clarity, moves procedures for responding to comments and taking action on Title V Permits into

the rule section on Issuance or Denial of a Permit.

DIVISION 214 STATIONARY SOURCE REPORTING REQUIREMENTS5 This division contains ODEQ’s provisions for reporting and reco rdkeeping, information requests (section 114 authority), credible evidence, bus iness confidentiality, em ission statements, and

excess emissions.

The following is a discussion and evaluation of th e noteworthy division cha nges in the definitions

and excess emission subsections:

1) Definitions 340-214-0010

Clarifies that a “Large Source” is a facility required to maintain a Title V Permit, and a “Small Source” is a facility required to maintain an ACDP.

2) Excess Emissions and Emergency Provisions 340-214-0300

Broadens applicability of the Ex cess Emissions rule to include excess emissions caused by reasons

other than those enumerated in the rule. Aligns language in ap plicability, planned start-up and shutdown, schedule maintenance, other excess emissions, enforcement action criteria, and

affirmative defense subsections with federal requirements by clarifying that the affirmative defense of emergency does not ta ke away ODEQ’s enforcement disc retion, but is relevant when evaluating a violation to determin e the level of penalty. Consolidat es notification requirements for excess emissions not addressed by planned star tup and shutdown, scheduled maintenance or emergencies, in the All Other Excess Emissions section. Clarifies that excess emission report must include whether a source followed appr oved procedures for startup, shutdown or maintenance activity when applicable. Conso lidates and further describes criteria for demonstrating emergency as an affirmative defense.

DIVISION 216 AIR CONTAMIN ANT DISCHARGE PERMITS

This division is the ODEQ federally-enforceable State operating permit (FESOP) program , and is also the administrative permit mechanism used to implement the notice of construction and major new source review programs.

Clarifies that facilities with ACDPs may not be operated if the permit expires or is terminated, unless a timely renewal application has been submitte d or another type of permit has been issued.

Clarifies that for facilities with Title V or AC DPs, requirements established in preceding permits remain in effect unless specifica lly modified or terminated.

Table 1 - To streamline permitting procedures, clar ifies which facilities must obtain basic permits and update rules to current practices, deletes the following unused Basic Permit categories: - Wood Furniture and Fixtures more than 5,000 but less than 25,000 board feet/maximum 8 hour input - Flour, Blended and/or Prepared and Associated Grain Elevator s more than 2,000 but less than 10,000 tons per year throughput. - Grain Elevators used for intermediate storag e more than 1,000 but less than 10,000 tons/year throughput.6 - Gray iron and steel foundries, malleable iron foundries, steel investment foundries, steel foundries more than one ton/yr. but less than 100 tons/yr. metal char ged (not elsewhere identified). Note that this source category is not in the current SIP and is only being deleted from the current

version of OAR 340-216. - Millwork (including kitchen cabinets and stru ctural wood members) more than 5,000 but less than 25,000 bd. ft./maximum 8 hour input.

- Non-Ferrous Metal Foundries more than one ton/yr. but less than 100 tons/yr. of metal charged. - Pesticide Manufacturing more than 1,000 tons/yr. but less than 5,000 tons/yr. - Sawmills and/or Planing Mills more than 5,000 but less than 25,000 board feet/maximum 8 hour finished product. - Seed Cleaning and Associated Grain Elevators more than 1,000 but less than 5000 tons per year throughput. - Bakeries, Commercial baking more than 500 tons of dough per year. - Cereal Preparations and Associated Grain Elevators more than 2,000 but less than 10,000 tons per year throughput. - Coffee Roasters roasting more than 6 tons coff ee beans in a year, but less than 30 tons/yr.

DIVISION 218 OREGON TI TLE V OPERATING PERMITS

Since this division establishes a program to implement Title V operating permits, it is not part of Oregon’s SIP. As such, EPA is taking no action on the rule revisions submitted for division 218.

DIVISION 228 REQUIREMENTS FOR FU EL BURNING EQUIPMENT AND FUEL

SULFUR CONTENT

This division provides sulfur content of fuel requirements and general emission standards for fuel burning equipments.

1) Sulfur Dioxide Standards 340-228-0200

To match federal standards, changes the aver aging time for sulfur dioxide standards for fuel-burning equipment from two hours to thr ee hours. As part of their June 23, 2010, SIP submittal, ODEQ provided a demonstration that this rule change will have no discernable effect on the air quality or on the stringency of their revised emission standard. EPA has reviewed ODEQ’s demonstration and has determined that th e revised rule will not interfere with the attainment or maintenance of the NAAQS for su lfur dioxide. Therefore, EPA proposes to approve these regulations.

2) Grain Loading Standards 340-228-0210

Adds requirement for notice to ODEQ prior to using an existing exemption allowing a higher emission rate for burning salt laden wood waste.

3) Utility Mercury Rule Corrections7 EPA is not taking action on the revised utility mercury budgets included in the October 10, 2008 SIP submittal by Oregon since the Clean Air Mercury Rule was vacated and these provisions have been previously removed from this division.

DIVISION 230 INCINERATOR REGULATIONS

1) Definitions 340-230-0030

Deletes “fugitive emissions”, “opacity” and “parti culate matter” definitions because they are

addressed in the General Defin itions, division 200. Clarifies the “pyrolysis” definition by deleting references to hospital or medical waste.

2) Crematory Incinerators 340-230-0200

Simplifies the opacity standard for crematory in cinerators by changing it from an aggregate

measurement of 6 minutes in 60 minutes to a 6 minute period. Clarif ies crematory operating requirements for units built before and after March 13, 1993. For continuity of recordkeeping, increases from one to two years the requirement to maintain crematory temperature monitoring records. Clarifies compliance demonstration requirements by describing specific source test procedures and citations.

EPA is not acting on these rules because incine rator regulations are not part of the SIP.

DIVISION 234 EMISSION STANDARDS FOR WOOD PRODUCTS INDUSTRIES

1) Definitions 340-234-0010

Deletes outdated regulations governing the use of Wigwam Waste Burners and adds a prohibition statewide (340-234-0100 through 01 40). Addresses rare historic cases in which wigwam

emissions have been included in a source’s nettin g basis by specifying that these emissions shall not be subtracted from the netting basis. Deletes reference to Director’s di scretion in the definition of daily arithmetric average to allow alternatives to emission limits, testing or monitoring methods in federal rules or the State Implementa tion Plan without prior EPA approval.

Adds additional exemptions for smelt dissolving tanks, sewers, drains, categorically insignificant activities, and wastewater treatment facilities to the list of “other sources” of Total Reduced Sulfur (TRS). Smelt dissolving tanks are covered by separa te state limits. Sewers, drains and wastewater

treatment facilities are not measurable sources of TRS. Categorically insi gnificant activities are very minor, difficult to evaluate and could incl ude non-industrial sources such as restrooms.

EPA is not acting on references to total reduced su lfur in this division be cause control of total reduced sulfur is not appropria te for inclusion in the SIP.

2) Kraft Pulp Mills 340-234-02008 Consistent with current practice, clarifies that the Department may require that a Kraft Pulp Mill

undertake an odor emission reductio n study program. Deletes section on submission of plans for construction and modification because general perm itting regulations in division 210 address these requirements.

3) Board Products Industries (Veneer, Plyw ood, Particleboard, Hardboard 340-234-0500)

Clarifies emission requirements for Board Produc ts by specifying uniform measurements and compliance methods.

DIVISION 236 EMISSION STANDARDS FOR SPECIFIC INDUSTRIES

1) Definitions 340-236-0010

Clarification of “collection efficiency” definiti on. 340-236-0010(15) - In de finition of “fluorides” and “particulate matter” deletes reference to Direct or’s discretion to allow alternatives to emission limits, testing or monitoring methods in federal rules or the State Implementation Plan without prior EPA approval. Updates “source test” defini tion for consistency with other rules, adds reference to the Department’s Source Sampling Manua l. Deletes reference to Director’s discretion to allow alternatives to emission limits, testing or monitoring methods in fe deral rules or the State Implementation Plan without prior EPA approval.

EPA has reviewed these 2008 amendments to the ODE Q rules and has determined that they meet EPA’s requirements under sections 110, part C and part D of title 1 of the Clean Air Act. EPA is therefore proposing to approve them as revisions to the Oregon SIP.

B. MARCH 17, 2009 SIP SUBMITTAL BY ODEQ

Description of Substantive Rule Revisions

The March 17, 2009 rule revision exempts polluta nts regulated by the Accidental Release Prevention rules and the Early Reduc tion High Risk Pollutant rules from regulation under the Plant Site Emission Emission Limits (PSEL) rule.

The PSEL rule sets limits on emissions of specifi ed regulated air pollutants. The primary purpose of establishing a PSEL is to assure compliance w ith ambient air standards, which regulate a group of pollutants known as criteri a pollutants (particulate ma tter, ground-level ozone, carbon monoxide, sulfur oxides, nitrogen oxides, and l ead). However, at the end of last year, ODEQ

discovered an error in the PSEL Rule requiring PSELs for two unint ended categories of pollutants. These two categories include substances regulate d by the Accidental Release Prevention rule and substances listed as Early Re duction High Risk Pollutants.

DIVISION 222 STATIONARY SOURCE PL ANT SITE EMISSION LIMITS9 Applicability 340-222-0020

The Accidental Release Prevention rule ( OAR 340-244-0230) was established to require businesses storing large quantities of hazardous ma terials to have a Risk Management Plan to prevent the accidental releases of those regul ated substances. The Early Reduction High Risk Pollutants rules (OAR 340-244-0120) are used to a llow a source to make early voluntary emission

reductions of listed chemicals in order to be allo wed greater flexibility later when complying with new federal regulations. These programs are not implemented through the PSEL rule and do not depend on that rule for implementation.

C. JUNE 23, 2010 SIP SUBMITTAL BY ODEQ

Description of Substantive Rule Revisions

Sections 110(a)(1) and (2) of the federal Clean Ai r Act requires states to submit changes to state implementation plan infrastructure elements to EPA for approval. The rule revisions submitted to EPA on June 23, 2010 are needed to update Oregon's infrastructure State Implementation Plan and meet EPA infrastructure requirements. The rule package also contains other changes to align ODEQ and EPA rules.

These following summarizes not eworthy division changes:

DIVISION 200 GENERAL AIR POLLUTION PROCEDURES AND DEFINITIONS

General Air Quality Definitions 340-200-0020

Incorporates the definition of PM 2.5 and adds PM 2.5 into the definition of criteria pollutants. Revises definition of volatile organic compound to exempt dimethyl carbonate and propylene carbonate, consistent with recent federal actions. EPA has determined that the volatile organic compounds dimethyl carbonate and propylene carbona te have low photochemi cal reactivity and are not significant contributors to ozone formation. EPA has exempted both compounds from the definition of volatile organic compound for purposes of ozone.

Abbreviations and Acronyms 340-200-0025

Adds acronym for PM 2.5.

DIVISION 202 AMBIENT AIR QUALITY STANDARDS AND PSD INCREMENTS

Adopts federal changes to National Ambient Air Quality Standards for PM 2.5 , ozone and lead including adding a definition for PM 2.5 and adding PM 2.5 into the definition of criteria pollutant.

Suspended Particulate Matter 340-202-006010 Adds 2006 24-hour PM 2.5 standard of 35 μ g/m 3 and 1997 annual average PM 2.5 standard of 15

μ g/m 3

.

Ozone 340-202-0090

Adds 2008 8-hour ozone st andard of 0.075 ppm.

Ambient Air Quality Standard for Lead 340-202-0130

Adds the 2008 lead standard of 0.15 μ g/m 3 maximum arithmetic mean averaged over a calendar

quarter.

DIVISION 204 DESIGNATION OF AIR QUALITY AREAS

Designation of Nonattainment Area 340-204-0030

Specifies PM 2.5 non-attainment area boundary descriptions for the ci ties of Klamath Falls and Oakridge.

DIVISION 206 AIR POLLUTION EMERGENCIES

Introduction 340-206-0010

Adds PM 2.5 threshold for significant harm (350.5 μ g/m 3 24-hour average).

Episode Stage Criteria for Air Pollution Emergencies 340-206-0030

Adds PM 2.5 thresholds for triggering air quality alerts (140.5 μ g/m 3 24-hour average), warnings (210.5 μ g/m 3 24-hour average), and emergencies (280.5 μ g/m 3 2-hour average) developed by ODEQ pursuant to the requirements of 40 CFR 51.151.

D. MAY 5, 2011 SIP SUBMITTAL BY ODEQ

Description of Substantive Rule Revisions

DIVISION 200 GENERAL AIR POLLUTION PROCEDURES AND DEFINITIONS

This division contains ODEQ’s general air quality definitions (rule 0020), a list of abbreviations and acronyms (rule 0025), general exceptions (rule 0030), provisions for adopting and submitting the Oregon SIP (rule 0040), provisions for comp liance schedules (rule 0050), and rules for conflicts of interest and makeup of boards (rules 0100 to 0120).

The following is a discussion and evaluati on of the noteworthy division changes:11 1) General Definitions 340-200-0020

Actual emissions - Adds exceptions in definition of actual emissions for sources that had not begun normal operation during the baselin e period but were approved or permitted to construct and operate. Oregon tightened its program by reducing th e netting basis from pot ential to emit (PTE) down to the highest actual emissi ons at the end of the baseline period for sources approved under division 200. This will be required before any future netting can take place and will prevent sources from netting out of NSR/PSD using th eir permitted PTE. Sources that reduce actual emissions because of voluntary controls will not lose that portion of th e netting basis. This

reduction will not affect the PSEL so sources will be able to increase up to PTE without going through NSR/PSD again.

Adds a provision for sources that had not begun normal operation but were permitted under division 224 (Major NSR) to reset actual emi ssions. ODEQ has revised the method of setting the starting emission level, or netting basis, for counting emission changes for new and expanding facilities when they are initially permitted.

Under the current SIP, to ensure that Oregon’ s NSR/PSD program is protective, companies are required to evaluate the air qualit y effects that would occur if a ne w or expanded fac ility operated at its capacity. Once this level is approved, it is added to a facility’s ne tting basis even though the facility may never actually operate at that leve l. This unrealistically high starting emission level could allow a future expansion to avoid NSR/PS D. To address this concern, ODEQ has added a process to reset the netting basis once a new or expa nded facility has been operating for up to 10 or 15 years to establish a realistic level. This applies to major greenhouse gas sources that were permitted but not yet operating before the greenhouse gas rules were adopted and to future NSR/PSD sources. The process will not limit the ab ility of a facility to operate permitted equipment, but will prevent use of the adde d netting basis until the level is reset.

Adds a provision to reduce PTE to actual em issions for sources that had not begun normal operations but were permitted to construct and operate under division 224. Adds a provision to reduce PTE to actual for sources permitted under division 224 or approved under division 210 after the baseline period. Oregon tighten ed its program by reduc ing the netting basis from PTE down to the highest actual emissions in the last 10 year s since the date of permit issuance for sources permitted under division 224.

Adds aggregate insignificant emissions threshold for PM 2.5 in PM 2.5 nonattainment areas. This

makes PM 2.5 consistent with the PM 10 threshold, which is 5% of th e significant emission rate or SER (5 tons) in Medford and other nonattainment areas in older rules. 5% of 10 tons equals 0.5

tons.

These changes to the definition of actual emissi ons in 340-200-0020(3) are consistent with the EPA definition in 40 CFR 51.165(a)(1) and 51.166(b).12 Aggregate insignificant emissions - Adds aggregate insignificant emissions threshold for greenhouse gases (GHGs). The de minimis level for GHGs is set at the State of Oregon GHG reporting threshold. (2,756 tons CO2e). Oregon’s rules use the terms “aggregate insignificant emissions”, “significant emissi on threshold”, and “significant em ission rate (SER)” for GHG PSD permitting purposes. However, these terms do not have the same meaning as a “SER” as used in the context of EPA’s PSD regulation at 40 C.F.R. 51.166. EPA has not esta blished a significant emission rate for GHGs. Oregon’s PSEL PSD perm itting program establishes a GHG threshold of 75,000 CO2e to tailor the applica tion of its PSD permitting program in a manner similar to EPA’s GHG tailoring rule.

Baseline Emission Rate - Adds subsection for regulated polluta nts only. Provides cl arification that the baseline emission rate only applies to polluta nts subject to the New Source Review program. Specifically, HAPs are not subject to NSR, but ther e may be other pollutant s also not subject to

NSR. No baseline emission rate will be necessary for PM 2.5 because PM 2.5 will be ratioed to PM 10 for both netting basis and PSEL.

Establishes baseline emission rate for GHG with th e first permit action after July 1, 2011 since that is when GHG sources are required to get perm its for GHGs alone. Adds subsection for newly regulated pollutants (including GHGs ). The baseline emission rate for newly regulated pollutants

will be established as the actual emissions durin g any consecutive 12 month period within the 24 months immediately preceding its designation as a regulated polluta nt with the first permit action

after the rules are a dopted (May 1, 2011).

Adds a provision for recalculati ng the baseline emission rate if actual emissions are reset in

accordance with the definition of actual emi ssions. Adds a provision for freezing only the production basis used to establish the baseline emission rate, not th e entire baseline emission rate. Emission factors can be changed upon obtaining better information.

Baseline Period - Adds exemption for GHG from 77/78 base line and adds a GHG baseline period as the highest 12-month consecu tive period between 2000 and 2010.

These changes to the definitions of baseli ne emission rate and baseline period in 340-200-0020(13) and (14) are consistent with th e EPA definitions and requirements in 40 CFR

51.165 and 51.166.

Biomass - Adds a definition of biomass and defers carbon dioxide emissions from biomass in accordance with EPA’s July 2011 deferral. The application of the PSD and Title V permitting requirements to carbon dioxide (C O2) emissions from bioenergy and other biogenic stationary sources has been deferred for a period of 3 years.

Carbon dioxide equivalent, CO2e - Adds definition of carbon dioxide equivalent. This definition is consistent with EPA’s Tailoring Rules for purposes of Title V and PSD.

Direct PM 2.5 - Adds definition of direct PM 2.5 . This definition is needed because is it used in the

definition of PM 2.5

.13 The direct PM 2.5 definition in 340-200-0020(36) is consistent with th e regulated NSR pollutant

definition in 40 CFR 51.165(a)(1) and 51.166(b).

Emission Factor - Deletes approval of emission factor by EPA or the DEQ. Discretionary approval

is not allowed. These emission factors are include d in the plant site emissions detail sheets.

Federal Major Source - Adds GHG threshold of 100,000 tons CO2e per year to definition of Federal Major Source consistent with EPA’s GHG tailoring rule. Include fugitive emissions in the definition of major modification. Clarifies that fu gitive emissions must be included in the major new source review applicability. Includes em ission decreases in potential to emit (PTE)

calculations. Clarifies that emission decreases may also be included in the major new source review applicability.

The GHG threshold in 340-200-0020(55) is consistent with the requirements in the GHG Tailoring

rule.

Greenhouse Gases - Adds definition greenhouse gases (GHGs). This definition is consistent with EPA’s Tailoring Rules for purposes of Title V and PSD. Adds deferral of carbon dioxide emissions from the combustion or decomposition of biomass. EPA has deferred carbon dioxide emissions from the combustion or decomposition of biomass.

Major Modification - Rewords definition of major modi fication to include changes “in the method” of operation. Adds a provi sion stating that major modificat ions for precursors are also major modifications for ozone and PM 2.5 . This clarifies the definition and is consistent with EPA rules. Clarifies that major modification is triggered if the PSEL exceeds the netting basis. Clarifies the accumulation of physical changes and changes in operation that trigger a major modification. Includes fugitive emissions in the definition of major modification. Clarifies that fugitive emissions must be included in the major new source review applicability and that emissions increases from the increased use of equipment permitted or approved to construct are not included in major modification applicability. Clarifies when sources would trigger NSR with only a 1 ton/year increase.

Adds provision that the portion of the netting ba sis and PSEL that was based on PTE because the source had not begun normal operations must be ex cluded from major modi fication applicability until it is reset. Deletes the excep tion for pollution control projects. The DC Circuit invalidated the federal exemption from NSR upon wh ich this paragraph is based.

To avoid penalizing sources that made prev iously approved changes that increased PM 10 emissions prior to Oregon regulating PM 2.5 , these PM 10 changes will be grandfathered into the permits. In the future, this would not apply to any source since they would trigger NSR/PSD.

These changes to the definition of major modification in 340-200-0020(70) are consistent with the EPA definition in 40 CFR 51.165(a)(1) and 51.166(b).14 Major Source - Adds fugitive emissions to the definition of major source. Fugitive emissions must be included to determine whether a source is majo r or not. Adds that pote ntial to emit calculations

must include emissions increases due to the new or modified source. Potential to emit calculations

of the new or modified source must be included to determine whether a source is major or not. This

clarifies the definition and is consistent with EPA rules and past implementa tion of the rules. Adds definition of major stationary source for GHG consistent with EPA rules.

Netting Basis - Provides clarification that the netting ba sis only applies to pollutants subject to the NSR program. Deletes the rules in netting basis that apply to the baseline emission rate since baseline emission rate will no long er be frozen. Adds provisions th at the initial netting basis and

PSEL for PM 2.5 and GHG will be established with the fi rst permitting action issued after July 1, 2011, provided the permitting action involved a pub lic notice period that began after July 1, 2011 (i.e., when major greenhouse gas sources wi ll be required to obtain permits).

Adds provision that the initial netting basis and PSEL for PM 2.5 will be the PM 2.5 fraction of the

PM 10 netting basis and PSEL. Since PM 2.5 is a subset of PM 10 emissions, Oregon set the PM 2.5 netting basis and PSEL as a fraction of the existing PM 10 netting basis and PSEL. Oregon treats

PM 2.5 and PM 10 in a comparable manner since PM 2.5 is a subset of PM 10 , which is a pollutant already addressed by the existing permitting rules. As a result, DEQ determines the amount of

PM 10 that is PM 2.5 at a facility and use that fraction to calculate permitted levels for PM 2.5 . This approach incorporates PM 2.5 at this time as if it had been pa rt of the program all along; allowing previously approved expansions to continue to operate and that new expansions are reviewed

consistent with state and federal re quirements. It also avoids the n eed to select a unique baseline period for counting changes in PM 2.5 emissions towards triggeri ng NSR/PSD. Because the PM 10 significant emission rate is 15 tons/year and the PM 2.5 significant emission rate is 10 tons/year,

sources could retroact ively trigger the PM 2.5 SER because of past approved increases in PM 10 . In order to eliminate this possibility, a one time 5 ton true up may be necessary.

Adds provision setting the initial source specific PSEL for a source with PTE greater than or equal to the SER equal to the PM 2.5 fraction of the PM 10 PSEL.

Clarifies when the netting basis is zero and when changes to the netting basis are effective. The changes clarify the instances when the netting ba sis and PSEL are reduced and matches the intent and past interpretation of the rule.

Adds a provision to reduce the netting basis from PTE for sources permitted under division 224 (Major NSR) after the baseline period. Or egon tightened its program by reducing the netting basis from PTE down to the highest actual emissions in the last 10 years since the date of permit issuance for sources permitted under division 224.

Adds a provision that emission re ductions required by rule do not include emissions reductions achieved under OAR 340-226-0110 and 0120 (Po llution Prevention and Operating and Maintenance Requirements under the Highest and Be st Practicable Treatment and Control rules). This provision will continue to encourage sour ces to implement voluntary early reductions. In addition, only the netting basis will be reduced to prevent unwarranted offsetting. The PSEL will15 not be reduced so a source will sti ll be able to utilize the full cap acity of a unit that went through PSD without triggering PSD again.

Ozone Precursor - Adds definition of ozone precur sor consistent with EPA rules.

PM 2.5 - Changes definition of PM 2.5 and adds EPA’s new reference test methods. Adds a provision

for PM 2.5 precursors. This definition is consistent w ith EPA’s rules for purposes of Title V and

NSR.

PM 2.5 fraction - Adds a definition for PM 2.5 fraction.

Adds part 52 to the CFR citations for refe rence methods. Appendix M of Part 51 includes

reference methods for condensable PM.

Regulated Pollutant - Adds precursors and GHGs to defi nition. Clarifies that only regulated pollutants with significant em issions are subject to NSR.

Significant Emission Rate - Adds exception for GHG emissions impacting Class I areas to the definition of significant emission rate. There is no ambient standard for GHG, so this provision does not apply to GHG emissions.

Small scale local energy project - Adds definition of small scale local energy project. House Bill 2952 amended ORS 468A.040 to add an exception for small scale local energy projects regarding net air quality benefit.

Volatile Organic Compounds - Adds propylene carbonate to definition of VOC.

2) Division 200 Tables

Adds EPA-adopted PM 2.5 significant impact levels (SILs). Combines SILs for all air quality areas into one table for all pollutants . Adds EPA-adopted significant emission rates (SERs) for GHG,

direct PM 2.5 PM 2.5 precursors and VOC precursors. EPA a dopted a major source threshold and SER when it defined GHG as a regulated pollutant. Adds de minimis levels for GHG, for PM 2.5 in the Medford AQMA, and for direct PM 2.5 . The de minimis level for GHG is set at the GHG reporting threshold. The de minimis levels for PM 2.5 are consistent with PM 10 . Adds generic PSEL

for PM 2.5 and GHG. The generic PSEL for GHG is based on proposed SER minus 1000 tpy. The generic PSEL for PM 2.5 is based on the proposed SER minus 1 tpy, consistent with other criteria pollutants.

DIVISION 202 AMBIENT AIR QUALIT Y STANDARDS AND PSD INCREMENTS

This division contains the State ambient air qua lity standards and the pr evention of significant deterioration (PSD) increments.

The following is a discussion and evaluati on of the significant division changes:16 1) Definitions 340-202-0010

Baseline Calculation - Deletes the words “major”. Corrects definition by clarifying that actual emission increases from any source or modifi cation on which construction commenced after January 6, 1975 cannot be included in the baseline calculation, not just major sources and major modifications. This change is necessary because wh en an air quality impact analysis is required under division 225 (Air Quality Analysis Requirem ents), all permitted sources, not just “major” sources, are included in the modeling analysis, not in the baseline ca lculation (or background concentration). The baseline concentration for PM 10 in the Medford-Ashland Air Quality Maintenance Area (AQMA) from the definition in division 225 was added. Adds baseline concentration year for PM 2.5 that is set on the year when ambient monitoring was done and when the increment was proposed.

2) Ambient Air Quality Standards

Suspended Particulate Matter 340-202-0060

Deletes annual PM 10 air quality standard (p reviously revoked by EPA).

DIVISION 216 AIR CONTAMIN ANT DISCHARGE PERMITS

This division is the ODEQ federally-enforceable State operating permit (FESOP) program , and is also the administrative permit mechanism used to implement the notice of construction and major new source review programs.

The following are the significant changes to this division.

Oregon DEQ delegates authority to Lane Regional Air Protec tion Agency to implement Air Contaminant Discharge Permit and Oregon Title V Operating Permit programs for regulation of

PM 2.5 and GHG within its area of ju risdiction. The requirements and procedures contained in divisions 200, 224, and 225 pertaining to PM 2.5 and GHG are used by the Regional Agency to implement its permitting programs until it adopts supe rseding rules which are at least as restrictive

as state rules.

Adds PM 2.5 and GHGs to source categories requiring ai r contaminant discharge permits. Adds a 5

tons PM 2.5 threshold for requiring a permit in nonattainme nt areas provides more protection for the area through source surveillan ce. Adds a 100,000 ton GHG CO2e threshold for GHG, consistent with the GHG Tailoring Rule.

Adds requirement for owner/operator to correct permit application upon beco ming aware of error. Corrects source category numb ers and adds GHG and PM 2.5 to permitting requirement tables.

DIVISION 224 MAJOR NEW SOURCE REVIEW17 This division contains the ODEQ major source permit to construct programs as required by Title I, Parts C and D of the Act. It requires an ai r contaminant discharge permit (ACDP) prior to beginning construction on a new majo r source or major modification

This division applies to new major sources and major modifications and requires that no owner or operator begin actual construction without first having received an Air Contaminant Discharge Permit and having satisfied the re quirements of this division.

The division includes the procedural requireme nts for the NSR program, including specifying the information that must 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 or modified source can operate with out applying for a Title V operating permit, and when a Title V Operating Permit must be revise d before commencing construction or operation.

The division also include s the procedures for proc essing permit applications.

The division also includes the s ubstantive requirements which must be met for approval of a new major source or major modification. These incl ude the requirement that the owner or operator must demonstrate the ability of the source to comply with all applicable requirements.

The following is a discussion and evaluati on of the noteworthy division changes:

1) Applicability and General Prohibitions 340-224-0010

Restructures OAR 340-224-0010 and cl arifies that division 224 applie s to the regulated pollutant for which the area is designated nonattainment or maintenance within nonattainment and maintenance areas, as well as to the regulated poll utant for which the area is designated attainment

or unclassified within attainment and unclassif iable areas. Adds applicability requirements for GHG PSD permitting of sources 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 Rules for purposes

of Title V and PSD.

2) Requirements for Sources in Nonattainment Areas 340-224-0050

Adds requirements for PM 2.5 precursors to source s in designated PM 2.5 nonattainment areas. This change is needed because of the PM 2.5 nonattainment areas in Oa kridge and Klamath Falls. Adds precursors to the LAER requirement. This ch ange is needed because LAER applies to the nonattainment area pollutant and its associated precursors. Clarifie s that LAER applies to each

emissions unit that emits the nonatta inment pollutant or precursor not included in the most recent netting basis or included in the mo st recent netting basis but has been modified to increase actual

emissions. Clarifies that modificatio ns to individual emissions units that increase the potential to emit less than 10 percent of the significant emissi on rate (SER) are exempt from applying LAER unless these modifications are not constructed yet, ar e part of a discrete, identifiable, larger project that was constructed within the previous 5 years, a nd that is equal to or gr eater than 10 percent of the SER; or were constructed without, or in violation of, ODEQ's approval.18 3) Requirements for Sources in Maintenance Areas 340-224-0060

Adds precursors to the list of po llutants subject to BACT in main tenance areas. Adds precursors to the BACT requirement. Clarifies that BACT ap plies to each emissions unit that emits the maintenance pollutant or precursor not included in th e most recent netting basis or included in the most recent netting basis but has been modified to increase actual emissions. Clarifies that

modifications to individual emi ssions units that increase the potential to emit less than 10 percent of the SER are exempt from applying BACT unle ss these modifications are not constructed yet, are part of a discrete, id entifiable, larger project that was cons tructed within the previous 5 years, and that is equal to or greater than 10 percent of the SER; or were constructed without, or in violation of, ODEQ's approval.

4) Prevention of Significant Deterioration Requirements in Attainment or Unclassified

Areas 340-224-0070

Adds precursors to the BACT requirement. Clarifie s that BACT applies to each emissions unit that emits the attainment (or unclassified) pollutant or precursor not included in the most recent netting basis, or is included in the most recent netti ng basis but has been modified to increase actual

emissions. Clarifies that modificatio ns to individual emissions units that increase the potential to emit less than 10 percent of the SER are exempt from applying BACT unless these modifications are not constructed yet, are part of a discrete, identifiable, larg er project that was constructed within the previous 5 years, and that is equal to or greater than 10 percen t of the SER; or were constructed without, or in vi olation of, ODEQ's approval.

Adds provision that the required ai r quality analysis is for the po llutant with increases above the SER over the netting basis. Adds provision that increases above the SER for direct PM 2.5 or PM 2.5 precursors also trigger an analysis of PM 2.5

.

PM 2.5 precursors have to be addressed in attainment and unclassified areas.

DIVISION 225 AIR QUALITY ANALYSIS REQUIREMENTS

This division contains all of the modeling, monito ring, impact analysis, and net air quality benefit requirements that are necessary to ensure am bient air quality requirements are met in the permitting process. The division also includes provi sions which specify the technical information and processes to be used in air quality impact analyses.

The definitions of the terms “allowable emissions” and “baseline concentration” are consistent with EPA’s definitions in 40 CFR 51.165(a) and 51.166(b).

The provisions for demonstrating net air quali ty benefit comply with the CAA and EPA’s requirements for emission offsets (section 173 of the Act, 40 CFR 51.165(a) and 40 CFR Part 51, Appendix S Emission Offset Interpre tative Ruling). EPA is ther efore proposing to approve these provisions as complying with Part D of the Act.19 1) Definitions 340-225-0020

Baseline Concentration - Adds baseline concen tration year of 2007 for PM 2.5 increment to the

definition.

Range of Influence (ROI) – Adds K value of 5 for PM 2.5 to the ROI equation used in modeling analyses. Changes K value to 5 for NO

x consistent with EPA’s new 1-hour SO 2 and NO

x standards.

2) Requirements for Analysis in Maintena nce Areas 340-225-0045 and PSD Class II and III

Areas 340-225-0050

Clarifies that a single source impact analysis is sufficient to show compliance with standards and increments for only the pollutants that trigger PSD. This change is a clarification to the rules

consistent with how the rule s have been applied. Adds PM 2.5 significant monito ring concentration

of 4 μ g/m 3 as specified in EPA’s PM 2.5 NSR/PSD implementing rule.

3) Requirements for Demonstrating Compliance with Standards and Increments in PSD

Class I Areas 340-225-0060

Clarifies that a single source impact analysis is sufficient to show compliance with standards and increments for only the pollutants that trigger PSD. Clarifies that a single source impact analysis is for emission increases equal to or greater than a significant emission rate above the netting basis due to the proposed source or modification. These cha nges are clarifications to the rules consistent with how the rules have been applied.

4) Requirements for Demonstrating a Net Air Quality Benefit 340-225-0090

Adds PM 2.5 to the list of pollutants for non-ozone areas. Adds PM 2.5 precursor, SO 2 and NO

x offset

ratios for non-ozone areas. These offset ratios ar e based the presumptive le vels established by EPA in the preamble to Significant Impact Levels (SIL s). Adds provision that precursor emissions can

be used to offset direct PM 2.5 and vice versa.

Adds alternative provisions for small scale loca l energy projects (and related infrastructure)

located in nonattainment and maintenance areas in dicating that the net air quality benefit provision

in this rule is satisfied if th e nonattainment or mainte nance pollutant emissions are offset using the offset ratios specified in this rule, provided th at the proposed major source or major modification

would not cause or contribute to a violation of the national ambient air quality standard or otherwise pose a material threat to compliance wi th air quality standards in the nonattainment area. House Bill 2952 amended Oregon Revised Statutes (ORS) 468A.040 to add an exception for small scale local energy proj ects regarding net air quality benefit.

DIVISION 228 REQUIREMENTS FOR FU EL BURNING EQUIPMENT AND FUEL

SULFUR CONTENT20 This division provides sulfur content of fuel requirements and general emission standards for fuel burning equipments.

1) Federal Acid Rain Program 340-228-0300

The acid rain program section was amended to inco rporate by reference the latest EPA regulations on acid rain permitting. Specifically 40 CFR Pa rts 72, 75 and 76 as of July 1, 2006 were incorporated by reference on July 2, 2010. EPA is not taking action on this rule revision because the acid rain program is not part of a State Implementation Plan.