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OAR Box 1802 

Prepped by Charmelle Mathews 

Document Number: 

55) IV-E-50 

Docket Number: 

A-90-37 

Printed 11/4/200811:57:59 AM Sheet 55 of 117 
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TESTIMONY OF JOHN SEITZ 

OFFICE DIRECTOR 

OFFICE OF AIR QUALITY PLANNING AND STANDARDS 

OFFICE OF AIR AND RADIATION 

BEFORE THE 

SUBCOMMITTEE ON CLEAN AIR, WETLANDS, PRIVATE PRpPERT¥p*ND 

NUCLEAR SAFETY 

OFTHE 

COMMITTEE ON ENVIRONMENT AND PUBLIC WO 

UNITED STATES SENATE 

February 28,2000 

Good afternoon Mr. Chairman and Members ofthe Subcommittee. Thank you for the 

opportunity to talk with you about the New Source Review program under the Clean Air 

Act. The New Source Review (or "NSR") program was enacted by Congress in 1977. 

It's goal is to minimize air pollution from large new and modified stationary sources. 

Recent figures suggest that over the life of the program, NSR has prevented more than 

a hundred million tons of air pollution. When companies upgrade facilities, either by 

building a new plant or making major modifications to an existing plant, they are 

required to install the best available pollution control equipment. In areas with unhealthy 

air, NSR assures that these sources do not impede progress toward cleaner air. In 

areas with clean air, especially pristine areas like national parks, the program assures 

that emissions from new and modified sources do not significantly degrade air quality. 

The program also assures citizens that any large new or modified industrial source in 

their neighborhoods will be as clean as practical. 

Upgrading pollution controls and the industrial infrastructure simultaneously makes 

economic and environmental sense. In general, it is more cost-effective for sources to 

install pollution control equipment such as scrubbers, electrostatic precipitators, or 

selective catalytic converters at the same time that they make major capital 

improvements. Because the NSR program relies on this principle, it minimizes 

emissions from new sources while maximizing opportunities for additional industrial and 

economic growth. It's a simple concept that has been working in the NSR program for 

almost a quarter-century, protecting our nation's air resources, and making up a critical 

component of our total air quality program. 

Background 

The NSR provisions of the Clean Air Act combine air quality planning, air pollution 

technology requirements, and stakeholder participation. NSR is a preconstruction 

permitting program. If new construction or making a major modification will increase 

emissions by an amount large enough to trigger NSR requirements, then the source 

must obtain a permit before it can begin construction. States are key partners in the 

program. Under the Act, states have the primary responsibility for issuing permits, and 

they can customize their NSR programs within the limits of EPA regulations. EPA's role 

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is to approve state programs, to review, comment on, and take any other necessary 

actions on draft permits, and to assure consistency with EPA's rules, the state's 

implementation plan, and the Clean Air Act. (EPA also issues permits where there is no 

approved NSR program, such as on some Tribal lands). Citizens also play a role in the 

permitting decision, and must be afforded an opportunity to comment on each 

construction permit before it is issued. 

The NSR permit program for major sources has two different components - one for 

areas where the air is dirty or unhealthy, and the other for areas where the air is 

cleaner. Under the Clean Air Act, geographic areas (e.g., counties or metropolitan 

statistical areas) are designated as "attainment" or "nonattainment" with the 

health-based National Ambient Air Quality Standards (NAAQS) - the air quality 

standards which are set to protect human health. Permits for sources located in 

attainment (or unclassifiable) areas are called Prevention of Significant Deterioration 

(PSD) permits and those for sources located in nonattainment areas are called 

nonattainment NSR permits. 

A major difference in the two programs is that the control technology requirement is 

more stringent in nonattainment areas and is called the Lowest Achievable Emission 

Rate (LAER). On the other hand, in attainment areas, a source must apply Best 

Available Control Technology (BACT) and the statute allows consideration of cost in 

weighing BACT options. 

Also, in keeping with the goal of progress toward attaining the national air quality 

standards, sources in nonattainment areas must always provide or purchase "offsets" -

decreases in emissions which compensate for the increases from the new source or 

modification. In attainment areas, PSD sources typically do not need to obtain offsets. 

However, PSD does require an air quality modeling analysis ofthe impact ofthe 

construction project, and if the analysis finds that the project contributes to ambient air 

pollution that exceeds allowable levels, this impact must be mitigated. Sometimes these 

mitigation measures can include offsets in PSD areas. In addition to ensuring 

compliance with the NAAQS, states track and control emissions of air pollution by 

calculating the maximum increase in concentration allowed to occur above an 

established background level - that change in concentration is known as a PSD 

increment. 

Another key requirement is the provision in the PSD program to protect pristine areas 

like national parks or wilderness areas (referred to as Class I areas). If a source 

constructs or modifies in a way that could affect a Class I area, the law affords a federal 

land manager (for example, a National Park Service superintendent) an opportunity to 

review the permit and the air quality analysis to assure that relevant factors associated 

with the protection of national parks and wilderness areas are taken into consideration, 

and, if necessary, that harmful effects are mitigated. 

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(The Clean Air Act also requires states to regulate construction for smaller changes, 

and at sources that are not big enough to be classified as "major." This program is 

known as minor NSR. However, minor NSR is not part of the NSR Reform rule and is 

not the focus of today's remarks) 

Current Status of the NSR Program 

Let me give you a few statistics about the NSR program to put things in perspective. 

Preliminary estimates based on our most recent data indicate that approximately 250 

facilities apply for a PSD or nonattainment NSR permit annually. That's out ofthe 

approximately 20,000 sources that would be classified as "major" under the Act, and 

the far larger number of additional stationary sources of air pollution in the United 

States that are not large enough to be called major. The nonattainment NSR and PSD 

programs are designed to focus on changes to facilities that have a major impact on air 

quality. And the NSR program is resulting in cleaner air. Recent data show that, each 

year, NSR permits at PSD sources have prevented about half a million tons per year of 

new emissions compared to what would be emitted if there were no federal or state 

permitting. Clearly, in the absence of NSR, Americans would be breathing less healthy 

air. Even in areas with clean air, there would likely have been significant declines in air 

quality in some places, as well as harmful impacts in national parks. As these 

reductions have been occurring, the United States is in the midst of a record-breaking 

economic expansion. Thus, the program is accomplishing its intended purpose. 

In addition to the emissions reductions, the NSR program has sparked improvements 

and innovations in pollution control technology. Whenever demand for good control 

technology exists, vendors compete to supply better control technology at lower cost. 

This competition reduces the cost of controls as the control technology improves. This 

technology-forcing aspect ofthe program is an important reason why it has been so 

successful in allowing for continued economic growth while ensuring environmental 

protection. It also ensures that the U.S. will remain a leading exporter of pollution 

control technology. 

NSR Reform 

Despite the successes ofthe NSR program, some of those with a stake in the program 

- EPA, regulated industry, state and local governments, environmental groups, federal 

land managers, and others - have engaged in a long-running dialogue about how to 

make the program work more efficiently and effectively. The issues raised fall into five 

general categories. First, some argue that the process for determining exactly whether 

a permit is necessary for changes they are making to existing sources could be easier. 

Second, despite the statutory requirement that PSD permits be issued within 12 months 

of a complete permit application, some believe that the process for obtaining a permit 

can take too long, delaying construction. Third, some are concerned that the decisions 

made in the NSR process, such as the selection of a control technology, have been 

arbitrary, making it difficult to plan ahead. Fourth, stakeholders such as citizens and 

federal land managers want to be more involved in the decision-making process. In 

addition, some believe that the program needs to cover more sources and is not 
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sufficiently rigorous, while others feel that the existing program is already too rigorous 

and too broad in scope. 

For the past several years, the EPA has been undertaking a thorough multi-stakeholder 

process to understand and address the concerns associated with NSR in an effort to 

make the program work better. The NSR program protects the public from air pollution 

from large sources - from every type of industry. EPA has been diligent about being 

inclusive and comprehensive in our analysis of industry concerns. Since 1992, we have 

held hundreds of hours of meetings actively seeking comments and recommendations 

from various stakeholders. We formed the NSR Reform Subcommittee of the Clean Air 

Act Advisory Committee, a group of experts from industry, environmental groups, and 

state and local government brought together for the purpose of making 

recommendations on improving NSR. We listened to analysis and debate from a wide 

variety of often conflicting points of view. We issued a proposed rule in 1996, took 

written comments, and held a public hearing. Since then, we continue to meet with 

stakeholders, and, as recently as this month, have had multiple meetings with outside 

groups representing industry. 

Our fundamental principle during this reform effort has been to promote more certainty 

and flexibility in the permitting process while maintaining at least the same level of 

environmental protection as the current program. A few examples of the approaches we 

have proposed include: (1) promotion of flexible plantwide caps that would enable 

sources to make changes at their plants without triggering NSR applicability so long as 

the overall cap is not exceeded; (2) a more clearly defined and faster process for 

making control technology decisions; (3) deregulation of source modifications that have 

already recently installed good controls; (4) increased incentives for new or modified 

sources to incorporate pollution prevention or innovative control technology; and (5) 

opportunities for more meaningful participation in the permitting process for the public 

and federal land managers through increased availability of information and earlier 

involvement. 

We are also considering other ways to better achieve the same goals as the current 

program. For example, we recently held a meeting of NSR stakeholders to obtain views 

on the concept of a sector-based approach to NSR at utilities. This approach would 

tailor NSR regulations specifically to the utility sector in an effort to address issues 

unique to utilities, while still providing the overall environmental protection of the NSR 

program. As noted, we continue to discuss several issues with stakeholders, and have 

not reached final decisions on the Reform package. However, we hope to complete an 

NSR Reform rulemaking later this year. 

Mr. Chairman, this concludes my prepared statement. I appreciate the opportunity to be 

here today. I would be happy to answer any questions that you may have. 

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