BEFORE THE ADMINISTRATOR 

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY 

) 

IN THE MATTER OF ) 

) 

CASH CREEK GENERATION, LLC ) 

) PETITION No. IV-2010-4 

HENDERSON COUNTY, KENTUCKY ) 

TITLE V/PSD AIR QUALITY PERMIT ) 

No. V-09-006 ) 

) 

ISSUED BY THE KENTUCKY DIVISION ) 

FOR AIR QUALITY ) 

) 

ORDER GRANTING IN PART AND DENYING IN PART PETITION FOR 

OBJECTION TO PERMIT 

On June 18, 2010, the United States Environmental Protection Agency (EPA) received a petition from 

the Environmental Law & Policy Center on behalfof Sierra Club, Ursuline Sisters ofMount Saint 

Joseph, and Valley Watch (Petitioners) pursuant to section 505(b)(2) ofthe Clean Air Act ("CAA'' or 

"Act"), 42 United States Code (U.S.C.) § 766Id(bX2). The Petition requests that the EPA object to 

Permit No. V-09-006 issued by the Kentucky Division for Air Quality (KDAQ) on May 5, 2010, to Cash 

Creek Generation, LLC (Cash Creek) for the proposed Cash Creek Generation Station, Source I.D. No. 

21-101-00134. Permit No. V-09-006 is a merged CAA Prevention ofSignificant Deterioration (PSD) 

construction permit and CAA title V operating permit issued pursuant to Kentucky's Administrative 

Regulations (KAR) at 401 KAR 52:020 (title V regulations) and 51:017 (PSD regulations). The permit 

is for Cash Creek Generating Station, a new coal gasification facility and co-located natural gas 

combined cycle plant to be located southwest of Owensboro, Kentucky, in Henderson County. 

KDAQ previously issued a permit to Cash Creek Generation, LLC to construct a coal integrated 

gasification combined cycle (IGCC) electric generation unit at the same location as the proposed facility 

addressed by Permit No. V-09-006. In an Order dated December 15, 2009, EPA granted in part and 

denied in part two petitions requesting that the EPA object to that previously issued permit (Permit No. 

V-07-17). Cash Creek never constructed the facility addressed by Permit No. V-07-017. Upon KDAQ's 

issuance ofthe permit addressed by this Order (Permit No. V-09-006), Cash Creek's authority to 

construct under previously issued Permit No. V -07-17 was deemed null and void and the permit was 

terminated. 

This Order contains EPA's response to Petitioners' request that EPA object to the permit on the basis 

that: (1) KDAQ failed to provide an opportunity for meaningful public participation, (2) KDAQ's 

calculation ofthe proposed facility's potential to emit volatile organic compounds (VOC), hydrogen 

1 
(H2S) and hazardous air pollutants (HAPs) failed to account for full emissions from active 

flaring, (3) the permit's source-wide VOC emission limit is not enforceable as a practical matter, (4) the 

best available control technology (BACT) limits applicable to the flare during startup and steady-state 

operations are not supported by a proper BACT analysis, (5) the BACT limits applicable to the flare do 

not cover shutdown and malfunction periods, ( 6) the applicant incorrectly estimated fugitive emissions 

from equipment leaks, (7) KDAQ omitted numerous control options and relied on a faulty costeffectiveness analysis in selecting BACT for equipment leaks, (8) KDAQ improperly determined that 

the source is minor for HAPs, (9) Cash Creek's calculation of particulate matter emissions from material 

handling assumed an unreasonably high control efficiency for wet suppression control methods and used 

an unreasonably low silt loading factor, (1 0) permit terms and conditions governing material handling 

are unenforceably vague and do not equate to the assumed control efficiencies, and (11) Cash Creek 

failed to perform an adequate ozone impacts analysis. 

Based on a review of the Petition and other relevant materials, including the Cash Creek permit and 

permit record, and relevant statutory and regulatory authorities, I grant in part and deny in part the 

Petition requesting that EPA object to the Cash Creek permit. I grant in whole or in part on issues (1), 

(2), (3), (5), (9) and (10) above. 

I. STATUTORY AND REGULATORY FRAMEWORK 

Section 502(d)(l) of the CAA, 42 U.S.C. § 766la(d)(l), calls upon each state to develop and submit to 

EPA an operating permit program intended to meet the requirements oftitle V of the CAA. The 

Commonwealth of Kentucky originally submitted its title V program governing the issuance of 

operating permits in 1993, and EPA granted full approval on October 31, 2001. 66 Fed Reg. 54953. The 

program is now incorporated into Kentucky's Administrative Regulations at 401 KAR 52:020. All major 

stationary sources of air pollution and certain other sources are required to apply for title V operating 

permits that include emission limitations and other conditions as necessary to assure compliance with 

applicable requirements of the CAA, including the requirements of the applicable State Implementation 

Plan (SIP). CAA §§ 502(a) and 504(a), 42 U.S.C. §§ 766la(a) and 766Ic(a). 

The title V operating permit program does not generally impose new substantive air quality control 

requirements (referred to as "applicable requirements"), but does require permits to contain monitoring, 

recordkeeping, reporting and other conditions to assure sources' compliance with applicable 

requirements. 57 Fed. Reg. 32250,32251 (July 21, 1992). One purpose ofthe title V program is to 

"enable the source, States, EPA, and the public to understand better the requirements to which the 

source is subject, and whether the source is meeting those requirements." !d. Thus, the title V operating 

permit program is a vehicle for ensuring that air quality control requirements are appropriately applied 

to facility emission units and for assuring compliance with such requirements. 

Applicable requirements for a new major stationary source2 include the requirement to obtain a 

preconstruction permit that complies with applicable new source review requirements. Part C of the 

CAA establishes the PSD program, which is the preconstruction review program that applies to areas of 

1 The Commonwealth of Kentucky Environmental and Public Protection Cabinet submitted the title V 

program and oversees the Kentucky Division for Air Quality (KDAQ), which is the permitting authority 

for title V and PSD permits in Kentucky. 

2 The proposed Cash Creek facility is a "major stationary source" consistent with the definition of that 

term in 401 KAR 51:001 § 1(118). 

2 
the country, such as Henderson County, that are designated as attainment or unclassifiable for the 

National Ambient Air Quality Standards (NAAQS). See CAA §§ 160-169, 42 U.S.C. §§ 7470-7479. 

New Source Review, or "'NSR," is the term used to describe both the PSD program as well as the 

nonattainment NSR program (applicable to areas that are designated as nonattairunent with the 

NAAQS). In attainment areas (such as Henderson County), a major stationary source may not begin 

construction or undertake a modification without first obtaining a PSD permit. CAA § 165(a)(I), 42 

U.S.C. § 7475(a)(l). The PSD program analysis must address two primary and fundamental elements 

(among other requirements) before the permitting authority may issue a permit: ( 1) an evaluation ofthe 

impact ofthe proposed new or modified major stationary source on ambient air quality in the area, and 

(2) an analysis ensuring that the proposed facility is subject to BACT for each pollutant subject to 

regulation under the PSD program. CAA § 165(a)(3), (4), 42 U.S.C. § 7475(a)(3), (4); see also 401 

KAR 51:017 (Kentucky's PSD program). 

EPA has promulgated two largely identical sets of regulations to implement the PSD program. One set, 

found at 40 Code of Federal Regulations (C.F.R.) § 52.21, contains EPA's own federal PSD program, 

which applies in areas without a SIP-approved PSD program. The other set ofregulations, found at 40 

C.F.R. § 51.166, contains requirements that state PSD programs must meet to be approved as part of a 

SIP. Kentucky administers a SIP-approved PSD program, which is governed by its PSD rules at 401 

KAR 51:017. See 40 C.F.R. § 52.920.3 Thus, the applicable requirements ofthe Act for new major 

sources, such as the Cash Creek, include the requirement to comply with PSD requirements under the 

Kentucky SIP. See, e.g., 40 C.F.R. § 70.2.4 In the case of Cash Creek, the PSD and title V permits were 

merged into one permit. 401 KAR 51:017 § 1 (3). 

Under CAA section 505(a), 42 U.S.C. § 766ld(a), and the implementing regulations at 40 C.F.R. § 

70.8(a), states are required to submit each proposed title V permit to EPA for review. Upon receipt of a 

proposed permit, EPA has 45 days to object to final issuance ofthe permit ifit is determined not to be in 

compliance with applicable requirements or the requirements of Part 70. 40 C.F.R. § 70.8(c). If EPA 

does not object to a permit on its own initiative, section 505(b)(2) ofthe Act and 40 C.F.R. § 70.8(d) 

provide that any person may petition the Administrator, within 60 days ofthe expiration of EPA's 45-

day review period, to object to the permit. The petition shall be based only on objections to the permit 

that were raised with reasonable specificity during the public comment period provided by the 

permitting agency (unless the petitioner demonstrates in the petition to the Administrator that it was 

impracticable to raise such objections within such period or unless the grounds for such objection arose 

after such period). 42 U.S.C. § 7661d(b)(2); 40 C.F.R. § 70.8(d). In response to such a petition, the Act 

requires the Administrator to issue an objection if a petitioner demonstrates that a permit is not in 

3 Revisions to 401 KAR 51:017 are incorporated into the SIP only ifthey are submitted to and approved 

by EPA. Prior to approving a SIP revision submitted to EPA by a state, EPA offers an opportunity for 

public comment. EPA then publishes a Federal Register notice announcing its final action on the SIP 

submission. A list of Kentucky regulations incorporated into Kentucky's SIP is provided at 40 C.F.R. § 

52.920. Further information regarding rules incorporated into Kentucky's SIP is available at 

http://www.epa.gov/region4/air/sips/ky/kytoc.htm. Citations to Kentucky regulations in this Order are to 

the SIP-approved version ofthese regulations. 

4 Kentucky defines "federally applicable requirement" in relevant part to include a "federally 

enforceable requirement or standard that applies to a source." 401 KAR 52:001 § 1(15). Kentucky 

further defines "federally enforceable requirement" as "[s]tandards or requirements in the state 

implementation plan (SIP) that implement the relevant requirements of the Act, including revisions to 

that plan promulgated at 40 C.F.R. Part 52." 401 KAR 52:001 § 1(34). 

3 
compliance with the requirements ofthe Act. 42 U.S.C. § 766ld(b)(2); 40 C.F.R. § 70.8(c)(l); see also 

New York Public Interest Research Group, Inc. (NYPIRG) v. Whitman, 321 F.3d 316, 333 n.ll (2d Cir. 

2003). Under section 505(b )(2) ofthe Act, the burden is on the petitioner to make the required 

demonstration to EPA. 5 MacC!arence v. EPA, 596 F.3d I 123, 1130-33 (9th Cir. 2010); Sierra Club v. 

Johnson, 541 F.3d 1257, 1266-1267 (11th Cir. 2008); Citizens Against Ruining the Environment v. EPA, 

535 F.3d 670, 677-78 (7th Cir. 2008); Sierra Club v. EPA. 557 F.3d 401,406 (6th Cir. 2009) (discussing 

the burden ofproofin title V petitions); see also NYPIRG, 321 F.3d at 333 n.ll. If, in responding to a 

petition, EPA objects to a permit that has already been issued, EPA or the permitting authority will 

modify, terminate, or revoke and reissue the permit consistent with the procedures set forth in 40 C.F.R. 

§§ 70.7(g)(4) and (5)(i)- (ii), and 40 C.F.R. § 70.8(d). 

Where a petitioner's request that the Administrator object to the issuance of a title V permit is based in 

whole, or in part, on a permitting authority's alleged failure to comply with the requirements of its 

approved PSD program (as with other allegations of inconsistency with the Act), the burden is on the 

petitioner to demonstrate that the permitting decision was not in compliance with the requirements of the 

Act, including the requirements ofthe SIP. Such requirements, as EPA has explained in describing its 

authority to oversee the implementation ofthe PSD program in states with approved programs, include 

the requirements that the permitting authority (1) follow the required procedures in the SIP; (2) make 

PSD determinations on reasonable grounds properly supported on the record; and (3) describe the 

determinations in enforceable terms. See, e.g., 68 Fed. Reg. 9892, 9894-95 (March 3, 2003); 63 Fed. 

Reg. 13795, 13796-97 (March 23, 1998). 

As the permitting authority for the Commonwealth ofKentucky's SIP-approved PSD program, KDAQ 

has substantial discretion in issuing PSD permits. Given this discretion, in reviewing a PSD permitting 

decision, EPA will not substitute its own judgment for that ofKentucky. Rather, consistent with the 

decision in Alaska Dep 't ofEnvt 'I Conservation v. EPA, 540 U.S. 461 (2004), in reviewing a petition to 

object to a title V permit raising concerns regarding a state's PSD permitting decision, EPA generally 

will look to see whether the petitioner has shown that the state did not comply with its SIP-approved 

regulations governing PSD permitting or whether the state's exercise ofdiscretion under such 

regulations was unreasonable or arbitrary.6 See, e.g., In re Louisville Gas and Electric Company, 

5 EPA is granting several claims, as discussed in Section III ofthis order. EPA notes generally that 

KDAQ may respond to these grants by improving or justifying certain aspects ofthe permit or 

permitting record, as suggested in the order, or by making other appropriate changes that comport with 

Kentucky's SIP, approved title V program, and applicable federal regulations. 

6 As EPA has previously explained, in reviewing PSD permit determinations in the context of a petition 

to object to a title V permit, the standard ofreview applied by the Environmental Appeals Board (EAB) 

in reviewing the appeals offederal PSD permits provides a useful analogy. In re Louisville Gas and 

Electric Company, Petition No. IV-2008-3, Order on Petition (August 12, 2009) at 5 n.6; see also In re 

East Kentucky Power Cooperative, Inc. (Hugh L. Spurlock Generating Station), Petition No. IV- 2006-

4, Order on Petition (August 30, 2007) at 5. The standard ofreview applied by the EAB in its review of 

federal PSD permits is discussed in numerous EAB orders as the "clearly erroneous" standard. See, e.g., 

In re Prairie State Generation Company, 13 E.A.D. 1, 10 (EAB, August 24, 2006); In re Kawaihae 

Cogeneration, 7 E.A.D. 107, 114 (EAB, April28, 1997). In short, in such appeals, the EAB explained 

that the burden is on a petitioner to demonstrate that review is warranted. Ordinarily, a PSD permit will 

not be reviewed by the EAB unless the decision ofthe permitting authority was based on either a clearly 

erroneous finding offact or conclusion of law, or involves an important matter ofpolicy or exercise of 

discretion that warrants review. 

4 
Petition No. IV-2008-3, Order on Petition (August 12, 2009); In re East Kentucky Power Cooperative, 

Inc., Hugh L. Spurlock Generating Station, Petition No. IV-2006-4, Order on Petition (August 30, 

2007); In re Pacific Coast Building Products, Inc., Order on Petition (December 10, 1999); In re 

Roosevelt Regional Landfill Regional Disposal Company, Order on Petition (May 4, 1999). 

II. BACKGROUND 

Facility 

The proposed Cash Creek facility would be located southwest ofOwensboro on Kentucky State 

Highway 1078 in Henderson County, Kentucky. The facility would consist oftwo production units: a 

gasification-to-substitute-natural-gas process and a combined cycle power block. The gasification-tosubstitute-natural-gas process will use coal and gasifier technology to produce synthetic gas (syngas) 

that will be converted into pipeline-quality natural gas in a methanation process. The natural gas that is 

produced by the facility either will be injected into an interstate natural gas pipeline or will be used as 

fuel for the combined cycle power block. The combined cycle power block will use two natural-gasfired combustion turbines in combination with heat recovery steam generating units and a steam turbine 

to produce electricity to support the natural gas plant and for sale. The gasification plant will use four 

General Electric 900 cubic foot gasifiers. The plant intends to operate three gasifiers simultaneously, 

with each gasifier producing thirty-three percent ofthe syngas required to operate the methanation 

process at maximum capacity. The fourth gasifier will be operated in warm stand-by to provide full 

capacity during periods ofgasifier maintenance and to enhance plant reliability. 

Permit History 

KDAQ released a draft air quality permit for public review on September 9, 2009, and held a public 

hearing on October 9, 2009. Due to significant changes made to the draft permit after the October 9, 

2009, public hearing, KDAQ released the revised draft permit for public comment on December 15, 

2009, and held a second public hearing on January 15, 2010. Petitioners provided KDAQ with several 

sets of comments during the two public comment periods.7 KDAQ responded to public comments, and 

on March 5, 2010, KDAQ submitted a proposed permit to EPA for the required 45-day review period. 

EPA did not object to the proposed permit within its review period, which ended on April 19, 2010. 

KDAQ issued the final permit (Permit V-09-006) on May 5, 2010. 

Previously, Cash Creek applied for and obtained an air quality permit from KDAQ authorizing it to 

construct and operate a facility using IGCC technology at the same location. Cash Creek never built the 

proposed I GCC facility, and the permit (Permit V -07-0 17) was rendered null and void upon issuance of 

the permit addressed by this order (Permit V -09-006). 

Background on PSD and BACT 

The CAA and corresponding PSD regulations require that new major stationary sources employ BACT 

to minimize emissions ofregulated pollutants emitted from the facility in significant amounts. CAA § 

7 Petitioners' comments on the initial and revised draft permits include: (a) comments dated October 8, 

2009, submitted on behalfof Sierra Club and Valley Watch; (b) comments dated January 14, 2010, 

submitted on behalf ofSierra Club, Ursuline Sisters of Mount St. Joseph, and Valley Watch; and (c) 

comments dated January 15, 2010, submitted on behalf of Sierra Club. 

5 
165(a)(4), 42 U.S.C. § 7475(a)(4); 40 C.F.R. §§ 51.166(j)(2) and 52.2l(j)(2); 401 KAR 51:017 § 8(2), 

(3). BACT is defined to mean: 

an emission limitation based on the maximum degree ofreduction [of each regulated 

pollutant emitted from the facility] which the permitting authority, on a case-by-case 

basis, taking into account energy, environmental, and economic impacts and other costs, 

determines is achievable for such facility through application ofproduction processes and 

available methods, systems, and techniques, including fuel cleaning, clean fuels, or 

treatment or innovative fuel combustion techniques for control of each such pollutant. 

CAA § 169(3), 42 U.S.C. § 7479(3); see also 401 KAR 51:001§ 1(25). 

EPA has developed a "top-down" process that permitting authorities can use to ensure that a BACT 

analysis satisfies the applicable legal criteria. The top-down BACT analysis consists of a five-step 

process which provides that all available control technologies be ranked in descending order of control 

effectiveness, beginning with the most stringent. See In re Prairie State Generation Company, 13 

E.A.D. I, 13-14 (EAB, August 24, 2006). Under the top-down process, the most stringent control 

technology is deemed the control necessary to achieve BACT-level emission limits unless the applicant 

demonstrates, and the permitting authority determines, that technical considerations, or energy, 

environmental, or economic impacts justify a conclusion that the most stringent technology is not 

achievable in that case. As EPA previously explained, an incomplete BACT analysis, including failure 

to consider all potentially applicable control alternatives, constitutes clear error. See, e.g., In re Cash 

Creek Generation, LLC, Petition Nos. IV -2008-1 & IV -2008-2, Order on Petition (Dec. 15, 2009), at 6; 

see also Prairie State, 13 E.A.D. at 15; In re KnaufFiber Glass, 8 E.A.D. 121, 142 (EAB 1999); In re 

Masonite Corp. 5 E.A.D. 551, 568-569 (EAB 1994). Cash Creek followed this top-down BACT 

methodology when it submitted its application for the Cash Creek facility, and KDAQ applied this 

methodology in evaluating the application and issuing its permitting decision. See Final Permit 

Statement of Basis (May 3, 2010) ("SOB") at 20-21. 

KDAQ determined that the Cash Creek facility has the potential to emit the following pollutants in 

significant amounts as defined in 401 KAR 51:001, Section (222)(a): particulate matter (PM); 

particulate matter with a diameter often microns or less (PM10), particulate matter with a diameter of 

two and a halfmicrons or less (PM25), nitrogen oxides (NOx), sulfur dioxide (SO2), and carbon 

monoxide (CO). SOB at 7. The permit contains emission limits determined as BACT for each ofthese 

pollutants. Id. KDAQ determined that a BACT review was not required for volatile organic compounds 

(VOC), sulfuric acid (H2SO4), or hydrogen sulfide (H2S) because the facility's predicted controlled 

emissions ofthese pollutants are below the PSD significance rate. !d. at 19. However, the facility's 

uncontrolled emissions of VOC, H2SO4, and H2S would exceed the significant emission rate. !d. 

Therefore, the permit includes source-wide emission limits equal to ninety percent ofthe significant 

emission rate for each of these pollutants. Id 

III. EPA DETERMINATIONS 

A. Petitioners' Claims Regarding Public Participation 

Petitioners contend that EPA must object to the permit because K.DAQ did not provide a meaningful 

opportunity for public participation during the permitting process. Specifically, Petitioners assert that (1) 

the public notice for the comment period failed to include a calendar "end date" as required by 401 KAR 

6 
52:100 § 5( 6); and (2) the permit record available during the public comment period omitted certain 

information that KDAQ was required to make publicly available. Petition at 5-8. 

1. 	 Petitioners' contention tbat KDAQ failed to specify a calendar "end date" in 

tbe public notice. 

Petitioners' Claim: Petitioners contend that the public comment period for the permit was deficient 

because the public notice for the comment period failed to specify the "end date" ofthe public comment 

period. For support, Petitioners cite to 401 KAR 52:100 § 5(6) and (7). Petition at 5. Petitioners explain 

that the notice instead instructed that "written comments must be postmarked within 30 days following 

the date ofpublication ofthis notice." Id. According to Petitioners, the term "date" means a particular 

day, month and year. Petitioners state that KDAQ's failure to specify the day, month and year on which 

public comment ended resulted in confusion because it was unclear whether the day that the notice was 

published counted toward the 30-day comment period. Id 

EPA's Response: For the reasons provided below, the Petition is denied with respect to this issue. 

Pursuant to CAA § 505(b )(2), a petition "shall be based only on objections to the permit that were raised 

with reasonable specificity during the public comment period provided by the permitting agency (unless 

the petitioner demonstrates in the petition to the Administrator that it was impracticable to raise such 

objections within such period or unless the grounds for such objection arose after such period)." 42 

U.S.C. § 766ld(b)(2). None ofthe comments submitted to KDAQ during either ofthe two public 

comment periods on the draft permit raised an issue regarding KDAQ's alleged failure to identify a 

public comment period "end date" in its public notices. Nor did Petitioners demonstrate in their petition 

that it was impractical to raise such objection within the public comment period. Also, there is no 

indication that the grounds for the objection arose after the public comment period. Furthermore, 

regarding the substance ofPetitioners' claim, the term "end date" is not defined in Kentucky's SIP. 

While Petitioners prefer that the term "date" be interpreted as "[t]ime stated in terms ofthe day, month, 

and year," KDAQ is not obligated to adopt Petitioners' preferred interpretation. Other possible 

interpretations of "date" include "the time at which an event occurs,"8 

or "[a] particular point or period 

oftime at which something happened or existed, or is expected to happen."9 Under these latter 

definitions, Petitioners have not demonstrated that the language in K.DAQ's public notices providing 

that public comments are due "30 days following the date ofpublication ofthis notice" is inconsistent 

with the applicable requirements, or otherwise inconsistent with title V. Therefore, EPA denies the 

petition with respect to this issue on procedural grounds, and, in the alternative, on substantive 

grounds.10 

2. Petitioners' contention tbat key information was unavailable during the 

public comment period. 

Petitioners' Claim: Petitioners state that the public was deprived of a meaningful opportunity to 

comment on the draft permit because K.DAQ omitted numerous required analyses and supporting 

materials from the record available for public review during the public comment period. See Petition at 

7-8. In particular, Petitioners contend that the following information should have been available: 

8 Merriam-Webster Dictionary, mw2.Merriam-Webster.com/dictionary/date (last visited Mar. 5, 2012).

9 American Heritage Dictionary ofthe English Language, Fourth Ed., Houghton Mifflin, 2009. 

10 EPA notes that Petitioners submitted comments by the deadline and KDAQ considered them in 

reaching its permitting decision. 

7 
1) supporting information for numerous emissions factors VOC and H2SO4 from the combustion 

turbine, and CO, VOC, NOx, PM and SO2 from the aspirator, and the same pollutants from the 

emergency generator; 

2) estimates of fugitive emissions from valves, leaks, and flanges, and other similar sources; 

3) the leak detection and repair (LDAR) plan to control fugitive emissions, the estimated controlled 

emissions under that plan and supporting materials for those emissions estimates, and the associated 

CO BACT analysis; 

4) the basis for the assumed heat content ofthe natural gas burned in the combustion turbines; 

5) emissions information and supporting materials pertaining to the BACT analysis; 

6) cost-effectiveness analyses to support rejection of lower sulfur coal and dry cooling in the BACT 

analysis; and 

7) a flare operation plan to control flaring emissions. 

Id.; see also id. at 19-31 (discussing the unavailability during the public comment period ofthe estimate 

of fugitive emissions from equipment leaks and the associated CO BACT analysis (including the LDAR 

requirements selected as BACT) and raising substantive issues regarding the information provided after 

the close ofthe comment period); id. at 14-15 (further discussion of concerns regarding the 

unavailability ofthe operation plan for public review). Petitioners cite to 40 C.F.R. § 70.5(c) as support 

for the proposition that the above-listed information is required to be included in the permit application 

and thus should have been available to the public during the public comment period. See Petition at 7 

(citing In re WE Energies Oak Creek Power Plant, Order on Petition (June 12, 2009) at 24, and In re 

RoclcGen Energy Center, 8 E.A.D. 536, 552-55 (EAB 1999)). Petitioners request that EPA direct KDAQ 

to make the requested information available to the public and to hold an additional public comment 

period. Id. 

Overview of Applicable Legal Framework for Certain Public Participation Claims 

EPA's regulations at 40 C.F.R. § 70.7(a)(l) provide that a permit may be issued only if, among other 

things, the permitting authority "has received a complete application" and "has complied with the 

requirements for public participation under paragraph (h) ofthis section." With regard to a permit 

application, EPA's regulations provide: "An application may not omit information needed to determine 

the applicability of, or to impose, any applicable requirement ...." 40 C.F.R. § 70.5(c); see also 40 

C.F.R. § 70.5(a)(2) (stating, among other things, that "[i]nformation required under paragraph (c) ofthis 

section must be sufficient to evaluate the subject source and its application and to determine all 

applicable requirements"). The regulations require each title V permit to include, among other things, 

"[e ]mission limits and standards, including those operational requirements and limitations that assure 

compliance with all applicable requirements at the time ofpermit issuance" and "compliance 

certification, testing, monitoring, reporting and recordkeeping requirements sufficient to assure 

compliance with the terms and conditions ofthe permit." 40 C.F.R. § 70.6(a)(l), (c)(l). Regarding 

public participation, the regulations require that permit proceedings1 "provide adequate procedures for 

public notice including offering an opportunity for public comment and a hearing on the draft permit." 

40 C.F.R. § 70.7(h). Finally, the regulations require that public "notice shall identify ... a person from 

whom interested persons may obtain additional information, including copies ofthe permit draft, the 

11 This provision expressly excludes modifications qualifying for minor permit modification procedures 

and expressly includes initial permit issuance, significant modifications, and renewals. 40 C.F.R. § 

70.7(h). 

8 
application, all relevant supporting materials ... and all other materials available to the permitting 

authority that are relevant to the permit decision." 40 C.F.R. § 70.7(h)(2). 

When a title V petition seeks an objection based on the unavailabilit.r of information during the public 

comment period in violation oftitle V's public participation requirements, the petitioner must 

demonstrate that the unavailability deprived the public ofthe opportunity to meaningfully participate 

during the permitting process. 

12 See In re Orange Recycling and Ethanol Production Facility, PencorMasada Oxynol, LLC, Petition No. 11-2000-07, Order on Petition (May 2, 2001) (applying the concepts 

ofmeaningful public participation and logical outgrowth to title V); cf, e.g., In re Murphy Oil USA, Inc., 

Meraux Refinery, Petition No. 2500-00001-V5, Order on Petition (Sept. 21, 2011) (discussing a 

response to significant comments as "an inherent component of any meaningful notice and opportunity 

for comment" (citing Home Box Office v. FCC, 567 F.2d 9, 35 (D.C. Cir. 1977))). To guide this analysis 

under title V, EPA generally looks to whether the petitioner has demonstrated "that the alleged flaws 

resulted in, or may have resulted in, a deficiency in the permit's content." See In re Sirmos Division of 

Bromante Corp., Petition No. II-2002-03, Order on Petition (May 24, 2004). Without such a showing, it 

may be difficult to conclude that the ability to comment on the information would have been 

meaningful. In implementing the requirements for public participation under title V, EPA is mindful that 

the part 70 regulations were promulgated in light ofCAA section 502(b)(6)'s pursuit of "[a]dequate, 

streamlined, and reasonable procedures ... for public notice, including offering an opportunity for 

public comment and a hearing." 42 U.S.C. § 7661a(b)(6). EPA also notes that where a permitting 

authority provides an explanation for its decision not to make something available during the public 

comment period, the petitioner bears the burden of demonstrating that the permitting authority's 

explanation is unreasonable. 

This analysis about the availability of information during the public comment period is related to the 

regulatory standard under 40 C.P.R.§ 70.5(c) governing information that may not be omitted from a 

permit application. Specifically, under 40 C.F.R. § 70.5(c), a permit application may not omit 

information "needed to determine the applicability of, or to impose, any applicable requirement." So an 

EPA objection to a proposed permit based on a permit application deficiency may be accompanied by an 

EPA objection based on a resulting flaw in the public participation process because, in many instances, 

the unavailability during the public comment period ofinformation needed to determine the applicability 

of or to impose an applicable requirement also may result in a deficiency in the permit's content. See In 

re Louisiana Pacific Corporation, Petition No. V-2006-3, Order on Petition (Nov. 5, 2007); In re WE 

Energies Oak Creek Power Plant, Order on Petition (June 12, 2009); In re Alliant Energy -WPL 

Edgewater Generating Station, Petition No. V-2009-02, Order on Petition (Aug. 17, 2010). 

However, the question of whether a permit application is deficient is distinct from the question of 

whether the public participation process was deficient. For this reason, it is not always the case that a 

permit application deficiency necessarily results in a deficient public participation process. For example, 

even if certain required information is omitted from an applicant's permit application, the permitting 

authority may have added the information to the permit record prior to the start ofthe public comment 

period. Another example might be where information submitted by the permit applicant after the close 

ofthe public comment period simply confirms assumptions underlying the draft permit conditions. 

Under both ofthose circumstances, though the permit application available during the public comment 

12 Where a petitioner claims that a permit is not in compliance with an unambiguous, express procedural 

requirement of 40 C.F.R. Part 70 (e.g., failure to publish public notice as required by 40 C.F.R. § 

70.7(h)(l)), EPA will analyze that argument on its own terms. 

9 
period may arguably have lacked required information, the omission of that information may not have 

impacted the public's opportunity to meaningfully participate in the permitting process. 

Additionally, under EPA's regulations, correcting a permit application deficiency does not necessarily 

involve offering an additional opportunity for public comment. Specifically, under 40 C.F.R. § 70.5(b), 

"[a ]ny applicant who fails to submit any relevant facts or who has submitted incorrect information in a 

permit application shall, upon becoming aware of such failure or incorrect submittal, promptly submit 

such supplementary facts or corrected information." Nothing in that provision requires that the 

supplemental information must be provided prior to the public comment period or that an additional 

public comment period must always be held on the newly submitted information. Likewise, EPA's 

regulations at 40 C.F.R. § 70.4(a)(l) state that a permitting authority may not issue a final permit unless 

the permitting authority "has received a complete application." Nothing in that provision indicates that 

the version ofthe application made available to the public during the public comment period must 

contain all ofthe information required to make the application complete. Thus, even after the close of 

the public comment period, a permit applicant may come into compliance with the permit application 

requirements of 40 C.F.R. § 70.5 by supplementing or correcting the permit application. Assuming that 

the application has been corrected or supplemented prior to submission ofthe proposed permit to EPA, 

EPA generally would consider whether the correction or supplement cured inadequacies in the permit 

application in determining whether to object to the proposed permit on the basis of§ 70.5. Nonetheless, 

depending on the circumstances, EPA may determine that an objection is warranted on the basis that the 

unavailability ofthe omitted information during the public comment period contravened 40 C.P.R.§ 

70.7(h) because the absence ofthat information deprived the public ofthe opportunity to meaningfully 

participate in the permitting process, especially where the missing information resulted in, or may have 

resulted in, a deficiency in the content ofthe permit. 

EPA's Response: For the reasons provided below, EPA partially grants and partially denies the petition 

on this issue. 13 The issues on which EPA is granting the petition on public participation grounds are 

meaningful with respect to KDAQ's PSD determinations in that they pertain to whether the facility's 

emissions were properly estimated and whether the permit includes appropriate BACT requirements. 

Fugitive emissions estimates 

Regarding the lack of a public comment opportunity on the estimates of fugitive emissions from valves, 

leaks, and flanges, EPA grants the petition on this issue. Because Cash Creek supplemented its permit 

application witfi this information after the close ofthe public comment period on the draft permit, Cash 

Creek's permit application is no longer deficient. However, Petitioners demonstrated that fugitive 

emissions calculations were unavailable during the public comment period, and further demonstrated 

that this information was needed to determine whether the proposed source is a major emitter of VOC 

and HAPs. See Petition at 20. Furthermore, the Petitioners raise numerous concerns regarding the 

fugitive emissions calculation. Due to the unavailability ofCash Creek's fugitive emissions calculation 

13 As a practical matter, EPA notes that the petition does not allege that Petitioners contacted the person 

identified by KDAQ pursuant to 40 C.F.R. § 70.7(h)(2) in order to request any ofthe listed information. 

EPA also reiterates that Kentucky operates a merged process for PSD permitting and title V permitting, 

and, as a general matter, the same requirements for public involvement apply to both types of permitting 

in Kentucky. 

10 
during the public comment period, Petitioners were unable to raise these concerns with KDAQ, and 

KDAQ, in turn, did not have an opportunity to respond to these concerns. Any potential errors in Cash 

Creek's fugitive emissions calculation could have resulted in an incorrect determination that the source 

is a minor source of VOC and HAP emissions. Therefore, EPA grants the petition on this issue and 

directs KDAQ to provide an opportunity for public comment on the fugitive emissions calculation. 

LDAR requirements and associated CO BACT analysis 

EPA also grants the petition with respect to the lack of a public comment opportunity on the proposed 

permit's LDAR requirements, which serve as BACT for control ofthe facility's fugitive CO emissions. 

As with the fugitive emissions calculation, it is undisputed that the BACT analysis that appeared in the 

permit application that was made available to the public omitted any discussion ofLDAR requirements 

serving as BACT for fugitive CO emissions. Because Cash Creek supplemented its application to 

include this information after the close ofthe public comment period, Cash Creek's permit application is 

no longer deficient. However, Petitioners demonstrated that the unavailability ofthis information during 

the public comment period prevented the public from evaluating and commenting on whether the LDAR 

requirements included in the proposed permit are sufficient to satisfy BACT requirements. Indeed, 

Petitioners identify various concerns regarding the adequacy ofthe LDAR requirements that they were 

unable to raise in their comments to KDAQ on the draft permit. See Petition at 27-31. Petitioners have 

shown that the unavailability ofthis information during the public comment period may have resulted in 

a permit deficiency. EPA grants the petition on this issue and directs KDAQ to provide an opportunity 

for public comment on the proposed LDAR requirements and associated CO BACT analysis. 

Flare operation plan 

EPA denies the petition with respect to Petitioners' claim that Cash Creek's flare operation plan should 

have been available for review during the public comment period on the draft permit. EPA's decision on 

this issue is based on the role of the operation plan requirement in this particular permit. 

In prior orders, EPA has determined that a facility operation plan that must be followed by a source must 

be included in a permit application and available for public review where the plan's content was needed 

to impose an applicable requirement or ifthe plan was relied upon as a compliance assurance measure. 

See In re WE Energies Oak Creek Power Plant, Order on Petition (June 12, 2009); In re Alliant Energy 

-WPL Edgewater Generating Station, Order on Petition, (Aug. 17, 2010). Likewise, in In re RockGen 

Energy Ctr, 8 E.A.D. 536, 552-55 (EAB 1999), the EAB held that a permit condition exempting the 

facility from BACT limits during startup and shutdown and requiring the post-construction development 

of a plan for limiting emissions during startup and shutdown violated the requirement that BACT limits 

be established prior to construction. However, in In re Power Holdings ofIllinois, PSD Appeal No. 09-

04, slip op. (EAB, Aug. 13, 2010), the EAB rejected a challenge to a permit provision that required the 

permittee to submit a flare minimization plan 90 days prior to startup, and to review and revise the plan 

annually. In that case, the EAB found that the flare minimization plan was not being employed as a 

substitute for BACT limits. See slip op. at 13-14. Furthermore, though the Power Holdings permit 

identified the flare minimization plan as part ofthe facility's BACT obligations, the permit contained 

numerous other requirements designed to ensure adequate control offlaring emissions resulting from 

startup, shutdown and malfunction events. Id The EAB concluded that nothing in the record 

demonstrated that the various permit requirements would be insufficient to satisfy BACT, even without 

the flare minimization plan. !d. at 15-16. 

11 
In this case, the operation plan required by Cash Creek's permit is not relied upon to impose an 

applicable requirement or as a compliance assurance measure. See Final Cash Creek Permit at 44-45. 

Unlike the plan at issue in RockGen, the operation plan required by Cash Creek's permit is not identified 

as a substitute for BACT limits; indeed, the permit does not identify the operation plan requirement as 

relating to Cash Creek's BACT obligations. See id Nor do Petitioners identify any other applicable 

requirement directing Cash Creek to implement an approved operation plan. Finally, nothing in the 

proposed permit or in the accompanying statement of basis identifies Cash Creek's implementation of 

the plan as necessary as a compliance assurance measure. EPA also notes that KDAQ explained in its 

Response to Comments document why it was unnecessary for the operation plan to be available during 

the public comment period (see KDAQ Response to Comments (March 2010) ("RTC") at B-58), and 

Petitioners made no attempt to demonstrate in their petition that KDAQ's explanation was unreasonable. 

Thus, EPA concludes that Petitioners have not shown that the alleged omission ofthe operation plan 

from the permit application and/or the unavailability ofthis information during the public comment 

period caused the permit not to be in compliance with applicable requirements or requirements of40 

C.F.R. part 70. However, if in response to EPA objections regarding other issues addressed by this 

order, KDAQ chooses to rely on implementation ofthe flare operation plan as BACT or to assure 

compliance with BACT or another applicable requirement, KDAQ would need to amend the permit to 

include the parts ofthe plan that are necessary to assure compliance with the applicable requirement(s), 

and further, the appropriate plan details would need to be made available for public review and 

comment. 

Other information that Petitioners allege should have been available during the public comment period 

With respect to the alleged unavailability during the public comment period of(a) supporting 

information for emissions factors used to calculate emissions from the combustion turbines, aspirator 

and emergency generator, (b) the basis for the heat content ofnatural gas, and (c) a cost-effectiveness 

analysis to support rejection oflower sulfur coal and dry cooling as BACT, EPA concludes that 

Petitioners have not met their burden ofdemonstrating that the alleged omission ofthis information 

from the permit application and/or the unavailability ofthis information during the public comment 

period caused or may have caused the permit not to be in compliance with applicable requirements or 

requirements of 40 C.F .R. part 70. In particular, Petitioners made no attempt to demonstrate that 

omission ofthis information from the permit application meant that the application lacked information 

"necessary to determine the applicability of, or to impose, any applicable requirement ..." See 40 

C.F.R. § 70.5(c). Nor do Petitioners identify how the alleged unavailability ofthis information during 

the public comment period may have resulted in a permit deficiency or otherwise deprived them of 

meaningful participation. Moreover, EPA notes that KDAQ responded to Petitioners' concerns 

regarding the unavailability ofthis information in its Response to Comments document (see RTC at B-9 

to -14), and Petitioners made no attempt in their petition to demonstrate that KDAQ's explanation was 

unreasonable. Therefore, EPA denies the petition with respect to the alleged unavailability ofthis 

particular information. 

Finally, EPA denies the petition with respect to the Petitioners' general allegation regarding the 

omission of emissions information and supporting materials pertaining to the BACT analysis. 14 The 

14 Petitioners' generalized allegation regarding the unavailability ofinformation supporting KDAQ's 

BACT analysis is distinct from the more specific allegations discussed above regarding the lack of a 

12 
permit application and supporting materials available to the public during the public comment period 

included extensive discussion regarding the selection of BACT for the proposed source. Petitioners do 

not specify what additional emissions information and supporting materials for BACT should have been 

included in the permit application. Nor do petitioners demonstrate how the alleged lack of some 

information regarding the BACT determination during the public comment period may have resulted in 

a permit deficiency or otherwise deprived them ofmeaningful participation. Moreover, EPA notes that 

KDAQ responded to Petitioners' concerns regarding the lack of support for its BACT analysis in its 

Response to Comments document (see RTC at B-12 to -14), and Petitioners made no attempt to 

demonstrate in their petition that KDAQ' s explanation was unreasonable. Therefore, EPA denies the 

petition with respect to the alleged unavailability ofthe additional emissions information and supporting 

materials pertaining to the BACT analysis during the public comment period. 

B. Petitioners' Claims Regarding Flare Emissions 

l. 	 Petitioners' contention that calculation of the facility's potential to emit 

(PTE) for purposes of determining whether the proposed facility will be a 

major source of VOC, H2S, and HAPs failed to account for full emissions 

from active flaring. 

Petitioners' Claim: Petitioners contend that KDAQ's determination that Cash Creek is a minor source 

for VOC, H2S, and HAPs was based on an underestimation of emissions from the facility's flare. 

Petition at 8-13. Petitioners contend that KDAQ's PTE calculation improperly omits flare emissions 

during shutdowns and malfunctions. Petition at 12. 

Petitioners assert that PTE must reflect the source's "maximum capacity to emit a pollutant," citing to 

the definition ofPTE in Kentucky's SIP. Petition at 9. According to Petitioners, there is no blanket 

exception from the PTE definition for emissions resulting from startup, shutdown, and malfunction 

(SSM). Id Petitioners further contend that flare emissions must be included in the PTE calculation 

because flares "are emissions units whose purpose is to control release ofgases from process units." Id 

Petitioners point out that determining whether PSD applies to a particular pollutant involves adding 

together the "potential to emit" of each "emissions unit," and the Kentucky SIP defines "emission unit" 

broadly as "any part of a stationary source ... that emits or has the potential to emit a regulated NSR 

pollutant." Id. As support for their position that flares are "emission units," Petitioners cite to In re 

ConocoPhillips Co., 13 E.A.D. 768, 774 (EAB 2008). Petition at 10. 

According to Petitioners, "flares emit pollutants while operating under their design to control emissions 

from the larger facility, e.g., during periods ofthe facility's SSM." See Petition at 10. Furthermore, 

Petitioners contend that EPA has already determined that SSM emissions must be included in PTE 

calculations, citing to In re BP Products, North America, Inc., Whiting Business Unit, Order on Petition 

(Oct. 16, 2009), at 5-7. Petition at 10. Petitioners also cite to EPA comments on a draft PSD permit and 

a letter from EPA Region 2 to New Jersey. Id Petitioners state that any constraint on emissions that is 

considered in the PTE calculation "must be explicitly set forth in the permit as a physical or operational 

limit." Id. at 9 (emphasis omitted); see also id at 11-12 (describing requirements relating to the 

enforceability of PTE limits). 

public comment opportunity on Cash Creek's fugitive emissions calculation as well as the LDAR 

requirements and associated CO BACT analysis for equipment leaks. 

13 
Petitioners explain that in response to their comments on the draft permit, KDAQ stated that PTE 

excludes malfunctions because malfunctions are not representative of normal operation. Petition at 12. 

Petitioners dispute KDAQ's claim. !d. According to Petitioners, KDAQ's position is contrary to 

Kentucky's SIP-approved regulations as well EPA's statements on this point, including in the BP 

Whiting Order. !d. Petitioners reject KDAQ's claim that In re Louisville Gas and Electric Company, 

Petition No. IV-2008-3, Order on Petition (Oct. 17, 2011) supports KDAQ's position, contending that 

the language cited by KDAQ is inapposite. Jd. Petitioners also dispute KDAQ's claim that shutdown 

(and therefore malfunction) emissions are included in Cash Creek's PTE calculation. !d. at 13. 

Petitioners explain that "[t]he theory backing KDAQ's claim is that the emission reductions from 

process equipment going offline during SSM will always outweigh increased emissions from the flare 

during the same events." ld According to Petitioners, "KDAQ fails to back its statements with any 

quantitative analysis of different malfunctions that could occur, and underestimates flaring emissions 

during SSM by citing unsupported emission estimates for only one limited shutdown scenario." Id 

Petitioners contend that other unplanned shutdowns would result in higher emissions, and also contend 

that system upsets and malfunctions could cause flaring even without other equipment shutting down, 

resulting in emissions that could significantly exceed those reported for what Petitioners describe as "the 

single scenario of a planned shutdown." ld 

Petitioners contend that these errors in estimating emissions from the flare are significant because 

KDAQ used the estimates to support its determination that the proposed facility is a minor source of 

VOC, H2S, and HAPs. !d. at 8-9. 

EPA's Response: For the reasons provided below, EPA grants in part and denies in part on this issue. 

Due to factual differences in the permit record and the way that the permit addresses the three pollutants 

with respect to which Petitioners raise concerns (VOC, H2S, and HAPs), EPA's response is different for 

each pollutant. 

VOC 

As Petitioners note, under Kentucky's federally approved SIP, the calculation of a facility's PTE for 

purposes of determining whether the facility triggers PSD requirements for a particular pollutant 

includes consideration of "[a] physical or operational limitation on the capacity ofthe source to emit 

[the] pollutant, including air pollution control equipment and restrictions on hours of operation or on the 

type or amount ofmaterial combusted, stored, or processed, ... ifthe limitation or the effect it would 

have on emissions ... [i]s federally enforceable." 401 KAR 51:001, § 1 (190) (PTE definition in 

Kentucky's SIP); see also 40 C.F.R. § 52.2l{b)(4) (federal PTE definition for PSD applicability); 40 

C.F.R § 632 (providing substantially the same PTE definition for determining applicability ofmaximum 

achievable control technology standards for HAPs); In re Orange Recycling and Ethanol Production 

Facility, Pencor-Masada Oxynol, LLC, Petition No. II-2000-07, Order on Petition (May 2, 2001), at 21. 

14 
other words, if a permit applicant agrees to an enforceable15 limit that is sufficient to restrict PTE, the 

facility's PTE is calculated based on that limit. In this case, Cash Creek agreed to accept a source-wide 

VOC emission limit of36 tons per year (tpy). See Final Permit at 85. Therefore, an EPA objection 

regarding Cash Creek's VOC PTE determination is warranted if the source-wide VOC limit in the 

permit is not enforceable. 

In their petition, Petitioners identify several concerns regarding the enforceability of Cash Creek's 

source-wide 36 tpy VOC emission limit. See Petition at 14-16. As explained below, EPA concludes that 

Petitioners met their burden of demonstrating that the VOC limit is not enforceable as a practical matter. 

See infra at 16-19 (providing the basis for EPA's conclusion that the VOC limit is unenforceable). 

Among other issues, Petitioners demonstrated that KDAQ failed to provide a reasoned explanation for 

how the compliance demonstration method associated with the VOC emissions limit, which is used to 

determine compliance with the source-wide VOC limit, accounts for all actual VOC emissions from the 

flare.ld An emission limit can be relied upon to restrict a source's PTE only if it is legally and 

practicably enforceable, and KDAQ acknowledges that Cash Creek would be above the significance 

level for VOC in the absence of an enforceable source-wide VOC limit. EPA is granting the petition 

regarding Petitioners' claim that the source-wide VOC limit is unenforceable, and, accordingly, that 

limit cannot be relied upon to determine that the source is below the relevant thresholds for VOC. For 

this reason, EPA grants the petition on Petitioners' challenge to KDAQ's determination that Cash Creek 

is below the significance level for VOC. EPA is thus focusing on the method of determining compliance 

with the source-wide VOC emissions limit, and, therefore, need not reach the separate issues raised in 

this portion of the petition regarding how the VOC PTE was calculated. KDAQ can respond to this 

objection by amending the permit to address the enforceability concerns described below. See infra at 

16-19. Alternatively, KDAQ can respond by making other changes to the permit as appropriate to ensure 

that the VOC PTE limit is enforceable, by taking other actions to ensure that PSD is not triggered for 

VOC, or by requiring Cash Creek to comply with the PSD requirements for VOC. 

H2SXa 

Though Petitioners contend in their petition that KDAQ's alleged incomplete assessment of emissions 

from active flaring affected KDAQ's determination that the proposed facility is a minor source of H2S 

for purposes of PSD applicability, this claim was not raised with "reasonable specificity" in public 

comments on the draft permit as required by section 505(b)(2) of the Act and 40 C.F.R. § 70.8(d), and 

Petitioners did not demonstrate that it was impracticable to raise such objection during the comment 

period. Further, there is no indication that the grounds for their objection arose after the public comment 

period. The only comment on the draft permit addressing the calculation of H2S emissions from the flare 

questioned whether unaccounted flare emissions would make the proposed facility's PTE exceed the 

significance level for HAPs, triggering the applicability of maximum achievable control technology 

15 Although the federal definition of PTE for PSD also includes the term "federally enforceable," 

following two court decisions, National Mining Association v. EPA, 59 F.3d 1351 (D.C. Cir.l995) and 

Chemical Manufocturers Ass'n v. EPA, No. 89-1514 (D.C. Cir.1995), EPA clarified that the term 

"federally enforceable" as used in relation to the definition of PTE for the federal PSD program, should 

be read to mean "federally enforceable or legally and practicably enforceable by a state or local air 

pollution control agency." John Seitz and Robert Van Heuvelen, "Release of Interim Policy on Federal 

Enforceability of Limitations on Potential to Emit" (Jan. 22, 1996), at 3. The term "federal 

enforceability" has also been interpreted to require practical enforceability. See, e.g., In re Shell 

Offshore, Inc., Kulluk Drilling Unit and Frontier Discoverer Drilling Unit, at n.54 (EAB 2007). 

15 
(MACT) standards promulgated under CAA § 112. 16 The comment did not raise Petitioners' claim that 

potential H2S emissions from the flare are large enough to trigger PSD requirements. 17 Therefore, EPA 

denies Petitioners' claims regarding KDAQ's alleged failure to consider full emissions from active 

flaring in determining that the proposed facility is a minor source ofH2S for purposes of PSD 

applicability. 

HAPs 

Cash Creek's permit does not include a limit on its emission oftotal HAPs. See SOB at I8. 

Therefore, the proposed facility's PTE for total HAPs is calculated based on the facility's unlimited 

potential to emit. In response to concerns raised by Petitioners in their comments on the draft permit 

regarding KDAQ's alleged failure to fully account for flaring emissions in determining that the proposed 

facility's PTE is less than the 25 tpy major source threshold for total HAPs, KDAQ pointed to Table 8-1 

in Cash Creek's permit application, which, as KDAQ explains, lists the HAPs that the facility will emit 

during flare standby operation (pilot only) and startup. See RTC at B-97. Based on the information 

provided in that table, KDAQ concluded that ''total HAPs emitted by the facility will be below 8.56 

tons/yr." Jd 

Because the table cited by KDAQ in support ofits determination that the proposed facility will be below 

the major source threshold for total HAPs expressly accounts only for flare emissions during flare 

standby and startup operations, KDAQ's response did not adequately respond to Petitioners' concern 

that flaring emissions other than those associated with standby and startup operations would cause the 

facility's PTE for combined HAPs to exceed the major source threshold. Therefore, EPA grants the 

petition on this issue with respect to HAPs due to KDAQ's failure to provide a reasoned explanation 

regarding how the PTE calculation for total HAPs accounts for flaring emissions associated with 

operations other than standby and startup. 

2. Petitioners' contention that the VOC potential-to-emit limit applicable to the 

flare is not enforceable as a practical matter. 

Petitioners' Claim: Petitioners contend that the permit lacks enforceable conditions limiting the flare's 

potential to emit. Petition at 14. Specifically, Petitioners contend that the permit's facility-wide 36 tpy 

VOC limit is unenforceable because the permit lacks flare minimization requirements needed to ensure 

the facility's compliance with the limit. Id According to Petitioners, the permit should have required a 

flare minimization plan, including a required process and/or standards for KDAQ's approval or 

disapproval ofsuch plan, provisions for public or U.S. EPA review ofand comment on the adequacy of 

the plan, and a process for revising the plan as factors impacting flaring change. Id. Petitioners state that 

the permit should include requirements similar to those in flare minimization rules promulgated by two 

local air quality management districts in California. !d. 

Petitioners contend that the compliance determination method associated with the 36 tpy VOC limit (see 

Final Cash Creek Permit at 84-85) is "just a formula without a measurement." Petition at 16. According 

to Petitioners, the demonstration "contains an unenforceable circular equation that assumes without 

basis what startup emissions will be per hour, then multipl[ies] 1,328 lbslhour times the number ofhours 

16 See Comments by Sierra Club and Valley Watch on Cash Creek Generating Station Draft Permit V09-006, dated October 8, 2009, at 44. 

17 EPA notes that because H2S is not a listed HAP under CAA § 112(b ), the proposed facility's H2S 

emissions are not considered in determining MACT applicability. 

16 
times an assumed high destruction efficiency (99.5 percent), and does not measure shutdown at all." Id 

Further, Petitioners explain that for flare pilot gases, the permit "also contains a formula without 

measurement ofhourly emissions times the number of hours per month." /d Petitioners contend that the 

permit "provides no way to assure that the 1,328 lbs/hour is met during startup, and no way to assure 

that the 99.5% destruction efficiency is met." Id. 

EPA's Response: For the reasons described below, the EPA partially grants and partially denies the 

petition on this issue. 

Flare Minimization Requirements 

EPA denies Petitioners' claim that the permit is deficient because it allegedly lacks "flare minimization" 

requirements. Petitioners did not demonstrate that there is any applicable requirement directing Cash 

Creek to prepare a "flare minimization plan" or "operating plan" similar to plans required by local 

California air quality management districts. While the permit must include terms and conditions 

sufficient to assure compliance with the VOC PTE limit, KDAQ has discretion regarding the exact 

nature ofthose compliance assurance requirements. 

Lack ofMonitoring to Assure Compliance with the Source-Wide VOC Limit 

Regarding Petitioners' claim that the permit is deficient in that it lacks monitoring requirements to 

ensure that flare emissions do not cause the facility to exceed the 36 tpy source-wide VOC limit, and the 

related claim that the VOC limit is lUlenforceable because the associated compliance demonstration 

assumes certain values without measurement, EPA partially grants and partially denies the petition. 

Assumed flare combustion efficiency: EPA grants the petition regarding Petitioners' argument that the 

VOC PTE limit is not enforceable because it simply assumes that the flare will achieve 99.5% 

combustion efficiency at all times. EPA recognizes that KDAQ indicated in its response to comments on 

the draft permit that it received confirmation from a flare vendor that this type of flare can achieve 

99.5% destruction removal efficiency for VOC (see RTC at B-32), and EPA also notes that the petition 

does not dispute the reasonableness ofKDAQ's reliance on the vendor information. Nonetheless, EPA 

agrees with Petitioners that for the 36 tpy VOC limit to be enforceable, the permit must include 

conditions that are sufficient to ensure that the flare achieves a combustion efficiency of99.5% or 

greater at all times that gases are vented to the flare. See Memorandum from Terrell E. Hunt, EPA, 

"Guidance on Limiting Potential to Emit in New Source Review Permitting" (June 13, 1989), at 7 

("When permits require add-on controls operated at a specified efficiency level, permit writers should 

include, so that the operating efficiency condition is enforceable as a practical matter, those operating 

parameters and assumptions which the permitting agency depended upon to determine that the control 

equipment would have a given efficiency."); see also id. at 19-20 (explaining that where a permit relied 

on fabric filter to be employed and maintained at 99% efficiency to enable the facility to comply with a 

PTE limit, the permit would either need to include "parameters that allowed the permitting agency to 

verify the fabric filter's operating efficiency," or would need to require the facility to install and operate 

continuous opacity monitors). As Petitioners correctly point out, there are no enforceable permit 

conditions that are designed to assure that the VOC combustion efficiency assumed in the compliance 

demonstration equation is achieved at all times that gases are vented to the flare. Though this issue was 

raised in public comments on the draft permit, KDAQ did not identify any permit conditions ensuring 

that this efficiency actually is achieved at all times that gases are vented to the flare; rather, KDAQ's 

response focused on vendor information indicating that the flare will be capable of achieving 99.5% 

destruction efficiency. See RTC at B-31 to -33, -36. 

17 
EPA recognizes that the permit does contain permit conditions requiring parametric monitoring ofthe 

flare for the purpose of assuring the facility's compliance with limits on pollutants other than VOC. See 

Final Cash Creek Permit at 42-46. However, the permit expressly ties this monitoring to Cash Creek's 

demonstration of compliance with the BACT limits rather than the 36 tpy VOC PTE limit, and the 

prescribed VOC compliance demonstration equation does not appear to allow consideration ofthe 

results ofthis monitoring in determining compliance with the VOC PTE limit. Moreover, the parametric 

monitoring required by the permit largely mirrors the flare requirements set forth in the New Source 

Performance Standards (NSPS), and EPA has never suggested that the flare requirements laid out in 40 

C .F .R. 60.18 are sufficient to ensure a continuous combustion efficiency of99 .5%. 18 Although Cash 

Creek's permit requires development of and compliance with a flare operation plan and compliance 

assurance monitoring plan, neither KDAQ nor Cash Creek have identified and explained how its 

specific operational and monitoring requirements will ensure continuous compliance with a combustion 

efficiency of99.5% or greater. To address this objection, KDAQ must amend the permit to include 

enforceable conditions sufficient to ensure that the flare achieves a continuous combustion efficiency of 

99.5% or greater. Alternatively, KDAQ may make other changes in the permit as appropriate to ensure 

that the VOC PTE limit is enforceable, take other measures to ensure that PSD is not triggered for VOC, 

or require Cash Creek to comply with PSD requirements for VOC. 

Assumed uncontrolled flare emissions during startup: EPA denies the petition with respect to 

Petitioners' claim that the compliance demonstration equation associated with the VOC PTE limit 

assumes without basis that startup emissions from the flare will be 1,328 lbslhr. This emission rate was 

provided by Cash Creek in its permit application and represents what flare emissions would be during 

startup if they were uncontrolled. See December 2009 Cash Creek Permit Application at 6-20. 

Petitioners offer no information demonstrating that KDAQ's inclusion ofthis uncontrolled emission rate 

in the compliance demonstration equation for the VOC PTE limit was unreasonable. 

Assumed Hourly Flare Pilot Emissions: EPA denies the petition with respect to Petitioners' claim that 

the VOC compliance demonstration equation assumes without measurement that the hourly VOC 

emission rate for the flare pilots will be 0.0109 lb/hr. This number reflects the flare pilots' uncontrolled 

hourly emission rate and was obtained from Cash Creek's permit application. See Cash Creek Permit 

Application at 6-19. In response to Petitioners' comments on the draft permit, KDAQ explained that the 

VOC emission factor for the flare pilots came from consultation with a flare vendor and KDAQ 

appended this information to its Response to Comments document. Petitioners did not demonstrate that 

KDAQ's reliance on this vendor information was unreasonable or resulted in a flaw in KDAQ's 

approach to assuring compliance with the source-wide VOC limit. 

Exclusion offlare emissions during shutdown malfunction: EPA grants the petition with respect to 

Petitioners' claim that the equation specified in Section D, paragraph 5 ofthe permit for use in 

18 EPA notes that, in responding to Petitioners' comments on the assumption of a 99.5% combustion 

efficiency, KDAQ cited to the flare vendor's statement that "EPA modified their rules for flares on heat 

content requirements per 40 C.F.R. 60.18 to exclude flares containing> 8% H2." RTC at B-32. EPA's 

decision to exempt high hydrogen flares from the standard regulatory heat content requirement was not 

intended to suggest that such flares can be assumed to achieve 99.5% destruction efficiency. To the 

extent that KDAQ relies on that exemption to support its assumption ofhigh combustion efficiencies for 

Cash Creek's high hydrogen flare at all times, that reliance is unjustified. See 63 Fed. Reg. 24436 (May 

4, 1998). 

18 
demonstrating the facility's compliance with the VOC PTE limit does not appear to account for flare 

emissions during shutdowns. As noted by Petitioners, the only flare emissions that the equation appears 

to account for are those that occur while the flare is on standby {pilot emissions) and while gases are 

vented to the flare during startups. See Final Cash Permit, Section D, at 85. Though KDAQ reports that 

source-wide VOC emissions will be lower during shutdowns due to certain reductions in emissions 

compared to "normal operations" ofthe gasifiers and one emission point switching to startup mode (see 

RTC at B-35), VOC emissions from the flare during shutdowns cannot be disregarded when calculating 

the facility's actual emissions to determine compliance with the 36 tpy VOC limit. Rather, all ofthe 

facility's VOC emissions, including emissions from the flare during shutdowns, should be considered in 

determining compliance with the facility's 36 tpy VOC PTE limit. Thus, to make the source-wide VOC 

PTE limit enforceable as a practical matter, KDAQ must either modify the "Compliance Demonstration" 

equation associated with the VOC limit to require Cash Creek to include all actual flare emissions, 

including those during shutdowns, in its calculations to determine compliance with this limit, or must 

make other appropriate changes to the permit or permit record to ensure that all actual flare emissions 

count toward Cash Creek's compliance with the VOC limit. Alternatively, KDAQ can respond to this 

objection by requiring Cash Creek to comply with PSD requirements for VOC. 

EPA notes that insofar as malfunctions result in additional VOC emissions, these emissions (like all 

actual Cash Creek VOC emissions) must be accounted for in demonstrating compliance with the sourcewide VOC PTE limit. EPA recognizes that Cash Creek represents that all malfunctions result in 

shutdown, and, accordingly, inclusion of shutdown emissions in Cash Creek's VOC emissions 

calculation should also encompass VOC emissions resulting from malfunctions. However, if a 

malfunction could result in flare emissions without an accompanying shutdown, additional revisions 

must be made to the compliance demonstration equation to assure that it accounts for such emissions. 

Alternatively, KDAQ could add permit conditions that create an enforceable restriction prohibiting Cash 

Creek from venting process gas to the flare unless such venting is associated with a shutdown event or 

other event for which emissions are explicitly included in the compliance demonstration methodology. 

See In re Murphy Oil USA, Inc., Meraux Refinery, Petition No. VI-2011-02, Order on Petition (Sept. 21, 

2011), at 7. 

3. Petitioners' contention that the BACT limits applicable to the flare are 

insufficient. 

a. BACTlimits applicable to the flare during startup and steady-state 

operations. 

Petitioners' Claim: Petitioners contend that the BACT limits for the flare are insufficient because: 

(1) KDAQ should have completed a top-down BACT analysis for the flare, and 

(2) KDAQ failed to explain what specific design, operation and maintenance measures are required at 

the flare, and how these measures ensure the maximum reduction in emissions achievable at the flare 

consistent with BACT requirement. Petitioners contend that to the extent that KDAQ is relying on the 

flare operation plan as BACT, that requirement is insufficient. 

EPA's Response: Regarding Petitioners' contention that the BACT determination for the flares during 

standby (normal) and startup operations is deficient because it was not based on a top-down analysis 

(Petition at 16), EPA denies the petition on this issue. Cash Creek provided a top-down BACT analysis 

for the flare in its permit application (see December 2009 permit application at 4-60 through 4-62) and 

KDAQ relied on that analysis in selecting BACT for the flare during standby and startup operations. See 

19 
SOB at 20-21, 41-42. Petitioners do not discuss Cash Creek's analysis in their petition and do not point 

to any information suggesting that the resulting BACT emission limits selected for the flare during 

standby and startup operations are inadequate. 

While Petitioners state that in selecting BACT for the flare, KDAQ ignored what they consider to be 

more stringent flare operation plan requirements under the Bay Area Air Quality Management District 

Regulation (BAAQMD) 12, Rule 12 for Flares at Petroleum Refineries (see Petition at 19), this assertion 

also does not provide a basis for granting the petition because the possibility that the BAAQMD flare 

monitoring requirements might be BACT for the flare was not raised in public comments and there is no 

showing that it was not practicable to raise it or that the grounds for this claim arose after the public 

comment period. Moreover, Petitioners do not make any attempt to demonstrate that application ofthe 

BAAQMD flare monitoring requirements would achieve a lower BACT emission limit for flare standby 

and startup operations than is specified in the permit. 19 

EPA also denies the petition with respect to the contention that KDAQ failed to identify what constitutes 

proper design, operation and maintenance ofthe flare for purposes of BACT during standby and startup 

operations. See Petition at 17. Section B ofthe proposed permit details the design, operation and 

maintenance requirements applicable to the flare. Specifically, the permit requires that the flare meet the 

design specifications in 40 C.F .R. § 60.18; requires the permittee to install, operate, and maintain a 

monitoring system for each vent connected to the flare to measure and record the date and time of a 

flaring event and the volume ofwaste gas vented to the flare; and requires the permittee to maintain an 

array of records demonstrating compliance with the BACT limits. Petitioners do not explain why these 

permit conditions are insufficient for purposes of defining what constitutes proper design, operation and 

maintenance ofthe flare for purposes ofBACT during standby and startup operations. 

b. BACT limits applicable to the flare during shutdowns and malfunctions. 

Petitioners' Claim: Petitioners assert that KDAQ did not make a BACT determination for flare 

operation during shutdowns and malfunctions, contrary to the requirement that BACT apply during all 

periods. Petition at 17. Petitioners contend that those permit conditions that appear to apply during 

shutdown and malfunction are not supported by a top-down analysis and "nothing in the record suggests 

that most ofthese limits had any direct connection to BACT." !d. at 17-18. Regarding additional 

operating limits added in response to comments, Petitioners explain: "KDAQ appeared to pick these 

numbers at random, as there is no supporting information in the record." Id at 18. Petitioners further 

assert that Cash Creek did not demonstrate that complying with an emission limit during shutdown and 

malfunction is infeasible, so there is no justification for using a work practice or operating standard in 

place of an emission limit pursuant to 40 C.F.R. 51.166(b)(12). !d. Petitioners add that in any event, 

KDAQ failed to specify the emission reductions achievable from such work practice or operating 

standard as required by the Kentucky SIP and federal regulations. !d. at 18-19. Petitioners assert that the 

provisions in the to-be-submitted flare operation plan do not qualify as BACT because these provisions 

are based on the NSPS for petroleum refineries and NSPS is only the floor for BACT determinations. ld 

at 19. Finally, Petitioners explained that KDAQ should have considered the more stringent flare 

operation plan requirements under the BAAQMD regulation in determining what constitutes BACT for 

the flare. !d. 

19 Petitioners do not contend that the BAAQMD flare operation requirements apply directly to the Cash 

Creek facility, but that KDAQ should have considered these requirements in determining what 

constitutes best available control technology for Cash Creek's flare. 

20 
EPA's Response: EPA grants the petition on this issue due to KDAQ's failure to provide a reasoned 

response to public comments regarding the apparent exclusion offlaring emissions during shutdown and 

malfunction events from the permit's BACT limits. In particular, though KDAQ'sResponse to 

Comments docwnent acknowledges Petitioners' comment regarding the absence of conditions in the 

permit establishing BACT limits for the flare during shutdown and malfunction events (see RTC at B54), KDAQ did not respond to the comment. Instead, KDAQ simply referred the commenters to its 

response to the comments pertaining to the consideration ofshutdown emissions in the calculation ofthe 

facility's PTE. However, nothing in that response addressed whether any BACT limit applies to the flare 

during shutdown and malfunction events or whether KDAQ intended to establish a work practice 

standard to meet the BACT requirement during these periods. Furthermore, based on a review ofthe 

proposed permit and the accompanying statement of basis, it does not appear that the permit contains a 

BACT limit applicable to flare emissions during shutdown and malfunction events.20 

KDAQ has an obligation to adequately respond to significant comments on a draft title V permit. Under 

section 502(b)(6) ofthe Act, 42 U.S.C. § 766la(b)(6), all title V permit programs must include adequate 

procedures for public notice regarding the issuance oftitle V operating permits, "including offering an 

opportunity for public comment." See also 40 C.F.R. § 70.7(h). It is a general principle of administrative 

law that an inherent component of any meaningful notice and opportunity for comment is a response by 

the regulatory authority to significant comments. Home Box Office v. FCC, 567 F.2d 9, 35 (D.C. Cir. 

1977) ("the opportunity to comment is meaningless unless the agency responds to significant points 

raised by the public."). See also, e.g., In re Louisiana Pacific Corporation, Petition V-2006-3, at 4-5 

(Nov. 5, 2007). Petitioners' comment regarding the apparent lack of a BACT limit governing flare 

emissions during shutdown and malfunction emissions was significant because it pertains to whether the 

BACT limits applicable to the proposed facility apply continuously. 

EPA previously has interpreted sections 165(a)(4) and 169(3) ofthe Act to require that a PSD permit 

assure that compliance with BACT limits is required at all times and cannot be waived. See In re 

Louisville Gas and Electric Co., Order on Petition (Sept. 10, 2008), at 10 ("LG&E Order") (stating that 

"[a] PSD BACT limit must apply at all times"); In re Prairie State Generating Co., 13 E.A.D. 1, 87-88 

& n.93 (EAB 2006) (explaining that a PSD permit cannot exclude emissions from meeting BACT limits, 

and listing various EPA guidance documents discussing the applicability ofemissions limitations during 

start-up, shutdown, and malfunction); see also In re Indeck-Elwood, LLC, 13 E.A.D. 126, 174 (EAB 

2006) (stating that it is "well established that BACT requirements cannot be waived or otherwise 

ignored during periods of startup and shutdowns."); In re Tallmadge Generating Station, PSD Appeal 

No. 0-12, at 24 (EAB 2003) (stating that "BACT requirements cannot be waived or otherwise ignored 

during periods ofstartup and shutdown"); In re RockGen Energy Center, 8 E.A.D. 536, 553-55 (EAB 

1999) (holding that PSD permits may not contain blanket exemptions from BACT limits during startup 

and shutdown). Thus, it is incumbent upon KDAQ to explain how the proposed permit assures that 

BACT limitations apply at all times in response to public comment regarding the apparent exclusion of 

shutdown and malfunction events from the permit's BACT limits. 

20 EPA notes that unlike with respect to VOC, the permit does not include limits intended to restrict the 

facility's actual emissions ofPM, PM10, PM2.5, NOx, SO2, and CO below the PSD applicability 

threshold. SOB at 7. KDAQ determined that the proposed facility has the potential to emit PM, PM10, 

PM2.5, NOx, SO2, and CO in significant amounts, and a BACT analysis was performed for these 

pollutants. ld The permit includes one set of BACT limits for the flare during standby operations (pilot 

gas combustion emissions) and a second set ofBACT limits for the flare during startup operations 

(while the gasifiers are preheated using methanol as fuel). Permit at 42. 

21 
Thus, EPA is granting the Petition on this claim because KDAQ did not adequately explain in response 

to comments whether the permit's BACT limits apply to the flare during shutdown and malfunction 

events. In response to this objection, KDAQ must explain whether the permit's BACT limits apply to 

the flare during shutdowns and malfunctions. IfKDAQ concludes upon further consideration that flaring 

emissions during shutdowns and malfunctions are in fact excluded from the permit's BACT limits, 

KDAQ must revise the permit to address that deficiency. Insofar as KDAQ intends to utilize a work 

practice standard in lieu ofan emission limit for any operating scenario that is not covered by the 

permit's emission limits, KDAQ must demonstrate "that technological or economic limitations on the 

application ofmeasurement methodology ...would make the imposition of an emissions standard 

infeasible" for that operating scenario. See 401 KAR 51 :00 l § 1 (25)( c); 40 C.F .R. § 51.166(b )( 12); see 

also LG&E Order at 10. KDAQ must include any such demonstration in the permit record and provide 

the public with an opportunity to comment. In addition, KDAQ must specify (and provide a public 

comment opportunity on) the "design, equipment, work practice, operational standard or combination 

thereof' required ofthe proposed facility in lieu of a numeric emissions standard. See 40 I KAR 51 :001 

Section 1(25Xc); 40 C.F.R. § 51.166(b)(12). Finally, in accordance with federal regulations and 

Kentucky's SIP, ifKDAQ utilizes a work practice standard in lieu of an emission limit, KDAQ must, 

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

equipment, work practice, or operation, and shall provide for compliance by means which achieve 

equivalent results." ld. 

C. Petitioners' Claims Regarding Fugitive Emissions from Equipment Leaks 

Petitioners raise numerous issues regarding Cash Creek's estimate offugitive emissions from equipment 

leaks and the associated CO BACT analysis, which resulted in the selection ofLDAR requirements as 

BACT. See Petition at 19-31. Petitioners point out that Cash Creek's estimate offugitive emissions from 

equipment leaks and the associated CO BACT analysis was not available to the public during the public 

comment period, but was instead produced by Cash Creek in response to public comments identifying 

the omission. See Petition at 20. Petitioners explain that the final permit included several new conditions 

(also not subject to public comment) relating to implementation ofLDAR requirements and inclusion of 

fugitive VOC and H2S emissions in the equation used to determine Cash Creek's compliance with the 

source-wide VOC and H2S PTE limits. See Petition at 20. Petitioners' concerns regarding the fugitive 

emissions calculation and CO BACT analysis are described below, along with EPA's response. 

1. 	 Petitioners' contention that KDAQ's determination that the source is minor 

for VOC and HAPs was based on a flawed estimate of fugitive emissions 

from equipment leaks. 

Petitioners' Claim: Petitioners contend that the post-hoc fugitive emissions analysis underestimates the 

facility's VOC and H2S HAP emissions. In particular, Petitioners claim that Cash Creek relied on 

inaccurate emission factors in calculating fugitive emissions. In addition, Petitioners contend that the 

permit improperly allows Cash Creek to demonstrate compliance with the PTE limit for fugitive 

emissions using the assumed emission factors without confirmation through source testing. See Petition 

at 22. 

Regarding the selected emission factors, Petitioners take issue with Cash Creek's use of Synthetic 

Organic Chemical Manufacturing Industry (SOCMI) emission factors without ethylene. Petitioners 

contend that Cash Creek should have used EPA's refinery emission factors, instead. Petitioners assert, 

without providing support, that the refinery emission factors are more appropriate because a coal 

22 
gasification facility's gas streams are more similar to refineries than to chemical manufacturing plants. 

Petitioners state that KDAQ failed to provide any technical background regarding the percentages or 

types of different chemicals in each process stream, and contend that, based on a comparison to another 

facility's permit application, the process stream likely includes chemicals not identified by Cash Creek. 

Petitioners further state that KDAQ failed to explain why it is appropriate to use the SOCMI without 

ethylene factors instead ofthe higher average SOCMI factors. See Petition at 23-25. 

Petitioners further contend that the fugitive leak estimates are erroneous because they fail to account for 

components where control of leaks is non-existent, limited, or delayed. Petitioners explain that the 

estimates assume exceedingly high levels of control associated with the proposed LDAR program, and 

do not account for any non-accessible, difficult-to-monitor, or unsafe-to-monitor components. 

Petitioners state that additional fugitive emissions will result from repair delays because the permit 

provides a process where delay of leak repair is allowed and sets no limit on mass emissions from delay 

ofrepair. See Petition at 25-26. 

Regarding the permit conditions applicable to fugitive emissions, Petitioners assert that the permit is 

flawed because it does not require monitoring or process sampling to confirm the low percentages of 

individual compounds in the process streams assumed by Cash Creek in selecting its emission factors. 

Petitioners further contend that the PTE limit for fugitive emissions is ineffective because compliance 

with the limit is determined by calculating emissions based on the same flawed emission factors without 

requiring monitoring to confirm the accuracy ofthose factors. See Petition at 26-27. 

EPA's Response: EPA denies as premature the petition on this issue. As explained above, EPA is 

granting the petition on the issue ofthe unavailability during the public comment period ofCash Creek's 

calculation offugitive emissions from equipment leaks. To address EPA's objection, KDAQ will need 

to submit the fugitive emissions calculation for public comment and provide an adequate response to 

any public comments received. Because KDAQ has not yet submitted the fugitive emissions calculation 

for public review, Petitioners' concerns regarding potential errors in that calculation are not ripe for EPA 

review. Therefore, EPA denies the petition as premature with respect to Petitioners' substantive 

concerns regarding Cash Creek's fugitive emissions calculation. 

2. Petitioners' allegation that KDAQ omitted numerous control options and 

relied on a faulty cost-effectiveness analysis in selecting CO BACT for 

fugitive equipment leaks. 

Petitioners' Claim: Petitioners contend that KDAQ's BACT analysis for fugitive equipment leaks 

should have considered more stringent LDAR programs in use at chemical plants and refmeries such as 

the one required by BAAQMD regulations. See Petition at 28-29. Second, Petitioners contend that 

KDAQ's analysis of the cost-effectiveness ofrequiring Cash Creek to utilize leakless components was 

flawed because KDAQ only considered a facility design employing entirely leakless components. 

Petitioners point out that EPA has required consideration/use ofsome leakless and/or certified low leak 

components in consent decrees for similar facilities (providing examples) and contend that the BACT 

analysis should have considered a control option consisting of less than allleakless components. See 

Petition at 30. Third, Petitioners contend that KDAQ's BACT analysis was flawed because KDAQ 

deemed use of entirely leakless components not to be cost-effective based solely on incremental cost, 

and that incremental cost effectiveness is an optional consideration that must always be paired with 

average cost effectiveness. See Petition at 30-31. 

23 
EPA's Response: EPA denies as premature the petition on this issue. As noted above, EPA is granting 

the petition with respect to KDAQ's failure to submit the CO BACT analysis for fugitive emissions 

from equipment leaks for public comment. Because KDAQ will need to submit the CO BACT analysis 

for public comment and respond to any significant public comments, it is premature for EPA to respond 

to the Petitioners' substantive concerns regarding the CO BACT determination for fugitive emissions. 

D. Petitioners Claim that the Proposed Facility is a Major Source of Hazardous Air 

Pollutants 

Petitioners' Claim: Petitioners state that the Cash Creek facility will be a major source ofhazardous air 

pollutants and should be subject to appropriate case-by-case MACT determinations for HAPs under 

Clean Air Act § 112. Petition at 31. This claim relates to issues B. I (alleging that the HAP PTE 

calculation does not fully account for flaring emissions) and C.l (alleging that the PTE calculation did 

not adequately account for fugitive emissions from equipment leaks). 

EPA's Response: The EPA denies as premature the Petition on this issue based on the current record. 

As explained above, EPA is in this Order objecting to Cash Creek's permit on the basis that KDAQ 

failed to provide a reasoned explanation in response to public comments questioning whether the PTE 

calculation for HAPs included consideration offlaring emissions that will occur at times other than 

during startup and standby (flare pilot) operations, and on the basis that KDAQ did not comply with 

public comment procedures with respect to the calculation offugitive emissions (including HAPs) from 

equipment leaks. In response to this objection, KDAQ will need to explain how (and if) the PTE 

calculation for HAPs accounts for flaring emissions other than during standby and startup operations, 

and must subject the equipment leak emissions calculation for public comment. Until KDAQ provides 

the required explanation and additional public process, Petitioners' claim that Cash Creek is a major 

HAP source that should be subject to a case-by-case MACT standard is not yet ripe for EPA's review. 

E. Petitioners' Claims Regarding Fugitive Particulate Matter Emissions from Material 

Handling 

Petitioners raise numerous issues regarding fugitive particulate matter emissions from material handling. 

These are summarized as follows and more specifically identified and responded to below. As a general 

matter, Petitioners contend that KDAQ failed to estimate and model the full fugitive PM10 and PM2.5 

emissions (collectively referred to as "PM emissions") from material handling allowed under the permit, 

including fugitive emissions from paved and unpaved haul roads, coal piles, and slag landfills. See 

Petition at 32. As a result, according to Petitioners, Cash Creek has not demonstrated that the proposed 

facility will not cause or contribute to a violation ofthe PM10 and PM2.5 NAAQS or the PSD increments 

as required by CAA § 165(a)(3), 42 U.S.C. § 7475(a)(3).Jd. Petitioners explain that ifCash Creek 

calculated material handling emissions correctly, projected PM emissions would be high enough to 

require that Cash Creek conduct a full NAAQS and PSD increment modeling analysis for PM10 and 

PM2.5. Id at 37. 

1. Petitioners' contention that the permit applicant utilized unreasonably higb 

and unsupported control efficiency for methods used to control fugitive PM 

emissions from baul roads and coal and slag piles. 

Petitioners' Claim: Petitioners take issue with Cash Creek's assumption in its modeling that the 

measures specified in the permit for controlling PM emissions from haul roads and coal and slag piles 

24 
will achieve 90% control efficiency. Petition at 32-35. Petitioners reference their comments on the draft 

permit (attached to the petition), in which they cite various sources that contradict the assumed 90% 

control efficiency. !d. at 33. Petitioners further contend that the permit conditions governing control of 

PM emissions from material handling are vague and unenforceable and therefore do not ensure that 

Cash Creek's control measures will achieve 90% control efficiency.ld. at 38-39. According to 

Petitioners, it would be more realistic to assume 75% control efficiency for haul roads, and 60% control 

efficiency for coal and slag piles.ld. at 33. Petitioners state that Cash Creek's fugitive PM emissions are 

significantly higher when recalculated using these more realistic control efficiencies.Jd at 33. 

Petitioners also contend that Cash Creek erred by calculating 24-hour average PM10 emissions using an 

equation that includes an emission reduction factor based on the number of days ofrain per year. Jd at 

34. Citing to AP-42 Chapter 13.2.2 Unpaved Roads,21 Petitioners state that this strategy is not applicable 

to short-term emission rate calculations. Specifically, Petitioners explain that it may not rain for many 

days in a row, and, thus, rainfall will not be a mitigating factor when calculating 24-hour PM10 emission 

rates during that period. !d. Petitioners state that Cash Creek's daily and hourly emission estimates must 

be recalculated without the use of any rainfall correction factor. !d. at 35. 

EPA s Response: For the reasons provided below, EPA grants the petition on this issue. The permitting 

record does not indicate that KDAQ provided a reasoned justification for its fugitive emissions 

estimates. 

EPA's AP-42 document describes various approaches to emissions estimation and depicts them in a 

hierarchical format. Where data are lacking and other preferred approaches are not available, emissions 

factors may be used to estimate emissions in permitting and other applications. AP-42, Introduction, at 

1-2. An emissions factor is a representative value that attempts to relate the quantity of a pollutant 

released to the atmosphere with an activity associated with the release ofthat pollutant. Before using an 

emission factor compiled in AP-42, EPA advises users to exercise professional judgment to verify that a 

particular emission factor is sufficiently representative of emissions from the particular activity or 

source to which it is to be applied. For example, AP-42 states the following: 

Before simply applying AP-42 emission factors to predict emissions from new or proposed 

sources, or to make other source-specific emission assessments, the user should review the latest 

literature and technology to be aware of circumstances that might cause such sources to exhibit 

emission characteristics different from those ofother, typical existing sources. Care should be 

taken to assure that the subject source type and design, controls, and raw material input are those 

ofthe source(s) analyzed to produce the emission factor. 

!d. at 4. In this case, Petitioners have demonstrated that KDAQ has failed to adequately consider several 

relevant factors and, thus, KDAQ has not demonstrated that it is appropriate to apply the emissions 

factors from AP-42 in the manner that they were used in this case to estimate fugitive emissions. 

21 AP-42, Compilation ofAir Pollutant Emission Factors, has been published since 1972 as the primary 

compilation ofEPA's emission factor information. It contains emission factors and process information 

for more than 200 air pollution source categories. A source category is a specific industry sector or 

group of similar emitting sources. The emission factors have been developed and compiled from source 

test data, material balance studies, and engineering estimates. The Fifth Edition ofAP-42 was published 

in January 1995. Since then EPA has published supplements and updates to the fifteen chapters available 

in Volume I, Stationary Point and Area Sources. AP-42 is available on EPA's website at 

http://www.epa.gov/ttn/chief/ap42/index.html#toc. 

25 
Regarding the assumed 90% control efficiency, in response to public comments KDAQ explained that 

the 90% control efficiency accounts for wet suppression in combination with other control methods. See 

RTC at B-22 to -23. Specifically, for paved roads, in addition to wet suppression, the permit requires silt 

fences, speed restrictions of 20 miles per hour, and chemical suppression. ld For unpaved roads, wet 

suppression is supplemented with silt fences, speed restrictions of20 miles per hour, and the use of 

gravel. See RTC at B-20 to -21. According to KDAQ, AP-42 indicates that it is possible to attain 90% 

control efficiency with only wet suppression; thus, KDAQ explains that it is reasonable to assume that 

wet suppression combined with the supplemental measures will achieve 90% control efficiency. See 

RTC at B-22 to -23. 

While AP-42 reports that some sources using wet suppression have achieved 90% control efficiency, 

this is one ofthe highest achievable control efficiencies for wet suppression methods. See AP-42, 

Section 13.2.2, Figure 13.2.2-2 (Watering control effectiveness for unpaved travel surfaces). The control 

efficiency achieved by wet suppression depends heavily on how frequently it is applied. See AP-42, 

Section 13.2.2.3, at 8 (explaining that watering and chemical suppressants "require frequent 

reapplication to maintain an acceptable level of control."); see also Air & Waste Management 

Association, Air Pollution Engineering Manual, 131 (2d ed. 2000) (explaining that "[t]he effectiveness 

of controls depends on the specific situations as well as the diligence to which it is applied"). To attain 

90% control efficiency, the wetting agent must be applied frequently and in large amounts. For example, 

AP-42 reports that up to 90% control efficiency ofPM emissions from storage piles and associated 

roadways can be achieved through "[c]ontinuous chemical treating ofmaterial loaded onto piles, 

coupled with watering or treatment ofroadways." See AP-42, Section 13.2.4.4, at 5. Likewise, the 

effectiveness of Cash Creek's supplemental control measures depends on how they are implemented, in 

combination with other site-specific factors. See Air & Waste Management Association, Air Pollution 

Engineering Manual, 127-131 (2d ed. 2000). As Petitioners point out, other than instructing Cash Creek 

to utilize the specified methods for controlling fugitive PM emissions, Cash Creek's permit provides no 

details regarding Cash Creek's implementation ofthese methods. See Final Cash Creek Permit at 75. For 

example, the permit lacks any requirement governing how frequently wet suppression must be applied, 

the atmospheric and operational conditions under which wet or chemical suppression should be applied, 

the time of day that wet or chemical suppression should be applied, or the amount that should be 

applied. Rather, the permit simply states that "gravel, silt fences, and wet suppression" shall be used on 

unpaved roadways, "silt fences, and chemical and/or wet suppression" shall be used on paved roadways, 

and "silt fences, compaction, chemical and/or wet suppression, and telescopic chutes and stacking tubes" 

shall be used on the coal storage pile and slag landfill. See Final Cash Creek Permit at 75. 

To make a reasoned demonstration that a proposed new source will not cause or contribute to a violation 

of any NAAQS or applicable PSD increment, the permit applicant and permitting authority should 

consider the emission rate that reflects the maximum allowable operating conditions allowed under the 

facility's permit as expressed by the enforceable emissions limit, operating level, and operating factor 

for each applicable pollutant. See 40 C.F.R. part 51, Appendix W, Table 8-2. Given the lack of 

specificity in the permit regarding Cash Creek's fugitive PM control obligations, EPA finds that 

Petitioners have demonstrated that KDAQ did not provide a reasoned basis for assuming that the 

combined fugitive PM control measures will achieve 90% control efficiency. To justify the assumed 

90% control efficiency, KDAQ needs to provide a reasoned explanation for the control efficiency 

expected from the combined measures that reflects the enforceable permit conditions governing 

implementation of each measure (e.g., sufficient permit requirements governing wet suppression justify

the assumed control efficiency). 

26 
EPA notes that two of the control measures identified by KDAQ as supporting the assumed 90% control 

efficiency-speed limits and the application of gravel to unpaved roads--do not appear to be relevant to 

the control efficiency parameter that is used to calculate controlled fugitive PM emissions from 

roadways. Although vehicle speed is a factor for road emissions, a range of vehicle speeds was included 

in the data used in developing the AP-42 equations for estimating uncontrolled fugitive PM emissions 

from paved and unpaved roads. See AP-42, Section 13.2.1.3, at 5 (paved roads); id at Section 13.2.2, at 

5 (unpaved roads). Likewise, while the application of gravel to unpaved roads reduces fugitive PM 

emissions, the impact of gravel application is captured by the AP-42 equation in the variable 

representing "surface material silt content" (i.e., the application of gravel lowers silt content). See id at 

Section 13.2.2.2, at 4 (unpaved roads). Thus, the effect ofspeed limits and gravel should already be 

accounted for in the AP-42 equations used to estimate the uncontrolled PM emissions. After the 

uncontrolled emissions rate is determined using the AP-42 equations, the control efficiency offugitive 

PM controls is applied to the uncontrolled emissions rate to arrive at the projected controlled emissions 

rate. Because the AP-42 equations used to calculate the uncontrolled PM emissions rate appear to 

account for the effect of vehicle speed and gravel, KDAQ's reliance on these measures to support the 

assumed 90% control efficiency lacks a reasoned basis. 

Finally, EPA finds that Petitioners have demonstrated that KDAQ erred in approving Cash Creek's use 

of an equation that includes a rainfall correction factor to calculate 24-hour average fugitive PM 

emissions. As indicated in AP-42, the equation for estimating particulate matter emissions from 

roadways that considers precipitation (i.e., natural mitigation) is appropriate for annual or other longterm applications. To assess compliance with short-term ambient standards, the potential maximum 

short-term emission factor associated with the project's industrial road conditions should be used. 

Because ofthe possibility ofhaving no rain during many days in an annual period, the maximum shortterm particulate emission factor would not include natural mitigation. In response to this petition, 

KDAQ needs to ensure that Cash Creek does not include a rainfall correction factor in its 24-hour 

average fugitive PM emissions calculation. 

2. Petitioners' contention that the applicant utilized an unreasonably low silt 

loading factor for paved roads. 

Petitioners' Claim: Petitioners take issue with Cash Creek's use of a 0.4 grams per meter squared (g/m2

) 

silt loading factor derived from measurements from the iron and steel industry in calculating PM 

emissions from paved roads. Petition at 35-37. Petitioners explain that this silt loading factor is from the 

low end ofthe range reported in AP-42 (which ranges from 0.09 to 79 g/m2 for the selected industry 

category) and should not be considered representative ofworst-case emissions. ld at 36. Petitioners note 

that AP-42 highly recommends the collection and use ofsite-specific silt loading data, and assert that 

Cash Creek should have attempted to obtain site-specific silt data from similar sources rather than rely 

on AP-42 data. !d. at 35. In addition, Petitioners point to a statement in AP-42 indicating that where a 

source cannot obtain site-specific data, an appropriate mean value should be selected from a table listing 

silt loadings that were experimentally determined for a variety ofindustrial roads. ld at 36. They 

explain that AP-42's industrial roadway table provides a range ofmean silt values from 7.4 to 292 g/m2

• 

!d. Petitioners also point to an EPA statement that "AP-42 emissions factors ... are not precise enough 

for regulatory applicability determination" and to an EPA statement recommending that if AP-42 factors 

are relied upon for applicability determinations, the maximum value in the range ofreported values 

should be used. Jd at 36 (citing U.S. EPA, Appendix D: Preliminary Emissions Factors Program 

Improvement Option Paper 4 Providing Guidance Regarding the Use ofEmissions Factors for Purposes 

Other than Emissions Inventories, at 4-3 tbl.4.1 & at 4-11 tb1.4.4). Petitioners state that KDAQ did not 

27 
explain why the worst-case silt conditions at the Cash Creek facility would be consistent with the low 

end ofthe AP-42 range, and did not explain why the iron and steel industry is the most analogous 

industry for the paved roads at the Cash Creek facility. Id at 37. Finally, Petitioners contend that the 

permit lacks conditions limiting the silt on the paved roads on a continuous basis to the 0.4 g/m2 

assumed in the calculations. ld 

EPA's Response: For the reasons stated below, EPA grants the petition on this issue. Petitioners 

demonstrated that the permit and permit record lack sufficient support for the assumption ofa 0.4 g/m2 

silt loading factor for the facility's paved haul roads, which is one ofthe lowest silt loading factors 

reported in AP-42 for an industrial facility ofany kind. See AP-42 for Paved Roads, at 13.2.1-10, Table 

13.2.1-3 (Jan. 2011). As KDAQ acknowledged in response to Petitioners' comments on the draft permit, 

AP-42 reports a wide range of silt loading factors for the iron and steel manufacturing industry: 0.09 

g/m2 to 79 g/m2.22 RTC at B-23. As Petitioners explain, due to this wide range ofreported silt loading 

values, AP-42 explains: "the collection and use ofsite specific silt loading data is preferred and is highly 

recommended." AP-42 for Paved Roads, at 13.2.1-9 (Jan. 2011).23 Furthermore, Petitioners are correct 

that where site-specific silt loading data cannot be obtained, AP-42 recommends selecting "an 

appropriate value for an industrial road ... from the mean values given in Table 13.2.1-3." ld (emphasis 

added).24 The mean value reported for the iron and steel manufacturing industry is 9.7 g/m2

-which is 

significantly higher than the 0.4 g/m2 value used by Cash Creek. Moreover, Petitioners correctly point 

out that the mean values for other industrial sectors range from 7.4 g/m2 all the way to 292 g/m . 

Petitioners demonstrated that KDAQ offered no explanation for why the reported values for the iron and 

steel manufacturing industry are more relevant to silt loading at the proposed facility than the values 

reported for other industries. Rather, in response to comments on the draft permit, KDAQ stated that the 

iron and steel manufacturing industry had the largest number ofsites tested and the largest sample set 

reported in AP-42. See RTC at B-22 to -23. Furthermore, even ifit is reasonable for KDAQ to rely on 

the iron and steel manufacturing industry values, KDAQ failed to provide a reasoned explanation in 

support ofits selection of a silt loading value that is significantly below the mean for that industry. 

While there may be some merit to KDAQ's explanation that silt loading wiii be low because the 

material being transported will consist ofmoist slag from the gasifiers, a more detailed analysis is 

needed to justify use of one ofthe lowest reported silt loading factors from another industry type. 

To address this objection, KDAQ needs to provide a reasonable explanation in the Statement ofBasis 

and/or Response to Comments document for why the assumed 0.4 g/m2 silt loading factor is appropriate 

for Cash Creek, or use a different approach based on a reasoned analysis. If KDAQ concludes that a 

different silt loading factor should be used, KDAQ needs to explain why the alternative factor is 

appropriate and, if a higher factor is used, instruct Cash Creek to remodel its PM emissions using that 

factor. 

22 EPA published an update to the AP-42 chapter on Paved Roads in January 2011. The updated chapter 

reports the same silt loading factor range for the iron and steel manufacturing industry that was reported 

in the 2006 version ofAP-42-Paved Roads. See 

http://www.epa.gov/ttn/chiefi'ap42/ch13/final/c13s0201.pdf

23 This statement also appeared in the 2006 version ofAP-42 for Paved Roads that was in effect at the 

time the Cash Creek permit was drafted. 

24 This statement also appeared in the 2006 version ofAP-42 for Paved Roads that was in effect at the 

time the Cash Creek permit was drafted. 

28 
3. Petitioners' contention that remodeled emissions exceed the significant 

impact levels used by KDAQ to determine when a full cumulative PM air 

impact analysis is required. 

Petitioners' Claim: Petitioners explain that they remodeled the facility's PM10 and PM2.5 impacts based 

on what they consider to be the correct material handling estimates, and that their modeling shows that 

the facility's PM emissions will exceed the PM significant impact levels used by KDAQ as a screening 

threshold. Petition at 37. As such, Cash Creek should undertake a full NAAQS and PSD increment 

ambient air quality analysis. ld. 

EPA's Response: EPA denies as premature the petition on this issue. As explained above, EPA is 

granting the petition on the issue ofKDAQ's failure to provide a reasoned explanation based on the 

permit record for Cash Creek's assumption of 90% control efficiency for fugitive particulate matter 

control methods to be used on the facility's haul roads and coal and slag piles, and for its assumption of 

a 0.4% silt loading factor for the facility's paved haul roads. It is possible that in response to EPA's 

objection, KDAQ will provide the additional explanation for why Cash Creek's assumptions were 

appropriate. Thus, it is premature for EPA to conclude that Cash Creek should undertake a full NAAQS 

and PSD increment ambient air quality analysis for PM10 and PM2.5 to make the demonstration required 

under PSD permitting requirements. 

4. Petitioners' contention that the permit contains unenforceable vague terms 

and conditions for material handling that do not equate to control 

efficiencies. 

Petitioners' Claim: Petitioners contend that various operating conditions applicable to paved and 

unpaved roads, as well as coal piles and slag landfills, are too vague to be enforceable and therefore do 

not constitute proper limitations on potential to emit from material handling sources sufficient to support 

the high control efficiencies assumed in the PM modeling. Petition at 38-39. Petitioners explain that the 

permit fails to specify the frequency with which wet suppression must be applied to roads, the 

atmospheric and operational conditions under which wet suppression must be applied, how to determine 

whether to apply water sprays or "other measures," etc. Id. 

EPA's Response: EPA grants the petition on this issue. As explained above, Petitioners demonstrated 

that KDAQ did not provide a reasoned basis for assuming that the permit requirements .governing 

control offugitive PM from haul roads, coal piles and slag landfills are sufficiently specific and 

stringent to equate to the 90% control efficiency assumed in Cash Creek's emission calculations. See 

supra at 25-27. Specifically, other than generally instructing Cash Creek to utilize the selected control 

methods, the permit provides no details regarding Cash Creek's implementation ofthese methods. To 

justify the assumed 90% control efficiency, which is at the high end ofreported fugitive PM control 

efficiencies, KDAQ needs to provide a reasoned explanation for the control efficiency expected from the 

combined measures that reflects the enforceable permit conditions governing implementation of each 

measure (e.g., more specific permit requirements governing wet suppression are needed to justify a 

higher assumed control efficiency) or take an alternate approach based on a reasoned analysis and make 

any necessary changes to the permit record and permit. 

29 
F. Petitioners' Claim that that the Ozone Impact Analysis was Inadequate 

Petitioners' Claim: Petitioners claim that Cash Creek and KDAQ failed to demonstrate that the 

proposed source will not cause or contribute to violations of ozone air quality standards, as required by 

CAA § 165(a)(3), 42 U.S.C. § 7475(aX3). Petition at 39-46. First, Petitioners contend that Cash Creek's 

ozone impact analysis was flawed because it did not involve source-specific single-source modeling as 

required by the CAA, 42 U.S.C. § 7475(e)(3)(D), Kentucky's regulations, 401 KAR 51:017 § 10, and 40 

C.F.R. Part 51, Appendix W, Guidelines on Air Quality Models (2003). Id. at 39-40. Petitioners cite to 

42 U.S.C. § 7475(e)(3)(D), arguing for the proposition that states and applicants are not to undertake 

their own independent adjustments ofmodeling approaches, but must seek federal approval of 

deviations from federal regulatory guidelines. Id at 40. 

Petitioners acknowledge the language in Subsection 5.2.l.c ofAppendix W titled, "Estimating the 

Impact ofIndividual Sources," which states that for ozone the method used to assess an individual 

source's impact "depends on the nature ofthe source and its emissions," and that "model users should 

consult with the [EPA] Regional Office to determine the most suitable approach on a case-by-case 

basis." Id. at 40-41. However, Petitioners contend that this language does not exempt a source from the 

ozone modeling requirement; rather, "the quoted passage must be read in context to mean that a case-bycase approach should be taken for individual source modeling methods for ozone impacts." Id. at 41. 

Petitioners assert that there is no evidence in the record that EPA Region 4 approved Cash Creek's 

method for assessing ozone impacts. Id. at 40-41. Petitioners acknowledge that Cash Creek's permit 

application cites to a December 2000 letter from EPA Region 4 to the Georgia Environmental Protection 

Division indicating that "ozone impact modeling is not normally required for single sources," and that 

"information on current ozone levels in the area should be cited to provide qualitative assurance that the 

increased [emissions] from facility operation will not cause or contribute to" an ozone violation. Id at 

41. According to Petitioners, EPA Region 4's letter to Georgia does not constitute regional approval of 

the Cash Creek's methodology because regional approval must be granted on a case-by-case basis. I d. 

Petitioners further note that EPA's letter to Georgia is nine years old and assert that it is extremely dated 

with respect to ozone modeling capabilities. Id. Citing various examples, Petitioners contend that singlesource ozone modeling is both technically and economically feasible, and that there are several sources 

ofinventory information that KDAQ could use for such modeling. Id. at 45-46. 

Petitioners further contend that even if a qualitative approach to assessing ozone impacts could be 

considered "modeling," the approach utilized by Cash Creek was inadequate to demonstrate protection 

ofthe ozone NAAQS. They argue the approach was unsuitable because it does not "provide[] the most 

accurate representation of atmospheric transport, dispersion, and chemical transformations in the area of 

interest." Id. at 42-43 (quoting Appendix W Subsection I.e). In particular, Cash Creek estimated ozone 

increases associated with the facility's NOx emissions by scaling the results from modeling sensitivity 

studies conducted by Georgia Environmental Protection [Division] (EPD) in support oftheir 8-hr ozone 

SIP development. 2010 SOB at 46. Petitioners state that Cash Creek and KDAQ made little to no effort 

to demonstrate that Georgia's ozone sensitivity modeling is appropriate for Kentucky based on 

similarities in atmospheric transport, dispersion, and chemical transformations in the region surrounding 

the proposed facility. Petition at 43. Petitioners identify various differences between the counties 

surrounding Atlanta that were the subject of Georgia's modeling and the area ofKentucky where the 

Cash Creek facility would be located, including differences in terrain, land use, atmospheric conditions 

and relative source contribution. Id. According to Petitioners, KDAQ failed to adequately address these 

concerns in its response to Petitioners' comments on the draft permit. 

30 
Petitioners point to a December 2001 modeling study by Kentucky Natural Resources and 

Environmental Protection Cabinet indicating that new power plants in Kentucky can generate large 

ozone increases, and that Henderson County has the second largest daily total of NOx emissions from 

new power plants. Petition at 44. Petitioners also note that ozone monitoring data in Henderson County 

have exceeded the 2008 ambient air quality standard of 0.075 parts per million (ppm), and that in March 

2009 KDAQ proposed Henderson County to be designated as in nonattainment with the 0.075 ppm 

standard. Id. at 44-45. 

EPA's Response: With respect to Petitioners'·contention that Cash Creek was legally required to 

perform modeling to assess the proposed new facility's impacts on ambient ozone levels, the petition is 

denied. While Kentucky's SIP requires that all applications of air quality modeling used in PSD 

permitting "shall be based on the applicable models, databases, and other requirements" specified in 

Appendix W of 40 C.F.R. part 51, Appendix W does not specify a particular model for use in analyzing 

an individual source's impacts on ambient ozone levels in PSD permitting. Rather, Appendix W Section 

5.2.l.c explains: "Choice ofmethods used to assess the impact of an individual source depends on the 

nature ofthe source and its emissions." It further states that model users "should consult with the [EPA] 

Regional Office to determine the most suitable approach [for analyzing ozone impacts] on a case-bycase basis." Appendix W Section 5.2.l.c. As EPA Region 4 explained in another context, depending on 

the nature ofthe source, its emissions and background ozone concentrations, "an ozone impact analysis 

other than modeling may be required." 76 Fed. Reg. 41100,41108 (July 13, 2011). 

EPA also denies the petition with respect to Petitioners' contention that Cash Creek's qualitative 

analysis is insufficient to demonstrate that the proposed facility will not cause or contribute to an ozone 

NAAQS violation. In this case, Cash Creek analyzed (1) current and anticipated background ozone 

concentrations at the location ofthe proposed facility based on data obtained from a representative 

regional monitor and from photochemical modeling conducted for the Visibility Improvement State and 

Tribal Association ofthe Southeast-Southeastern States Air Resource Managers (VISTA8-SESARM), 

and (2) the relationship between the proposed facility's emissions of ozone precursors (NOx and VOC) 

and the emissions ofthose same ozone precursors from other sources in the area. See Cash Creek Permit 

Application, Appendix A (Nov. 2009). Cash Creek acknowledged that the 2006-2008 average ofthe 

Henderson County monitoring station data was 0.076 ppm, slightly above the 8-hour ozone standard of 

0.075 ppm. However, Cash Creek explained that the VISTAS-SESARM data showed a range of 

predicted 2009 8-hour ozone design values in Henderson County of 0.065 ppm to 0.074 ppm, and that 

the average ofthe most recent 2009 data showed an ozone value of 0.071 ppm. Furthermore, Cash Creek 

reported that data show a large decrease in ozone concentration from 2007 to 2009, which, combined 

with the VIST AS-SESARM modeling data, suggests that Henderson County will be below the 0.075 

ppm 8-hour ozone NAAQS when the facility commences operation in 2014. Finally, Cash Creek noted 

that use ofthe Henderson County monitoring station data resulted in a conservative assessment ofthe 

proposed facility's anticipated ozone impacts because the monitor is located in a more urban area (with 

greater vehicular emissions) than the area where the facility would be located. Based on all ofthese 

considerations, KDAQ concluded that emissions from the facility would not cause or contribute to an 

ozone NAAQS violation. Id. 

While the Petitioners are correct that Cash Creek did not attempt to demonstrate that Georgia's ozone 

sensitivity modeling is representative ofthe Kentucky project location, the analysis based on Georgia's 

modeling merely supplements Cash Creek's overall analysis ofthe proposed facility's anticipated ozone 

impacts. Significantly, Cash Creek did not submit the analysis as a definitive demonstration ofthe effect 

31 
that the proposed source will have on ambient ozone levels. Rather, recognizing that there may be 

differences between Georgia and Kentucky with respect to ozone formation, Cash Creek simply offered 

the analysis in further support of its conclusion-made based on consideration ofthe other factors 

described above-that the proposed facility will not cause or contribute to a violation ofthe ozone 

NAAQS. KDAQ explained in response to comments on the draft permit that use ofthe Georgia 

modeling results to help assess the potential ozone impacts ofthe proposed source likely leads to a 

conservative ozone impacts analysis given the fact that the Georgia modeling addressed an urban area 

whereas the location ofthe proposed source is predominantly rural. RTC at B-1 07. Regardless ofthe 

relevance ofthe Georgia modeling, however, Petitioners have not demonstrated that the totality ofCash 

Creek's analysis is insufficient to demonstrate that the proposed facility will not cause or contribute to 

an ozone NAAQS violation. 

Finally, EPA denies the petition with respect to Petitioners' contention that KDAQ failed to consult with 

EPA Region 4 regarding the method used to assess the proposed facility's ozone impacts. KDAQ's 

approach was consistent with general guidance provided by EPA Region 4 to KDAQ in presentations 

and discussions, and with communications between Region 4 and the KDAQ modeler handling the Cash 

Creek application. The method was selected based on a case-by-case review ofthe magnitude ofthe 

project's emissions, the projected ambient background ozone levels during operation, the levels of 

existing emissions of ozone precursors in the region, and the available modeling systems and other 

approaches to analyzing single source ozone impacts. Petitioners have not demonstrated that section 

5.2.l.c ofAppendix W requires explicit written EPA approval ofthe methods used on a case-by-case 

basis for each individual permit, particularly in a situation like this where a qualitative approach was 

used for the ozone impacts analysis. Nor have Petitioners pointed to any prior EPA statements adopting 

such an interpretation. EPA has not previously established specific guidelines for documenting for the 

record a consultation with EPA Regional offices under section 5.2.1.c. Given the lack ofspecificity in 

EPA's guidelines and the fact that KDAQ's approach was consistent with prior Region 4 guidance, 

Petitioners have not demonstrated that KDAQ's approach in this case was unreasonable or inconsistent 

with the guidelines in section 5 .2.l.c ofAppendix W. EPA agrees that it is preferable for permitting 

authorities to provide clear documentation that they have consulted with an EPA Regional office 

regarding an ozone impacts analysis section 5.2.1.c., but, under the circumstances ofthis case, 

Petitioners have not demonstrated that KDAQ's approach is inconsistent with any relevant applicable 

requirement. 

IV. CONCLUSION 

For the reasons set forth above and pursuant to section 505(b)(2) ofthe CAA and 40 C.F.R. 

§ 70 .8( d), I hereby grant in part and deny in part the issues in the Petition dated June 18, 2010. 

Date 

32