OAR Box 1787 

Prepped by Ollie Stewart 

Document Number: 

88) ll-C-46 

Docket Number: 

A-90-37 

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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY 

WASHINGTON, D.C. 20460 

OFFICE OF 

AIK ANO RADIATION 

MAY 3 I 1355 

Mr. William H. Lewis 

Morgan, Lewis and Bockius 

1800 M Street, N.W. 

Washington, D.C. 2003 6-5869 

Dear Mr. Lewis: 

As you know, the Environmental Protection Agency (EPA) is 

committed to working with industry and other stakeholders to 

develop flexible solutions to address the implementation concerns 

raised with our programs. Thanks in a large part to your 

initiative, we were able to hold a successful meeting with you 

and over 55 of your colleagues to discuss implementation issues 

of concern. I am providing our responses to the issues raised by 

the industry representatives at the April 12, 1995 meeting. 

The EPA has made considerable progress in developing rules 

and guidance that take into consideration many of your concerns. 

Several of the concerns you raised are being addressed in 

rulemaking packages that are underway for new source review 

reform and operating permits. In addition, we are holding 

stakeholder meetings on enhanced monitoring and section 112(g). 

EPA is also developing guidance in several areas that will help 

clarify a number of the uncertainties that have been raised in 

the industry comments. 

I look forward to continue working with you as we move 

forward in developing rules that work for all parties and 

foremost in achieving clean air for all our/Citizens, 

Sihcer 

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Mar/ D. Nichols 

Assistant Administrator 

for Air and Radiation 

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ENVIRONMENTAL PROTECTION AGENCY 

(EPA) 

RESPONSE TO ISSUES RAISED BY INDUSTRY ON 

CLEAN AIR ACT IMPLEMENTATION REFORM 

May 30 , 199 5 
P.4 

TABLE OF CONTENTS 

EPA'S RESPONSE TO ISSUES RAISED BY INDUSTRY ON 

CLEAN AIR ACT IMPLEMENTATION REFORM 

Page 

Summary of EPA Efforts 3 

EPA Response to Specific Issues 

Operating Permit Program 6 

New Source Review. 13 

Air Toxics 27 

Enhanced Monitoring. .40 

Potential to Emit.. , 43 

Fugitive Emissions, .. , 46 

* • • 

-A 
P.5 

EPA'S RESPONSE TO INDUSTRY CONCERNS ON 

CLEAN AIR ACT IMPLEMENTATION REFORM 

On April 12, 1995, EPA met with 55 industry representatives 

to discuss issues they had raised and to indicate what actions 

EPA intends to take on the issues. The specific issues raised by 

the various industry representatives and EPA's responses to those 

issues are attached. The vast majority of issues raised by 

industry were not new to EPA; the Agency has been working with 

industry representatives and other stakeholders for several 

months trying to find cost-effective, common sense solutions to 

these often complex issues. 

It is also important to note that the responses included in 

this document reflect the Agency's positions as of mid-May 1995. 

On several of these issues, notably operating permits and 112(g), 

EPA is in the midst of reevaluating its programs in light of ^m 

recent feedback from various stakeholders. In June 1995 EPA will 

meet with the Clean Air Act Advisory Committee to discuss options 

for addressing section 112(g). EPA is also currently working out 

final details of a proposed supplemental rule on operating 

permits and will shortly make available additional information 

about that proposal. 

Enhanced Monitoring 

In general, EPA agrees with concerns raised about the 

enhanced monitoring rule and has withdrawn the package from 

review by the Office of Management and Budget. EPA hopes to 

develop a strategy that will allow it to issue compliance 

assurance requirements that build on the requirements of existing 

rules and ensure that the environmental results expected from 

those rules are being achieved. EPA received an extension of the 

court-ordered deadline until June 30, 1995. EPA intends to seek 

a further extension of at least a year to allow time for 

stakeholder involvement in development of the rule. One of the 

first steps EPA will take is to hold a stakeholders' meeting on 

May 31, 1995. EPA will work with representatives from industry, 

states, and environmental groups to obtain their assistance in 

developing a new flexible approach for the enhanced monitoring 

rule. 

Operating Permit Program 

Over the next month EPA plans to make several significant 

improvements to the permit program that will enhance a facility's 

ability to make process or operational changes without revising 

its Title V permit, make far greater use of existing State permit 

programs for purposes of Title V, and reduce the costs and 

burdens of developing permit applications. Some of these changes 

are described below. EPA intends to make available information 

about the other changes shortly. 
P.6 

V 

In the last several months EPA has been working with 

representatives from industry, states, and environmental groups 

to find a solution that will allow a more streamlined process for 

permit revisions and provide more flexibility to states and 

industry. EPA plans to issue a supplemental proposed rule on 

operating permit revisions in June 1995. EPA has already shared 

a draft of the supplemental proposal with industry, states and 

other stakeholders to get their comments on the revised approach. 

EPA is currently in the process of working out final details 

about what will be in the supplemental proposal, so it is not 

possible to fully describe the extent of the changes in that 

document here. However, in general the supplemental proposal 

will include a streamlined system for permit revisions that 

builds on existing successful State programs. Under this 

process, States would have greater flexibility to decide the 

amount of public review and EPA review for most permits, by 

matching the level of review to the environmental significance of 

the changes. A State would not be required to provide any EPA or 

public review for changes that it can show are de minimis. 

EPA is also working on a series of guidance documents that 

will address many implementation issues raised by industry and 

states. This guidance is expected to clarify the flexibility 

allowed under the current rule and provide guidance on ways to 

reduce the costs and effort in preparing permit applications, 

which in turn will reduce the administrative and economic burdens 

of this program, As a result of concerns about the size and cost 

of some permit applications that have recently come to EPA's 

attention, the Agency plans to hold meetings with industry and 

State stakeholders in June to clarify the requirements on permit 

application content and ensure that State or local agencies do 

not request needless information in the applications. 

New Source Review 

EPA has worked through the Clean Air Act Advisory Committee 

to obtain independent advice and counsel on policy and technical 

issues associated with reforming the New Source Review program. 

Through these efforts, EPA provided a draft NSR reform rule for 

stakeholders' comment in 1994. Based on input received from the 

industry, states, environmental and other groups, EPA has revised 

the draft rule and intends to propose the reform rule in July 

1995. The proposed revisions provide stakeholders with more 

certainty and flexibility to comply with EPA's NSR requirements, 

and promote the use of innovative control technologies and 

pollution prevention 

While EPA views the. NSR proposal package as being balanced 

and as not sacrificing environmental protection, this package 

provides industry with several important benefits. To name just 
P.7 

a few, EPA plans to exempt certain "clean" emission units, and 

pollution control and pollution prevention projects from NSR 

altogether. EPA also plans to provide an approach that promotes 

voluntary use of plant-wide applicability limits which allows 

industry to operate without changes to its' permit as long as the 

plant's emissions do not exceed a cap. 

Air Toxics 

EPA recognizes that states and industry need lead time to be 

able to implement the modification provisions contained in 

section 112(g). EPA published an interpretive notice in February 

1995 advising states that they are not required to implement the 

modification provisions until EPA issues the final rule. This 

reversed an earlier EPA legal interpretation. In developing the 

final section 112(g) rule, EPA will consider the need for 

additional lead time to implement the modification provisions 

following promulgation of the rule. 

In response to comments received on the proposed rule, EPA 

is considering making several significant changes. EPA plans to 

discuss these proposed changes at the June meeting of the Clean 

Air Advisory Committee meeting. As it develops the final rule, 

EPA plans to hold meetings with industry, states and other 

stakeholders about potential changes to the proposed rule. EPA 

plans to issue the final rule in early 1996. 

Potential to Emit 

EPA's requirements for a source's limits on its potential to 

emit to be federally enforceable is currently in litigation. In 

that litigation EPA has taken the position that it has the legal 

authority to require federal enforceability. EPA believes there 

should be a credible system to ensure adherence to restrictions 

which allow a source to avoid federal requirements. Federal 

enforceability provides EPA the opportunity to ensure compliance; 

it also provides citizens the opportunity to ensure that sources 

in their communities are taking steps to reduce toxic air 

pollution. 

In January 1995, EPA issued a memorandum outlining 

alternative ways that restrictions on potential to emit could be 

less burdensome. For example, EPA identified approaches such as 

general rules and general permits to create restrictions on large 

numbers of sources without having to resort to individual 

permits. To ensure that states have sufficient time to implement 

these approaches, EPA provided a two-year transition period. 

During the transition period, sources emitting less than 50 

percent of the major source threshold would be excluded from 

having federally enforceable limitations, as long as appropriate 

records are kept. Sources above the 50 percent threshold that 

have State permit limits can simply submit certifications that 
^ 8 _ 

accept their State limits as federally enforceable. EPA is 

giving serious consideration to extending the provision for 

sources emitting less than the 50 percent cutoff beyond the twoyear period. 

Fugitive Emissions 

EPA continues to conduct section 302 (j) rulemakings where 

required under the Act, but believes section 112 does not require 

such a rulemaking. A court decision on the legal issue of 

whether such rulemaking is required under section 112 is expected 

to be issued shortly. EPA is interested in specific concerns 

about the technical feasibility of measuring fugitive hazardous 

air pollutant emissions, and in providing guidance in this area. 

EPA has committed to issue guidance in May 1995 on treatment 

of co-located sources of fugitive emissions that have not been 

listed under section 302 (j). 

•\ 
P.9 

V 

I 

EPA'S RESPONSE TO ISSUES RAISED BY INDUSTRY ON 

CLEAN AIR ACT IMPLEMENTATION REPORM 

Operating Permit Program 

REDUCING PERMIT APPLICATION BURDENS 

Issue 1: To reduce the burden of the permit application, EPA 

should issue guidance to confirm that sources are not 

required to include a substantial level of detail in 

their permit applications. Specifically covered should 

be limiting detail on emissions and reviews related to 

identification of applicable requirements. 

Response: 

• EPA agrees and is creating guidance on this and many other 

implementation issues. 

• EPA's guidance will address the extent to which emissions 

must be quantified for purposes other than determining a 

facility's potential emissions. EPA will clarify that 

extensive emission inventories are not the main goal of the 

Title V operating permit program, and that documentation of 

emissions may be reduced where the purpose is for cataloging 

emissions rather than, for example, determining whether a 

State or federal rule applies. 

• EPA will clarify that emissions of very small amounts of 

pollutants could be reported as present in "trace" amounts, 

instead of calculating the actual quantity of emissions. 

The guidance will clarify that calculation of tons per year 

emissions of pollutants covered under the accidental release 

program [section 112(r)] is not required, unless the 

pollutant is also a hazardous air pollutant (HAP) under the 

air toxics provisions in section 112(b). 

• Although not part of industry's recommendation, another 

means of reducing the burden of permit applications is to 

allow part of an application to be submitted within the one 

year deadline and the remaining information to be submitted 

nearer the date of permit issuance for sources whose 

required date for permit issuance is significantly later in 

the state's 3-year transition period. EPA will clarify that 

permit authorities may initially deem an application 

complete, provided core information is included, and then 

allow submittal of additional necessary information nearer 

the date of permit issuance. The application shield will 

continue to be provided to applications deemed complete in 

this manner. 
P.10 

UPDATED EMISSIONS ESTIMATES 

Issue 2: EPA should issue guidance that, at a minimum, 

establishes the following: 

1) If emissions estimates developed in preparing Title 

V applications differ from prior good faith estimates, 

then use of the prior estimates should not be called 

into question by the new estimates, and 

2) If emission limits were based on prior good faith 

estimates that are lower than current estimates, then 

the previous emission limits may be revised using the 

Title V permit process to reflect estimates based on 

current methodologies. 

Response: 

EPA recognizes the need for fair and appropriate measures 

under these circumstances. 

EPA is developing guidance on what effect new emission 

factors or information would have on a previously submitted 

permit application. This guidance is expected to be issued 

very shortly. 

EPA agrees that good faith estimates are an important factor 

in this issue. EPA is soliciting comments from industry on 

how it should address the issue of "good faith" estimates. 

EPA also agrees that changes to emission estimates should 

not require a revision of the operating permit if the new 

estimate has no affect on what requirements apply. If new 

requirements apply, the existing rule defines the procedures 

for incorporation into the permit. 

INSIGNIFICANT ACTIVITIES 

Issue 3: EPA should allow States to exclude as insignificant 

activities any units with emissions below the Stateestablished significance thresholds -- even if the 

units are subject to an applicable requirement. 

Response: 

EPA will provide additional guidance to States concerning 

exclusion of certain activities from the obtaining a permit, 
P.11 

• EPA will clarify through guidance that States may reduce the 

level of information in the application for activities 

subject to a generically applicable State implementation 

plan (SIP) requirement, such as small units subject to 

general SIP opacity requirements. 

MINOR NEW SOURCE REVIEW/TITLE I MODIFICATIONS 

Issue 4: EPA should immediately issue a ruling that Title I 

modifications include only changes explicitly defined 

as modifications under the Act, and do not include 

changes not covered by those definitions that are 

governed by State or local minor new source review 

(NSR) programs. 

Response: 

• EPA is continuing to consider how best to address this issue 

in the supplemental proposal it plans to issue in June 1995. 

In the meantime, EPA has approved a number of state permit 

programs that have not treated minor changes under their new 

source review program as "Title I modifications." These 

programs allow minor NSR changes to be processed as minor 

permit modifications under their Title V program. 

• EPA's interpretation of the phrase "Title I modifications" 

in the current rule allows this approval and EPA will 

continue to grant similar approvals. 

• As part of its supplemental proposal EPA currently intends 

to offer for public comment a streamlined two-tracked system 

for permit revisions that builds on existing successful 

State new source review programs. Under this process, 

States would have greater flexibility to decide the amount 

of public and EPA review for most permit revisions, by 

matching the level of review to the environmental 

significance of the change. The new system for permit 

revisions will reduce the importance of the phrase "Title I 

modifications" because consideration of whether the change 

is a Title I modification would not be a factor in 

determining what revision process is necessary. 

APPLICABLE REQUIREMENTS - EXCLUSION OF CERTAIN TERMS 

Issue 5: EPA should issue guidance confirming the following: 

States can limit minor NSR terms included in title V 

permits to those that they deem to be environmentally 

significant (but States would have the option to treat 
P.12 

minor NSR and Title V separately), and 

States are only reguired to include state 

implementation plan (SIP) terms that are necessary 

elements of an EPA-required nonattainment or 

maintenance plan. 

Response: 

• EPA agrees that some minor NSR terms may be obsolete or 

inappropriate for operating permits. 

• EPA intends to clarify through guidance that, for example, 

the permit would not need to incorporate the NSR application 

by reference or include certain other terms determined by 

the source and permit authority to be extraneous. This 

guidance will indicate the types of terms that may be 

extraneous and would suggest ways in which States may drop 

these requirements from NSR and Title V permits. 

[For treating minor NSR and Title V separately, see response to 

the next issue.] 

APPLICABLE REQUIREMENTS - LEVEL OF DETAIL 

Issue 6: EPA should allow States to include a basic requirement 

to comply with a particular general program in the 

Title V permit, with an acknowledgment that compliance 

with the underlying requirements, as revised from time 

to time, will be required. These general programs 

would include: 

minor NSR 

monitoring and enhanced monitoring 

categories of de minimis reasonably available 

control technology (RACT) requirements and 

determinations of RACT non-applicability 

112(r) risk management plans 

EPA should issue guidance to confirm that applicable 

requirements may be incorporated into Title V permits 

using citations (i.e., references) rather than 

narrative restatement, 

Response: 

While EPA believes this approach could lead to permits that 

would not have specific, enforceable conditions for some of 

10 
these requirements, EPA is continuing to consider varying 

ways in which states may incorporate new source review 

requirements into Title V permits. 

• Some requirements do lend themselves to generic treatment. 

In the March 1994 supplemental proposal on accidental 

releases under section 112(r), EPA proposed standard permit 

conditions that would assure compliance with requirements of 

the accidental release program. Under this approach the 

risk management plan would not be a part of the application 

or the permit. Changes to the risk management plan would 

not require revising the permit. 

• EPA agrees that a citation-based approach to identifying 

underlying requirements is needed and will be issuing 

guidance on the use of citations in June 1995. 

• EPA described for public comment an approach to crossreferencing in its August 29, 1994 proposal, and intends to 

expand on this approach in the guidance document mentioned 

above. Under the August proposal, the permit would need to 

include the emission limits and monitoring requirements, 

while test methods and lengthy procedures could be 

referenced. Any citation would need to ensure that 

judgements required in an underlying requirement are 

identified in the permit. 

OPERATIONAL FLEXIBILITY AND PERMIT REVISION PROCEDURES 

Issue 7: EPA should promulgate the operating permit revision 

procedures that reflect the approach set out in 

industry's "straw proposal." 

Response: 

• EPA's supplemental rule on Title V permit revisions, which 

will be issued in June 1995, will address this issue. This 

proposal will include an alternative, streamlined system for 

permit revisions that builds upon existing state permit 

programs. 

• It will give States great flexibility to decide the amount 

of public and EPA review for most permit revisions, by 

matching the level of review to the environmental 

significance of the change. A State is not required to 

provide any review for changes that it can show are de 

minimis. The public, affected States, and EPA would have an 

adequate opportunity to review and comment on more 

environmentally significant actions. 

• Under the June proposal, changes that do not require 

11 
P.14 

approval under State minor NSR would be allowed to proceed 

with no further review upon submittal of a notice to the 

State, provided the change would not conflict with the Title 

V permit. 

• The permit revision procedures are expected to avoid 

duplication with existing State permit programs. For 

changes subject to preconstruction review, any public, 

affected State or EPA review would occur prior to 

construction of the project. This is where State review is 

already provided under new source review, and would avoid 

second-guessing of a preconstruction permit by EPA. 

TITLE V MONITORING 

Issue 8: EPA should issue Title V monitoring guidance that 

provides: 

1) Existing monitoring established as part of an 

applicable requirement should satisfy the Title V 

monitoring requirement. 

2) If no such monitoring is provided in the underlying 

requirement, states can establish Title V monitoring as 

part of the permitting process, subject to the 

following constraints: 

monitoring data that is sufficient to determine 

compliance with the underlying applicable 

requirement shall be the objective of any new 

monitoring, and where the applicable requirement 

was established through rulemaking, should only 

serve as indicator monitoring until the compliance 

determination aspects of the underlying 

requirement can be formally reviewed and revised 

through rulemaking. 

costs shall be taken in account in determining 

such monitoring, expressly recognizing that 

monitoring may not be feasible for certain units 

because any benefits will be outweighed by 

associated costs. 

monitoring aust be established in a manner that 

will assure that an increase in stringency of the 

underlying requirement will not result. 

3) States should be able to exempt small units from 

monitoring. 

Response: 

12 
P.15 

• Several of the points raised are related to EPA's enhanced 

monitoring proposed rule which EPA is currently reexamining. 

Either as part of that reexamination, or in separate 

guidance EPA will clarify what is necessary to meet the 

operating permit rule requirements on periodic monitoring. 

• EPA agrees directionally with the points that periodic 

monitoring should be satisfied by monitoring included in an 

applicable requirement. 

• EPA also agrees that periodic or enhanced monitoring is not 

intended to increase the stringency of the underlying 

requirement. 

RESEARCH AND DEVELOPMENT ACTIVITIES 

Issue 9: EPA should exclude research and development (R&D) and 

related activities from coverage under Title V and 

section 112(g). At a minimum, the current Title V rule 

must be implemented consistent with the preamble to 

make clear that states have authority to treat colocated R&D facilities and related activities 

separately in determining whether they are a Title V 

major source. 

Response: 

• In the June 1995 supplemental proposal on permit revisions, 

EPA will clarify that under the current rule, R&D facilities 

may be considered separately from the manufacturing facility 

at which they are located. This means that R&D laboratories 

would not be required to obtain a permit, unless the R&D 

facility alone is a major source. 

13 
P.16 

EPA'S RESPONSE TO ISSUES RAISED BY INDUSTRY ON 

CLEAN AIR ACT IMPLEMENTATION REFORM 

New Source Review 

SUMMARY OF RECOMMENDATIONS 

Issue 1: New source review (NSR) is triggered by two types of 

activities at existing sources: installing new 

emissions units and changing existing emissions units. 

With respect to new units, the NSR "emission increase" 

tests exclusively govern NSR applicability. As to 

existing units, the NSR "exclusions" from "physical or 

operational change," as well as the "emissions 

increase" tests determine applicability. EPA's July 

NSR reform package addressed both types of activities 

and contains certain solutions that industry supports. 

It contains other provisions that industry does not 

support in their present form. Finally, the July 

package omits provisions that industry believes are 

essential to meaningful reform. 

"One size does not fit all" is a principle that needs 

to be recognized in the NSR program. Both "exclusion" 

provisions and "the emission increase" tests must 

reflect this principle. 

The "exclusions" to NSR either focus on conduct that 

existing facilities normally undertake during their 

useful life or on conduct that the Agency wishes to 

encourage because it is in the public interest. 

Different "exclusions" are needed in order to reflect 

different conditions that exist in different 

facilities. The "exclusion" options need to be 

expanded. 

Options are also needed -under the emissions increase 

test. An allowable-to-allowable test should be 

provided for sources that have undergone NSR review and 

for sources where the State implementation plan (SIP) 

is consistent with that approach. EPA should also 

confirm the existing discretion of sources to use an 

actual-to-actual approach. Source owners should also 

have discretion to choose from a menu that includes, at 

a minimum, these tests and plantwide applicability 

limits (PALs). 

14 
P.17 

Response: 

EPA began a comprehensive reassessment of its NSR program 

over two years ago. That process involved extensive 

discussions with representatives from all the stakeholder 

groups and resulted in recommendations forwarded to EPA from 

the Clean Air Act Advisory Committee (CAAAC). 

EPA has developed a regulatory package addressing the 

recommended changes and expects the proposed rules to be 

signed by the Administrator within the next few months. 

While EPA views the package as being balanced and as not 

sacrificing the environmental protection inherent in the New 

Source Review program, there is no doubt that the package 

will provide industry with several important benefits 

including: 

• Deregulation of many changes at "clean" emissions units 

and pollution control and pollution prevention projects 

- - Sources that have clean emissions units or are 

undertaking projects to clean up air pollution would 

generally not be targeted for federal new source 

review. 

• Promotion of voluntary plant-wide limits -- Rather than 

face potentially complicated, piecemeal applicability 

decisions every time a change at a plant is 

contemplated, most plant managers prefer to work with 

an emissions cap or budget, an annual emissions limit 

that allows managers to make almost any change any time 

as long as the plant's emissions do not exceed the cap. 

EPA will include this option in the proposed rule. 

• Help for cyclical industries such as the automobile 

manufacturing companies - - Industry alleges that 

existing regulations unintentionally penalize 

industries that have suffered recent downturns and 

inhibit modernizing changes that are vital to their 

recovery, even when changes at a plant lower emissions. 

EPA's proposal will level the playing field for these 

sources by extending the range of years they can use to 

establish their emissions baseline. 

• Encouragement of pollution prevention and innovative 

control technologies -- The proposed changes will 

ensure that bona fide pollution prevention qualifies 

for the pollution control project exclusion and revamp 

the under-used innovative control technology waiver to 

simplify the process and eliminate penalties for good 

faith failures. 

15 
Better coordination of permits impacting Class I areas 

-- EPA will clarify the role of the Federal Land 

Manager, the State permitting authority and the 

applicant with regard to the NSR permitting process. 

Other changes establish de minimis levels for air 

quality impacts and provide mitigation alternatives for 

sources whose proposed new emissions threaten Class I 

areas. The changes should dramatically reduce delays 

and disputes currently associated with permitting near 

federal Class I areas. 

Increased State flexibility -- Instead of one-sizefits-all solutions to applicability and other issues, 

States would be explicitly allowed for the first time 

to choose applicability and implementation approaches 

from a menu of alternatives. 

EXCLUSIONS FROM PHYSICAL AND OPERATIONAL CHANGES 

Issue 2: Pollution Control Project (PCP) Exclusion: The 

exclusion should follow the Wisconsin Electric Power 

Company (WEPCO) exclusion by dropping the following 

from the July draft: 

- The requirement that the source owner seek and obtain 

a prior state determination that the pollution control 

project exclusion applies "up-front" before commencing 

construction on a project. 

- The mandatory control requirements of collateral 

emissions increases. 

- The "offset" requirement for nonattainment areas. 

- The "air toxics" risk evaluation. 

Response: 

• EPA generally agrees and as mentioned above, EPA will be 

proposing a broad pollution control project exclusion as 

part of its NSR reform package to allow exemptions for 

sources that have clean emission units or undertaking 

projects to clean up air pollution. 

• This exclusion will not include any specific requirement for 

State pre-authorization. EPA expects that most projects 

will be reviewed by states as part of their minor NSR 

programs. As with EPA's existing NSR exclusions, the timing 

and nature of this state minor NSR approval will be left for 

states to determine. 

16 
P.19 

• The proposed exclusion will include the following safeguard 

used in the WEPCO rule to ensure that pollution control 

projects do not have an adverse environmental impact: The 

project cannot cause or contribute to a violation of a 

national ambient air quality standards (NAAQS), or 

prevention of significant deterioration (PSD) increment or 

have an adverse impact on air quality related values (AQRVs) 

in a Class I area. 

• Under this test, states are to consider the collateral 

emissions from a project and ensure that new emissions 

of nonattainment pollutants do not contribute to the 

existing problem. EPA regulations will not specify how 

the state must deal with increases that do not 

contribute to a nonattainment problem. 

• EPA will not require an evaluation for toxic emissions for 

pollution control projects that are add-on or fuel switches 

to a less polluting fuel. EPA's experience with such 

projects has shown that a toxics safeguard is not needed. 

Given the uncertain nature of many pollution prevention 

projects, EPA believes that it is a reasonable environmental 

safeguard to confirm that such projects result in an 

environmental benefit before a pollution control project 

exemption is granted. As part of an evaluation of whether a 

project is environmentally beneficial, EPA would expect 

states to consider any increase in toxic emissions. 

Issue 3: Pollution Prevention Exemption: As EPA has recognized 

in numerous public statements, "pollution prevention" 

projects (i.e., projects that allow a facility to 

produce a product with less environmental discharges 

per unit of product made) must be encouraged. To 

effectuate this policy, the "pollution prevention" 

exclusion proposed by the Agency should: 

- Eliminate the July draft requirement that the project 

not improve efficiency nor increase annual utilization. 

- Exclude all "pollution prevention" projects from NSR 

unless the project increases the source's "potential to 

emit." 

Response: 

• The pollution control project exclusion included in the NSR 

Reform rulemaking will extend the exclusion to pollution 

prevention projects. Any pollution prevention project will 

qualify as long as it is "environmentally beneficial" and 

will not cause or contribute to a violation of a NAAQS or 

PSD increment, or cause a Class I adverse impact. 

17 

» 
<* 

• These conditions are patterned after the WEPCO rule and ^ 

will create a broad, flexible exclusion for pollution *.• 

prevention projects. 

• An exclusion of projects that do not increase a source's 

potential to emit would create an exclusion that could 

considerably reduce the effectiveness of the NSR program. 

Almost any modernization that a source undertakes has the 

incidental effect of lowering emissions. A new emissions 

unit or modernization generally has fewer emissions that one 

built 40 years earlier. Since these types of changes would 

not likely increase a source's potential to emit, industry 

would claim this as a pollution prevention project -- even 

though its' pollution prevention aspects are likely to be 

negligible and actual emissions may increase dramatically 

due to increased utilization. 

Issue 4: A New "Cross Media" Project Exclusion: EPA should « 

recognize that pollution control projects required 

under other laws may result in "collateral" emissions 

increases of air pollutants. The PCP exclusion for air 

pollution projects should be extended to these 

projects. 

Response: 

• Cross media project exclusions are under consideration by 

EPA. EPA will solicit comments on extending the PCP 

exclusion to cover these types of projects, provided they do 

not cause or contribute to NAAQS violation, PSD increment 

violation or adverse impact on Class I area. 

• Also this issue may be addressed in multi-media permitting 

pilot initiative currently underway. 

Issue 5: "Routine Maintenance, Repair and Replacement" 

Exclusion: The July guidance on this exclusion should 

be dropped. Instead, the following guidance should be 

included in the proposal: 

"Routine maintenance, repair, and replacement 

means maintenance, repair and replacement projects 

occurring on a regular basis, on a cyclical basis, 

or due to unanticipated failure of equipment, 

which are undertaken in an industrial category to 

maintain competitive position or reliable 

operation." 

18 
P.21 

Response: 

• EPA agrees with removing the routine maintenance, repair and 

replacement language from the proposal package. 

• With other changes being made to NSR applicability, this 

issue becomes less important. Both PALs and the Clean Unit 

Test (included in the NSR Reform proposal rule) will provide 

clear distinction of the types of changes that can be 

undertaken without triggering NSR. 

Issue 6: A "Restoration" Exclusion: A new exclusion, based on 

the "results in" language in the modification 

definition, should be included for activities that 

restore a unit to the highest capacity achievable in 

the previous five years. The exclusion would be 

limited in time and would recognize that requirements 

governing the timing of capital expenditures vary 

depending upon market conditions, and may not allow an 

industry to make a capital investment to restore 

operations immediately after a problem occurs. It 

would also recognize that units that have deteriorated 

over more than a five year period of time should be 

evaluated under other tests. This is consistent with 

the WEPCO rule's implementation of the "causal link" 

requirement though the rule's focus on "representative 

baseline" year conditions in the definition of 

"representative actual annual emissions." 

Response: 

• EPA believes the issue of how restoration of lost capacity 

should be treated for NSR applicability purposes is better 

resolved by the PAL, the Clean Unit Test, and other 

mechanisms in the NSR Reform package that provide sources 

with considerable flexibility to make changes. EPA believes 

that the routine maintenance exclusion already included in 

the existing NSR regulations also has the effect of 

excluding "routine restorations." 

Issue 7: "Clean Unit" Exclusion: Establish an exclusion for 

sources that have installed BACT equivalent level of 

control or MACT or reasonably available control 

technology (RACT) or their equivalent, under a state or 

voluntary cox trol program. Units that have undergone 

NSR should be subject to the "allowable-allowable" test 

discussed in the following issue. 

19 
* 

Response: 

• EPA agrees and has included a new clean unit exclusion which 

allows an operator of a unit to make changes to the unit 

provided the change does not increase hourly emissions (and 

is allowed under permit). EPA is taking comment on several 

alternative definitions for "clean unit" including the 

industry's suggested definition. 

Issue 8: Non-Emissions Unit Exclusion: Industry supports EPA's 

suggestion in draft NSR package of last summer that a 

NSR exclusion be created for non-emitting units. 

Response: 

• After consultation with a number of state permitting 

authorities, EPA determined that a regulatory change is not 

required to exclude units that are generally not targeted as 

emitters of air pollutants. Moreover, there was concern 

that the draft non-emitting unit regulations could subject <<» 

units, currently excluded as a matter of common sense, to 

major NSR due to the narrow exclusion that was being 

proposed. To preserve the permitting authority's existing 

flexibility, EPA is not proposing a regulatory exclusion for 

nonemitting units. EPA will continue to evaluate this 

issue, particularly with regard to changes to units that 

affect the emissions at other units, and if warranted, 

provide guidance in the future. 

EMISSIONS INCREASE TESTS 

Issue 9: EPA's proposal should Include a menu of alternative 

emissions increase tests. If a source owner could show 

that there would be no significant emission increase 

under a particular test, NSR would not be triggered. 

(1) "Allowable-to-allowable" test for units that have 

undergone NSR. The "allowable-to-allowable" treatment 

for units that have undergone NSR review is a 

clarification of current law -- these units have been 

evaluated and permitted under the NSR program at the 

allowable level and have been evaluated for BACT or 

LAER at that level. Any changes in the unit that allow 

the -unit to achieve permitted levels have been 

authorized by the NSR permit. 

(2) An "actual-to-actual" test for units that have 

"begun normal operations" with a 5 year look-back and 

explicit preamble language recognizing that if a 

projected or actual increase in production rate or 

hours of operation above past actual levels is not 

20 
caused by a change, the hours of operation production 

rate increase exclusions applies. 

(3) An actual-to-potential test with a 10 year lookback that applies to units that are new greenfield 

units, and at the option of the source owner, to units 

that have begun normal operations. 

(4) Plant-wide applicability limits -- as in the July 

draft rule. 

Response: 

EPA is for the first time proposing to give States a series 

of applicability options including versions of all four of 

these tests for determining whether an increase in emissions 

will follow from a proposed change. As a result, States may 

offer all of these options to industry with the only 

limitation that sources will not be allowed to "game" the 

system by switching between incompatible options. For 

instance, if a source chooses a PAL, it may not go above the 

PAL limit because it wants to use a "clean unit" test. 

CLASS I AREAS 

Issue 10: Permitting Authority Control: EPA's NSR rules must make 

it clear that it is the permit issuing agencies -- not 

Federal Land Managers (FLM) -- that have the authority 

to determine if a PSD permit applicants' proposed new 

source will have an adverse impact on air quality 

related values (AQRVs) in Class I areas. 

Response: 

• EPA's draft NSR Reform package sets up criteria for the 

permitting authority to consider when rejecting a FLM's 

finding of adverse impact. The draft preamble and 

regulations make clear that this is ultimately the 

permitting authority's decision when the proposed source 

does not cause or contribute to a Class I increment 

exceedance. 

Issue 11: Class I Size/Distance Cut-Offs: EPA should set 

reasonable size/distance cut-offs so that sources can 

avoid all aspects of the Class I area review process if 

they are small enough or propose to locate far enough 

away from Class I areas. 

Response: 

• EPA's draft NSR Reform package for the first time proposes 

Class I increment significance levels which will allow small 

21 
sources to demonstrate that they will have a de minimis 

impact on the Class I increment. Since AQRVs may be 

specific to the Class I area and involve secondary impacts 

that are considerably more complicated to assess than an 

increment, EPA does not set national significance levels for 

AQRVs. EPA expects that the existence of the Class I 

significance levels will help considerably in eliminating 

delays for small sources. 

Issue 12: Early FLM Coordination: Permit applicants should be 

encouraged, but not required, to notify FLMs early on 

of major sources proposing to locate within 100 km of a 

Class I area. This may be accomplished through 

establishment of a bulletin board service. 

Response: 

• EPA's draft proposal does address the establishment of a 

bulletin board system and calls for States to list projects 

on the data base. States are also required to include FLMs 

in any pre-application meetings involving projects within 

100 kilometers (kms) of a Class I area and provide copies of 

permit applications for proposed sources within 100 kms of a 

Federal Class I area. For new, large projects outside of 

100 kms, States are encouraged, but not required, to include 

the FLM in any pre-application meeting as appropriate. 

Issue 13: EPA Approval of Models and Modeling Techniques: EPA 

should make it clear that permit issuing agencies need 

not give any deference to FLM claims of adverse impacts 

on AQRVs in a Class I area when the FLM claims are not 

based on use of EPA-approved models or modeling 

techniques for evaluating the impacts of a proposed new 

source on AQRVs. 

Response: 

® EPA's draft proposal distinguishes between modeling to 

determine air quality impacts and an AQRV analysis. EPA 

does approve models used Uo predict the impact of emissions 

from a source on the surrounding air quality, and generally 

requires the use of an EPA-approved model for this showing. 

However, AQRV analyses generally start with the ambient 

loadings predicted by the EPA-approved models and then 

determine what the impact of that loading will be on the 

AQRV in question, such as the impact of ambient sulfur 

dioxide (and its derivatives) on visibility. In general, 

EPA has no approval procedures in place for these conversion 

methodologies and does not require that FLMs, States, or 

sources secure EPA approval, In the draft NSR Reform 

package, EPA provides that conversion methodologies be 

subject to public notice and comment, either before its use 

22 
: by a source or FLM or in conjunction with a determination on 

a specific permit. 

Issue 14: Mitigation of Source Impacts Through Offsets: EPA 

should provide States in rules for a broad range of 

approaches for assessing the adequacy of offsets in 

mitigation of adverse AQRV impacts. 

Response: 

• The draft NSR Reform Rule sets out general principles for 

assessing offsets. EPA is also taking comment on whether 

offsets for sources impacting Class I areas may include 

"double-counting" emissions reductions needed by a source to 

comply with other Clean Air Act requirements. 

Issue 15: Existing Source Problems: EPA should not use the NSR 

process to address problems that may be caused by 

existing sources (including existing mobile sources) 

impacts on Class I areas. 

Response: 

• EPA is in the process of developing regional haze 

regulations that are focused on existing sources and Class I 

area visibility degradation caused by these existing 

emissions. Assuming all other applicable PSD requirements 

are met, the draft NSR Reform package would require permit 

denial for Class I area concerns if the new emissions will 

have an adverse impact on AQRVs. It is the state or other 

permitting authority, and not the FLMs, that will make the 

final determination as to whether the proposed source's 

emissions will have these proscribed results (for AQRVs, the 

state decides when the proposed source does not cause or 

contribute to a Class I increment exceedance). 

TOP-DOWN BEST AVAILABLE CONTROL TECHNOLOGY 

Issue 16: Eliminate Top Down BACT: The top-down BACT approach 

removes from the States discretion that the Clean Air 

Act has given to them to make BACT determinations. EPA 

should substantially revise or eliminate the "top down 

BACT" approach. 

Response: 

• EPA does not require states to use the top down methodology 

for making BACT determinations in its draft NSR Reform 

package. Instead, EPA's proposed regulations for state 

programs will identify certain core criteria that BACT 

determinations must meet. These criteria include that the 

applicant consider the most stringent technology and provide 

an acceptable rationale if the most stringent technology is 

23 
not accepted. EPA would propose a top-down approach in its 

PSD regulations which are applicable to states without SIPapproved PSD programs. 

Issue 17: Require Exclusive Use of Incremental Costs: EPA should 

specify that incremental rather than average costs 

should be the basis for selection and rejection of 

control technologies under the BACT process. 

Response: 

• Since EPA's draft provides states with discretion in making 

BACT determinations and in evaluating the factors that go 

into that decision, it would be inappropriate for EPA to 

mandate that states use only incremental costs in assessing 

BACT options. The draft NSR Reform package would not change 

EPA's current policy that recommends states consider both 

average and incremental costs in selecting the final BACT 

level. 

Issue 18: BACT "Cut-Off:" EPA must establish a "cut-off date 

for considering undocumented new technologies in the 

BACT selection. EPA should retain the proposed 

provision requiring commenters on draft PSD permits to 

show that technologies have been "demonstrated in 

practice," i.e., that a new or emerging technology must 

have six months of operating performance history to 

verify its claimed effectiveness. 

Response: 

• In the draft NSR Reform package, EPA is including a 

presumptive cut-off date and a provision that undocumented 

new technologies considered in determining BACT must have 

six months of operations to verify claimed effectiveness. 

AIR OUALITY ISSUES 

Issue 19: EPA should delete pre-construction monitoring 

requirements from the PSD rules. Where postconstruction monitoring can produce useful data, it may 

be appropriate for EPA to require such monitoring. 

Response: 

© Section 165(e)(1) of the CAA requires each PSD source (or 

permitting authority) to conduct a preconstruction analysis 

of the ambient air quality at the proposed site and in areas 

which may be affected by the source's emissions, in 

accordance with regulations issued by EPA. EPA believes 

that it is appropriate to reevaluate the regulatory 

requirements for preconstruction monitoring for proposed PSD 

24 
construction, where air quality data cannot feasibly be used 

to analyze a source's impact upon air quality standards, in 

the draft NSR Reform Rule, EPA is soliciting comment on the 

appropriateness of providing an exemption for some cases 

from PSD preconstruction monitoring. 

• Existing regulations [e.g., 51.166(m)(2)] provide for the 

use of post-construction monitoring when in the opinion of 

the permitting authority such monitoring is necessary to 

determine the effect emissions may have, or are having, on 

air quality in any area. However, existing regulations do 

not specify that such ambient monitoring may include the 

monitoring of air quality-related impacts in Federal Class I 

areas. In the draft NSR Reform Rule, EPA is proposing to 

amend its PSD regulations to clarify that post-construction 

ambient monitoring may be required for the purpose of 

determining the effect emissions from a facility may have, 

or are having, on AQRVs in a Federal Class I area. 

Issue 20: Since the Clean Air Act specifically exempts from PSD 

review pollutants that are regulated under section 112, 

EPA should drop its proposal for air quality impact 

analyses for section 112 pollutants. 

Response: 

• Section 112(b)(6) of the Act provides that part C 

requirements for prevention of significant deterioration 

(PSD) do not apply to hazardous air pollutants (HAPs) listed 

under section 112. In a March 11, 1991 memorandum, EPA 

stated that it would no longer consider HAPs to be 

individually regulated under the Federal PSD regulations at 

40 CFR 52.21. However, EPA also indicated that any HAP that 

is a constituent of a more general pollutant listed under 

section 108 of the CAA (e.g., VOC, particulate matter) 

remains regulated under PSD as part of that regulated 

pollutant. £ee, 57 FR 18070 at 18074-75 (April 28, 1992) 

(publication of March 11, 1991 memorandum). This policy 

will be addressed in EPA's rulemaking initiative to update 

the PSD and NSR regulations based on the 1990 CAA 

Amendments, scheduled for proposal this summer. EPA has 

removed additional discussion of HAPs/PSD implementation 

issues from the draft NSR Reform rule and will evaluate the 

need for further guidance over the next several months. 

25 
LOWEST ACHIEVABLE EMISSION RATE 

Issue 21: Lowest Achievable Emission Rate (LAER) determinations 

should factor in economic considerations. 

Response: 

• As opposed to BACT, the definition of LAER does not provide 

for the consideration of economics. However, EPA's existing 

guidance provides, in a generic sense, for limited 

consideration of economic factors in a LAER determination. 

EPA's policy is that if an emission limit will preclude 

construction of new plants within a class or category of 

sources, then there is justification for the permitting 

authority to reevaluate that particular LAER limit for that 

class or category of source. If another plant in the same 

(or comparable) industry already uses that control 

technology, then such use constitutes evidence that the cost 

to industry of that control technology is not prohibitive. 

Thus, LAER costs are considered only to the degree that they 

reflect unusual circumstances which, in some manner, 

differentiate the cost of control for a source from control 

costs for the rest of the industry. 

UNDEMONSTRATED CONTROL TECHNOLOGY/APPLICATION (UT/A) AND 

DEMONSTRATED POLLUTION PREVENTION 

Issue 22: EPA must extend the UT/A waiver to LAER decisions for 

sources in nonattainment areas. Although the UT/A 

waiver provides evidence that the LAER definition can 

be interpreted to provide for "comparability," the 

concept was not properly extended to projects that 

employ demonstrated pollution prevention technologies 

in nonattainment areas. 

Response: 

e EPA agrees that applicability of the UT/A should be extended 

to nonattainment areas and is proposing to do so in the 

draft NSR Reform Rule. 

• The UT/A waiver does not provide evidence that the LAER 

definition can be interpreted to provide for "comparability" 

and that it should be extended to demonstrated control 

techniques or applications. The draft UT/A waiver 

regulations, consistent with the Agency's interpretation of 

LAER, require an undemonstrated control technique installed 

in a nonattainment area to achieve applicable LAER limits. 

The comparability concept is applicable only to an 

undemonstrated technique that marginally fails to achieve 

its permitted .limit. As crafted, the permitting authority 

26 
P.29 

establishes marginal failure emission limits which are 

included in the UT/A's permit and subject to public review 

and comment. This concept is designed to enhance and 

encourage the installation of undemonstrated control 

techniques or applications by providing the permitting 

authority with increased flexibility to either accept or 

reject an UT/A that marginally fails to achieve its 

permitted limit. This flexibility is not available under 

existing innovative control technology waiver regulations. 

Issue 23: The concept of "comparable emission reductions" which 

EPA has proposed for UT/A waivers in nonattainment 

areas should be extended to demonstrated pollution 

prevention technologies in nonattainment areas. 

Response: 

• The concept of "comparable emission reductions" and its 

application to demonstrated pollution prevention 

technologies in nonattainment areas is addressed in the 

Agency's response to Issue 22 above. 

• « 

27 
EPA'S RESPONSE TO ISSUES RAISED BY INDUSTRY ON 

CLEAN AIR ACT IMPLEMENTATION REFORM 

Air Toxics - Section 112 

Issue 1: The Section 112 program being developed and implemented 

by EPA is contrary to Congress's plan for regulating 

air toxics, and is fundamentally unfair to the 

regulated community because controls are required 

sooner, apply more broadly, and are more stringent than 

Congress intended. EPA must adopt an air toxics 

program that reflects the gradations and distinctions 

mandated by Congress. By imposing overly-broad 

regulations EPA is severely complicating the 

implementation of Section 112 and forcing regulated 

sources to commit substantial human and financial 

resources to meet standards that are neither justified 

nor authorized by the Clean Air Act. 

Response: 

• Section 112 is a common sense approach to the regulation of 

air toxics across the Nation. For 20 years, the Clean Air 

Act directed EPA to use risk assessment to regulate 

hazardous air pollutants to an "ample margin of safety" 

level. By 1990, there was broad consensus that this 

approach had failed. Due to controversy and litigation over 

risk assessments and "how safe is safe," EPA had managed to 

set standards for only seven toxic air pollutants and a 

handful of sources. More than two-and-one-half billion 

pounds of toxic chemicals were still released into the air 

each year, according to industry-reported Toxics Release 

Inventory (TRI) data. Thus, industry, environmentalists, 

States and EPA broadly agreed in 1990 to use a technologybased approach as the primary means of reducing emissions of 

air toxics. 

• Congress created the Maximum Achievable Control Technology 

or MACT program as a practical approach: based on 

evaluation of existing control technologies, EPA must 

establish control requirements to assure all major sources 

of hazardous air pollutants (HAPs) achieve the level of 

control already being achieved by the better performing 

similar sources. The MACT program provides for 

environmental equity by leveling the playing field for 

industry so that cleaner facilities are not at a competitive 

disadvantage relative to their dirtier competitors. 

• EPA believes the MACT program is working. In the four years 

since 1990, the air toxics program has achieved more than 

was accomplished during the prior 20 years. EPA already has 

set standards for 10 major industries, which when fully 

implemented will reduce toxic emissions by more than one 

28 
P.31 

billion pounds per year. In doing so, EPA is implementing 

the MACT program in a creative and flexible manner to ensure 

that the standards are practical, make common sense, and 

• focus on environmental results. 

• EPA has worked closely with industry and others on each MACT 

standard. Where high costs or other problems are 

identified, EPA is taking a cooperative and problem-solving 

approach. The statute provides a menu of tools EPA is 

actively using to smooth the rough edges that can sometimes 

occur with a technology-based approach. These include: 

Applicability cutoffs 

Subcategorization 

Emissions averaging 

Breadth of affected source definition 

Compliance schedule beyond three-year compliance date 

when environmental benefits warrant it 

Prohibitory (exclusionary) rules in MACT standards 

(which serve as limits on potential emissions) 

• EPA remains committed to working with industry and other 

stakeholders in the development of its air toxics rules to 

assure common sense approaches can be implemented. 

I. THE DEFINITION OF MAJOR SOURCE AND THE APPLICABILITY OF MACT 

AND GACT 

Issues 2, 3 and 4: 

Major sources must be defined with reference to section 

112(c) source categories. 

MACT for Categories of Major Sources must apply only to colocated sources of HAPs in a given source category that 

together have the potential to exceed the 10/25 tons per 

year major source thresholds. MACT for a given major source 

category must not extend to co-located area sources or in 

co-located major sources in different source categories. 

MACT and GACT for Categories of Area Sources -- Area sources 

(including area sources co-located with major sources) 

should be subject to MACT or GACT for categories of area 

sources only after EPA demonstrates that the area source 

category presents a threat of adverse effects to human 

health or the environment that warrants regulations. 

29 
Response: 

These three issues concern the definition of major source, 

which is the subject of a pending court decision. EPA 

agrees that it is important to resolve this issue as soon as 

possible because of its broad implications for the section 

112 program. 

The Agency believes that its definition of major source 

makes common sense, is consistent with the law, and 

addresses public concerns about air toxics. Under EPA's 

definition, the determination of whether a facility is a 

major source depends upon total HAP emissions from the 

entire facility, not just from equipment within the same 

source category. Congress selected the 10/25 tons per year 

threshold based on the common sense view that all the 

emissions from a plant site contribute to health and 

environmental threats. 

EPA's program ensures that air toxics controls are required 

for all industrial and commercial plant sites that emit 

major amounts. This would not be true under the suggested 

alternative, which would carve plants into pieces and 

consider whether each piece emits major amounts. 

Take for example a facility that emits multiple HAPs and is 

composed of three 20-ton sources in different source 

categories. Under the suggested alternative, this facility 

would be considered to be a trio of area sources. It would 

be exempt from major source controls although its toxic 

emissions would total 60 tons a year -- far above the 25-ton 

major source threshold. This would not result in a credible 

air toxics program nor satisfy public concerns about toxic 

emissions. 

With regard to area sources, EPA has made findings under 

section 112(c)(3) for the area sources EPA has regulated. 

EPA is working to ensure that MACT requirements are 

reasonable and cost-effective. The Agency is using tools 

available under the statute -- such as applicability 

cutoffs, subcategorization and emissions averaging --to 

achieve this result. EPA is willing to explore concepts 

such as broader emissions averaging within plant sites to 

provide additional flexibility. 

30 
Issue 5: New and Existing Source MACT for Categories of Major 

Sources - New source MACT for categories of major 

sources must only apply to constructed or reconstructed 

major sources (i.e., a greenfield major source or the 

reconstruction of at least 50% of an existing major 

source). Similarly, existing source MACT for 

categories of major sources applies to existing major 

sources and modified major sources. Section 112(g) is 

the gatekeeper that determines whether and where new 

and existing source MACT for categories of major 

sources apply -- i.e., section 112(g) guides the 

identification of major source constructions and 

reconstructions to which new source MACT applies, and 

major source modifications to which existing source 

MACT applies. 

Response: 

• EPA has agreed to discuss the relationship of section 112(g) 

to sections 112(d) and 112 (j) in upcoming meetings with 

litigants on this issue, as well as with other stakeholders. 

• In EPA's view, for purposes of 112(d) and 112 (j) new source 

MACT applies when an affected source is constructed or 

reconstructed. The scope of the affected source is defined 

in each MACT standard, after notice and comment. This 

approach provides flexibility to tailor the applicability of 

new source MACT to the source category in question. 

• Although the Agency's interpretation of the statute differs 

from the alternative interpretation above, EPA agrees that 

new source MACT should be applied to units for which new 

source MACT is reasonable. Where appropriate, EPA has 

defined the "affected source" broadly, preventing small 

changes at existing sources from being subject to new source 

MACT. EPA believes that proposed and promulgated MACT 

standards would apply new source MACT to appropriate units, 

but is willing to consider and discuss any information to 

the contrary. 

• EPA is carefully considering voluminous comments on this 

issue that were received during the public comment period on 

the proposed section 112(g) rule. The Agency is considering 

a very broad definition of major source for purposes of that 

rule, which would limit the applicability of new source MACT 

for that rule. 

31 
Issue 6: Consistency Among Key Section 112 Programs - The three 

MACT standard setting provisions - sections 112(d), 

(g), and (j) - must be co-extensive. That is, a major 

source with a section 112(g) case-by-case MACT 

limitation by definition satisfies subsequent 112(d) or 

(j) MACT requirements. Likewise, a major source with a 

section 112(j) MACT limitation by definition satisfied 

subsequent sections 112(d) requirements. 

Response: 

• This issue is part of the ongoing litigation on the section 

112(j) rule. EPA will address it in the context of that 

litigation. 

A 

II. DETERMINING POTENTIAL TO EMIT * 

Issue 7: Potential to Emit -- All controls and limitations 

(including voluntary controls approved by the State) 

must be considered when determining the potential to 

emit BAPs under section 112 -- not just those that are 

federally enforceable. 

Response: 

• This topic is addressed under the potential to emit issues 

section. 

Issue 8: Fugitive emissions may not be considered for purposes 

of determining a source's potential to emit under 

section 112 until EPA conducts a section 302(j) 

rulemaking. 

Response: 

• This topic is addressed under the fugitive emissions issues 

section. 

III. MACT STANDARD SETTING ISSUES 

Issue 9: The MACT Floor for New Major or Area Sources must be 

set at the emissions limitation achieved by the best 

controlled similar source in the same source category. 

Response: 

• In general EPA agrees with this issue. While the Clean Air 

Act allows EPA to select the best controlled similar source 

(without limitation to a source within the regulated source 

category), this source is almost, always going to be found in 

32 

« 
the source category being regulated. EPA is not aware of 

situations where it has gone outside the regulated source 

category for new source MACT. 

Issue 10: The MACT Floor for Existing Major or Area Sources -

First, the MACT floor for existing sources must be set 

at the average emissions limitation achieved by all of 

the best performing 12 percent of sources ln the 

relevant source category or, for categories with fewer 

than 30 sources, the average emissions limitation 

achieved by all of the best performing 5 sources in the 

relevant source category. Second, if data is not 

available on every source in the category, EPA must 

demonstrate that the floor that is calculated on the 

basis of the partial data is the same as the floor that 

would be calculated if data were available on every 

source in the source category. Additionally, EPA must 

validate all data used to support a MACT floor 

determination to ensure its quality. 

Response: 

• The Clean Air Act states that the MACT floor for existing 

sources must be based on the average emission limitation 

achieved by the best performing 12% of the sources in the 

regulated source category. The term "all" does not appear 

in the Act. EPA's approach to determining the MACT floor 

was developed after a very open discussion and EPA has not 

been litigated over this issue. In each rule, EPA develops 

the data used to support the MACT floor and its validity and 

use are subject to review and comment. 

• As stated in the Federal Register notice enunciating EPA's 

position on determining the MACT floor (59FR29200), EPA 

plans to retain its discretion in setting MACT floors. For 

example, the CAA authorizes EPA to establish subcategories 

of sources, which results in a separate floor determination 

for sources in the subcategory. 

Issue 11: The Theoretical "Superfacility" (EPA "Model Plant") --

New and existing source MACT floors are based on the 

average emission limitation achieved by major sources 

in the relevant source category. In other words, MACT 

limitations are not separately calculated for each 

emission unit of major sources in the source category 

such that only a fictional "superfacility" can comply 

without installing additional controls. 

Response: 

• EPA is using the best information it can gather in 

developing MACT floors. Usually the best information EPA 

can obtain is on an emission unit by emission unit basis. 

33 
With this information EPA determines the MACT floor for the 

emission unit. If industry representatives believe EPA 

should use an emissions database based on plant-wide 

estimates to establish MACT floors and then MACT, EPA is 

willing to discuss this approach to help affected industries 

collect the appropriate data needed for this approach. 

IV. ADDITIONAL SECTION 112 IMPLEMENTATION ISSUES 

Section 112 General Provisions 

Issue 12: The section 112 General Provisions should apply only as 

expressly specified in each promulgated MACT standard. 

Response: 

• EPA agrees and is attempting to do this already. 

Issue 13: BAPs should be listed by regulation and a procedure 

should be provided by which pollutants may be delisted 

if an applicant demonstrates that a listed HAP alone, 

or in a particular use, does not pose a threat to 

public health or the environment. If new HAPs are 

added to the list, they must not be subject to 

regulation under previously promulgated MACT standards. 

Response: 

• The Clean Air Act contains provisions to delist HAPs from 

the list in section 112(c). EPA has developed a set of 

procedures and provided those to the public. EPA has used 

these procedures to evaluate delisting petitions such as the 

pending caprolactam petition as called for under the Act. 

As a result, EPA is now planning to delist caprolactam. 

• With respect to "particular use," EPA believes the Act 

provides that HAPs are either covered or not covered under 

section 112. However, section 112(c) also provides that a 

particular source category can be delisted if the 

appropriate findings are made. 

• With respect to the last question, EPA notes that there has 

been no petitions to list new HAPs. EPA will consider 

whether existing MACT standards should apply to any newly 

listed HAPs as new HAPs are listed. EPA would only consider 

applying MACT standards to newly listed HAPs after taking 

public comment and making final decisions on the finding 

that such application is reasonable and appropriate for 

affected sources. 

34 
Issue 14: The definition of "affected facility" must be 

consistent with the definition of major source to 

ensure that the given standard is not applicable to 

area sources or other categories of major sources. 

Response: 

• EPA uses the term "affected source" to clearly define which 

equipment are affected by the MACT standards. The substance 

of this issue is handled under Issues 2, 3, and 4 of this 

section. 

Issue 15 Existing major sources must not be subject to new 

source MACT when modified. 

Response: 

• EPA agrees that existing sources are not subject to new 

source MACT when modified. When a large readily segregated 

unit or collection of equipment is constructed (readily 

identified by the States and the public as a new affected 

source), however, this equipment can be defined as a new 

source and therefore subject to new source MACT under 

section 112(d). Generally EPA has defined "affected 

sources" broadly, thus eliminating small changes at existing 

sources from being subject to new source MACT. For example 

in the Hazardous Organic NESHAP (HON), EPA defines the 

chemical manufacturing process unit for purposes of setting 

what pieces of equipment are subject to new source MACT 

requirements. 

Issue 16: Nonapplicability determinations must not be required. 

Response: 

• EPA generally agrees with this issue based on an initial 

review of 40 CFR 63.1(b)(3). EPA has discussed this issue 

with affected interests and plans to review and, perhaps, 

revise this requirement in light of recent discussions on 

potential to emit. 

Issue 17: Sources must be able to bypass for brief periods during 

malfunction while minimizing emissions in the extent 

feasible. 

Response: 

• Whether a bypass action is permissible or a violation 

depends on the definition of malfunction and the factual 

circumstances of the action. The definition in the General 

Provisions governs although specific standards may supersede 

the General Provisions. If an operator experiences a 

35 

« * 
sudden, infrequent and not reasonably preventable event, 

then activities (such as bypassing control system) are 

permissible provided the operator takes action to minimize 

emissions. Generally, activities such as bypasses would be 

addressed in the startup, shutdown, and malfunction plan. 

Issue 18: Startup, shutdown, and malfunction plans are not 

applicable requirements that must be included in Title 

V operating permits. 

Response: 

• EPA agrees that these plans do not need to be included in a 

Title V permit. The requirement to have the plans and the 

criteria governing the adequacy of the plans are referenced 

from the applicable requirements in the MACT General 

Provisions. The plans and actions required by the plans can 

be enforced independent of the Title V permit. 

Modification Provisions fSection 112(g)1 

Issue 19: Section 112(g) must not become effective until 18 

months after promulgation of the section 112(g) 

regulation or until the relevant State promulgates a 

rule to implement section 112(g), whichever is later. 

Response: 

• EPA recognizes that states and industry need lead time to be 

able to implement section 112(g). The effective date of the 

section 112(g) program already has been delayed. EPA 

published an interpretive notice in February indicating that 

states and industry do not have to implement section 112(g) 

EPA issues a final rule. In developing the final 112(g) 

rule, EPA will consider the need for lead time for state 

development of section 112(g) programs. EPA is open to 

considering a reasonable time period after promulgation. 

Issue 20: Section 112(g) must not apply to stationary sources 

that are not included in a section 112(c) category of 

major sources. 

Response: 

• EPA believes sections 112(c) and 112(g) are meant to apply 

broadly to all major sources of toxic air emissions. All 

categories that contain major sources are meant to be listed 

on the source category list. EPA recognizes the need to 

amend the list if it finds sources that are not in listed 

categories. In the interim, section 112(g) ensures control 

of toxic emissions from constructed, reconstructed, and 

modified major sources in the category. The fact that EPA 

36 
P.39 

has inadvertently overlooked a source category should not 

mean that citizens lose the protection from toxic emissions 

that is provided by section 112(g). 

Issue 21: Research and development facilities should be exempt 

from section 112(g). 

Response: 

• EPA received many comments expressing this concern during 

the public comment period. EPA is working on alternative 

approaches to exempting research and development facilities 

in the final rule. 

Issue 22: Broad and self-implementing exclusions must be provided 

to effectuate Congressional intent that only 

significant changes should trigger the application of 

existing source MACT. An exclusion for operations that 

the major source is designed to accommodate is 

essential to the workability of section 112. Sources 

are "designed to accommodate" any activity that is 

permissible under the source's design specifications or 

Title V operating permit application or permit. 

Response: 

• The "designed to accommodate" language in the section 112(g) 

proposed rule was the result of intensive collaborative 

thinking among EPA staff and the Clean Air Act Advisory 

Committee. This issue also received voluminous comment 

during the public comment period. EPA is considering those 

comments as the final rule is developed. 

• EPA does not believe, however, that it is appropriate to 

automatically exempt those changes that are represented only 

in a permit application, but not in an approved permit which 

has not been reviewed by the state or EPA. 

Issue 23: Reasonable emission estimation techniques must be 

adopted that realistically assess whether a proposed 

change will cause an emissions increase. 

Response: 

• EPA understands the concern that it or a permitting 

authority could second-guess the methodology used in a de 

minimis determination after the fact, and possibly then 

bring enforcement action. EPA intends to address this 

concern in the final rule more directly than was done at 

proposal. EPA is looking for a way for sources to have more 

certainty that their emission estimates will be acceptable. 

37 
Issue 24: De minimis emission levels must be established at 10 

tons per year unless it is demonstrated that a lower 

level is necessary to protect human health or the 

environment. Any de minimis level must be measurable.. 

Response: 

• At proposal, many de minimis levels were set at 10 tons. 

Pollutants of relatively higher toxicity were given lower de 

minimis values based upon greater hazard. EPA is carefully 

considering comments received on this issue, including the 

concern that emissions be measurable, as stated above. 

• In order to address the concern that small changes not 

overwhelm the system, EPA has provided numerous other 

exclusions, such as those for raw materials switches 

("operations the major source is designed to accommodate") * 

and those for production rate increases and routine 

maintenance, repair, and replacement. 

Issue 25: A simple, streamlined offset procedure is required 

under section 112(g)(1). Sources only need to submit 

an "offset showing" - preapproval is not required. 

Sources must be able to claim offset credits for 

reductions taken under other programs and sources must 

be able to take credit for shutdowns and curtailments. 

Response: 

• Rather than require preconstruction review of offsets, as is 

required for case-by-case MACT determinations, the proposal 

only requires pre-operation review of offsets. EPA did not 

intend that this review be onerous. However in the final 

rule, EPA intends to address the concern that the offset 

procedures be simpler and more straightforward. 

• As stated above, EPA is considering adopting a broad 

definition of major source that provides maximum flexibility 

for offsets. Should EPA do so, the definition would be 

linked to an approach that allows only those offsets which 

provide additional emission reductions. 

Issue 26: Modified major sources must have three years after MACT 

is determined to achieve compliance. 

Response: 

• The proposed rule grants the permitting agency/authority to 

determine the time need to comply on a case-by-case basis. 

The permitting authority has the discretion to allow up to 3 

years for compliance. Common sense would suggest that there 

are many MACT emission limitation measures, such as source 

38 

«* 
P.41 

reduction projects, that may not require 3 years for 

compliance. 

• The new source review program, for example, provides no such 

lead time for compliance. MACT standards under section 

112(d) require different compliance periods, up to three 

years maximum, on a source category by source category 

basis. Therefore, EPA believes it is reasonable to grant 

the permitting authority discretion to use common sense in 

making case-by-case compliance decisions -- just as they can 

approve MACT determinations on a case-by-case basis. 

Issue 27: EPA has no authority to veto section 112(g) 

determinations made by States that have received 

section 112 delegation. 

Response: 

• The supplemental title V proposal contains a list of more 

environmentally significant permit revisions including 

section 112(g) determinations for which EPA will require an 

opportunity to review and object to the revision if 

appropriate. This does not mean that EPA intends to veto 

section 112(g) determinations; but rather is retaining the 

right to do so. 

• It is to the source's advantage to provide an EPA veto 

opportunity upfront when making a section 112(g) 

determination. This is because the title V operating permit 

process provides for EPA veto opportunity when new 

requirements are entered into the permit. If that 

opportunity has been provided, then the source can more 

confidently incorporate 112(g) requirements into its permit. 

EPA is also considering ways to reduce the administrative 

burden associated with such permit changes. 

Issue 28: Case-by-case MACT determinations must be streamlined, 

be based on information reasonably available to 

sources, and allow the use of MACT for similar sources. 

Response: 

• EPA agrees that case-by-case MACT determinations should be 

practical and based on reasonably available information. 

EPA is considering comments on its case-by-case MACT 

guidance and will address this issue in the final rule. 

39 
P.42 

Section 112 (j) 

Issues 29 and 30: 

Applications for section 112(j) limitations are due 12 

months after the section 112 (j) deadline (i.e., 30 

months after the section 112(e) scheduled promulgation 

date). Source category applicability must be defined 

before the section 112(j) deadline so that sources have 

notice that section 112(j) applies. 

Response: 

These issues are part of the ongoing litigation on the 

section 112 (j) rule. EPA does need to understand the issue 

better and will address it in the context of the litigation. 

In the final section 112 (j) rule, EPA committed to sharing 

information with sources as the section 112 (j) deadline 

approaches and information about a source category has been 

gathered, or EPA has made a presumptive MACT determination. 

EPA intends to work with stakeholders should section 112 (j) 

ever become a reality for a source category. 

40 
P.43 

EPA'S RESPONSE TO ISSUES RAISED BY INDUSTRY ON 

CLEAN AIR ACT IMPLEMENTATION REFORM 

Enhanced Monitoring 

Issue 1: • 

• EPA's proposed "enhanced monitoring" ("EM") regulations have 

a number of serious flaws that have not been adequately 

addressed by the Agency. 

• The proposed program focuses improperly on monitoring 

to detect small changes in emissions, which may be the 

result of the normal variability associated with the 

underlying process, emission control technology, and 

analytical methods, rather than on monitoring to detect 

large, and environmentally significant, excess 

emissions incidents. 

• The proposed program, which requires development of 

complicated and controversial new monitoring 

requirements on a case-by-case basis through the Title 

V permitting process, would impose huge burdens on 

industry and the state; would "gridlock" the permitting 

process; and would inevitably lead to the imposition of 

inconsistent requirements on similar sources. 

• The proposed program would impose enormous compliance 

costs on industry, that easily could exceed $1 

billion/year, with little, if any, environmental 

benefit. 

• Despite Agency claims to the contrary, the proposed 

program would increase the stringency of many emission 

standards, contrary to law. 

• The proposed program would severely restrict emissions 

trading, averaging and netting, thereby compromising 

use of market-based incentives --a critical tool for 

implementation of the 1990 amendments. 

• Monitoring approaches that would satisfy the criteria 

in the proposed rule are simply not available for some 

source categories (e.g., fugitive emission sources and 

batch processes). For other source categories (e.g., 

those subject to mass limits), companies would be 

required to use undemonstrated techniques. 

• EPA should seek an extension of the deadline to engage in a 

meaningful stakeholder dialogue to develop a reasonable EM 

program. In order to allow time for this dialogue to 

unfold, the Agency must seek a 12 month extension of the 

April 30, 1995 court-ordered deadline. 

41 
P.44 

EPA should propose a reasonable EM program with the 

following elements: 

• The Agency should develop an EM program that uses 

legislative rulemakings - not the Title V permit 

program - as the process for determining EM for any 

emission standard that was originally established 

through rulemaking. 

• At most, the Agency should use the current EM 

rulemaking to articulate criteria for identifying 

emission standards with insufficient monitoring, and 

criteria for enhancing them to the point of 

sufficiency. The Agency could also use the current 

rulemaking to establish a schedule with deadlines for 

completing a review of existing standards, under an 

appropriate prioritization scheme. 

• The criteria articulated in this rulemaking should: 

• Establish as a goal selection of monitoring 

techniques that will provide data sufficient to 

prevent and detect large excess emission 

incidents, which have significant environmental 

impact, rather than monitoring techniques to 

detect small changes in emissions. 

• Include adequate safeguards to address costs and 

cost-effectiveness (1) by clearly providing for 

selection of the least-cost method that satisfies 

the criteria, and (2) by providing for rejection 

of any monitoring methods as EM that result in 

unreasonable costs. 

• Require use only of demonstrated monitoring 

techniques. 

• Provide clear and unequivocal safeguards to assure 

that changes in monitoring methods will not change 

the stringency of the standard. These safeguards 

would include requiring consideration of the 

following: (1) the need for appropriate averaging 

times to take into account variability in 

emissions; (2) the need for a change in the 

numerical expression of standards; and (3) the 

need to establish start-up/shutdown/malfunction 

exemptions. 

42 
P.45 

Once the criteria and schedule are established, EPA 

(for Federal standards) and the states (for state 

standards) would apply the criteria, and identify 

insufficient monitoring compliance methods. These 

standards would be candidates for rulemaking 

proceedings to enhance them. 

Response: 

EPA agrees and has withdrawn from the Office of Management 

and Budget its proposed rule for enhanced monitoring. It 

has received a 60-day extension of the court-ordered 

deadline and intends to seek a further extension of at least 

a year after it holds a meeting with interested 

stakeholders. EPA plans to issue a Federal Register 

notice that announces the process it intends to follow in 4 « 

reproposing and issuing the final enhanced monitoring rule. 

EPA has withdrawn the enhanced monitoring protocols from the 

Technology Transfer Network (TTN) computer bulletin board 

and in the upcoming Federal Register notice will clarify 

that those protocols are no longer applicable. 

On May 31, 1995, EPA is meeting with representatives of 

industry, states and environmental groups to discuss further 

options for developing a new flexible approach for the 

enhanced monitoring rule. 

EPA hopes to develop an approach that will build on the 

requirements of existing rules and ensure that the 

environmental result expected from those rules are being 

achieved. 

One approach EPA is considering would focus on improving 

current pollution control equipment operating and 

maintenance monitoring requirements. An enhanced operating 

and maintenance monitoring protocol would require that a 

source owner provide documentation that it has operated and 

maintained a pollution control device or process operation 

in accordance with established, reliable operating and 

maintenance practices and that any necessary corrective 

actions have been implemented to ensure that emissions have 

been reduced. At the May 31 stakeholders meeting, EPA 

anticipates discussing this option as well as any other 

options or issues raised by stakeholders. 

43 
^.46 

EPA'S RESPONSE TO ISSUES RAISED BY INDUSTRY ON 

CLEAN AIR ACT IMPLEMENTATION REFORM 

Potential to Emit 

Issue 1: Federal Enforceability: EPA should eliminate "Federal 

enforceability" in determining a source's potential to 

emit because: 

-- The requirement has no legal basis. 

-- The requirement needlessly forces sources with realworld maximum emissions potential below the statutory 

thresholds to comply with the burdensome requirements 

designed for "major" sources or to attempt to render 

existing controls and limitations "federally 

enforceable" by entering a tedious and costly -- and 

often unavailable -- federal documentation process. 

Moreover, existing sources face lengthy and costly 

delays when making even routine changes because of the 

need to create or revise "federally enforceable" 

restrictions. 

-- The requirement forces states to expend significant 

time and resources to develop and administer processes 

for non-major sources to render controls and 

limitations "federally enforceable." 

-- The requirement is unnecessary for effective 

enforcement. States and localities can enforce 

restrictions imposed by their laws and permits. 

Moreover, if a source operates above a statutory 

threshold without complying with applicable "major" 

source requirements, EPA and citizens have enforcement 

tools available. 

Response: 

• EPA is currently in litigation on the federal enforceability 

issue. In that litigation EPA has taken the position that 

it has legal authority to require federal enforceability. 

• Equally important, EPA believes that the provision for 

federal enforceability makes sense. For sources that have 

the capability to emit major amounts, and avoid federal 

permits and federal emission reduction requirements by 

restricting their operations, EPA believes it is reasonable 

to ensure adherence to those restrictions by providing that 

they be enforceable by the federal government and citizens. 

The requirement for federal enforceability increases the 

credibility of the system by giving EPA the opportunity to 

address patterns of noncompliance. It also provides 

citizens an opportunity to ensure that sources in their 

44 
communities are not inappropriately avoiding requirements 

that, if complied with, would decrease exposures to 

hazardous pollutants. 

• There are many ways to ensure that the creation of federally 

enforceable restrictions does not create a burden on . 

industry. In a January 25, 1995 guidance memorandum, EPA 

identified approaches such as general rules and general 

permits that allow restrictions to be created for large 

numbers of sources without having to resort to individual 

permits. To ensure that states have sufficient time to 

implement any needed approaches, EPA has provided a two-year 

transition period. Under this transition policy, sources 

emitting less than 50 percent of the major source threshold 

would not be required to get permits but must only keep 

records reflecting their actual emissions. Sources emitting 

more than 50 percent of the major source threshold, and for 

which there are state permits limiting their emissions to 

less than major amounts, can submit a certification 

accepting the state limits as federally enforceable. 

Issue 2: The transition policy announced by EPA on January 25 is 

not an adequate response to the public and private 

burdens imposed by the "federal enforceability" 

requirement. 

Response: 

• EPA believes that the transition policy eliminates any 

short-term administrative burden that would be imposed by 

the requirement. The policy does require sources emitting 

less than the 50 percent threshold to keep appropriate 

records of their operations sufficient to demonstrate that 

the 50 percent level is being adhered to. In most cases, 

such records will be related to the amount of materials used 

or processed and should not require any new recordkeeping 

activities. EPA does not intend to second-guess the actual 

emissions findings of sources and states. Sources that are 

very close to the major source threshold must merely certify 

that they have a permit that effectively restricts emissions 

and accept the limits in the permit as federally 

enforceable. 

• EPA believes that the various approaches to eliminating the 

burden over the longer term (limitations by rule, general 

permits, clarifications regarding realistic worst-case 

activities) should be in place by the end of the transition 

period. EPA is open to reviewing this assessment as the end 

of this 2-year period approaches. EPA is also giving 

serious consideration to permanently extending the exemption 

for sources emitting less than the 50 percent cutoff. 

45 

« A 
P.48 

Issue 3: EPA should develop general principles for realistic 

determinations of "maximum design capacity" which 

recognize inherent physical, operational, and other 

restrictions-. 

Response: 

• EPA agrees that realistic assumptions of this nature need to 

be made and has initiated an effort to evaluate several 

categories of small sources (grain elevators, gas stations, 

automobile body shops, and emergency generators). EPA plans 

to follow up this effort with more general guidance on 

principles that can be used to evaluate additional 

categories. 

Issue 4: EPA should allow sources to rely on objectively 

reasonable estimates of potential to emit, and issue 

presumptively acceptable methods for estimating 

potential emissions. 

Response: 

EPA agrees that sources should use objective and reasonable 

methods, and that a general hierarchy for these methods has 

been established. Source-specific testing is generally 

preferred. Where no source-specific information is 

available or feasible to obtain, tests on similar facilities 

or emission factors can be used. 

Issue 5: 

Response: 

EPA should adopt an enforcement policy which does not 

penalize a source when post hoc application of an 

updated estimation method results in a determination 

that the source's potential to emit, as calculated 

today, would exceed an applicable threshold, where 

reliance on the prior estimation method was, at the 

time, objectively reasonable. 

(Refer to Issue 2 in the Operating Permit Program secti 

for response to this issue.) 

on 

46 
EPA'S RESPONSE TO ISSUES RAISED BY INDUSTRY ON CLEAN 

AIR ACT IMPLEMENTATION REFORM 

Fugitive Emissions 

Issue 1: EPA must apply the 302(j) rulemaking requirement across 

the board to all Clean Air Act programs that apply to 

major sources, including the section 112, title V, PSD, 

and nonattainment NSR. 

Response: 

• EPA continues to conduct section 302(j) rulemakings where 

required under the Act, but EPA believes section 112 does 

not require such a rulemaking. A court decision on this 

legal issue should be issued shortly. EPA is interested in 

hearing specific concerns about the technical feasibility of 

measuring fugitive HAP emissions, and in providing guidance 

in this area. 

Issue 2: In a section 302(j) rulemaking, EPA must demonstrate 

that the benefits of regulating a source of fugitive 

emissions would outweigh the costs of such regulation. 

Response: 

• EPA historically has considered economic feasibility in 

rulemakings conducted under section 302(j). 

Issue 3: EPA should issue guidance regarding the proper 

treatment of co-located sources of fugitive emissions 

that have not been listed pursuant to section 302 (j). 

EPA committed to issue this guidance promptly in a 

February 10, 1995 motion to the D.C. Circuit. 

Response: 

• EPA has committed to issue this guidance in May 1995. i 

47 
P.50 

Attendees at Meeting with 

Assistant Administrator Mary Nichols 

April 12, 1995 

EPA: 

1. Mary Nichols - OAR/IC 

2. David Doniger - OAR/IC 

3. Bill Tyndall - OAR/IC 

4. Rob Brenner - OAR/IC 

5. Nancy Sutley - OA 

6. Alan Eckert - OGC 

7. Michael Winer - OGC 

8. Greg Foote - OGC 

9. Lydia Wegman - OAQPS 

10. Jeff Clark - OAQPS 

11. John Seitz - OAQPS 

12. Fred Dimmick - OAQPS 

13. Mike Trutna - OAQPS 

14. Tim Smith - OAQPS 

15. Kathie Stein - OECA 

16. Winston Smith - Region IV 

17. Julie Domike - OECA 

18. Jim Ketcham-Colwill 

Industry Representatives: 

1. Gena Ashe - AT&T 

2. Robert D. Bessette - Council of Industrial Boiler Owners 

3. Dorothy Bowers - Merck & Co. 

4. Shannon Broome - GE 

5. Bill Burkhart - The Procter & Gamble Company 

6. Kevin Butt - Toyota, Mgr of Envt'l Affairs 

7. Georgia Callahan - Texaco Inc. 

8. Nancy Cookson - Chemical Manufacturers Association 

9. Ted Cromwell - Chemical Manufacturers Association 

10. John Dege - E.I. duPont de Nemours & Co., Inc. 

11. Edan Dionne - IBM 

12. Sherry Edwards - SOCMA 

13. Michael Faulkner - Fluor Daniel 

14. Joseph Flaherty - Kaiser Aluminum 

15. David Friedland - Beveridge & Diamond 

16. Barry Garelick - Solar Turbines, Inc. 

17. Denise Grant - Chemical Manufacturers Association 

18. Julia A. Hatcher - Latham & Watkins 

19. Maureen Healey - The Society of the Plastics Industry, Inc, 

20. Patricia Hill - Georgia-Pacific Corporation 

21. Joseph C. Hovious - Union Carbide 

22. Mike Innerarity - Tenneco Gas 

23. Ed Jaffee - Primary Glass Manufacturers Council 

24. Douglas Kliever - Cleary, Gotlieb 

WA01/213129.1 
P.51 

f .,.•; 

25. Chuck Knauss - Swidler & Berlin 

26. Karil Kochendorfer - American Textile Manufact. Institute 

27. Theresa K. Larsen - National Association of Manufacturers 

28. Bill Lewis - Morgan, Lewis & Bockius 

29. A. Walt Long - Owens-Illinois 

30. Ken Markowitz - Kilpatrick & Cody 

31. Jack McClure - Shell Oil Company 

32. Michael McCord - Morgan, Lewis & Bockius 

33. John Medley - Mobil Oil Corporation 

34. Tim Mohin - Intel Government Affairs 

35. Jeffry C. Muffat - 3M 

36. Henry Nickel - Hunton & Williams 

37. Frank Partee - Ford Motor Co., Dearborn, MI 

38. Paul Patlis - United Technologies Corporation 

39. Bill Pedersen - Shaw, Pittman 

40. Dick Penna - Van Ness Feldman 

41. Richard C. Phelps - Eastman Chemical Company 

42. Michael Pucci - AT&T 

43. Patrick Rahrer - Hogan & Hartson 

44. John E. Reese - American Petroleum Institute 

45. Leslie Ritts - NEDA/CARP 

46. Arline M. Seeger - Morgan, Lewis & Bockius 

47. Eva Seydell - United Technologies Corporation 

48. Quin Shea - National Mining Association 

49. Ellen Siegler - American Petroleum Institute 

50. Susan Smith - Owens-Illinois 

51. Corey Snyder - The Procter & Gamble Company 

52. Scott Styles - Air Products and Chemicals 

53. Brian Taranto - Exxon Chemical 

54. Dina Vizzaccarro - AAMA, Washington Office 

55. Rasma I. Zvaners - Chemical Manufacturers Association 

56. 

57. 

58. 

59. 

WA01/213129.1