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EPA's proposed rule allows an averaging approach for vpv -

covered portions of a plant, ss£ PP- • EP *

 i 8 als o proposing 

a broader averaging proposal, as eet forth below. Significantly, 

this latter averaging scheme is not being proposed as an 

alternative to the averaging approach, described above. Rather, 

the two approaches are entirely complimentary. However, because 

the legal issues posed by the broader averaging scheme differ 

appreciably from those implicated by the more narrow averaging 

proposal, EPA believes that a separate discussion of the former 

is warranted. 

The broad averaging proposal relies upon the legal theory, 

developed by EPA, which would permit compliance with the __f>N MACT 

standard (or, for that matter, with 'any other MACT standard to be 

developed by EPA) by averaging emissions from points located 

anywhere within an entire contiguous facility, which contains 

HOH-covered processing units. EPA believes that this approach is 

legally permissible under section 112 of the Clean Air Act 

Amendments of 1990 and would also result in desirable policy 

consequences. 

Having,carefully analyzed Section 112 and its legislative 

history, EPA concluded that there is a difference between the 

term "source in a category or subcategory," used in Section 112 

(d), and the term "source," used in Section 112 (i). To l^egin 

with, EPA believes that the use of different words by Congress in 

these two subsections was not accidental and reflected a yellthought-out Congressional intent, needs cite. Specifically, for 

purposes of establishing emissions standards under subsection 112 

(d), Congress expected EPA to identify specific production lines, 

pieces of equipment, etc., located within major stationary 

sources or area sources, and to treat them as sources only for 

the purposes of subsections 112 (d) (3) (A) and (B), i__j_u, *or the 

purposes of determining what are the average emission limitation 

achieved by the best performing twelve percent of existing 

sources or average emission limitation achieved by the five best 

performing sources, since the term source was used in the 

subsection 112 (d) for a distinct and unique purpose, the, 

relevant statutory language contains a qualifying set of words -

"in a category or subcategory" - appended to the word "source." 

Significantly, in subsection 112 (i), the relevant statutory 

language contains the tern "source" — a fact that, EPA believes, 

clearly reflected the congressional intent that, for purposes of 

subsection 112 (i), the term source was to be used in itsi 

traditional meaning, which encompasses an entire plant, jit vould 

bo. helpful to list several regulations where EPA defined the term 

aou^ce to include an entire facility. This reading is supported 

by the fact that the definitions of statutory terms, set Iforth in 

subsection 112 (a), contain the traditional definitions qf such 

terms as "major source", "stationary source", etc. Undeii the 

EPA's statutory construction, the statutory language "any 

emissions standard, limitation, or regulation promulgated under 
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this £112] section and applicable to a source" describes all of 

the existing MACT standards, established under subsection 1|12 

(d) , and applicable to a source, which contains within it 

"sources in a category or subcategory" (j.e,. production lJ|nen, 

pieces of equipment, etc. _ covered by such MACT standards. 

EPA also notes that, in its "early reductions" rule, it 

adopted a plant-wide definition of source. §sa. 56 FR 27, 342 

(June 13, 1991) —an early indication that the agency believed 

that an entire contiguous facility could, be considered to be a 

source for purposes of compliance with the requirements of 

Section 112* EPA also is mindful of tbe fact that it has 

traditionally enjoyed wide latitude in coming up with diverse 

definitions of the term "source," depending on what regulatory 

objectives were Implicated. This congress ie well aware o£ this 

fact, and EPA's considerable discretion in this area has been 

affirmed by the court». needs cites. in the present instance, 

EPA believes that the statutory analysis described above, can be 

sustained under the first prong of the Chevron analysis. 

Alternatively, this legal theory can be supported by the fpll 

weight of Chevron discretion, available to EPA under Sectipn 112. 

Under its broad averaging approach, EPA would make no 

changes in the way it has identified categories and subcategories 

of sources ln the HON and devised appropriate emission standards 

for then, nor in the way it would prescribe future emissijon 

standards for other eaission categories or subcategories. ' For 

compliance purposes, however, if an owner or operator does not 

wish to control a particular HON-covered emission point to the 

level that would result in the compliance with the relevant HON 

emission standard, the extra emissions from that point could be 

offset by emissions reductions greater than what is required by 

any standard then in effect under Section 112 at one or m?re 

other emission points within the entire stationary source; In 

addition, emissions averaging would be allowed across all!the 

emission points within the entire plant, including the so<jat! 

source category as well as points not yet covered by any #ACT 

standard. 

Aa such, emissions from process vents, wastewater operation, 

storage vessels and transfer operations could be averagedi among 

themselves or with other emissions points within the entire 

stationary source, in order to provide as much flexibility aa 

possible. However, distinction would be made between emijssion 

points physically similar to emission points covered under the 

HON or any other MACT and all other emission points. Fori the 

former, to participate in the averaging scheme, they must comply 

with whatever compliance routines have been established Ujnder the 

SOCMI HON or other relevant MACT. For the latter, to participate 

in averaging, the source must petition EPA to establish ajn 

appropriate compliance routine. To be sure, once EPA establishes 

such a compliance routine for any new type of an emission point, 
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121005 

all similar eaissions points located within any sources car 

participate in the averaging, so long as they use the EPAapproved compliance routine. EPA solicits comment also on how it 

would verify the baseline for unregulated emission points, and 

how it would structure the averaging compliance process to | assure 

the standard as a whole remains enforceable. One possibility to 

consider would be to use the average emissions from such emission 

points over some representative time period as their baselines. 

As explained above, while equipment, leaks are included into 

SOCMI sources, they cannot at this time be included in emissions 

average. Under this alternative, EPA would expeditiously pevelop 

methods to assign allowable emission levels to particular leak 

points or groups of leak points, and, even .without awaiting for 

any individual petitions, vould similarly develop methods cor 

calculating emissions from types of emission points not regulated 

by HON. 

Under the broad averaging approach, emission reductions from 

emissions points not covered by the HON would be usable to 

generate credits, subject to the previously discussed limitations 

and any limitations added in any other MACT standard applicable 

to the relevant emission points. Credits could be generated at 

any time from non-HON emission points until they become subject 

to a MACT standard. When they become subject to a MACT standard, 

the future value of reductions at those emission points w^uld be 

governed by the emission standards required by the new MACfT. 

Stated differently, the offsets available from such points would 

have to be recomputed using the new baseline established for 

them. Each future MACT standard must contain a floor | 

calculation. To the extent that points covered by these later 

standards have been already controlled for the purposes of 

participating in an averaging scheme, that relates to the[ 

compliance with an earlier standard, the floor for the later 

standard by be more stringent. As future MACT standards are 

adopted, EPA would attempt to maximise averaging opportunities 

and therefore minimise 'compliance delays and costs. j 

EPA believes that the broad averaging scheme, described 

above, provides significant policy benefits. To begin with, it 

would enable sources to achieve the same environmental gains, as 

under the more narrow averaging proposal, but at significantly 

reduced costs. Second, by inducing sources to make costeffective reductions throughout entire facilities, EPA wcjuld be 

in a better position to establish subsequent KACTs. In fact, in 

all cases, when such MACTs are established under subsection 112 

(d), the MACT "floor" would be tighter than otherwise wovld have 

been the case if the emission points out3ide of the already 

covered MACT categories vould have stayed uncontrolled. Last, 

but not least, EPA believes that the utilization of the broad 

averaging scheme may result in the discovery of emission points 

within facilities that otherwise might have been overlooked by 

EPA and state regulators. This last point is supported 1j>y the 

positive experience with the broad averaging schemes in the State 
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of California. 

Ray, set forth below is the appropriate language for tjhe 

last substantive language insert. It is aB follows: 

"fii) Information reasonably similar to information 

regarding emissions averaging required by any ^andard TM 

under Section 112. The Administrator may request any 

related supplemental information within 30 days after 

submission." 

•

w

" i , proposed 

reasonably 

[gooi