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# OAR Box 1781 Prepped by Ollie Stewart



### Document

Number: 

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Docket Number: 

# A-90-3 7

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Wh y Chang e a G * d Thing ?

By : LeighC . Haye s Senio r Progra

m Manage r Radia nCorporatio n Researc hTriangl e Park , Nort hCarolin a 2770 9

Jun e 13 , 198 9P. 3

INTRODUCTION

O nDecembe r 1 , 1987 , Crai g Potter , the nth e Assistan t Administrato r fo r EPA' s Offic e o f Ai r an dRadiation , issue da mem o (th e "Potte r memo" ) indicatin g tha t problem s wit hNS Rprogram implementatio nnecessitat e progra m change s i nth e followin g fou r areas , a s suggeste db y th e NS RTas k Forc e tha t Mr . Potte r created :

1 . Trackin g Permi t Action s - EPA Regiona l Office s t o be involve dwit h al l majo r andsome mino r sourc e permi t actions . 2 . BAC T Determinatio n- EPA t o procee dwit h"Top-Down " approach , becaus e o f ".. . poorl y documente do r biase d... " decision s propose d b y PS D applicants . 3 . Trainin g - Par t o f th e problem s ma y b e du e t o lac k o f trainin g an d EPA i s t o procee dwit ha new , update droundo f Ne w Sourc e Revie w workshops . 4 . Polic y

an dGuidanc e - Dedicatio no f on e FT E (full-tim e equivalent ) t o addres s polic y

issue s an

denhanc e guidanc e communication . Prio r t o thi s memo , EP A ha dprepare dtwo othe r guidanc e items onBAC T decisionmaking : o 197 9 memo from

Davi dHawkins , the nAssistan t Administrato r fo r Air , Noise , an

dRadiation , t o EPA

regiona l offices ; an

d

o EPA' s 198 0 PS D Worksho pManual . Th e Hawkin s mem o describe dsome genera l guideline s fo r BAC T decisions . Th e guidanc e i nEPA' s 198 0 PS D Worksho pManua l i s mor e specifi c an ddescribe s th e "bottom-up " process , 1 nwhic hth e applicabl e emissio ncontro l minima ar e identifie dan

dmor e stringen t control s analyze da s BAC T candidates . Numerou s Administrato r remand s o f BAC T decision s hav e occurre dove r th e pas t fou r years--Nort hCounty , H-Power , Pennsauken—largel y du e t o deficient , poorl y documente dBAC T analyses . Thes e remand s plu s EPA revie w o f pas t state-issue d PS D permit s hav e cause dEPA t o overhau l th e proces s that , i n EPA' s opinion , wil l resul t 1 nth e BAC T decision s envisione db y th e Clea nAi r Ac t amendment s o f 1977 .P. 4

BACKGROUN D - How

W e Go t Her e First , let' s tak e a loo k a t a histor y o f PS D permit s tha t i s somewha t responsibl e fo r EPA

concludin g tha t th e BAC T decisio nproces s need s repair . Durin g th e perio d fro

m 197 8 t o 1981 , abou t two-third s o f al l PS D permits , a s show ni nFigur e 1 , wer e reviewe d an d directl y

processe d b

y EPA . I nthe nex t three-yea r period , Stat e an d loca l ai r pollutio nagencie s too k th e lead i nPS D permi t reviews , t o abou t th e sam e degree . I norde r t o judg e th e histor y o f the BAC T decisio nprocess , let' s loo k a t BAC T decision s durin g eac ho f th e two three-yea r periods , 1978-198 1 an d 1981-1984 . A s mos t peopl e know , applicabl e New Sourc e Performanc e Standard s (NSPS ) establis hth e minimu m leve l o f stringenc y

fo r BAC T decisions . Usin g thes e nationall y uniform standard s a s a benchmark , Tabl e 1 show s th e percentag e o f BAC T decision s fo r Particulat e Matte r (PM) , Sulfu r Dioxid e (S0 2 ) , an

d Nitroge nOxid e (N0 X ) , tha t wer e mor e stringen t tha nthei r applicabl e NSPS .

TABL E 1 . PERCENTAG E O F BAC T DECISION S MOR E STRINGEN T

THA N APPLICABL E NSPSs 2 " 5

Pollutan t Perio d £ M

SQ g NQ „ 1978-198 1 3 1 3 2 1 5 1981-198 4 3 9 4 7 1 5

Ther e ar e man y

factor s tha t Influence d BAC T decision s an d thei r stringency , th e mos t Importan t o f whic hi s th e differen t mi xo f sourc e type s receivin g PS D permit s durin g thes e two periods . Th e 1978-198 1 time fram e wa s heavil y influence d b

y th e utilit y

an d petroleu

m product s industries , an d PS D permit s Issue d betwee n1981-198 4 wer e dominate d b y th e natura l ga s an

d food processin g industries . Thus , i t 1 s difficul t t o dra w conclusion s abou t th e relativ e difference s i nth e value s i nTabl e 1 . Probabl y th e bes t conclusio n t o dra w i s t o sa y

tha t abou t one-thir d o f BAC T decision s fo r PM , one-thir d t o one-hal f o f BAC T decision s fo r S0 2 an d one-sevent ho f BAC T decision s fo r N0 X wer e mor e stringen t tha napplicabl e NSPS .Oi . _ 1

.

•

Stat e an d Loca l Agencie s 12 % \^ - Contractors ^ ^ 12 % v ^^^-

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/ \ I X

. l' l / x . I \ 1 Contractor s \

1 1 \ 1 1 19 % ^

EP

A 1 | EP A \ J 1 

# \ ^^

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# / 1 24

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Stat

e an d / \ / \ / Loca l Agencie s / \ / \ X 64 ° / o /



## 1978-198 1 1981-198 4

Figur e 1
. Distributio n o f NSR/PS D Permi t Applicatio n

Reviewer s 3P. 6

Th e BAC T decisio nproces s endorsed b y EP A during the perio

d fro m 1981-198 4 wa s th e bottom-up approac ha s describe d i nEPA' s 198 0 PS D Worksho p Manua l and , to varyin g degrees , wa s als o endorse d an d practice d b

y mos t permitting authorities . During the prio r period , the genera l framewor k fo r the BAC T decisio nproces s wa s establishe d b y the 197 9 Hawkin s memo , whic hdescribe d decisio ncriteri a muc hlik e the 198 0 guidance . I n1985 , the EP

A examine d agai nthe BAC T decision s durin g th e 1981-198 4 period . Pertinen t amongs t thi s examinationwer e tw o analyses : 1 . Th e frequenc y

wit hwhic hBAC T analyse s encompasse d considerationo f mor e stringen t contro l options ; an d
2 . Th e additiona l emission s reduction s potentiall y achievabl e wit hmor e stringen t BAC T decisions . Wit hregar d t o th e firs t analysis , EP A wante d t o determin e i f BAC T decision s wer e mad e afte r detaile d consideration s o f alternatives . Detaile d consideration s mean s a careful , quantitative analysi s o f the impact s o f mor e stringen t contro l options . Thi s doe s no t includ e a subjective discussio no f alternative s base d o

nunsubstantiate d claims . Tabl e 2 shows th e frequency wit hwhic hBAC T analyse s considered , a s discusse d above , alternative controls .

Tabl e 2 . Percentag e o f BAC T Decision s Performed Wit h Consideratio no f Alternativ e Control s Numbe r o f Contro l Alternative s Pollutan t Considere d 0 1 2 3 4 Mor e Tha n4 

## £1

1 8 4 4 9 2 1 0 

### ®Z

8 4 8 4 2 1 < 1 

### « K

7 5 9 6 8 1 1 

## < £

9 5 3 2

—

—

— VO

C 9 2 1 5 1 0 1P. 7

Eithe r o r bot ho f two conclusion s ca nb e draw nfro m Tabl e 2 : 1 . PS D applicant s wer e generall y proposin g stringen t controls , leavin g few alternatives , i f any , t o b e considered ; o r 2 . PS D applicant s generall y faile dt o presen t quantitativ e analyse s o f contro l option s mor e stringen t tha npropose dBACT . A nexaminatio no f th e stringenc y o f BAC T decision s i s necessar y t o hel p determin e whic ho f thes e conclusion s i s mos t correct . Th e level s o f BAC T stringenc y wer e determine db

y comparin g BAC T decision s mad e betwee n1981-198 4 t o two benchmarks : 1 . Th e emission s leve l tha t coul dhav e bee nallowe dinth e absenc e o f BAC T requirements ; an

d
2 . Th e emission s level s tha t woul dhav e resulte di f BAC T decision s reflecte dth e mos t stringen t controls . Accordingly , Figur e 2 show s thre e value s fo r PM , SO- , an dNO emission s associate dwit hPS D permit s issue di nth e perio d1981-1984 : 1 . Th e middl e ba r ineac hbo xshow s th e leve l o f emission s associate d wit hactua l BAC T decisions ; 2 . Th e ba r o nth e left , labele d"Maximu m __^_

_Emissions, " show s th e leve l o f emission s tha t woul dhav e hypotheticall y resulte dha dBAC T no t applie d an

dal l source s wer e permitte da t thei r applicabl e NSP S o r SI P allowabl e rates ; an d 3 . Th e ba r o nth e right , labele d "Mos t Stringen t BAC T ^_

_ Emissions, " show s th e leve l o f emission s tha t hypotheticall y woul d hav e resulte dhadal l BAC T decision s bee nequa l i nstringenc y

t o th e mos t stringen t BAC T decisio nfo r simila r sourc e an demissio nuni t types , considerin g fuel s an draw materials . Examinatio no f Figur e 2 show s fo r PM an dSO - tha t BAC T decision s resulte din emission s reduction s significantl y beyondotherwis e applicabl e emissio n regulations . Th e same thin g coul dno t be sai d fo r NO emission s wher e mos t emission s subjec t t o BAC T wer e permitte da t thei r NSP S o r SI P allowabl e rate . Th e bar s o nth e righ t i neac hgraphindicat e tha t mor e stringen t BAC T decision s coul dhav e bee nmad e inmany cases , resultin g i nsignificantl y greate r emission s reductions . Thus , th e mor e appropriat e conclusio nfo r th e Tabl e 2 dat a i s th e belie f tha t PS D applicant s generall y faile dt o presen t an

d documen t consideratio no f applicabl e contro l option s mor e stringen t tha nth e propose dBACT .P. 8

MAXIMU M m

EMISSION S BAC

T P M EMISSION S MOSTSDalNOGX T BAC T I' M EMISSION S

SO ,

SO , (MISSION S BAC T SO , (MISSION S MOSTSTHlNtHN T .BAC T SO , (MISSION S

NO i

MAXIMU M NO
. (MLSSMN S SAC T NOx (MISSION S MOBTSTWNQOt T BAC T NO * (MISSION S


### Figur e 2
. BAC

T Emission s Level s Compare d wit h Potentia l Maximu m Emission s an d Emission s Level s Resultin g fro m Applicatio n

o f Mos t Stringen t BACT 1P. 9

Thi s conclusion , couple dwit hothe r factors , likel y contribute dt o a re-examinatio nb

y EPA o f alternativ e approache s t o BAC T decisionmaking . Th e goa l o f thi s re-examinatio nwa s t o develo pan dInstitut e a proces s tha t provide da grea t dea l o f incentiv e fo r PS D applicant s t o eithe r examin e i n detai l mor e stringen t contro l option s o r t o propos e th e mos t stringen t on e an d avoi dth e nee dt o conside r alternatives . A secondan

dequall y

importan t goa l
wa s t o leav e intac t bu t refin e th e economic , energy , an denvironmenta l criteri a fo r BAC T decisionmaking . Usin g th e Administrator' s remand s a s tes t
cases , EPA

conclude dtha t th e "top-down " proces s i s th e mos t effectiv e mean s o f achievin g th e BAC T result s contemplate d b y Par t C o f th e Clea nAi r Act .

BAC T DECISIO N

TRADE-OFF S Init s evolvin g top-dow nprocess , EP

A i s attemptin g t o provid e guidanc e withou t specifyin g rigi dcriteri a tha t limi t th e flexibilit y o f BAC T decisions . Ho w

wel l thi s ca nb e done , onl y time an dcircumstanc e wil l tell . However , let' s tak e a loo k a t th e fundamenta l concept s o f th e PS D program , includin g BACT , t o gai nfurthe r insigh t int o th e rol e tha t BAC T play s i n decision s mad e by

majo r sources . Show

ninFigur e 3 i s a hypothetica l exampl e o f a nexistin g majo r sourc e tha t ha s experience dIncrease d capacit y utilizatio n.an

d Increase d annua l emission s over th e pas t fou r t o fiv e year s du e t o economi c growth . Becaus e o f thi s productio ngrowth , i t now want s t o construc t andexpan dIt s capacit y an da s a resul t wil l Increas e emission s b y 20 0 tons/year , a s calculate dwithou t stringen t controls . A t thi s point , i t ha s two options : 1 . Obtai na PS D permi t an dinstal l BAC T onemissio nunit s contributin g t o th e increase demissions ; o r 2 . "Net-out " o f revie w b y eithe r retrofittin g control s ono r cuttin g bac k us e o f existin g unit s (obviousl y th e sourc e woul dno t choos e th e latte r option ) suc htha t th e resultin g transaction , whe n combine dwit hth e propose dincrease , wil l no t b e a majo r modification . I f th e sourc e find s th e cos t o f BACT , whe ncompare dt o other , les s stringen t applicabl e contro l requirements , i s fa r greate r tha nth e cos t o f retrofittin g control s t o existin g unit s t o reduc e emission s b y 20 0 tons/year , the nth eP.1 0

700 —

eo o — Propose d Increas e Subjec t t o PS D

500 —

40 0 —

30 0 —

20 0 — Emission s Increas e Ove r Pas t 4- 6 Year s

10 0

186 4 196

0 1968

Tim e 1967

Figur e 3
. Majo r Sourc e Seekin g t o Expan d

8P.1 1

sourc e ma y

choos e t o "net-out " o f PS D review . Thi s woul dallow economi c growt hwit hlittle , i f any , ne t increas e inemission s bu t emission s control s woul db e pu t o nol dunits , an dno t th e new

ones . BAC T decision s tha t ar e les s expensiv e tha nretrofi t control s provid e significan t incentiv e t o appl y fo r an dobtai na PS D permit , resultin g i nemission s growt htha t woul donl y be constraine db

y allowabl e PS D increment s o r othe r ai r qualit y standards . Shoul dman y

source s i nth e are a choos e th e PS D permi t option s whe nexpanding , th e availabl e PS D incremen t coul dbecome quickl y consume dan

dfutur e growt h woul db e blocke di nth e area . Thus , inorde r fo r anare a t o preserv e a margi n fo r futur e economi c growth , BAC T decision s mus t b e ver y stringen t 1

nthe absenc e o f a norderl y

system t o allocat e consumptio no f ai r qualit y resources . Stringen t BAC T decision s woul dpromot e a "net-out " i nsom e case s an

dminimiz e emission s andresultin g incremen t consumptio ni nothers . Intim e an

da s source s expandan dothe r growt hoccur s ina narea , PS D
source s ma y

findn o incremen t remainin g available . Th e onl y recours e the ni s to.retrofi t existin g unit s plu s instal l BAC T o nth e ne w an dmodifie dunits , an dincu r a significan t economi c burden . Thus , decision s mad e b y majo r source s wishin g t o expandar e a functio no f th e incrementa l cos t o f BAC T (ove r othe r applicabl e requirements ) versu s th e cost s t o retrofi t control s onexistin g units . Retrofi t contro l cost s are , i n turn , relate dt o th e stringenc y o f SI P requirement s fo r existin g sources . Followin g thi s logic , ther e woul dsee m t o b e some relationshi pbetwee nth e stringenc y

o f BAC T decision s an

dth e stringenc y

o f th e SI P fo r existin g source s o f th e sam e pollutant .
TOP-DOW N BAC T CRITERI A
EPA' s top-dow

nBAC T approac happear s t o b e consisten t wit hth e nee d t o manag e ai r qualit y

suc htha t ther e i s alway s a margi nfo r economi c growt h i nPS D areas . Thus , th e degre e o f incremen t consumptio nresultin g fro m a PS D projec t play s littl e rol e 1nth e criteri a EP A ha s suggeste dt o b e use d1nBAC T decisionmaking . Furthermore , th e economi c criteri a EP A 1 s suggestin g i nit s preliminar y

top-downapproac hfocuse s mainl y oncos t effectivenes s an d incrementa l cos t effectiveness , expresse d1 nterm s o f dollar s pe r to no f pollutan t emission s reduced . Whil e i t i s reasonabl e fo r thes e criteri a t o b eP.1 2 * 1

mos t important , considerin g th e trade-off s discusse d above , EPA ha s suggeste d usin g decisio n"benchmarks " base d onBAC T decision s mad e fo r simila r source s anywher e inth e countr y wit hlittle , i f any , consideratio no f loca l factors . Ye t th e exampl e cite d abov e indicate s tha t loca l SI P factor s shoul d play som e rol e inBAC T decisionmaking , eve ni f onl y t o establis hth e minimu m cos t effectivenes s fo r BAC T controls . Thes e factor s shoul d b e compare d wit hth e cost s o f SI P control s applicabl e t o existin g source s an d emission s unit s i

n orde r t o strik e a balanc e s o tha t neithe r favor s retrofi t ove r BAC T control s b y a wid e degree .

SUMMARY
N o doub t th e EP A

considere d th e top-dow nBAC T procedur e befor e issuing th e 198 0 guidance , bu t n o publicl y availabl e document s suppor t this . However , w e mus t recogniz e tha t th e NS Rpermittin g experienc e o f th e pas t 1 0 o r s o year s provide s th e underpinning s o f th e top-dow nprocess . Inothe r words , i t woul d hav e bee nimpossibl e t o implemen t th e top-dow nproces s bac k in198 0 becaus e o f th e relativel y few PS D permit s an

d decision s upo nwhic ht o bas e futur e BAC T decisions . Th e need s fo r stringen t BAC T decision s wer e recognize d earl y i nth e developmenta l stage s o f PS D an d it s Implementation . Inhi s recen t Iow a La w Revie w article , Crai g Ore nconclude d tha t "th e sponsor s o f PSD , though , see m t o hav e assume d tha t th e increment s wer e th e onl y mean s o f ensurin g tigh t BAC T determination s an

d thus , d o no t see

m t o hav e seriousl y

considere d alternative s t o th e increments. " Furthermore , i nhi s 197 9 BAC T guidance , Dav e Hawkin s state d tha t ".. . BAC T determination s [shoul d b e used ] durin g thi s initia l perio d t o conserv e th e remainin g increment s a s muc ha s possibl e unti l mor e systemati c [increment ] allocatio nmechanism s ar e pu t inplace. " I t appears , then , tha t BAC T wa s initiall y though t o f a s th e primar y technology-forcin g mechanis m o f PSD , unti l suc htime a s a neffectiv e incremen t allocatio nand maintenanc e program become s th e technolog y driver . Thi s infer s tha t greate r flexibilit y inBAC T decision s i s possibl e onl y b y institutin g incremen t maintenanc e o r allocatio nprograms . However , ver y few state s hav e develope d suc ha progra m an d EPA ha s faile d t o requir e o r giv e guidanc e fo r suc hmechanisms .

1 0P.1 3

Althoug hstringen t BAC T decision s wil l likel y dominat e th e future , permittin g agencie s mus t be give nth e latitud e an dflexibilit y

t o adjus t decision s somewha t accordin g t o issue s an dpolicie s tha t ar e mos t Importan t a t th e time . Th e prominenc e o f growin g environmenta l issue s tend s t o lowe r th e threshol dfo r definin g wha t i s a significan t impact , t o th e poin t wher e any . measurabl e impac t ma y

b e unacceptable . Fo r instance , soli dan dhazardou s wast e disposa l i s a majo r nationa l issu e an d"pollutio nprevention " I s a curren t polic y

tha t seek s t o prevent , rathe r tha nreduce , pollution . Extr a weigh t i na BAC T analysi s migh t b e considere dfo r contro l option s tha t produc e
n o solid , aqueous , o r hazardou s waste , althoug hthe y ma y no t b e th e mos t stringen t i nterm s o f ai r emissions . BAC T decisionmakin g mus t allow flexibilit y

fo r decision s t o suppor t suc hissues , eve nthos e tha t ar e mor e loca l t o th e PS D source . I f th e flexibilit y neede dt o conside r nationa l an d loca l issue s t o a greate r degre e i nBAC T decisionmakin g mus t b e accompanie db y a mechanis m

t o allocat e PS D increments , the nEPA shoul dmov e quickl y

forwar d t o provid e guidanc e fo r suc ha mechanism , thereb y allowin g stat e an

dloca l agencie s th e option-fo r greate r autonomy .

1 1P.1 4



### REFERENCE S

1 . Hayes , Baviell o an d Sugiyama , New

Source Review Permitting

Experience, 

### Pape r presente da t th e 79t hAnnua l meetin g o f the Ai r Pollutio n Contro l Association , Minneapolis , Minnesota , 1986 . 2 . Hayes , L . C , e t al. , Analysis of New Source Review Permitting 

### Experience, prepare dfo r U.S . Environmenta l ProtectionAgency , Augus t 198 2 (NITI S No . PB-83-115972) . 3 . Hayes , L . C , e t al. , Analysis of New Source Review (NSR) Permitting 

### Experience:

Part 2, prepare dfo r th e U.S . Environmenta l Protectio n Agency , Septembe r 1985 . 4 . Hayes , L.C . et al. , Analysis of New Source Review Permitting 

### Experience:

Part 3, prepare dfo r th e U.S . Environmenta l Protectio n Agency , August , 1986 . 5 . Oren , C . H. , Prevention of Significant

Deterioration:

Control Compelling

Versus Site Shifting, Iow

a La w Review , Octobe r 1988 , 

### pag e 100 . 6 . Hawkins , D . L. , Guidance for Determining

BACT Under PSD, mem

o to EP A 

### Regiona l Administrators , Januar y 4 , 1979 , pag e 12 .

1 2