BEFORE THE ADMINISTRATOR UNITED STATES ENV IRONMENTAL PROTEC TION AGENCY

IN THE MATTER OF ) ORANGE RECYCLING AND ETHANOL ) ORDER RESPONDING TO PRODUCTION FACILITY, PENCOR- ) PETITIONERS’ REQUEST THAT MASADA OXYNOL, LLC ) THE ADMINISTRATOR OBJECT ) TO ISSUANCE OF A Permit ID: 3-3309-00101/00003 ) STATE OPERATING PERMIT Facility NYSDEC ID: 3330900101 ) ) Issued by the New York State ) Department of Environmental Conservation ) Petition No.: II-2001-05 ) ____________________________________)

ORDER DENYING PETITIONS FOR OBJECTION TO PERMIT

The New York State Department of Environmental Conservation, Region 3 (NYSDEC) issued a modified state operating permit to Pencor-Masada Oxynol, LLC (Masada 1 ) on October 1, 2001, incorporating changes made pursuant to the Order of the Environmental Protection Agency (EPA) Administrator, dated May 2, 2001 (May 2001 Order). See66 FR 30904, June 8, 2001. 2 This Order was in r esponse to petition s received rega rding the initial pe rmit issued to authorize constr uction and opera tion of the Orange Recycling and Etha nol Production Faci lity in Middletown, NY. Th e modified Masada permit was issued p ursuant to title V of the Clean Air Act (CAA or the Act), 42 U.S.C. §§ 7661-7661f, CAA §§ 501-507, the federal implementing regulations, 40 CFR Part 70, and the New York State permitting regulations.

In October and November 2001, the EPA received four petitions from 14 different petitioners, requesting that EPA object to the issuance of the modified Masada permit. Specifically, we received separate petitions from Jeanette Nebus, Robert C. LaFleur, president of Spectra Environm ental Group, Inc . (Spectra), an d Deborah Glover

. We also receiv ed a fourth petition with 11 signatories: Talkini Alves, Vidal Milland, Kristine Hannon, Bridget Coppola, Nicole Young, Ka thleen House, Camp bell House, Susan Co hen, Debbie Carl isle, Roberta Constantino, and Elizabeth Collard.

Under section 505 (b)(1) of the Ac t, EPA may object to t he issuance of a permit on its

1 Pencor-Masada Oxynol, LLC is the cor porate owner of the Orange Recycl ing and Ethanol Production Fa cilit y to be buil t in Middlet own, New York. In the i nterest s of clar ity, t his Order uses the term “Masada” to encompass both t he corporate owner and the Middle town facil ity at issue her e. The phrase “the Masada permit” r efers t o the permit issued by NYSDEC for the Middletown faci lity.

2 The full text of t he Administrator’s May 2001 Order is avail able at http://www.epa.gov/region07/program s/artd/air/ti tle5/petitiondb/petiti ons/masada_decision2000 .pdf.

1own initiative if the Administrator find s that it is “not in com pliance with the a pplicable requirements of the [Act], including the requirements of an applicable [state] implementation plan.” See also40 CFR 70.8(c). The Act and EPA’s imple menting regulation s provide that, if the Administrator d oes not object in wr iting, “any person ” may petition the A dministrator to object to the permit. CAA § 505(b)(2); 40 CFR § 70.8(d).

In the May 2001 Order, I granted petitions from Spectra Environmental Group Inc. and Ms. Jeanette Nebus to object to the NYSDEC permit on two grounds: inadequate public notice with respect to the limits on the facility’s potential to emit (PTE) - specifically permit conditions 36 and 41 - and the applicability of the record keeping requirements of the Standards of Performance for Industrial-Commercial-Institutional Steam Generating Units (NSPS) Subpart Db. The remaining petitions were denied. Pursuant to the Order, NYSDEC reopened the comment period and, ultimately, issued the revised permit on October 1, 2001. NYSDEC’s new permitting action w ith respect to thes e narrow issues, namely its conside ration of the PTE lim its and NSPS Db record keeping requirements, is an appropriate subject matter for petitions under section 505(b)(2 ) of the Act.

The new petitions w ith respect to this f acility raise a nu mber of claims. Some relate to the October 2001 NYSDEC permit decision and some repeat issues previously addressed in the May 2001 Order. With respect to the NYSDEC revised permit decision, the petitioners allege that (1) the permi t fails to include th e physical or ope rational limits nec essary to proper ly limit the source’s PTE, (2) the permit limits actual emissions instead of potential emissions, (3) the annual emissions limits are set too close to major thresholds, (4) the hourly emissions limits have too long an avera ging period, (5) th e consequences of deviations fro m or exceedanc es of permit limits are not severe enough, and (6) the inspection and maintenance measures for data from continuous emission s monitors (CEM) shou ld be clarified. Additionally, the pe titioners raise two issues with respect to the applicable requirements of the NSPS, suggesting that the requirement to calculate the annual capacity factor needs clarification, and the c riteria and implications of the use of an emergin g technology should be specified. Th e petitioners req uest that EPA object to the issuance of the Masada permit pursuant to section 505(b)(2) of the Act and 40 CFR § 70.8(d) f or these reasons

. The petitioners also reassert several of the claims from previous petitions, including the applicability of the major New Source Review and Prevention of Significant Deterioration programs, and the emissions of toxic air pollutants. These issues, which were addressed in great detail in the May 2001 Order, were not part of NYSDEC’s October 2001 permit decision and are thus beyond the sco pe of this title V pe tition process. Ac cordingly, EPA den ies all such claims that do not relate to the defined scope of the NYSDEC October 2001 permitting decision.

Finally, one of the petitions raises concerns about environmental justice. While the May 2001 Order addressed issues regarding NYSDEC’s compliance with Executive Order 12898, the new petition questions EPA’s compliance with the Executive Order. This issue will be discussed below in section II.C.

In sum, EPA has performed an independent review of the petitioners’ claims. Based on

2review of all the information before me, including the initial Masada permit of July 25, 2000, the modified permit of October 1, 2001, my previous Order of May 2, 2001, and the information provided by the pe titioners in the pet itions, I hereby de ny the petitions for the reasons set f orth in this Order.

I. STATUTORY AND REGULATORY FRAMEWORK

Major stationary sources of air pollution and other sources covered by title V are required to obtain an operating permit that includes emission limitations and such other conditions as are necessary to assure compliance with applicable requirements of the Act. See CAA §§ 502(a) and 504(a). Section 502(d)(1) of the Act calls upon each State to develop and submit to EPA an operating permit p rogram to meet the requirements of title V. EPA grante d interim approva l to the title V operating permit program submitted by the State of New York effective December 9, 1996. 61 Fed. Reg. 57589 (Nov. 7, 1996 ); see also 61 Fed. Reg. 63928 (Dec. 2, 1996) (correction); 40 CFR Part 70, Appendix A. EPA subsequently granted full approval to New York’s program effective November 30, 2001. 66 Fed. Reg. 63180 (Dec. 5, 2001).

The title V opera ting permit progra m does not genera lly impose new substa ntive air quality control requirements (which are referred to as “applicable requirements” ), but does require permits to contain monitoring, record keeping, reporting, and other compliance requirements to assure compliance by sources with existing applicable requirements. 57 Fed. Reg. 32250, 32251 (July 21, 1992). One purpose of the title V program is to enable the source, EPA, States, and the public to clearly understand the regulatory requirements applicable to the source and wheth er the source is m eeting those requ irements. Thus, the title V operating p ermits program is a vehic le for assuring th at existing air qua lity control requir ements are appr opriately applied to facilit y emission units in a si ngle document and assuring complian ce with these requirements.

Under section 505 (a) of the Act an d 40 CFR § 70.8(a), Sta tes are require d to submit to EPA for review a ll operating permi ts proposed for iss uance, following the close of the pu blic comment period. EP A is authorized un der section 505(b )(1) of the Act a nd 40 CFR § 70.8(c) to review proposed permits, and objec t to permits that fai l to comply with appli cable requirem ents of the Act, including the State’s implementation plan (and the associated public participation requirements), or the requirements of 40 CFR Part 70.

If EPA does not object to a permit on its own initiative, section 505(b)(2) of the Act and 40 CFR § 70.8(d) provide that any person may petition the Administrator, within 60 days of the expiration of EPA’s 45-day review period, to object to the permit. Petitions must, in general, be based on objectio ns to the permit that were raised wit h reasonable spe cificity during the public comment period. W hen a petitioner a sks EPA to object to a title V permit, a pe titioner must provide enough information for EPA to discern the basis for its petition. The statute provides that a petition for review does not stay the effectiveness of the permit or its requirements if the permit was issued a fter the expira tion of EPA’s 45-da y review period a nd prior to an EPA objection. If EPA objects to a permit in response to a petition and the permit has been issued, the permitting auth ority or EPA will modif y, terminate, or r evoke and reissu e such a permit

3consistent with the procedures in 40 CFR §§ 70.7(g)(4) or (5)(i) and (ii) f or reopening a pe rmit for cause.

II. ISSUES RAISED BY THE PETITIONERS

The Administrator’s Order of May 2, 2001, directed the NYSDEC to reopen the Masada permit to allow additional public comments on the methodology for limiting the potential emissions of the fa cility. Also, EPA dir ected NYSDEC to inc orporate the por tions of the NSPS Subpart Db applica ble to the gasifier

. The NYSDEC took the necessary steps to remedy these deficiencies. T he petitioners ha ve now requested that EPA object to Ma sada’s modified p ermit based on a variety of alleged flaws in the PTE-limiting strategy and the supporting permit terms. Petitioners also have concerns with the NSPS requirements and EPA’s compliance with the Executive Order 12898 on environmental justice.

A. Adequacy of Permi t Provisions Limiting Masada’s Potentia l To Emit (PTE)

1. Need for Physic al or Operationa l PTE Limits

Several of the pe titioners argue th at the PTE limits in Mas ada’s permit are inadequate because they are not based on physical or operational limitations. Petitioners Nebus and Glover, quoting from EPA’s June 13, 1989 Guidance on Limiting Potential to Emit in New Source Permitting
, 3 (hereinafter “1989 Guidance”), argue that “short term limits are the most useful and reasonable way to restrict and thereby verify limits on potential to emit.” Petitioner Nebus demands that the pe rmit contain opera tional constraints, including “hours of operations, co ntrols, amounts of materials and fuels, input and throughput, limits on what the source does and how much capacity the y have.” Petitione rs Alves et al. als o argue in favor of strictly enfor ced hourly limits and limitations on hours of operation and production rates. Petitioner LaFleur claims that the NYSDEC and EPA have employed unenforceable blanket emissions limitations in the permit, and that Ma sada is unable to c orrelate proce ss feedstock and ethanol productio n with emissions. We are addressing these claims under a co mmon heading, since all of these claim s relate to the need for physical or operational restrictions on the facility’s PTE.

The Clean Air Act does not specifically address how to calculate a facility’s PTE. EPA’s regulatory defi nition of “potentia l to emit”4 refers generally to physical and operational

3 This me moran dum w as transm itted from Terrell E. H unt, Asso ciate Enfo rcemen t Counse l, Air Enforcement Division, Office of Enfo rcement and Com pliance Monitoring and John S . Seitz, Director, Stationary Source Com pliance D ivision, Of fice of Air Q uality Pan ning an d Stand ards, to EP A Reg ional air directors, EPA Regional Counsels, other EPA headquarters offi ces and the Chief of the Envir onmental Enforcement Section at the Department of J ustice.

4 EPA re gulations define “p otential to em it” as “the m aximu m capa city of a station ary sourc e to emit a poll utant under i ts physical and operat ional desi gn. Any physical or operati onal limit ation on t he capacity of the source to emit a pol lutant, including air poll ution contr ol equipment and r estrictions on hours of operation or on the t ype or amount of material combusted, stor ed, or processed, s hall be treat ed as (continu ed...)

4constraints, but le aves room for inte rpretation about what forms of pra ctically enforc eable limitations may be appropriate in particular circumstances. Thus, in addition to the 1989 Guidance cited by the petitioners, which discusses strategies for limiting potential emissions from newly constructed facilities, EPA has issued several subsequent guidance documents on these issues. 5 These documents illustrate that the Clean Air Act and the implementing regulations allow for a flexible, case-by-case evaluation of appropriate methods for ensuring practical enforceability of PTE limits. The key consideration throughout these policy and guidance docume nts is whether the t erms and condition s that limit the potent ial emissions are, in fact, enforceable as a practical matter.

Masada’s permit relies on a 365-day “rolling cumulative total” emissions limit for nitrogen oxides (NO X ) and sulfur dioxid e (SO 2 ), with emissions re corded each da y and added to the total from the previous 364 days to determine an annual emissions total each day. To support this approa ch, the permit re quires extensive data collection p rocedures and q uality assurance measures, including stack testing and direct real-time continuous emissions measurements (CEM) to track the total daily emissions from the facility. As discussed below, EPA finds that this rolling cumulative methodology is a practically enforceable and effective means of limiting PTE in this case.

The 1989 Guidance cited by some of the petitioners spec ifically contempl ates PTE limits based solely on an emissions limit in particular circumstances. For example, the 1989 Guidance recognizes that emissions limits, coupled with the requirement to install, maintain and operate a CEM system to determine compliance, may be appropriate where setting operating parameters for control equipment is infeasible. 1989 Guidance, at 8. Likewise, the 1989 Guidance notes that "emissions limits are more easily enfo rceable than op erating or produc tion limits” in volatile organic compound surface coating operations where the emissions limit is combined with a requirement to calculate daily emissions. Id.

Petitioners have not demonstrated that NYSDEC erred in determining that it was appropriate to employ such emissions limits, coupled with a CEMs system, in this permit.

4 (...continued) part of its design if the l imitation or t he effect it would have on emissions is federal ly enforceable. Secondary emissions do not count in determi ning the pot ential to emit of a stati onary source. ” 40 CFR 52.21(b)(4).

5 See, e.g. , Memorandum entitl ed "Guidance an[d]Enforceabil ity Requir ements for Li miting Potential to E mit throu gh SIP a nd §11 2 Rules a nd Gen eral Perm its," from K athie A. Ste in, Directo r, Air Enforcement Division, Office of Enforcement and Compliance Assurance, to Regional Air Directors, dated January 25, 199 5; Mem orandu m entitled “3M T ape M anufactu ring Div ision Plant, S t. Paul, Min nesota,” from Jo hn B. Ra snic, Direc tor, Stationa ry Sour ce Com pliance D ivision, EP A’s Off ice of Air Q uality Planning and St andards, t o David Kee, Direc tor, EPA Region V Air and Radiati on Division, dated Jul y 14, 1992; Memorandum entitl ed "Policy Det ermination on Limiting Pot ential to Emit for Koch Ref ining Company Clean Fuels Pr oject, ”from John Rasnic to David Kee, da ted March 13, 1992;Memorandum entitled "Use of Long Term Rolling Averages to Limit Potential to Emit,” from John Rasnic to David Kee, dated February 24, 1992. These memos are available on EPA’s Tit le V Policy and Guidance Database, at htt p:/ /www. epa .gov/r egion07/pr ograms/ art d/a ir

/po li cy/ sea rch .ht m.

5Masada’s operations will have significant fluctuations due the variability of the processed waste, making an operating parameter-based PTE limit less appropriate. The emissions-based PTE limit discussed belo w recognizes thi s fact, and provid es Masada with ope rational flexibil ity accordingly. Moreover, Masada will be measuring its emissions on a real-time basis using CEMs, thus obviating the need to limit and monitor operating parameters as a surrogate for emissions. 6 Thus, the petitioners have not demonstrated that it was inappropriate for NYSDEC to use the PTE limit to restrict Masada's emissions directly, rather than its operations or production.

Although it is generally preferred that PTE limitations be as short-term as possible (e.g., not to exceed one month), EPA guidance also allows permits to be written with longer term limits if they are r olled (meaning re calculated per iodically with upda ted data) on a fr equent basis (e.g., daily or monthly). The 1989 Guidance recognizes that such longer rolling limits may be appropriate for sources with “substantial and unpredictable annual variation in production.” 1989 Guidance, at 9. Similarly, the Agency explained in a 1995 guidance document that "EPA policy allows for rolling limits not to exceed 12 months or 365 days where the permit ting authority finds that the limit provides an assurance that compliance can be readily determined and verified." 7 Annual limits rolled on a daily basis are entirely appropriate where, as here, the operations of the facility will fluctuate throughout the year and CEMs are used to ensure practical enforceability. Thus, contrary to petitioners’ assertions, shorter term limits are not always essential to a practically enforceable limit.

Thus, EPA finds that the permit is consistent with the Clean Air Act, EPA’s implementing regul ations, and Agenc y policy and guidan ce. EPA denies the petitions with regard to this issue.

2. Actual emissions vs. PTE

Petitioners Nebus and Glover assert that the permit constrains the actual emissions, rather than potential emissions, of the faci lity. Ms. Nebus clai ms that “the issued M asada permit limits actual emissions, but not PTE.” She then elaborates that the permit only warns the facility when it is getting close to the limit, and does not effectively limit the facility because there are no

6 This is consist ent with pr ior EPA practi ce in appropri ate cir cumstances. See e.g., Memorandum entitled “3M Tape Manufacturing Divisi on Plant, St. Paul, Minnesota,” from John Rasnic to David Kee, dated July 14, 1992 (“a federal ly enforceable emissi ons limit may be used ...to limit t he potential t o emit as long as a cont inuous emissions monitor (CEM) or an accepta ble alt ernative is used. ”); and Memorandum entitled “Po licy Determ ination on Limiting Potential to E mit for K och Re fining Co mpan y Clean F uels Project,” fr om John Rasnic to David Kee, dated March 13, 1992 (“Use of an emission li mit to restri ct potentia l to emit ... is acceptabl e provided tha t emissi ons can be and are required t o be readil y and periodically determined or calculated.”)

7 Mem orandu m entitled “Guida nce and Enforc eability Re quirem ents for L imiting Po tential to Emit through SIP a nd §112 Rules and Genera l Permits ,” from Kathie A. Stein, Director, Air Enforcement Division, Office of Enf orcement and Compliance Assurance, to Regional Air Direct ors, dat ed January 25, 1995.

6operational constraints. Petitioner Glover states that, “this permit disregards PTE and is based on actual emissions.”

In order to be considered practically enforceable, an emissions limit must be accompanied by terms and conditions that require a source to effectively constrain its operations so as to not exceed the relevant emissions threshold. These terms and conditions must also be sufficient to enable regulators and citizens to determine whether the limit has been exceeded and, if so, to take appropriate enforcement action. In other words, a source may not lawfully excee d that limit. Therefore, under EPA’s regulatory framework, the source does not have the "potential to emit" above that l imit. This is true whe ther the limit restr icts emissions dire ctly or restricts specific opera ting parameters, as petitioners wou ld prefer. As disc ussed above in #1, E PA believes that Mas ada’s permit limits are practical ly enforceable

. Therefore, th ey effectively limit Masada’s pote ntial emissions and E PA denies the petiti ons on this basis.

3. Annual limits too close to major thresholds

Petitioners LaFleur, Nebus and Alves et al. each remark on either the unreliability of the emissions estimates, or the level at which the annual limits were set for NOXand SO 2 . Petitioner LaFleur states that, “Masada has not provided adequate data nor substantiation of its emissions estimates.” Petitio ners Alves et al. c laim that “the emiss ions calculations are simply not reli able or realistic.” Pe titioner Nebus sta tes that the SO 2 annual emissions should be limited to less than 246 tpy and NO Xshould be limited to less than 99.5 tpy 8

. EPA finds that thes e individual claims relate to each other, and is reading them to mean that petitioners request the annual limits to be lowered to provide a greater margin of compliance, due to the uncertainty in the facility’s emissions estimates

.

This issue was addr essed in great de tail in the May 2001 O rder, and EPA con tinues to disagree that the re is a need for a greater margin of compliance be tween Masada’s PTE limits and the applicab le major source th resholds. Although EPA agrees that th ere is some uncer tainty in Masada’s estima tes, it is unrealisti c to expect prec ise emission facto rs prior to constru ction in cases where the process involves new technology and the facility is the first of its kind. The fact that there is some uncertainty regarding the estimates, however, is yet another reason to require careful monitori ng of actual emiss ions.

I already concluded in the May 2001 Order that, based on the Agency’s review of the best information c urrently availa ble, the source’ s emissions estimate s are sufficien tly credible to serve as a reasonable basis for determining that the PTE limits can be met by the source operating as planned. May 2001 Order, at 24. I also determined that the CEM system, operated properly as required by the permit, provides reliable data to assure that Masada’s emissions stay

8 Notwithstanding the dete rmination that t he Masada facility fa lls within a 250 tpy source category, the Clean Air Act and NYSDEC regulations (6 NYCRR 231) establish a 100 tpy major source for attainment areas that fal l within the Ozone Transport Regi on, as is the ca se here. cuto ff f or NO

x
7below the major source thresholds. In addition, stringent measures are included in the permit for conservative treatment of missing CEM data, as well as limits on how much data can be missing.

As noted in the previous Order, a strength of the rolling cumulative total approach is that it accounts for the variability in the data. It does so by limiting the source’s operational constraints to the actual measured emissions, not the emissions factor, which itself often contains inherent uncertainty when applied to an individual case. May 2001 Order, at 23. Indeed, Masada bears the risk if it has underestimated emissions in that the source would be required under the permit to constrain facility operations to keep emissions below the permit limits. Therefore, there is no need for additional margins of compliance, and EPA denies the petitions on this issue.

4. Averaging of hou rly emissions limits

Petitioner LaFleur claims that, “alth ough pounds-per- hour mass limits are expressed in the permit, those limits are meaningless because compliance with those short term limits is to be demonstrated on a 30-day rolling average.” Many traditional PTE limits are constructed using limitations on hourly emissions rates al ong with restrictio ns on hours of oper ation. Since this comment could be read broadly as relating to NYSDEC’s October permitting decision regarding PTE, I am exercising my discretion to consider this comment as a valid petition issue.

Petitioner LaFleur is correct that Ma sada’s PTE limits ge nerally do not rel y on the hourly mass limits to establish the facility as a minor source. Instead, as discussed above, they rely on a 365-day rolling total emissions limit, supported with stack testing and direct, real time data from CEM. The hourly limits are not directly related to the an nual emissions limits s pecified in conditions 36 and 41.

EPA disagrees with petitioner that the hourly limits on mass emissions of NO Xand SO 2 (see condition 81) are meaningless. They serve two important purposes. First, they provide a maximum operating level for the facility, which is used in calculating a fallback PTE if CEM data availability falls below 75% (see permit conditions 36.2 (I)(3) and 41.2 (I)(4)). Second, Masada is requir ed to control its SO 2 emissions by 97% under 6 NYCRR 212.9(b), and the hourly limit of 61.2 lb/hr represents the level to which Masada must control. Therefore, the hourly limit serves to help make the 97% control limit practically enforceable. For the purposes described here, it is reasonable for the permit to allow the collected CEM data to be compiled and averaged every 24 hours, incorporating data from the most recent 30 days. EPA denies Mr. LaFleur’s petition on this issue.

5. Consequences

Petitioners Nebus a nd Glover both cla im that there should be severe conse quences to Masada for exceeding any emissions limit. They each have similar statements in their respective petitions, claiming that in all instance s of excess emissio ns, the facility mus t immediately submit a major source pe rmit application. M s. Nebus goes a ste p further and co ntends that, in the c ase of an exceedan ce, the facility s hould be shut down un til all requiremen ts are met.

8EPA believes the pe rmit has sufficie ntly strong languag e about some of the possible consequences of exceeding a PTE l imit or any permit vio lation. However, the permit does not

, nor should it, list comprehensively all the potential enforcement ramifications of noncompliance. The permit describes varying degrees of consequences, depending on the nature of the violation. Conditions 36.2 (I)(4) and 41.2 (I)(5) specify that if the CEM data availability drops below 95%, a record keeping violation will be cited, after the first year of operation. Conditions 36.2 (I)(3) and 41.2 (I)(4) specify that if the CEM data availability drops below 75%, then a new methodology for calculating PTE is to be used. The maximum hourly emission rate is to be multiplied by 8,760 hours (365 days x 24 hours), resulting in PTE above major source thresholds, and Masada must promptly submit the appropriate permit applications for review under major NSR and/or PSD. Conditions 36.2 (I)(1) and (III)(1) and 41.2 (I)(1) & (III)(1) specify that any exceedance of the annual limit (99.5 tpy NO Xor 246 tpy SO2 ) shall constitute 365 days of violation. Conditions 36.2 (I)(2) and 41.2 (I)(2) specify that if the facility exceeds 100 tpy NO Xor 250 tpy SO2 , then the facility shall be subject to major NSR and/or PSD as though constructio n had not yet commen ced, and Masada must promptly submit the appropriate permit applications. It is important to note that if the facility exceeds these limits, not only does it need to get a majo r source permit, but it may be conside red to have been in violation of PSD and/or NSR from the time it was initially c onstructed. Finall y, condition 41.2 (I )(3), relating to SO 2, specifies that if Masada applies to relax any permit restrictions and thus becomes a major source, then the facility must undergo PSD review as though construction had not yet commenced.

Petitioner Nebus also claims that Masada should shut down in the case of an exceedance. EPA disagrees that the permit needs to be revised to include such a statement. The CAA provides sufficient enforcement authority for EPA to enforce this permit and all other CAA requirements. See e.g. § CAA 113, 303, 502(b)(5)(E). States have similar authority. EPA and the state must retain discretion to determine what remedy is appropriate in any given situation. There may be occasions where NYSDEC or EPA may see a need to shut down a facility. As expressed in Condi tion 1 of the Facility Level section of t he permit, NYSDEC h as authority under 6 NYCRR 200.5 to seal access to any air contamination source. 9 EPA has authority to address similar c ompliance proble ms, including seeki ng an immediate inju nction to cease operation. The authority to enforce this permit can not be expanded by this permit and it is not appropriate to attempt to specify or limit the response that will be taken in the case of a violation.

If EPA or NYSDEC re quires Masada to s ubmit a permit appli cation because of a permit violation, a prompt submittal is suffici ent, and there is n o need to require an immediate application. NYSDEC has the authority to determine if an application is delayed beyond reason,

9 The commissioner may seal an air contaminati on source to prevent it s operation if compliance with 6 N YCRR Chapter III is not m et within the time pro vided b y an ord er of the co mmiss ioner issue d in the case of the violation. S ealing means l abeling or t agging a sourc e to notify any person t hat operat ion of the sourc e is prohib ited, and also includes p hysical m eans of p reventing the opera tion of an air contaminati on source wit hout resul ting in de struct ion of any equi pment associated with s uch source, a nd includes, b ut is not limite d to, bolting , chaining or wiring shut con trol panels, a pertures o r condu its associated with such source. (6 NYCRR 200.5, page 5 of permit, Item 1.1(a))

9and take appropriate action. In conclusion, EPA believes the permit is sufficient, and denies the petitions on this issue.

6. CEM Inspection and Maintenance

Petitioner Nebus expresses concerns that there are not enough backup measures or safeguards for times when the CEM a re not operationa l. She also believe s the permit should specify the sche dule for inspecti ng and performing maintenance on th e CEM.

EPA believes the pe rmit is clear abou t what Masada shou ld do in case of pro blems with the CEM. Conditions 36 .2 (I)(3-4), (I I)(5) and 41.2 ( I)(4-5), 41.2 (I I)(5) specify me asures to take when CEM are not available. Calculations are to be made, substituting data according to 40 CFR §§ 75.31 or 75.33 ( c)(1) (if avail ability above 95%) or permit-specif ic procedures ( if availability below 95%). If CEM data availability ever falls below 75%, th e facility is to use its maximum permitted hourly rate multiplied by 8,760 hours. Regarding maintenance of the systems, the terms at conditions 36.2 (II)(2-4) and 41.2 (II)(2-4) say to install, maintain and operate NO Xand SO 2 CEM systems. Although these terms are n ot specific in how f requently to perform maintena nce on the CEM, the permit specifies elsewhere that M asada will comply w ith 40 CFR Part 75 regarding the maintenance of CEM systems. Also, condition 76.2 (10) specifies that daily CEM drift tests and quarterly accuracy assessments must be performed on CEM measuring NO X from the package boiler (40 CFR 60 Appx. F, Procedure 1).

In conclusion, it should be noted that the burden is on the petitioners to demonstrate how the safeguards a nd related provis ions in the permit ar e not adequate. T he petitioners in th is case have not met this burden to justify an objection to the permit. Finally, EPA believes that the permit is structured to provide a powerful incentive for Masada to maintain its CEM in optimum operating condition, because of the consequences associated with loss of data. EPA believes the permit is satisfactory in this regard, and denies the petitions on this issue.

B. New Source Per formance Standar ds

1. Annual Capacity Factor

Petitioners Nebus and Glover request clarification of what Masada’s obligations are regarding some of the terms in the per mit addressing Stan dards of Perform ance for IndustrialCommercial-Insti tutional Steam Gene rating Units. The n otification requi rement at 40 CFR 60.49b (a) in Subpart Db, listed in permit condition 1-4, specifies four items that must be reported at the time the facility begins to operate. Specifically, sources are required to report (1) the design heat input capacity and identification of the fuels to be combusted, (2) a copy of any federally enforceable requirement that limits the annual capacity factor, (3) a c alculation of the annual capacity factor at which the facility expects to operate, and (4) notification of any emerging technology that will be used for controlling emissions of sulfur dioxide. These factors are to be reported for each fuel that the facility expects to fire. In addition, permit condition 1-5 cites the record keeping requirement at 40 CFR § 60.49b(d), which requires calculation of the annual capacity factor using a rolling 12-month average. Petitioners Nebus and Glover believe

10the permit should specify what fuels Masada uses, which fuel is most polluting, and how emissions are controlled.

Both the 124 mmBtu/hr natural gas-fired package boiler and the 245 mmBtu/hr fluidized bed gasifier are subject to 40 CFR 60.49b (d). Permit condition 75 incorporates this requirement for the package boiler, and is identical to permit condition 1-5 relating to the gasifier. In accordance with EPA’s May 2001 Order, NYSDEC’s October 2001 permitting decision reopened the pe rmit to apply the NSPS to the gasifier, as the regulation wa s properly applie d to the package boiler in the July 2000 permit. Therefore today’s response addresses this comment as it relates to the gasifier.

EPA disagrees that the permit needs to be revised. The facility description states that the gasifier will combust only natural gas, lignin, processed biosolids and digester gas and the permit properly requires the facility to identify the fuels that are being combusted as part of the initial start-up notification. However, the issue of which fuel is most polluting and how the emissions from the firing of these fuels are controlled is not germane because the substantive emissions limitations of NSPS Db apply only to coal-fired and oil-fired steam g enerating units and thus do not apply to the gasifier.

Petitioner Nebus expresses a concern that the annual capacity factor is only calculated on a 12-month rolling average, instead of a daily average. She refers to the 365-day rolling total that exists elsewh ere in the permit. EPA wishes to clari fy that the annual capacity facto r (ACF) is a ratio of how much energy a steam generating unit actually produces in a year divided by the maximum energy it could produce if it ran 8,760 hours (365 days x 24 hours) at its maximum heat input capacity. This factor is generally useful because some of the requirements in the NSPS vary depending on the ACF for a fa cility. In Masada’s case, there a re no applicable requirements that depend on the unit’s calculated ACF, and Masada has no restrictions on how high its ACF can be. T herefore, EPA b elieves there wo uld be no value if Ma sada were to calculate its ACF on a more frequent basis than required by the NSPS as stated. EPA denies the petitions on this issue.

2. Emerging Technologies

Petitioner Nebus expresses a concern that the permit is ambiguous as to whether Masada will use an emerging technology. Permit condition 1-4.2 (4), in applying the NSPS at Subpart Db (Industrial-Commercial-Institutional Steam Generating Units) to the gasifier, specifies that Masada must repor t whether it intend s to use an emergin g technology to con trol SO 2 emissions as part of the notification of startup. The regulations also specify that EPA must review and approve a determination of whether a technology qualifies as emerging for purposes of this rule. If the EPA determ ines that a techno logy qualifies as "e merging", then the regulation at 40 CFR 60.42b allows facilities using emerging technology to have more lenient control requirements for SO 2 than facilities using conventional technology.

Ms. Nebus claims the emerging technol ogy should be named in the permit, and th e public has a right to know w hether the Adminis trator makes suc h a determination in a given case. E PA

11agrees that in a case where the Administrator does determine that a technology qualifies as emerging, and the facility receives more lenient permit limits as a result, the public should be informed. Howev er, as noted pre viously, the standa rds regulating em issions of SO2 at 40 CFR 60.42b only apply to f acilities that comb ust coal or oil. Bec ause the gasifie r does not combust these fuels, it is not subject to this standard.

EPA understands why there may be some confusion on the part of the petitioner regarding wheth er Masada will use an emerging tech nology. As it happen s, the dry lime injection and spra y dryer absorbe r to be used by Masa da to control SO 2 emissions from the gasifier are conventional technologies. EPA denies the petitions on this issue.

C. Environmental Justice - Executive Order 12898

EPA also received a petition arguing that EPA failed to evaluate the “environmental disparate impacts” on minority and low-income communities under Executive Order 12898. 10 The petition asserts that the proposed plant site is in the vicinity of a day care center, nursery, retirement home, senior citizen apartments, three public schools and three low-income housing projects. The petitioners state that EPA had extensive involvement in reviewing the NYSDEC permit, which now “carries EPA’s imprimatur.” Petitioners cite, by way of example, letters and meetings between EPA and the NYSDEC on the adequacy of the state’s proposed and draft permit, meetings and letters between Senator Richard Shelby (R-AL), Masada CEO Daryl Harms and Administrator Browner, and the Administrator’s May 2, 2001 Order.

Executive Order 12898, signed on February 11, 1994, focuses federal attention on the environmental and human health conditions of minority populations and low-income populations with the goal of achieving environmental protection for all communities. The Executive Order also is intended to promote non-discrimination in federal programs substantially affecting human health and the en vironment, and to pr ovide minority and l ow-income commun ities access to public information on, and an opportunity for public participation in, matters relating to human health or the environment. It generally directs federal agencies to make environmental justice part of their mission by identifying and addressing, as appropriate, disproportionately high and adverse human health or environmental effects of their programs, policies, and activities on minority and low-income populations. I recently reaffirmed EPA’s commitment to ensuring that environmental justice is secured for all communities in a memorandum to senior Agency officials dated August 9, 2001.

Environmental justice issues can be raised and considered in a variety of actions carried out under the Clea n Air Act, as for e xample when EPA or a delegated stat e issues a PSD or NSR

10 The petit ion was signed by the foll owing people: Tal kini Alves , Vidal Mil land, Kris tine Hann on, Bridg et Copp ola, Nico le Youn g, Kathle en Hou se, Cam pbell Ho use, Susa n Cohe n, Debb ie Carlisl e, Roberta Constanti no, and Elizabeth Collard.

12permit. 11 Unlike PSD or NSR per mits, however, title V generally does not impose new, substantive emissio n control require ments, but rather requires that all underlying applic able requirements be included in the ope rating permit. Titl e V also includes im portant public participation provisions as well as monitoring, compliance certification and reporting obligations intended to assure compliance with the applicable requirements.

In this particular case, petitioner s have not demonstr ated that the Masa da title V permit fails to properly identify and comply with the applicable underlying requirements of the Act, the approved state im plementation plan , or the requirem ents of title V itsel f; thus, the petition to object to the permit must be denied. In addition, the record does not indicate that concerns about environmental justice and the application of the Executive Order were raised to NYSDEC during the comment period on the revised permit which ended on June 25, 2001. EPA’s title V regulations provi de that issues may n ot be raised for t he first time in the c ontext of a petition to the Administrator. 40 CFR §70.8(d). This issue is, therefore, not one which provides grounds for me to object to NYSDEC’s issuance of the Masada permit.

However, as explained in the May 2001 Order, as a recipient of EPA financial assistance, the programs and activities of NYSDEC, including its issuance of the Masada permit, are subject to the requirements of title VI of the Civil Rights Act of 1964, as amended, and EPA’s implementing regulations, which prohibit discrimination by recipients of EPA assistance on the basis of race, color, or national origin. 42 U.S.C. § 2000d et seq.; 40 CFR Part 7. The petitioners may file a complai nt under title VI a nd EPA’s title VI re gulations if they be lieve that the stat e discriminated against them in violation of those laws by issuing the permit to Masada. The complaint, however, must meet the jurisdictional criteria that are described in EPA’s title VI regulations in order for EPA to accept it for investigation. 12

11 Indeed, as indicat ed in the r esponse to a nother Tit le V permit pet ition, section 173(a)(5) of the Clean A ir Act requ ires that a per mit for a “m ajor sourc e” subjec t to the NS R prog ram m ay be issue d only if an analysis of alt ernative sites concludes t hat “the be nefits of the propos ed source si gnificant ly outweigh the environmental and social costs imposed as a res ult of its location, const ruction or modificati on.” See Borden Chemical, Inc. , Title V peti tion No. 6-01-01 (Dec. 22, 2000), pp. 34-44, avai lable at http://ww w.epa.g ov/regio n07/pro grams/a rtd/air/title5/petition db/petition s/borden _respon se1999 .pdf.

12 Under Title VI, a reci pient of f ederal fi nancial assista nce may not discr iminate on t he basis of race, colo r, or nation al origin. Pu rsuant to E PA’s T itle VI adm inistrative reg ulations, E PA’s O ffice of Civ il Rights conduct s a preli minary review of Title VI complaints f or acceptance, rejection, or referra l. 40 CFR § 7.1 20(d) (1). A complaint shoul d meet jur isd ict

iona l requir ements as desc ribe d in EP A’s Ti tle

VI regulations. First, i t must be in writi ng. Second, it must descr ibe alleged disc riminatory acts t hat may violate EPA’s Title VI regulat ions. Ti tle VI does not cover di scriminat ion on the grounds of income or economic stat us. Third, it must be timely fi led. Under EPA’s Title VI r egulations, a complai nt must be filed within 180 ca lendar days of th e alleged discrimina tory act. 40 CFR § 7.120(b)(2 ). Fourth, because EPA’s Title VI regulat ions only appl y to recipi ents of EPA fi nancial assista nce, it must identi fy an EPA recipie nt that allegedl y committed a dis criminator y act. 40 CFR § 7. 15.

13III. CONCLUSION

For the reasons set forth above and pursuant to sections 505(b) and 505(e) of the Act, 42 U.S.C. §§ 7661d(b) and (e), and 40 CFR §§ 70.7(g)(4) or (5) and 70.8(d), I deny the petitions submitted by Jeanette Nebus, Robert LaFleur, Deborah Glover, Talkini Alves, Vidal Milland, Kristine Hannon, Bridget Coppola, Nicole Young, Kathleen House, Campbell House, Susan Cohen, Debbie Carlisle, Roberta Constantino, and Elizabeth Collard.

April 8, 2002 / S /

Dated: Christine Todd Whitman

, Administrator

14