### UNITED STATES ENVIRONMENTAL PROTECTION AGENCY REGION III

SUBJECT:

FROM:

TO: 1650 

### Arch Street Philadelphia, Pennsylvania 19103-2029

D).-0{.--L.oiS David pbell sociate Director Office ofPermits and Air Toxics



### Approval and Promulgation ofAir Quality Implementation Plans; Maryland; Preconstruction Requirements-Nonattainment New Source Review (NSR)
I. BACKGROUND
The Maryland Department ofthe Environment (MDE) has submitted a State Implementation Plan (SIP) revision request, pertaining to the New Source Review (NSR) requirements ofthe Clean Air Act (CAA). The proposed revision affects Maryland's nonattainmentNew Source Review (NSR) program. Ifapproved, this action would revise the previously approved version oftheir rules as described below.


### II. SUMMARY OF ACTIONS
OnAugust 22, 2013, MDE submitted a SIP revision request to EPA. This SIP revision request, ifapproved, would revise Maryland's currently approved nonattainmentNSRprogram by amending Regulation .01 under section 26.11.01 ofthe Code ofMaryland Regulations (COMAR), and Regulations .01 and .02 under COMAR 26.11.17. Generally, the revisions incorporate provisions related to the 2008 "Implementation ofthe New Source Review (NSR) Program for Particulate Matter Less than 2.5 Micrometers (PM2.s)" (2008 NSRPM2

.s Rule; 73 FR28321). Forreasons outlined below, EPA is proposing to approve MDE's August 22,2013 approval. Following is a discussion ofthe background ofEPA's PM2.s regulations, as well as an analysis of the specific revisions submitted byMDE.


### III. Background

B. 

### PM2.s
Fine particles in the atmosphere are made up ofa complex mixture ofcomponents. Common constituents include sulfate (S04); nitrate (N03); ammonium; elemental carbon; a greatvariety oforganic compounds; and inorganic material (including metals, dust, sea salt, and other trace elements) generally referred to as "crustal" material, although it may contain material from other sources. Airborne particulate matter (PM) with a nominal aerodynamic diameter of2.S micrometers or less (amicrometer is one-millionth ofa meter, and 2.S micrometers is less than one-seventh the average width ofa human hair) are consideredto be "fineparticles" and are also known as PM2.s. "Primary" particles are emitted directly into the air as a solid or liquid particle (e.g., elemental carbon from diesel engines or fire activities, or condensable organic particles from gasoline engines). "Secondary" particles (e.g., sulfate and nitrate) form in the atmosphere as a result ofvarious chemical reaetions.
The health effects associated with exposure to PM2.s include potential aggravation ofrespiratory and cardiovascular disease (i.e., lung disease, decreased lung function asthma attacks and certain cardiovascular issues). Epidemiological studies have indicated a cmTelation betweenelevated PM2.s levels and premature mortality. Groups considered especially sensitive to PM2.s exposure include older adults, children, and individuals with heart and lung diseases. For more details regarding health effects and PM2.s see EPA's Web site at http://www.epa.gov/oar/particlepollution/ (see heading "Health and Welfare").
On July 18, 1997, EPA revised the NAAQS for PM to add new standards for fine particles, using PM2.s as the indicator. Previously, EPA used PMto (inhalable particles smaller than or equal to 10 micrometers in diameter) as the indicator for the PMNAAQS. EPA established health-based (primary) annual and 24-hour standards for PM2

.s, setting an annual standard at a level of 1S micrograms per cubic meter (J.tg/m3) and a 24-hour standard at a level of6S J.tg/m3 (62 FR 386S2). Atthe time the 1997 primary standards were established, EPA also established welfarebased (secondary) standards identical to the primary standards. The secondary standards are designed to protect against major environmental effects ofPM2

.s, such as visibility impairment, soiling, and materials damage. On October 17, 2006, EPArevised the primary and secondary NAAQS for PM2.s. Inthat rulemaking, EPA reduced the 24-hourNAAQS for PM2.s to 35 J.tg/m3 and retained the existing annual PM2.s NAAQS of 15 J.tg/m3 (71 FR 61236).


### 1. Implementation ofNSRRequirements for PM2.s- the NSRPM2.s Rule
After EPApromulgated the NAAQS for PM2.s on October 23, 1997, the Agency issued a guidance document written by John Seitz entitled "Interim Implementation ofNew Source Review Requirements for PM2.s" (Seitz Memo). The Seitz Memo was designed to help states implementNSRrequirements pertaining to the newPM2.s NAAQS in light oftechnical difficulties posed byPM2.s atthattime. Specifically, the Seitz Memo stated: "PMto may properly be used as a surrogate for PM2.s in meeting NSRrequirements until these difficulties are resolved."
EPA also issued a guidance document entitled "Implementation ofNew Source Review Requirements in PM2.s Nonattainment Areas" (the "200S PM2.s NonattainmentNSR Guidance"),
on AprilS, 200S, the date that EPA's PM2.s nonattainment area designations became effective for the 1997 NAAQS. This memorandum provided guidance onthe implementation ofthe nonattainment majorNSRprovisions in PM2.s nonattainment areas in the interim period between the effective date ofthe PM2.s nonattainment area designations (AprilS, 200S) and EPA's promulgation offinal PM2.s nonattainmentNSRregulations. Besides re-affirming the continuation ofthe PMto Surrogate Policy for PM2.s attainment areas set forth in the Seitz Memo, the 200S PM2.s nonattainmentNSR Guidance recommended that until EPApromulgated the

2PM2.s majorNSRregulations, "States should use a 

### PMw nonattainment majorNSRprogram as a surrogate to address the requirements ofnonattainment majorNSRfor the PM2.s NAAQS."
On May 16,2008, EPA finalized the "Implementation ofthe New Source Review (NSR) Program for Particulate Matter Less than 2.5 Micrometers (PM2.s)" (2008 NSRPM2.s Rule) to implementthe 1997 PM2.s NAAQS, including changes to the NSRprogram (See, 73 FR28321). The 2008 NSRPM2.s Rule revised the NSRprogram requirements to establishthe framework for implementing preconstructionpermitreview for the PM2.s NAAQS in both attainment and nonattainment areas. The 2008 NSR PM2.s Rule required that major stationary sources seeking permits must directly satisfy the PM2.s requirements, as ofthe effective date ofthe rule, rather than relying on

### PMw as a surrogate, with two exceptions. The first exception was a "grandfathering" provision inthe Federal PSD program at 40 CFR 52.21(i)(l)(xi). This grandfathering provision.applied to sources that had applied for, but had.not yet received, a final and effective PSD permit before the July 15, 2008, effective date ofthe May 2008 final rule. The second exception was that states with SIP-approved PSD programs could continue to implementthe Seitz Memo's PM10 Surrogate Policy for up to three years (until May 2011) or until the individual revised state PSD programs for PM2.s are approved by EPA, whichever came first. For additional information onthe NSRPM2.s Rule, see (73 FR28321). OnFebmary 11, 2010, EPA proposedto repeal the grandfathering provision for PM2.s contained inthe federal PSD program at 40 CFR 52.21(i)(l)(xi) and to end early the 

### PMw Surrogate Policy applicable in states that have a SIP approved PSD program (75 FR 6827). In support ofthis proposal, EPA explainedthat the PM2.s implementation issues that led to the adoption ofthe 

### PMw Surrogate Policy in 1997 have been largely resolved to a degree sufficient for sources and permitting authorities to conduct meaningful permit-related PM2.s analyses. The repeal ofthe grandfathering rule was finalized onMay 18, 2011 (76 FR 28646).
The 2008 NSRPM2.s Rule also established the following NSRrequirements to implementthe PM2.s NAAQS: (1) Require NSRpermits to address directly emitted PM2.s and precursor pollutants; (2) establish significant emission rates for direct PM:u and precursorpollutants (including sulfur dioxide (S02) and oxides ofnitrogen (NOx)); (3) establish PM2.s emission offsets; and (4) require states to account for gases that condense to form particles (condensables) in PM2

.s emission limits. Additionally, the 2008 final rule authorized states to adopt provisions intheir nonattainment NSRrules that would allow major stationary sources and major modifications locating in areas designated nonattainment for PM2.s to offset emissions increases ofdirect PM2.s emissions or PM2.s precursors with reductions ofeither direct PM2.s emissions or PM2.s precursors in accordance with offset ratios contained in the approved SIP for the applicable nonattainment
area. The inclusion, in whole or inpart, ofthe interpollutant offsetprovisions for PM2.s is discretionary onthe part ofthe states. Inthe preamble to the 2008 final rule, EPA included preferred orpresumptive offset ratios, applicable to specific PM2.s precursors that states may adopt in conjunction withthe newinterpollutant offsetprovisions for PM2.s, and for which the state couldrely onthe EPA's technical workto demonstrate the adequacy ofthe ratios for use in any PM2.s nonattainment area. Alternatively, the preamble indicated that states may adopt their
ownratios, subject to the EPA's approval, that would have to be substantiated by modeling or othertechnical demonstrations ofthe net air quality benefit for ambient PM2.s concentrations. The preferred ratios were subsequently the subject ofa petition for reconsideration, which the Administrator granted. EPA continues to support the basic policythat sources may offset increases in emissions ofdirect PM2.s or ofany PM2.s precursor in a PM2.s nonattainment area with actual emissions reductions in direct PM2.s or PM2.s precursors in accordance with offset
3ratios as approved in the SIP for the applicable nonattainment area. However, we no longer consider the preferred ratios set forth in the preamble to the 2008 final rule for PM2.s NSR implementation to be presumptively approvable. Instead, any ratio involving**P~'b.s** precursors adopted bythe state for use inthe interpollutant offsetprogram for PM2.s nonattainment areas mustbe accompanied by a technical demonstration that shows the net air quality benefits of such ratio for the PM2

.snonattainment areain which 

### it will be applied.
The 2008 NSR PM2.s Rule, as well as the 2007 "Final Clean Air Fine Particle Implementation Rule" (2007 PM2.s Implementation Rule) 1were the subject oflitigationbefore the United States Court ofAppeals for the D.C. Circuit (the Court) inNatural Resources Defense Council v. EPA.2 OnJanuary 4, 2013, the courtremanded to EPA boththe 2007 PM2.s Implementation Rule and the 2008 NSRPM2.s Rule. The court found that in both rules EPA erred in implementing the 1997 PM2.s NAAQS solely pursuantto the general implementationprovisions ofsubpart 1 of part D oftitle I ofthe CAA, rather thanpursuantto the additional implementationprovisions specific to particulate matter in subpru14 ofpart D oftitle I. 3 As a result, the court remanded bothrules and instructed EPA "to re-promulgate these rules pursuant to Subpart 4 consistent with this opinion." Although the court declined to establish a deadline for EPA's response, EPA intends to respond promptly to the court's remand and to promulgate new generally applicable implementationregulations for the PM2.s NAAQS in accordance withthe requirements of subpart 4. In the interim, however, states and EPA still need to proceed with implementation of the 1997 PM2.s NAAQS in a timely and effective fashion in orderto meet statutory obligations under the CAA and to assure the protection ofpublic health intended by those NAAQS.


### IV. Analysis
PM2.s
The PM2.s provisions submitted by MDE for approval into the Maryland SIP largely mirror the 2008 PM2.s NSRRule, which, as stated above, required NSRpermits to address directly emitted PM2.s and precursorpollutants, established significant emissionrates for direct PM2.s and precursor pollutants (including sulfur dioxide (S02) and oxides ofnitrogen (NOx)); established PM2.s emission offsets, and required states to account for gases that condense to :form particles (condensables) in PM2.s emission limits. However, the proposed revisions do not include provisions relating to interpollutant offsetratios for PM2.s precursor emissions.
EPA is inthe process ofevaluating the requirements ofsubpart 4 as they pertain to nonattainmentNSR. Inparticular, subpart 4 includes section 189(e) ofthe CAA, which requires the control ofmajor stationary sources ofPM10 precursors (and hence under the eourt decision, PM2.s precursors) "except where the Administrator determines that such sources do not contribute significantly to PM10 levels which exceed the standard in the area." The evaluation of

1 72 FR20586 (April25, 2007)

2 706 F.3d 428 (D.C. Cir. 2013)

3The court's opinion did not specifically address the point that implementation under subpart 4 requirements would
still require consideration ofsubpart 1requirements, to the extentthat subpart4 did not override subpart 1. EPA assumes that
the court presumed that EPA would address this issue ofpotential overlap between subpart 1 and subpart 4 requirements in subsequent actions

4whichprecursors need to be controlled to achieve the standard in a particular area is typically conducted inthe context ofthe state'spreparing and the EPA's reviewing ofan area's attainment plan SIP. Atthe time ofsubmittal, three areas in Maryland were designated as nonattainment for PM2.s: the Maryland portion ofDC-MD-VA nonattainment area for the 1997 annual PM2.s NAAQS; the Baltimore nonattainment area for the 1997 annual PM2.s NAAQS; and the Maryland portion ofthe Martinsburg-Hagerstown, MD-WV nonattainment area for the 1997 annual PM2.s NAAQS.
EPA has taken final action to redesignate all ofthese areas to attainment: on October 6, 2014, EPA took final action to redesignate the Metro-Washington area; on December 16,2014, EPA took final action to redesignate boththe Baltimore nonattainment area and the MartinsburgHagerstown nonattainment area to attainment. See 79 FR 60081, 79 FR 75032 and 79 FR 75035, .respectively. As a result, MDE is no longer obligatedto submit a nonattainmentNSR SIP revision under section 189 ofthe CAA addressing nonattainmentNSRpermitting requirements for PM2.s, including the requirements under subpart 4. Therefore, EPA has not evaluated the August 22, 2013 submittal for the purposes ofdetermining compliance with the subpart 4 requirements. To the extent that any area is designated nonattainment for PM2.s in Maryland in the future, MDE will have to make a submission under Section 189(a)(2) ofthe CAA addressing how its nonattainment permitting program satisfies the CAA statutory requirements as to PM2.s, including subpart 4 and any applicable PM2.s Federal implementationrules.


### IV. SUMMARY OF CHANGES
This SIP Revision includes amendments to Regulation .01 under COMAR 26.11.01 (General Administrative Provisions) and Regulations .01 and .02 under COMAR26.11.17 (Nonattainment Provisions for MajorNew Sources and Major Modifications).


### V. RECOMMENDED AGii:NCY ACTION
I find that the proposed revisions meet the applicable requirements ofthe CAA. Accordingly I recommend that approval be granted to Maryland's August 22, 2013 submittal.

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