# T E C H N I C A L 

# S U P P O R T 

# D O C U M E N T

Departme nt of the Environment 

## COMAR 26.11.17 Nonattainment Provisions fo r Major New So urces and Majo r Modifi cations

Purpose of the Amendments

The purpose of this action is to establish re quirem ents for the construction of new m a j o r sources and m a jor m odifications in areas designated as nonatt ainm ent that are comp atible with federal requirem e nts.

This action will be sub m itted to the U.S. E nvironm ental Pro t ection Age n cy as a r e vision to Maryland' s State Implem entation Plan (SIP).

Background

COMAR 26.11.17 establishes requirem e nts for the construction of new major sources and m a jor modifications at m a jor sources th at apply in ozone nonattainm e nt areas. Because Maryland is in the Ozone Tran sport Reg i on, the nonattainm e nt New Source Review (NSR) requirements apply statewide. Generally, the regulati ons require affected sources to install state-of-the-a rt controls, referred to as to the lowest achievable em ission rate (LAER), and to offset em issions by a specific offset ratio depending on the location of the source. In 2002, the Environm ental Protection Agency (EPA) amended its New Source Review provisions and established diffe rent procedures to determ ine em ission increases w h en m odifyi ng an existing facili ty and set forth different procedures for electric generating units (EGUs) and non-EGU major sources. These regulations were challenged by environm ental groups and states, including Ma ryland. The courts upheld most of EPA’s new rule, but struck down certain provisions.

States are required to establish regulations that are at leas t as restri ctive as EPA’s. The substantive requirem e nts for new sour ces, however, rem a in unchanged. The Departm e nt’s proposed am endments adopt all the federal definitions and include procedures that are nearly identical to the EPA procedures, except for the period used to calculate a source’s em issions increase following a m odification. Under EPA’s rule, the non-EGU source could use a 24-m o nth period to calculate emissions within the past ten years, while MDE’s regulations would allow the source to select the 24 m onth baseline period from the previous five years, absent a dem onstration that another period was more representative of nor m a l operations.

The am endm ents also include specific requi rements for the creation, banking and transfer of e m issions reduction credits (ERCs).

1Expected Emission Reductions

The am endm ents apply to new or modified s our ces and se t f o rth th e cr ite ria f o r is suin g perm its to c onstruc t in n onatta inm e nt are a s. The am endm ents do not affect exis ting

unm odified sources and therefore there is no expected em ission reduction from existing sources. There is an ov erall ben e fit to the environ m ent, however, becau se New Source Review requires state-of-the-a rt pollution controls for new and m odified sources subject to the rule.

Sources Affected

These am endm ents apply statewide and affect new sources in the Baltimore/W a shington areas that will have em issions of 25 tons per year or m o re of VOC or NOx and new sources in the rest of the state with em issions of 50 tons per year of VOC or 100 tons per year of NOx. Major m odifications in the rest of the State will affect m a jor sources that will have e m ission incr eases of 40 tons per yea r or m o re.

Requirements of the A m endments

The regulations m a intain the sam e m a jor source thresholds and offset ratios as the current regulations and contain the f o llowin g changes:

1. Current regulations require a source to us e th e averag e em issions of the previous 2 years or another 2-year period that is more repre s entative of norm a l operations as the baseyear from which increases are d e term ined. Except for E GUs, EPA now allows a source to choose a 24-month period using a 10- year look-back. The proposed regulations requir e a 5-y ear look -bac k unless th e regula t ed en tity can es tablish th at an other 24-m onth period within the prior 10 years is mo re representative of norm a l operations.

2. The current regulations contain a contem poraneous period that extends back 5 years from the date of a comp l e te perm it applicati on. It now extends back in tim e five years f r om the date of the complete p e rm it applic a tion and f o rward in tim e to th e date when the new source commences operation.

3. A new term “projected actual em issions” is added that allows an existing source to consider emissions that the unit cou l d ha ve acco mmodated during th e 24 -m onth period in determ ining whether th e incre a se in e m issions is “significant.” As a result of the use of this term , a source could use a higher ba seline and becom e exempt from these requirem e nts even though there is a significant em issions increase.

4. In lieu of m eeting appli cab le req u irem ents an existi ng source m a y request a “plantwide applicab ility lim it (PAL)” which esta b lishes a five-year cap on the total p l ant

em issions. Under a PAL, the units at the sour ce could increase and decrease em issions if the cap is no t exceed ed.

5. A new section is added that sets forth requ irements for creati ng and using ERCs as

2offsets. The ERCs are created by overcontro l or shutting dow n installations that were included in the Departm e nt’s m o st recent St ate Implem entation Plan. The new sectio n also establishes a ten year life for ERCs.

Economic Impact

The proposed action h a s no econom i c impact. These am endm ents will not increase the cost of compliance. Recent chang e s to the federal NSR program m a de t h e federal ru le, under som e conditions, less stringent. Maryla nd, however, is proposing changes to its current NSR program that incorporate som e but not all of the federal changes. This

m a kes the Maryland regulations more stringen t than the f e d e ral rule.

The am endm ents do not change the substantiv e portions of the regul ations that require state-of-the-art controls and offsets based on Maryland' s fully approved 1-hour Ozone State Implem entation Plan. As with the exis ti ng regulations, the cost of compliance varies depending upon the size of the source, cont rol costs, and the cost of offse t s.

Comparison to Federal Standards

In comp liance with Executive Order 01.01.1996.03, this proposed regulation is m o re restrictive o r string ent th an corres ponding federal standards as follows:

(1) Regulation citation and m a nner in which it is m o re restric tive than the applic able federal standard:

40 CFR 51.165

COMAR 26.11.17.01B(2-1) defines the term “Ba s eline actual em issions.” This regulation establishes the proced ures used to identify a histor ic em issions baseline from which em ission increases are calcu l ated. W h et her or not em issions have increased is a

m a jor factor in determ ining whether or not this regulation app lies to a proposed modification of an existing facility. If an e m i ssio n increase is signi ficant, this regulation would require use of state-of-the -art controls and costly offsets. The federal rule perm its calculation of the baseline em issions using a 24-month period that occurred up to ten years ago. It is the Departm e nt’s position that the older baseline em issions would not necessarily be representative of m o re current em issions a nd we question the accu racy of

em issions that are based on data and records that are up to ten years old.

The Departm e nt’s regulations allow a source to choose a baseline em issions period from

em ission records up to five years old. For aff ected f acilities, th e MDE belie ves tha ta f i ve year look back of e m issions would best repr esent norm a l or typical em issions and would be m o re accurate. The D e partm e nt’s selected fi ve year period is also consistent with th e duration of the facility’s operating perm it and its five year reporting requirem e nt.

Allowing a facility to choose an em issions ba seline from an earlier period could m e an that a facility would not be subject to New Source Review even though it proposes a

3significan t modification and increas e in em issio n s.

(2) Benefit to the public health, safety or welfare, or the environm ent:

The Departm e nt’s use of a five year period from which to select baseline em issions is beneficial to the environ m ent and to pub lic health because a greater number of modification s will be sub j ect to the restrictive req u irem en ts in this regulation. Although nearly all proposed increases of em is sions w ould be subject to so m e existing regulation under COMAR, this regulation would require state-of-the-art cont rols and em issions offsets of up to 130 percent of the new e m issions.

(3) Analysis of additional burden or cost on the regulated person:

These am endm ents will not inc r ease the cos t of comp liance. Recent chan ges to th e federal NSR program m a de the federal ru le less stringent. Maryland, how ever, is proposing changes to its current NSR program that incorporate som e but not all of the federal changes. This m a kes the Maryland re gulations m o re string ent th an the f e dera l rule.

The am endm ents do not change the substantiv e portions of the regul ations that require state-of-the-art controls and offsets based on Maryland' s fully approved 1-hour Ozone State Implem entation Plan. Marylan d ’s regu la tio n, however, will r e quir e more source s to be subjec t to the m o re restrictive req u irem ents in this ch apte r

.
(4) Justifica t ion for the n eed for m o re restric tive s t andards :

The Departm e nt, over the years, has regulated n early all exis ting em issio n sources th at contribute to the pollutants that cause Maryland to f a il to m e et the f e der a l health relate d

am bient air quality standards for ozone. In order for Maryland to show progress in

m eeting the standards, we m u st continue to requ ire sta t e-of-th e -art pollution controls on new large facilities and modifi cation s of existing f acilities.

Additionally, nitrogen oxides (NOx), which would be subject to po llu tion contro l

m easures under these regulations, is a precursor to the form ation of ozone. It is also a contributor to our nonattainm e nt status for the federal fine particulates ambient standard. The EPA ha s already set 2010 attainm e nt da tes for Maryland to m eet the am bient standards for both ozone and fine particulates.

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