### UNITED STATES ENVIRONMENTAL PROTECTIONAGENCY REGIONS 9991STH 

### STREET- SUITE 300

DENVER, CO S0202-2466 Phone SOO-227-S917 http://www.epa.gov/regionOS

Ref: 8P-AR 

## FEB II 

# 3m Terry L. O'Clair, Director Division ofAir Quality Environmental Health Section North DakotaDepartment ofHealth P.O. Box 5520 Bismarck, ND 58506-5520

RE: EPA Region 8's Review ofNorth Dakota Air Pollution Control Rule 33-15-01-13, Shutdown and malfunction ofan installation

- Requirement for notification. DearTerry: I am following up on a July 7, 2004 telephone conversationAmyPlatt, Laurie Ostrand and Jonah Staller had with you and Tom Bachman regarding concerns EPA has with North Dakota's Shutdown and Malfunction provisions in rule 33-15-01-13. We agreedto send you a letter that further explains these concerns with options and suggestions to revise the rule. In the way ofbackground for our review ofNorth Dakota's rule, we note that state implementationplans (SIPs) must assure thatthe national ambient air quality standards (NAAQS) and prevention ofsignificant deterioration (PSD) increments are protected at all times. SIP provisions that allow for an automatic exemption for excess emissions from start-up, shutdown, malfunction and maintenance activities mayresult in levels ofemissions that interfere with attainment and maintenance ofthe NAAQS and/orprotection ofthe PSD increments. Giventhe above, the following principles apply: 1. A state's rule should make clear that all excess emissions are violations. One reason to define all excess emissions as violations is to ensure that owners and operators have appropriate incentives to properly design, operate, and maintaintheir facilities.

12. A state always has the discretion to not pursue an enforcement action for excess emissions resulting from start-up, shut-down, malfunction and maintenance activities. 3. A state decision to not pursue an enforcement action must not barEPA or citizen enforcement ofthe applicable requirements as allowed under the Clean Air Act. EPA's views related to these principles are explained in the enclosed September 20, 1999 EPAmemorandum from Steven A. Herman and Robert Perciasepe to Regional Administrators entitled "StateImplementation Plans: PolicyRegarding Excess Emissions During Malfunctions, Startup, and Shutdown," and April 27, 1977 andNovember 8, 1977 Federal Register notices on the sametopic (42 FR 21472 and 42 FR 58171, respectively). Our recent concerns with the North Dakotarule originallycame to light when we reviewed the draft PSD pennit to construct for Red Trail Energy's proposed ethanol production plantnearRichardton, North Dakota. As a result ofthatpermit action we decided to take a closer look atNorth Dakota's SIP-approved shutdown and malfunctionprovisions in 33-15-01­ 13, as well as other SIP-approved rules. Ourreview found that wehadinadvertently approved problematic provisions into the SIP. Ourdetailed comments are contained in the enclosure to this letter. Our main concern with theprovisions in 33-15-01-13 is that they appear to allow sources to continue to operate, and potentiallyexceed emission limits, duringmaintenance on control equipment or during a malfunction. We also note that rule 33-15-05-03.2(2)(d), for refuse incinerators, contains malfunction provisions that allow sources to operate, and potentially exceed emission limits, during malfunctions following Department approval. There are a couple ofoptions the Department could pursueto address ourconcerns with the maintenance and malfunctionprovisions in 33-15-01-13 and the malfunctionprovisions in 33-15-05-03.2(2)(d): 1. The Departmentcouldrevise the existingrules to be purelyrules that require notification when excess emissions occur. This would include removing any language that appears to allow sources to continue to operate, and potentially exceed emission limits, during maintenance ormalfunctions. 2. The Department could revise the existing rules to be notification rules (as discussed above) that also contain enforcement discretionprovisions for excess emissions due to malfunctions. An example ofan enforcement discretion rule is the draft ofthe Wyoming rule discussed below and enclosed. 3. The Department could develop affirmative defense provisions for startup, shutdown and/ormalfunctions as discussed in our September 1999policy, and revise the existing

2rules to benotification rules (as discussed above). Note, the September 1999 policy does not contemplate the use ofaffinnative defense provisions for routine maintenance. Finally, rule 33-15-20-04 addresses production facilities emissionrequirements and contains malfunction/maintenance provisions. Paragraph 6 indicates that it onlypertains to the reporting ofmalfunctions and maintenance and does not obviate a source's responsibilityto complywith otherrequirements. These provisions are acceptable except to the extent that the paragraph refers back to 33-15-01-13. Depending on how the Department addresses our concerns with 33-15-01-13, rule 33-15-20-04 may also need to berevised. We are also providing comments onthe varianceprovisions in 33-15-01-07. Again, because SIPs need to assure attainment and maintenance ofthe NAAQS andprotection ofPSD increments at all times, provisions that allow sources to exceed emission limitations are generally prohibited. North Dakota's varianceprovisions were inadvertently approved into the SIP. You should be aware that wehave been evaluating other state rules in ourRegion against the Clean Air Act and theprinciples explained in the September 1999policy.

-We examined Wyoming's existing excess emissions rules, inresponse to the Administrator's order in a TitleV petition case, and found problems with them. Wehave worked with the state and have settled on languagethat wouldresolve ourconcerns. See enclosed language Wyoming is intendingto propose as a SIP revision this spring. -We proposed to disapprove a Colorado rule that wouldhave allowed a set number ofexceedances ofopacity limits perquarter, including during startup, shutdown, and malfunction. We suggested the statepursue an affinnative defense rule for startup and shutdown. The state adopted such a rule and we are evaluating it against the requirements ofthe Clean AirAct. Also, in Colorado, we infonned the state that their existing upset rule was a problem. We negotiated language with state staffoverthe course ofseveral months. The state Commission declined to act onthe draft changes. Weare now considering appropriate follow-up action.

-We encouraged Utah to develop a rule to address concerns weraised with its "Unavoidable Breakdown" rule. Utah proposed a new affinnative defense rule whose public commentperiodran from October 1, 2004 to November 1, 2004. On October 22, 2004 we sent a letterto Utah with ourcomments and concerns with the new rule. Because ofthe comments received onthe rule, Utah decided to notproceed with the rulemaking and instead is starting discussions with EPA and industry about excess emission rules.

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### Please contact Laurie Ostrand orAmyPlatt ifyou have any questions regarding this letter or ifyou would like EPA review ofany language you develop to address these concerns. They both canbe reached at (800) 227-8917.

Enclosures

cc: Tom Bachman, ND Department ofHealth

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### EPA Comments on Rule 33-15-01-13, "Shutdown and malfunction ofan installation - Requirement for notification" 1) 

### Paragraph 1. 

### Maintenance shutdowns

- appears to allow sources to continue to operate and exceed emission limitations duringmaintenance ofcontrol equipment. Although the rule does not specificallyindicate that sources can exceed limits during maintenance, the paragraph indicates that sources can shut down control equipment for maintenance while still operating the source so long as the Department is notified and certain information is provided. InEPA's view, it is not appropriate underthe Clean AirActto automatically allow sources to exceed emission limitations during maintenance orto provide an affirmative defense for excess emissions during maintenance activities because SIPs must assure attainment and maintenance ofthe NAAQS and protection ofPSD increments at all times. Among otherthings, an owner or operator should be able to schedule maintenance that might otherwise lead to excess emissions to coincide with maintenance onproduction equipment orduring otherfacility shutdowns. Itis not appropriate to provide anyincentive to owners oroperators, in the form of an automatic exemption or an affirmative defense, to schedule maintenance on control equipment while theycontinue to operate productionprocesses. Inthis regard, you should note that our September 20, 1999 memorandum from Steven A. Herman and Robert Perciasepe to Regional Administrators entitled "State Implementation Plans: PolicyRegarding Excess Emissions During Malfunctions, Startup, and Shutdown" does not discuss allowing an affirmative defense for excess emissions during maintenance activities. This omission was intentional andbased on ourinterpretation ofthe Clean Air Act that any excess emissions during maintenance activities shouldbe addressed onlythrough the exercise of enforcement discretion and not throughthe provision ofan affirmative defense. For further discussion ofhow we view maintenance activities, see the enclosed April 27, 1977 and November 8, 1977 Federal Register notices. When we mentioned the above concern to you onthe July7, 2004 call, you indicated that rule 33-15-02-07, "Concentrations ofair contaminants inthe ambient airrestricted," prohibits sources from exceeding ambient air quality standards. You suggestedthat the NAAQS wouldbe protected even ifa source were availing itselfofthe provisions inparagraph 1 of33-15-01-13. However, provisions that indicate that sources cannot cause orcontribute to NAAQS violations are not practically enforceable. Among otherthings, wenote that rule 33-15-02-07 establishes no means to determine compliance with orenforce its requirements. In addition, the 1970 Act established the air qualitymanagement process as a basic philosophyfor airpollution control in this country. Underthis system, we establish air quality goals (NAAQS) for commonpollutants. States develop control programs (SIPs) and also issue permits underthe PSD ornonattainment new source review programs, to assure that the NAAQS are attained and maintained and increments protected. The NAAQS themselves are not an emission standard orlimitation. Coalition Against Columbus Centerv. New York, 967 F.2d 764, 769 (2d Cir. 1992). States establish enforceable emission limits in SIPs orpermits for 5sources to assure that the NAAQS and increments are protected. Rule 33-15-02-07 contains no source-specific enforceable emissions limits. Therefore, the provisions in 33-15-02-07, which indicate that sources cannot cause or contribute to NAAQS violations, cannotbe relied on to address the concerns wehave with the maintenance provisions in ARM 33-15-01-13. See #4 below for suggested changes to address our concerns. 2) Paragraph 2a. Malfunctions

- allows sources to exceed emission limitations during malfunctions. The rule indicates that sources that are malfunctioning and expect to cause emissions ofaircontaminants in violation of"this article or other applicable rules and regulations" can continue to operate for up to ten days so long as the Departmentis notified. Also, the rule allows sources to operate for longerperiods oftime during major equipment failure and potentiallyexceed emission limits during these extendedperiods. We view this paragraph as allowing an automatic exemption to emission limits. InEPA's view, it is not appropriate under the Clean AirAct to automatically allow sources to exceed emission limitations during malfunctions (or during startup, shutdown and maintenance) because SIPs must assure attainment and maintenanceoftheNAAQS and protection ofthe PSD increments at all times. For further discussion ofhow we view malfunctions, seethe enclosed September 20, 1999 EPA memorandum from Steven A. Herman and Robert Perciasepe to Regional Administrators entitled "State hnplementation Plans: PolicyRegarding Excess Emissions DuringMalfunctions, Startup, and Shutdown" and the April 27, 1977 and November 8, 1977 Federal Registernotices (cited previously). Also, see discussion in #1 regarding otherprovisions in North Dakota's rules that indicate that a source cannot cause orcontribute to NAAQS violations. Finally, see # 4 below for suggested changes to address ourconcerns. 3) Paragraph 3, Continuous emission monitoring system failures, we note, contains a director discretion provision. We willbe addressing ourconcerns regarding director discretion provisions in a separate letter 4) Suggested changes to 33-15-01-04 and 33-15-01-13 follow: 33-15-01-13. Shutdown and malfunction ofan installation

- Requirement for notification.

a. TheDepartment could revise the existingrules to be purelyrules that require notification when excess emissions occur: (i) Paragraph 1 of the rule should be deleted because it relates only to the continued operation ofthe source during scheduled maintenance on control equipment, something that is unnecessary and inappropriate. It should be replaced with a provision that states that all excess emissions are violations, regardless ofcause. 6

### (ii) Paragraph 2 ofthe rule should be changed. We would prefer to see notification for malfunctions expected to last less than 24 hours. Also, all language from "On receipt of this notification" until the start ofthe last sentence in 2.a should be stricken. Paragraph 2.b canberetained. (iii) The Department may also want to include a general notification regarding conditions that caused or may cause a violation and specify items that sources must include in the notice to the department. b. The Department could revise the existing rules to be notification rules (as discussed above) that also contain enforcement discretion provisions for excess emissions due to malfunctions. An 

### example ofan enforcement discretion rule is the draft ofthe Wyoming rule enclosed. In 

### a rule ofthisnature that refers to the Department's exercise ofits enforcement discretion, you should also include a caveat indicating that a state decision not to pursue an enforcement action does not bar or affect citizen or EPA enforcement action.

c. The Department could revise the existing rules to benotification rules (as discussed above) and also develop affirmative defenseprovisions for startups, shutdowns, and/or malfunctions as discussed inour September 1999 policy. Note, wedo not interpret the Clean Air Act to permit us to approve affirmative defense provisions for routine maintenance. 33-15-01-04. Definitions 

### Regardless ofwhat option you select based onthe above discussion, we also recommend that you add definitions for "excess emissions" and "malfunction" to the definition section of yourregulations (33-15-01-04). We suggest the following definitions: The term "excess emissions" means an air emission level which exceeds any applicable emission limitation. The term "malfunction" means a sudden and unavoidable breakdown ofprocess or control equipment.

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### Variances 33-15-01-07 Although we did not discuss the issue ofvariances on our July 7, 2004 call, wehave had and continue to have concerns with North Dakota's variance provisions that are approved into the SIP (33-15-01-07). EPA generallydoes not approve suchprovisions in SIPs because SIPs must assure attainment and maintenance ofthe NAAQS and protection ofPSD increments at all times and because variance provisions are inconsistent with sections 110(a) and 110(i) ofthe Clean Air Act. We request that the state delete the variance provisions from its rules and seek EPA approval ofa SIP revision to remove the variance provisions from the SIP. In

### the alternative, the state could add a new paragraph 3 to the rule that would read as follows: 3. All variances must be adopted and submitted to EPA as SIP revisions pursuant to section 110 ofthe Clean Air Act. No variance shall be effective until such SIP revision is approved byEPA.

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