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# OAR Box 

# 1787 Prepped by Ollie Stewart



### Document

Number: 

# 17 ) ll-B- 2
Docket Number: 

# A-90-3 7

Printed 11/4/200810:22:18 AM

Sheet 17 of 147P. 2 

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## ir-3-2. : UNrTE D STATE S ENVIRONMENTA L PROTECTIO N AGENC Y

WASHINGTON , DC , 2046 0

SS 3 2 199

2 OfFlCeO F A M AN D RADIATIO N MEMORANDU

M SUBJECT :

FROM :

TO : Applicabilit yo f Policyo n Limiting Potentia l t o Emi t t o

Genera l Motor s Morrai n Assembl yPlant , Dayton , Ohio
. Joh n B
. Rasnic , Directo r ""^l^vvu ^ **fL
. "T^nAlt^ -^W
. StationarySourc e Complianc e divisio n *\~ Offic e o f Ai r Qualit yPlanning and,Standards

_\ Davi d Kee , Directo r Ai r and Radiatio n Divisio n Regio n V 

### 0 ; r ' ! I 

### 'W i Thi s i s i n respons e t o a memorandu mdatedEE.Augus t 31, ; fromGeorg e Czernia k t o Mami e Mille r requesting a n official" " writte n positio n fro m me . o n th e issue s involving th e 198 9 guidanc e o n "Limiting Potentia l t o Emi t i n Ne wSourc e Permitting " a s discusse d byClar a Poffenberge r an d Bil l MacDowel l o n Augus t 27 , 1992
. Th e memorandu mo f Augus t 31 , 1992 , correctl yconclude s tha t Genera l Motor s Morrai n Assembl yPlan t i n Dayton , Ohi o (GM ) mus t mee t th e federa l polic yrequirement s sinc e th e polic yprovide s guidanc e a s t o EPA' s view s o n th e "federall yenforceable " requirement s o f limiting potentia l t o emi t i n al l ne wsourc e permitting
. Anumbe r o f memorand a have , addresse d th e issu e o f th e 198 9 guidanc e and w e hav e regularl ycorresponde d wit hyo u an d you r staf f regarding th e policy
. W e believ e tha t th e issu e a t thi s tim e i s no t ho wt o appl yth e polic ybu t whethe r th e polic yapplie s i n thi s case . Fromth e conversatio n betwee n Bil l MacDowel l an d Clar a Poffenberger , w e understan d tha t GMchallenge s th e applicabilit yo f th e polic ywit hth e argumen t tha t the yar e neithe r subjec t t o th e majo r ne wsourc e requirement s no r ar e they subjec t t o a federa l program . Rather , the ysugges t tha t sinc e th e Ne wSourc e Revie wprogramthe yar e i n fac t avoiding i s a SI P approve d program , th e federa l policie s d o no t apply
. Th e progra m approve d i n th e SI P incorporate s b yreferenc e Appendi xS o f 4 0 CF R par t 51
. The definitio n o f "potentia l t o emit " a s foun d i n Appendi xS i s th e sam e a s i n 4 0 CFR §52.2 1 an d §51.165 , an

d §51.166
. Th e Jun e 28 , 198 9 federa l registe r notic e [5 4 F R 27279 ] tha t addresse d federa l enforceabilit yapplie d t o al l thes e section s an

d specificall yamende d eac hsection a s wel l a s Appendi x S
. A s state d i n th e Augus t 3 1 memorandum , th e definitio n contain s a federa l enforceabilit yrequirement
.

Printed on Recycled

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# JP. 3

"An y physica l o r operationa l limitatio nonthe capacity o f the sourc e t o emi t a pollutant,. . .shal l b e treateda s par t o f the desig

nonl y i f the limitatio

no r th e effect i t voul dhave o

nemission s i s federally enforceable. " Appendi xS t o Par t 5 1 - Emissio nOffse t Interpretativ e Ruling , II.A.3 . W e therefor e concur wit hyou r of f ice that G

M mus t mee t the requirement s o f the Federa l policy . The policy

onLimitin

g Potentia l t o Emi t i nNew Sourc e Permittin

g specificall y

addresse s what i s federall y enforceable . T o b e federall y

enforceable , tw

o criteri a mus t b e met : (1 ) th e limitatio

nmus t be containe

dina permi t tha t itsel f i s federally enforceabl e (se

e p . 2 o f th

e polic y an dthe 1989 , federa l register notice ) an

d(2 ) the limitatio nmus t b e enforceabl e a s a practica l matter . Whethe r a specifi c limitatio ni s enforceabl e a s a practica l matte r ha s beenth e subjec t o f variou s discussion s with your staff . W

e concu r withyou

r staf f tha t G

M ca nsatisfy

th e Federa l policy

requirement s witheither (1 ) a combinatio no f operatin

g restrictions , s o lon g a s th e operatin

g restriction s are independentl y

enforceabl e or (2 ) limit s o nthe VO C usag e s o lon g a s the permi t contain s adequat e recordkeepin g an dcomplianc e demonstratio

nrequirement s sufficient t o determine tha t usage . Lastly , w

e agre e that th

e TTopcoat Protocol " whichdetermine s th e pound s o f VO C pe r gallo no f applie

dsolids , woul db e insufficient t o limi t th e potentia l t o emit , i nthi s case . I f yo uhav e an y question s regardin g thi s matter , pleas e contac t Clara Poffenberge r at 202- 2 60-2842 .P. 4

• % »

lending institution s an d othe r record s o f projecte d demand an d output
. EP Astate d tha t wher e i t appear s obviou s tha t a propose d sourc e o r modification , b yit s physica l and operationa l desig n characteristics , coul d no t economicall yb e ru n a t mino r sourc e level s fo r a n appreciabl e lengt ho f time , EPAwil l conside r mino r sourc e limit s take n b ythe sourc e unrealisti c and sham
. Specifi c Criteri a Simila r t o th e 198 9 guidance , thi s memorandu m provide s criteri a t o permitting an d enforcemen t authoritie s t o appl ywhe n makin g determination s whethe r a sourc e i s circumventin g majo r NS R throughth e mino r modificatio n process .
1
. Filing o f mor e tha n on e mino r sourc e o r mino r modificatio n applicatio n associate d wit hemission s increase s a t a singl e plan t withi n a shor t time period
. I f a sourc e file s mor e tha n on e mino r sourc e permi t applicatio n simultaneousl yo r withi n a shor t tim e perio d o f eac h other , thi s mayconstitut e strong evidenc e o f a n inten t t o circumven t th e requirement s o f preconstructio n review
. Authoritie s shoul d scrutiniz e application s tha t relat e t o th e same proces s o r unit s tha t th e sourc e file s eithe r befor e initia l operatio n o f th e uni t o r afte r les s than a yea r o f operation
. Th e Septembe r 18 , 198 9 memorandu mfro mJohn Calcagn i t o William Hathawaystate s tha t tw o o r mor e relate d mino r change s ove r a shor t time perio d shoul d b e studie d fo r possibl e circumvention
. 2
. Applicatio n o f funding
. Application s fo r commercia l loan s or , fo r publi c utilities , bond issues , shoul d b e scrutinize d t o se e i f th e sourc e ha s treate d th e project s a s on e modificatio n fo r financia l purposes . I f th e projec t woul d no t b e funde d o r i f i t woul d no t b e economicall yviabl e i f operate d o n a n extende d basi s (at leas t a year ) withou t th e othe r projects , thi s shoul d b e considere d evidenc e o f circumvention
. 3
. Report s o f consume r demand an d projecte d productio n levels
. Stockholde r reports , report s t o the Securitie s an d Exchang e Commission , utilit yboar d reports , o r busines s permi t application s should"b e reviewe d fo r projecte d operatio n o r productio n levels
. I f reporte d level s ar e necessaryt o mee t projecte d consume r demand bu t ar e highe r tha n permitte d levels , thi s i s additiona l evidenc e o f circumvention
.P. 5 

# .++-

Althoug hi t i s somewha t unclear , th e respons e t o th e §11 4 reques t arguabl ysupport s 3M' s justification
. Ye t i n ligh t o f criteri a fo r identifying circumventio n situations , a s furthe r explaine d below , th e StationarySourc e Complianc e Divisio n (SSCD ) believe s th e sourc e mayno t hav e bee n permitte d properl yfo r it s modifications
. EPAPolic yan

d Authorit y EP Astate d i n th e Jun e 28 , 198 9 Federa l Registe r notic e o n th e definitio n o f federall yenforceabl e (5 4 FR 27274 ) and i n it s Jun e 13 , 198 9 guidanc e o n "Limiting Potentia l t o Emi t i n Ne w Sourc e Permitting " tha t i t i s no t onl yimprope r bu t als o i n violatio n o f th e Clea n Ai r Ac t t o construc t a sourc e o r majo r modificatio n wit ha mino r sourc e permi t whe n ther e i s inten t t o operat e a s a majo r sourc e o r majo r modification
. Permit s wit h condition s tha t d o no t reflec t a source' s planne d mod e o f operatio n ar e sha

mpermits , ar e voi d a £ initio , an d canno t shiel d a sourc e from

th e requiremen t t o underg o preconstructio n review
. 4 0 CF R §52.21(r)(4 ) require s applicatio n o f NS R requirement s t o a sourc e tha t ask s fo r a relaxatio n o f permi t limit s whic hwoul d mak e th e sourc e major
. EPAstate d tha t i t wil l requir e applicatio n o f §52.21(r)(4 ) eve n wher e a sourc e legitimatel y change s a projec t afte r finding i t canno t compl ywit hth e operatin g restriction s whic hwer e take n i n goo d faith
. Generall yi n "sham " permitting , a sourc e attempt s t o expedit e constructio n b ysecuring mino r sourc e statu s through permit s containing operationa l restriction s fromwhic hth e sourc e intend s t o fre e itsel f shortl yafte r completio n o f constructio n an d commencemen t o f operation
. Suc hattempt s ar e treate d a s unlawfu l circumventio n o f th e preconstructio n revie wrequirements
. Similarly , attempt s t o expedit e constructio n b ysecuring severa l mino r sourc e permit s an d avoiding majo r modificatio n requirement s shoul d b e treate d a s circumvention
. Amemorandu m date d Septembe r 18 , 1 9 8 9 fro mJohn Calcagn i t o William Hathawaystate d thi s positio n (se e Memorandu m4.4 2 i n th e NS R Guidanc e Notebook)
. EPAstate d i n the 198 9 Federa l Registe r notic e tha t i t i s no t possibl e t o se t forth , i n detail , th e circumstance s i n whic hEPA consider s a n owne r o r operato r t o hav e evade d preconstructio n revie wthroughmino r permits , and thu s subjec t itsel f t o enforcemen t sanction s unde r §§11 3 and 16 7 fromth e beginnin g o f construction
. However , EPAwil l loo k t o objectiv e indici a t o identif ycircumventio n situations
. Fo r example , EPAprovide d example s o f objectiv e criteri a i n th e Jun e 13 , 198 9 guidanc e o n limiting potentia l t o emit
. EPAals o state d som e criteri a i n the Federa l Registe r notic e whic hinclude : th e filing o f a n applicatio n fo r a federa l PS D permi t a t o r nea r the same time a s a stat e mino r sourc e permit ; th e economi c realitie s surrounding a transaction ; an

d projecte d level s o f operatio n a s portraye d t oP. 6

:*• !

4
. Statement s o f authorize d representative s o f the sourc e regarding plan s fo r operation
. Statement s b

yrepresentative s o f th e sourc e t o EPAo r t o Stat e o r loca l permittin g agencie s abou t the source' s plan s fo r operatio n can b e evidenc e t o sho winten t t o circumven t preconstructio n revie wrequirements
. 5
. EPA' s ow

n analysi s o f th e economi c realitie s o f the project s considere d together
. EP Ama ydetermin e tha t i t i s reasonabl e t o expec t tha t compan ymanagemen t woul d coordinat e th e plannin g an d executio n o f project s considering thei r intrinsi c relationshi p wit heac hothe r (physica l proximity , stage s o f productio n process , etc. ) an d thei r impac t o n economi c viabilit yo f th e plan t (scheduling dow n time i n ligh t o f productio n targets , economie s o f scale , etc.)
. Analysi s o f 3M-Maplewoo d Although3 Mapplie d fo r and receive d severa l mino r sourc e permit s withi n 1 8 months , i n respons e t o the §11 4 request , 3 M state d tha t independen t division s a t th e plan t mad e th e funding decision s fo r eac hindependen t projec t an d tha t eac hprojec t i s independentl yviable
. Thus , the ysuggest , th e project s ar e no t par t o f a n attemp t t o circumven t preconstructio n review
. 3 Man d Minnesot a hav e indicate d tha t th e divisions ' action s shoul d b e reviewe d separatel yand shoul d no t b e treate d a s part s o f a whole
. However , th e lawplainl ytreat s th e Maplewoo d plan t a s on e majo r emitting facilit yfo r NS R purposes . Th e NS R regulation s d o no t provid e specia l treatmen t becaus e i t i s a researc han d developmen t plant
. Further , give n th e natur e o f thi s source , unde r norma l conditions , a certai n leve l o f productio n o r researc hdevelopmen t o f ne wproduct s ca n be'expected
. Althoughthe NS R progra m generall yallow s source s t o modif ybelo wsignificanc e level s withou t aggregating othe r contemporaneou s ne t increases , source s canno t us e the mino r modificatio n proces s t o circumven t majo r modificatio n requirements
. Wher e a sourc e i s permitte d fo r severa l mino r modification s tha t mayi n goo d fait hb e intende d t o b e separat e bu t resul t i n th e source' s aggregat e increase s t o b e majo r eve n considering decrease s ove r a shor t time perio d (e.g. , on e yea r o r 1 8 months) , the modification s mayrequir e majo r ne wsourc e review
. Suc h modification s coul d requir e NS R i f theyar e viewe d a s being consisten t wit hth e source' s overal l productio n goal s o r plan s fo r a shor t planning period
. I n othe r words , 3 Mshoul d no t benefi t fro mth e absenc e o f a plant-wid e productio n plan
. Give n th e natur e o f th e plant' s work , 3 M ma yb e abl e t o reasonabl y anticipat e tha t modification s wil l occu r withi n a relativel yshor t perio d o f time
.P. 7

' • ~ * >\

Report s o n consume r demand an d projecte d productio n o r emissio n level s mayprovid e evidenc e tha t thi s plan t i s expecte d t o modif yregularl yi n respons e t o suc hdemand s o r researc hneeds
. Som e minimu

mleve l o f researc hactivit yan d commensurat e emissions , source-wide , perhap s coul d b e expecte d fro myea r t o year , a s woul d b e expecte d t o kee p th e 3 M plan t productiv e o r operable
. Thes e emission s an d thereb

ymodification s canno t b e presume d t o b e independen t give n th e plant' s overal l basi c purpos e t o suppor t a variet yo f researc hand developmen t activities
. Therefore , eve n thougheac hresearc hprojec t mayhav e bee n individuall yconceive d an d separatel yfunded , i t i s appropriat e t o loo k a t th e overal l expecte d researc hactivit yi n assessing NS R applicabilit yand enforcement
. Withou t regar d t o whethe r 3 Mintende d t o circumven t NS R requirements , thi s sourc e an d th e Stat e shoul d discus s alternativ e permittin g tha t coul d minimiz e th e uncertaint yo f intent
. Althoug hw e canno t requir e aggregatio n o f al l d e minimi s ne t increases , w e believ e tha t ne t increase s shoul d b e aggregate d fo r eac h"planning period " o f th e plant
. On e wayt o trea t thi s sourc e i s t o se t a plant-wid e emission s level , tha t ca n b e raise d onl yb y goin g throughmajo r NSR
. Recently , w e worke d wit hyo u an d th e MPCAt o develo p a plantwid e emission s cap permi t fo r a 3 M facilit y i n St
. Paul
. Althoughther e ar e a numbe r o f concern s tha t mus t b e addresse d i n suc ha n approach , w e believ e tha t th e sourc e and th e Stat e woul d benefi t from th e certaint ytha t suc ha n approac h provides
. I f yo u hav e an

yquestion s regarding thi s matter , pleas e contac t Clar a Poffenberge r a t (703 ) 308-8709
. cc : Kare n Schapiro , O E Gre g Foote , OG C Bil l Lamason , AQM D Ai r Divisio n Director s NS R contact s