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OAR Box 1781 

Prepped by Ollie Stewart 

Document Number: 

107) IV-C-21 

Docket Number: 

A-90-37 

Printed 10/29/2008 10:46:23 AM Sheet 107 of 142 
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY 

RESEARCH TRIANGLE PARK. NC 27711 

A-10-37 

13L---^I 

«B 6 1959 

OFFICE OF 

AIR QUALITY PLANNING 

ANO STANDARDS 

FEB 2 5 2000 

EPA AIR DOCKET • 

Mr. Patrick M. Raher 

Hogan & Hartson, L.L.P. 

Columbia Square 

555 Thirteenth Street, NW 

Washington, D.C. 20004-1109 

Dear Mr. Raher: 

Thank you for your letter dated June 18,1999, in which you provided comments and 

concerns about the analysis by STAPPA /ALAPCO on the NSR/Plantwide Applicability 

Limitations (PAL) concepts proposed by DaimlerChrysler Corporation, Intel Corporation, Eli 

Lilly and Company, Merck & Co., Inc. and Dupont (PAL Stakeholders) on May 17,1999. 

The Environmental Protection Agency (EPA) supports the position that the PAL program 

needs to be a flexible, effective, and environmentally sound option that provides a streamlined 

path for determining major NSR applicability. We appreciate the efforts of the PAL 

Stakeholders to date and look forward to continuing our discussions on PAL at the upcoming 

meeting on August 11 in Durham. At this meeting, we intend to first focus on the allowables 

based PAL and periodic PAL adjustment issues. There will also be time allocated so that 

representatives from EPA's Office of General Counsel (OGC) and Office of Enforcement and 

Compliance Assurance (OECA) may ask questions concerning your PAL paper. 

To ensure that we use the time productively, attached are some clarifying questions and 

requests for additional information concerning the PAL concept paper dated May 17,1999. The 

responses to the questions and requested information will facilitate discussions at our August 11 

meeting and ensure that both the stakeholders and EPA have an opportunity to share relevant 

information concerning the PAL Stakeholder's proposal. The responses will also be evaluated 

and considered as we finalize the requirements for a PAL program. Additionally, a copy of the 

responses will be placed into the docket for the NSR reform rulemaking. 

Recycled/Recyclable • Printed with Vegetable on Based Inks on 100% Recycled Paper (40% Postconsurner) 
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If you have any questions concerning the attached requests, please contact Mike Sewell at 

(919)541-0873. 

Sincerely, 

cLL2if-r(2. 

U^-ibYai S. Seitz 

Director 

Office of Air Quality Planning 

and Standards 

Attachment 

cc: William Becker 

John Paul 

Bill O'Sullivan 
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ATTACHMENT 

PAL Concept Paper Questions and Requests for Additional Information. 

Please note that the following questions and requests follow the order of issues addressed 

in the PAL Stakeholder's concept paper dated May 17,1999 (hereinafter referred to as the "PAL 

Proposal"). 

PAL Proposal Introduction: 

1. The PAL Proposal introduction states that "the PAL structure presented in this paper is 

an integrated approach that compared to "traditional" NSR, provides equivalent or better 

environmental protection." Under the PAL Proposal, BACT is installed on all new "major" units 

added under the PAL. Please provide examples of permitting scenarios that compare the PAL 

Proposal approach to traditional NSR, which in many cases results in BACT or LAER 

technology on units emitting less than "major" amounts. Please include an example situation 

where allowables emissions from existing well-controlled units are used to set the PAL and the 

actual emissions in tons per year from the these units have never exceeded 50% of the 

allowable's. 

2. The PAL Proposal states that permitting under a PAL provides more incentive for 

pollution prevention than the current Federal NSR system. How is this incentive different 

compared to the current netting system? Doesn't each system reward those that reduce 

emissions by allowing them to offset new increases and avoid major NSR? 

PAL Coverage (Partial PAL Issues): 

Under the PAL Proposal, certain emission units may be excluded from the PAL under the 

following circumstances: (1) emissions units that are minor (such as VOCs from fuel 

combustion); (2) emission units that comprise a separate part of the facility if the two operations 

are clearly distinct and the same manufacturing activities are not and will not be carried out at 

parts covered and uncovered by the PAL. 

1. Please clarify whether the PAL Proposal provides for more than one PAL to be 

established at a stationary source per pollutant. If yes, please explain why multiple PAL are 

needed at the same source for the same pollutant. 

2. If the concern is that unrelated operations at a source would need to coordinate to 

ensure compliance with the PAL, could the source take one PAL and allocate portions of the 

PAL to its different operations for management purposes? 

If a source must measure emissions from "de minimis" sources for netting 

purposes, please explain why is it harder to measure such sources under a PAL? 

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Please provide some examples and factors that could be used to determine 

whether operations or portions ofa facility are sufficiently distinct and separate 

to qualify for a separate PAL. What if the operations share energy, heat 

generation, or waste treatment? 

How would the partial PAL concept impact the current definition of major 

stationary source, if at all? 

3. For units outside the PAL, how would a source measure the actuals emissions baseline 

for netting purposes? What units would be included in the source's baseline? 

PAL Enforceability: 

Please provide any concerns or questions the PAL Stakeholders have concerning 

emissions quantification, monitoring, reporting, and record keeping requirements to be included 

in PAL permits to ensure practical enforceability? 

Initial Level of PAL: 

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1. For an actuals-based PAL, the proposal suggests using the same definition of "actual 

emissions" as in the current NSR rules. EPA) proposed a definition of "actual emissions" that 

would use a unit's highest 12-month level of {operations within the last ten years multiplied by a 

current emission factor. How would this definition be used to accommodate plantwide use? For 

example, how would a facility account for a unit that has been shut down since the chosen 

baseline year? 

2. The PAL proposal also indicates that under certain circumstances a PAL baseline may 

be based on allowable emissions. These circumstances include: 

a. "A greenfield facility where the new facility has satisfied the applicable state and 

federal NSR requirements and the facility has not reached full capacity. Under these 

circumstances, the PAL is set on the basis of the NSR review. Performance limits reflecting the 

BACT, LAER and State NSR determinations of good controls are retained." 

- To illustrate what is meant by the sentence "the PAL is set on the basis of the NSR 

review", please provide a simplified example (in writing) that reflects how a typical 

configuration of emission units would be accounted for and folded into the allowables 

PAL baseline at a greenfield facility. 

- Please explain what is meant by the sentence "Performance limits reflecting the BACT, 

LAER and State NSR determinations of good control technology are retained." 

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- If a greenfield source in an ozone attainment area obtains an allowables PAL for VOC 

what control technology requirements would apply to new units added under the PAL 

that emit 99 tpy or less of VOC? 

b. " In the case ofa facility where an extensive revamp or expansion (which is well 

defined and embodies good control technology on all the new sources) has been reviewed and 

approved consistent with applicable state/Federal NSR requirements, and recent actual emissions 

are lower than the levels considered in the NSR approval of the expansion or revamp. The PAL 

may be based on recent actuals plus an increment to accommodate the approved growth or 

change." 

- To illustrate what is meant by this option, please provide a simplified example (in 

writing) that reflects how each of the emissions units at a typical facility which underwent 

an extensive revamp or expansion would be accounted for and folded into a PAL 

baseline. 

- Does this option represent a hybrid type of PAL that is based both on actual and 

allowable emissions? 

- How would the "increment to accommodate the approved growth or change" be 

determined? Would the growth increment be the allowables for the new units? 

c. "In the case where the applicant can demonstrate that recent actual emissions plus an 

insignificant increase is not adequate to operate the existing equipment at its full capacity. The 

PAL must be based on BACT or LAER determinations in the previous five years (so long as the 

permitting authority determines that the level of good control has not advanced significantly 

since the determinations) or based on a good control determination (such as the state NSR "best 

available technology" review) made at the time the PAL is set." 

- To illustrate what is meant by this option, please provide a simplified example (in 

writing) that reflects how each of the emissions units at a typical facility that is eligible to 

qualify for an allowables based PAL under the conditions set forth in this option would 

be accounted for and folded into the PAL baseline. 

- Does this option represent a hybrid type of PAL that is based both on actual and 

allowable emissions? 

- How do you define "good controls"? Can you provide examples of the technology that 

would be minimally acceptable control for some of your more common processes? 

- What criteria, if any, should EPA specify for State programs to ensure that State reviews 

produce "good controls"? What opportunity, if any, should EPA have to object to 

deficient State determinations? 

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- What factors are appropriate for the permitting authority and EPA to consider when 

determining whether the level of good control has advanced significantly since the initial 

BACT or LAER determination? 

3. Please provide feedback on an allowables PAL option that is tied to a requirement that 

certain emissions units must be "well controlled". For an allowables-based PAL, EPA believes it 

may be appropriate to specify a size cutoff and tie that cutoff to a specific type of technology 

requirement. For example, an appropriate threshold to require controls is for all emissions units 

that emit in significant amounts or greater ofa major NSR regulated pollutant (e.g, 40 tpy for 

S02). What if an allowables based PAL is allowed if such units must meet BACT or LAER and 

all units emitting less than the significant threshold must meet the State's NSR requirements for 

new minor sources. The allowables PAL baseline would be set by summing together the level of 

allowable emissions associated with each of the BACT, LAER or State minor NSR 

determinations. Would this type of "allowables" PAL address the concerns of your group? If 

not, please explain why? 

Assuming for discussion purposes that a greenfields source can secure an allowables 

PAL. If an adjustment to reflect actual emissions is required after a fixed period of time (e.g., 

five or ten years), would such a fixed time period before adjustment occurs allow the source to 

reach full production? Would mis type o f "allowables" PAL for greenfield sources address the 

concerns of your group? If not, explain why? 

4. In general, the PAL Proposal includes an allowables based PAL where the major 

emissions units are well controlled. Does industry propose that the allowables emissions concept 

for PAL be extended to the more traditional major NSR applicability tests (e.g, netting)? What is 

the PAL Stakeholders' position on whether and how the allowables emissions concept for NSR 

applicability can be limited to PAL? 

5. For nonattainment NSR permitting does the PAL Proposal propose that NSR offsets 

be obtained for the full allowables level? 

6. When permitting an allowables PAL for sources obtaining a PSD permit, does the 

PAL Proposal provide for air quality modeling and Class I analysis to be done at the allowables 

level? 

PAL Adjustment Issues: 

The PAL Proposal does not require periodic adjustment of the PAL level to reflect more 

contemporaneous levels of actual emissions. 

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1. How does the PAL Proposal meet the contemporaneity requirements of Alabama 

Power? If the PAL Proposal essentially provides for a PAL adjustment after twenty years how 

does this ensure that emissions reductions are "contemporaneous" with the emissions increases 

from new or modified units under the PAL? 

2. The PAL Proposal provides that the PAL may be adjusted to correct "significant" 

errors. What criteria would be used to determine whether or not an error is significant? 

3. For certain major units the PAL Proposal states the "the permitting authority will have 

authority, in addition to any current authority, to require that the unit be placed on a schedule for 

control technology upgrade to current best available technology performance levels over the first 

ten years of the PAL permit being in place." 

- Please explain whether the exercise of this authority by the State is mandatory (i.e., it 

must require the control of such units) or discretionary (may require such controls). 

- Regardless of whether the State's authority is discretionary or mandatory...can the PAL 

source dispute such request and try to avoid installing the requested controls? 

4. What is the PAL Stakeholder's position on the concept that any requirements EPA 

sets for PAL are minimum requirements. Do we agree that the States retain the authority to 

adopt more stringent control and other requirements for existing or new emissions units that are 

under a PAL? 

Flexibility Under A PAL: 

1. BACT for the PAL pollutant is proposed for all new units added under the PAL that 

are considered "major" (i.e., unit emits over 100 tpy or the major source threshold for the area, 

whichever is lower). So that we may consider the environmental impact of requiring BACT on 

new units emitting at these thresholds, please provide the following infonnation for both VOC 

and NOx emissions units for the different source categories represented by the PAL Stakeholders. 

For the typical existing stationary source what percentage of existing units are "major" 

for the PAL pollutant? What percentage of total emissions of the PAL pollutant from the 

stationary source come from "major" units? 

2. During a previous meeting the PAL Stakeholders stated that PTE limits, including 

restrictions of hours of operation and pollution control equipment, should be considered when 

determining if a new unit is "major" for purposes of BACT/LAER applicability. 

Please explain what is meant by this statement. Does it mean that a source could 

install less than BACT/LAER controls on a unit to avoid being "major"? 

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Assuming the purpose of PAL is to provide operational flexibility, please explain 

why the use of PTE limits under PAL does not limit this flexibility? 

3. Does the PAL Proposal include the option to permit a PAL to substitute and thereby 

remove limits taken previously to avoid major NSR [i.e., limits subject to 40 CFR 52.21(r)(4)]? 

4. Does the PAL Proposal provide for the installation of LAER instead of BACT on all 

new "major" units added under the PAL for nonattainment pollutants? 

Expanding the PAL Level: 

The PAL Proposal permits the PAL level to be increased "by taking the change that is 

associated with the need for the increase through the Federal NSR process." Additionally, "to 

expand the PAL, all major units covered by the PAL must have good controls or be on an 

enforceable schedule to install the controls or shutdown within five years". 

Is this option to expand the PAL level available if the units being added would fit 

' under the existing PAL? If the source could create room under the PAL for the 

new units by installing additional controls on existing units would the option be 

available? 

Would the PAL be increased by the allowable or actual emissions from units that 

meet major NSR requirements? 

Does the PAL Proposal mean that in order to expand the PAL that the major NSR 

requirements would apply to all units being added, including units that are less 

than the major NSR significance levels (e.g., 40 tpy for S02)? Please explain. 

Are there any other ways proposed that the PAL could be expanded? In other 

words could units be added to a PAL source that are not part of the PAL? If so, 

under what conditions? 

PAL Termination: 

In the PAL Proposal a PAL is set for a period often years. During the ten years at the 

request of the permittee and if approved by the permitting authority the PAL can be terminated. 

Upon termination the PAL limit will be retained as a permitted cap. As the end of the ten years 

approaches, renewal can be requested for another ten years. At the end of twenty years the PAL 

must be reevaluated. 

1. Please explain what is meant by the statement that the tpy limit representing the PAL 

would be "retained" at the facility? Would the permitted cap be one cap for all units previously 

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under the PAL? Would the cap be considered a limit taken to avoid major NSR and thus subject 

to the requirements of 40 CFR 52.21(r)(4)? What happens if the source wants to increase the 

cap? 

2. Is there a proposed minimum time period for the PAL to be in effect before the source 

may apply for PAL termination? Could a source have the PAL dissolved and later re-establish 

the PAL anew? 

3. Please explain the extent of the PAL reevaluation at the end of twenty years? For 

example, would the PAL be adjusted for any reason because actual emissions under the PAL 

may have been less than the P.AL limit? 

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