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# OAR Box 1781 Prepped by Ollie Stewart

Document

Number: 

# 95)IV-C-1 0 Docket Number: 

# A-90-3 7

Printed 10/29/2008 10:46:22 AM Sheet 95 of 142

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# A - ^-3 7 UNITE D STATE S ENVIRONMENTA L PROTECTIO N AGENC Y TO ~ £ - - I O RESEARC H TRIANGL E PARK . N C 2771 1 AP R I 4 I99 9

OFFIC E O F AI R QUALIT Y PLANNIN G AN D STANDARD S Dr . Barr y R . Wallerstei n Actin g Executiv e Office

r Sout h Coas t Air Qualit y Managemen

t Distric t 2186 5 E.Cople y Driv e Diamon d Bar , Californi a91765-418 2 Dea r Dr . Wallerstein : Thi s i s i n respons e t o your

Marc h 23,199 9 letter

regarding-ceTtain issue s discusse d afth e Marc h 9,199 9 meetin g with representative s o f th e Sout h Coas t Ai r Qualit y Managemen

t Distric t (SCAQMD ) staff

, th e SCAQMD Hom

e Rul e Advisor

y Board , an d EP A concernin g th e implementatio n o f

th e Clea n Ai r Act' s requiremen

t tha t ne w major

source s an d majo

r modification s apply Lowes t Achievabl e Emission s Rat e (LAER ) i n th e Sout h Coast . I n general , th e majo t issu e area s discusse d at

th e meetin g include d th e exten t t o whic h cos t

and smal l busines s consideration s can b e factore d into LAE Rdecisions , ho w t o ad d agreate r degre e o f certaint y a s t o wha

t represent s LAE

Rdurin g th e permittin g process , an d th e LAE Rrequirement a s i t applie s t o relocate d sources . A s you ar e aware , some o f

th e issue s yo u hav e raise d are currentl y bein g addresse d withi n th e context

o f EPA' s Ne w Sourc e Revie w (NSR) Refor mrulemaking . The

y includ e regulator y change s intende d t o promote certainty , suc h a s definin g th e circumstance s under whic h anew pollutio n contro l technolog y i s considere d achieve d i n practice , settin g acutof f date fo r th e consideratio n o f

ne w developin g pollutio n contro l technologie s i n determinin g Bes t Achievabl e Contro l Technolog y (BACT)/LAER , an d amendin g th e definitio n o f LAE Rt o accommodat

e undemonstrate d technologies . Th e EPA wil l continu e t o addres s thes e issue s withi n th e contex t

o f th e NS RRefor

mrulemaking . T o date , th e rulemakin g ha s include d multiple , publi c stakeholder meeting s an d a

n extende d comment

perio d lastin g 6 months . Althoug h th e commen

t perio d o n th e propose d rulemakin g ha s alread y close d and w e are no t obligate d t o conside

r additional comments , t o th e extent you r current issue s wer

e covere d i n th e NS RRefor

mproposal , w e wil l endeavor t o take into consideratio n an y additiona

l comment s yo u ma y wis h t o provid e i n th e nex t fe w week s a s w e procee d wit h developin g afinal rulemaking .

ft1 - Th e LAE Rissue s relatin g t o ver

y smal l source s (suc h a s thos e subjec t t o LAE Ri n th e Sout h Coast ) or t o aspecifi c typ e o f

busines s ar

e bes t addresse d i n th e contex t

o f th e individua

l case , rathe r tha n throug h anationa

l rulemakin g or

apubli c wor

k group typ e o f

process . A s discusse d a

t th e Marc h meeting , workin g throug h som e real worl d cas e example s ma y b e th e bes t wa y t o understan d th e real magnitud e o f th e problemand th e need , i f any , t o issu e additiona

l guidanc e o

r chang e current

policy . Regio n I

X i s committe d t o workin g wit h th e Distric t

t o 

# 1 Interne t Addres s (URL ) • http://www.epa.gb v Recycled/Recyclabl e • Printe d wit h Vegetabl e O H Base d Ink s o n Recycle d Pape r (Minimu m 25 % Postconsumer )P. 3

• /

addres s th e outlier s identifie d i n th e District' s Socioeconomi c Impac t Report , alon g wit

h an y othe r extrem e case s tha t warran t specia l attention . W e believ e th e Marc h meetin g wa s a n important majo r ste p t o reachin g amutua

l understandin g o f

th e issue s an d potentia

l solutions , and tha t Regio n I X wil l continu e a s th e overal l lea d t o follo w u p wit

h futur e meeting s wit

h you r staf f an d othe r intereste d partie s in order

t o brin g thes e issue s t o closure . I n addition , mos t o f th e othe r LAE Rissue s raise d i n referenc e t o cos t and smal l busines s concerns , includin g smal l sourc e relocation , ar

e somewha

t uniqu e t o th e Sout

h Coast . Consequently , i n regar d t o th e other LAE Rissue s no t

covere d i n th e rulemaking , w e fee l tha t i t woul d b e mos t

appropriat

e a t thi s time fo r th e SCAQM

D t o continu e t o mee t

an d wor k wit h Regio n I X a s th e EPA lead . W e understan d tha

t Regio n I X ha s alread

y contacte d th e Lo s Angele s Are aChambe r o f Commerc e and offered t o wor

k wit h stakeholder s o n som

e o f thes e Sout

h Coas t specifi c issues . O f

course , th e Home Rul e Advisor

y Grou p an d th e Scientifi c Revie w Committe e wil l continu e t o serv e a s valuabl e forum s fo

r publi c discussio n o f

thes e issues . T o th e extent necessary , thi s office wil l continu e t o provide appropriat e input and consultatio n wher

e issu e resolutio n ma

y hav e broader nationa l polic y implications . I appreciate thi s opportunit y t o b e o f servic e an d trus t

tha t thi s informatio n wil l b e helpful . Sincerely , ^JoMiS . Seit z Directo r Offic e o f Air Qualit y Plannin g and Standard s cc : D . Howekamp , EP

A Regio n D

C M . Kenny , CARB , Sacramento , C A L . Wallace , Sempr

aEnergy , Lo s Angeles , C A j

%: 

# 2.P. 4

- i j 

# Sout

h Coas t Ai r Qualit y Managemen t

District 21865 E . Cople y Drive. Diamon

d Bar . C A 91765-418 2 L (909 ) 396-200 0 • http://www.aqmd.gov 

# 1 ) ^ Office of the Executive Officer Barry R. Wallerstein, D.Env. ' 909.396.2100.fax 909.396.3340 

### Marc h 23 , 1999 Mr . Joh n Seit z Director , Office o

f Ai r Qualit y Plannin g & Standard s U . S . Environmenta

l Protectio n Agenc y Mai l Drop-1 0 Researc h Triangl e Park , N C 2771 1

Subject : Lowes t

Achievabl e Emission s Rat e (LAER) Discussion s Dea r Mr . Seitz : O n Mar& h 9 , 1999 , you

r staf f alon g wit h other s fro

mU.S . EP

A met wit h representa tive s of the Sout h Coas t Ai r Qualit y Managemen

t Distric t (SCAQMD ) staf

f an d the SCAQMD Hom

e Rul e Advisor y Grou p t o discus s important

issue s regardin g imple

mentatio n o f

LAE Ri n ou r jurisdiction . We exten d ou r sincer e appreciatio n to the U.S . EP A fo r th e tim e an d efforts spen

t t o meet an d confe r o n thes e issues . Thi s meetin g wa s acontinuatio n o f

wor k starte d i n 199 8 o

n thes e ver

y issue s wit

h the U.S . EP

A Regio n IX , a s detaile d i

n m y Jul y 30 , 199 8 letter

t o Davi d Howekamp . I

t i s importan

t tha t we continu e thi s dialogu e unti l asatisfactor y resolutio n i s reached , includin g integratio n o f

apubli c proces s t

o facilitat e stakeholde

r participatio n regardin g thes e LAE Rissues . A s suggeste d by you

r staff , w e will send ou

r comment s regardin g th e LAE Rissue s discusse d i

n th e U.S . EPA' s Ne w Sourc e Revie w Refor m(NS RReform

) proposa l t o th e appropriate docke

t thi s month . W e als o understan d tha t th e issue s of

cos t an d relocatio n wer

e not addresse d i

n th e NS RRefor

mproposal , an

d ma y no t b e handle d i

n tha t regulator y process . Hence , w e wil l provide furthe r thought s o

n thes e item s to you under separat e cove r t o complemen

t th e item s discusse d i

n m y letter s of

July 30 , 1998 , and Februar

y 2 6 an d March 3 , 1999 , to Davi d Howekam p of U.S . EP A Regio n IX . Whil e the March 9 , 1999 meetin g wa s helpful , asustaine d effor t i s needed . Hence , we recommen d apubli c workin g grou p meetin g o

r foru mo n LAE Rissues . Suc

h actio n woul d hono r

th e reques t

o f Administrato r

Caro l Browne

r a t th e July 199 8 meetin g a

t th e Lo s Angele s Chambe

r o f Commerce . The SCAQM D staf f wil l b e happy to assis t 

# 3P. 5 » J P)'f » W « a

f *f "



### Mr . Joh n Seitz -2

- March 23 , 1999 you an d other U.S . EP A official s in notifyin g th e publi c an d holdin g such meeting s in th e Lo s Angele s area . I clos e by thankin g you an d the other

U.S . EP A staf f fo r thei r cooperatio n and willingnes s t

o analyz e thes e important

f polic y issues . I woul d als o lik e to reques t

a: L written respons e t

o thi s letter

an d m y previou s letter s t

o U.S . EP A n o later tha n Apri l 1999 , s o tha

t th e SCAQM D Governin g Boar d an d othe r electe d official s ma

y b e kep t apprise d o f

our progres s in thi s area . Pleas e direc t

al l question s or

inquirie s regardin g thi s matte r t o Po mPomGangul i (909

- 396-3185 , aganguli@aqmd.sgov) or Barbar aBair

d (909-396-2302 , bbaird@aqmd.gov) . \



### Sincerely , 

# B Barr y R . Wallerstein , D.Env . Executiv e Office

r PB:EC:AG:pg

m Encl . 

### cc : Davi d P . Howekamp , US . EPA , Regio n I X Mik e Kenny , Californi aAi

r Resource s Boar

d SCAQM D Hom e Rule Advisor

y Group Member s



# 4 - / *P. 6



# Sout h Coas t 

# Ai r Qualit y Managemen t

Distric t 2186 5 E . Copje y Drive . Diamon d Bar . C A 91765-418 2 (909 ) 396-200 0 • http://www.aqmd.go v 

### March 3 , 199 9 Mr . Davi d P . Howekam

p Director , Ai

r & Toxic s Divisio n Environmenta

l Protectio n Agency , Regio n I X I 7 5 Hawthorn e Street Sa n Francisco , C

A 9410 5 Dea r Mr . Howekamp : " On Februar

y 26 , 1999, 1 wrot e t o you regardin g some issue s wit h th e federa

l policie s an d procedure s fo

r implementin g th e requiremen t o f Lowes t Achievabl e Emission s Rat e (LAER ) i n New Sourc e Review . I als o mentione d therei n tha t w e ma y hav e additiona

l materia l fo r th e consideratio n o f

th e U.S . EP

A i n th e nea r future . Pleas e find enclose d tw o additiona

l paper s o n Cos t and Sourc e Categorie s a s relate d t o th e discussio n schedule d fo

r the upcomin g meetin g o n March 9 , 199 9 a t th e EP A office s i

n Nort h Carolina . Thi s complete s th e packag e o f 6 topica l Whit e Paper s on LAE

Rissue s - whic h should focu s th e discussio n durin g the Marc h 9 meeting . Th e 6 LAE

RWhit e Paper s wer

e prepare d b

y th e Sout h Coas t Ai r Qualit y Managemen

t District' s (SCAQMD's ) Hom e Rul e Advisor y Group - Ne w Sourc e Revie w Subcommitte e (HRAG - NS RSubcommittee ) wit h th e hel p o f

th e SCAQM

D staff , an d are fo r discussio n purposes . Thes e issue s ar e o f prim e importanc e t

o th e SCAQMD an d w e appreciat

e EPA' s willingnes s t o revie w ari d discus s thes e issue s i

n greate r depth . Pleas e direc t

all question s an d inquirie s regardin g thi s matter t o PomPo mGangul i a

t (909 ) 396-318 5 o r

BarbaraBaird a

t (909 ) 396-2302 . Sincerely yours , Barr y R . Wallerstein , D . Env . Executiv e Office

r JPB:AG:pgm 

### Ends . 

# 5P. 7 

### COS T I N LAE RDETERMINATION S Presen t EP A Polic y an d Procedur e The curren

t genera l polic y fo r LAE Rdetermination s i s tha

t cos t i s not t o b e considere d i

n makin g aLAE

Rdetermination . W e understand tha

t EP A rational e i s based o

n adistinctio n between federa l BAC T (wher e cost consideration s ar

e allowed) an

d non-attainmen t

LAER . Therefor

e permittin g an

d technolog y issue s i

n aftainmen

t area s versu s non-attainmen t area s ma y have differen

t results . I n making thi s distinction , EPA relie s o n th e Clea n Ai r Act definition o f

federa l BAC T an

d LAER . SCAQM D Hom e Rul e Advisory Gnou p Perspectiv e •Cos t should b e considere d in th e demonstratio n o f "Achieve d i

n Practice " LAE R an d EP A shoul d allo w th e permittin g authorit y some flexibility i

n thi s area , du e t o th e following reasons : 1 . Historica

l condition s relate d to LAE Rhav e change d ove

r time . 2 . Th e Calcagni memo , date d 2/23/89 , dealin g wit h consideratio n o f

cos t i n LAE Rneed s t o b e updated . (a) Cos t need s specia

l consideration , especiall y fo r smal l businesses , sinc e ther e i s azero threshol d ftgr

applicabilit

y o f LAERi n th e onl y extrem e non-attainmen t

are ao f the l country . (b ) Th e Calcagn i memo assume s tha t th e initia l installatio n i s cos t representativ e o f

al l subsequen

t operations , whic h ma

y no t b e th e case . 3 . The focu s o n exhaus t emission s i

n aLAERimplementatio n polic y ma y discourag e th e development o f innovative , alternative , an d mor e desirabl e technologie s t o contro l emission s o f ai r pollutant s in som

e instances .



# \DP. 8



### SOURC E CATEGOR Y Presen t EP A Polic y an d Procedure : Th e Clea n Air Act provide s tha

t astationar

y sourc e mus t

implement

a s LAE Rth e mos t stringen t emission s limitatio n whic h i s eithe r containe d in aSI

P for, o r ha s been achieved i

n practic e by , a"clas s or

categor y o f stationar y sources. " EP A Regio n I X appear s to b e takin g a

n expansiv e vie w o f

thi s phras e (otherwis e known a s a"sourc e category" ) i

n encouragin g th e SCAQM D to appl y ne w LAE

R determination s t o any sourc e tha t use s simila

r equipment . Issue s hav e arisen wit h regar d to whethe

r al l futur e source s woul d b e operate d i n th e same industria

l contex t a s th e sourc e o r

source s tha

t initiall y use d th e LAE

Rtechnology . SCAQM D Home Rul e Advisory Grou p Perspective :

. 1 . I n th e Sout h Coast , LAE

Rmus t b e applie d t o any ne w sourc e or any physica l chang e (or

chang e in th e metho d o f

operation ) resultin g i

n a n emission s increas e of

even one pound. Th e LAE Rrequirement

thu s applie s t o thousand s o f

businesses , mos t

o f small or moderate size , whos e operation s an

d abilit y to affor d significan

t additiona l contro l cost s vary widely , an d henc e ca n affect feasibility . 2. LAE

Rdetermination s require consideratio n o f th e uniqu e contex t

and attribute s o f

eac h individua

l sourc e category . Generalizin g fromon e context t o anothe r ma y or ma y no t b e warrante d an

d shoul d depend upo n a variet y o f factors , includin g acompariso n o f processes , material s used , an d acces s t o capital , amon g othe r considerations . 3 . The curren

t practic e o f

definin g categorie s ver

y broadl y ma

y neglec t potentiall y importan

t distinction s amon g industria l setting s an d th e marke t condition s tha

t define industries . Example s ar e th e difference s in th e wa y equipmen t i s use d and i

n th e abilit

y o f th e facilit y operato r t o affor d th e require d capita

l investment

o r operatin g an

d maintenanc e costs . 4 . Th e broa

d characterizatio n o f

"sourc e category " applie d i n th e context

o f LAE Rdetermination s ma

y als o b e a

t odd s wit h th e EPA' s constructio n o f th e sam e ter munde r Clea n Ai r Ac t § 112 , wher

e it recognize s ove

r 17 0 distinc t sourc e categorie s that

warran t separate regulation s and differen t contro l requirement s fo

r variou s subcategories . 

# 7P. 9 •f j pu - p«« "

5 . AQM D Permit s Recently , EP

A issue d notic e o f

violation s an d Sectio n 11 4 informatio n request s i n respons e t o permit s issue d by th e A^MD . Thes e action s hav e put th e facilit y in aver y uncomfortabl e positio n o f

bein g caugh

t i n betwee n th e AQM

D and th e EP

A regulator

y process . Whil e w e recogniz e an d respec t EPA' s oversigh t

authorit y o n permitting , w e wan t t o explor e ui e possibilit

y o f EH A establishin g apolic y o f

providin g guidanc e t o th e AQM D durin g the publi c commen t iproces s befor

e permit s ar

e issued , and only usin g notic e o f violation s a s rar

e exception s an d only afte

r consultatio n wit

h AR B an d th e AQMD. . ' 6 . LAE Rb y Siz e an d Categor y AQM D staf f firmly believe s tha

t co| t ha s t o b e considere d in the demonstratio n o f chieved i n practice, " whic h shoul d b e specifie d fo r differen t sourc e categorie s an d siz e ranges . W

e believ e there ar e tw o potential conflictin g policie s existin g a t EP A tha t nee d to b e clarified . On

e polic y allow s fo

r technolog y transfe

r among sourc e categorie s an d "siz e ranges , apparentl y eve n between differen t industries , whil e th e other polic y provide s tha t federa l LAE Rdoe s no t

apply i n case s where th e economi c impac t i s s o grea t n o sourc e i n th e industr

y woul d b e built . W e believ e th e economi c impac t polic y shoul d prevai l ove

r th e technolog y transfer

^ polic y in case s wher

e ther e ar e n o source s i n that specific sourc e categor

y and siz e ratng

e tha t hav e bee n demonstrate d "achiev e in practice, " and i n whic h fere wil l b e a n unacceptabl e economi c impact . W e woul d like EP A t o provid e aclea

r positio n o n Ihi s issue .

C:\docs\ta\9807\BACT 2 

# 2P.1 0 

# ^out n Loas t Ai r Qualit y Managemen t

District

_ . 2186 5 E

. Cople y Drive . Diamon

d Bar . C A 91765-418 2 * " **' (909 ) 396-200 0 • http://www.aqmd.go v Februar y 26 , 199 9 Mr . Davi d P . Howekam

p Director , Ai

r & Toxic s Divisio n Environmenta

l Protectio n Agency , Regio n I X 7 5 Hawthorne Stree

t Sa n Franscisco , C.

A Dea r Mr . Howekamp , A s yo u ma y know , you

r staf f ha s bee n working wit

h th e Sout h Coas t Ai r Qualit y Managemen

t Distric t (SCAQMD ) staf

f an d th e SCAQM

D Governing Board' s Home Rul e Advisor y Grou p t o streamlin e an

d enhance-th e implementatio n of

th e Ne w Sourc e Revie

w program , which i s a

n importan

t aspec t of our permittin g program . I

n particular , som

e issue s have arise n lately i n th e implementatio n o f

th e Lowes t Achievabl e Emission s Rate (LAER) requiremen t i n accordanc e wit

h curren t federa l policie s an

d procedures . I n a n attemp t to resolv e thes e LAERissues , th e SCAQM D Home Rul e Advisor

y Group' s Ne w Sourc e Revie w Subcommitte e member s hav e prepare d th e attache d materia l wit h th e hel p o f th e SCAQM D staff . I t i s m y understandin g tha

t ameeting ha s bee

n schedule d a

t th e U.S . EPA' s office s in Nort h Carolin ao n March 9 , 1999 , t o discus s thes e issue s i n greate r dept h wit h th e U.S . EPA . The attached paper s are intende d t o for mth e basi s fo

r discussion s between th e SCAQM D Home Rul e Advisor y Grou p members , SCAQM

D staff s an d th e U.S . EP A office s involve d i n formulatin g policy , implementation , an

d enforcemen

t activitie s relativ e t o LAER . I reques t tha t yo u mak e appropriat e distribution s t o th e other

U.S . EP A office s a

t your earlies t convenience . Th e attache d materia l ha s bee n marke d Draft , sinc e i

t ha s no t yet bee n reviewe d by all member s o f th e Hom e Rul e Advisor

y Group' s Ne

w Sourc e Review Subcommittee . Additiona l materia l ma y b e sen t t o yo u nex t week t o supplemen t thes e papers . The SCAQM

D staf f and publi c loo k

forwar d t o engagin g i n ameaningfu l dialo g wit

h th e U.S . EP A o n thi s importan

t LAE Rissue . Pleas e direc t

al l question s o r

inquirie s t o PomPo mGanguli a t (909 ) 396

- 318 5 o r Barbar aBair d a t (909 ) 396-2302 . Sincerel y yours . Barr y R . Wallerstein , D.Env . Executiv e Office

r CC : Michael D . Antonovich , SCAQM D Governin g Boar d Membe r End . JPB:AG:m

d

r; .vjr^.T«V - ,-".*V-v4.V^-- ;TM___

_P.1 1 ^ IM P . V i wfii i KUI I m •? < • • T- T " 

### CRITERI A FO R "ACHIEVE D I N PRACTICE " Presen t EP A Polic y an d Procedur e 1 . A n emission contro l technolog y tha t set s ane w LAE Rstandard i s deemed "achieve d i n practice " i f i t ha s been : (a ) Required an

d reporte d through existin g regulators ' programs ; or (b ) Operating continuall y fo r a t leas t six month s on asourc e (includin g foreign sources ) whic h ha s bee n operatin g a

t 5 0 percen t o r mor e of desig n capacity ; an

d (c ) Verifie

d throug h performanc e tes t o r othe r performanc e data . 2 . W e understand tha

t EPA' s rational e is : (a ) A technolog y tha

t ha s bee n through aregulator}

- progra mha s alread

y bee n reviewe d fo r performance , applicability , etc . (b ) Six-month s i s areasonabl e tim e to demonstrat

e atechnolog y becaus e tha t i s th e maximu mallowe d fo

r ashakedown perio d fo

r replacemen t

emission s units . Furthermore , th e 5 0 percent loa d facto r provide s some assuranc e tha t the technolog y ha s bee n place d in meaningful service . (c ) Performanc e mus t

b e verifie d by a

t leas t one sourc e test . SCAQM D Home Rul e Advisory Grou p Perspectiv e 3 . Th e fac t tha t atechnolog y wa s required , an d ha s bee n reporte d throug h existin g regulator y program s doe s no t

ensur e th e applicability , effectiveness , o r reliabilit y o f tha t technology , du e to th e followin g reasons : (a) EP A polic y doe s no t

includ e afeedbac

k mechanis min th e LAE

RClearinghous e fo

r confirming peiffomiaig.b

e o f technologies . (b ) SIP s routinel y contaiiUechnology-forcin g measures ; constructio n permit s frequentl y lis t emergin g technolog y becaus e th e projec t proponen t

ha s propose d it s use , prio r t o actua l field verification . (c ) A n actio n b y on e permi t

enginee r in on e agenc y mus t

no t automaticall y becom e a nation-wid e precedent . Difference s betwee n regions , plants , an d economi c environment s var

y widely . (d ) Customar

y commercia

l consideration s (e.g. , performanc e guarantees ) als o var y widely . (e ) Vendor s o f

contro l technologie s wil l begi n t o lear n t o exploi t

th e LAE Rprocess . 4 . I n som e case , th e technolog y mus t b e prove n b y continuou s full-scal e commercia l operatio n fo

r a t leas t on e yea r a t aloa d tha t i s significant ; period s longer than on e yea

r ma y b e reasonabl y necessar

y dependin g upo n th e "operatin g cycle " o f th e equipmen t 5 . Ther

e ar e numerou s factor s in additio n t o performanc e that mus t b e considere d i n evaluatin g th e applicabilit

y o f afor e jg n technolog y t o afacilit

y i n th e U.S . 6 . Som

e flexibilit y shoul d b e afforded t o consider technologie s wit

h comparabl e emissio n reductio n capabilities . 

# loP.1 2 

### LAE RDETERMINATION CUT-OF F DAT E Presen t EP A Polic y an d Procedur e LAE Rdeterminatio n i s fixe

d a t th e time the permi

t i s issued . 1 . W e understand tha

t EPA' s rational e is : (a) A fina l determinatio n befor

e th e public revie w proces s o f

th e draf t permi t obviate s th e benefit s o

f the publi c proces s (b ) A sourc e i s no

t disadvantage d b

y suc h apositio n sinc e i t

ma y no t legally begi n constructio n uni

t afte r i t ha s received afina

l permit (c ) Contro l technolog y searche s b y the publi c wil l uncove

r potentia l ne w technologie s tha t ma y achiev e additiona

l emissio n reduction s SCAQM D Hom e Rul e Advisor y Grou p Perspectiv e i 2 . ; Th e LAE Rdeterminatio n shoul d b e fixe d a t th e time apermi t

applicatio n i s deeme d complet e fo r mino r and majo r sources , du

e to th e following reasons : (a) Applicant s ar

e indee d disadvantage d b

y suc h "movin g target " uncertainty , particularl y smal

l busines s applicant s wh o canno t affor d acontinuou s du

e diligenc e search . (b ) Allow s certaint

y fo r lon g lea d project s where substantia l engineerin g an

d desig n i s involved . (c ) Simila

r to di e lates t

EP A NS RRefor

mproposal , except

that i t differ s in (1 ) timin g o f finalization , an

d (2 ) scop e o f

presumptio n o f

du e diligenc e o n th e par

t o f th e applicant . (d ) Allow s pollutio n preventio n project s to procee d i n amor e timel y fashion . (e ) Titl e V exacerbate s th e curren t situatio n give n th e lon g revie w time s o f mos t permi t revisio n scenarios . (f ) Sout h Coas t BAC T proces s i s well publicize d nationally ; fe w technologie s exis t

tha t w e are no t awar e of . (g ) EPA' s publi c revie w proces s i s fo r larg e sourc e permit s (-PSD ) an d majo r sourc e NS Rpermits . (h ) Provide s mor

e incentiv e fo

r developmen

t o f ne w technolog y fo

r LAER .P.1 3



### . RELOCATION O

F EXISTING SOURCE S Presen t EP A Polic y an d Procedur e Relocate d source s ar

e "new " fo

r purpose s oi

f LAE Ran d offsets . Region-wid e equivalenc y program s ca

n offe r som e relief fromoffset s i

f aloca l rul e s o provides , but

there ca n b e n o relief fromLAER . 1 . W e understan d dia

t EPA' s rational e is : (a) Relocate d source s are "new " to the are ai n which the y propos e t o locate . (b ) Federa

l regulation s provide alimite d relocatio n exemptio n fromPS D requirements , bu t there i s n o mentio n o f

an y exemptio n fromNS Rrequirements . (c ) Previou s interpretatio n ha s treate d relocate d source s a s "new. " (d ) Relocatio n offers th e sam e potentia l a s ne w source s t o require more stringent control s without

retrofitting . SCAQM D Hom e Rul e Advisory GroupPerspectiv e 2 . Relocate s source s ar e no t "new " b y (definition ; they are existin g source s an d no t subjec t to NSR , du e t o th e followin g reasons* . (a) Clea n Ai r Ac t NS Rdoe s no t

apply to relocate d existin g sources . (b ) A relocatio n i

n th e sam e ai r bas<i n doe s no t ad d t o total pollutio n burden , (c) , Localize d impact s ar e alread y addresse d by specifi c rules . (d) Relocatio n i s no t

muc h o f a n is§ue i n mos t of th e countr

y where majo

r source s ar

e a t 10 0 ton s pe r yea r potential t o emi t

or more , bu t

i t impose s significan

t burden s o n smal l business , anjll^lativel y smal l sources , in Souther n California , wher e majo r sourc e threshol d i s onl y 1 0 ton s per year . (e ) Relocation s ma

y no t presen t th e sam e opportunit

y t o impos e mor e stringen t control s a s atrul y ne w source ; sourc e nfa y no t hav e realisti c options . (f ) To o stringen t

requirement s o n relocations ca n deter pollutio n reductio n efforts . (g ) Requirin g stringen t

NS Rcontrol s fo

r relocation s ma

y lead smaller

source s to g o "underground. "



# 2 .P.1 4



### PUBLI C PROCES S FO

RLAE RDETERMINATION S Presen t EP A Polic y & Procedur e 1 . EPA' s LAE

Rdetermination s are : (a) Ope n t o an y informatio n tha

t ma y o r ma y not b e availabl e t o applicant . (b ) Not alway s reflecte d i

n th e LAE RClearinghouse . (c ) Sometime s mad

e without publi c revie

w of new/advance d technology . 2 . W e understan d tha

t EPA' s rational e is : (a) Applicant

mus t conduc t researc h on ne

w LAE Rtechnologies . (b ) LAE RClearinghous e ma

y no t contain all pertinent

information . (c ) Publi c revie w o f

technolog y occur s durin g Titl e I o r Titl e V publi c noticing . • SCAQMD Hom e Rul e Advisory Grou p Perspectiv e 3 . The Publi c Proces s fo r LAE Rdetermination s need s t o b e enhance d to : (a ) Includ e forma

l and early publi c participatio n fo r ne w an d mor

e stringent LAE R determinations . (b ) Provide ne w LAE

Rtechnolog y infonnatio n t o applicant s i n atimely manner . (c ) Improv e th e content , utility , an d timelines s o f

th e LAE RClearinghouse . (d ) Utiliz e th e SCAQMD BACT<5i4deline mode l fo r EPA' s LAE

RClearinghouse . (e ) Provid e adequate resources fo r maintenanc e and validatio n o f databas e an d publi c commen t docke t 4 . Thi s positio n i s base d on : (a ) EPA' s previousl y state d goal s to increas e certainty , consistency , an d timeliness . (b ) Implementatio n o f

CAA Sectio n 173(d

) [EP A Clearinghouse] . (c ) Lac k o f resource s an d attentio n t o Clearinghous e dat ai n recent pas t (d ) Recognitio n o f

th e fac t tha t th e burde n o f

du e diligenc e i s currently place d o n th e applicant wh o i s i n th e weakes t

positio n t o carr

y i t ou t successfully . (e ) Publi c revie w i s essential t o validate EPA' s LAE Rdeterminatio n fo

r emissio n standard s base d o n ne w technologies .



# 1 3 >A" <P.1 5 R P |l|l«l«lfj|li p LIS T O F ANTICIPATE

D BACT/LAERMEETING PARTICIPANT S < Augus t

4,199 8 U.S . EP A Region I

X Davi d Howekam

p Nin aSpiegelma

n MattHabe r Juli aBarrow s U.S . EP A Smal l Busines s Office . Washington . D.C . To mKelly (202-2«SGM©01 ) Kare n Brown (202-260-1391 ) AR B Peter Yenturin i Ra y Menenbroke

r AQM D Chun g Liu Barbar aBair

d LaRond aBowe

n PomPo mGanguli Coalitio n fo

r Clea n Ai r Ti mCarmichal e Californi aManufacturer s Associatio n Cur t Coleman , CM

A Small Busines s Coalitio n Gene Beck

C:\docs\ta\9807\BACT l 

# 14

-P.1 6

ISSUE S FORDISCUSSIO N A T AUGUS T 4,199 8 MEETING 1 . Facilit

y Relocatio n I t i s not clea r t o th e AQM

D tha t th e relocatio n o f

facilitie s should b e treate d th e sam e a s ne w o r modified source s i

n term s o f Ne w Sourc e Review an

d BACT/LAE

Rrequirement s in th e Federa

l Clea n Ai r Act . Under

EP A guidance , th e AQM

D ha s treate d relocate d facilitie s th e sam

e a s ne w o r modifie d sources . However , we d o not believ e th e policie s underlyin g th e Clea

n Ai r Ac t requirement s fo

r LAE Rnecessarily appl

y t o relocations . W e nee d t o kno w fro mEP A th e basi s and interpretatio n o f th e Federa l Clea n Ai r Act o n thi s issue . 2 . Effectiv e Dat e BACT/LAE RDeterminatio n Ther e ar e question s abou

t th e fairnes s o f

applyin g LAE

Rrequirement s u p t o th e dat e o f issuanc e o f

permits . Th

e difficulty , stem s fro

mth e facilit

y having to do an overal l facilit y ^ plannin g design , cos t

study , and impac t

assessment

prio r t o submittin g th e permi t application , base d on the understandin g o f th e BACT/LAE

Rrequirement s at

that time . I t woul d ad d a n extraburde

n fo r th e facilit y to respon d t

o BACT/LAE

Rrequirement s whe

n th e permi t ha s bee n processed an d ane w set

o f requirement s have emerged . W e understan d tha

t EP A insist s o n BACT/LAERdeterminatio n u p t o th e tim e o f

permi t issuance , no t

whe n permi t applicatio n i s deeme d complete . W e woul d appreciat e i t

if EP A coul d provide th e lega

l basi s an d forma

l polic y fo r such aposition . W e woul d als o lik e t o discus s the possibilit

y o f allowin g th e determinatio n of BACT/LAE

Rwhe n th e permi t applicatio n i s deeme

d complete fo

r thos e permit s withou

t publi c notificatio n requirements . 3 . Sectio n 50 7 an d Othe r Potentia l Relie f

fo r Smal l Busines s Sectio n 50 7 allow s potentia l relie f fo r smal l busines s in term s of exemption s t o federa

l rulemaking . W

e would lik

e EP A to examin e and determine i f ther e ar e situation s fo

r which small businesse s could b e exempte d fromfedera l LAE Rrequirement s unde r Sectio n 50 7 and othe

r regulations . 4 . BACT/LAE RExemptio n fo r Non-Majo r

Source s Unde r existin g SI

P commitments , th e AQMD i s require d t o appl y BACT/LAE Ro n minor sources . Thi s i s i

n th e for mo f Regulatio n XII

I fo r the Sout h Coas t Ai r Basin . W

e woul d lik e EP A t o examin

e th e possibility o f

changin g thi s arrangement . I n addition , w e woul d lik e t o examin e th

e possibilit

y o f offerin g alternativ e emissio n reduction s in lie u o f applyin g BACT/LAE

Rt o specifi c sourc e categories .

C:\docs\ta\9807\BACn . 

# 1

5P.1 7



# Sout h Coas t Ai r Qualit y Managemen t

District 2186 5 E . Cople y Drive , Diamon

d Bar . C A 91765-418 2 (909 ) 396-200 0 • http://www.aqmd.go v Office of the Executive Officer Dr. Barry R. Wallerstein 909-396-2100: fax 909-396-3340 •

July 30,199 8 Davi d P . Howekam

p Offic e o f th e Director U.S . Environmenta

l Protectio n Agenc y 40 1 M Street , SW Washington , D.C . 2045 0 Dea r MrJJoweicamp : \^ r ^ ^ W e appreciat

e th e opportunit

y t o mee t wit h EPA , ARB , Coalitio n fo

r Clea n Air , Califomi aManufacturer s Association , and the Small Busines s Coalitio n o n th e AQMD' s implementatio n o f BACT/LAER . Thi s meetin g wil l b e held a

t th e EP A Regio n I

X offic e in Sa

n Francisc o on Tuesday , Augus t 4,199 8 fro

m 10:00 a.m . to 1:0

0 p.m . A lis t

o f anticipate d meetin g participant s i s enclose d fo r you r information . We ar e sendin g identica

l letter s an d attachment s tcal l participant s on the list . T o ensur e tha t thi s will b e ameaningfia

l an d productiv e meetin g fo r all parties , AQMD staf

f suggest s tha

t w e concentrate o n the following si x issues : 1 . Facilit

y Relocatio n 2 . Effective Dat

e fo r BACT/LAE

M Determinatio n 3 . Sectio n 50 7 an

d Othe r Potential Relie f

fo r Small Busines s 4 . BACT/LAI R Exemptio n fo r N<§n-Majo

r Source s 5 . Credibilit

y of AQME ) Permit s 6 . LAE

Rb y Size and Categor

y AQM D staf f ha s prepared , an

d enclose d fo

r your review , abrie f

descriptio n o f

thes e issue s and woul d lik e t o discus s you r

preliminar

y positio n o n eac h o f

thes e point s a

t th e meeting . We believ e al l th e meetin g participant s ca

n an d wil l spea

k wit h authorit y fo r his/her organization s o

n thes e issues . The implementatio n o f

BACT/LAE

R ha s bee n acritica

l issu e facin

g th e AQMD , a s extraordinar y effort s ar e neede d t o comba

t th e nation' s wors t

ai r qualit y problem . W

e wan t to wor k wit h al l partie s t o resolv e thes e issue s a

t th e earlies t

possibl e date . I believ e w e owe th e regulate d communit y an d publi c ou r concerte d effort s t

o find an i acceptabl e resolutic; n in balancin g environmenta l and economi c needs , an d complyin g wit

h federa l and stat e law . W e need ! your

help and participatio n in thi s process . W e look forwar d t o meetin g wit

h yo u o n Augus t

4,1998 .

Barr y R . Wallerstein , D.Env . Actin g Executiv e Office

r BRW:CSL:d

k Enclosure 

# ( p