P. 1 

# OAR Box 1802 Prepped by Charmelle Mathews



### Document

Number: 

# 20 ) IV-E-1 5 Docket Number: 

# A-90-3 7

Printed 11/4/200811:57:59 AM

Sheet 20 of 117Jul

y 20,199 8 ^ 1 '--jE> I ^ MEMORANDU

M SUBJECT : Summary

- Meeting Clea n Ai r Ac t Advisor y Committee Subcommitte e on Permits/NSR/Toxi c Integratio n To : Ai

r Docke t A-90-3 7 From : Denni s Crumpler , NS RRefor mTea mLeader , Integrate d Implementatio n group , ITPI D Attache d i s asummar

y o f ameeting ofth e aforename d Subcommitte e on th e evening o f Tuesda y Februar y 17,199 8 from5:0

0 p.m . - 7:0

0 p.m . Certain element s ofth e NS RRefro m wer e discusse d in thi s meeting . Th e summar y include s a

n attende e list . Als o attache d i s acopy of overhea d transparencie s tha

t Mr . Davi d Solomon used t o presen t basi c materia

l on NS R Reform . EL2 _ 

### nP. 3

CLEA N AI R ACT ADVISOR Y COMMITTE E SUBCOMMITTE E O N PERMITS/NSR/TOXI C INTEGRATIO N

Meetin g Summar

y Tuesda y Februar

y 17,199 8 5:0 0 p.m . -7:0 0 p.m . ACTIO N ITEM S

• Th e subcommitte e wil l reconvene t o discus s th e Ne

w Sourc e Review (NSR

) refor m proposal . MEETIN G SUMMAR

Y Lydi aWegma

n of OAQPS bega

n th e meetin g wit

h introductions . Sh

e then explained the agendafo r th e meeting :

• Discus s th e NS Rrefor mproposa l an d it s relationshi

p t o th e draf t NS Rconcept s fo r transitiona

l areas . • Discus s offse

t pool s an d transitiona

l nonattainmen

t areas . NS R Refor m Proposal : Ms . Wegma

n bega n th e discussio n b y explainin g tha t EP A i s tryin g t

o pul l togethe

r variou s piece s o f

NS Rtha t hav e bee n moving in differen

t directions . Ms . Wegma

n describe d thre e issue s t

o conside r i n ligh t ofth e curren

t rulemaking activities : (1 ) The 199 6 propose d NS Rrefor mrul e wa s a

n Agency initiativ e tha

t responde d t

o stakeholde r concern s regardin g th e existin g program . (2 ) The WEPC O litigatio n wa s aresult of a199 2 EP

A rulemaking tha

t affecte d utilities ' actua l to futur e actua l tes t an d include d ademan

d growt h exclusion . The litigatio n wa s stayed unti l recently . On

e part y i s seeking abriefing schedule , an d litigatio n i s moving forwar d again . Ms . Wegma

n note d tha

t man y concept s in plac e in 199 2 hav e changed o r ar e changing wit

h utilit y restructurin g an

d deregulation . Thus , wor

k o n th e refor

m proposa l relate d t o WEPC O shoul d b e reconsidere d in ligh t of thes e changes . Th

e briefing schedul e provide s tim e t o rethin k thi s issue . (3 ) The NS R"transitional"are arulemaking wa s discusse d a t th e las t subcommitte e meetin g (Novembe

r 6,1997 ) in a"Concep

t Pape r on Implementing th e Ne

w Sourc e Review Progra

min Transitiona

l Area s Unde

r th e 8-hou r Ozone Standard " tha

t wa s distribute d a

t tha t meeting . The concept

pape r se t fort h idea s fo r usin g reduction s achieved unde

r th e regiona

l strateg y to mee

t th e offse t requirements , throug h offse t pools . For th e technolog y component , th e pape r propose d a

n enhanced-Bes t

Availabl e Contro lP. 4

Permits/NSR/Toxi c Integratio n PAG E 2 Technology (BACT) optio n fo r nonattainmen

t NSR . Thi s enhanced-BAC T concept wa s no t strongly supported . Ms . Wegma

n describe d th e ke

y element s ofth e refor

mrule :

• First , th e basi c result ofth e propose d applicabilit y tes t i s tha t fewe r source s wil l b e subject to review . The applicabilit y tes t fo r modification s include a

n actua l t o futur e actual , potentia

l to potential , an

d aclea n unit test .

• Second , th e rul e include s ne w procedure s t

o addres s Clas s I are aimpacts . Thi s issu e ha s bee n controversial ; particularly , man y industr y member s believ e Clas s I analyse s ar e burdensome .

• Third , th e refor

mrul e include s broade

r exclusion s includin g pollutio n contro l project s an d plan t wide applicabilit

y limit s (PALs) .

• Fourth , th e refor

mrul e shoul d streamline th e permit review process . Greg Foote , EP

A OGC , discusse d th e statu s ofth e WEPC O litigation . Th e partie s filed a join t motio n in cour

t on Frida y (Februar y 13,1998 ) tha

t asks fo r abriefing schedul e t

o which petitioner s opening brief

s woul d b e file

d n o earlie r tha n nex t October . Interna

l milestone s ar

e included in thi s briefing schedule . Mr . Foot e expect s ora

l argument s t

o begi n Ma

y 1999 o r thereafter . Ms . Wegma

n explaine d tha

t EP A i s investigatin g tw o approaches : (1 ) Proposin g a n NS R refor mpackag e tha

t woul d serv e a s asubstitut

e fo r adifferen t approach t

o technolog y in transitiona l areas ; or (2 ) Moving forwar

d wit h th e refor mpackag e an

d havin g i t finalized b y Decembe r 199 8 along wit

h whateve r optio n i s decided upon fo

r transitiona

l areas . EP

A originally hoped t

o follow th e forme

r approach ; however , i

t doe s no t see ma s i f consensu s ca

n b e reached on thi s option . Davi d Solomon o f OAQP S ha s helpe d develo

p ane w ide afo r transitiona l areas . Ms . Wegma

n expressed he

r main concer

n tha t EP A mov e forwar

d wit h a refor mpackag e tha

t amajorit y ofth e communit

y ca n agree upon . Ms . Wegma

n added tha

t som e subcommittee members , a

t a n earlie r meeting , proposed t

o reconvene th e subcommitte e on NS R Reform . Th e discussio n moved t

o Clas s I areas . Moll

y Ross , DOIFWP , provide d abrie f background o

n Preventio n o f

Significan t Deterioratio n (PSD ) Clas s I issue s t o se t th e contex

t of th e discussio n on th e Federa l Lan d Manage r (FLM)' s approach . Ms . Ros s explaine d tha t CA A Section 165(d

) deal s wit h FLM s responsibilitie s an

d role s in preconstructio n review an d th e potentia l fo r aClas s I are aimpact . The legislativ e histor y o n Section 165(d

) state s tha t th e FL M should b e aggressiv e an

d shoul d protec t

th e establishe d value s of

thes e Clas s I areas . FLM s role s ar e distinguishe d fromothers ' roles , includin g EPA , whos e rol e i s mor e reserve d in thi s area . Ms . Ros s describe d ke

y legislatio n relate d t

o definin g an d protectin g establishe d value s o r ai rP. 5

Permits/NSR/Toxi c Integratio n PAG E 3 qualit y relate d value s (AQRVs) . Ms . Ros s note d tha t th e Par k Organi c Act

a t 1 6 US C 1 direct s the Secretar

y ofth e Interior

t o conserv e th e resource s of park s unimpaire d (e.g. , scenery , wildlife , histori c objects , natura l systems) . Th e Wildernes s Act a t 1 6 US C 113 1 protect s area s in thei r natura l conditions . Further , enabling legislatio n exist s fo r each par k an d wildernes s area , which basically refer s back t o th e broa d act s (e.g. , Organi c Act

an d th e Wildernes s Act

) tha t protec t curren t an d futur e values . Man

y report s indicat

e ai r pollutio n ha s significantly contribute d t

o th e los s o f

thes e values . Ms . Ros s summarized EPA' s implementatio n ofth e CA A involvin g FLM s review of ne w sources . The section s ofth e 1979-198 0 PS D regulations , basically repea t th e statutor

y languag e an d leav e man

y issue s ope

n t o interpretation . The histor y of practic e ha s been consisten t wit h the statutor

y authority . During th e pas t 2 0 years , FLM s an

d EP A hav e been workin g together . Fo r example , th e DO I ha s apermit applicatio n guidanc e documen t fo r ne w ai r pollutio n source s tha t i s give n t o state s t o distribut e t o ne w sources . EP

A ha s interprete d Clas s I issue s in th e visibilit y rule s promulgate d i

n th e 1980 s an

d ha s publishe d manuals , guidelines , an d memoranda addressing Clas s I issues . Problem s d o exist , however , an

d th e FLM s ar

e requestin g tha

t EP A clarif y an d articulat e implementation . Ms . Ros s put

Clas s I issue s in perspectiv e b y notin g tha t th e Nationa

l Par k Servic e (Par

k Service ) an

d Fis h an d Wildlif e Servic e (FWS ) hav e 6 9 Clas s I area s between the man d hav e reviewed ove

r 50 0 PS D permit s tha

t ma y affec t DOI Clas s I areas . Onl

y 5 0 o f thes e 500 case s received written comments . Onl y 1 2 ofth e 5 0 case s hav e led t o advers e impac t

determination s o r request s fo

r permit denials . O

f thes e 1 2 cases , only thre e hav e been appealed . The remainde r have bee n dropped o

r settled . Ms . Ros s emphasized tha

t wor k fromth e NS Rrefor

mcommitte e ha s contribute d t o a proposed rul e tha

t increase s expediency , provide s uniformit y acros s jurisdictions , an

d clarifie s roles . I n particular , th e proposed rul e recognize s FLM s a s expert s regardin g par k an d wildernes s are aAQRVs . Thi s rol e i s appropriat e becaus e FLM s know th e value s an d purpose s fo

r which the Clas s I area s wer

e establishe d an

d ar e managed , an

d they hav e biologist s an

d visibilit y expert s t o addres s AQRVs , wherea s permittin g authoritie s typically d o not . Ms . Ros s applauded th e propose d regulation' s allocatio n ofth e ofth e information burden . The propose d rul e request s applicant s provide FLM s wit h analyse s addressin g impact s fromthei r source s on Clas s I areas . FLM s shoul d provide source s early i n th e applicatio n proces s wit

h relevan t information they hav e fromth e nationa l an d site-specifi c research monitoring an

d databas e programs , utilizin g th e particula r sourc e characteristic s consisten t wit h othe r require d analyse s tha

t ar e withi n th e applicant' s knowledg e an d responsibility . I

n respons e t o comment s tha

t FLM s should perfor

mal l analyse s fo

r source s requestin g permit s in Clas s I areas , Ms . Ros s commented tha t th e Centra

l Offic e fo r th e Par k Servic e an

d FWS woul d b e unabl e t o staf f o r finance thes e analyses . Ms . Ros s als o questione d whethe r th e tas k of performing suc

h analyse s fo

r all suc h prospectiv e source s wa s a n appropriat

e or soun d us e of taxpaye r dollar sP. 6

Permits/NSR/Toxi c Integratio n PAG E 4 Ms . Ros s summarize d th e comment s receive d regardin g th e propose d rule . Man y comment s requeste d FLM s identif y an d provid e AQRVs . I n th e propose d rule , EP A use s th e definitio n FLM s hav e use d (i.e. , AQRV s ar e an y Clas s I resource s rangin g fromsceni c view s t o specifi c fauna , tha t

ma y b e affecte d b y ai r

quality) . I n th e permit , FLM s wil l focu s o n AQR V o f concern (i.e. , indicator s o f ai r pollutio n problems) . Fo r eac h Clas s I are ather e ar e ahandfu l o f thes e AQRV s o f

concer n (e.g. , specifi c type s o f vegetation) . A s par t

o f NSR , FLM s wil l identif

y specifi c sensitiv e indicato r AQRV s t o hel p applicant s focu s thei r analyses . Onc e th e AQRV s o f concern ar e identified , th e critica l loa d level s nee d t o b e identified . Th e Fores t Servic e ha s develope d ayellow-red-gree n lin e approac h tha t summarize s th e impact s fromcumulativ e pollutio n levels . Further , th e FWS , Park Service , an d Fores t

Servic e hav e forme d an FL M Ai r Quality Relate d Workgrou p (FLAG ) t o develo p consisten t procedure s t o addres s AQR V an d pollutio n issues . Ms . Ros s note d tha t

FLM s d o us e guidelin e an d specificall y approve d model s t o asses s AQRV s o f

concer n an d critica l loa d levels . Sh e describe d th e mos t difficul t scenario : ane w sourc e u p fo

r permi t revie w i n apollute d area . Sh e asked , rhetorically , whe n doe s thi s sourc e hav e t o tak e responsibilit y for advers e impact s i t

imposes . FLM s ar e considerin g usin g d e minimi s level s o r

siz e distanc e criteri at o identif y source s o f

greates t concern . Sh e describe d an FL M effor

t i n Tennesse e tha t

include s screening-leve l value s i n th e permittin g procedures . FLM s woul d reques t

i n return , an enhance d monitorin g progra mi n Clas s I area s tha t woul d allo w FLM s t o watc h impact s o n resource s the y ar e statutoril y boun d t o protect . Monitorin g woul d hel p determin e i f

al l th e regiona l ai r

pollutio n program s ar e adequatel y addressin g Clas s I are aproblems . I f

condition s i n Clas s I are aar e foun d t o b e deteriorating , o r no t improving , mechanism s t o adjus t

an d adap t

(e.g. , tighte n NS Rpolicies ) mus t exist . Ms . Ros s propose d anothe r alternativ e —aSE

P approac h t o addres s documente d advers e impacts , an ide adiscusse d with EP A i n 199 6 correspondence . Monitorin g migh t b e require d o f

individua l source s o r

migh t b e supporte d throug h afund tha t partl y draw s upo n permi t fees . Ms . Ros s conclude d he r

presentatio n b y notin g tha t NS Ronl y affect s asmal l percentag e ofth e source s i n Clas s I areas . Thes e source s ar e important , however , becaus e the y wil l b e th e futur e long-termsources . NAAQ S ar e not adequat e enoug h t o protec t Clas s I areas . Th e ozon e an d P M regulation s hav e lef t muc h ofth e park

an d wildernes s resource s subjec t t o damage . FLM s ar e willin g t o identif y specifi c sensitiv e an d indicato r AQRVs . However , FLM s believ e listin g al l possibl e AQRV s i s apoo r us e o f resources . FLM s nee d support fromEPA . Donn aLamb , USD A Fores t Service , adde d tha t

th e Fores t

Servic e manage s 8 8 Clas s I area s an d ha s a$ 4 millio n budget : one-thir d i s use d for monitoring ; one-thir d i s use d for coordinatin g with states ; an d one-thir d i s use d t o support PS D analyses . Th e Fores t Servic e i s seriousl y considerin g th e subcommittee' s recommendation s an d i s tryin g t o develo p alis t o f AQRV s usin g database s an d website s an d i s identifyin g previou s situation s wher e advers e impac t call s wer e made . Ms . Lamb commente d tha t th e Fores t

Servic e Clas s I area s involv e wildernes s areas . Th e Fores t Servic e i s attemptin g t o translat e universa l ai r qualit y concern s int o indicator s tha t

ar e mor e specifi c an d measurabl e (e.g. , wate r quality) . Th e existin g scientifi cP. 7

Permits/NSR/Toxi c Integratio n PAG E 5 dat anee d t o b e updated . The fla

g color approach shoul d mov e thi s proces s forwar d an d mak e th e datamor

e consisten

t acros s regions . Ms . Lam

b note d tha

t one strengt

h ofth e PS D progra

m i s tha t it allow s fo r an d recognize s difference s acros s regions . Ms . Lam b confirmed tha

t th e fla g proces s i s currently a

n interna l project tha t involve s th e Par

k Service , Fores t

Service , FWS , an

d EPA . A draf

t repor t regardin g Phas e I of

thi s project

(i.e. , availabl e informatio n tha t consensu s ha s bee n reache d o n includin g issue s suc h a s AQRVs , level s o f

concern , threshol d values ) should b e availabl e fo

r publi c review lat

e thi s summer . Currently , it seem s a s i f

th e fla g proces s wil l b e regio n specifi c a s oppose d t o nationa l AQRVs . A subcommitte e membe

r asked i f an y consideratio n ha s been given t o ensur e tha t thi s proces s wil l no t

dela y permittin g of

sources . Ms . Ros s answered tha t early notificatio n i s key . Simila r t o industry , FLM s d

o not wan t delays . Industr

y an d th e state s hav e mor

e contro l ofth e timing tha n FLMs . A membe r commented tha

t Ms . Ros s appropriately classifie d FLM s a s statutorily mor e aggressiv e tha

n EP A an d emphasized industry' s concer n tha t FLM s wil l us e thi s statutor y mandat e t o involv e themselve s wit

h asources ' completenes s determination . Lesli e Ritts , Hoga n &Hartson fo

r NE D A/CARP , commented tha t muc h o f industry' s concer

n arise s fromth e Buen a Vist adecision . Ms . Ros s confirmed he r belie f tha t unde r EPA' s propose d regulation , th e stat e make s th e call fo

r completeness . Sh

e added tha

t th e FL M woul d not

challeng e apermit

i f th e FL M di d not hav e adequat

e data . Sh e confirme d tha t FLM s intend t

o publis h a s muc

h a s possibl e t o provide source s wit

h information on AQRVs , critica l loadings , an

d significanc e level s t o giv e source s a

n ide ao f potentia l issues . However , withi n reasonabl e limits , FLM s d o wis h t o reserv e th e right

t o reflect ne w scientifi c understanding s in their determination s o f

ai r pollutio n effect

s on th e nationally significan t resource s i

n Clas s I areas . PS D review unde r Section 16 5 i s acas e b y cas e review . T o increas e a

n applicant' s certainty , FLM s coul d probabl y commi t t o stickin g wit

h th e criteri ase

t earl y i n th e cas e fo

r th e remainde

r o f tha t particula r case . Bill Lewis , Morgan , Lewis , an d Bockius , requeste d FLM s provide a s much information a s possible , becaus e source s ar e generall y investin g substantia

l amount s of

resource s eve

n prior t o the permit applicatio n process . Ms . Ritt s an

d Ms . Wegma

n suggested the FLM s an

d EP A examine aspecifi c cas e agains t the propose d rul e t

o se e wher e th e rul e ma

y b e clarified o

r modified . Pa t Raher , Hoga

n & Hartson , asked abou

t pre-constructio n or

pre-permit

ai r qualit y monitoring (i.e. , i f

thi s issu e arises , i s ther

e apossibilit

y o f post-constructio n monitoring?) . Ms . Lam b responded tha

t monitorin g i s importan

t t o FLM s ove

r tim e but tha t specifi c issue s wil l nee d t o b e addresse d cas e b y case . I n general , FLM s need hel

p wit h monitorin g to determine othe r programs ' effects on ecosystems . Th e mor e effective othe

r program s an

d existin g source s ar e in controllin g ai

r pollutio n an

d preservin g AQRVs , the mor e leewa y FLM s ca

n provide t o ne w sourc e in Clas s I areas . Ms . Ros s clarified tha t FLM s ar e unlikely t

o publis h ne

w AQRV s during th e early stage s of

a n application . Th

e AQRV s ar

e basically publishe d an

d known . Negotiation s woul d involv e FLM s identifying th e specific AQRV s o f concern .P. 8

Permits/NSR/Toxi c Integratio n PAG E 6 Ms . Wegma

n suggeste d th e subcommitte e reconvene onc e mor e befor e proposin g th e mie . Sh e als o reminde d th e subcommitte e tha t th e element s containe d in th e NS Rpackag e ar e summarized in th e handout . Offse t Pool s an d Transitiona l Nonattainmen t Areas : Davi d Solomon , OAQPS , reminded th e subcommitte e ofth e "Concept Pape r on Implementing th e Ne

w Sourc e Review Progra

min Transitiona

l Area s Unde

r th e 8-hou r Ozon e Standard " distribute d an

d discusse d a

t th e las t subcommitte e meetin g (Novembe r 6,1997) . Th

e concept pape r se t fort h idea s fo r usin g reduction s achieved unde r th e regiona

l strateg y t o mee t the offse t requirements , through offse t pools . Mr . Solomon distribute d ahandout summarizing hi s presentatio n on offse

t pool s an d bega n b y discussin g th e basi c assumption s o f offse t pools :

• Offsets cannot

b e otherwis e require d b y th e Act . • Us e o f

apoo l mus t

not interfer e wit h RF P an d attainment . • Offsets fo

r apoo l mus t

b e real , permanent , quantifiable , enforceable , an d geographically correct . He explained tha

t offse t pool s ma y com e fromSIP-require d reduction s i f growt h i s built int o aNO x budget . State s als o ca

n include additiona

l growt h i f it' s par t ofth e attainmen

t demonstration . The maximu msiz e ofth e poo l cannot

exceed th e growt

h projection . Mr . Solomon explaine d th e offse t calculation : actua

l emission s minu s emission s a t th e ne w allowabl e (ful

l capacity) . Thi s calculatio n i s consisten t wit h th e histori c approach ; ensure s reduction s ar

e real , quantifiable , permanen t an d enforceable ; act s a s th e mos t conservativ e estimat e of reductions ; an

d coul d limit

availabl e offsets . Mr . Solomon clarifie d tha t offsets ar e voluntar y an d tha t an y nonattainmen

t are ama y participat

e i n thi s approach . Thi s structur e wa s primarily designe d t

o addres s transitiona

l area s an d NOx , although an

d it ma y b e applied t

o othe r pollutants . Mr . Solomon summarized th e basi c approach an d curren t staf f thinking : 200 0 SI P Submittal ; • Stat

e quantifie s emission s fromne w sourc e growth ; • Creditabl e reduction s fromspecific source(s ) identified an d quantified ; • SIP-require d reduction s ar e OK . • Us e cannot

interfer e wit h RF P an d attainment . • Creditabl e reduction s allocate d t o offse t pool ; • Periodi c Reconciliation ; • Validat

e offsets , debit

pool , ensur

e geographi c requirement s ar e met .P. 9

Permits/NSR/Toxi c Integratio n PAG E 7 A subcommitte e membe

r asked whethe

r offsets conside

r seasona l conditions . Mr . Solomo n responde d tha

t th e Act require s annua

l tonnage . Unde

r th e ca p and trad e program , EP

A i s examining ho w thi s seasona l progra mwil l b e reconcile d wit

h annua l tonnage . In examining the OTA G SI P call , EP A explicitly request s comment s o n thi s issue . H e added tha t thes e offsets ar e differen t tha n aca p an d trade progra

man d ar e unrelate d t

o seasonality . Mr . Solomon clarified tha

t state s ar e examining reduction s they wil l achieve , som e ma y b e seasona

l an d som e ma y b e permanent . Regardless , th e stat e wil l examine th e individua l sourc e t o determine , base d on strategie s built

int o th e SIP , th e amoun

t of credit th e sourc e wil l generate . If th e sourc e i s onl y generating credit s fo

r six months , tha

n thes e credit s woul d b e quantified fo r six months . Mr . Solomon explaine d tha t thes e offsets ar

e differen t tha n th e traditiona

l emissio n reductio n credit

progra mi n tha t th e stat e i s pre-programme d up-fron t (i.e. , i t alread y ha s aban

k of offset s se t aside) . Th

e stat e i s takin g aportio n of

al l th e reduction s tha

t wil l b e achieved an

d applying aportio n of

thes e reduction s t

o allocat e t o ne w sources , thereb y demonstratin g tha t thes e reduction s ar

e not necessar y t o mee t attainmen t i n th e standard . Thes e ar

e reduction s tha

t woul d otherwis e b e require d a s par t ofth e SI P call . Ms . Wegma

n note d tha

t th e initia l poo l EP A considere d in developin g thes e offse t pool s would com

e fromth e reduction s fromth e NO x SI P call t o reduc e interstat

e transport . Th

e purpos e ofth e NOx SI

P call i s t o reduc e significan

t contributio n t

o interstat e transport , although man y transitiona

l area s wil l com

e int o attainment . Transitiona

l area s ar e nonattainmen

t areas . Mr . Solomo

n confirmed tha

t th e reduction s in th e SI

P cal l tha t accoun t fo r growt h beyond what' s require d fo r attainmen t ar e no t considere d t

o b e legally require d b y EPA . Thes e reduction s ar e not RAC T o r statutorily-mandate d requirement s but ar e reduction s require d b y th e SEP . Ms . Wegma n clarified tha

t th e SI P call i s based on wor

k fromth e OTAG , which include d growt h margins . Mr . Solomon added tha t th e state s hav e apreapprove d poo l of offsets tha

t the y ca n dra w fromt o allocat e t o ne w sources . State s hav e man y option s availabl e t

o the min allocatin g thes e offsets . The state s ca n determine wher

e th e reduction s com

e froman d ca n choos e t o g o wit h no growth , a s long a s they mee t th e budget . Mr . Solomon explaine d tha t th e geographi c requiremen t involve s aspecifi c 17 3 requiremen

t unde r th e Subpar

t 2 designatio n fo

r seriou s or sever e nonattainmen

t areas . Periodi c reconciliatio n mus t

b e don e in th e aggregat

e t o ensur e tha t ne w emission s hav e no t

shifte d int o the sever e o r seriou s nonattainmen

t areas . Mr . Solomon summarized th e pro s o f offse t pools : U p front demonstratio n tha

t reduction s ar

e surplus ; Similarit y to curren

t offse t approach ; Conservativ e estimates ; Offsets ar e real , permanen

t an d enforceable ; Certaint y t o applican t an d stat e tha t offsets ar e availabl e an

d acceptable .P.1 0

Permits/NSR/Toxi c Integratio n PAG E 8 Th e con s o f offse t pool s ar e tha t th e pool s ar

e fixed (i.e. , pool s cannot

b e large r tha n wha t i s in the attainmen

t pool) . Offset

s singl e ou

t individua l source s fo

r offsets . Further , initia

l demonstration s ma

y presen t aburden to th e stat

e i n decidin g wha

t reduction s they ma

y dra w fromin creatin g th e offse

t pool . Mr . Solomon presente d som e implementatio n questions : (1 ) Mus t sourc e specifi c reduction s b e identifie d u p front? (Perhap s th e reduction s ca n b e identified on a

n as-needed basis. ) (2 ) Wha t i s th e baselin e yea

r fo r offse t calculation ? Whe

n th e poo l i s set , shoul d source s b e examined t

o determine wha

t th e reduction s ar

e tha t they ar e otherwis e going t

o achieve ? (3 ) Ca n offsets b e generate d on a

n "actual " basis ? (On

e subcommitte e membe

r expressed hi s interes t in having offsets generate d froma n allowabl e basis. ) (4 ) Ca n "ca p an d trade " source s b e in a

n offse t pool ? (Mr . Solomon explaine d tha t offsets wil l automatically b e generate d fo r source s tha

t ente r aca p an d trade program , although ther

e i s aquestio n wit

h seasona l trade program s an

d annua l tonnage . Th

e mai n questio n i s i f

reduction s fromsource s in th e ca p an d trade progra

mca n b e put int o a n offse t poo l t o fun d othe r source s tha

t ar e not in aca p an d trade program. ) (5 ) How t o addres s th e geographi c requirement s of 173 ? (6 ) Wha t happen s t o apoo l i f timely attainmen

t ofth e standar

d doe s not occur ? Mr . Solomon briefl

y presente d a

n alternativ e approach tha

t wa s develope d i

n respons e t

o significan t negativ e stakeholde

r comment s t

o th e enhanced-BAC T approach . Thi s approach consider s allowing BAC

T a s a n alternativ e t

o th e Lowes t

Achievabl e Emission s Rat e (LAER ) unde r th e following conditions :

• The are ai s designate d "transitional; " • The sourc e acquire s offsets unde r aca p an d trade program ; an

d • Th e ca p an d trade progra

mi s mas s emissio n based . M r Solomon asked th e subcommittee t o conside r i f i t make s sens e t

o allo w source s i

n thes e area s t

o go wit h BACT . Mr . Solomon note d tha t i f BACT doe s no t

equa l LAER , it will b e fairl y clos e in term s of

technology . He presente d som e consideration s regardin g thi s approach :

• Contain s atechnology forcin g component ; • Difference s betwee

n BAC T an d LAE Rlimit s wil l b e offset ; • Create s a

n incentiv e fo

r mas s based ca

p an d trade program ;P.1 1

Permits/NSR/Toxi c Integratio n PAG E 9

• Provide s amor

e leve l permittin g playin g field between attainmen t an d transitiona

l areas ; • Maintain s consistenc y wit h th e Presidentia

l Directive ; an

d • Ha s no t

been endorsed b y th e Office of Genera l Council . Ms . Wegma

n clarifie d tha

t EP A ha s no t require d amas s base d emissio n ca p but th e Agenc y i s strongly encouraging it . Allocation s woul d b e b y tonnag e versu s emissio n rate standards . Mr . Solomon note d tha

t offse t pool s hav e been presente d t o th e states . The state s di d not expres s immediat

e disapprova

l ofth e offse

t pool s an d ar e currently examining th e proposal . Enhance d BAC T ha s no t been introduce d t

o them . He requeste d subcommitte e members ' feedback . Th e meeting wa s adjourned a

t 7:3 0 p.m .P.1 2

Permits/NSR/Toxi c Integratio n PAG E 1 0

CLEA N AI R AC

T ADVISOR Y COMMITTE E SUBCOMMITTE E O N PERMITS/NSR/TOXI C INTEGRATIO N

Tuesda y Februar

y 17,199 8 ATTENDANC E LIST Le aAnderson , EPA/OG C Barbar aBankoff

, El i Lill y & Co . Bil l Becker , STAPPA/ALAPC O Kare n Blanchard , EPA/OAQP S Terry Bowers , DO D Vinc e Brisini , GP U Genc o Ray Carwile , Alko a Denni s Crumpler , EPA/OAQP S To mCurran , EPA/OAQP S Joh n Devine , EPA/OG C Larry Feldcamp , Bake r

& Bott s Gre g Foote , EP A OG C Stephe n Fotis , Va n Nes s Feldma n Jerry B . Fulmer , Alco a Julie Hatcher , Latha m& Watkin s Dav e Hawkins , NRD C Pet e Jonker , Souther n Californi aGa s Compan y Am y Kreiger , Swidle r

& Berli n Donn aLamb , USD A Fores t Servic e Bil l Lewis , Morgan , Lewi s & Bockius , LL P An n McCabe , Amoc o Ti mMohin , Inte l Corp . L . Neuworth , Latha m& Watkin s Jud y Odoulamy , DOE/G C Mar k Owens , El i Lill y & Co . Clara , Poffenberger , Barke r & Botts , LL P Patric k Raher , Hoga n & Hartson , LL P Lesli e Ritts , Hoga n & Hartso n fo r NE D A/CAR P Moll y Ross , DOI/Assistan t Secretary' s Offic e (FWP ) Chri s Shaver , DOI/NP S Michae l Smith , El i Lill y & Co . Davi d Slaughter , Thompso n Publishin g Grou p Davi d Solomon , EP A Debbi e Stackhouse , EP A Scott Walsu , JS C Lydi aWegman , EP A Holl y Wilson , EPA/OAQP S An n Mari e Woo d EPA/OPA R Ev aWong , IC F* • ft f

r

7 -

1 

## Current

NS R Rulemakin g Activitie s

• NS R Refor m rul e propose d 199 6 -Agenc y initiativ e

- Respond s t o stakeholde rconcern s ove r existin g progra m • WEPC O litigatio n

- Resul t o f 199 2 rulemakin g

- Tie d t o refor m • NS R "transitional " area s rulemakin g

- NS R progra m unde rne w ai rquality standard s

- Presidentia l Directiv e

- Decembe r199 8 deadlin e 

## WEPC O Litigatio n

• Specia l applicabilit y tes t fo rutilitie s -Actua l t o futur e actua l (exclude s emission s du e t o increase s i n demand ) • Industr y

- Tes t shoul d no

t b e limite d t o utilitie s • Environmenta l group s

- Tes t i s not enforceabl e -Deman d growt h exclusio n illega l • Cour t ha s aske d fo ra briefin g schedul e • WEPC O rul e di d no t forese e utilit y deregulatio n • EP A raise d WEPC O issue s i n Refor m proposa l 

## Ke y Element s o f Refor m Rul e

• Applicabilit y tes t fo rmodification s -Actua l t o futur e actua l

- Potentia l t o potentia l -Clea n uni t tes t

- Fewe rsource s subjec

t t o revie w • Ne w procedure s t o addres s Clas s I are a impact s

- Ensur e timel y Federa l Lan d Manage r coordinatio n & inpu t

- Balance s packag e

• Broade rexclusion s (pollutio n contro l projects , ozon e depletin g substances , plantwid e applicabilit y limits ) • Streamlinin g o f th e permi t revie w proces s



## NS R Transitiona l Rul e

• Provid e incentive s t o state s • Leve l th e playin g fiel d • 10/9 7 Concep t Pape r

- Offset Pool s • Ca n b e use d i n al l nonattainmen t area s • Agenc y stil l developin g detail s • Stakeholder

s are intereste d

- Enhance d BAC

T • Negative comment s fro m al l stakeholder

s • Proposa l schedule d fo rApri l 199 8

## Th e Majo r Question s

• Doe s i t mak e sens e t o hav e differen t NS R rule s fo r"transitional " areas ? • I s finalizin g th e NS R refor m rul e th e bes t wa y t o addres s "transitional " are a concern ? • I n additio n to , o rinstea d of , NS R reform , wha t typ e o f NS R (o rother ) incentive s woul d b e meaningfu l an d statutoril y permissibl e fo r"transitional " areas ?

A n Alternativ e Approac h t o LAER ?

• Significan t negativ e stakeholde rrespons e o n enhance d BAC T • I s i t reasonabl e t o allo w BAC T a s a n alternativ e t o LAE R where : -(1 ) th e are a i s designate d "transitional" , an d

- (2 ) th e sourc e acquire s offset s unde ra cap-and-trad e program , an d

- (3 ) cap-and-trad e progra m i s mas s emission s based .

- Includ e a "top-down " approac h t o BACT ? • Consideration s

- Contain s a technolog y forcin g componen t -An y differenc e betwee n BAC T an d LAE R limit s mus t b e offse t -A n incentiv e fo rmas s base d cap-and-trad e program s

- Mor e leve l permittin g playin g fiel d betwee n attainmen t an d transitiona l area s

- Consisten t wit h Presidentia l Directiv e

- Ha s no t bee n endorse d b y OG C 

## Th e Majo r Question s

• Shoul d advers e impact s o n ai rqualit y relate d valu e (AQRVs ) i n Clas s I area s b e addresse d throug h th e SI P by th e contro l o f existin g sources ? • Wit h limite d resource s wha t shoul d b e th e # 1 priorit y fo rth e NS R program ?