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TEXAS COMMISSION ON ENVIRONMENTAL QuAlflIn'filVISION Bryan W. Shaw, Ph.D., Chairman Buddy Garcia, Commissioner
Carlos Rubinstein, Commissioner
Mark R. Vickery, P.G., Executive Director

Protecting Texas by Reducing andPreventing Pollution 

### April 1,2010

Docket No. 2009-0801-SIP 

### Project No. 2009-018-SIP-NR**y",·~:·** -,...r;·,

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### Alfredo "AI" Armendariz, Ph.D., Regional Administrator U.S. Environmental Protection Agency

- Region 6 1445 Ross Avenue Dallas, Texas 75202-2733 w -**S~2** 

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### Dear Dr. Armendariz:

On March 10,2010, the Texas Commission on Environinental Quality (Commission) adopted a revision to the state implementation plan (SIP) for demonstration of reasonable further progress for the Houston-GalvestonBrazoria (HGB) 1997 eight-hour ozone nonattainment area.

The Commission adopted the HGB Reasonable Further Progress (RFP) SIP revision, demonstrating that the RFP emissions reduction requirement will be met for the six-year period (2003-2008) beginning Janumy 1 of the
year following the year used for the baseline emissions inventory (2002) and all remaining three-year periods after the first six-year period (2009-2011, 2012-2014, and 2015-2017) out to the area's attainment 

### date (2019). This SIP revision also sets the nitrogen oxides (NOx) 

### and volatile organic compounds (VOC) motor vehicle emissions budgets (MVEB) for transportation conformity purposes for the milestone years 2008, 2011, 2014, 2017, and 2018.

Enclosed are the proposed revision to the SIP, a public hearing certification, a complete record of the public hearings, and the accompanying order. I look forward to your expeditious approval ofthis SIP revision.
Sincerely,

# ~~;dAtv- Bryan W. Shaw, Ph.D. Chairman

BWS/ts



### Enclosures

cc: The Honorable Rick Perry, Governor of Texas Mr. 

### Toby Baker, Office of Budget, Planning and Policy, Office of the Governor .Mr. 

### MarkR. Vickery, P.G., Executive Director, Texas Commission on Environmental Quality

P.O. Box 13087 Austin, Texas 78711-3087 512-239-1000 Internet address:www.tceq.state.tx.us

'.' " 'dTexas Commission on Environmental Quality Public Hearings October 28 and 29. 2009
Concerning Revisions 

### to the HGB Eight-Hour Ozone Reasonable Further Progress SIP Project No. 2009-018-SIP-NRREVISION TO THE STATE IMPLEMENTATION PLAN FOR THE CONTROL OF OZONE AIR POLLUTION

HOUSTON-GALVESTON-BRAZORIA 1997 EIGHT-HOUR OZONE STANDARD NONATTAINMENT AREA

TCEQ

TEXAS COMMISSION ON ENVIRONMENTAL QUALITY P.O. BOX 13087 AUSTIN, TEXAS 78711-3087

Houston-Galveston-Brazoria Reasonable Further Progress State Implementation Plan Revision for th e1997 Eight-Hour Ozone Standard

PROJECT NO. 2009-018-SIP-NR

Adopted March 10, 2010HGB Reasonable Further Progress SIP Revisi on for the 1997 Eight-Hour Ozone Standard

ix LIST OF APPENDICES

Appendix Appendix Name

Appendix 1 HGB Reasonable Further Progress Demonstration Calculations Spreadsheet

Appendix 2 Development of Reasonable Further Progress Point Source Inventories

Appendix 3 Development of Reasonable Further Progress Area Source Inventories

Appendix 4 Development of Reasonable Further Progress Non-Road Mobile Source Emissions Inventories for Source Categories in the EPA’s NONROAD 2005 Model

Appendix 5 Development of Reasonable Further Progress Non-Road Mobile Source Emissions Inventories for Airports

Appendix 6 Development of Reasonable Further Progress Non-Road Mobile Source Emissions Inventories for Locomotives

Appendix 7 Development of Reasonable Further Progress Non-Road Mobile Source Emissions Inventories for Commercial Marine Vessels

Appendix 8 Development of Reasonable Further Progress Non-Road Mobile Source Emissions Inventories for Drilling Rigs

Appendix 9 Houston-Galveston-Brazoria 1997 Eight- Hour Ozone Nonattainment Area Reasonable Further Progress On-Road M obile Source Emissions InventoriesAPPENDIX 2



### DEVELOPMENT OF REASONA BLE FURTHER PROGRESS POINT SOURCE INVENTORIESAppendix 2: POINT SOURCES

Emissions Inventory Development Stationary point source emissions data are collect ed annually from sites that meet the reporting requirements of 30 Texas Administrative Code §101.10. To collect the data, the TCEQ mails emissions inventory questionnaires (EIQ) to all sites identified as meeting the reporting requirements. Companies are required to re port emissions data and to provide sample calculations used to determine the emissions. Information characterizing the process equipment, the abatement units, and the emission points is also required.

All data submitted in the EIQ are reviewed for quality assurance purposes and then stored in the State of Texas Air Reporting System (STARS) database. The following TCEQ web page contains EIQ guidance documents and other histori cal point source emissions of major pollutants: http://www.tceq.state.tx.us/implementation/air/industei/psei/psei.html

. Additional information is available upon request from the TCEQ’s Air Quality Division.

Updated 2002 Base Year Inventory The TCEQ extracted the 2002 base year inventory data from STARS on February 4, 2009. The extracted data included reported ozone season daily emissions of NO X and VOC from each site in the HGB area that submitted a 2002 EIQ and reflect ed revisions made on or before the extract date. County-level reported VOC emissions were adjusted to account for unreported VOC emissions discovered in the Texas Air Quality Study (TexAQS) of 2000.

Updated Uncontrolled Milestone Year Inventories In developing the uncontrolled milestone year inventories, the TCEQ projected the 2002 inventory using the following approaches: applying projection factors to 2002 emissions; refining the VOC emission estimates to reflect unreported emissions; and adding unused NO X and VOC emissions credits to the projected emission s.

n First, the TCEQ projected em issions by applying growth factors to the 2002 actual inventory. The Economic Growth Analysis System (EGAS) 5.0 was used to derive growth factors from the following data sets: the Regional Economic Modeling, Inc. (REMI) 5.5 factor set at the countywide level for Texas; the Moody’s Economy, Inc. factor set at the countywide level for Texas; and the REMI 6.0 factor set at the statewid e level for Texas. To select growth factors, the TCEQ compared growth factors to actual gr owth in emissions from 2002 to 2005 for each contaminant and each industrial category at the county level, and selected the factors that most closely corresponded to historical growth.

County-level reported VOC emissions were th en revised to account for unreported VOC emissions discovered in the TexAQS 2000. The TexAQS 2000 measured ambient VOC concentrations in the Houston Ship Channel were determined to be several times greater than the values in the TCEQ’s emissions inventories.

Emissions credits are emissions reductions that may return to the airshed in the future as companies elect to use them. To ac count for this potential increase in NO x and VOC emissions in the HGB area, emissions credits banked in the Emissions Banking and Trading (EBT) database as of October 2, 2008, were added to the project ed inventory after the growth factors had bee applied.

Banked Emissions Reductions Credits (ERCs) we re applied using New Source Review (NSR) permitting offsets. ERCs listed in the EBT data base as of October 2, 2008, were applied. An offset ratio of 1.3:1 was applied to the banked cr edits and all of the banke d ERCs were applied by the first milestone year. The ERC transac tions from 2002 to 2008 were also applied.

For Discrete Emissions Reduction Credits (DERCs), the credits were applied over ten years, from 2009 to 2018. DERCs listed in the EBT database as of April 14, 2009, were applied. An offsetratio of 1.1 was applied to account for the 10 percent environmental contribution retirement obligation. Historic use has been less than one to n per day. Since DERCs are used for short-term emission increases, the DERC transactions betw een 2002 and 2008 were not applied.

Table 1: Contributions to the Uncontrolled Inventory from Emission Reduction Credits NO X , tpd VOC, tpd Banked ERCs 0.30 2.74 Banked DERCs 16.60 0.26 ERC Transactions 1.54 0.41

Updated Controlled Milestone Year Inventories In developing the controlled milestone year i nventories, the TCEQ projected the 2005 point source inventory using the following approaches: applying the Mass Emissions Cap and Trade Program (MECT) 2008 caps to the projected NO X emissions, applying the Highly Reactive VOC Cap and Trade Program (HECT) caps to the projected VOC emissions, applying rules restricting storage tank landings to VOC projections, updatin g the VOC emissions to account for unreported VOC emissions discovered in the Texas Air Qu ality Study of 2006 (TexAQS II), and adding unused emissions credits to the projected NO X and VOC emissions.

The TCEQ designated 2005 as the baseline year for controlled projections since it was the most recent National Emissions Inventory year ava ilable. The 2005 point source inventory was extracted from STARS on February 4, 2009. Th e extracted data were reported ozone season daily emissions of NO X and VOC from each site in the HGB area that submitted a 2005 EIQ and reflect revisions made on or before the extract date.

The NO X emissions allocations in the MECT 2008 NO X cap take into account all NO X controls, including controls applied to electric generati ng units (EGUs) and large stationary engines. MECT allocations for EGUs were adjusted by the ratio of 2005 summer daily emissions to 2005 daily average of annual emissions to account for increased operation during the summer. Emissions from sources not subject to the MECT program were develope d by applying growth factors to the non-MECT sources in the 2005 inventory.

The VOC emissions were developed by applying the HECT cap to projections. Highly reactive VOC (HRVOC) emissions from HECT-applicable units at sites subject to the cap were projected using the sitewide cap. Other VOC emissions we re projected using growth factors for the nonHECT sources in the 2005 inventory.

Title 30 TAC Chapter 115 rules that limit tank landi ngs were also applied to VOC projections. The revised rule limits convenience landings unless an abatement device is used to control the VOC emissions or landing loss emissions are aut horized under an emissions limit or cap in a permit issued under 30 TAC Chapter 116. The adju stments from this rule were determined as follows: emissions from tank landings that occurre d in 2002 were summed for each site in each county; 2005 emissions were also reviewed to ensu re that they were comparable to 2002 values; annual averages of the 25 tons per year threshold specified in 30 TAC Chapter 115 were determined for each site in each county; and the total landing loss emissions were subtracted from these emissions limits on a countywide level.

Adjustments to county level VOC emissions we re made to account for unreported emissions determined from ambient monitoring data. Emissions derived from measured ambient VOC concentrations in the Houston Ship Channel were determined to be greater than the values in the TCEQ’s emissions inventories; however, the difference between ambient and reported VOC emissions was less in 2006 than in 2000. This adjustment differed from the uncontrolled adjustment because it was developed using the mo st current science and uses data from a network of ambient monitors that was established after the base year. These data were not available during the base year and therefore cannot be used to adjust the base year VOC emissions. Thedifference in emissions resulting from these two different adjustments was not claimed as a reduction in the RFP demonstration.

Emissions credits are emissions reductions that may return to the airshed in the future as companies elect to use them. To ac count for this potential increase in NO x and VOC emissions in the HGB area, emissions credits banked in the EBT database as of October 2, 2008, were added to the projected inventory after the growth factors had been appli ed.

Banked ERCs were applied using NS R permitting offsets. An offset ratio of 1.3:1 was applied to the banked credits and all of the banked ERCs were applied by the first milestone year. The ERC transactions from 2002 to 2008 were also applied.

For NO X DERCs, no offset ratio was applied because the credits could be applied to MECT allowances, with the ratio of 10 tons of DE RCs generated before 2005 equaling one ton of allowance. The maximum amount of 10,000 tons of DERCs per year specified in 30 TAC §101.356 was applied. Historic DERC use has been less than 1 ton per day.

For VOC DERCs, an offset ratio of 1.1 was app lied to account for the 10 percent environmental contribution retirement obligation. The credits were applied over ten years, from 2009 to 2018.

The DERC transactions between 2002 and 2008 were not considered because of the short term nature of DERCs.

Table 2: Contributions to the Controlled In ventory from Emission Reduction Credits NO X , tpd VOC, tpd Banked ERCs 0.30 2.74 Banked DERCs 2.74 0.26 ERC Transactions 0.98 0.41