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OAR Box 1875 

Prepped by Ollie Stewart 

Document Number: 

74) ll-F-21 

Docket Number: 

A-90-19 

Printed 12/1/2008 11:12:48 AM Sheet 74 of 86 
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A-90-19 

ll-F-21 

D2TE: October 15, 1992 

SUBJECT: Draft Language for Complementary Legal Theory for 

Broader Emissions Averaging 

FROM: Alan Eckert, EPA/OGC 

TO: David Rivkin, Office of the Vice President 

Council on Economic Competitiveness 

See attached. 

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^di. J^^T^T&^K . 

October 15, 1992 

40 C.F.R. Part 63 - Hazardous Organic NESHAP ("HON") 

(SOCMI plus seven other source categories) 

Insert Re: Plant"Wide Emissions Averaging 

EISA's proposed standard provides, as noted above, a broad 

averaging approach for HON units at a plant. EPA also solicits 

comment on whether it should in the final rule adopt a broader 

averaging approach, as set forth below. 

This broader averaging approach would rely upon an 

alternative legal theory which would permit compliance with the 

HON MACT standard through reduction of emissions from points 

anywherfe within the entire contiguous facility. The basic 

framework for setting and implementing emissions standards for 

hazardous air pollutants (HAPs) is contained in section 112(d) 

and 112! (i) of the Clean Air Act Amendments. 

Adopting a definition of the term "source" for regulatory 

purposes has been recognized by the Supreme Court as an area in 

which t[ne Administrator is accorded a high degree of flexibility. 

Chevron v. Natural Resources Defense Council, (cite). This 

approach would read Chevron as affording the Administrator 

sufficient flexibility to, in effect, adopt different definitions 

of the jterm "source" for purposes of identifying source 

categories and for standard setting under sections 112(d)(2) and 

(3) , arid of the same term for the purposes of requiring 

compliance under section 112(i)(3). Section 112(i) (3) does not 

preclude EPA from identifying the "source" that must achieve 

compliance with the standard as a "major source," which of course 

would normally include an entire plant. The Administrator 

solicits comment on the legal authority and policy implications 

of this interpretation of sections 112(d) and (i) to permit a 

broader averaging approach, and also on implementation 

considerations. 

Urider this approach, EPA would make no changes in the way it 

has identified categories and subcategories of sources, nor in 

the way it prescribes emission standards for those categories or 

subcategories. For compliance purposes, however, if an owner or 

operator does not wish to control a particular emission point, 

the uncontrolled emissions from that point could be offset by 

emissions reductions greater than what is required by any 

standard then in effect under Section 112 at one or more other 

emission points within the entire stationary source. In 

addition, emissions averaging would be allowed across all the 

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emission points within the entire plant, including the SOCMI 

source category as well as points not covered by any MACT 

standard. As such, emissions from process vents, wastewater 

operations, storage vessels and transfer operations could be 

averaged among themselves or with other emissions points within 

tha Entire stationary source, in order to provide as much 

flexibility as possible. EPA solicits comment also on how it 

would set the baseline for unregulated emissions points, and how 

it would structure limits for such points to assure the standard 

as a whole remains enforceable. Comment is also requested on 

legal! authority for and policy implications of including new and 

existing sources in the same average. 

As explained above, while equipment leaks are included in 

SOCMI sources, they cannot at this time be included in emissions 

averages. Under this alternative, EPA would expeditiously 

develop methods to assign allowable emission levels to particular 

leak points or groups of leak points, and would similarly develop 

methods for calculating emissions from emission points not 

regulated by the HON. The Administrator seeks comments on 

appropriate ways to include a provision that, upon petition of 

any oirner or operator of a stationary source, EPA will establish 

calculation methods to be used for emission averaging for 

equipment leaks. 

1 Jnder this alternative approach, emission reductions from 

emissions points not covered by the HON would be useable to 

generate credits, subject to the previously discussed limitations 

and ar^y limitations added in any other MACT standard applicable 

to th6 emission points, credits could be generated at any time 

from rion-HON emission points until they become subject to a MACT 

standard. When they become subject to a MACT standard, the 

futurej eligibility and value of reductions at those emission 

points would be governed by the emission reductions required by 

those standards. Each future MACT standard must contain a floor 

calculation. To the extent that points covered by these later 

standards have been controlled for compliance with an earlier 

standajrd, the floor for the later standard may be more stringent. 

AS futjure MACT standards are adopted, EPA would attempt to 

maximize averaging opportunities and therefore minimize 

compliance delays and costs. 

S-bvera L l factors must be considered in implementing this 

alternative approach. First, the averaging approach allows 

inclusion of points that will be regulated by subsequent MACT 

standards. In calculating residual risk under section 112(f), 

should I all points in the initial average be included in one risk 

calculation even though some of those points will not be subject 

to the standards under 112(d) until a later date? 

Second, it would require a determination on the 

permissibility of interpollutant trades. This concern is already 

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being evaluated for VOC HAPs in the SOCMI soxirce category. The 

alternative approach would further complicate this issue by 

adding dissimilar categories (e.g., industrial cooling towers) 

emitting dissimilar pollutants (e.g., chromium). Since the HON 

currently addresses only organic HAPs significant changes would 

be necessary to accommodate non-VOC HAP controls. 

To facilitate comment on this alternative, EPA is setting 

forth below the regulatory changes that would be necessary to 

implement it. 

1. S63.100 Applicability and designation of source. 

Amend to add paragraph (h), as follows: 

"(h) Subparts F,G, and H allow emissions averaging 

within the entire stationary source subject to the 

requirements of this Part, including any additional 

information submittals and detailed credit/debit 

calculations the permitting authority may require." 

2. S63.101 Definitions. Amend as follows: 

"Emission point means an individual process vent, 

storage vessel, transfer rack, wastewater stream, or 

equipment leaJc, and for purposes of emissions 

averaging, any individual item of equipment within the 

stationary source. 

* * * 

"Stationary source means any building, structure, 

facility, or installation which emits or may emit any 

air pollutant subject to regulation under the ACT. 

building, structure, facility, or installation means 

all of the pollutant-emitting activities which belong 

to the same industrial grouping, are located on one or 

more contiguous or adjacent properties, and are under 

the control of the same person (or persons under common 

dontrol) except the activities of any vessel. 

Pbllutant-emitting activities shall be considered as 

piart of the same industrial grouping if they belong to 

the same Major Group (i,e,, which have the same twodigit code) as described in the Standard Industrial 

Classification Manual, 1987 (National Technical 

Ihformation Service stock number PB 87-100012)." 

3. S63.112 

follows; 

Emission limits. Amend paragraph (c), as 

"(c) Compliance with the emission standard in 

paragraph (a) or (b) shall be demonstrated in one of 

trie following two ways: 

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"(2) the owner or operator may elect to control 

different groups of emission points within the 

istationary source to different levels than specified 

under SS63.113 through 63.147 as long as the overall 

i emissions reductions from the stationary source equal 

or exceed the emission reduction required by S63.112. 

"(i) Owners or operators using this emissions 

averaging compliance approach must calculate their 

emission debits and credits for those emission points 

involved in the emission average as specified in 

S63.150, develop an implementation program as required 

in S63.151, and comply with the general reporting 

requirements in S63.152. 

"(ii) Emission debits and credits must be 

calculated separately for new and existing sources. 

New sources may be included in the same emission 

average as existing sources. The determination of 

whether an emission point is part of a new or existing 

source shall be made according to the provisions of 

Subparts A and F of this Part." 

4. S63.150 Emissions averaging Provisions. 

a. Amend paragraph (c), as follows: 

"(c) The following emission points can be 

Credited in an emissions average to offset use of 

controls less stringent than the reference technology 

on Group l emission points: 

* * * 

"(6) Any other emissions points within the 

stationary source except those excluded from use as 

credits in an emissions average by a standard 

promulgated under Section 112." 

b. Amend paragraph (d), as follows: 

"(d) The following emission points cannot be used 

tb generate credits in emission averaging: 

"(1) Emission points subject to SS63.113 through 

63.149 already controlled on or before (November 15, 

1$90), except those that were controlled as part of the 

early reduction program or a pollution prevention 

program as described in paragraph (c) of this section. 

* * *" 

c. Amend paragraph (e) as follows: 

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"(e) For all points included in an emission 

average, the owner or operator shall: 

* * * 

"(2) Calculate credits for all emission points 

that are overcontrolled to compensate for the debits 

using equations in paragraph (g). Emission points that 

meet the criteria of paragraph (c) may be included in 

the credit calculation, whereas those described in 

paragraph (d) shall not be included. 

\5. S63.151 Implementation program. 

* * * 

!" (b) For emission points included in an emission 

average, the fallowing information shall be provided as 

part of the written statement of the implementation 

program: 

* * * 

"(8.5) For each emission point included in the 

average other than a process vent, storage vessel, 

transfer rack or wastewater stream, the owner or 

Operator shall document the following information: 

"(i) The information regarding emissions 

averaging required by any other standard proposed under 

Section 112; or 

"(ii) Information reasonably similar to 

information regarding emissions averaging required by 

dny standard proposed under Section 112. The 

supplemental information within 3 0 days after 

submission." 

6i. Any other necessary conforming changes. 

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