UNITED STATES ENVIRONMENTAL PROTECTION AGENCY REGION6



### .Mr. Doug Szenher 1445 ROSS AVENUE, SUITE 1200 DALLAS, TX 75202-2733 

# MAR 2

# 22011

Arkansas Department ofEnvironmental Quality POA Division 5301 Northshore Drive NorthLittleRock,AR 72118 RE: U.S. Environmental Protection Agency (EPA) Comments on Proposed Revisions to 

### the Arkansas Regulations 19 and 26 for the Greenhouse 

### Gas (GHG) Tailoring Rule DearMr. Szenher: Thank 

### you for providing us the opportunity to 

### review and comment on the proposed revisions to Regulations 19 and 26 ofthe Arkansas Air

### Pollution Code. The proposed rulemaking revises the Arkansas prevention ofsignificant deterioration (PSD) andtitle V programs to 

### establish the greenhouse gas-specific permitting thresholds in EPA's final 

### rule ''Prevention ofSignificantDeterioration and Title V Greenhouse Gas Tailoring Rule" published on June 3, 2010 (see 75 FR 31514). We are supportive ofthe proposed rule revisions, but note that there are several significant differences between the proposed Arkansas revisions and the federal GHG Tailoring Rule provisions at 40 Code ofFederal Regulations (CFR) 52.21 and 70.2 as outlined in our enclosed comments. These areas ofdifference must be corrected for the Arkansas program to 

### implement the GHG thresholds as EPA intended. We encourage the Arkansas Department ofEnvironmental Quality (ADEQ) to adopt these revisions with the corrections identified in the enclosure to correctly implement the GHG Tailoring Rule provisions in the state ofArkansas. We would appreciate the opportunity to 

### review the revised rulemaking language priorto adoption to ensure the revisions address our concerns and adequately implementthe GHG Tailoring Rule provisions. We appreciate the timely efforts by ADEQ to update the PSD and title V programs and its.willingness to consultEPA Region 6 throughout this process. We look forward to future collaboration with ADEQ onthe implementation ofthe GHG Tailoring Rule. Ifyou have any2 

### questions about the GHG Tailoring Rule, or about EPA's review ofyourproposed rulemaking, please feel free to

### contact me at (214) 665-6435 or contactMs. AdinaWiley ofmy staffat (214) 665-2115.

Enclosure Sincerely yours,

# Y'~4- JeffRobinson Chief Air Permits Section1



### Enclosure
I. 

### The definition of"C02Equivalent Emissions" at Regulation 19, Chapter 2 includes the incorporation date ofOctober 30, 2009. We note that it will be ADEQ's responsibility to monitor Table A-1 to subpart A of40 CPR Part 98 for updates and to initiate rulernaking accordinglypursuant to all applicable state implementation plan (SIP) revision requirements. 2. The definition of"greenhouse gases" at Regulation 19, Chapter 2, should be 

### revised to mirrorthe definition of"greenhouse gases" at Regulation 19, Section 19.904(0)(1). Additionally, this definition must be revised to remove the reference to measuring in C02ebecause C02eis one oftwo steps used in conjunction with major source mass thresholds to determine whether a source is subject to regulation for its GHG emissions. We suggest the following revisions to this definition: "Greenhouse gases" (GHGs) is 

### the airpollutant defined as the aggregate group of six greenhouse gases: carbon dioxide, nitrous oxide, methane, hydrofluorocarbons, perfluorocarbons, and sulfurhexafluoride, 1111d slialllle mell&llf'ed BB 

### COOe. 3. EPA does not support the proposed revisions to Regulation 19, Section 19.407(C)(2)(a)(vi). While an emission source with apotential to emit (PTE) less than the 75,000 tpy C02ewill in practical effect be 

### excluded from regulatory consideration in a way that may equate to the treatment ofde minimis emission levels, the significance levels established in the TailoringRule arenot by nature consideredde minimis byEPA. See 75 FRat 31560. EPA approaches GHG applicability intwo steps. First, EPA uses the phased-in GHG permitting thresholds to determine ifthe source's GHG emissions are subject to regulation. Then, EPA determines whetherthe source has a PTE that is at or above the Clean Air Act major source thresholds for GHGs. More information about EPA's use ofthe permitting thresholds for determining subjectto regulation is available in the March 15, 2011, GHG Permitting Questions and Answers posted at www.epa.gov/nsr/ghgqa. 4. Regulation 19.904(G) refers to the permitting ofC02eemissions. We note that the PSD program does not permit C02eemissions, but instead permits GHG emissions that are subject to regulation. C02eis not initselfapollutant subject to 

### regulation under PSD; C02e is one oftwo steps used to determine ifa source's GHG emissions are subject to PSD permitting. 5. Regulation 19.904(G) also includes the incorporation dates ofNovember 29, 2005, and June 3, 2010. We note that 

### itwill be ADEQ's responsibility to monitor the referenced provisions of40 CFR 52.21 for updates and initiate rulemaking accordingly pursuant to all applicable SIP revision requirements. 6. The definition of"C02 Equivalent Emissions" at Regulation 19, Section 19.904(GX1) includes the incorporation date ofOctober 30, 2009. We note that it will be ADEQ's responsibilityto monitor Table A-1 to subpart A of40 CFR Part 98 for updates and initiate rulemaking accordingly pursuant to all applicable SIP revision requirements.2

7. Regulation 19, Section 19.904(0)(3) includes the incorporation date of November 29, 2005. We note that it will be ADEQ's responsibility 

### to monitor the referenced provisions of40 CFR 52.21 for updates and initiaterulemaking accordingly pursuant to all applicable SIP revision requirements.
8. Regulation 19, Section**19.904(0)~3)** also includes the following typo: "a significant emissions increase (as calculated using the procedures in 40 CFR 52.21(a)(2)(iv), as of November 29, 2005), and a significant net emissions increase (as defined in 40 CFR 52.21(b)(3), as ofNovember29,2005, and 40 CFR 52.21(b)(23), as of November 29, 2005), occur."
9. Regulation 9, Chapter 9, Appendix A, Insignificant Activities List, Group A, Sections 1 and 13 states that certain activities less than 75,000 tpy C02 are considered insignificant. We note that C02 is onlyone ofsix pollutants analyzed 

### inthe aggregate to determine GHG emissions. Additionally, the insignificant activitylist exclusions need to bebased both onthe same major source 100/250 tpy thresholds and the C02ethresholds used to determine whether a source is subject to regulation for PSD permitting.
10. We also recommend the following addition 

### to improve clarity at Group A, Section 13: "or5 tpy ofanyJl!Wa:.air pollutantregulated under this regulation. These emission limits applyto the sum ofall activities listed under this group."
11. EPA believes the addition ofnew subsectionM under the definition of"applicable requirement" at Regulation 26, Chapter 2, would bebetter situated under the new subsection ofGHGs under the definition of''regulated airpollutant". The definition of "applicable requirement" already appears to cover GHG permittingunder subsections A and B as Title I requirements. Further, we note that as in comment 4 above, the title V program does not permit C02e emissions, but instead permits GHG emissions that are subject

### to regulation. C02eis notinitselfa pollutant subject to regulation under title V; C02e is one oftwo steps used

### to determine ifa source's GHG emissions are subject to title V permitting.
12. The definition of"C02 EquivalentEmissions" atRegulation 26, Chapter 2 includes the incorporation date ofOctober 30, 2009. We note that it will beADEQ'sresponsibilityto monitor Table A-1 

### to subpart A of40 CFRPart 98 for updates and to initiaterulernaking accordinglypursuant

### to all applicable title V revision requirements.
13. The definition of"greenhouse gases" at Regulation 26, Chapter 2, should be revised to mirrorthe definition of"greenhouse gases" used throughout Regulation 19 

### to promote internal consistency. We suggest the following revisions to this definition: "Greenhouse gases" (GHGs) is the airpollutant defmed as the aggregate group ofsix greenhouse gases: carbon dioxide, nitrous oxide, methane, hydrofluorocarbons, perfluorocarbons, and sulfurhexafluoride.3

14. The revised definition of"major source" at Regulation 26, Chapter 2 appears to limit major source applicability under title V 

### to a source that has both l00,000 tpy C02e and I00 tpyofany regulated pollutant; essentially this means a source is only major for title V ifit can be considered major for GHG emissions. EPAbelieves that the clearest option for resolving this concern is to revise the definition of"major source"pursuant to the revisions at 40 CFR70.2 to include the phrase" any regulated 

### air pollutant

### subject to regulation". Then as explainedbelow, the definition of"subject to regulation" couldbe added to the Regulation 26 definitions.
15. EPA believes that the inclusion ofthe "subject to regulation" language at 40 CFR 70.2 would greatly improve clarity ofthe Arkansas regulations. We thinkthat ADEQ could either add this as a separate Regulation 26 definition or include this under the new subsection for GHGs under the definition of"regulated airpollutant".
16. The revisions to Regulation 26, Section 26.302 do not adequately address the two step approach used to determine whether a sourceis subject to titleV permitting. Inaddition to emitting at or above the 100,000 tpy C02ethreshold, a source must also be a major title V source with I00 tpy ofGHG emissions. We note that ifthe ADEQ chooses to correctthe definition of"major source" as discussed above in comment 14 it is likely that Section 26.302 will not need

### to be revised.
17. EPAis concerned about the revisions to Regulation 26, Section 26.305. We interpret the purpose ofthis revision to exclude from inclusion in the title V permit emissions ofGHG that are not major for PSD. Ifthatis the case, the revision need to reference both the C02ethreshold to determine a source is subject 

### to regulation and the l00/250 tpy major source threshold for determining whether the source is major for PSD permitting. Additionally, we have concerns that this provision will preclude a source from taking synthetic minor limits to avoidmajor source applicability.
18. EPA interprets the revisions to theminorpermitmodification procedures at Regulation 26, Section 26.1002 to apply to sources that are minorfor PSD permittingrequirements. Ifthat is the correct interpretation, this provision must be revised to reflect the usage of C02e

### to determine ifthe source is subject to regulation and then the 100/250 tpy major source thresholds to determine ifthe source is major for PSD.