22 ENVIRONMENTAL ADMINISTRATIVE DECISIONS

IN RE PEABODY WESTERN COAL COMPANY

CAA Appeal No. 04-01

ORDER DENYING REVIEW

Decided February 18, 2005

Syllabus

On July 1, 2004, Peabody Western Coal Company (“Peabody”) filed a petition with

the Environmental Appeals Board (“Board”) requesting review of a May 21, 2004 U.S.

Environmental Protection Agency (“EPA”) permit decision (“Permit”), issued by EPA Region IX under 40 C.F.R. Part 71, which implements Title V of the Clean Air Act. The

Permit covered certain coal preparation operations at Peabody’s Kayenta and Black Mesa

surface coal mines (collectively the “Black Mesa Complex” or “Facility”) located on Hopi

and Navajo Nation tribal lands. The Permit incorporated opacity requirements established

by the New Source Performance Standards (“NSPS”) for coal preparation plants, as well as

related monitoring and recordkeeping requirements. The Permit did not include a potential

to emit (“PTE”) limit to officially restrict the Facility’s capacity to emit particulate matter

(“PM”), as Peabody had requested.

Peabody argued in its Petition that Region IX had clearly erred in two respects. First,

Peabody claimed that Region IX impermissibly denied Peabody’s request for a PTE limit.

Specifically, Peabody claimed that Region IX had not adequately justified its decision not

to establish a PTE limit for the Black Mesa Complex, and that this decision was contrary to

historical practice since States had established such limits in comparable Title V permitting

decisions under 40 C.F.R. Part 70. Second, Peabody argued that the monitoring, recordkeeping, and reporting requirements of the Permit were unreasonably burdensome, and

therefore impermissible. Specifically, Peabody claimed that the Permit provisions requiring

daily visible emission monitoring survey (“VEMS”) and periodic Method 9 opacity observations were unduly burdensome and inconsistent with the monitoring requirements that

EPA had included in other similar permits. Additionally, Peabody argued that the requirement for weekly inspection of the water sprays used to control opacity, and the associated

corrective action requirements, exceeded EPA’s authority under Title V.

Held: The Board denies review as to each of the issues in the Petition. First, the

Board finds that Region IX’s decision not to establish a PTE limit for the Facility was, at its

core, a technical determination. In light of the considerable deference that the Board typically affords the permit issuer on questions of technical judgment, the Board concludes that

the Region adequately explained the basis for its decision, and that the Region’s rationale

was reasonable based on the information in the administrative record. Among other things,

because of the Facility’s size, and Peabody’s reliance on unverified emission factors and

assumed control efficiencies for establishing and demonstrating compliance with its proposed PTE limit, Region IX’s decision not to include a PTE limit in Peabody’s permit was

not clearly erroneous on technical grounds.

VOLUME 12
PEABODY WESTERN COAL COMPANY 23

Additionally, the Board finds that Peabody failed to demonstrate adequately that the

State Title V permits it cited as precedent for its proposed PTE limit involved facilities that

were truly similar to the Black Mesa Complex, or that these State permits relied on emission factors and estimated control efficiencies in the same manner as did the approach that

Peabody proposed in this case. Absent a clear demonstration by Peabody that the State

permitting decisions are sufficiently similar to serve as useful precedent here, and given

Region IX’s facially reasonable technical assessment that a PTE limit was inappropriate for

the Black Mesa Complex based on site-specific factors, the Board concludes that it will not

substitute its judgment for the Region’s on this technical issue. Accordingly, the Board

denies review of Region IX’s decision not to establish a PTE limit.

The Board concludes also that Peabody failed to demonstrate that Region IX’s inclusion in the Permit of daily VEMS and periodic Method 9 opacity observation requirements

was clearly erroneous. In this regard, the Board finds that Peabody did not provide an

adequate explanation of why it believed the monitoring requirements to be unduly burdensome. Nor did Peabody provide any meaningful discussion of the similarities or difference

between the Black Mesa Complex and the facilities that it relied upon as precedent for

proposing less stringent monitoring requirements. The Board finds that the record provides

adequate support for Region IX’s conclusion that Peabody’s proposed alternative monitoring requirements were inadequate to ensure compliance given the Facility’s size and relatively unreliable emission controls. Thus, absent any specific factual or technical analysis

demonstrating that the Region’s monitoring and recordkeeping provisions were unreasonable, and given Region IX’s apparently rational consideration of relevant factors, the Board

concludes that Peabody has failed to carry its burden of demonstrating that the Region’s

exercise of its technical judgment in this regard was clearly erroneous.

Finally, the Board finds that Peabody failed to address Region IX’s response to

Peabody’s comments on the draft permit regarding EPA’s authority to require monitoring

and repair of water sprays at the Black Mesa Complex. In general, petitioners may not

simply repeat objections made during the comment period, but rather must demonstrate

why the permitting authority’s response to those comments warrants review. Because

Peabody did not address the Region’s response to Peabody’s earlier comments on this issue,

the Board denies review of the Permit on this basis.

Before Environmental Appeals Judges Edward E. Reich and

Kathie A. Stein.

Opinion of the Board by Judge Stein:

On May 21, 2004, Region IX of the United States Environmental Protection

Agency (“EPA” or “Agency”) issued a permit to the Peabody Western Coal Company (“Peabody”) pursuant to Title V of the Clean Air Act (“CAA” or “Act”), 42

U.S.C. § 7661 et seq. (“Title V”), for operation of Peabody’s Black Mesa and

Kayenta coal mines. The Title V permit incorporates opacity limits and other requirements associated with the New Source Performance Standards (“NSPS”) for

coal preparation plants (40 C.F.R. pt. 60, subpt. Y), along with related monitoring,

recordkeeping, and reporting requirements. On July 1, 2004, Peabody filed a petition for review (“Petition”) with the Environmental Appeals Board (“EAB” or

“Board”) challenging certain elements of Region IX’s permit decision. Peabody

argues that the Region’s decision was clearly erroneous in two respects. First,

Peabody claims that Region IX impermissibly declined to issue Peabody a potenVOLUME 12
24 ENVIRONMENTAL ADMINISTRATIVE DECISIONS

tial to emit (“PTE”) limit for the two mines.1 Second, Peabody claims that the

monitoring, recordkeeping, and reporting requirements in the Title V permit are

unreasonably burdensome and therefore impermissible.

For the reasons discussed below, we deny review as to each of the issues

raised in Peabody’s Petition.

I. BACKGROUND

A. Factual and Procedural Background

Peabody operates the Kayenta and Black Mesa mines, two contiguous surface coal mines which are treated as a single stationary source for purposes of the

permitting program under Title V of the CAA.2 The mines are located on the

Navajo Nation and Hopi Tribe reservations just west of Kayenta, Arizona, and

process more than twelve million tons of coal per year.3 See Petition at 3; Response at 6; Respondent’s Exhibit (“R Ex”) 2 (U.S. Dept. of Energy, Energy Information Admin., Major U.S. Coal Mines (2000)) at tbl. 14. The Facility includes,

in addition to the mines themselves, coal preparation operations where the extracted coal is crushed and screened to prepare it for use as fuel. See Title V

Permit Application (Oct. 15, 1999) (“1999 Permit Application”), Transmittal Letter at 1-2; Response at 6. Coal processing operations at the Facility that were

constructed, reconstructed, or modified subsequent to the effective date of the

NSPS (October 10, 1974) are subject to the NSPS for coal preparation plants. See

40 C.F.R. §§ 60.251(b), (g), (h), (i), 60.252(c);4 see also Title V Permit Application (February 1, 2002) (“Final Permit Application”), Transmittal Letter at 3 (explaining that because of modifications to certain of the Facility’s coal processing

units these units are subject to the NSPS for coal preparation plants).5

1 We discuss PTE and PTE limits in detail in Part I.B.2 below.

2 EPA’s regulations define a “stationary source” as “any building, structure, facility, or installation that emits or may emit any regulated air pollutant or any [hazardous air] pollutant listed under

section 112(b) of the Act.” 40 C.F.R. § 71.2.

3 The Black Mesa and Kayenta mines have been operating since 1970 and 1973, respectively.

See Response to Peabody Western Coal Company’s Petition for Review (“Response”) at 6. For ease of

reference, we will refer to the coal processing operations at the two mines collectively as the “Black

Mesa Complex” or the “Facility.”

4 The NSPS defines a “coal preparation plant” as “any facility (excluding underground mining

operations) which prepares coal by one or more of the following processes: breaking, crushing, screening, wet or dry cleaning, and thermal drying.” 40 C.F.R. § 60.251(a).

5 The relevant EPA regulations define “modification” as “any physical change in, or change in

the method of operation of, an existing facility which increases the amount of any air pollutant (to

Continued

VOLUME 12
PEABODY WESTERN COAL COMPANY 25

The Facility is subject to Title V, pursuant to 40 C.F.R. § 71.3(a), because

the Facility has the potential to emit particulate matter with a diameter of ten

microns or less (“PM10”) in quantities exceeding 100 tons per year (“tpy”) — making it a “major source” under 40 C.F.R. § 71.2. Part 71 requires that sources subject to Title V must submit Title V permit applications. 40 C.F.R. § 71.5. Peabody

submitted an application for a Title V permit on October 15, 1999, for operation

of its coal preparation plant.6 See generally 1999 Permit Application. This was

followed by a revised application submitted on June 13, 2000 (“2000 Permit Application”), and the Final Permit Application on February 1, 2002.

On September 23, 2003, Region IX issued a CAA Title V operating permit

for the Facility (“2003 Permit”). On October 21, 2003, Region IX informed

Peabody that it intended to reopen the permit to address certain issues that

Peabody had raised with respect to the 2003 Permit. See R Ex 1 (Certified List of

Documents Comprising the Record (“Cert. Index”)), item III.B (Letter from Region IX to Peabody extending permit effective date and appeal deadline); see also

Petitioner’s Exhibit (“P Ex”) D (Region IX’s Supplemental Statement of Basis

(“Supp. SOB”)) at 2. The Region issued a final Title V operating permit on

May 21, 2004 (“Final Permit”). The Final Permit incorporates the opacity standards established by the NSPS for coal preparation plants. See 40 C.F.R. pt. 60,

subpt. Y. The NSPS establishes a 20% opacity limit for coal processing and conveying equipment, coal storage systems, and coal transfer and loading systems.

The NSPS opacity limit relies upon six-minute Method 9 testing.7 See 40 C.F.R.

§§ 60.254(c), 60.11, app. A; see also Final Permit at 5. As relevant to this Petition, the Final Permit also includes the following specific monitoring and recordkeeping requirements:

• Peabody must conduct a daily visual emission monitoring survey (“VEMS”)

of each crusher, screen, and transfer point;

(continued)

which a standard applies) emitted into the atmosphere by that facility or which results in the emission

of any air pollutant (to which a standard applies) into the atmosphere not previously emitted.” 40

C.F.R. § 60.2.

6 Because the Facility began operation before the establishment of any CAA permit program,

it was not required to obtain preconstruction air quality permits (such as a Prevention of Significant

Deterioration (“PSD”) permit under CAA § 165, 42 U.S.C. § 7475). See Response at 8 n.8.

7 Method 9 is an official EPA test method for making visual determinations of the opacity of

emissions from stationary sources. See 40 C.F.R. pt. 60, app. A-4, Meth. 9. A six-minute Method 9 test

quantifies the average opacity of emissions over a period of approximately six minutes. Id.

VOLUME 12
26 ENVIRONMENTAL ADMINISTRATIVE DECISIONS

• When a VEMS detects opacity of 10% or greater, Peabody must conduct a

six-minute Method 9 observation within 24 hours, and record the results;8

• Peabody must conduct a Method 9 observation of each emission point subject to the opacity standard at least once per month; 

• Peabody must conduct weekly inspections of all water sprays associated

with emission points subject to the opacity standard, and take action to correct malfunctioning sprays within 24 hours.9

Final Permit at 6-7. These requirements apply only to those emission points at

Peabody’s Facility that are part of the coal preparation operations.10 See id. at 5,

tbl. 1 (listing nineteen individual emission units subject to the NSPS).

The Final Permit includes generally applicable recordkeeping provisions

that require documentation of: the date, place, and time of sampling or measurement; the date(s) analyses were performed; the company or entity that performed

the analyses; the analytical techniques or methods used; the results of such analyses; and the operating conditions that exist at the time of sampling or measurement. Id. at 10. The Final Permit establishes a five-year record retention requirement running from the date of monitoring. Id. Peabody must report all monitoring

results semiannually, and monitoring reports must contain certain specified information. Id. at 11. Peabody must also promptly report any “deviations” — a term

that is defined in the Final Permit. Id. at 12.

During the permit proceedings below, but well after it had submitted its

Final Permit Application, Peabody requested that Region IX include a provision

in the permit limiting the Facility’s potential to emit PM10.

11 See, e.g., R Ex 10

(Letter from Brian P. Dunfee, Peabody Group, to Steve Branoff, Region IX (May

8 However, “[i]f one or more NSPS affected facilities is housed within a single structure,

[Peabody] shall observe the opacity at each opening where gasses vent to the atmosphere.” Final Permit at 6. Peabody must make all VEMS and Method 9 observations while equipment is operating. Id.

9 Peabody must also keep records of its water spray inspections, any malfunctions, and any

repairs it conducts. Final Permit at 7.

10 Certain inaccessible operations (i.e., underground coal transfer points), as well as the sample

system crushers and associated equipment, are excluded from the VEMS and routine Method 9 monitoring requirements. See Final Permit at 6; R Ex 22 (Region IX’s Response to Comments (Sept. 23,

2004) (“RTC”)) at 4.

11 As discussed in more detail in Part I.B.2, a PTE limit may allow a facility to escape subsequent regulation. See generally R Ex 13 (Memorandum from John S. Seitz, Director, EPA Office of

Air Quality Planning and Standards, to EPA Regional Air Division Directors: Options for Limiting the

Potential to Emit (PTE) of a Stationary Source Under Section 112 and Title V of the Clean Air Act)

(“Options for Limiting PTE”) at 5. In this case, Peabody’s stated objective was to escape possible

future regulation under the PSD program. See Peabody’s May 12, 2002 Letter at 1.

VOLUME 12
PEABODY WESTERN COAL COMPANY 27

12, 2002) (“Peabody’s May 12, 2002 Letter”)) at 1. Peabody also requested that

Region IX modify the monitoring and recordkeeping requirements to make them

less stringent. See R Ex 27 (Letter from Brian P. Dunfee, Peabody Group, to Geraldo C. Rios, Region IX (August 21, 2002) (“August 21, 2002 Comments”))

at 2-4. Region IX declined to include either a PTE limit or Peabody’s suggested

alternative monitoring and recordkeeping provisions in the Final Permit. See RTC

at 4-6, 10.

Peabody filed a timely Petition for Review with the Board on July 1, 2004,

challenging Region IX’s permit decision on two grounds. First, Peabody claims

that Region IX impermissibly denied Peabody’s request for a PTE limit. Petition

at 1. Second, Peabody argues that the monitoring, recordkeeping, and reporting

requirements of the Final Permit are unreasonably burdensome. Id.

B. Statutory and Regulatory Background

1. Title V of the CAA

In general, Title V of the CAA requires creation and implementation of an

operating permit program for major sources of air pollutants.12 This section of the

Act, however, does not itself establish substantive emission reduction requirements. That is, Title V contemplates a permit program that incorporates and ensures compliance with the substantive emission limitations established under

other provisions of the Act, but that does not independently establish its own

emission standards.13 See Ohio Pub. Interest Research Group, Inc. v. Whitman,

386 F.3d 792, 794 (6th Cir. 2004) (“Title V does not impose new obligations;

rather, it consolidates pre-existing requirements into a single, comprehensive document for each source, which requires monitoring, record-keeping, and reporting

of the source’s compliance with the Act.” (citing 42 U.S.C. § 7661c(a), (c); 40

C.F.R. § 70.6(a)(3), (c)(1))). However, where the applicable underlying standard

does not include “periodic” monitoring, Title V permitting authorities generally

may impose monitoring and recordkeeping requirements as necessary to assure a

12 For purposes of Title V, “major source” means any stationary source (or any group of stationary sources located within a contiguous area and under common control) that is a major source under

CAA § 112 of the Act (the hazardous air pollutant provisions), a major stationary source as defined in

CAA § 302 of the Act (the CAA general definitions), or a major stationary source under part D of title

I of the Act (criteria air pollutant provisions). CAA § 501(2), 42 U.S.C. § 7661(2); 40 C.F.R. § 71.2.

13 The Title V program targets stationary sources of air pollution emissions, and Title V permits may incorporate, for example, NSPS, as well as standards established under the PSD program

(CAA § 165), and the National Emission Standards for Hazardous Air Pollutants (“NESHAP”) program (CAA § 112).

VOLUME 12
28 ENVIRONMENTAL ADMINISTRATIVE DECISIONS

facility’s compliance with applicable requirements.14 See 40 C.F.R.

§ 71.6(a)(3)(i)(B) (“Each permit shall contain * * * periodic monitoring sufficient to yield reliable data from the relevant time period that are representative of

the source’s compliance with the permit.”); Part 70 Operating Permit Program, 57

Fed. Reg. 32,250, 32,251 (July 21, 1992) (“Part 70 Rulemaking”); see also Appalachian Power Co. v. EPA, 208 F.3d 1015, 1019, 1028 (D.C. Cir. 2000) (addressing whether EPA guidance appropriately could require that permitting authorities

include additional “enhanced” monitoring even where the underlying standard already included periodic monitoring).

As a general rule, the CAA delegates responsibility for the administration

and enforcement of Title V to the States, and requires that EPA promulgate regulations that set minimum standards for State Title V operating permit programs.

See CAA § 502(b), 42 U.S.C. § 7661a(b).15 EPA’s regulations must include the

elements set forth in the Act.16 Id. States are required to adopt permit programs

under State or local law (or interstate compact) consistent with EPA’s Title V

regulations, and submit such programs for EPA approval. See CAA § 502(d), 42

U.S.C. § 7661a(d). If any State fails to submit an approvable Title V permit program, or if the State does not adequately administer or enforce its approved program, EPA must promulgate, administer, and enforce a federal Title V program

within the State. CAA § 502(d)(3), 42 U.S.C. § 7661a(d)(3). In 1996, EPA

promulgated a federal Title V program applicable in any State without an approvable Title V program. See Part 71 Operating Permit Program, 61 Fed. Reg. 34,202

(July 1, 1996). These regulations are codified at 40 C.F.R. pt. 71 (“Part 71”).

14 “Applicable requirement” is a term of art in the Title V program that, in general, refers to

any substantive requirement that applies to an emissions source under any CAA regulatory provision.

See 40 C.F.R. § 71.2.

15 The EPA promulgated requirements governing State Title V programs in 1992. See Part 70

Rulemaking, 57 Fed. Reg. 32,250 (July 21, 1992). These regulations are codified at 40 C.F.R. pt. 70

(“Part 70”). In connection with litigation over these rules EPA proposed revisions to the Part 70 regulations on August 29, 1994 (59 Fed. Reg. 44,460), which, to date, have not been finalized.

16 These elements include: requirements addressing permit applications; monitoring and reporting requirements; fee requirements; requirements for adequate personnel and funding to administer

the program; a requirement that State permitting authorities have adequate legal authority to effectively administer and enforce Title V programs; procedural requirements for permit review, public

notice, and final approval; procedures to prevent unreasonable delay in permit actions; procedures to

make permit-related material publicly available; a requirement for permits to incorporate new applicable requirements in a timely manner; and provisions allowing certain changes at a facility without

permit revision. CAA § 502(b), 42 U.S.C. § 7661a(b).

VOLUME 12
PEABODY WESTERN COAL COMPANY 29

Section 301(d) of the Act allows EPA to treat Indian Tribes in a manner

similar to States under certain circumstances.17 In general, however, EPA does not

require that Indian Tribes develop Title V programs. As EPA has explained:

The EPA expects that most Tribes will not develop title V

operating permit programs, in part due to the resources

required to develop such a program. Within Indian Country, EPA believes it is generally appropriate that EPA promulgate, administer, and enforce a part 71 Federal operating permits program for stationary sources until Tribes

receive approval to administer their own operating permits programs.

Federal Operating Permits Program, 64 Fed. Reg. 8247, 8248-49 (Feb. 19,

1999);18 see also Indian Tribes: Air Quality Planning and Management, 63 Fed.

Reg. 7253 (Feb. 12, 1998) (“Tribal Authority Rule”).

In any area where the federal Title V program applies, covered major

sources of air pollutants must submit Title V permit applications directly to the

appropriate EPA Regional office for approval. 40 C.F.R. § 71.3(e)(3). In accordance with the Part 71 regulations, such applications must provide for compliance

with all applicable requirements. 40 C.F.R. §§ 71.1(b), 71.6(a)(1). In general, after reviewing a Title V permit application, and requesting modifications as necessary, EPA issues a draft permit for public comment followed by a final Title V

permit for the source.

In this case, because the Facility is located within the borders of the Navajo

Nation and Hopi Tribe reservations, and because neither Tribe has obtained approval to administer its own Title V program, Region IX issued Peabody’s Final

Permit under the authority of Part 71. Peabody has petitioned the Board for review of the Region’s permitting decision.

17 CAA § 301(d) reads in pertinent part: “Subject to the provisions of paragraph (2), the Administrator * * * is authorized to treat Indian tribes as States under this Act * * * .” CAA § 301(d),

42 U.S.C. § 7601(d). The second paragraph of § 301(d) enumerates certain limitations on EPA’s authority in this regard; however, those limitations are not germane to our analysis here. See CAA

§ 301(d)(2), 42 U.S.C. § 7601(d)(2).

18 This rulemaking promulgated revisions to the Part 71 regulations that were intended to establish EPA’s policy for administering Title V programs in Indian Country. These revisions were challenged in the D.C. Circuit, which partially vacated and remanded the rulemaking. See Mich. Dept. of

Envtl. Quality v. EPA, 268 F.3d 1075 (D.C. Cir. 2001). The narrow ruling of the court in that case,

relating to EPA’s jurisdiction over disputed lands, does not affect our analysis here. See id. at 1088-89.

VOLUME 12
30 ENVIRONMENTAL ADMINISTRATIVE DECISIONS

2. Potential to Emit 

To provide additional context for our discussion of the Petition, it is useful

at this juncture to provide some background regarding the concept of PTE, and

the role of PTE limits in the overall CAA regulatory framework. In general, PTE

has a statutory nexus which relates to EPA’s need to identify which sources qualify as “major sources” subject to regulation under the Act. See, e.g., CAA

§ 165(a), 42 U.S.C. § 7475(a) (requiring new source review (“NSR”) or PSD permits for any “major emitting facility on which construction is commenced after

the date of the enactment of this part”); 40 C.F.R. § 52.21(b)(1)(i) (defining “major stationary source” for PSD purposes in part as “any stationary source which

emits, or has the potential to emit, 250 tons per year or more” of a regulated

pollutant) (emphasis added). Thus, PTE is a technical determination that “is jurisdictional in nature.” Ala. Power Co. v. Costle, 636 F.3d 323, 352 (D.C. Cir. 1979).

At its core, potential to emit relates to a source’s inherent capacity to emit

air pollutants. That is, PTE reflects the maximum capacity of a source to emit any

given air pollutant, based on the source’s physical design and operational limitations. See 40 C.F.R. § 70.2;19 R Ex 21 (Region IX’s Statement of Basis (Sept. 23,

2003)) (“SOB”) at 4. Given the relatively broad scope of PTE, a source’s PTE may

be significantly higher than its typical actual emissions.20 See RTC at 10. How19 The PSD regulations define PTE as:

[T]he maximum capacity of a stationary source to emit a pollutant under

its physical and operational design. Any physical or operational limitation on the capacity of a source to emit a pollutant including air pollution

control equipment and restriction on hours of operation or on the type or

amount of material combusted, stored or processed, shall be treated as

part of its design if the limitation or the effect it would have on emissions is federally enforceable.

40 C.F.R. § 52.21(4). While the federal enforceability element of the “potential to emit” definitions in

EPA’s PSD regulations and EPA’s regulations under § 112 of the Act was successfully challenged,

those regulatory definitions still serve as valuable reference points. See Nat’l Mining Ass’s. v. EPA, 59

F.3d 1351, 1361-65 (July 21, 1995)(hereinafter “National Mining”); Chem. Mfr. Ass’n. v. EPA, No.

89-1514 (D.C. Cir., filed Sept. 15, 1995) 1995 U.S. App. LEXIS 31475. See also R Ex 14 (Policy

Memorandum from John S. Seitz, Director, EPA Office of Air Quality Planning and Standards: Release of Interim Policy on Federal Enforceabilty of Limitations on Potential to Emit (Jan. 22, 1996))

(“Interim Policy Memorandum”) (discussing the practical impact of National Mining).

20 EPA guidance generally discusses the meaning of “maximum capacity.” See Options for

Limiting PTE at 8. Typically, however, “an emissions unit’s actual emissions [are] less than its PTE

because the unit does not actually operate at maximum production rate for an entire year.” Approval of

Implementation Plans; Texas, 65 Fed. Reg. 2,560, 2,567 (Proposed Rule, Jan. 18, 2000); see also

Approval and Promulgation of Air Quality Implementation Plans; Connecticut, 68 Fed. Reg. 2,722,

2,725 (Jan. 21, 2003) (“Absent an inherent physical or operational restriction [or other enforceable

restriction], EPA calculates PTE assuming the source operating full time * * * at its maximum emission rate.”).

VOLUME 12
PEABODY WESTERN COAL COMPANY 31

ever, in identifying a source’s PTE, the Agency must consider whether existing

restrictions on emissions capacity are legally and practically enforceable. See National Mining, 59 F.3d at 1362-62 (discussing the contours of potential to emit);

Alabama Power, 636 F.3d at 352-55 (rejecting EPA’s interpretation of PTE as

worst case uncontrolled emissions); see generally Interim Policy Memorandum.

In sum, therefore, PTE reflects a source’s maximum emissions capacity considering the application of any emission control equipment, or other capacity-limiting

restrictions, that effectively and enforceably limit emissions capacity. See Part 71

Rulemaking, 61 Fed. Reg. 34,202, 34,212 (July 1, 1996); see generally Interim

Policy Memorandum.

In many cases, a source may seek to limit its PTE, if possible, to avoid

potentially more burdensome regulation in the future. In order to accomplish this,

a facility may ask the permitting authority to impose enforceable limits on the

source’s capacity to emit. Title V permits (and other permits as well) may function

as vehicles for establishing such PTE limits, potentially allowing a source to

avoid more burdensome permitting requirements for “major sources” by instead

qualifying as a “synthetic minor” source for purposes of some other regulatory

program.21 See generally Options for Limiting PTE at 5.22 For example, the PSD

program establishes certain permitting requirements for construction or modification of “major sources” of air pollutants. See generally 40 C.F.R. § 52.21. As relevant in this case, the PSD program includes a provision defining a major source as

any stationary source which emits, or has the potential to emit, 250 tons per year

or more of any pollutant regulated under the CAA’s NSR requirements.23

Id. § 52.21(b)(1). However, if a source accepts limitations through a Title V permit program that restrict the source’s capacity to emit air pollutants to a level

below the PSD major source threshold, that source will be a synthetic minor

source under the PSD program and will not be subject to the PSD permitting requirements unless future facility modifications increase emission capacity enough

21 EPA guidance defines the term “synthetic minor” as “air pollution sources whose maximum

capacity to emit air pollution under their physical and operational design is large enough to exceed the

major source threshold but [is] limited by an enforceable emissions restriction that prevents this physical potential from being realized.” R Ex 23 (Memorandum from John S. Seitz, Director, EPA Office of

Air Quality Planning and Standards: Potential to Emit Transition Policy for Part 71 Implementation in

Indian Country (March 7, 1999)) (“Part 71 Transition Policy”) at 2 n.2.

22 Again, subsequent court cases potentially affect the applicability of the federal enforceability requirement for PTE limits. See supra note 19; see generally Interim Policy Memorandum. EPA

guidance indicates that in certain circumstances (e.g., for PSD) language in EPA’s regulations or guidance materials regarding federal enforceability “should now be read to mean federally enforceable or

legally and practically enforceable by a state or local air pollution agency.” Interim Policy Memorandum at 3 (internal quotation marks omitted).

23 EPA’s regulations define “regulated NSR pollutant” at 40 C.F.R. § 52.21(b)(50).

VOLUME 12
32 ENVIRONMENTAL ADMINISTRATIVE DECISIONS

to exceed the PSD major source threshold.24

In order to be cognizable as a PTE limit, however, a capacity restriction

must meet certain minimum criteria. Specifically, it must be practically enforceable, which EPA guidance has interpreted to mean “that the permit’s provisions

must specify[:] (1) a technically-accurate limitation and the portions of the source

subject to the limitation; (2) the time period for the limitation (hourly, daily,

monthly, and annual limits such as rolling annual limits); and (3) the method to

determine compliance including appropriate monitoring, recordkeeping, and reporting.” Options for Limiting PTE at 6.

In this case, Peabody requested that Region IX issue a PTE limit for the

Black Mesa Complex, in connection with issuance of its Part 71 permit, restricting the Facility’s capacity to emit PM10. See Peabody’s May 12, 2002 Letter at 1.

Peabody’s stated objective was to establish the Facility as a synthetic minor

source for purposes of PSD.25 Id.

II. DISCUSSION

A. Standard of Review

In general, the Board will grant petitions for review only if it appears from

the petition that the permitting authority’s decision involved a clearly erroneous

finding of fact or conclusion of law, or that the decision involves an important

policy consideration which the Board, in its discretion, should review. See 40

C.F.R. § 71.11(l)(1); see In re Teck Cominco Alaska Inc., 11 E.A.D. 457, 472

(EAB 2004) (applying similar language under 40 C.F.R. § 124.19(a)); In re City

24 In this case, because the Facility was constructed prior to the effective date of the PSD

program, it was not required to apply for a PSD permit initially. However, if in the future the Facility

were to undertake a major modification, as defined by the PSD regulations (40 C.F.R. § 52.21(b)(2)),

it would be required first to obtain a PSD permit, unless, at that time, it had in place a PTE limit

making the Facility a synthetic minor source for purposes of the PSD program. See Response at 8 n.9;

40 C.F.R. § 52.21(a)(2), (r)(1).

25 According to statements in the record, apparently Peabody believed that the Facility’s PTE

limit would have restricted PM10 emissions to no more than 185 tpy. See Final Permit Application,

Form PTE. The major source threshold for the Facility under the PSD program is 250 tpy. See 40

C.F.R. § 52.21(b)(1)(i). However, Region IX disputes whether the requested limit would have the intended effect. See Response at 8, n.10. According to the Region, total suspended particulate (“TSP”),

and not just PM10, must be counted for purposes of determining major source status under the PSD

program. Id. (citing 40 C.F.R. § 52.21 (definition of “regulated NSR pollutant”)). Thus, because TSP is

typically about twice the level of PM10 alone, Region IX believes that Peabody has failed to demonstrate that the Facility would qualify as a synthetic minor under the PSD program even with the PTE

limit it requests.

VOLUME 12
PEABODY WESTERN COAL COMPANY 33

of Moscow, 10 E.A.D. 135, 140-41 (EAB 2001) (same).26 It is clear from the

history of the applicable regulatory language that the Administrator intended for

the Board to exercise its broad powers of review “only sparingly,” and that “most

permit conditions should be finally determined at the Regional level.” 45 Fed.

Reg. 33,290, 33,412 (May 19, 1980) (preamble to rulemaking that established 40

C.F.R. pt. 124); see Teck Cominco, 11 E.A.D. at 472; In re Rohm & Hass Co.,

9 E.A.D. 499, 504 (EAB 2000). Moreover, the burden of demonstrating that review is warranted rests squarely with the petitioner. 40 C.F.R. § 71.11(l)(1); see

Rohm & Hass, 9 E.A.D. at 504; In re Wash. Aqueduct Water Supply Sys.,

11 E.A.D. 565, 573 (EAB 2004).

To obtain review, a petitioner must clearly and specifically identify the basis for its objection(s) to the permit, and explain why, in light of the permit issuer’s rationale, the permit is clearly erroneous or otherwise deserving of review.

See Zion Energy, LLC, 9 E.A.D. 701, 705 (EAB 2001). In order to carry this

burden the petitioner must address the permit issuer’s responses to relevant comments made during the process of permit development; the petitioner may not

simply reiterate comments made during the public comment period, but must substantively confront the permit issuer’s subsequent explanations. Id.; see also In re

Knauf Fiber Glass, GmbH, 9 E.A.D. 1, 5 (EAB 2000)(“Petitions for review may

not simply repeat objections made during the comment period; instead they must

demonstrate why the permitting authority’s response to those objections warrants

review.”); In re City of Irving, Tex. Mun. Separate Storm Sewer Sys.,

10 E.A.D. 111, 129-30 (EAB 2001).

Additionally, when a petitioner seeks review of a permit based on issues

that are fundamentally technical in nature, the Board assigns a particularly heavy

burden to the petitioner. See In re Carlota Copper Co., 11 E.A.D. 692, 708

(EAB 2004) (explaining that “a petitioner seeking review of issues that are technical in nature bears a heavy burden because the Board generally defers to the Region on questions of technical judgment.”); Teck Cominco, 11 E.A.D. at 473

(same); City of Moscow, 10 E.A.D. at 142 (same). This demanding standard

serves an important function within the framework of the Agency’s administrative

process; it ensures that the locus of responsibility for important technical decisionmaking rests primarily with the permitting authority, which has the relevant

specialized expertise and experience. See In re NE Hub Partners, L.P.,

26 The Board has not previously addressed the standard of review under the Title V regulations. However, the applicable regulatory language is nearly identical to the regulatory language governing the review of other types of permits (such as PSD and NPDES permits). Compare 40 C.F.R.

§ 71.11(l)(1) with 40 C.F.R. § 124.19. Accordingly, we believe that our prior discussions of the standard of review under these other permit programs serve as valuable precedent in this context. See Part

71 rulemaking, 61 Fed. Reg. 34,202, 34,226 (July 1, 1996) (suggesting, in general, that EPA intended

for the administrative appeal provisions in Part 71 to reflect the Agency’s longstanding approach under

40 C.F.R. pt. 124).

VOLUME 12
34 ENVIRONMENTAL ADMINISTRATIVE DECISIONS

7 E.A.D. 561, 567-68 (EAB 1998), rev. denied sub nom. Penn Fuel Gas, Inc. v.

EPA, 185 F.3d 862 (3d Cir. 1999). In other words, where a permit decision pivots

on the resolution of a genuine technical dispute or disagreement, the Board prefers not to substitute its judgment for the judgment of the decisionmaker specifically tasked with making such determinations in the first instance. Thus, as we

explained in NE Hub, the Board typically will not grant review where the record

demonstrates merely “a difference of opinion or an alternative theory regarding a

technical matter.” Id. at 567. Instead, where “the views of the Region and the petitioner indicate bona fide differences of expert opinion or judgment on a technical

issue,” deference to the Region’s decision is generally appropriate if “the record

demonstrates that the Region duly considered the issues raised in the comments

and if the approach ultimately selected by the Region is rational in light of all of

the information in the record.”27 Id. at 567-68.

B. PTE Limit

1. Adequacy of the Proposed PTE Limit

As discussed above, during the course of the permitting process Peabody

requested that Region IX issue a PTE limit restricting the Facility’s PM10 emissions capacity. See Peabody’s May 12, 2002 Letter at 1. Because the PM emissions from the Facility’s coal processing operations are primarily fugitive in nature,28 it was not possible for Peabody to conduct emission testing to directly

measure its PM emissions rate.29 See Final Permit Application, Transmittal Letter

at 2; SOB at 5. Therefore, Peabody’s request for a PTE limit of 185 tpy relied on a

quantitative estimate of the Facility’s capacity to emit PM10.

30 See Final Permit

Application, Transmittal Letter at 2-3. This estimate, in turn, relied on emission

27 This standard is similar to the standard of review applied by federal courts when reviewing

agency rulemaking decisions involving significant technical or scientific issues. See NE Hub at 568

n.6 (citing Appalachian Power Co. v. EPA, 135 F.3d 791, 801-02 (D.C. Cir. 1998)). Unlike the federal

courts, however, the Board is not required to give deference to other components of the Agency. Id.

(citing In re Mobil Oil Corp., 5 E.A.D. 490, 509 n.30 (EAB 1994)).

28 EPA’s regulations define fugitive emissions as “those emissions which could not reasonably

pass through a stack, chimney, vent, or other functionally equivalent opening.” 40 C.F.R.

§ 52.21(b)(20).

29 Such direct measurement typically requires the use of equipment that captures and channels

emissions though a stack where testing can occur.

30 Peabody originally estimated the PM10 emissions capacity of the facility at 244 tpy; however, after it incorporated different emission factors it revised its estimate downward to 185 tpy. See

Response at 17 n.17.

VOLUME 12
PEABODY WESTERN COAL COMPANY 35

factors and assumed emission control efficiencies.31 Id. Peabody estimated the

uncontrolled emissions from each emissions unit based on the application of

AP-42 emission factors. Peabody then estimated the net emissions from these

units by applying assumed control efficiencies, and requested that Region IX establish a PTE limit for the Facility based on the cumulative total estimated net

emissions.32 See Final Permit Application, Transmittal Letter and Form PTE.

Similarly, Peabody’s proposed compliance regimen did not include direct

measurement of PM emissions. See Final Permit Application, Periodic Monitoring Plan. Rather, Peabody proposed that its continued use of enclosures and water

sprays (and compliance with the other terms of the Final Permit) could adequately

demonstrate compliance with the PTE limit. See id.; Peabody’s May 12, 2002 Letter at 1 (“Peabody would voluntarily accept conditions in the final permit requiring [it] to continue the present controls at the Black Mesa Complex”). Peabody

did not propose any additional compliance monitoring or reporting requirements

aimed at ensuring compliance with its proposed PTE limit.33 Because Peabody’s

approach would rely entirely on the application of emission factors and assumed

control efficiencies, for purposes of both estimating maximum emissions capacity

31 In general, an emission factor is a numerical emissions estimate that represents the anticipated rate of pollutant release from a given type of industrial operation, assuming no emission controls

are employed. See R Ex 15 (Compilation of Air Pollutant Emission Factors, AP-42, Stationary Point

and Area Sources (5th ed., vol. 1, 1995) (“AP-42”), Introduction) at 1 (“An emission factor is a representative value that attempts to relate the quantity of a pollutant released to the atmosphere with an

activity associated with the release of that pollutant. * * * Such factors facilitate the estimation of

emission from various sources of air pollution.”). In principle, an estimate of the net emissions from an

operation can be calculated by applying an emission factor and then reducing the resulting emissions

outcome based on the assumed emission control efficiency of the control equipment used at the relevant facility.

32 In conducting this exercise Peabody used emission factors which AP-42 identifies as generally representative of uncontrolled emissions from crushed stone processing operations. See Final Permit Application, Transmittal Letter at 2-3; R Ex 16 (AP-42 § 11.19.2). Peabody explained that “[d]ue

to the similarities in processing and equipment, it is not unreasonable to consider the use of crushed

stone processing factors for coal processing operations.” Final Permit Application, Transmittal Letter

at 2. Peabody then assumed a control efficiency of 95% for the enclosures and water sprays used at the

Black Mesa Complex to control PM10 emissions, based on efficiency levels identified for similar types

of controls in other Title V permits. See August 21, 2002 Comments at 6; Response at 17 n.17.

33 In theory, Peabody argues, by demonstrating that it is using the appropriate control strategy

(enclosures and/or water sprays), it could adequately calculate ongoing PM10 emissions capacity using

emission factors, reflecting the uncontrolled emissions performance of its emissions units, and assumptions regarding efficiency of its control equipment. See Peabody’s May 12, 2002 Letter at 1; Final

Permit Application, Transmittal Letter at 2-3. The Final Permit also calls for opacity monitoring; however, nothing in the record suggests a quantifiable relationship between opacity and PM10 emissions

performance that might allow the Final Permit’s opacity monitoring provisions to serve as a basis for

demonstrating ongoing performance with a tons per year PTE limit for PM10. Interestingly, Peabody

challenges both the Final Permit’s opacity monitoring provisions, as well as the Final Permit’s requirement for weekly inspection of the water sprays used to control PM emissions. Petition at 17-21.

VOLUME 12
36 ENVIRONMENTAL ADMINISTRATIVE DECISIONS

and monitoring ongoing compliance, the accuracy and appropriateness of the

emission factors and the control efficiency assumptions were the focal point of

Region IX’s analysis of Peabody’s proposal. See SOB at 4-5; R Ex 20 (Letter from

Gerardo C. Rios, Region IX, to Brian Dunfee, Peabody Western Coal Co.

(March 21, 2001) (“Region IX’s March 21, 2001 Letter”); RTC at 10; Supplemental RTC at 3.

During the course of the permitting process, Peabody explained that it “determined the effectiveness of the control equipment * * * us[ing] data on control

efficiencies calculated for comparable control devices that have been accepted by

state permitting authorities.” August 21, 2002 Comments at 6. Peabody explained

further that “annual PTE emissions were based on anticipated maximum annual

coal sales,” and AP-42 emission factors. Final Application at 2. Peabody justifies

its use of emission factors as follows:

[Peabody] based its potential to emit calculations on emission factors used routinely in permit applications for these

types of facilities. These emission factors are considered

technically accurate and appropriate for use in calculating

potential to emit. * * * The use of these methods of calculation in the context of limiting potential to emit has

been accepted by state permitting agencies for numerous

other mine facilities. For example, below we list many

mines in which the permitting agency has established (or

will soon establish) source PTE, at least in part, by using

emission factors and assumed control efficiencies and

then based on the PTE limit, granted the source synthetic

minor status for Title V purposes. This approach is no different than the case here, whereby [Peabody] is seeking to

qualify as a synthetic minor source for purposes of PSD

by agreeing to permit limitations on the facilities [sic]

PTE.34

Peabody’s August 21, 2002 Comments at 5-6.

Region IX points out, however, that there is a fundamental conceptual difference between PTE and actual emission performance that makes Peabody’s

complete reliance on emission factors inappropriate in this instance. While PTE is

34 Peabody’s comments went on to list without detailed explanation, some 17 mines with permits that purportedly relied on emission factors and assumed control efficiencies in the same way that

Peabody was proposing for its permit. Peabody’s August 21, 2002 Comments at 6. We were unable,

anywhere in the record, to find any more detailed discussion of Peabody’s reliance on the State permits

that it cited.

VOLUME 12
PEABODY WESTERN COAL COMPANY 37

intended to identify the highest possible level of emissions that a facility is capable of releasing in light of its physical design and operational characteristics (considering enforceable restrictions on emission capacity), emission factors are intended to provide a generalized estimate of the average emissions performance of

a particular type of emission source. RTC at 10; SOB at 4; March 21, 2002 letter

to Peabody. According to AP-42, “[i]n most cases, these factors are simply averages of all available data of acceptable quality, and are generally assumed to be

representative of long-term averages for all facilities in the source category (i.e., a

population average).” AP-42 Introduction at 1. As a result, according to Region

IX, emission factors do not necessarily reflect the level of emission appropriate

for calculating PTE. Response at 13.

In its RTC document Region IX stated that it was not “disputing Peabody’s

use of emission factors and control efficiencies for the purpose of calculating actual emissions,” but that because “PTE is meant to be a worst case emissions calculation,” Peabody’s approach was not adequate for “the creation of a practically

enforceable PTE limit for regulatory purposes.” RTC at 10. In an earlier communication, referenced in the RTC, Region IX explained further that because the

estimated emissions were relatively close to the PSD major source threshold of

250 tpy, and because the proposed PTE limit was “based on emission factors and

estimated control efficiencies,” it would be difficult to establish adequate monitoring to assure compliance “[g]iven the nature of emission units at the coal mines.”35

Region IX’s March 21, 2001 Letter at 1. Additionally, Region IX explained that

“[p]arametric monitoring to ensure proper operation of control equipment (e.g.,

water pressure in the sprays), while useful to assure compliance with the opacity

limit, does not provide direct data on actual PM10 emissions” adequate to establish

a PTE limit.36 Id. at 1-2. Thus, Region IX concluded that “even if the title V permit contained conditions for operation and maintenance of emission controls

* * * those conditions would not be sufficient to create an enforceable PTE limit.

* * * Because of the uncertainties inherent in emission factors and [assumed]

control efficiencies, EPA would consider a PTE limit [here] * * * only in con35 In light of Peabody’s then estimated PTE of 244 tpy, Region IX explained that it was “unlikely that [Peabody could] propose adequate monitoring to assure compliance.” Region IX’s March

21, 2001 Letter at 1. Because Peabody’s requested PTE limit was “so close to the PSD major source

threshold,” the Region believed that “either source testing or the use of a continuous emissions monitoring system,” would be necessary. Id. Region IX also observed that the fugitive nature of Peabody’s

emissions generally precluded such options. Id.

36 Parameter monitoring is an indirect method of monitoring a unit’s emissions performance by

monitoring one or more operational parameters of the emissions unit itself and/or of the emission

unit’s control equipment — the underlying assumption being that specific parameter values can be

correlated with a particular level of ongoing emissions performance. See Sierra Club v. EPA, 353 F.3d

976, 982, 991 (D.C. Cir. 2004).

VOLUME 12
38 ENVIRONMENTAL ADMINISTRATIVE DECISIONS

junction with stringent monitoring and testing provisions.”37 Id.

With respect to the AP-42 emission factors from which Peabody derived its

proposed PTE limit, Region IX observes that such factors are specifically not intended for use in establishing emission limits or for measuring compliance with

such limits. See Response at 12-13. EPA’s guidance acknowledges its own limitations in this regard:

Use of these factors as source-specific permit limits

and/or emission regulation compliance determinations is

not recommended by EPA. Because emission factors essentially represent an average of a range of emission rates,

approximately half of the subject sources will have emission rates greater than the emission factor and the other

half will have emission rates less than the factors. As

such, a permit limit using an AP-42 emission factor would

result in half of the sources being in noncompliance.

AP-42 Introduction at 2. Here, as Region IX points out, Peabody not only proposes to rely on the AP-42 factors to establish both its PTE limit and to demonstrate compliance with that limit, Peabody compounds the potential inaccuracy of

this approach by using unverified emission control assumptions in both calculations.38 See Region IX’s March 21, 2001 Letter at 2. Another potential element of

uncertainty relates to the fact that the AP-42 factors that Peabody uses are not

37 Through a consultant, Peabody submitted arguments in support of using an assumed control

efficiency of 95% for its enclosures and water sprays. See Cert. Index items II.I and II.J (Letters from

William Monnett, McVehl-Monnett Assoc., Inc., to Region IX, December 18, 2000, and January 10,

2001). The Region explains in response that:

The letter identified two other permits where a 95% control efficiency

was used for what it referred to as [an] “atomized and/or fogging spray”

system. However, as recognized in that same letter, the facility does not

use [this type of equipment]. The letter also argues that the 95% efficiency should be accepted because the material is “flushed at multiple

points with considerable water.” However, Peabody presented no actual

on-site verification to support its claimed water usage, nor proof that

higher water usage necessarily results in additional control efficiency.

RTC at 15 n.15. Region IX also observes that other permits have sometimes ascribed significantly

lower control efficiencies to water sprays at coal preparation facilities. Id. at 16 n.16. Additionally,

Region IX notes that Peabody’s proposal would require that only 75% of the water spray nozzles be

operational. See id.; Final Permit Application, Periodic Monitoring Plan.

38 In this respect Region IX noted that the proposal does not include “‘those operating parameters and assumptions which the permitting agency depended upon to determine that the control equipment would have a given efficiency,’” as EPA guidance recommends. See Response at 15 and n.15

(quoting R Ex 12 (EPA Guidance on Limiting Potential to Emit in New Source Permitting (June 13,

1989)) (“1989 PTE Guidance”) at 7).

VOLUME 12
PEABODY WESTERN COAL COMPANY 39

factors for coal preparation facilities at all, but factors for crushed stone processing, which Peabody claims, without detailed analysis “operate in a similar fashion

and use the same fundamental equipment.”39 Final Permit Application, Transmittal Letter at 2.

Finally, AP-42 includes a rating of each emission factor on a scale from A

to E, with A being the most reliable and E the least. See AP-42 Introduction at 8.

As AP-42 explains:

A factor’s rating is a general indication of the reliability,

or robustness, of that factor. This rating is assigned based

on the estimated reliability of the tests used to develop the

factor and on both the amount and the representative characteristics of those data. In general, factors based on many

observations, or on more widely accepted test procedures,

are assigned higher ranking. Conversely, a factor based on

a single observation of questionable quality, or one extrapolated from another factor for a similar process, would

probably be rated much lower.

Id. In this case, the factors that Peabody used in developing its proposal carried

relatively low reliability rankings; depending on the source type, from C (average

— while no specific bias, not clear if the facilities tested represent a random sample of the industry) to E (poor — may be reasons to suspect that the facilities

tested do not represent a random sample or evidence of variability within the

source category population).40 See AP-42 Introduction at 9-10, § 11.19.2-4, tbl.

11.19.2-1.

Based on its evaluation of the proposed PTE limit, Region IX concluded

that Peabody had not sufficiently demonstrated that it met the central criteria for

establishing such limits — technical accuracy and a reliable method of determining compliance. Region IX explained its reasoning this way: “Although Peabody

had previously commented to EPA that it would like a PTE limit, other than rely39 Peabody states that “EPA suggested using this approach because the Aerometric Information

Retrieval System (AIRS) factors used in the previous versions of this application were judged to be

outdated.” Final Permit Application, Transmittal Letter at 2. We make no judgment here about the

appropriateness of using the emission factors for crushed stone processing to estimate emissions at a

coal processing facility. We simply note that in the context of establishing and enforcing a PTE limit it

is not unreasonable to expect that this substitution may introduce additional uncertainty.

40 Additionally, the AP-42 factors for crushed stone processing identify numerous variables

that may affect the rate of emissions from processing operations at any particular facility (e.g., stone

size distribution and surface moisture content of processed material, process throughput rate, topographical and climatic factors, wind, material moisture content, seasonal conditions, and a variety of

equipment and operational factors). AP-42 at 11.19.2-3.

VOLUME 12
40 ENVIRONMENTAL ADMINISTRATIVE DECISIONS

ing on AP-42 emission factors, it has not previously provided to EPA any test

data, site-specific emission factors, or proposed monitoring sufficient to establish

a practically enforceable PTE limit.”41 Supp. SOB at 4.

While Region IX ultimately decided to issue Peabody’s Title V permit without a PTE limit, the Region made it clear that a PTE limit was not a conceptual

impossibility for the Black Mesa Complex. In this respect Region IX observed

that it was reviewing the emission factor testing protocol and parametric monitoring proposal that Peabody submitted to Region IX on March 4, 2004, and that “[i]f

EPA approves the testing protocol, Peabody may then submit the test results in

support of a final request for a PTE limit in the permit.” Supp. SOB at 5. Thus, as

of the date of permit issuance, Region IX believed that the data were inadequate

to conclude either that the AP-42 emission factors that Peabody used or the assumed control equipment efficiencies were appropriate to establish a PTE limit

for the Black Mesa Complex.42 Nonetheless, the Region did not rule out the possibility that Peabody might be able to make the technical case with additional analysis. In fact, Region IX made it clear that Peabody could seek to modify its Title V permit to include a PTE limit if Peabody was ultimately able to make a

satisfactory technical case. Supp. RTC at 3; Supp. SOB at 5 (indicating that

Peabody could “apply[] for a significant permit modification in the future to add a

PTE limit if its approach is deemed technically and practically enforceable”); see

also 40 C.F.R. § 71.7(e)(3)(addressing requirements for significant permit

modifications).

It is clear from the record that Region IX’s decision not to issue Peabody a

PTE limit for PM10 emissions from the Black Mesa Complex was, at its core, a

technical determination. This is significant, because, as we have explained, the

41 Notably, Peabody does not dispute the relevance of the criteria that Region IX identifies as

critical for demonstrating the appropriateness of a PTE limit. Nor does Peabody point to any specific

technical rationale in the administrative record to bolster its argument that its assumed control efficiencies and the AP-42 emission factors satisfy these criteria. Rather, as discussed in the following section,

Peabody seemingly relies on its generalized reference to several State Title V permit decisions that

purportedly involved PTE limits issued under similar circumstances. As discussed below, however,

Peabody does not adequately explain why those permit decisions function as precedent for its proposed PTE limit, particularly in light of apparently significant factual and technical differences.

42 We note here that Peabody’s submission of a validation report after close of the comment

period and issuance of the Final Permit in this case cannot serve as a basis for granting review. See

Cert. Index, item VI.D (indicating transmittal of the emission factor testing document to Region IX on

June 8, 2004, 18 days after Region IX issued the Final Permit). Despite its inclusion in the Certified

Index, because Peabody provided Region IX with this document after the Permit had been issued, it

was not part of the administrative record for the Region’s permit decision. See 40 C.F.R.

§ 124.17(c)(defining the administrative record for final permits and stating that “[t]he record shall be

complete on the date the final permit is issued”); see also In re Weber # 4-8, 11 E.A.D. 241, 243 n.2

(EAB 2003) (finding that “Region[ V’s] response [to comments] is not officially part of the administrative record as it postdates permit issuance”).

VOLUME 12
PEABODY WESTERN COAL COMPANY 41

burden of demonstrating that review is warranted rests squarely with the petitioner, and where a petitioner seeks review of issues that are fundamentally technical in nature the petitioner bears a particularly heavy burden because the Board

generally defers to the permit issuer on questions of technical judgment. See, e.g.,

In re Carlota Copper Co., 11 E.A.D. 692, 708 (EAB 2004); In re NE Hub Partners, L.P., 7 E.A.D. 561, 567 (EAB 1998), rev. denied sub nom. Penn Fuel Gas,

Inc. v. EPA, 185 F.3d 862 (3d Cir. 1999). With this in mind, we believe that,

given the size of the Facility and the nature of its emissions,43 it was not clearly

erroneous for Region IX to conclude that Peabody’s proposed PTE limit was not

justified, based on the administrative record and in light of the significant uncertainties inherent in Peabody’s proposed approach.44 While we also consider

Peabody’s argument that Region IX’s decision in this case impermissibly departs

from established precedent (Part II.B.2 below), we cannot conclude purely as a

technical matter that Region IX clearly erred in declining to issue Peabody a PTE

limit.

2. State-Issued PTE Limits Cited by Peabody

In its petition Peabody argues that Region IX’s decision in this case departs

significantly, and without adequate discussion or justification, from established

EPA policy regarding the issuance of PTE limits. See Petition at 9-17. Specifically, Peabody contends that States have issued numerous PTE limits under similar circumstances, to sources that are similar to the Black Mesa Complex, and that

these permit decisions are in direct conflict with Region IX’s decision in this case.

Id.; see P Ex I (consisting of a collection of Part 70 permit decisions and related

documents). While Part 70 permits are State-issued Title V permits, and not

EPA-issued permits, Peabody argues that by failing to intervene to prevent States

from issuing these Title V permits EPA has tacitly acknowledged the States’ decisions as acceptable under the Title V program.45 Petition at 12-15. Thus, according to Peabody, by its inaction EPA has created a general policy, for purposes of

Part 70 and Part 71, of accepting PTE limits that are “based on emission factors

43 As Region IX observes the Facility is one of the largest surface coal mines in the country,

processing more than twelve million tons of coal per year. See Response at 6.

44 Peabody contends that Region IX based its decision not to issue a PTE limit merely on fact

that “the crushers and screens at the facility are not completely enclosed and emissions from the units

therefore cannot be measured using EPA Method 5 [stack testing],” Petition at 10 (citing SOB at 5).

However, Region IX denies this, and examination of the full record, as reflected above, demonstrates

that the Region’s consideration of this issue was considerably more nuanced than Peabody suggests.

See also Response at 13-14.

45 Peabody argues that EPA has several mechanisms through which it could have and should

have intervened if it was dissatisfied with State permitting practices. See Petition at 12-14.

VOLUME 12
42 ENVIRONMENTAL ADMINISTRATIVE DECISIONS

and parametric monitoring.”46 Id. at 11. Peabody argues:

These examples illustrate that state permitting agencies

routinely use emission limits based on emission factors

and parametric monitoring for mines and other sources

with similar emission units. These sources are not required to conduct [Method 5 stack] testing to verify compliance with these limits. Many of these mines qualify as

“synthetic minor sources” because their PTEs have been

limited in state air permits through the use of emissions

factors and parametric monitoring.

Id.

At the core of Peabody’s argument are two critical propositions: (1) that the

facilities Peabody identifies are truly similar to the Black Mesa Complex; and (2)

that the operating permits issued for these facilities rely on emission factors and

estimated control efficiencies in a manner “no different than the case here.” August 21, 2002 Comments at 6. In our view, Peabody fails to sufficiently demonstrate the accuracy of either proposition.

Region IX considered Peabody’s comments on the draft permit and explained that it did not find Peabody’s mere reference to other permit decisions

persuasive. See RTC at 10. In the RTC, the Region restated Peabody’s comment

and explained that “decisions by other permitting authorities to limit PTE are case

specific, and depend on the configuration and operation of a particular facility.”

Id. Peabody, however, did not explain whether or how the configuration and operation of the facilities it cited were similar to the configuration and operation of

the Black Mesa Complex. See Petitioner’s August 21 Comments at 6-7. Accordingly, Region IX concluded that the mere fact that “other permitting authorities

have created PTE limits in permits for other mines does not bind EPA in this

case.” RTC at 10.47

46 Peabody explains in its comments on the 2002 draft permit that its request for a PTE limit is

based on “emission factors used routinely in permit applications * * * [and] considered technically

accurate and appropriate for calculating [PTE].” August 21, 2002 Comments at 5-6. However, as discussed in the previous section, AP-42 itself appears, in general, to contemplate a more limited role for

emission factors than Peabody proposes here, and the emission factor rankings appear to reflect serious reservations about the reliability of the particular factors upon which Peabody relies.

47 We believe, as a procedural matter, that this response was adequate to address Peabody’s

comment, particularly in light of Peabody’s failure to provide any detailed explanation of the similarities between the permitting exercise here and the State-issued permits upon which Peabody’s argument

relied. As we have explained in the past, the Region need not “respond to each comment in an individualized manner,” and the Region’s responses need not be “of the same length or level of detail as the

Continued

VOLUME 12
PEABODY WESTERN COAL COMPANY 43

Region IX observes further that the factual circumstances underlying the

permit limits cited by Peabody are different from the circumstances in this case in

ways that are potentially significant for purposes of determining the appropriateness of establishing a PTE limit. See Response at 20-22. Region IX points out that

many of the permits that Peabody identifies were issued to mines that “use one or

more baghouses, with most using multiple baghouses.”48 Id. at 21. According to

the Region, because baghouses are particularly effective at reducing PM emissions, and provide much greater certainty regarding emission performance, the

presence of baghouses represents a material difference that is potentially relevant

in determining whether a PTE limit should be issued.49 Indeed, Region IX explains that because baghouses are particularly effective at removing PM, use of

this control technology generally assures that actual emissions will be reduced

well below the major source threshold. See id. at 22.

Our examination of the record confirms that most of the permits that

Peabody references involve operations at which at least some sources are controlled by baghouses. For example, the permit for the Kemmerer/Skull Point

mine, which Peabody references in its Petition, covers nine sources (including

crushers, silos, and transfers) that are controlled with baghouses and seven

sources (including truck dumps and stock piles) that are not.50 Wyo. Dept. of

Envtl. Quality, Air Quality Permit MD-379 (Oct. 19, 1998) tbls. I, II (“Kemmerer/Skull Point Permit”). Similarly, the permit for Buckskin Mine involves 19

sources controlled with baghouses. Only truck dump emissions are not controlled

by a baghouse, and this emissions source was estimated to account for less than

ten percent of the total emissions covered by the permit.51 Wyo. Dept. of Envtl.

Quality, Air Quality Permit No. MD-707 (Feb. 15, 2002) (“Buckskin Permit”).

(continued)

comment.” See In re NE Hub Partners, L.P., 7 E.A.D. 561, 583 (EAB 1998), rev. denied sub nom.

Penn Fuel Gas, Inc. v. EPA, 185 F.3d 862 (3d Cir. 1999).

48 A baghouse is an emission control device that removes particulates by mechanically filtering the emission stream. See Davis County Solid Waste Mgmt. v. EPA, 101 F.3d 1395, 1398 n.1 (D.C.

Cir. 1996).

49 Use of a baghouse also typically involves conveyance of emissions through a stack, which

allows for direct emissions monitoring if necessary. See Response at 21.

50 Significantly, the sources not controlled with baghouses are subject to size or throughput

restrictions in addition to tons-per-year emission limits and water spray requirements, and the sources

with baghouses are subject to limits on hours of operation, pound-per-hour emission limits,

tons-per-year limits, and grain loading limits (gr/dscf). Id. at 2 & tbls. I, II.

51 The truck dump emissions are subject to a 20% opacity limit and are controlled through the

use of a “stilling shed,” which must be inspected weekly. Buckskin Permit at 2-3. Additionally, the

facility as a whole is subject to a coal production limit, and the individual sources other than the truck

dump are subject to limits on hours of operation, in addition to flow rate, grain loading, lb/hr, and tpy

emission limits. Id. at 2 & tbl. I.

VOLUME 12
44 ENVIRONMENTAL ADMINISTRATIVE DECISIONS

Most of the other permits among those Peabody references also cover sources

controlled by baghouses. See P Ex I.

Region IX observes also that, in addition to requiring baghouses for many

emission sources, the permits that Peabody identifies include other elements that

are not present in Peabody’s Final Permit. Most of the referenced permits include

short-term emission limits (such as lb/hr limits), limits on hours of operation, restrictions on process rates or throughput, and/or parametric monitoring requirements for at least some of the covered emission sources, in addition to requirements for specific control equipment (such as baghouses, stilling sheds, water

sprays, etc.).52 As discussed above, according to the Region, such limits are potentially important because they can provide additional certainty regarding the ongoing emissions performance of a facility covered by a permit, and offer an additional means of verifying compliance with applicable limits. See also 1989 PTE

Guidance at 5-8.

Conversely, none of the sources covered under Peabody’s Title V permit

use a baghouse (or other capture and control equipment) to control emissions. The

only control measure Peabody proposes to use to ensure compliance with a PTE

limit at the Black Mesa Complex is a requirement to continue using water sprays

and enclosures and to periodically inspect and repair malfunctioning equipment.53

In sum, it appears that the factual circumstances underlying the State Part 70 permits that Peabody cites are materially different than the underlying facts of this

case, and, significantly, it appears that the Part 70 permits that Peabody relies

upon include provisions that account for the bulk of the respective facilities’ emissions much more reliably than does the approach Peabody proposed here.

With respect to Peabody’s assertion that the permits issued for other facilities employ emission factors and estimated control efficiencies in the same manner as Peabody’s proposed approach in this case, Region IX disagrees. See

52 See, e.g., Kemmerer/Skull Point Permit; Buckskin Permit; Wyo. Dept. of Envtl. Quality,

Air Quality Permit No. MD-616 (April 30, 2001) at 3-4 (Antelope Coal Mine permit including flow

rate, grain loading, lb/yr, and tpy limits for many sources, as well as maximum coal production limits);

N.M. Envtl Dept. Air Quality Bureau, Permit No. 1010-M-2 (February 9, 1999) (permit for York

Canyon Complex coal mine including limits on production rate, hours of operation, and feed rate);

Colo. Dept.of Pub. Health and Env’t, Permit No. 93RO1204 (April 10, 2001) at 2 (permit for

Twentymile Coal Company includes throughput and process rate limits, and short term (per day) limits

calculated as “annual limits divided by 143”).

53 It is somewhat unclear from the record whether the Final Permit actually establishes an

enforceable requirement for Peabody to operate water sprays. During the course of permit development both Peabody and Region IX indicated that Peabody was under no obligation to continue using

water sprays. See SOB at 5; Peabody’s August 21, 2002 Comments at 4. On the other hand, the Final

Permit includes a requirement to inspect water sprays on a weekly basis and conduct repairs if the

sprays are not functioning properly, suggesting (although not expressly stating) that Peabody must

continue to operate the sprays. Final Permit at 7; RTC at 6.

VOLUME 12
PEABODY WESTERN COAL COMPANY 45

Response at 20 (“Peabody grossly mischaracterizes the true nature of these permits and appears to not fully understand how emission factors were used in these

other permitting contexts.”). According to the Region, the examples that Peabody

cites “use emission factors only for emission inventories and applicability determinations with respect to whether the source is major, uses that are considered

acceptable” under relevant EPA guidance.54 Id. Indeed, we conclude that Peabody

has not satisfactorily demonstrated that the permits it cites reflect a reliance on

emission factors and assumed control efficiencies that is of the same nature and

degree as it proposed for the Black Mesa Complex.

By its own admission, Peabody cites only one case in which a State permit,

in Peabody’s words, “us[es] emission factors to directly monitor compliance,” as

would be the case under the approach Peabody proposed in this case. August 21,

2002 Comments at 7 (referencing the Technical Review Document for the Public

Service Company — Arapahoe Station in Colorado (Operating Permit

96OPDE136) (“Arapahoe Station TRD”)).55 Specifically, Peabody argues that the

requirements for the “new rail car unloading station” at the Arapahoe Station relied upon emission factors for purposes of monitoring compliance. Id. at 7; Arapahoe Station TRD at 25. It appears, however, that this permit is dissimilar from

Peabody’s Final Permit in ways that Region IX suggests are important. For example, in addition to PM and PM10 emission limits, and water spray and enclosure

requirements, the Arapahoe Station’s rail car unloading station standards include a

process rate limitation — something not present in Peabody’s Final Permit. Arapahoe Station TRD at 24. The coal processing operations in that case were also

significantly smaller than the operations at the Black Mesa Complex, involving

only about 1.5 million tons of coal per year (compared with more than 12 million

tons at the Black Mesa Complex). Id. Additionally, the Arapahoe Station’s rail

car unloading station constitutes just one of many emission sources at the facility,

many of which utilize more effective and reliable PM emission controls (such as

baghouses and electrostatic precipitators). See id. at 2. Ultimately, it is not clear

from the Arapahoe Station TRD that the permit even establishes a PTE limit for

the facility which would allow it to avoid coverage under other regulations — for

example, it appears that the facility’s overall PTE for PM emissions is well above

the level required to trigger the application of PSD. Id. at 4.56

54 See AP-42 Introduction at 2-3 (uses of emission factors).

55 Peabody stated: “The emission factor used to estimate emissions from this unit is the same

factor used by [Peabody] to estimate emissions from conveyor transfers (the drop/transfer equation

from AP-42 Section 13.2.4 dated January 1995).” August 21, 2002 Comments at 7.

56 Moreover, even if this permit were factually similar to the case at hand, we question whether

a single relevant Part 70 permit would be sufficient to demonstrate that Region IX’s Part 71 permit

decision here constitutes an impermissible departure from an established Agency policy as Peabody

argues.

VOLUME 12
46 ENVIRONMENTAL ADMINISTRATIVE DECISIONS

Finally, with respect to the one federal Title V permit decision that Peabody

cites (a decision related to the McKinley Coal Mine in McKinley County, New

Mexico), as Region IX explains, it does not involve issuance of a PTE limit at all.

Rather, it reflects an example of EPA’s implementation of the PTE transitional

policy for Part 71 in Indian Land, under which EPA will forego Title V permitting

for sources whose actual emissions (not PTE) are less than 50% of the applicable

major source threshold.57 See P Ex F (letter from Matt Haber, EPA, to William

Sanderford, Pittsburg & Midway Coal Co., (Nov. 17, 1999)); Part 71 Transition

Policy. Thus, in this case emission factors and assumed control efficiencies were

utilized only for purposes of estimating actual emissions to determine whether

application of the Part 71 Transition Policy was appropriate. Because in the McKinley mine example Region IX did not address PTE at all, it does not support

Peabody’s claims and certainly does not serve as precedent here.

In the end, we find that Peabody has failed to demonstrate adequately that

the State Part 70 permits it cites are sufficiently similar to the Final Permit at issue

here to serve as useful precedent. Given the heavy burden on a petitioner seeking

review of a Region’s technical determination, this failure on the part of Peabody is

fatal to its Petition.58 In our view, Region IX appears to have exercised its technical judgment appropriately in deciding not to establish a PTE limit for the Black

Mesa Complex. As discussed above, Region IX’s conclusion in this regard has a

solid basis in the record, and Region IX’s Final Permit decision was based on a

facially reasonable technical assessment that, given the data Peabody submitted, a

PTE limit was inappropriate for the Black Mesa Complex. Peabody’s arguments

in its Petition do not demonstrate clear error on the part of Region IX, and absent

such a demonstration we will not substitute our judgment for the Region’s on this

57 Because the total estimated actual emissions from the McKinley mine were less than 35 tpy,

compared to the 100 tpy Title V major source limit, EPA applied the Part 71 Transition Policy thereby

temporarily exempting the facility from Part 71 permitting. The Transition Policy is not held out as

equivalent to establishing a PTE limit. As Region IX notes in its brief, it informed the McKinley mine

at the time that it would need to apply for appropriate PTE limits if and when a minor source permit

program became available on the Navajo reservation. See Response at 21.

58 Again, the Petitioner bears the burden of demonstrating that the Region’s decision was

clearly erroneous, and that this burden is particularly heavy when a petitioner “‘seek[s] review of issues that are quintessentially technical.’” NE Hub, 7 E.A.D. at 567 (quoting In re Ash Grove Cement

Co., 7 E.A.D. 387, 403 (EAB 1997)); In re Carlota Copper Co., 11 E.A.D. 692, 708 (EAB 2004).

Additionally, in its Petition, Peabody fails to respond to the Region’s substantive response to its comments on the draft permit. Specifically, Peabody does not address Region IX’s assertion, discussed

above, that because of difference in the configuration and operation of individual facilities, the Part 70

permits that Peabody cites cannot serve as useful precedent in this case. As we have repeatedly held

“Petitions for review may not simply repeat objections made during the comment period; instead they

must demonstrate why the permitting authority’s response to those objections warrants review.” In re

Knauf Fiber Glass, GmbH, 9 E.A.D. 1, 5 (EAB 2000); accord In re City of Irving, Tex. Mun. Separate Storm Sewer Sys., 10 E.A.D. 111, 129-30 (EAB 2001); Zion Energy, LLC, 9 E.A.D. 701, 705

(EAB 2001).

VOLUME 12
PEABODY WESTERN COAL COMPANY 47

technical issue.59 Accordingly, because Peabody has failed to carry its burden, we

deny review of Final Permit on this issue.

C. Monitoring, Recordkeeping, and Reporting Requirements

Peabody challenges the inclusion in the Final Permit of certain monitoring

and recordkeeping requirements. Primarily, Peabody argues that the requirement

for daily VEMS and the 10% instantaneous opacity trigger for conducting Method

9 opacity observations are onerous and unreasonable. Petition at 17-20. Additionally, Peabody argues that Region IX lacks authority to adopt inspection and repair

provisions for water sprays at the Black Mesa Complex. Id. at 20-21. We address

each of Peabody’s arguments in turn below.

With respect to the Final Permit’s VEMS and opacity monitoring requirements, Peabody’s argument distills to two general propositions. First, in Peabody’s

view, the opacity monitoring provisions are impermissible because they are more

stringent than the monitoring provisions incorporated into other Title V permits

for purportedly similar facilities. Second, Peabody believes that the opacity provisions are clearly erroneous because they will unnecessarily impose a greater burden on Peabody than would its alternative proposal, purportedly without corresponding environmental benefit.

Interestingly, Peabody does not in fact develop its argument that the Final

Permit’s compliance monitoring provisions will be unduly burdensome. While

Peabody “estimates that up to two full-time Method 9 observers would be required

to comply with the opacity monitoring, visual emission survey, and recordkeeping

provisions of the Permit,” Petition at 18, this generalized concern is not accompanied by any factual assessment — for example, describing the economic burden

or logistical difficulty of implementing these requirements at a facility like the

Black Mesa Complex — or by any relevant reference to the materials in the record.60 Rather, the substance of Peabody’s argument focuses entirely on its assertion that “[o]ther operations that handle large quantities of coal are not subject to

such onerous requirements.” Petition at 18.

59 As we conclude that Peabody has failed to demonstrate clear error on this issue, even considering the State-issued permits it references, we need not decide in general whether or not State

permit decisions issued under Part 70 may serve as binding precedent on EPA permitting activities

under Part 71. See Response at 18-19.

60 Indeed, at least one document in the record is seemingly inconsistent with the Peabody’s

conclusions regarding resource demands. See R Ex 24 (Letter from Peabody to Region IX (Nov. 25,

2001)) at 1 (including a comment regarding “the daily routine, continuous visible emission survey of

all crushers, screens, and transfer points that is estimated to take two to three hours” (emphasis

added)).

VOLUME 12
48 ENVIRONMENTAL ADMINISTRATIVE DECISIONS

In this regard, Peabody provides two specific examples of purportedly similar sources whose Title V permits include less stringent opacity monitoring requirements.61 Petition at 18. These sources, according to Peabody, are subject to

weekly, rather than daily, VEMS requirements, and must conduct Method 9 observations only when a VEMS detects instantaneous emissions greater than the

applicable regulatory opacity limitation. Id. Peabody alludes to “similar disparities” in monitoring requirements for “other coal handling operations,” citing without explanation two additional power plants. Id. Finally, Peabody identifies two

coal mines which it contends “do not have requirements to monitor opacity from

fugitive sources on the frequency required of Peabody,” one of which “is required

to conduct only quarterly Reference Method 9 opacity observations at its truck

dump.” Petition at 18-19. Peabody provides no additional explanation of the factual similarities between the Black Mesa Complex and the sources that it cites, no

more precise analysis of these sources’ Title V permit requirements, and no detailed discussion of the significance of any similarities and differences.62

Peabody then identifies its proposed alternative monitoring requirements.63

It concludes, again without explanation, that its proposed opacity provisions

“would be as protective of the environment as the provisions that Region IX included in the Permit, without imposing unreasonable burdens on the company.”64

61 Both of these sources are coal-fired power plants. See Petition at 18.

62 While, all else being equal, one might expect more stringent requirements to be more burdensome, given site-specific factors (such as facility size, number of emission units, other regulatory

obligations, etc.), this might not always be the case. We note in this regard that Peabody identifies no

evidence whatsoever suggesting that the provisions included in its Final Permit would, in fact, be

relatively more burdensome to Peabody than the seemingly less stringent provisions in other permits

are for the sources to which they apply.

63 These consist of weekly VEMS of NSPS-affected units and Method 9 observations whenever instantaneous observations appear to exceed the regulatory limit (20% based on a six-minute

average). Peabody August 21, 2002 Comments at 3; Petition at 19. In its comments on the draft permit, Peabody suggested annual routine Method 9 observations for NSPS-covered units; however, the

Petition does not mention this as an element of Peabody’s proposed alternative monitoring requirements. See Petition at 19; Peabody August 21, 2002 Comments at 3.

64 During the permitting process Peabody argued that “because a trained Method 9 observer

can distinguish between ten percent and twenty percent opacity, there is no basis for requiring a

Method 9 test whenever a visual emission survey detects opacity of ten percent or more.” Petition

at 19; see also Peabody August 21, 2002 Comments at 3. Region IX responded by observing that

Peabody’s approach of requiring Method 9 testing when opacity “on an instantaneous basis[] appears

to exceed the regulatory threshold” was “not enforceable as a practical matter” because it did not “account for the fact that a Method 9 test is a six minute average.” RTC at 5. That is, Region IX did not

believe that one could reliably judge the six-minute average opacity of emissions from a source (the

standard for the regulatory threshold) based on an instantaneous observation — what Peabody’s language appeared to require in order to determine whether a Method 9 test was warranted. In its brief,

Peabody argues that Region IX’s response was inadequate because “particulate matter emissions do not

fluctuate rapidly, [so] there is no reasonable basis for believing that an instantaneous reading of ten

Continued

VOLUME 12
PEABODY WESTERN COAL COMPANY 49

Id. at 19. Because “[t]he Region never justified its disparate treatment of the Mine

as compared to other similar sources with the same opacity limit,” Peabody reasons, “EPA’s inclusion of the onerous provisions in the Permit is clearly

erroneous.”65

In response to Peabody’s comments on the 2002 Draft Permit,66 Region IX

explained that it agreed with Peabody’s assertion that the presence of a minimal

opacity was an inherent consequence of normal operations at the Black Mesa

Complex. RTC at 5. Region IX therefore changed the opacity monitoring provisions in the Final Permit to require six-minute Method 9 observations only where

instantaneous observations detected opacity of greater than 10% — instead of requiring Method 9 testing in response to any visible emissions as originally contemplated. Id. It seems clear from the record that Region IX views the daily

VEMS and the 10% opacity trigger in the Final Permit as a means of systematically identifying units with increased opacity to allow for remedial action before

emissions become serious enough to cause a violation of the applicable opacity

standard. RTC at 5.

In this respect, Region IX acknowledges that “10% opacity is not a regulatory requirement” but a “useful gatekeeper” to ensure that potentially significant

opacity events are properly scrutinized. RTC at 5. Additionally, Region IX expressed concern that Peabody’s proposed alternative requirements were inadequate given the Facility’s use of relatively less reliable emissions controls:

The language suggested by Peabody * * * is insufficiently protective because it would only trigger Method 9

testing if an instantaneous opacity reading appeared to be

above the 20% limit. * * * We do not believe that

Peabody’s proposal of weekly visible emission surveys

and annual method 9 testing are sufficient to assure compliance with a 20% opacity limit at coal handling equipment without baghouses.

(continued)

percent would signal a probable exceedance of the twenty percent limit.” Petition at 20. Peabody’s

argument in this regard appears to miss the point of Region IX’s objection.

65 Again, Peabody provides no explanation, based on specific resources concerns or technical

considerations, why the monitoring provisions included in the Final Permit are “onerous.” Despite

Peabody’s gratuitous description of the monitoring provisions throughout its brief as “burdensome,”

“unreasonable,” and “onerous,” it cites nothing in the record to support its assertions.

66 These comments largely mirror Peabody’s argument in its Petition, and are similarly lacking

in technical detail and analysis. See Peabody’s August 21, 2002 Comments at 2-3.

VOLUME 12
50 ENVIRONMENTAL ADMINISTRATIVE DECISIONS

Id.; see supra note 49 and accompanying text (discussing the relative reliability

and effectiveness of baghouses). In our view, Region IX’s reasoning is clear: because baghouses are particularly reliable and generally reduce emissions well below the regulatory limit, there is less chance of opacity excursions leading to violations where baghouses are employed, and therefore less stringent monitoring

may be justified. Accordingly, otherwise similar units may reasonably require different levels of ongoing scrutiny (including frequency of testing and the sensitivity of triggering events) depending on the type of equipment they utilize to control

emissions. In this instance, because the Facility’s emission are entirely fugitive in

nature, because the control technologies employed are relatively less reliable and

less effective, and because the Facility processes such a large quantity of material,

Region IX concluded that relatively close scrutiny of its compliance with applicable emission standards was justified. See RTC at 5; Response at 26 n.23.

Peabody provides little basis for us to question Region IX’s technical conclusions in this regard.67 Indeed, as discussed above, Peabody offers no facts or

technical analysis to support its claim that the Final Permit’s monitoring and recordkeeping provisions are unreasonable or unduly burdensome.68 Ultimately, Region IX appears to have selected a monitoring approach based on the consideration of relevant factors. See RTC at 5 (identifying factors including type of control

equipment, size of the facility, etc.).69 Nothing about the Region’s approach

67 With respect to the Final Permit’s required monthly Method 9 observations, Peabody states

only that “[t]hese requirements are onerous and go far beyond opacity monitoring required for other

mines.” Petition at 17-18. While Peabody implies that some sources are not required to conduct routine

Method 9 observations at all, and observes that at least one source is obligated to conduct quarterly

(rather than monthly) Method 9 tests, nowhere does Peabody provide any specific assessment of the

burden imposed by the monthly testing requirement, or any explanation of why the monthly requirement is unnecessary or of limited value in this case.

68 We note that Peabody itself apparently proposed the daily VEMS that it now challenges. See

Final Permit Application, Periodic Monitoring Plan; Response at 24. While Peabody obviously

changed its position at some point regarding the desirability of such a requirement, we find no factual

discussion or analysis in the record addressing why Peabody abandoned its support for this approach

or why it now views the approach as unreasonable.

69 While Peabody argues on appeal that, in response to its comments on the draft permit, Region IX failed to explain how it applied the factors relevant to making case-specific decisions regarding opacity monitoring requirements, we find that the record speaks for itself in this regard. Region IX

clearly considered important, among other things, the fact that the Black Mesa Complex is one of the

largest coal mining operations in the country, the fact that it is not currently subject to any other

permitting requirement, the fact that the facility does not utilize more effective capture and control

equipment (such as baghouses), and the fact that the facility is not subject to any operational or process restrictions (such as limits on hours of operation or throughput). See RTC at 5, 10. Moreover, the

significance of these factors in determining the stringency of Peabody’s monitoring requirements is

clear from the record. Region IX’s March 21 Letter; RTC at 5, 10; SOB at 14. Region IX’s failure to

reiterate the details of its concerns in the context of a particular comment response does not in this

case render the Region’s decision arbitrary. See, e.g., In re Kendall New Century Dev., 11 E.A.D. 40,

Continued

VOLUME 12
PEABODY WESTERN COAL COMPANY 51

strikes us as inherently unreasonable or inappropriate, especially in light of the

deference we typically afford Regional decisionmakers on technical matters in

general and monitoring issues in particular. See supra note 58; see also In re Haw.

Elec. Light Co., 10 E.A.D. 219, 233 (EAB 2001) (deferring to permit issuer’s

technical judgment in selection of monitoring data for its ambient air quality

analysis).

While Peabody cites permit examples intended to show that similar sources

of emissions are not required to conduct daily VEMS or six-minute Method 9

observations in response to instantaneous opacity that is lower than the regulatory

limit, there are also examples of permit decisions that require daily VEMS, and

that include mandatory Method 9 testing in response to any visible emissions. See

Response at 26-31 (citing numerous permit decisions that include similarly stringent monitoring). The fact that permits exist with monitoring requirements of varying stringency is not surprising. As Region IX notes, Title V permit terms are

established on a case-by-case basis, taking into consideration a multitude of factors. The range of stringency of monitoring requirements in existing permits, from

more stringent than those in Peabody’s Final Permit to significantly less stringent,

seems to confirm Region IX’s observation that establishing such limits is a fundamentally case-specific exercise. See RTC at 5.

We conclude, based on the record as a whole, that Region IX reasonably

considered relevant factors in deciding what monitoring provisions to include in

Peabody’s Final Permit. Peabody fails to carry the heavy burden of demonstrating

that the Region’s exercise of its technical judgment in this regard was clearly erroneous. Accordingly, we deny review on this issue.

D. Water Sprays

Finally, Peabody argues that the requirement for weekly inspection of the

water sprays used to control opacity at units subject to the NSPS, and the associated corrective action and recordkeeping requirements, exceed EPA’s authority

under Title V. Peabody’s argument in its entirety is as follows:

(continued)

50 n.13 (EAB 2003) (finding that the absence of a “direct response” was not grounds for granting

review where the permitting authority’s “general explanation in its response to comments was sufficient to articulate the basis for its decision.”); In re NE Hub Partners, L.P., 7 E.A.D. 561, 583 (EAB

1998), rev. denied sub nom. Penn Fuel Gas, Inc. v. EPA, 185 F.3d 862 (3d Cir. 1999) (finding Region III’s comment responses adequate even though they “were short in comparison to Petitioners’

comment documents, and * * * did not provide individual responses to each comment”); see also In

re Steel Dynamics, Inc., 9 E.A.D. 165, 191 (EAB 2000)(“Thus, while [the permit issuer] should have

clearly explained its decision-making process in the record, * * * the reality in this case is that petitioners could deduce the likely basis for [the permit issuer’s] choice * * * and we are able to discern

that [the permit issuer] applied its considered judgment * * * .”).

VOLUME 12
52 ENVIRONMENTAL ADMINISTRATIVE DECISIONS

The water sprays are not subject to NSPS requirements or

to any other requirement under the Clean Air Act, and

EPA may not impose any new requirements in the facility’s Title V permit. In the absence of a federally enforceable PTE limitation that incorporates the spraying, EPA

has no legal basis for imposing these requirements.

Petition at 21.

Peabody made a virtually identical argument in its comments on the 2002

Draft Permit. See August 21, 2002 Comments at 4. However, in its Petition

Peabody fails to acknowledge or address Region IX’s response to those comments. Region IX explained that:

EPA disagrees with Peabody’s contention that “EPA may

not impose any new requirements in the facility’s title V

permit.” Title V permitting authorities have the statutory

and regulatory authority to add monitoring to title V permits. EPA and air pollution districts routinely add periodic and other title V monitoring to title V permits when

the monitoring associated with applicable requirements is

inadequate. The 1990 Clean Air Act requires that all title

V permits have “monitoring, compliance certification, and

reporting requirements to assure compliance with the permit terms and conditions.” (Section 504(c)). Section

114(a)(3) of the Act requires “enhanced monitoring at all

major stationary sources,” and section 504(a) require[s] title V permits to include “such other conditions as are necessary to assure compliance with applicable requirements”

of the Act. In addition, there are regulatory provisions in

40 C.F.R. Part 71 that implement these statutory

requirements.

As noted in EPA’s Statement of Basis for the Black Mesa

[Complex] title V permit, when an underlying applicable

requirement does not require periodic testing or monitoring, Part 71 requires that title V permits must contain “periodic monitoring sufficient to yield reliable data from the

relevant time period that are representative of the source’s

compliance with the permit.” (40 C.F.R. 71.6(a)(3)(i)(B)).

Permitting authorities have an obligation to add monitoring provision to title V permits when applicable requirements have no periodic monitoring or [have] insufficient

monitoring. For opacity, such conditions typically include

visible emission surveys, Method 9 tests, water spray obVOLUME 12
PEABODY WESTERN COAL COMPANY 53

servation, pressure drop monitoring and leak detection for

baghouses, as well as associated record-keeping requirements. Since Peabody uses sprayers to comply with an

opacity limit in an NSPS that does not require any ongoing monitoring, EPA is using its statutory and regulatory

authority to require sprayer inspection and maintenance as

part of the periodic monitoring needed to assure compliance with the opacity limit. EPA believes it is reasonable

to expect Peabody to conduct weekly observations of its

water sprays and record the results.

RTC at 5-6.

Peabody’s failure to address Region IX’s detailed response to Peabody’s earlier comments on this issue is fatal to its petition for review of this issue. As we

have noted already (see supra note 58), “Petitions for review may not simply repeat objections made during the comment period; instead they must demonstrate

why the permitting authority’s response to those objections warrants review.” In

re Knauf Fiber Glass, GmbH, 9 E.A.D. 1, 5 (EAB 2000). Accordingly, we deny

review of the Final Permit on this issue.

III. CONCLUSION

For the reasons describe above, we find that Peabody has failed to demonstrate clear error with respect to Region IX’s decision not to include a PTE limit in

Peabody’s Title V permit, and Region IX’s inclusion of opacity monitoring provisions in the Title V permit for the Black Mesa Complex. Additionally, we find

that Peabody failed to adequately address Region IX’s response to Peabody’s

comments regarding the Region’s authority under Title V to adopt monitoring requirements for water sprays. Accordingly, Peabody’s petition for review is hereby

DENIED.

So ordered.

VOLUME 12