Document ID: EPA-HQ-OAR-2004-0087-0016
Agency: epa
Document Type: Supporting & Related Material
Title: 
Posted Date: 2007-09-12T04:00Z

CONSIDERATION OF 1994 AND 1995 PROPOSALS ON ALTERNATIVE OPERATING
SCENARIOS AND ADVANCE NSR WITH ASSOCIATED COMMENT SUMMARIES

Overview

During the process of creating our proposal on Flexible Air Permitting,
EPA considered certain comments received from industry, environmental
groups, and regulatory agencies on our 1994 and 1995 proposals to revise
parts 70 and 71.  This document summarizes the changes that were
proposed in 1994 and 1995 with respect to the concepts and definitions
of “alternative operating scenarios” (AOSs) and “advance NSR”
and the comments they generated.  While the positions in these two
proposals were not finalized, the comments received in response to them
together with other relevant Agency experiences, including insights
gained from the development and evaluation of several State pilot
permits, were useful as EPA developed its positions contained in the
proposal for Flexible Air Permitting.  The summary below is intended to
reflect the extent to which EPA considered these comments in determining
our proposed approaches.

Proposed Changes to Parts 70 and 71: 1994 and 1995

In August 1994, EPA proposed to allow use of the concept of AOSs to
provide advance approval to construct and operate new or modified units
subject to NSR and section 112(g) (referred to as “advance NSR”). 
The concept of advance NSR put forward at that time was that the
permitting authority would decide the applicable NSR requirements before
an anticipated project or class of projects was constructed or modified,
and then include that project’s requirements in the part 70 permit for
the facility.  As a result, the project would be “pre-approved” by
the permitting authority.  This pre-approval would avoid the need for a
separate NSR permit and a part 70 permit revision prior to the project
being constructed or operated.  The NSR permit would be unnecessary
because preconstruction review and approval had already occurred for the
anticipated project or class of projects, and the NSR permit terms were
already established (in the part 70 permit).  A part 70 permit revision
would be unnecessary since the part 70 permit already contained the NSR
construction and operation requirements for the project.

A second proposed change addressed the requirement in §70.6(a)(9) that
a source keep a contemporaneous record of all changes among AOSs in an
on-site log.  The proposed revisions to part 70 would allow a source to
use an on-site log of changes among operating scenarios when each of
those scenarios had monitoring that met two conditions.  First, under
the 1994 proposal, each scenario must be monitored in a way that yielded
objective, contemporaneous measurement and recordation of the relevant
emissions or parameters.  Second, each scenario must have a sufficiently
different means of measurement that the contemporaneous record revealed
the scenario under which the source was operating when the record was
made.  In any other case, the facility would be required, for each week
during which one or more changes to a different operating scenario was
made, to copy the on-site log of changes for that week and mail it to
the permitting authority.  These proposed provisions were intended to
assured that either the scenarios were monitored in a way that
inherently revealed the scenario in effect at all times, or the
permittee reported changes among scenarios within a sufficient period of
time to avoid any significant possibility of after-the-fact tampering.

	

The 1994 proposal to treat advance NSR as an AOS under part 70 did not
propose to materially alter the underlying NSR State implementation plan
(SIP) requirements.  The extent to which advance NSR approval would be
available, or indeed, whether it would be available at all, would be
governed by each State minor NSR program.  The 1994 proposal did not
address the extent to which advance NSR would be available in State NSR
programs.  It simply provided that, where advance NSR was available, the
AOS provisions of §70.6(a)(9) would offer a mechanism for implementing
it through part 70 permits.  A permitting authority considering
implementing advance NSR under the 1994 proposal would be required to
consider the extent to which its NSR rules allowed the use of approaches
which forecast specific NSR requirements in advance.  Advance NSR, as
proposed, would demand an ability to predict the construction and
operational details of the future project or class of projects with
enough certainty to allow the permitting authority to fix relevant NSR
requirements in the part 70 permit, including compliance monitoring
terms.  A permitting authority would also have to consider whether
including advance NSR as an AOS in a part 70 permit would satisfy its
own procedures for drafting, providing for review of, and issuing NSR
permits for the changes which were being preapproved.

	In 1995 EPA further clarified its proposed positions on advance NSR by
proposing to add definitions of “advance NSR” and “alternate
operating scenario” to §70.2,  and also explained that in EPA’s
view, a change subject to an advance approval scenario would not be a
change under section 502(b)(10) of the Clean Air Act (the Act). 
Rather, EPA proposed in 1995 that it would constitute a switch to an AOS
under §70.6(a)(9).  As the preamble noted, this interpretation would
have two advantages.  First, it would allow the use of advance NSR for
title I modifications and avoid the limitation that changes under
section 502(b)(10) cannot be title I modifications.  Second, the
seven-day advance notification under section 502(b)(10) which attaches
to each change made under that section would not apply to changes under
the advance NSR approval.  Consequently, where the NSR program would
allow for advance approval, and the permitting authority could approve
an AOS containing advance approval, the part 70 permit could allow a
source to make the approved change without a part 70 revision.

The definition EPA proposed for “advance NSR” in §70.2 was as
follows:

Advance NSR means terms or conditions in a part 70 permit setting forth
requirements applicable to new units or modifications under applicable
major or minor NSR programs or regulations implementing section 112(g)
of the Act, so that such changes may be operated without having to
obtain a part 70 permit revision.

A revised definition of AOS was also proposed, as follows:

Alternative operating scenarios means terms or conditions in a part 70
permit which assure compliance with different modes of operation for
which a different applicable requirement applies and for which the
source is designed to accommodate.

      What follows is a summary of the comments made from industry,
regulatory agencies, and environmental groups on the changes proposed in
1994 and 1995.  In addition to soliciting general comments regarding the
proposals, there were also specific areas about which the Agency was
interested in receiving comments.  First, EPA solicited comments on the
availability of the advance NSR option subject to certain additional
constraints, as well as the appropriateness of the use of advance NSR
for nonattainment area NSR under part D of title I of the Act, PSD under
part C, minor NSR under section 110(a)(2)(C), and modifications of HAP
sources under section 112.  Second, the Agency was interested in
permitting authorities’ experiences with monitoring alternative
scenarios.  In their experience, has tampering with compliance reports
been a problem?  Would the proposed revisions effectively address any
such problem?  Third, the Agency invited comments on the appropriate
interval for reporting.  Fourth, EPA solicited comments on the
definitions for “advance NSR” and “alternative operating
scenario.”

Summary of Comments on “  SEQ CHAPTER \h \r 1 advance NSR” concept

A large number of industry commenters supported advance NSR.  On the
whole the commenters felt advance NSR approval would provide flexibility
and would be useful particularly with permits with emissions caps. 
There was one regulatory agency that favored the advance NSR concept and
one that opposed it.  The commenter that opposed the concept felt that
adding another set of construction permits to the already complicated
part 70 permit process would simply slow down the process.

In relation to the specific areas where the Agency had solicited
comments, there were a number regarding the extension of advance NSR
approval if the associated NSR permit’s time limit expires before the
operating permit’s term is up.  Four industry comments supported the
extension, stating that extending NSR approval is needed if advance NSR
is to provide real benefits in operation flexibility.  One suggested
method for extension would be to include in the permit a provision to
allow the source to submit a notification exercising the extension
option without any other requirement for a response from the permitting
authority.  Another suggestion was for EPA to specifically provide that
States can grant advance NSR approval for whatever period they deem
appropriate.  Two regulatory agencies opposed extending the NSR permit
timeline, questioning whether it would save time and stating that
additional constraints should not be placed on the NSR process already
in place.

	Several industry commenters were in support of advance NSR for the
specific programs mentioned above, while other industry commenters were
not as explicit in identifying the programs named by EPA for which they
believed advance NSR to be appropriate.  Two regulatory agencies
provided comment on the appropriateness of advance NSR approval for the
specific programs mentioned above.  One regulatory agency stated that
for major NSR (part D and PSD), the existing programs already
incorporate the needed flexibility – a source could get a PSD approval
with the operating permit if it will start the project within
18 months.  However, the commenter indicated that any longer lead time
should necessitate a new technology review and a new public comment
period.  The commenter also stated that minor NSR and HAP sources should
be handled by existing programs and notification requirements.  The
second regulatory agency stated it did not support advance NSR approval
for major or minor NSR because changes of this magnitude should be
addressed at the time that a company is committing to them, not just
anticipating them.  Otherwise, this commenter stated, other changes that
have occurred in the interim which might impact the decision cannot be
considered appropriately.

Summary of Comments on “advance NSR” definition

	Many commenters (consisting of all three groups) suggested alterations
to the proposed definition for clarification.  One industry
commenter noted that the proposed definition uses the term “new
units,” which is not defined, and does not mention reconstructed
sources, although it does address the other two possibilities
(newly-constructed sources and modifications).

 

	An environmental group believed that “advance NSR” needed to be
clarified to express the limited scope of the concept.  Specifically,
the words “one or more specifically identified” should be added
before the phrase “new units.”  One regulatory agency believed that
“advance NSR” did not adequately encompass the flexibility of the
States to make decisions on the alternative scenarios (e.g., decide that
a construction permit is still needed, allow review of plans for a
proposed change before construction is initiated).  The commenter
suggested “permit provisions to accommodate future new and modified
units” as a better description than “advance NSR.”

	Two of the industrial commenters were concerned about possible
confusion between the terms “advance NSR” and “PALs.”  They
suggested that the Agency should clarify that the requirement under
advance NSR to provide information about the applicable terms and
conditions of anticipated changes does not apply to NSR PALs, and that
EPA should state in the rule that to the extent a facility has
pre-approval under a PAL permit to implement generic changes, advance
specification of the terms and conditions that apply to those changes is
not required. 

	Two commenters (one industry and one environmental group) specifically
supported adding a definition of “advance NSR” to promote greater
certainty in implementing emissions caps under section 502(b)(10) of the
Act.  

Summary of Comments on Alternative Operating Scenarios tc "	6.4.1  
Alternative Operating Scenarios - General " \l 3 

	The comments on AOSs came from industry.  Four of these commenters
generally supported the concept of AOSs as a potential means of
obtaining operational flexibility, but expressed concern that the
proposed restrictions on AOSs would unnecessarily complicate their use
or make them unworkable. One of these commenters and two other industry
commenters stated that it should be clarified that AOSs are only
appropriate when there are alternative emissions standards that would
apply to the alternative scenarios.

	Five other industry commenters indicated that AOSs as proposed would
not prove useful because it is impossible to accurately predict future
operating conditions over the life of the permit.  Two of these
commenters provided examples of the extremely rapid and radical shift in
operations that characterize their industry.  These commenters suggested
a more innovative approach to AOSs, for example to characterize as AOSs
a specific number of wholesale technology changes and a specific number
of equipment upgrades.  Under this suggested approach, the permit could
allow for these activities to be undertaken without triggering any
permit revisions as long as the source remained within the emissions cap
and did not increase HAP emissions in conjunction with the changes in
excess of de minimis levels.  The commenters noted that the permit need
only contain general language indicating that AOSs are available only
for VOC emissions and only where the certain prerequisites are
satisfied, such as (1) VOC emissions from the change must not exceed
the plantsite emissions cap, (2) the change must meet certain RACT and
other SIP requirements specified in the permit, and (3) the change must
not trigger any new applicable requirement.

	Several comments were received from industry on the proposal to allow
permitting authorities to add AOSs that were not requested by the source
to part 70 permits.  Eight commenters opposed the proposal, while three
commenters were in agreement with it.  

	The eight opposing commenters raised several concerns.  Many commenters
indicated that such scenarios would add unnecessary detail to the
permits, limiting the inherent flexibility that would otherwise be
available.  Some felt that it was an intrusion on business privacy and
that the permitting authorities could not know enough about each
individual source’s operations to properly create an alternative
scenario.  A third concern was that all the additional scenarios may bog
down the permitting process or result in an unrealistic portrayal of
emissions, inflating the fees charged to sources.  Two commenters
believed that EPA misread the provisions of the Act in proposing that
permitting authorities be authorized to add AOSs to permits.

 	Three commenters agreed with the proposal, although two of them
suggested two guiding principles to define the limitations of the
permitting authorities’ discretion:

	1.  An AOS is only necessary to the extent that changes in a source’s
mode of operation implicate either (1) a new applicable requirement or
(2) different measures for demonstrating compliance with applicable
requirements.  In particular, there is no need for extraneous process
operation detail in a permit unrelated to demonstrating compliance.

	2.  An AOS should contain only the detail necessary for demonstrating
compliance with applicable requirements.  In particular, the level of
detail should be governed by the underlying applicable requirement.  For
example, if the applicable requirement establishes an emissions limit,
such as a VOC emissions limit for a degreaser, and specifies compliance
by mass balance, the scenario need only include the RACT emissions limit
along with the mass balance formula.  No other process details would be
necessary or appropriate.

	

Summary of Comments on Reporting Requirements for Alternative Operating
Scenarios

	The majority of commenters opposed the proposed revisions to
§70.6(a)(9)(i), generally characterizing the proposed new AOS reporting
requirements as unnecessary and burdensome, and stating that the burden
would not be justified by the very small environmental benefit that
would result.  Several commenters, both regulatory agencies and
industry, stated that the proposed reporting would make AOSs less
useful, and several regulatory agencies indicated that permitting
authorities do not have the resources to review weekly reports.  One
industry commenter felt that once the permit is given, the source should
only be required to notify the agency of any exceedances of the
scenarios.  Another stated that the source should be allowed to operate
under one all-encompassing operating scenario, rendering the reporting
moot.  One industry commenter felt that information would be available
to foreign competitors about U.S. sources’ production processes. 
Another industry commenter also stated that the requirements were not
feasible for smaller sources that may not have the resources to generate
and submit weekly reports.  Several industry commenters also noted that
in most cases AOSs are unlikely to be so different that a different
means of measurement would be used, although the recorded range of
values may well vary among alternative scenarios.

	Some suggested alternatives were offered, including quarterly reports,
annual logs, onsite logs, semi-annual reporting, or determination of
requirements on a case-by-case basis and included as a permit condition.
 Several of the commenters favored reporting along with the regular
semi-annual monitoring reports that are already required under the Act.

	One regulatory agency and one industry commenter supported the proposed
notice requirement for AOSs, although the industry commenter requested
that EPA clarify that only a “one-time” notice is required to be
submitted the week following a change to an AOS and that no notice is
required for weeks in which no change among operating scenarios is made.

Summary of Comments on “Alternative Operating Scenario” definition 
SEQ CHAPTER \h \r 1 

	Two industry commenters and one regulatory agency supported the
proposed definition and did not suggest changes.  Eleven industry
commenters suggested changes to the wording of the definition of
alternative operating scenarios for clarity and efficacy.  One of the
elements that several commenters focused on was “designed to
accommodate.”  The commenters stated that the term was not previously
defined in part 70 (although it is a term of art in the NSR program),
and varying interpretations of the term could lead to substantial
confusion and possibly limit the range of operating scenarios available
under the permit.  The suggestions were to delete the phrase completely
or for EPA to define the phrase such that AOSs could include both those
that are feasible under the source’s design as well as those that are
reviewed and included in its title V operating permit. 

	Additional specific changes were suggested by industry commenters:

Clarify the definition to make it clear that the purpose of AOSs is
simply to record applicable requirements that apply to sources or
activities that have variable operations (or future effective
requirements).

Delete “. . . for which a different applicable requirement applies and
. . .” to simplify the definition and to avoid any confusion in
situations such as a change in service for a storage tank that causes
the emissions unit to no longer be subject to a regulation.  

Do not specify that alternative operating scenarios are always subject
to “a different applicable requirement” because sometimes the same
applicable requirement may apply to multiple scenarios.

Delete reference to terms and conditions that “assure compliance”
with different modes of operation for which a different applicable
requirement exists, since it implies monitoring/enhanced monitoring. 

Redefine AOSs so that the term refers to permit authorizations that
“may” be requested at a source’s option and is not implied that it
must be requested.

Specifically mention the new definition of “advance NSR.”

Clarify that AOSs “may include those reviewed in accordance with an
advance NSR condition included in the part 70 permit” in order to
expand possible NSR actions.

August 27, 2007

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