Strategic Air Planning: Is the Time for a PAL Here?

1. Strategic Air Planning: Is the Time for a PAL Here? Presented to Georgia AWMA by All4 Inc. Mark Wenclawiak, CCM| mwenclawiak@all4inc.com | (678) 460-0324 October 24, 2013

2. Agenda • Air permitting to support growth • Plantwide Applicability Limit (PAL) permitting • Not new concept but time for a kick start? • Mounting air pressures • Facility needs and expectations • Major New Source Review (NSR) struggles • Importance of strategic planning • What is a PAL, how it can be smart strategic decision

3. Air Pressure • National Ambient Air Quality Standard (NAAQS) • NSR • Greenhouse Gas (GHG) Regulation • National Emission Standards for Hazardous Air Pollutants (NESHAPs) • Boiler MACT • Project happening again • Significant capital expenditures and complicated permitting efforts • Balancing these pressures with economic recovery and growth

4. Air Pressure (continued) • In years past, actual emission increases predicted and realized from projects • Common theme of this new day and age has emerged: For most facilities, future emissions will decrease from historic actual levels as a result of new and developing air regulations and standards, regardless of growth in productivity. • Preserve those historically high emissions!

5. Facility Needs • Ability to change operations quickly & as needed • Long range targets for planning: • Internal - production/energy/economics (more production at lower costs) • External – new rules driving up costs to comply • You – caught in the middle • Energy study – modify process line to generate steam savings and increase in production • Emissions from boiler decrease – good thing • But…still need that PSD applicability analysis

6. Future Planning • Strategic planning for the future must consider implications of both new air rule applicability and air permitting implications: • Lots of rules/lots of issues/lots of confusion • New rules likely require facility changes • No exemption for pollution control projects • Permitting issues can impact project design • Do you install scrubber to control HCl for MACT? • Co-benefit: SO2 will decrease as well – how does that impact your NAAQS compliance • Scrubber project many now be desirable

7. Future Planning (continued) • Air issues must be integrated into facility operations planning • Result will be same old push/pull for projects whether needed or required: • PSD applicability analysis • Potential impacts to project design, cost, schedule • Confusion and frustration • System for evaluating projects must be established and adhered to • Compliance with NAAQS is critical

8. PAL Option • “Plantwide Applicability Limitation” (PAL) is an available regulatory option that can potentially ease the PSD permitting cycle • Federal PSD rule provides for PALs based on historic actual emissions • PALs are pollutant specific and could be a critical part of a facility strategic plan…Why???? • Preserve that baseline!

9. PAL Advantages • For a facility with a PAL permit that maintains emissions below PAL, physical changes and changes in method of operation are not major modifications and do not require approval under PSD • Decisions regarding process and air pollution control technology now remain with the source, not the agency (e.g., BACT)

10. Why a PAL Now? • PALs historically worked for relatively simple industries with limited sources and where technology was driving emissions lower per unit of production • New air quality world we are in is forcing facilities to realization that future emissions will be lower per unit of production driven by rules, standards, permitting, technology, etc. • Emerging in complex plants like cement, pulp and paper

11. Why a PAL Now? (continued) • Air permitting complicated enough • Largely avoided up until now • Must be able to track and report emissions against PAL • Historically facilities saw too many sources and not enough data to justify a PAL • However, data and tools now available for demonstrating compliance due to other rule activities • So how do you establish a PAL?

12. Establishing A PAL • One or more pollutants (including GHGs) • Based on 12-month rolling total (tons/yr) • Same baseline actual emissions used in PSD applicability assessment: • 24-month consecutive period during the prior 10 years of operation • Add PSD/NNSR significance threshold

13. PAL Concerns – Big Picture • PAL established for 10 year period • PAL can be adjusted down to account for new applicable requirements, NAAQS compliance concerns • Getting out of a PAL can have serious ramifications (e.g., BACT) • State/local air construction permits may still be required

14. PAL Concerns – Specifics • Effort associated with developing PAL application • Ahead of the game more than you think • Developing methods to demonstrate compliance • Also likely in place • NAAQS are a driver – know where you stand • Modifications under a PAL will not trigger modeling • But NSR reform rules appear to be working • Could have accommodated • Even non-applicability evaluations not simple • SIP permits, NSPS, NESHAPs, RACT, etc. still apply

15. PAL Planning Approach • Develop historic facility-wide baseline emission rates and potential PAL levels • Major planning sessions • Consider new rules, facility operations plans, potential energy efficiency improvements, new technologies, low hanging fruit for emissions reductions • Address potential NAAQS issues • Weigh value of PAL for each pollutant • PM and VOC from coating operations

16. Parting Thoughts • Allows you to implement projects quickly • For typical facility projects, PSD is no longer a consideration under a PAL • Economic and competitive advantage over competitors • For planning facility now has a clear bright line it can manage operations to (12-month emissions) • Future second guessing by agency of PSD applicability decisions and potential enforcement issues off the table

17. Questions? Mark Wenclawiak, CCM| mwenclawiak@all4inc.com | (678) 460-0324