Prevention of Significant Deterioration/ Nonattainment/ Netting Applicability Examples

1. Prevention of Significant Deterioration/ Nonattainment/ Netting Applicability Examples David ReynaTechnical Specialist, Air Permits Division Autumn Environmental Conference and Expo, October 9, 2019

2. Overview • Prevention of Significant Deterioration (PSD) • Nonattainment New Source Review (NNSR) • Project emission increase approach • Net emission increase approach • Examples

3. Prevention of Significant Deterioration (PSD) • Code of Federal Regulations (CFR) • 40 CFR §52.21 • Regulated pollutants • Attainment: below National Ambient Air Quality Standards (NAAQS) • Texas Administrative Code (TAC) • 30 TAC §116.12 • 30 TAC §§116.160-164

4. Prevention of Significant Deterioration • Named Sources 100 TPY (including fugitives) • 28 Named sources as in 40 CFR §51.166(b)(1) • Unnamed Sources 250 TPY (fugitives not included) • Major for One, Major for All • Best Available Control Technology (BACT)

5. Nonattainment(Rules) • Code of Federal Regulations (CFR) • 40 CFR §51.165 • Criteria pollutants • At/Over National Ambient Air Quality Standards (NAAQS) • Texas Administrative Code (TAC) • 30 TAC §116.12 • 30 TAC §§116.150, 151

6. Nonattainment • Only for certain pollutants in nonattainment areas • Ozone Marginal/Moderate Area: 100 TPY major source • Significant Level: 40 TPY • Ozone Serious Area: 50 TPY major source • Significant Level: 25 TPY/Netting trigger 5 TPY • Lowest Achievable Emission Rate (LAER) • Offsets for ozone

7. Project Increase From Existing Facilities • Baseline Actual to the Potential to Emit (PTE) • Baseline Actual to the Projected Actual • Could Have Accommodated • Incremental Increase

8. Baseline Actual To PTE • Baseline actual emission rate (using 2013 – 2014) = 17 TPY • PTE VOC emissions (Table 1a) = 25 TPY • Emission increase = 8 TPY (>5 TPY netting significant emission rate)

9. Baseline Actual To Projected Actual • Baseline Actual emission rate (using 2013 – 2014) = 17 TPY • Projected Actual = 20 TPY (for VOC emissions) • Emission increase = 3 TPY (<5 TPY netting significant emission rate)

10. Projected Actual • Provide relevant information to determine the projected rate • 30 TAC §116.12 • Keep records to insure you don’t exceed the project increase • 30 TAC §116.127 • A projected actual is not an enforceable limit • A projected actual can’t be used to define contemporaneous increases and decreases

11. Project Increases • If the Baseline Actual Emission Rate of new or modified equipment, compared to the Planned Emission Rate (PTE or projected actual), is ≥ the netting significance level... • Netting is required • Table 1F Air Quality Application Supplement • Table 2F Project Emission Increase • Table 3F Project Contemporaneous Change • Table 4F Description of Creditable Reductions

12. Contemporaneous and BAE Period Application Received Prior Project Contemporaneous Period Current Project 24-month BAE Prior Project 24-month BAE SOC SOO 10 year Current Proj. BAE period 10 year Prior Proj. BAE period

13. Example 1 • A company proposes to build a new facility at an existing major named source in an attainment area • Current PTE = 150 TPY NOx • Proposed PTE = 200 TPY NOx • Baseline Actuals = 133 TPY NOx 200 TPY – 133 TPY = 67 TPY NOx

14. Example 1 (Netting NOx) • Current Project: • June 2018 NOx = 67 TPY • Previous Projects: • Jan 2017NOx = 50 TPY (increase) • June 2015 NOx = 60 TPY (increase) • Nov 2013 NOx = 30 TPY (decrease) 67 TPY + 50 TPY + 60 TPY – 30 TPY = 147 TPY

15. Example 2 • A company is constructing a natural gas liquid facility located in a serious nonattainment area • This project will have Frac 1 and Frac 2 units along with heaters, storage tanks, engines and a flare

16. Example 2 Total Emissions VOC = 38 TPY NOx = 31 TPY CO = 60 TPY SO2 = 70 TPY PM = 20 TPY

17. Example 3 • Same company comes back in two years and wants to construct two new frac units (Project B) • Represents Frac 3 and Frac 4 units and associated equipment • Project B affects some equipment from Frac 1 and Frac 2.

18. Example 3 Project B Total Emissions VOC = 15 TPY NOx = 20 TPY CO = 70 TPY SO2 = 80 TPY PM = 40 TPY

19. Example 3 Netting • Total emissions from affected sources: VOC = 25 TPY NOx = 16 TPY • Baseline actuals: VOC = 20 TPY NOx = 10 TPY VOC = 15 TPY + 25 TPY – 20 TPY = 20 TPY NOx = 20 TPY + 16 TPY – 10 TPY = 26 TPY

20. Site Totals • Site total emissions VOC = 53 TPY NOx = 51 TPY CO = 130 TPY SO2 = 150 TPY PM = 60 TPY

21. Example 4 • Same company comes back in three years and wants to construct another two new frac units. • They represent Frac 5 and Frac 6 units along with heaters, storage tanks, engines (separate and independent of Frac 1, 2, 3 and 4 operations).

22. Example 4 Project C Total Emissions VOC = 15 TPY NOx = 10 TPY CO = 12 TPY SO2 = 40 TPY PM = 30 TPY

23. Example 4 (Netting VOC) • Current Project: • July 2017 VOC = 15 TPY • Previous Projects: • Apr 2016 VOC = 20 TPY (increase, Frac 3 & Frac 4) • Mar 2015 VOC = 10 TPY (decrease) • Dec 2014 VOC = 15 TPY (decrease) • Mar 2014 VOC = 38 TPY (increase, Frac 1 & Frac 2) 38 TPY + 20 TPY + 15 TPY – 15 TPY – 10 TPY = 48 TPY

24. Example 4 (Netting NOx) • Current Project: • July 2017 NOx = 10 TPY • Previous Projects: • Jan 2017NOx = 26 TPY (increase, Frac 3 & Frac 4) • Dec 2013 NOx = 5 TPY (decrease) • Mar 2014 NOx = 31 TPY (increase, Frac 1 & Frac 2) • Oct 2011 NOx = 15 TPY (decrease) 31 TPY + 26 TPY + 10 TPY – 5 TPY = 62 TPY

25. Example 5 (Could Have Accommodated) • Company request a modification to its Refinery • Increase in production • Baseline Period 2012 and 2013 • Baseline actual emission for this period 805 TPY • Company would like an adjustment to its baseline for emissions capable of accommodating during this period

26. Example 5 (Applicability Analysis) • Company determines the highest production for a consecutive 30 day period during the baseline time frame. • Company verifies that they have and will operate 24 consecutive months without an extended shutdown • This annualized production rate represents what the company could have produced during the baseline period

27. Example 5 (Emission Ratio) • The emissions are then estimated by multiplying the ratio of “what Could Have Produced (CHP) and Actual Production (AP) rate” during the baseline period by the baseline emission rate. • For this example the ratio that we will be using is 1.5

28. Example 5 (Actual Emission) • This method utilizes actual emission data and corrects it to an operating level actually achieved over a sustained period. • The 1207.50 TPY includes emissions that could have been accommodated

29. Example 5 (Requirements) • The company should include in the permit application sufficient details about the proposed project so that project-related emissions increase can be estimated and distinguished from unrelated emission. • The facilities are legally and physically capable of sustaining the operating conditions associated with the accommodated emission rate during the baseline period.

30. Example 5 (Considerations) • CHA can only be used in conjunction with BAE to PAE • Emissions that could be accommodated are normally determined based on production. • Provide data to support accommodation

31. Questions

32. Contact Information David Reyna Phone: 512-239-6051 Email: david.reyna@tceq.texas.gov