Air Permitting in Colorado

1. Air Permitting in Colorado Martha Hyder Wind River Environmental Group LLC September 2013

2. Overview • Background (pollutants) • Federal permitting regulations • Colorado permitting regulations • Colorado Department of Public Health and Environment (CDPHE) permitting initiatives • Engines • Boiler MACT • Questions?

3. Background • Criteria pollutants: For which National Ambient Air Quality Standards (NAAQS) have been established: • Nitrogen dioxide (NO2) • Sulfur dioxide (SO2) • Carbon monoxide (CO) • Particulate matter (PM10, PM2.5) • Lead • Ozone (O3): formed in atmosphere from precursors: nitrogen oxides (NOx) and volatile organic compounds (VOCs)

4. Background, con’t • Hazardous air pollutants (HAPs) (187 federal) • Colorado non-criteria reportable pollutants (NCRPs): overlap with federal HAPs but includes additional pollutants • Others of interest: • Greenhouse gases (GHGs): federal regulations cover carbon dioxide (CO2), methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride • Carbon dioxide equivalent (CO2e) is sum of each multiplied by their global warming potentials

5. Federal Permitting Regulations • Pre-construction permitting for major sources (New Source Review (NSR)/Prevention of Significant Deterioration [PSD]) • Major sources have potential to emit (PTE) at least one regulated pollutant >100/250 tons per year (tpy) except GHGs. PTE includes controls if federally enforceable • Obtain permit before commence construction • Operating (Title V) permits • Apply for permit within 12 months after commencing operation (renew every 5 years)

6. Colorado Permitting Regulations • Colorado’s permitting regulations implement the federal requirements and add permitting for sources not covered by federal regulations • Regulation 3 • Part A: General provisions and Air Pollutant Emissions Notices (APENs) • Part B: Minor source construction permits • Part C: Operating permits • Part D: Major source construction permits • See also Part G: Statement of Basis and Purpose

7. Part A: General Provisions & APENs • APENs are used as entry into permitting and are also emission inventory tools • General and specialty forms • Must be filed for individual emission units or groups of like units if not categorically exempt and have uncontrolled actual emissions > 1 tpy attainment area, > 2 tpy nonattainment (Front Range for ozone [VOCs & NOx as precursors]) • Colorado: Uncontrolled actuals = uncontrolled emissions at expected maximum rate or capacity

8. Part A, con’t • APENs for NCRPs based on “bins” and threshold emissions in pounds per year (lb/yr). Each NCRP is assigned a bin: A:50, B:500, C:1,000 lb/yr • Submit APENs for new sources and renew 30 days before 5 year anniversary, annually if significant emissions increase (April 30 for previous calendar year), change in ownership, or other changes to source • Initial APEN for new source reports expected emissions; subsequent APENs report actual emissions • Also submit APENs with any permit application

9. Part B: Construction Permits • New/modified minor or “synthetic minor” sources • Synthetic minor would be major except for enforceable restrictions • HAPs if subject to Colorado or federal National Emission Standards for Hazardous Air Pollutants (NESHAP) or Maximum Achievable Control Technology (MACT) standards • Obtain permit before construct/install/modify • If APEN-exempt, permit exempt

10. Part B, con’t • Additional categorical exemptions • Also emission-based exemptions (1-5 tpy nonattainment, 5-10 tpyattainment depending on pollutant) • Based on uncontrolled actuals • Emission thresholds are for entire facility • Application form, project description, emission calculations & backup, possible dispersion modeling for NAAQS compliance • Permit will not necessarily include all requirements that apply to source

11. Part B, con’t • 60 day completeness review • 60 days preliminary analysis • 15 + 30 days if public comment required • 30 days permit issuance following end of public comment period

12. Part B, con’t • There are also General Permits (GPs) for some types of sources (petroleum tank batteries, natural gas-fired internal combustion engines, etc.) • If your source meets the General Permit requirements, can “register” under the applicable GP on APEN form and must comply with GP requirements

13. Catchall Provision • Sources subject to: • New Source Performance Standards (NSPSs) • National Emission Standards for Hazardous Air Pollutants (NESHAP) • Maximum Achievable Control Technology (MACT) standards • Must file an APEN and/or obtain a construction permit, regardless of emissions IF the regulation has been incorporated into Colorado regulations

14. Part C: Operating Permits • Applies to: • Any PSD/NSR major source • Major HAP source (10 tpy individual, 25 tpy all HAPs) • PTE > 100 tpy any regulated pollutant • Apply after source in operation • Renew every 5 years • Forms(!) • Application must list most air requirements that apply to source (applicable requirements)

15. Part C, con’t • Should not impose new requirements, except perhaps monitoring • Permit shield (can request for inapplicable requirements) • Application shield (shields from enforcement for not having an operating permit while application is processed). Application must be complete and timely to be granted.

16. Part D: Major Sources • Implements federal PSD and nonattainment NSR construction permit requirements • Based on PTE, not uncontrolled actuals • PSD application: project description, emission calculations & backup, best available control technology (BACT) analysis, air quality impact analysis (dispersion modeling for NAAQS compliance, PSD increment consumption, air quality related values), and growth, soils, and vegetation impact analysis

17. Part D, con’t • PSD review required for pollutants emitted in significant amounts if source is major for any pollutant • Nonattainment NSR application: Project description, emission calculations & backup, lowest achievable emission rate (LAER) analysis, emission offsets, certification that owner’s other sources are compliant • Nonattainment NSR only applies to the pollutant or pollutants that the area is nonattainment for (major is > 100 tpy)

18. Part D, con’t • New/modified source may be PSD for some pollutants and nonattainment NSR for others • Major source permitting is a lengthy process (usually 1 year+ from submission of application) • Permit must be obtained before commence construction • Tailoring Rule: Increases threshold for PSD permitting for GHGs from 100/250 tpy to 100,000 tpy CO2e (major) and sets a significance level at 75,000 tpy CO2e

19. CDPHE Initiatives • Stakeholder process 2013 • Raise APEN thresholds to 2 tpy attainment & nonattainment • Simplify NCRP APEN requirements by eliminating A & B bins (threshold would be 1,000 lb/yr for all NCRPs) • Raise construction permit thresholds in both attainment & nonattainment areas to 25 tpy for all pollutants except lead • Get rid of catchall provision

20. Internal Combustion (IC) Engines • Engine source types: • On-road and off-road mobile sources (including cars, trucks, aircraft, water craft, locomotives, construction equipment, etc.) • Stationary engines • Determined by use, not by engine design or technology • Federal government regulates mobile source emissions (e.g., tailpipe standards for cars/trucks, nonroad engine standards, etc.) • Both state/local and federal government regulate stationary sources

21. Nonroad Engines • A type of mobile source that can become a stationary source (and vice versa) • Self-propelled, or propels another piece of equipment, portable, or transportable engines (wheels, skids, handles, etc.) • Requirements placed on manufacturers, not owners/ operators • BUT: If a nonroad engine (or replacement) remains at a single location (not just a single facility) for more than 12 months (or entire season for seasonal source), it becomes a stationary source, subject to stationary source regulations

22. Federal Stationary Engine Regulations • New/modified/reconstructed compression ignition (CI) (diesel) New Source Performance Standard (NSPS): 40 Code of Federal Regulations (CFR) 60, Subpart IIII • New/modified/reconstructed spark ignition(SI) NSPS: 40 CFR 60, Subpart JJJJ • Existing and new/reconstructed reciprocating IC engine (RICE) MACT: 40 CFR 63, Subpart ZZZZ. Applies at major and area (< major) HAP sources

23. Colorado Engines • 40 CFR 60, Subpart IIII has been incorporated into Colorado regulations • 40 CFR 60, Subpart JJJJ has not but may be incorporated next year • 40 CFR 63, Subpart ZZZZ has only been incorporated for major HAP sources; area source provisions not in Colorado regulations • Note: catchall provision only applies if regulation incorporated in Colorado regs

24. NSPS Subpart IIII: CI Engines • Applies to owners/operators/manufacturers of new/modified/reconstructedstationary CI engines: • (Excluding fire pumps) ordered after July 11, 2005 and manufactured after April 1, 2006 OR modified or reconstructed after July 11, 2005 • Fire pump engines ordered after July 11, 2005 and manufactured after July 1, 2006 OR modified or reconstructed after July 11, 2005

25. NSPS Subpart IIII: CI Engines • Applies to both emergency and non-emergency stationary engines • Excludes engines being tested at stationary test cell/stand • Notification, recordkeeping, reporting requirements • Emission limits • Use on-road (ultra low sulfur) diesel only for displacement <30 liters per cylinder (l/cyl)

26. NSPS Subpart IIII: CI Engines • Limitations on installing older engines (dates after which older engines cannot be installed) • Testing and monitoring requirements

27. NSPS Subpart JJJJ: SI Engines • Applies to owners/operators/manufacturers of new/modified/reconstructedstationary SI engines: • Ordered, modified, or reconstructed after June 12, 2006 • Manufactured after … dates depend on use, size, and type (ranges from July 1, 2007 to January 1, 2009) • Applies to both emergency and non-emergency stationary engines • Applies to engine burning any gaseous fuel as well as gasoline or LPG

28. NSPS Subpart JJJJ: SI Engines • Excludes engines being tested at stationary test cell/stand • Notification, recordkeeping, reporting requirements • Emission limits • Limitations on installing older engines (dates after which older engines cannot be installed) • Testing and monitoring requirements

29. RICE MACT Subpart ZZZZ • Applies to owners/operators of new and existingstationary RICE at both major and area sources of HAPs • In general, new stationary engines follow NSPS requirements • “New” for >500 hp engines at major sources is ordered/installed/reconstructed on or after December 19, 2002 • For other engines and area sources, generally June 12, 2006

30. RICE MACT, con’t • Existing stationary engines have requirements, including: • Recordkeeping, reporting, notifications • Emission limits • Testing & monitoring, etc. • Compliance date for existing SI RICE ≤500 hp at major HAP source and existing SI RICE at area sources is October 19, 2013

31. RICE MACT, con’t • Certain engines >500 hp located at major HAP sources are exempt • Commercial/residential/institutional emergency engines at area sources are exempt, with certain exceptions • Emergency engines are limited to 100 hours per year for non-emergency operation or they are no longer considered emergency engines

32. Colorado Engine Requirements • Colorado has additional control technology/emission standard requirements for existing, new/modified, and relocated natural gas RICE (see Regulation 7, XVI for ozone nonattainment area [control technology requirements] and XVII for statewide requirements) • Section XVII is designed to “gap fill,” engines subject to emissions control in a federal MACT or NSPS are exempt

33. Colorado, con’t • Section XVII includes emission standards for newor relocated engines > 100 hp and control technology requirements for existing engines (unless too expensive) • Regulation 6 NSPS relocation requirements: Under federal NSPS, moving an existing NSPS-type source into Colorado does not make it “new” under the federal rules

34. Colorado, con’t • However, the federal NSPS requirements in Regulation 6 are triggered by relocation of an NSPS-type source into the state so that an existing (used) NSPS-type source would have to meet the federal NSPS requirements for NEW affected facilities (state-only requirement) • Regulation 6 relocation requirement only applies to NSPS that have been incorporated into Colorado regulations (for engines, NSPS IIII; RICE MACT for major HAP sources but not NSPS JJJJ or RICE MACT for area HAP sources)

35. Colorado, con’t • Requirement was revised May 16, 2013 for engines because: • Add-on controls may be infeasible (or very expensive), especially for smaller engines • Was encouraging companies to keep old engines in state • For engines < 500 hp, there is a 5 year “grace period” (that is, you may relocate a <500 hp, < 5 year old engine into Colorado without triggering new emission standards) • Engines > 500 hp still trigger NSPS if relocated into Colorado as do engines older than 5 years

36. Boiler MACT • Promulgated December 2012 • 40 CFR 63, Subpart JJJJJJ (area sources), 40 CFR 63, Subpart DDDDD (major sources) • Does not apply to boilers at area sources that burn natural gas • Work practice standards, recordkeeping, reporting, emission limits (larger sources) • Existing area source boiler compliance: March 2014 • EPA having Webinars to explains the requirements in November: www.epa.gov/ttn/atw/boiler/boilerpg.html

37. Questions?