Proposed NSR Rules for Indian Country

1. EPA - New Source Review Proposed NSR Rules for Indian Country Raj Rao, Jessica Montanez, Wendy Namisnik OAQPS, USEPA

2. Here’s what we will cover • Purpose of NSR rules for Indian country • Highlights of the proposed minor NSR rule • Examples of minor NSR permitting • Highlights of the proposed major NSR rule • Example of major NSR permitting • Delegation, public participation, and administrative and judicial review • Process and timeline for final rulemaking • Commenting on the proposed rules

3. First, let’s recap NSR • Preconstruction permit program to manage growth in a controlled manner • Designed to protect public health and welfare as new pollution sources are built or existing sources are modified • Requires most new sources to be designed and built clean

4. Why do we need Federal NSR rules in Indian country? • Fill existing regulatory NSR program gaps in Indian country; currently no programs are in place for: • Minor NSR • Nonattainment major NSR EPA does currently implement the PSD program in Indian country • Provide a cost-effective and timely permitting mechanism • Level the economic playing field with States

5. How will Tribes benefit from the proposed Federal NSR rules? • Protect Tribal sovereignty from State incursion by clarifying jurisdiction • Provide equal opportunity for economic development • Establish clarity of requirements for sources • Create a timely mechanism for obtaining permits • Ensure that resources are protected through controlled growth • Build Tribal capacity • Supply potential model for Tribal Implementation Plan (TIP) development See appendix A for information on SIPs, TIPs, and FIPs • Allows tribes to administer the program through delegation

6. Specifics of the Minor NSR rule

7. What does the minor NSR rule apply to? • New minor sources • Sources with PTE equal to or above the minor NSR thresholds, but less than the corresponding major NSR threshold • Modifications at existing minor/major sources • When there is a physical or operational change at an existing source that is not subject to major NSR • Emissions increase will be calculated based on allowable emissions (i.e. “Allowable-to-allowable emissions test”- see appendix B for a definition of allowable emissions) • Synthetic minor sources, including Hazardous Air Pollutants (HAP) sources • Major sources seeking to limit potential to emit below the major source threshold Proposed rule includes flowcharts to help!

8. Minor NSR thresholds • Thresholds: cutoffs below which minor NSR does not apply to a new minor source or modification • Thresholds are lower in nonattainment areas. For example: • Ozone attainment areas – 10 tpy NOx • Ozone nonattainment areas – 5 tpy NOx • An analysis of stationary sources across the country, which evaluated the percentage of sources that would be exempt from these rules if the thresholds applied nationally, showed that: • Sources and modifications with emissions below the thresholds are inconsequential to attainment and maintenance of the NAAQS

9. Minor NSR thresholds (continued)

10. What are the minor NSR rule requirements? • Main requirements are: • Case-by-case control technology review • Air Quality Impact Analysis (AQIA) in rare cases • Monitoring, recordkeeping, and reporting as needed to assure compliance • Public participation, administrative and judicial review • Tribes may implement their own minor NSR program when EPA approves their Tribal Implementation Plan (TIP). • Tribes may request delegation of EPA’s NA minor NSR program.

11. Minor NSR permits • Typical/common type of permit – individual emissions units are issued enforceable allowable emissions limits (tpy) • Source-wide permit – a Plantwide Applicability Limitation (PAL) is issued for the entire source, regardless of the number of emissions units • Beneficial for sources needing flexibility to make rapid changes • Requires increased monitoring • General permit - a standard permit created by the permitting agency for common source categories, i.e. gas stations, dry cleaners, etc. • Synthetic minor source permits –major sources seeking to limit potential to emit to become synthetic minor sources

12. How would a source obtain a minor source permit? • Source submits a complete application (refer to 40 CFR 49.154(a)) • The reviewing authority: • Will perform a control technology review on a case-by-case basis • May require an Air Quality Impacts Analysis (AQIA) if they believe the source will have a significant impact on the NAAQS • Then, the reviewing authority: • Must determine within 45 days if application is complete enough to commence a technical review or request additional information • If the source does not receive a request for additional information or a notice of complete application within 50 days of the reviewing authority’s receipt of the application, the source application would be deemed complete • Will develop a draft permit and provide public notice seeking comments on the draft permit for a 30-day period once the application is complete • Will issue a final permit if the reviewing authority determines that the source application meets all applicable requirements. Otherwise, they will send the source a letter denying the permit and the reasons for the denial

13. Let’s apply what we’ve learned about minor NSR with some practical examples

14. Emit PM Emit PM Emit PM Emit PM Emit PM, CO, NOx, SO2, and VOC ROADWAYS Example 1: Asphalt Batch Plant • Source information: • Process capacity of 300 tons of asphalt/hour. • Dryer burner capacity of 60 MMBTU/hour. • Area information: • Area in attainment for all pollutants. • Permit information: • Source owner applying for a typical/common permit. http://www.carolinaasphalt.org/docs/presskit/CAPA_Asphalt_Process.PDF

15. Asphalt Batch Plant – Review • Reviewing authority reviews source information and performs case-by-case control technology review. It determines that to control: • PM/PM10: • The dryer will need a cyclone and a baghouse. • Cyclones remove larger abrasive particles to reduce the inlet loading of PM to other downstream collection devices. Baghouses trap particles by filtering gas streams through large cloths or fiberglass bags. • The screens/bins/mixer will need a capture system (hood). • The roadways will need dust suppressants (any chemical formulation applied to the ground to control emission of dust). • The conveyor transfer points will need shrouding (screen or cover that reduces the amount of particulate matter that flies away at transfer points). • The aggregate piles will not need to be controlled. • NOx, VOC, and CO: • Dryer and mixer have to combust natural gas or Liquid Petroleum Gas (LPG) with good combustion practices. • LPG is the propane, butane, or propane-butane mixtures derived from crude oil refining or natural gas fractionation. • SO2: • No controls needed. Pollutant being emitted in amounts lower than minor NSR threshold.

16. Emit PM Emit PM Emit PM Emit PM Emit PM, CO, NOx, SO2, and VOC ROADWAYS Asphalt Batch Plant - Permit • Reviewing authority determines that AQIA is not needed. • Reviewing authority develops draft permit. • Permit is subject to 30-day public comment period. • After the public review is finished, the reviewing authority issues the final permit. The highlights of this permit are: • For the baghouse: • Emission limits are placed on exhaust for PM/PM10, NOx, VOC, CO. • Initial compliance test will be required, with re-tests every 3 years. • Inspection and maintenance program http://www.carolinaasphalt.org/docs/presskit/CAPA_Asphalt_Process.PDF

17. Emit PM10 Emits VOCs Emits PM10 Emits PM10 and VOCs Emits PM10 Waste chips- fired boiler Emits PM10 Example 2: Minor Source PAL Permit for a Lumber Mill • Source Information: • See diagram. • Area information: • All pollutants are being emitted in minor amounts. • Permit Information: • Owner requests minor source PALs for PM10 and VOC to provide operational flexibility. • Minor source PALs will be established based on allowable emissions in tpy. http://geoheat.oit.edu/ http://plantsci.sdstate.edu/woodardh/Soils_and_Ag/Black_Hills/

18. Lumber Mill PAL – Review and Permit • Reviewing authority reviews source information and performs case-by-case control technology review. It determines that no controls are required for: • PM/PM10 and VOCs • Reviewing authority determines that AQIA is not needed. • Reviewing authority develops draft permit. • Permit is subject to 30-day public comment period. • After the public review is finished, the reviewing authority issues the final permit. The highlights of this permit are: • Owner may make any modifications at the source as long as total source emissions stay within the PAL limits • Monitoring will be done to assure compliance with the PALs based on: • Actual mass emissions for each 12-month period, rolled monthly • On site-specific emission factors developed through testing

19. Example 3:General Permit for a Natural Gas Gathering Facility • Source Information: • Such facility is generally comprised of compressors and related auxiliary equipment. • Compressors emit CO, NOx, PM10, SO2, VOC. • Permit Information: • EPA develops a general permit after going through public participation. • To qualify for coverage under this general permit, a new natural gas gathering facility may not exceed the following limits: • PM10 – 10 tpy • SO2 – 25 tpy • VOC – 25 tpy • CO – 95 tpy • NOx – 95 tpy http://www.eia.doe.gov/kids/energyfacts/sources/non-renewable/naturalgas.html

20. General Permit for Natural Gas Gathering Facility – Review and Permit • EPA determined for the natural gas gathering facility general permit that the following permit conditions are needed: • Burn natural gas in compressors. • To comply with PM10,VOC, SO2, CO, and NOx emissions limits. • Burn natural gas with a sulfur content less than 154 ppm and conduct periodic testing. • To comply with SO2 emissions limits. • Reviewing authority determines that AQIA is not needed. • Owner of planned new facility applies for coverage under the general permit. It includes: • An initial performance test for CO and NOx. • Reviewing authority sends a letter of approval (or disapproval). • If approved, owner posts notice of approval at the site and starts construction of the facility as permitted.

21. Plywood Example 4:Synthetic Minor Permit for a Wood (Plywood) Furniture Factory • Source Information: • PTE for VOC is 400 tpy at 24 hrs/day, 7 days/wk (8,760 hrs/yr). • Actual operations are typically 8 hrs/day, 5 days/wk (2,080 hrs/yr). • Area information: • Area in attainment for VOC and ozone. • Permit Information: • Owner requests a synthetic minor permit for VOC. http://www.forestlearn.org/mills/plywood/plytour/green_sorting.htm http://www.essexcoatings.com/

22. Wood (Plywood) Furniture Factory - Permit • At the request of the reviewing authority, source submits a screening modeling analysis to see if NAAQS are threatened. The analysis shows that the NAAQS are not threatened. • Reviewing authority develops draft permit. • Permit limits operating hours to 5,000 hrs/yr (reduction from 8,760 hrs/yr potential): • Reduces PTE to 230 tpy • Allows for increased utilization at the facility because the facility is actually operating at 2,080 hrs/yr. • Permit is subject to 30-day public comment period. • After the public review is finished, the reviewing authority issues the final permit. The highlights of this permit are: • Facility must track and record actual hours of operation to show that the 5,000 hrs/yr limit is being met.

23. Now let’s talk about the Major NSR rule

24. What does the major nonattaiment NSR rule apply to? • Applies to: • New major sources with PTE equal to or above the major NSR thresholds • Major modifications -any physical or operational change at a source that would result in a significant net emission increase of any regulated NSR pollutant • Major sources would be subject to the existing nonattainment major NSR rules for areas lacking an approved Part D plan – 40 CFR part 51, Appendix S Proposed rule includes flowcharts to help!

25. What does the nonattainment major NSR rule require? • Main requirements include: • LAER – the lowest emissions rate contained in the implementation plan and/or practically achievable for that type of source • Offsets at prescribed ratios – emissions reductions to offset the proposed increase from project • Public participation, administrative and judicial review • Tribes may implement their own major NA NSR program when EPA approves their TIP • Tribes may request delegation of EPA’s NA major NSR program.

26. Major NSROptions for offset waiver Economic Development Zone (EDZ) option • Major stationary sources and major modifications subject to this program may be exempted from the offset requirement if they are located in a zone targeted for economic development by the Administrator, in consultation with the Department of Housing and Urban Development (HUD). • Criteria for this waiver: • Source located in a geographical area which meets the criteria for an EDZ, and the Administrator has approved a request from a tribe and declared the area as an EDZ • Tribe demonstrates that the new permitted emissions will not interfere with attainment of the applicable NAAQS by the applicable attainment date.

27. Major NSROptions for offset waiver(continued) Appendix S, Paragraph VI option • Source exempt from offset requirement until attainment date for NAAQS passes • Criteria for this waiver: • Source will comply with implementation plan limits and will not interfere with the attainment date • EPA determines that these criteria are satisfied and publishes this finding in the Federal Register

28. Let’s apply what we’ve learned about major NSR with an example

29. 500 tpy SO2 • 50 tpy VOC • 30 tpy PM10 Which pollutants are subject to major nonattainment NSR permitting? Area in nonattainment for SO2 Area in marginal nonattainment for Ozone • Facts: • Volatile Organic Compounds (VOCs) are ozone precursors. Ozone is the criteria pollutant, not VOC • The tons per year (tpy) in the plume are the plant’s potential to emit these pollutants. Area in attainment for NOx New Plant

30. Example Solution Determine if the source is major by comparing the plant’s potential to emit for each nonattainment pollutant to the nonattainment major NSR threshold of 100 tpy. • The SO2 emissions are 500 tpy, which are greater than 100 tpy. Therefore, SO2 is subject to nonattainment major NSR. • VOCs are ozone precursors and since the area is in marginal nonattainment for ozone, we have to evaluate this pollutant for the major nonattainment NSR program. In this case, since the emissions of VOCs are lower than 100 tpy, the plant is not subject to nonattainment major NSR for VOC. • The NOx emissions are not evaluated for nonattainment major NSR because the area is in attainment for NOx. Remember, the plant expects to emit: SO2=500 tpy VOC=50 tpy NOx=30 tpy And the areas are designated: SO2=Nonattainment Ozone=Nonattainment NOx=Attainment

31. Delegation, Public Participation, andAdministrative and Judicial Review for both rules

32. Delegation • We encourage you to consider delegation of authority to assist EPA with administration of both rules • To apply for delegation, the tribe: • Must be recognized by the Secretary of Interior • Laws must provide adequate authority • Must demonstrate technical capacity and resources • EPA retains all enforcement authority • If the Tribe develops a TIP, it may use the final Tribal Minor and Major NA NSR rules as models

33. Public participation • Draft permit, application, and justification for permit issuance/denial available for inspection at: • EPA Regional Office • At least one location in the area, for example at the Tribal environmental office • Public notice with 30-day public comment period • Public notice may be posted at locations such as trading posts, libraries, post offices, etc., as appropriate • Opportunity for a public hearing, if sufficient interest

34. Administrative and judicial review • You may appeal the final permit if: • You commented on the draft permit; or • The grounds for appeal occurred after the public comment period ended • First, the person must appeal to EPA’s Environmental Appeals Board (EAB) • If denied by EAB, the person may appeal to Federal Court

35. What you can and should do next

36. First, you must understand the NSR Tribal rule making process and timeline • Proposal published in the Federal Register and public comment period commenced on August 21, 2006. • Public comment period, as originally proposed, ended on November 20, 2006(90 day comment period). • Public comment period has been extended for 60 more days. The official comment period now ends on January 19, 2007. • This is where you can make a difference. • WE ENCOURAGE YOU TO COMMENT! • Final rule will be published around: • Fall 2007

37. EPA wants your comments on the following specific minor source issues: • Is the proposed definition of modification appropriate? • Are the approach and proposed minor NSR thresholds appropriate? • Should all existing minor sources be required to: • Register only • Be subject to the rule • Be exempt from the rule • Should only existing synthetic minor sources be subject to the rule? • You are also encouraged to comment on any other issues you find relevant!

38. EPA wants your comments on the following specific minor source issues (continued): • Is the proposed permit issuance process appropriate? • Is proposed ‘allowable–to–allowable” test appropriate for quantifying emissions increase from modifications? • Is the proposal to allow “project netting” appropriate for minor NSR? • Is the proposed case-by-case control technology appropriate or should no controls be required for minor sources? Can other approaches achieve these purposes? • Is the proposed process of allowing a stationary source to become a synthetic minor appropriate? You are also encouraged to comment on any other issues you find relevant!

39. EPA wants your comments on the following specific minor source issues (continued): • Should section 112(g) case-by-case MACT determinations be reviewed through this minor NSR program? • Are the public participation requirements appropriate? • What do you think of the general permits and issuance process? • Are the two optionsfor reviewing initial permit decisions satisfactory? You are also encouraged to comment on any other issues you find relevant!

40. EPA wants your comments on the following specific major source issues: • Appendix S • Should sources subject to the major NSR program in Indian country be subject to the provisions of Appendix S? • NOTE: We will not entertain general comments on Appendix S provisions, since this transitional program has been implemented in States across the country for many years • Compliance certification • Should the source be required to certify that all their sources in the State where the proposed source is locating are in compliance, or that all their sources in all of Indian country are in compliance? You are also encouraged to comment on any other issues you find relevant!

41. EPA wants your comments on the following specific major source issues (continued): • Offset Waivers - options presented to address the lack of availability of offsets for tribes: • EDZ option • Is the criteria for identifying parts of Indian country as EDZs appropriate and/or should we consider any other criteria? • We seek comment on the approach of providing offset relief since we are proposing to have the Administrator consult with HUD only once to develop a general set of approval criteria. This means a consultation will not be required every time a tribe applies for its area of Indian country to be designated as an EDZ. • Appendix S, paragraph VI option • Is this an appropriate option for an offset waiver? • We are also requesting comment on other potential options for offset relief in Indian country. You are also encouraged to comment on any other issues you find relevant!

42. Finally, please submit your comments on the proposed NSR rules Submit your comments, identified by Docket ID No. EPA-HQ-OAR-2003-0076, using one of the following methods: • Federal eRulemaking Portal: http://www.regulations.gov Follow the on-line instructions for submitting comments • E-mail: a-and-r-docket@epamail.epa.gov • Fax: 202-566-1741 • Mail: Attention Docket ID No. EPA-HQ-OAR-2003-0076, U.S. Environmental Protection Agency, EPA West (Air Docket), 1200 Pennsylvania Avenue, Northwest, Mailcode: 6102T, Washington, DC 20460

43. Conclusion The two new proposed rules for Indian country attempt to fill existing regulatory gaps. EPA values your feedback regarding these rules. Please take the time to submit your comments! If you have any questions contact Jessica Montanez at 919-541-3407 or montanez.jessica@epa.gov.

44. Appendix ASIPs, TIPs, and FIPs • Implementation Plans – a set of programs and regulations developed by the appropriate regulatory agency in order to assure that the NAAQS are attained and maintained. These plans can be developed by the state, tribe, or EPA, depending on which has jurisdiction in a particular area. For that reason, there are three kinds of implementation plans: • State Implementation Plan (SIP) – plan that reflects each state’s particular needs and air quality issues, but that must meet certain federal standards. The EPA’s requirements for SIPs are laid out in 40 CFR part 51. If a state fails to submit an approvable SIP within the schedules provided in the CAA, sanctions are imposed on the state. • Tribal Implementation Plan (TIP) - a tribe’s plan for improving for maintaining or improving its air quality. A TIP can be designed to respond to the tribe’s particular air quality goals and values, and can be changed over time to reflect the changing air quality concerns of the tribe. Section 301(d) of the CAA as amended in 1990 and as implemented through the Tribal Air Rule (TAR), provides for tribal implementation of CAA programs. • Federal Implementation Plan (FIP) – plan that assures that the NAAQS are attained and maintained when a state fails to or a tribe elects not to develop their implementation plan respectively. EPA has the responsibility under the CAA to ensure that public health and the environment are protected.

45. Appendix BAllowable Emissions Allowable emissions – the emissions rate calculated using the maximum rated capacity of the source (unless the source is subject to federally enforceable limits which restrict the operating rate, or hours of operation, or both) and the most stringent of the following: • Applicable standards as set forth in 40CFR parts 60 and 61; • Any applicable SIP or TIP emissions limitation, including those with a future compliance date; or • The emissions rate specified as a federally enforceable permit condition, including those with a future compliance date.