New Source Review

1. New Source Review NSR Reforms Oklahoma Department of Environmental Quality Air Quality Council Presented by Matt Paque, Attorney, ODEQ - AQD April 20, 2005

2. Federal New Source Review (NSR) Program • Established by the 1977 Clean Air Act Amendments • To ensure that new major stationary sources and major modifications • Install state-of-the-art pollution controls • Assess air quality impacts • Protect against violations of health-based air quality standards

3. New Sources • A new source with a Potential to Emit (PTE) at or above the applicable threshold amount “triggers,” or is subject to NSR.

4. “Major Modification” “Any physical change in, or change in the method of operation of a [existing] stationary source which increases the amount of any air pollutant emitted by such source or which results in the emission of any air pollutant not previously emitted.” Exclusions: • Routine maintenance, repair and replacement. • Changes that do not result in a significant emissions increase.

5. “Major Modification” A project is a major modification for a regulated NSR pollutant if it causes: (1) A significant emissions increase at the project; (2) A significant net emissions increase at the source.

6. NSR Reform RulesPublished December 31, 2002 • Final Rules (67 FR 80186) • Revision to Major Modification determination • Baseline Actual Emissions • Actual-to-Projected Actual Applicability Test • Plantwide Applicability Limitations (PALs) • Clean Units • Pollution Control Project (PCP)

7. OAC Chapter 100 • ODEQ/AQD is working to propose changes to the Oklahoma Air Pollution Control Rules that will incorporate the NSR Reforms as well as earlier EPA NSR rulemakings.

8. Revision to Major Modification Determination • Two changes to existing NSR regulations that will affect how to calculate emissions increases to determine whether projects trigger NSR requirements: • “Baseline Actual Emissions” changes the method for determining the source’s baseline emissions prior to a project. • “Actual-to-Projected Actual Applicability Test” changes the method for estimating the emissions after the project.

9. Baseline Actual Emissions • Baseline actual emissions are based on any consecutive two-year period within the 5 years immediately preceding the project. • Use same 24-month period for all emissions units involved in project and same 24-month period for each pollutant.

10. Baseline Actual Emissions • Used to calculate emissions increases for: • Modifications, to determine a modified unit’s pre-change baseline actual emissions as part of the new actual-to-projected actual applicability test. • For netting, to determine the pre-change baseline actual emissions of an emissions unit that underwent a physical or operational change within the contemporaneous period. • Also used to establish a PAL emissions cap.

11. Actual-to-Projected Actual Calculation • Source must make a projection of post-change annual emissions that are expected to result from the project. • Source must project changed unit’s maximum actual annual emissions rate that will occur during any one of the 5 years after the change, OR • 10-year period after the change (if the change involves an increase in the emissions unit’s PTE or capacity).

12. Projected Actual Emissions • Compares pre-change actual emissions to post-change “projected actual” emissions. • Avoids major NSR as long as difference in emissions is not significant. • Apply to changes at any existing emissions unit (includes replacement and reconstructed units).

13. Plant-wide Applicability Limits (PALs) • Plant-wide applicable limits (“PALs”) allow source owners to make changes to their facilities without obtaining a major NSR permit. • Once a PAL is established, plant may make any change without undergoing major NSR provided the emissions do not increase above the PAL “actual emissions” level (known as “actuals PALs”).

14. Clean Unit Certification • A source that underwent a post-1990 BACT/LAER review (or equivalent at time of installation) may be exempt from the standard NSR applicability test for certain future changes; even if emissions do increase, “no emissions increase will be deemed to occur.” • Available for up to 10 years after applying emissions controls, with a 10-year renewal possible.

15. Pollution Control Project (PCP) Exclusion • Designed to encourage projects at existing major sources that will result in a net overall reduction of air pollutants, even if there will be a significant increase of a collateral pollutant. • Old “primary purpose” test eliminated.

16. PCP Exclusion, cont’d What Qualifies for the Exclusion? • A project must pass two tests to qualify for the exclusion: • Environmentally Beneficial Test (shows benefits outweigh emissions increase). • Air Quality Test (project cannot result in an emissions increase that will cause a violation of a NAAQS or PSD increment or result in an adverse impact on Class I areas).

17. Revisions to 252:100 Subchapter 8, Part 7 • First proposal: July 20, 2005 - Air Quality Council meeting. • Revisions to Oklahoma Air Pollution Control Rules should be adopted by AQC and submitted to EPA by January 6, 2006.