Prevention of Significant Deterioration (PSD) NSR Program

1. Prevention of Significant Deterioration (PSD) NSR Program Candace Carraway U.S. Environmental Protection Agency Office of Air Quality Planning and Standards Draft July 2013

2. Major Topics • 4 steps to determine whether new construction or modification project is subject to PSD • Attainment status • PTE • Identify appropriate threshold (new construction) or emission rate (modification) • Compare proposed emissions to threshold or rate • When a modification may “net out” of PSD • Common applicability issues

3. Which Sources Might be Subject to the PSD Program? • Sources locating in areas attaining the National Ambient Air Quality Standards or areas that are unclassifiable • New major sources • Existing major sources making major modifications • Physical or operational changes at the source • Change should show significant net emissions increase • Some sources have been “grandfathered” or have opted for “synthetic minor permit”

4. How Do You Know When PSD Applies to a Source? • Assess attainment status of source’s geographic area • Determine source’s potential to emit (PTE) • Determine which thresholds or emissions rate applies • Determine if proposed emissions will exceed the applicable limit

5. Step 1: What is the Attainment Status of Source’s Geographic Area? • Determine if area is in attainment for each National Ambient Air Quality Standard (NAAQS) emitted by the source • To find this information: • Contact the appropriate EPA Regional office or applicable permitting authority • Check green book, http:/www.epa.gov/oaqps001/greenbk/map_download.html • Search an EPA database such as: www.epa.gov/air/data

6. Step 2: What is the Source’s Potential to Emit (PTE)? • The maximum capacity of source to emit a pollutant under its physical and operational design • Based on operating 24 hours a day, 365 days a year (8760 hours/year) • Can include effect of emissions controls, if enforceable by permit or: • State Implementation Plan (SIP), • Tribal Implementation Plan (TIP) or • Federal Implementation Plan (FIP) conditions

7. Calculating Emissions for NSR Applicability • All new and modified units are subject to applicability determinations • New units – based on PTE • Modified units – based on actual emissions (or potential if new unit) • Include all regulated NSR pollutants that the source emits • Source emissions are calculated using: • On-site measurement (e.g., stack testing) • Operational records of actual production • Vendor design capacity or rated capacity information • Material balance (i.e., mass balance) calculations • Emission factors • Emissions from all affected emissions units are added for each regulated NSR pollutant

8. Exercise on Potential to Emit • Create 2 or 3 short scenarios (ranging from easy to more difficult) and ask the class to break into small groups to work through them. Include a synthetic minor permit scenario if possible. This should take 15 minutes including discussion to wrap up. Purpose is to get participants to distinguish between PTE and actual emissions, how permits/SIPs can restrict PTE, build confidence.

9. 3. What is the Applicable PSD Threshold for New Sources? • 250 tons per year (tpy) for most source categories • 100 tpy, if part of the 28 listed source categories (and include fugitive emissions for these source categories) • Higher for Greenhouse Gases (GHGs) Determine source’s Potential to Emit (PTE) (per pollutant, may include fugitives) Is PTE ≥ applicable threshold? (per regulated NSR pollutant) Source not subject to PSD Start No Source subject to PSD Yes

10. Applicability: Thresholds Attainment Areas

11. Step 4: How Do You Determine if Proposed Emissions will Exceed the Applicable Limit ? • For each pollutant, compare the source’s PTE with applicable threshold • If PTE is equal to or higher than threshold, source is major for PSD • For example: • Source PTE for NO2 is 300 tpy • 300 tpy > 250 tpy, source is subject to PSD

12. Exercise on Applicability (100 tpy vs. 250 tpy) • Create short exercise that involves class determining whether 100 tpy or 250 tpy threshold applies to one or more sources. No need to break into groups, do this verbally. Should take 5 minutes or less. Refer class to slides 10 and 25 (in appendix)

13. Modifications that are Subject to the PSD Program • A major modification = a mod that results in (1) a significant emissions increase and (2) a significant net emissions increase, i.e., increase that is higher than the significant emissions rate (SER) • Step 1: calculate proposed emissions • Step 2: if emissions are greater than or equal to SER, calculate Net Emissions Increase to see if it is greater than or equal to SER Are Proposedmodification emissions ≥ SER?(per pollutant) Determine Source’s Net Emissions Increase (NEI), (per pollutant) Modification is a major modification and subject to Major NSR Is the NEI ≥ SER? Start Yes Yes No Modification not subject to Major NSR No

14. Applicability: Modifications • Significant Emission Rate (SER) – emissions rate threshold in tpy, by pollutant • NEI = Sum of contemporaneous emissions increases and decreases to the proposed modification emissions increase/decrease • Under PSD, contemporaneous period starts 5 years before the source commences construction and ends when the source commences operation Are Proposedmodification emissions ≥ SER?(per pollutant) Determine Source’s Net Emissions Increase (NEI), (per pollutant) Modification is a major modification and subject to Major NSR Is the NEI ≥ SER? Start Yes Yes No Modification not subject to Major NSR No

15. Calculating a Project’s Emissions Increases • Emissions are based on actual emissions • Actual emissions = projected emissions after the change minus baseline emissions before the change (actual-to-projected-actual test) • Projected emissions: max. annual emissions (tpy) that will occur during any one of 5 yrs after project • If unit was added, emission increase based on PTE • Include fugitives if source is part of the 28 source category list

16. Determining Net Emissions Increase (NEI) • NEI = Sum of contemporaneous emissions increases and decreases to the proposed modification emissions increase • Sum of contemporaneous emissions increases and decreases to the proposed modification increase • NEI = PMEI + CEI – CED (ERC) where: • PMEI – Proposed modification emissions increase • CEI – Creditable emissions increase • CED – Creditable emissions decreases • ERC – Emissions reduction credit(s) • Under PSD, contemporaneous period starts 5 years before the source commences construction and ends when the source commences operation • If NEI is greater than SER, source is major

17. Exercise on Determining if a Modification is Major • Create fairly simple exercise that gets class to review proposed mod against the relevant SER. 10 minutes or less.

18. In What Other Circumstances Can a Source be Subject to PSD? • Once it is determined that a source is major for PSD, source also has to review pollutants that are below the thresholds by comparing PTE to Significant Emissions Rate (SER) • Pollutants for which the area is in attainment (NAAQS) • Other pollutants • Emissions equal to or higher than SER make pollutant also subject to PSD • Concept known as “Major for one Major for all”

19. Common Problem Areas • Facilities may try to split major modifications into multiple “minor” modifications • Facilities may insist that their multiple emissions units are not part of the same “source” for PSD purposes • Facilities may try to use emission decreases for netting that are not creditable (i.e., not federally enforceable) • Facilities may try to use emission decreases for netting that were required by rules or consent decrees

20. Defining the New Source • Includes all related activities classified under the same 2-digit SIC code number • Has the same owner or operator • Is located on contiguous or adjacent properties • Includes all support facilities

21. Example • Review situation where facility took the position that it was several sources, including how the permitting agency resolved the issue and its justification

22. Final Applicability Exercise • Create a scenario to wrap up all the major concepts involved in applicability • Divide class into small groups to complete exercise; should allocate 30 minutes for this

23. Summary • 4 step process used to determine if new construction or modification is subject to PSD • PSD threshold for new construction is based on PTE • PSD emission rate (SER) is based on actual emissions • Higher thresholds and SER apply to Greenhouse gases • Potential applicability issues of concern: • “sham” minor modifications • disaggregation of emissions units • netting

24. Appendix

25. 28 Source Categories

26. Significant Emission Rates (SERs) SER– a rate of emissions that would equal or exceed any of the following rates: Notwithstanding the above, any emissions rate or any net emissions increase associated with a major stationary source or major modification, which could construct within 10 km of a Class I area, and have an impact on such area equal to or greater than 1 g/m3 (24-hour average)

27. PSD Thresholds for GHGs (Permits issued on or after July 1, 2011) • PSD applies to GHGs, if: • The source is otherwise subject to PSD (for another regulated NSR pollutant) and • The source has a GHG PTE equal to or greater than 75,000 tpy CO2e • OR source has a GHG PTE equal to or greater than: • 100,000 tpy CO2e, and • 100/250 tpy mass basis

28. Calculating GHG Emissions on a Mass Basis and CO2e Basis • To compute the mass basis of GHG emissions, simply add the tpy for each GHG that is emitted from the facility • To compute the CO2e basis, first multiply the emissions of each GHG times its Global Warming Potential (GWP) value. Then add the tpy of all the GHGs. • Each GHG is assigned a value based on its Global Warming Potential (GWP) with the higher values going to the pollutants that have the most serious GWP

29. Example Calculation • Assume a proposed emissions unit emits 3 of the six GHG compounds in the following amounts: • 50,000 tpy of CO2 (GWP = 1) • 60 tpy of methane (GWP = 21) • 3 tpy of PFC-14 (a perfluorocarbon) (GWP = 6,500) • GHGs mass-based emissions: • 50,000 tpy +60tpy + 3 tpy = 50,063 tpy • CO2e-based emissions: • (50,000 tpy x 1) or 50,000 tpy, plus • (60 tpy x 21) or 1,260 typ, plus • (3 tpy x 6,500) or 19, 500 • Total: 70,760 tpy

30. Major Modifications and GHGs (for Permits Issued after July 1, 2011) PSD applies to GHGs if: • Modification is otherwise subject to PSD (for another regulated NSR pollutant), and has a GHG emissions increase and net emissions increase • Equal to or greater than 75,000 tpy CO2e, and • Greater than 0 tpy mass basis • OR BOTH: • The existing source has a PTE equal to or greater than: • 100,000 tpy CO2e and • 100/250 tpy mass basis • Modification has a GHG emissions increase and net emissions increase: • Equal to or greater than 75,000 tpy CO2e and • Greater than 0 tpy mass basis • OR BOTH: • The source is an existing minor source for PSD, and • Modification alone has actual or potential GHG emissions equal to or greater than: • 100,000 tpy CO2e, and • 100/250 tpy mass basis