EPA NSR Chief Outlines NSR Changes at 2017 AWMA Conference

Raj Rao, EPA’s New Source Review Group Leader in the Qir Quality Policy Division of the EPA’s Office of Air Quality Planning and Standards, provided an outline of recent and possibly forthcoming changes to the NSR program at the Air & Waste Management Association's annual conference in June. Highlights of Mr. Rao’s remarks included the following:

PM2.5 NAAQS SIP Requirements Rule. The rule was published August 24, 2016, 81 Fed. Reg. 58010 and provides framework for both the 2012 and future PM2.5 NAAQS. It responds to the NRDC v. EPA case and requires SIPs and NSR to address all PM2.5 precursors—SO2, NOx, VOC, and ammonia. Defines “major stationary source” for PM2.5 and PM2.5 precursors for moderate nonattainment areas as 100 tons/year potential to emit and for serious nonattainment areas as 70 tons/year potential to emit. Establishes significant emission rates (SERs) for PM2.5 and three PM2.5 precursors (SO2, NOx and VOC) that would apply for modification at existing major stationary sources where no EPA-approved NNSR insignificance demonstration. Each state must develop an area-specific SER for ammonia. The rule also updates the Offset Interpretative Rule (Appendix S) to add precursor requirements and phases them in as follows: SO2 and NOx are already regulated; April 15, 2017 for VOC and ammonia, in which case phase-in may be delayed if state submits a precursor demonstration, then VOC and ammonia take effect on the later of April 15, 2017 or the date of disapproval of the precursor demonstration.

PM2.5 Precursor Demonstration Guidance. The draft guidance was issued in November 2016. The NNSR demonstration is separate from the general NAAQS demonstrations and relies upon sensitivity analyses based on air quality modeling of projected emissions increases resulting from new and modified major stationary sources growth in the area. EPA has received comments and is considering them, but the final guidance date is still “to be determined.”

Implementation of the 2015 Ozone NAAQS. Proposed rule published November 17, 2016, 81 Fed. Reg. 81276. Comment period closed on February 13, 2017, timing of final rule still “to be determined.” This proposal included an “inter-precursor trading” (IPT) of interest to many.

Draft Guidance on Significant Impact Levels (SILs) for Ozone and PM2.5 in PSD Program. This draft guidance was posted August 1, 2016 and had a 60-day comment period through September 30, 2016. In general, states and industry were supportive, environmental non-governmental organizations were opposed. EPA has spent considerable time on updating the technical and legal basis for SILs, including development of a new technical support document and a legal memorandum in support. General conclusions that can be shared at this time include:

NAAQS SILs are not class specific, so no need for different SILs for Class I or II areas
PM2.5 SIL promulgated in rule are 1.2 ug/m3 (24-hour) and 0.3 ug/m3 (annual).
New evaluation resulted in similar values of 1.3 ug/m3 (24-hour) and 0.2 ug/m3 (annual).
EPA must follow its rule, but state authorities have discretion to interpret annual impacts between 0.2 and 0.3 ug/m3.
Ozone SIL recommended at 1.0 ppb

All comments are still under consideration, with a final release date “to be determined.”

Draft Guidance on Modeled Emission Rates for Precursors (MERPs). In the recent revision to Appendix W that became final on May 22, 2017, EPA finalized a two-tiered demonstration approach for adding single-source impacts on ozone and secondary PM. EPA has provided the draft technical guidance as “only one of possible Tier I demonstration tools”. States and sources may use other tools or make other demonstrations. EPA has determined that values for precursors will vary across the United States “reflecting different sensitivities of an area’s air quality level to precursor emissions.” The draft guidance provides a framework for how to derive values for MERPs based on relevant existing or new area-specific modeling. The Guidance includes analyses of MERPS for several areas, but does not endorse a specific MERP value for each precursor. Mr. Rao noted:

If a permit applicant chooses to use MERP values provided in the guidance, applicant should include a narrative that provides a technical justification that the existing information is relevant to the project

EPA is currently considering comments and will “shortly” release a final version guidance.

Greenhouse Gas. Mr. Rao noted that EPA has issued a rule allowing rescission of certain PSD permits (80 Fed. Reg. 26183). It also has finalized a rule removing certain GHG provisions from the PSD and Title V rules that were vacated (80 Fed. Reg. 50199). On August 26, 2016, EPA proposed a rule on Revisions to the PSD and Title V GHG Permitting Regulations and Establishment of a SER for GHG Emissions under the PSD Program (81 Fed. Reg. 68110). This rule proposes the remaining changes to the PSD and Title V programs that, in EPA’s view, are needed to fully implement the D.C. Circuit’s amended judgment. EPA is currently reviewing comments and the final release date is “to be determined.”

Ambient Air. In comments, Mr. Rao noted that EPA has received many comments, inquiries and suggestions about the providing further definition or guidance on how “ambient air” is defined and used for modeling purposes in the PSD program. He indicated that the agency is actively looking at possibly issuing additional guidance in this area.