Prevention of Significant Deterioration (PSD) and Nonattainment New Source Review (NSR): Reconsideration of Inclusion of Fugitive Emissions, 77882-77902 [E8-29998]
Download as PDF
<![CDATA[
77882
Federal Register / Vol. 73, No. 245 / Friday, December 19, 2008 / Rules and Regulations
AGENCY: Environmental Protection
Agency (EPA).
ACTION: Final rule.
Source Review (NSR) Improvement
rules to change the requirements of the
major NSR programs regarding the
treatment of fugitive emissions.
Specifically, this final rule requires that
fugitive emissions be included in
determining whether a physical or
operational change results in a major
modification only for sources in the
source categories that have been
designated through rulemaking
pursuant to section 302(j) of the Clean
Air Act (Act). Also, this action
elaborates on guiding principles for
determining fugitive emissions for
purposes of NSR and title V permitting.
SUMMARY: The EPA is finalizing
revisions to the December 31, 2002 New
DATES: This final rule is effective
January 20, 2009.
ENVIRONMENTAL PROTECTION
AGENCY
40 CFR Parts 51 and 52
[EPA–HQ–OAR–2004–0014, FRL–8752–4]
RIN 2060–AM91
Prevention of Significant Deterioration
(PSD) and Nonattainment New Source
Review (NSR): Reconsideration of
Inclusion of Fugitive Emissions
FOR FURTHER INFORMATION CONTACT: Mr.
Joseph Mangino, Air Quality Policy
Division, Office of Air Quality Planning
and Standards (C504–03),
Environmental Protection Agency,
Research Triangle Park, NC 27711,
telephone number: (919) 541–9778; fax
number: (919) 541–5509, e-mail address:
mangino.joseph@epa.gov.
SUPPLEMENTARY INFORMATION:
I. General Information
A. Does this action apply to me?
Entities potentially affected by this
action include sources in all industry
groups. The majority of sources
potentially affected are expected to be in
the following groups.
Industry group
SIC a
NAICS b
Electric Services ......................................................................................
Petroleum Refining ..................................................................................
Industrial Inorganic Chemicals ................................................................
491 .....................
291 .....................
281 .....................
Industrial Organic Chemicals ..................................................................
286 .....................
Miscellaneous Chemical Products ..........................................................
Natural Gas Liquids .................................................................................
Natural Gas Transport .............................................................................
Pulp and Paper Mills ...............................................................................
Paper Mills ...............................................................................................
Automobile Manufacturing .......................................................................
289
132
492
261
262
371
Pharmaceuticals ......................................................................................
Mining ......................................................................................................
Agriculture, Fishing and Hunting .............................................................
283 .....................
211, 212, 213 ....
111, 112, 113,
115.
221111, 221112, 221113, 221119, 221121, 221122
324110
325181, 325120, 325131, 325182, 211112, 325998,
331311, 325188
325110, 325132, 325192, 325188, 325193, 325120,
325199
325520, 325920, 325910, 325182, 325510
211112
486210, 221210
322110, 322121, 322122, 322130
322121, 322122
336111, 336112, 336211, 336992, 336322, 336312,
336330, 336340, 336350, 336399, 336212,
336213
325411, 325412, 325413, 325414
21
11
.....................
.....................
.....................
.....................
.....................
.....................
a Standard
b North
Industrial Classification.
American Industry Classification System.
Entities potentially affected by the
subject rule for this proposed action also
include state, local, and tribal
governments.
B. How Is This Preamble Organized?
The information presented in this
preamble is organized as follows:
I. General Information
A. Does this action apply to me?
B. How is this preamble organized?
II. Background
A. What is major New Source Review?
B. What sources are subject to major NSR?
C. What are fugitive emissions, and how do
they figure into major NSR applicability?
D. What is the basis for and history of
EPA’s treatment of fugitive emissions in
major NSR applicability determinations?
E. Why did EPA reconsider this aspect of
the December 2002 NSR Improvement
final rulemaking?
III. What is included in this final action?
A. What are the results of EPA’s
reconsideration?
B. What are EPA’s revisions to the major
NSR regulations?
C. What is the effect of this action on the
minor NSR program?
VerDate Aug<31>2005
17:58 Dec 18, 2008
Jkt 217001
IV. What is the rationale for this final action?
A. The Newmont Petition
B. Policy and Legal Rationale
V. When will these changes take effect in the
federal PSD Program and will states be
required to revise their State
Implementation Plans (SIPs) to
incorporate this proposed action?
VI. What are the guiding principles for
determining fugitive emissions?
VII. Statutory and Executive Order Reviews
A. Executive Order 12866: Regulatory
Planning and Review
B. Paperwork Reduction Act
C. Regulatory Flexibility Analysis
D. Unfunded Mandates Reform Act
E. Executive Order 13132: Federalism
F. Executive Order 13175: Consultation
and Coordination with Indian Tribal
Governments
G. Executive Order 13045: Protection of
Children from Environmental Health and
Safety Risks
H. Executive Order 13211: Actions That
Significantly Affect Energy Supply,
Distribution, or Use
I. National Technology Transfer and
Advancement Act
J. Executive Order 12899: Federal Actions
to Address Environmental Justice in
PO 00000
Frm 00002
Fmt 4701
Sfmt 4700
Minority Populations and Low-Income
Populations
K. Congressional Review Act
VIII. Judicial Review
IX. Statutory Authority
II. Background
A. What is Major New Source Review?
The major NSR program is mandated
by parts C and D of title I of the Act.
Major NSR is a preconstruction review
and permitting program applicable to
new or modified major stationary
sources (major sources) of air pollutants
regulated under the Act. In areas not
meeting National Ambient Air Quality
Standards (NAAQS) and in ozone
transport regions (OTR), the program is
implemented under the requirements of
part D of title I of the Act. We call this
program the ‘‘nonattainment’’ major
NSR program. In areas meeting NAAQS
(‘‘attainment’’ areas) or for which there
is insufficient information to determine
whether they meet the NAAQS
(‘‘unclassifiable’’ areas), the NSR
requirements under part C of title I of
E:\FR\FM\19DER2.SGM
19DER2
Federal Register / Vol. 73, No. 245 / Friday, December 19, 2008 / Rules and Regulations
the Act apply. We call this program the
Prevention of Significant Deterioration
(PSD) program. Collectively, we also
commonly refer to these programs as the
major NSR program. These regulations
are contained in 40 CFR 51.165, 51.166,
52.21, 52.24, and appendix S to part 51.
B. What sources are subject to major
NSR?
Major NSR applies to (1) construction
of new major sources, and (2) major
modifications at existing major sources.
In either case, the initial step in
assessing applicability is to determine
whether the source in question qualifies
as a ‘‘major source.’’ A proposed or
existing source qualifies as a major
source if it ‘‘emits or has the potential
to emit’’ a regulated NSR pollutant in an
amount greater than the specified
annual threshold. We define ‘‘potential
to emit’’ (PTE) as the maximum capacity
of a source to emit a pollutant under its
physical and operational design, taking
into account any physical or operational
limitations on the source that are
enforceable as a practical matter. (See,
for example, § 52.21(b)(4) for the full
definition of PTE.)
If a proposed new source’s PTE is
greater than the applicable major source
threshold for one or more regulated NSR
pollutants, it is subject to
preconstruction review under major
NSR. For the PSD program, the major
source threshold is 100 tons per year
(tpy) for sources in any of 28 source
categories listed in the regulations, and
250 tpy for any other type of source.
(See §§ 51.166(b)(1) and 52.21(b)(1) for
the full definition of ‘‘major stationary
source’’ under PSD.) The major source
threshold under nonattainment major
NSR is generally 100 tpy, but is lower
for some pollutants in nonattainment
areas classified as serious, severe, or
extreme. (See § 51.165(a)(1)(iv) for the
full definition of ‘‘major stationary
source’’ under nonattainment major
NSR.) These same major source
thresholds also apply to modifications
at existing minor sources where the
modification by itself has potential
emissions in excess of the applicable
threshold.
If an existing major source (i.e., an
existing source with actual emissions
and/or PTE greater than the applicable
major source threshold) is planning a
physical or operational change, the
project is subject to review under major
NSR if it is a ‘‘major modification.’’ A
physical or operational change is a
major modification if it meets both of
the following two criteria: 1
1 On
October 20, 2005, we proposed different
major NSR applicability procedures for
VerDate Aug<31>2005
17:58 Dec 18, 2008
Jkt 217001
• The physical or operational change,
taken by itself, would result in a
significant increase in emissions of a
regulated NSR pollutant; and
• The physical or operational change,
taken together with other,
contemporaneous emissions increases
and decreases at the source, would
result in a significant net emissions
increase.
The level of emissions that is
considered ‘‘significant’’ varies by
pollutant and, in some cases, by a
nonattainment area’s classification. For
example, an increase of 40 tpy is
significant for sulfur dioxide, while 0.6
tpy of lead is considered a significant
increase. (See §§ 51.166(b)(23) and
52.21(b)(23) for the full definition of
‘‘significant’’ under PSD and
§ 51.165(a)(1)(x) for the full definition
under nonattainment major NSR.) In
determining the increase in emissions
from a physical or operational change,
new emissions units are evaluated at
their PTE, while existing and
replacement units are generally
evaluated by comparing their baseline
actual emissions before the physical or
operational change to their projected
actual emissions after the change.
C. What are fugitive emissions, and how
do they figure into major NSR
applicability?
For purposes of major NSR, we define
‘‘fugitive emissions’’ as emissions that
could not reasonably pass through a
stack, chimney, vent, or other
functionally equivalent opening. (See,
for example, § 52.21(b)(20).) Examples
of fugitive emissions include
windblown dust from surface mines and
volatile organic compounds (VOCs)
emitted from leaking pipes and fittings
at petroleum refineries.
Quantifiable fugitive emissions are
included in a stationary source’s PTE
when determining whether the source is
a major source only if they are emitted
from one of the source categories
specifically listed in the major NSR
regulations. This is consistent with
section 302(j) of the Act, and is made
clear in the definition of ‘‘major
stationary source’’ that is found in the
major NSR regulations. (See, for
example, § 52.21(b)(1)(iii).)
Conversely, under the 2002 NSR
rules, fugitive emissions, to the extent
quantifiable, are included in
determining whether a physical or
operational change is a major
modification (i.e., in calculating the
resulting emissions increase and net
modifications at electric generating units. (See 70
FR 61081.) Our rulemaking effort for such units is
ongoing.
PO 00000
Frm 00003
Fmt 4701
Sfmt 4700
77883
emissions increase), regardless of the
source category that the emission source
belongs to. This is the case because the
definitions of the terms ‘‘projected
actual emissions’’ and ‘‘baseline actual
emissions’’ under the 2002 NSR rules,
which are the definitions used to
calculate emission increases at existing
units, include quantifiable fugitive
emissions. (See §§ 52.21(b)(41)(ii)(b) and
52.21(b)(48)(ii)(a).) In our November 13,
2007 (72 FR 63850, November 13, 2007)
notice we proposed to modify this
aspect of the current NSR rules to take
a consistent approach as to the
inclusion of fugitive emissions in
threshold major source and major
modification determinations.
D. What is the basis for and history of
EPA’s treatment of fugitive emissions in
major NSR applicability
determinations?
Section 302(j) of the Act sets out the
definition of ‘‘major stationary source’’
that, along with several other provisions
of the Act, provides the basis for the
definitions used in the major NSR
regulations. The definition in section
302(j) specifies that fugitive emissions
are included in major source
determinations only for source
categories that EPA specifies through
rulemaking. As discussed below, EPA
enacted regulations pursuant to section
302(j) that specify the source categories
for which fugitive emissions are
included in the major source
determination and has listed these
source categories in the ‘‘major
stationary source’’ definitions. However,
the Act is silent regarding the treatment
of fugitive emissions for purposes of
determining whether a physical or
operational change is a major
modification. Below, we discuss the
history of this issue leading up to this
final action.
We first created the list of source
categories for which fugitive emissions
are included in major source
determinations (the ‘‘section 302(j) list’’)
in the final PSD and nonattainment
major NSR rules issued in 1980 on
remand from the DC Circuit. (See 45 FR
52676, August 7, 1980.) The court
remanded our initial major NSR rules
for a variety of reasons, including our
failure to follow the requirements of
section 302(j) in promulgating a partial
exemption for fugitive dust. (See
Alabama Power v. Costle, 636 F.2d 323,
369–370 (DC Cir. 1979).)
The promulgated section 302(j) list
included the source categories listed in
section 169(1) of the Act, which is the
definition of ‘‘major emitting facility’’
for purposes of PSD. Under that
definition, the major source threshold
E:\FR\FM\19DER2.SGM
19DER2
77884
Federal Register / Vol. 73, No. 245 / Friday, December 19, 2008 / Rules and Regulations
for the listed source categories is 100
tpy, rather than the 250 tpy threshold
that applies to other categories of
sources. In the preamble to the 1980
major NSR rules, we noted that the
Alabama Power court stated that
‘‘Congress’’ intention, in establishing
the list of source categories in section
169(1) of the Act, was to identify
facilities which, due to their size, are
financially able to bear the substantial
regulatory costs imposed by the PSD
provisions and which, as a group, are
primarily responsible for emission of
the deleterious pollutants that befoul
our nation’s air.’’ (See 45 FR 52691,
August 7, 1980.) In light of that intent,
we determined that as a matter of
policy, it would be appropriate to count
all emissions-including fugitive
emissions-in threshold calculations of
major NSR applicability for those source
categories. (Again, see 45 FR 52691,
August 7, 1980.) In doing so, we
indicated that our listing decisions
would be based on whether sources in
the category have the potential to
degrade air quality significantly. We
also indicated that we would consider
information raised by commenters that
showed that unreasonable
socioeconomic impacts relative to the
benefits would result from subjecting
the sources to the relevant PSD or
nonattainment programs.
In addition to the source categories
listed in section 169(1), based on
application of these criteria, we
included on the section 302(j) list ‘‘any
other stationary source category which,
as of August 7, 1980, is being regulated
under section 111 or 112 of the Act.’’
We noted in the 1980 preamble that
categories of sources are regulated under
section 111 (New Source Performance
Standards or NSPS) or 112 (National
Emission Standards for Hazardous Air
Pollutants or NESHAP) on the basis of
a determination that their emissions
seriously and adversely impact ambient
air quality. We therefore determined
that it was appropriate to include their
fugitive emissions in the threshold
calculations for purposes of major NSR
applicability. We included the August 7,
1980 cutoff date because we believed
that sources not regulated by NSPS or
NESHAP before the promulgation date
of the major NSR rules could not have
been afforded a meaningful opportunity
to comment on the inclusion of their
fugitive emissions in threshold
applicability determinations for the
source category.
In the preamble to the 1980 NSR
rules, we explained that the Alabama
Power court determined that the
‘‘substantive preconstruction review
and permitting requirements of section
VerDate Aug<31>2005
17:58 Dec 18, 2008
Jkt 217001
165 ‘apply with equal force to fugitive
emissions and emissions from industrial
point sources,’ ’’ but went on to explain
that this meant only that ‘‘section 165
requires that fugitive emissions be taken
into account in determinations of
whether NAAQS or allowable
increments will be violated * * * and
that fugitive emissions be subjected to
BACT requirements * * *.’’ (See 45 FR
52691, August 7, 1980.) Thus, in the
preamble to the 1980 rules, we
analytically grouped fugitive emissions
for purposes of the major source
definition and major modifications
under the rubric of ‘‘threshold
calculations.’’ (See 45 FR 52690–91,
August 7, 1980.)
However, the 1980 NSR regulations
on their face require fugitive emissions
to be included in threshold applicability
determinations for any project, but then
exempt from the relevant PSD or
nonattainment requirements any project
that (1) would be ‘‘major’’ only if
fugitive emissions were included and
(2) does not belong to one of the
categories specifically listed pursuant to
the section 302(j) rulemaking. (See, for
example, § 52.21(i)(4)(vii) as
promulgated in 1980 at 45 FR 52739,
August 7, 1980, respectively. See also
the discussion at 49 FR 43204, October
26, 1984.) Thus, in the 1980 rules, we
included the section 302(j) list in a
provision that exempted from PSD
permitting requirements ‘‘a particular
major stationary source or major
modification, if * * * [t]he source or
modification would be a major
stationary source or major modification
only if fugitive emissions, to the extent
quantifiable, are considered in
calculating the potential to emit of the
stationary source or modification and
the source does not belong to [any of the
categories in the section 302(j) list].’’
(See §§ 52.21(i)(4), (i)(4)(vii), 45 FR
52738–52739, August 7, 1980.) A
similar exclusion applied in the
nonattainment major NSR context. (See
§ 51.18(j)(4), 45 FR 52746, August 7,
1980.) In our response to a petition for
reconsideration of the 1980 rules
submitted on behalf of the American
Mining Congress, we continued this
approach, stating that ‘‘EPA * * *
intended to establish that any source
which would be ‘major’ only if fugitive
emissions were taken into account is not
to be considered ‘major’ for any PSD
purpose, unless the source belongs to
one of the categories on the list which
now appears in [§ ]52.21(i)(4)(vii).
Similarly, EPA intended to establish
that any modification that would be
‘major’ only if fugitive emissions were
taken into account is not to be
PO 00000
Frm 00004
Fmt 4701
Sfmt 4700
considered ‘major’ for any PSD purpose,
unless the source * * * belongs to one
of the categories on that list.’’ Further,
we committed to amend the regulations
to conform them to these intentions.
(See letter from Douglas M. Costle, EPA
Administrator, to Robert T. Connery,
Holland & Hart, January 19, 1981.)
On October 26, 1984 (49 FR 43202,
October 26, 1984) we affirmed the
interpretation that we had stated in the
1980 NSR rulemaking. (See 49 FR
43208, October 26, 1984.) We also
added NSR regulatory provisions that
the fugitive emissions of a stationary
source shall not be included in the
threshold determination of whether it is
a major stationary source unless the
source belongs to one of the categories
of sources identified by EPA in its
section 302(j) rulemaking. (See 49 FR
43209–10, October 26, 1984.)
In a companion notice published on
October 26, 1984 (49 FR 43211, October
26, 1984), we solicited public comment
on an ‘‘interpretive ruling’’ regarding
section 302(j) of the Act as it relates to
the review of physical or operational
changes involving fugitive emissions.2
In this notice, we observed that in our
1980 NSR rulemaking and when
proposing amendments in 1983, we had
assumed that the rulemaking
requirement in section 302(j) regarding
source categories for which fugitive
emissions should be considered applies
to modification determinations as well
as to threshold major source
determinations. However, in this 1984
interpretive proposal, we stated that we
believed our prior assumption in this
regard was incorrect. We proposed to
include fugitive emissions for sources in
all source categories, to the extent
quantifiable, when determining whether
a physical or operational change meets
the significance thresholds for a
modification for purposes of major NSR.
(See 49 FR 43213–14, October 26, 1984.)
On February 28, 1986 (see 51 FR
7090, February 28, 1986), we reopened
the comment period to receive further
comment on several of the issues
addressed in our October 26, 1984
proposal. The comment period ended
April 9, 1986. Comments on this
proposal are captured in legacy docket
A–84–33.
On November 28, 1989 (see 54 FR
48870, November 28, 1989), we
finalized our 1984 interpretation and
concluded that the section 302(j)
limitation on including fugitive
emissions applies to the threshold
2 This was an ‘‘interpretive ruling’’ in that we
proposed to change our previous interpretation of
the Act. To put the interpretive ruling into effect,
we chose not to finalize the proposed revision to
the major modification definition.
E:\FR\FM\19DER2.SGM
19DER2
Federal Register / Vol. 73, No. 245 / Friday, December 19, 2008 / Rules and Regulations
determination of whether a source is a
major source, but not to the threshold
determination of whether a physical or
operational change constitutes a major
modification. We pointed out that the
language of section 302(j) explicitly
attaches the rulemaking requirements
only to existing or proposed major
sources, and says nothing about major
modifications to existing sources. We
also noted that the PSD and
nonattainment major NSR definitions of
‘‘modification’’ in section 169(2)(C) and
section 171(4) of the Act, respectively,
merely cross-reference section 111(a)(4)
of the Act, which is the definition of
‘‘modification’’ in the NSPS provisions.
Because section 111(a)(4) defines
modification solely in terms of the total
amount of pollution that a change at a
source would produce, we believed that
Congress intended to establish no
qualitative distinction between stack
and fugitive emissions. Moreover, we
stated that the legislative history on
section 302(j) does not refer directly to
major modifications, although the
conference report on the PSD
construction and modification
definitions in section 169(2)(C) does
provide that Congress’ general intent
was ‘‘to conform to usage in other parts
of the Act’’ [123 Cong. Rec. H 11957,
col. 3 (daily ed.) (November 1, 1977)].
We reasoned that this passage referred
not only to section 111(a)(4), but to
usage of these terms in existing EPA
regulations under the NSPS and NSR
programs, which did not distinguish
between fugitive and stack emissions.
We concluded that an interpretation of
section 302(j) to exempt fugitive
emissions from modification
calculations ran counter to EPA’s
longstanding practice, and that if
Congress intended a legislative change
as to major modifications, it would have
said so explicitly. (See 54 FR 48882–83,
November 28, 1989.) We further
concluded that EPA’s longstanding
practice of considering the fugitive
emissions of all sources, not just those
on the section 302(j) list, when
determining whether a major
modification had occurred was
reasonable. (See 54 FR 48883, November
28, 1989.) In addition, we related that
our interpretation likely would not
impose new regulatory burdens because
fugitive emissions from physical or
operational changes would still be
excluded from applicability
determinations unless the changes
occurred at a major source. We reasoned
that under the Act and EPA regulations,
a modification is ‘‘major’’ and subject to
review only if the source at which it
would occur is also ‘‘major.’’ Hence, a
VerDate Aug<31>2005
17:58 Dec 18, 2008
Jkt 217001
modification to a source of
predominantly fugitive emissions that
does not belong to a currently listed
category could not be subject to review,
even if its fugitive emissions were taken
into account, because the source would
not be ‘‘major.’’ (See 49 FR 43213–14,
October 26, 1984.) Based on this
reasoning, our November 28, 1989 final
action reaffirmed our October 1984
proposed interpretation that the list of
fugitive emissions sources created
pursuant to section 302(j) does not
apply to major modifications and that
fugitive emissions for sources in all
source categories must be included
when determining whether a physical or
operational change meets the
significance thresholds for purposes of
major NSR.
In October 1990, we issued the draft
‘‘New Source Review Workshop
Manual,’’ 3 in which we stated that
under the federal PSD regulations,
fugitive emissions ‘‘are included in the
potential to emit (and increases in the
same due to modification)’’ if they occur
at one of the source categories listed
pursuant to section 302(j). (See page A.9
of the Manual, which may be found at
https://www.epa.gov/ttn/nsr/gen/
wkshpman.pdf.) This phrasing
seemingly contradicts our November
1989 final interpretive ruling, although
we did not intend to change our policy
in this area.
In the NSR Improvement final
rulemaking published December 31,
2002 (67 FR 80186, December 31, 2002),
we promulgated final rules consistent
with our November 1989 final
interpretive ruling. In that rulemaking,
we required the inclusion of fugitive
emissions in calculating emissions
increases for purposes of determining
whether a particular physical or
operational change constitutes a major
modification requiring a PSD or
nonattainment major NSR permit for all
major sources, regardless of source
category. (See, for example,
§ 52.21(b)(41)(ii)(b), which includes
fugitive emissions, to the extent
quantifiable, in the definition of
‘‘projected actual emissions’’ and
§ 52.21(b)(48)(i)(a), which includes
fugitive emissions, to the extent
quantifiable, in the definition of
‘‘baseline actual emissions.’’)
E. Why did EPA reconsider this aspect
of the December 2002 NSR Improvement
final rulemaking?
On July 11, 2003, we received a
petition for reconsideration of the
3 The ‘‘New Source Review Workshop Manual’’ is
in draft form and the Agency chose not to finalize
this manual.
PO 00000
Frm 00005
Fmt 4701
Sfmt 4700
77885
December 2002 NSR Improvement final
rules from Newmont USA Ltd., dba
Newmont Mining Corporation
(Newmont). Newmont argued that we
failed to comply with the requirements
of section 302(j) of the Act in requiring
fugitive emissions to be counted for
purposes of determining whether a
physical or operational change
constitutes a major modification for
sources in source categories not listed
pursuant to section 302(j). Newmont
also argued that we failed to provide
notice and an opportunity for comment
on this issue. The EPA Assistant
Administrator for Air and Radiation
granted Newmont’s petition by letter in
January 2004.
III. What is included in this final
action?
A. What are the results of EPA’s
reconsideration?
Based on our review and
consideration of comments received on
the issue regarding whether fugitive
emissions are to be counted for
purposes of determining whether a
physical or operational change
constitutes a major modification, we are
revising the provisions of the December
2002 NSR Improvement final rules
related to the treatment of fugitive
emissions. We have decided to reverse
our existing policy and include fugitive
emissions in determining whether a
physical or operational change results in
a major modification only for sources in
the source categories that have been
designated through rulemaking
pursuant to section 302(j) of the Act. In
other words, we have decided to adopt
the same approach to fugitive emissions
for determining whether a change is a
major modification as is currently used
for determining whether a source is
major.
B. What are EPA’s revisions to major
NSR regulations?
To implement our new approach to
fugitive emissions, in this final action
we are revising all four main portions of
the major NSR program regulations:
§ 51.165, § 51.166, § 52.21, and
appendix S to part 51. The revisions are
nearly identical for these regulations
because they contain nearly identical
provisions related to major
modifications. As indicated at proposal,
we are including specific revisions for
appendix S to part 51 in this action
consistent with the changes that we
proposed and are finalizing for § 51.165.
For §§ 51.165, 51.166, 52.21, and
appendix S to part 51, we are modifying
a number of definitions. In addition, we
are finalizing the following:
E:\FR\FM\19DER2.SGM
19DER2
77886
Federal Register / Vol. 73, No. 245 / Friday, December 19, 2008 / Rules and Regulations
(1) A minor change in the provisions
for plantwide applicability limitations
(PALs) to preserve the existing
treatment of fugitive emissions for
PALs.
(2) A modification to the paragraph in
each rule that explains how to calculate
whether a significant emissions increase
will occur as the result of a physical or
operational change.
(3) A minor revision in the provisions
on monitoring and reporting for
physical and operational changes that
are found not to be major modifications.
(4) Deletion of a now unnecessary
paragraph that provides for a
generalized exemption related to
fugitive emissions and repeats the
section 302(j) source category list.
We are also finalizing revisions to the
definitions of ‘‘baseline actual
emissions’’ and ‘‘projected actual
emissions.’’ As noted in the Newmont
petition, these definitions (which figure
in determining the increase associated
with a physical or operational change)
currently require that fugitive emissions
be included, to the extent quantifiable,
without regard to source category. Our
revisions will qualify this requirement
so that fugitive emissions (to the extent
quantifiable) must be included for an
emissions unit that ‘‘belongs to one of
the source categories listed in [the
section 302(j) list that appears in the
definition of ‘major stationary source’]
or is located at a major stationary source
that belongs to one of the listed source
categories.’’ For baseline actual
emissions, this revision appears in
§ 51.165(a)(1)(xxxv)(A)(1), (B)(1), and
(C); § 51.166(b)(47)(i)(a), (ii)(a), and (iii);
§ 52.21(b)(48)(i)(a), (ii)(a), and (iii); and,
II.A.30(i)(a), (ii)(a), and (iii) of appendix
S to part 51. For projected actual
emissions, the revision appears in
§ 51.165(a)(1)(xxviii)(B)(2) and (4),
§ 51.166(b)(40)(ii)(b) and (d),
§ 52.21(b)(41)(ii)(b) and (d), and
II.A.24(ii)(b) and (d) of appendix S to
part 51.
Note that the final language refers to
emissions units that are, themselves, in
a source category on the section 302(j)
list, as well as the 302(j) listing status of
the entire major stationary source at
which the emission unit is located. An
emissions unit under NSR means any
part of a stationary source that emits or
has the potential to emit any regulated
NSR pollutant. If either the emissions
unit or the parent source is in a source
category on the section 302(j) list, the
emission unit’s fugitive emissions, to
the extent quantifiable, must be
included for purposes of determining
whether a physical or operational
change constitutes a modification. This
treatment of fugitives from emission
VerDate Aug<31>2005
17:58 Dec 18, 2008
Jkt 217001
units in making major modification
determinations is thereby consistent
with the treatment of fugitives from
emissions units in making major source
threshold determinations. We are also
finalizing similar language throughout
this rule. See section IV of this preamble
below for additional discussion of the
rationale for this language.
The following example illustrates
how to consider fugitive emissions from
an emission unit within a facility. A
fossil-fueled boiler unit that exceeds 250
million British thermal units per hour
heat input (MMBtu/hr), and thus meets
the definition of a 302(j) listed source
category by itself, may be located at an
industrial facility whose primary
activity is not represented by one of the
source categories listed pursuant to
section 302(j). In this case, threshold
determinations for major modifications
at the facility would need to consider
fugitive emissions, to the extent
quantifiable, from the boiler unit but not
from other non-302(j) emissions units at
the facility. Alternatively, if a boiler unit
did not exceed the 250 MMBtu/hr heat
input level, and thus did not meet the
definition of a 302(j) listed source
category by itself, but was located at a
facility represented by a source category
on the section 302(j) list due to the
facility’s primary activity classification,
the boiler unit’s fugitive emissions, to
the extent quantifiable, must be
included for purposes of determining
whether a physical or operational
change constitutes a modification.
We are also finalizing our proposed
definition of ‘‘baseline actual
emissions’’ to maintain the current
requirements for PALs. Plantwide
applicability limitations are an
alternative means of determining the
applicability of major NSR to changes at
an existing major stationary source.
Instead of evaluating each physical or
operational change individually, the
source tracks total emissions from the
source to be sure that they remain below
the level of its PAL. Baseline actual
emissions are used in setting the level
of the PAL.
We continue to believe that it is
appropriate to include fugitive
emissions (to the extent quantifiable) in
setting the level of the PAL and in
tracking compliance with it, regardless
of the source category. In the preamble
to the December 2002 NSR
Improvement rules, we explained that
the benefit of PALs to the public and the
environment is that PALs are designed
‘‘to assure local communities that air
emissions from your major stationary
source will not exceed the facility-wide
cap set forth in the permit unless you
first meet the major NSR requirements.’’
PO 00000
Frm 00006
Fmt 4701
Sfmt 4700
We further explained that a PAL
‘‘provides a more complete perspective
to the public because in setting a PAL,
your reviewing authority accounts for
all current processes and all emissions
units together and reflects the long-term
maximum amount of emissions it would
allow from your source.’’ (See 67 FR
80206, December 31, 2002.) We
therefore do not believe we can exempt
fugitive emissions from being included
when setting a PAL. Consequently, we
are revising the subparagraph of this
definition that addresses PALs to ensure
that fugitive emissions continue to be
included for the purposes of PALs for
all source categories. This revision is
found in §§ 51.165(a)(1)(xxxv)(D),
51.166(b)(47)(iv), 52.21(b)(48)(iv), and
II.A.30(iv) of appendix S to part 51.
To reinforce our intentions for PALs,
we are finalizing a minor revision to the
provisions for PALs to state clearly that
a PAL is to include fugitive emissions,
to the extent quantifiable, ‘‘regardless of
whether the emissions unit or major
stationary source belongs to one of the
source categories listed in [the section
302(j) list].’’ This revision is found in
§§ 51.165(f)(4)(i)(D), 51.166(w)(4)(i)(d),
52.21(aa)(4)(i)(d), and IV.K.4(i)(d) of
appendix S to part 51.
We are also finalizing a revision to the
definition of ‘‘major modification’’ to
mirror the existing definition of ‘‘major
stationary source.’’ Specifically, we are
adding a subparagraph to this definition
saying:
Fugitive emissions shall not be included in
determining for any of the purposes of this
section whether a physical change in or
change in the method of operation of a major
stationary source is a major modification,
unless the source belongs to one of the source
categories listed in [the section 302(j) list that
appears in the definition of ‘‘major stationary
source’’ for the rule] of this section.
This new language is in
§§ 51.165(a)(1)(v)(G), 51.166(b)(2)(v),
52.21(b)(2)(v), and II.A.5(vii) of
appendix S to part 51.
This action also finalizes a revision to
the definition of ‘‘net emissions
increase’’ to preclude an unlisted major
source from including contemporaneous
increases and decreases in fugitive
emissions in the ‘‘netting analysis’’ for
a physical or operational change. We do
not believe that an unlisted source
(which does not include fugitive
emissions in determining the increase in
emissions from the current physical or
operational change) should be able to
use decreases in fugitive emissions to
‘‘net out’’ of major NSR. Rather, we
believe that unlisted sources should
treat fugitive emissions consistently for
all purposes related to determining the
applicability of major NSR to physical
E:\FR\FM\19DER2.SGM
19DER2
Federal Register / Vol. 73, No. 245 / Friday, December 19, 2008 / Rules and Regulations
or operational changes. Accordingly, we
are adding language at
§§ 51.165(a)(1)(vi)(C)(3),
51.166(b)(3)(iii)(d), 52.21(b)(3)(iii)(c),
and II.A.6(iii) of appendix S to part 51
that states that in order for an increase
or decrease in fugitive emissions (to the
extent quantifiable) to be considered
‘‘creditable’’ in netting analyses, it must
occur at an emissions unit that belongs
to one of the section 302(j) listed source
categories or is located at a major
stationary source that belongs to one of
section 302(j) listed source categories.
The final definitional changes made
in this action ensure consistent
treatment of fugitives where fugitive
emissions are referenced in other steps
in the major NSR program. For this
purpose, we are adding subparagraphs
to summarize how fugitive emissions
are to be addressed in each section and
to refer the reader to the relevant
provisions. We believe that the added
subparagraphs will aid understanding of
our intentions regarding fugitive
emissions. These revisions are made in
§§ 51.165(a)(1)(ix), 51.166(b)(20),
52.21(b)(20), and II.A.9 of appendix S to
part 51.
The December 2002 NSR
Improvement rulemaking added
provisions to the major NSR regulations
to clarify the two-step process for
determining whether a physical or
operational change is a major
modification. Step 1 is the evaluation of
the proposed change to determine
whether it will cause a significant
increase in emissions of a regulated NSR
pollutant. If so, the source goes on to
Step 2, which is a ‘‘netting analysis’’ to
determine whether the change will
result in a significant net emissions
increase when taken together with any
contemporaneous, creditable emissions
increases or decreases that have
occurred at the source. This action
revises the provisions for Step 1 to
clarify that fugitive emissions (to the
extent quantifiable) are only included
for section 302(j) listed emissions units
and source categories. (Clarifications for
Step 2 are handled in our revisions to
the definitions that are discussed
above.) This revision appears in
§§ 51.165(a)(2)(ii)(B), 51.166(a)(7)(iv)(b),
52.21(a)(2)(iv)(b), and IV.I.1(ii) of
appendix S to part 51.
The December 2002 NSR
Improvement rulemaking also added
provisions for monitoring and reporting
the emissions that actually occur after a
physical or operational change in cases
where the change was determined, prior
to construction, not to be a major
modification. This action makes minor
revisions to these provisions to be
explicit that fugitive emissions (to the
VerDate Aug<31>2005
17:58 Dec 18, 2008
Jkt 217001
extent quantifiable) need only be
monitored and reported if the emissions
unit or major stationary source in
question is on the section 302(j) list.
This revision provides for consistent
treatment of fugitive emissions before
and after the physical or operational
change. This revision affects
§§ 51.165(a)(6)(iii) and (iv),
51.166(r)(6)(iii) and (iv), 52.21(r)(6)(iii)
and (iv), and IV.J.3 and IV.J.4 of
appendix S to part 51.
Finally, we are deleting a paragraph
in each of the major NSR regulations
that is no longer necessary. The
paragraphs deleted were the original
paragraphs placed in the rules to
implement section 302(j) of the Act.
However, after the definition of ‘‘major
stationary source’’ was revised to
include only the section 302(j) list, and
we later adopted a policy (reversed now
by this action) that fugitive emissions
must be counted for all source
categories in major modification
determinations, these paragraphs tended
to confuse the issue. With this action,
we provide a uniform approach to
fugitive emissions for major source and
major modification determinations, and
these paragraphs have now become
completely unnecessary. Accordingly,
in this action we are removing and
reserving the following paragraphs:
§§ 51.165(a)(4), 51.166(i)(1)(ii),
52.21(i)(1)(vii), and II.F. of appendix S
to part 51.
C. What is the effect of this action on the
minor NSR program?
Major NSR programs are very similar
across the United States, prescribed in
significant detail as they are by the Act
and the implementing federal
regulations. In contrast, state and local
minor NSR programs are subject only to
general requirements under §§ 51.160–
164 and, as a consequence, may vary
significantly from area to area.4 As a
result, we do not know, with certainty,
how such programs typically address
fugitive emissions in minor NSR
permitting. We requested comment on
this topic.
We believe that it is important for
minor NSR programs to be clear
regarding the treatment of fugitive
emissions in all areas of the program.
This will afford all sources consistent
treatment and a ‘‘level playing field.’’ In
addition, a common understanding of
program requirements from the outset is
important to avoid controversy and
wasted resources during the permitting
process. In light of the importance of
clear requirements regarding the
4 There are currently no approved tribal minor
NSR programs.
PO 00000
Frm 00007
Fmt 4701
Sfmt 4700
77887
treatment of fugitive emissions, this
action requires that each
implementation plan as a minimum
element must be explicit in specifying
how fugitive emissions are to be
accounted for in all aspects of the minor
NSR program. We discuss this
requirement more specifically in section
V of this preamble.
We recently proposed minor NSR and
nonattainment major NSR regulations
for sources in those areas of Indian
country where tribes do not have an
EPA-approved implementation plan.
(See 71 FR 48696.) We proposed in the
minor NSR rule to require minor
sources to include fugitive emissions to
the extent quantifiable for applicability
purposes for all sources, or include
them only for source categories listed
pursuant to section 302(j), or exclude
them for all sources. In the final tribal
minor NSR rule, we will adopt one of
these proposed approaches. When we
finalize the minor NSR rule for Indian
country, we expect to address the
treatment of fugitive emissions
consistent with this final rule.
We solicited comment on all aspects
of our proposal regarding minor NSR.
We also solicited comment on whether
we should include rule language in 40
CFR 51.160 (for example, at § 51.160(e))
to require state, local, and tribal minor
NSR programs to directly address
fugitive emissions in minor NSR rules.
The comments received on the minor
NSR program aspects of the proposed
rule generally split into two groups: (1)
Those that agreed with EPA that it is
important for minor NSR programs to be
clear regarding the treatment of fugitive
emissions and that these requirements
should be explicitly stated in a state’s
implementation plan, and (2) those who
felt state and local permitting
authorities should not be required to
provide an explicit description of how
they treat fugitive emissions in their
minor NSR programs.
Several commenters from the second
group questioned whether EPA can
require state and local agencies to
specify explicitly how they will treat
fugitive emissions in all aspects of their
minor NSR programs. They argued that
states have latitude to customize their
programs and that EPA does not have
the authority to require states to include
this clarification as a minimal element
of their minor NSR program. These
commenters were generally concerned
that EPA, by requesting information on
how fugitives were being treated in
minor NSR programs, was trying to
extend aspects of the proposed rule to
minor NSR programs and thus extend
their authority beyond major NSR
program requirements.
E:\FR\FM\19DER2.SGM
19DER2
77888
Federal Register / Vol. 73, No. 245 / Friday, December 19, 2008 / Rules and Regulations
We disagree with commenters that
believe EPA is attempting, with this
rule, to establish minimal state minor
NSR requirements for fugitive
emissions. The purpose of this rule is
not to prescribe specific requirements or
dictate how minor NSR programs
should be constructed and operated to
address fugitive emission sources. We
fully recognize that states have
considerable latitude to customize their
minor NSR programs as long as they
meet the basic purpose of ensuring that
construction and modification of minor
sources does not interfere with
attainment and maintenance of the
NAAQS.
We do believe, however, that it is
important for minor NSR programs to be
clear regarding the treatment of fugitive
emissions in all areas of the program.
We disagree with commenters that our
requirement in this action for state,
local, and subject tribal authorities to
provide an explanation of how they
treat fugitives in their implementation
plans falls outside our authority.
Section 110(a)(2)(C) of the Act and our
responsibility to review implementation
plans provides us with authority to
specify the inclusion of this minimum
element in state, local, and tribal minor
NSR programs. We believe a common
understanding of program requirements
from the outset is important to
reviewing program objectives and
avoiding controversy and wasted
resources during the permitting process.
IV. What is the rationale for this final
action?
A. The Newmont Petition
The thrust of Newmont’s petition for
reconsideration is two-fold:
1. The EPA did not comply with the
requirements of section 302(j) of the Act
when we included fugitive emissions in
the definitions of ‘‘baseline actual
emissions’’ and ‘‘projected actual
emissions’’ for purposes of determining
whether a change at a facility
constitutes a ‘‘major modification.’’
2. The EPA did not provide notice or
an opportunity for comment on this
approach, since these definitions were
not proposed in the 1996 proposed
major NSR revisions. (See 61 FR 38250,
July 23, 1996).
As we noted in the 1984 and 1989
Federal Register notices where we
proposed and finalized the interpretive
ruling that established our existing
approach to fugitive emissions for major
modifications, the language of the Act
does not resolve the issue of whether
the fugitive emissions provisions of
section 302(j) were intended by
Congress to apply to major
VerDate Aug<31>2005
17:58 Dec 18, 2008
Jkt 217001
modifications as well as major sources.
On its face, section 302(j) mandates
rulemaking only for determining
whether a new source is to be
considered a ‘‘major stationary source,’’
and does not explicitly address major
modifications. Neither does the
definition of ‘‘modification’’ in section
111(a)(4) address the issue. As
discussed above, in our 1989 notice we
also noted that interpreting section
302(j) to exempt fugitive emissions from
modification calculations ran counter to
our longstanding practice, and reasoned
that if Congress meant the section 302(j)
rulemaking provision to cover major
modifications, it would have said so.
We believe this interpretation remains a
permissible construction of the statute,
and that since the time we finalized the
interpretive ruling in 1989, we required
that fugitive emissions be included in
major modification determinations. For
these reasons, we disagree with the
petition on the two counts summarized
above.
As stated in our proposal, we now
believe, however, that the absence of
reference to ‘‘major modification’’ in
section 302(j) simply does not dispose
of the issue to reconsider the inclusion
of fugitive emissions in determining
major modifications. For PSD at least,
Congress only added major
modifications to the program in
‘‘technical and conforming
amendments’’ after enacting the 1977
Clean Air Act Amendments and even as
to nonattainment major NSR, defined
‘‘modification’’ only by cross-reference.
Similarly, we believe the legislative
history is scant; Congress simply
adverted to its desire to ‘‘conform [the
PSD definition of construction] to usage
in other parts of the Act.’’ (See 123
Cong. Rec. 36331 (Nov. 1, 1977).) We
cannot conclude from the statutory text
or the legislative history what Congress
explicitly intended on this point; the
evidence is simply too ambiguous.
Accordingly, we believe that we
continue to have discretion under the
second prong of Chevron, USA v. NRDC,
467 U.S. 837, 842–43 (1984), to adopt ‘‘a
permissible construction of the statute.’’
B. Policy and Legal Rationale
We believe that section 302(j) evinces,
at a minimum, an intent by Congress to
require a special look at fugitive
emissions for purposes of calculating a
source’s emissions for NSR purposes.
The statute is silent or ambiguous on the
applicability of section 302(j) to the
question of whether a physical or
operational change is a modification.
That is, we do not believe that the Act
precludes us from applying the section
302(j) restrictions on counting fugitive
PO 00000
Frm 00008
Fmt 4701
Sfmt 4700
emissions to the methodology for
determining whether a physical and
operation change constitutes a major
modification for NSR purposes.
Moreover, although no authoritative
conference or committee report
addresses the issue of how fugitive
emissions should be addressed in NSR
permitting, there are numerous
examples in committee hearings on the
bills that led up to the 1977
Amendments of industry testimony to
the effect that in many cases fugitive
emissions would not be susceptible to
control or would be exceedingly costly
to control, or would be infeasible to
measure. See e.g., Hearings on Clean Air
Act Amendments of 1977, Subcomm. on
Health and the Environment, House
Comm. on Interstate and Foreign
Commerce, March 11, 1977, H.R. Rep.
No. 95–59 at 1327 (statement of Earl
Mallick, American Iron and Steel Inst.)
(high costs of controlling fugitive
emissions); Id., Part 2, March 18, 1975,
H.R. Rept. No. 94–25 at 690 (testimony
of Fred Tucker, National Steel Corp.)
(impossible to comply with SIP limits
on fugitive emissions); Hearings on
Implementation of the Clean Air Act—
1975, Subcomm. on Environmental
Pollution, Sen. Comm. on Public Works,
Apr. 22, 1975, S. Rept. No. 94–H10, Pt.
1 at 757 (statement of David M.
Anderson, Bethlehem Steel Corp. to
effect that control of fugitive emissions
would be enormously costly but would
have ‘‘a net negative environmental
impact’’); Id., Pt. 2, App. A at 2026
(statement of Cast Metals Federation)
(fugitive emissions control at nonferrous
metals smelters extremely costly with
adverse energy impacts and no
improvement in air quality). But see Id.,
App. B at 2232–33 (EPA written
responses to Committee questions) (for
some industries fugitive control can be
critical to attainment of standards).
In light of this legislative history, it is
reasonable to read section 302(j) of the
Act as reflecting a decision by Congress
that it simply did not know enough to
make the critical decisions regarding the
extent to which fugitive emissions
should be included in threshold
applicability determinations both for
purposes of determining whether a
source is a major source, and whether a
physical or operational change
constitutes a modification. Rather, we
believe Congress assigned the resolution
of these complex issues to EPA.
As stated in the proposal, for policy
and programmatic reasons, we now
believe that it is better to adopt a
uniform approach to these threshold
determinations as they relate to fugitive
emissions. We feel that this final action
is most consistent with EPA’s earliest
E:\FR\FM\19DER2.SGM
19DER2
Federal Register / Vol. 73, No. 245 / Friday, December 19, 2008 / Rules and Regulations
and most nearly contemporaneous
construction of the statute contained in
the 1980 NSR rules, which required that
sources count fugitive emissions when
determining whether an emissions
increase qualifies as a major
modification only if the source belonged
to a section 302(j) listed category. By
returning to a procedure that removes
differentiation in the treatment of
fugitive emissions for major source and
modification threshold determinations,
we provide a more uniform approach
that we believe more accurately
represents the original intent of
Congress in establishing the section
302(j) provisions and the resultant 1980
rules that followed.
In addition, with this final action we
believe we now have addressed the
additional regulatory burden that was
not adequately recognized in the 1984
notice. (49 FR 43213–14, October 26,
1984.) We believe our assertion in the
1984 notice (see 49 FR 43213–14,
October 26, 1984) that the interpretation
that we proposed then ‘‘likely would
not impose new regulatory burdens’’
was not correct; our interpretation
proposed in 1984 and finalized in 1989
imposed a new regulatory burden on
major sources in a source category not
on the section 302(j) list, since their
fugitive emissions would be counted in
determining whether they had made a
change constituting a major
modification and thus possibly
subjecting those modifications to NSR
review.
Some commenters supported EPA’s
proposed exclusion of fugitive
emissions in threshold determinations
for major modifications at non-section
302(j) listed sources under the PSD and
nonattainment NSR programs. They
believe that EPA’s current policy of
including these emissions in such
determinations conflicts with EPA’s
historical policy of excluding fugitive
emissions in applicability
determinations for sources not included
on the section 302(j) list and creates
confusion in the permitting process by
providing for differential treatment of
fugitive emissions.
Many of those who commented that
they support the proposed rule also
argued that EPA’s 1989 interpretive
ruling, which includes fugitive
emissions in applicability
determinations for all sources, was
based on a misreading of section 302(j)
and that EPA adopted (in 2002 NSR
Improvement final rules) the
interpretive ruling policy into its
regulations without notice or comment.
They felt that we did not accurately
describe our historical policy in the
proposed rule by failing to state that our
VerDate Aug<31>2005
17:58 Dec 18, 2008
Jkt 217001
previous treatment of fugitives, as read
under the 1989 interpretive ruling and
as codified in the 2002 NSR
Improvement final rules, were incorrect
interpretations.
We disagree with commenters that
there were inaccuracies in describing
our past decisions and discretion to
include fugitives in NSR rule
interpretations and guidance materials.
While we acknowledge that our position
on inclusion of fugitive emissions for
determining major modifications for all
sources has changed over the years, we
do not agree with commenters that any
previous interpretations or rulings were
not permissible constructions of the
statute. We cannot conclude from the
statutory text at 302(j) or the legislative
history what Congress explicitly
intended in regards to inclusion of
fugitive emissions for calculating major
modifications. As a result, we believe
that we have used our discretion under
the second prong of Chevron, USA v.
NRDC, 467 U.S. 837, 842–43 (1984), to
adopt ‘‘a permissible construction of the
statute.’’ We have similarly exercised
our discretion to do so with this final
action.
Other commenters generally opposed
EPA excluding fugitive emissions from
non-section 302(j) listed sources in
threshold determinations for major
modifications under the NSR programs
and believed that the proposed revisions
to the NSR rules incorrectly implement
section 302(j) provisions and are not
consistent with past practice and
guidance regarding the treatment of
fugitive emissions. They argued that
EPA’s own past finding as to the
Congressional intent regarding
treatment of fugitive emissions under
the NSR program (54 FR 48870,
November 28, 1989) show that section
111(a)(4) of the Act ‘‘defines
modification solely in terms of the total
amount of pollution that a change at a
source would produce,’’ thus leading
the EPA to conclude that Congress
intended to establish no qualitative
distinction between stack and fugitive
emissions (72 FR 63854, November 13,
2007). These commenters urged EPA to
reverse the proposed action and to
retain the current policy regarding
treatment of fugitives as included in the
2002 NSR Improvement rules.
We disagree with comments that these
revisions to the NSR rules incorrectly
implement section 302(j) and that our
construction of the statute included in
the 2002 NSR Improvement rules
should be considered the correct
interpretation of the Section 302(j)
provisions. We believe now that the
absence of reference to ‘‘major
modification’’ in section 302(j) simply
PO 00000
Frm 00009
Fmt 4701
Sfmt 4700
77889
does not dispose of the issue of whether
there was Congressional intent to limit
inclusion of fugitive emissions in
threshold applicability determinations
for major modifications to listed section
302(j) sources. Accordingly, we believe
that we continue to have discretion
under the second prong of Chevron,
USA v. NRDC, 467 U.S. 837, 842–43
(1984), to adopt ‘‘a permissible
construction of the statute.’’ As such, we
do not believe that the Act precludes us
from applying the section 302(j)
restrictions on counting fugitive
emissions to the methodology for
determining whether a physical and
operation change constitutes a major
modification.
We feel that this final action is most
consistent with EPA’s earliest, most
nearly contemporaneous construction of
the statute in the 1980 rules, which
required that sources count fugitive
emissions when determining whether
an emissions increase qualifies as a
major modification only if the source
belonged to a section 302(j) listed
category. By returning to a procedure
that removes differentiation in the
treatment of fugitive emissions for major
source and modification threshold
determinations, we provide a more
uniform approach that we believe more
accurately represents the original intent
of Congress in establishing the section
302(j) provisions and the resultant 1980
rules that followed.
V. When will these changes take effect
in the federal PSD Program, and will
states be required to revise their State
Implementation Plans (SIPs) to
incorporate this final action?
We are requiring that these changes
take effect in the Federal PSD permit
program by February 17, 2009. This
means that we will apply these rules in
any area without a SIP-approved PSD
Program for which we are the reviewing
authority, or for which we delegated our
authority to issues permits to a state,
local or tribal reviewing authority on
that date.
We are also requiring that the
requirements of this final action be
established as minimum program
elements of the PSD and nonattainment
NSR programs approved by EPA as part
of SIPs. Notwithstanding this
requirement, it may not be necessary for
a state or local authority to revise its SIP
to begin to implement these changes.5
Some state or local authorities may be
able to adopt these changes through a
change in interpretation of existing
5 Currently, there are no tribal permitting agencies
with an approved Tribal Implementation Plan (TIP)
to implement the major NSR permitting program.
E:\FR\FM\19DER2.SGM
19DER2
77890
Federal Register / Vol. 73, No. 245 / Friday, December 19, 2008 / Rules and Regulations
language in the approved SIP without
the need to revise their SIP.
For any state or local authority that
can implement the changes without
revising its approved SIP, we propose
that the changes become effective when
the reviewing authority publicly
announces that it accepts these changes
by interpretation. Although no SIP
change may be necessary in certain
areas that adopt these changes by
interpretation, we encourage state and
local authorities in such areas to make
such SIP changes in the future to
enhance the clarity of the existing rules.
For areas that need to revise their SIPs
to adopt these changes, these changes
would not be effective in such areas
until we approve the SIP revision. We
are requiring that such state and local
authorities submit revisions to SIPs to
reflect requirements that are at least as
stringent as the minimum program
elements we adopt in this final rule
within 3 years after the rule’s
promulgation date. We are also allowing
state and local authorities to maintain
NSR program elements that have the
effect of meeting the minimum program
elements of this rule, but that, in these
cases, the state and local authority must
submit an explanation for that
conclusion to EPA by the SIP
submission deadline.
We are also requiring state, local, and
subject tribal authorities to explicitly
specify in their implementation plans
how the reviewing authority will treat
fugitive emissions in all aspects of their
minor NSR program. Section
110(a)(2)(C) of the Act provides us with
authority to specify the inclusion of this
minimum element in state, local, and
tribal minor NSR programs. Therefore,
we are requiring state, local, and subject
tribal authorities to specify this in their
implementation plan within 3 years
from the promulgation date of this
action.
We received comments in the
proposal on establishing the
requirements of this action as minimum
program elements for SIP-approved PSD
programs. One commenter stated that
they believed EPA could not lawfully
make the proposed requirements a
minimum program element for SIPapproved PSD programs. Other
commenters provided that section 116
of the Act stipulates that states are free
to adopt air pollution control
requirements that are more stringent
than those required by the Act or EPA
regulation and therefore should not be
required to adopt any minimum
program requirements in the proposal.
One commenter stated that California
state law specifically prevents the
relaxation of NSR programs and that
VerDate Aug<31>2005
17:58 Dec 18, 2008
Jkt 217001
forcing California to adopt rule
amendments that are less stringent
would require California air pollution
control districts to violate state law.
We disagree with commenters who
believe we do not have authority to
establish the revisions to the treatment
of fugitive emissions under the major
NSR program, as finalized in this action,
as minimum program elements of the
NSR programs. The basis for
establishing minimum program
elements is rooted in well established
statutory authority and interpretations
for implementing the federal NSR
program. We interpret the requirements
of section 110 of the Act to require
states to meet a certain minimum set of
requirements that we specify, consistent
with the Act, before any SIP can be
approved by the Administrator, while
section 116 does not allow states to
adopt or enforce any SIP requirements
less stringent than any minimum
program element we specify through
rulemaking. Moreover, the minimum
program elements we establish in the
NSR programs in no way precludes the
development of more stringent major
NSR programs by California, or any
other state or local agencies in areas
covered by SIP-approved PSD Programs.
We also received comments on the
impact of the proposed fugitive
emission requirements on state and
local air quality implementation plans.
Several commenters opposed the EPA’s
proposal and reconsideration on the
treatment of fugitives primarily because
they believe it would impede their
efforts to achieve attainment of health
standards for ozone and PM2.5 and their
ability to prevent significant
deterioration in attainment areas. Some
of these commenters argued that the
proposal makes NSR applicability less
stringent by exempting fugitive
emissions from major modification
applicability determinations which
would result in an increase in fugitive
emissions from non-listed sources when
determining whether NAAQS or
allowable increments will be violated.
We agree with commenters that this
action could result in some sources
(those not on the section 302(j) list) not
having to go through NSR review for
major modifications; however, we
disagree that this action will provide a
blanket exemption to fugitive emissions
from non-section 302(j) sources. This
action does not prohibit in any way a
reviewing authority from requiring
control of fugitive emissions by
emission standards or limitations or
modeling of quantifiable fugitive
emissions, regardless of source category,
where such measures might be
considered necessary for compliance
PO 00000
Frm 00010
Fmt 4701
Sfmt 4700
with a NAAQS or for other
environmental protection purposes. We
fully recognize that some states and
localities may need to regulate
additional fugitive emissions under
their implementation plan for
attainment purposes. We do not intend
to preclude such regulation in either
major or minor NSR where necessary to
achieve the purposes of the Act. This
rule only affects the treatment of
fugitives in threshold applicability tests
to determine what constitutes a major
modification. If a source is determined
to be either a major source or major
modification due to its non-fugitive
emissions, then all applicable pollutant
emissions at the source, including
fugitive, are subject to subsequent NSR
review steps (e.g., BACT/LAER review,
air quality impacts) according to NSR
program requirements.
This action in no way prevents
reviewing authorities from controlling
fugitive emissions through their SIP
rules (e.g., minor source NSR program),
through any other requirements under
the Act (e.g., MACT standards), or state
and local permitting programs that
would control these emissions. We also
specifically include, and reemphasize in
this action (see section VI of this
preamble), consideration to surrounding
air quality (e.g., nonattainment areas) as
a criteria in determining if it is
reasonable to collect, capture, and
control fugitive emissions.
We also believe by returning to the
original 1980 NSR rule construction
regarding fugitives, we have kept intact
the air quality goals of the statute. In the
preamble to the 1980 major NSR rules,
we noted that the Alabama Power court
stated that ‘‘Congress’’ intention, in
establishing the list of source categories
in section 169(1) of the Act, was to
identify facilities which, due to their
size, are financially able to bear the
substantial regulatory costs imposed by
the PSD provisions and which, as a
group, are primarily responsible for
emission of the deleterious pollutants
that befoul our nation’s air.’’ (See 45 FR
52691, August 7, 1980.) In light of that
intent, we determined that as a matter
of policy, it would be appropriate to
count all emissions—including fugitive
emissions—in threshold calculations of
applicability for those source categories.
In doing so, we indicated that our listing
decisions would be based on whether
sources in the category have the
potential to degrade air quality
significantly. We believe that the section
302(j) listing continues to address the
air quality impacts from major emitting
facilities and that this action preserves
the intended air quality improvement
strategies under the major NSR program.
E:\FR\FM\19DER2.SGM
19DER2
Federal Register / Vol. 73, No. 245 / Friday, December 19, 2008 / Rules and Regulations
VI. What are the guiding principles for
determining fugitive emissions?
In our major NSR and title V permit
rules, ‘‘fugitive emissions’’ means
‘‘those emissions which could not
reasonably pass through a stack,
chimney, vent, or other functionally
equivalent opening.’’ In practice, we
interpret the phrase ‘‘could not
reasonably pass’’ by determining
whether such emissions can be
reasonably collected or captured (e.g.,
enclosures or hoods). Under this
interpretation, it is axiomatic that any
emissions actually collected or captured
by the source are non-fugitive
emissions. The answer is less clear
when the source is not currently
collecting or capturing the emissions. In
these circumstances, we make case-bycase determinations as to whether a
source could reasonably collect or
capture such emissions.
Our past determinations articulate a
number of principles we use in making
these case-by-case determinations,
though none may express the entirety of
our policy. Moreover, some EPA
memoranda, when viewed in isolation,
may appear to provide divergent
positions. Accordingly, we rearticulate
our guiding principles in making these
case-by-case determinations, and
expand the explanation of these
principles to enhance the understanding
of the regulated community.
Specifically, EPA will use the following
guiding principles in determining
whether emissions qualify as fugitive:
1. Determining which emissions
could ‘‘reasonably pass’’ is a case-bycase decision based on whether or not
the emissions can be reasonably
collected or captured.
2. Because another similar facility
collects, captures, or controls emissions
does not mean that it is reasonable for
others to do the same, but it is a factor
in each consideration.
(a) If a source already collects or
captures and discharges the emissions
through a stack, chimney, vent or other
functionally equivalent opening, then
such emissions are non-fugitive at that
source.
(b) If we establish a national
emissions standard or regulation that
requires some sources in the source
category to collect or capture and
control such emissions, then this weighs
heavily towards a finding that the
emissions are non-fugitive at other
sources in this category; and
(c) The more common collection or
capture of such emissions is by other
similar sources, the more heavily this
factor should weigh toward a finding
that collection is reasonable.
VerDate Aug<31>2005
17:58 Dec 18, 2008
Jkt 217001
3. The cost to collect or capture and
control emissions is a factor when
considering what is ‘‘reasonable.’’
(a) The combined costs to collect or
capture and control emissions can be
used as an alternative measure for the
costs of emissions capture or collection
alone in the case-by-case analysis;
(b) The surrounding air quality (e.g.,
nonattainment areas) is a consideration
when deciding if costs (collection,
capture, control) are reasonable, and
(c) If it is not technically or
economically feasible to control the
emissions, then collection or capture of
such emissions may not be reasonable.
As we stated at proposal, we believe
that these three overarching principles
represent our existing policy on
defining fugitive emissions. Moreover,
we believe that these elaborations on
these basic principles represent a
reasonable interpretation of our existing
regulatory language to be applied to
future fugitive emissions
determinations. Accordingly, we do not
propose specific changes to the existing
regulatory language to accommodate
this final action.
Our second principle relates to a
concept we established in one of our
initial guidance memorandums defining
fugitive emissions. Specifically, we
indicated that a consideration in the
case-by-case analysis is whether
emissions are ‘‘ordinarily’’ collected or
captured by other sources in the source
category. In subsequent memoranda, we
interchanged the term ‘‘ordinarily’’ for
‘‘commonly.’’ 6 In a more recent
memorandum, we describe this element
in terms of a presumption.7 We view
these presumptions as no more than
suggesting a starting point for the caseby-case analysis.8 These guiding
principles recognize that our existing
guidance does not establish a non6 Compare Memo from Gerald A. Emison,
Director, Office of Air Quality Planning and
Standards to David P. Howekamp, Director, Air
Management Division, Region IX, Emissions from
Landfills (Oct. 6, 1987) (landfills are not ordinarily
constructed with gas collection systems) to Memo
from John S. Seitz, Director, Office of Air Quality
Planning and Standards, to Director, Air, Pesticides
and Toxics Management Division, Region I and V,
et al., Classification of Emissions from Landfills for
NSR Applicability Purposes (Oct. 21, 1994) (* * *
use of systems has become more common).
7 See e.g., Memo from Thomas C. Curran,
Director, Information Transfer and Program
Integration Division, to Judith M. Katz, Director, Air
Protection Division, Interpretation of the Definition
of Fugitive Emissions in Parts 70 and 71 (Feb. 10,
1999).
8 Recent case law suggests that the Agencies
possess a limited ability to establish presumptions
through guidance. See e.g. General Elec. Co. v. EPA,
290 F.3d 377 (DC Cir. 2002) (document stating
without qualification that a certain value may be
used to satisfy regulation was substantive rule;
created norm or safe harbor that private parties can
rely on).
PO 00000
Frm 00011
Fmt 4701
Sfmt 4700
77891
rebuttable presumption, and does not
attempt to establish a specific
methodology states must use in
conducting the case-by-case analysis.
However, the expanded principles
explain how states should weigh
collection or capture of emissions by
other similar sources in that analysis.
Although costs have always been a
consideration in determining whether
emissions are fugitive, we historically
focused on the cost of collection or
capture and not the cost of control.
Notwithstanding our past practice, we
believe that it is reasonable to consider
the cost and economic feasibility of
control in determining whether
emissions can be reasonably captured or
collected. For example, the cost of
controlling emissions may be helpful in
the analysis if cost data on collection,
capture and control in the aggregate are
more available or more easily calculated
than cost data on collection or capture
alone.
Thus, with this action, we are
allowing that the reviewing authority
may consider the reasonableness of the
combined costs of capture or collection
and control as an alternative to
considering only the cost of collection
or capture. Notably, however, we expect
permitting authorities to find higher
costs reasonable when considering
combined costs as an alternative
compared to what would be reasonable
if considering capture or collection costs
alone. We also believe that accounting
for the differences in attainment status
is appropriate, because permitting
authorities tend to accept higher
collection, capture, and control costs as
reasonable in areas where air quality
problems are more severe.
Finally, as technology improved, the
technical feasibility to collect or capture
virtually any source of emissions
likewise evolved. For example, it is
technically feasible to build a large
capture device to collect virtually any
type of process emissions. Yet, these
captured emissions may contain air
pollutants in such small concentrations
that there is no technically or
economically-feasible method to control
the emissions once captured. Yet, under
a strict interpretation of whether
emissions are ‘‘reasonably collected,’’
we could find that such emissions are
non-fugitive because they are reasonably
collectable. Nonetheless this would fail
to provide meaning to the term ‘‘fugitive
emissions’’ as intended by Congress.
As expressed by the Alabama Power
court,
‘‘In the general definitional section of the
Act, section 302(j), Congress employed the
term ‘fugitive emissions’ to refer to one
manner of emission of any air pollutant. As
E:\FR\FM\19DER2.SGM
19DER2
77892
Federal Register / Vol. 73, No. 245 / Friday, December 19, 2008 / Rules and Regulations
commonly understood, emissions, from an
‘industrial point source’ include emissions
emanating from a stack or from a chimney.
By contrast, ‘fugitive emissions’ are
emissions from a facility that escape from
other than from a point source.’’ 9
In our proposed 1979 major NSR rule,
we followed this common
understanding of the term ‘‘fugitive
emissions.’’ When we finalized our rule
in 1980, we changed the definition of
fugitive emissions from those emissions
‘‘which do not reasonably pass’’ through
a stack or vent, to those that ‘‘could not
reasonably pass’’ to avoid creating a
disincentive for a source to collect and
control emissions when technically and
economically feasible. It was not our
intent to interpret the term in a way that
could eliminate the distinction between
fugitive and non-fugitive emissions.
Accordingly, we believe that when the
only reason to collect or capture such
emissions would be to control the
emissions, and there is no technical or
economically feasible means to control
the emissions, then collecting the
emissions is nonsensical, and thus, may
not be reasonable.
Although this aspect of our principles
may expand on how we historically
considered costs in a case-by-case
analysis, we believe that this
interpretation remains fully consistent
with Congress’ intent in distinguishing
fugitive emissions from non-fugitive
emissions in the Act. The promulgated
section 302(j) list includes the source
categories listed in section 169(1) of the
Act, which is the definition of ‘‘major
emitting facility’’ for purposes of PSD.
In the preamble to the 1980 major NSR
rules, we noted that the Alabama Power
court stated that Congress’ intention in
establishing the list of source categories
in section 169(1) of the Act was to
identify facilities which, due to their
size, are financially able to bear the
substantial regulatory costs imposed by
the PSD provisions and which, as a
group, are primarily responsible for
emission of the deleterious pollutants
that befoul our nation’s air.’’ (45 FR
52691, August 7, 1980). Thus, the
purpose of the fugitive emissions
inquiry is to determine which emissions
should count for determining source
size with a view towards requiring large
sources to install pollution controls. If
the emissions cannot be controlled, then
it is reasonable to consider this factor in
determining whether such emissions
can be ‘‘reasonably’’ collected or
captured.
We received several comments on our
proposed elaborated guidelines for
determining fugitive emissions. Several
9 Alabama
Power v. Costle, 636 F.2d at 368.
VerDate Aug<31>2005
17:58 Dec 18, 2008
Jkt 217001
commenters supported EPA’s guiding
principles for determining fugitive
emissions and for the inclusion of
control costs as one of the case-by-case
criteria that could be used for
determining fugitive emissions. Two
commenters, however, disagreed with
the addition of ‘‘cost of control’’ to ‘‘cost
of capture or collection’’ as one of the
cost criteria that reviewing authorities
may consider in determining whether
emissions could reasonably pass
through a stack, chimney, vent, or other
functionally equivalent opening. One of
these commenters stated that the
presumption of the elaborated guidance
in the proposed rule is that if it is not
technically or economically feasible to
control the emissions—regardless of the
technical or economic feasibility of
capture—then it is not reasonable to
capture them and they are therefore
fugitive. The same commenter also felt
that this new cost criterion could
require permitting authorities to do
additional upfront cost analyses prior to
permit application, thereby increasing
demand on limited resources.
Another commenter supported the
use of costs for either capture or
collection and control or just for capture
and collection, and also supports
allowing permitting authorities to
account for attainment status when
considering the cost of collection,
capture and control as higher costs may
be found acceptable in ‘‘dirtier’’ areas.
We disagree with the comments that
guidance should not allow the
reviewing authority to consider the cost
of control. We believe that in some cases
it is beneficial to consider the cost and
economic feasibility of control in
determining whether emissions can be
reasonably captured or collected. For
example, the cost of controlling
emissions may be helpful in the analysis
if cost data on collection, capture and
control in the aggregate are more
available or more easily calculated than
cost data on collection or capture alone.
Further, this guidance provides that
the reviewing authority may consider
the reasonableness of the combined
costs of capture or collection and
control as an alternative to considering
only the cost of collection or capture.
This elaboration on guidance does not
place a regulatory requirement on the
reviewing authority to take any specific
approach to considering cost in
determining fugitive emissions.
Therefore, this alternative clearly
identifies the cost factor, among many
other case-specific factors, as an
interpretive tool that a reviewing
authority may use in determining
whether fugitive emission can be
reasonably collected or captured.
PO 00000
Frm 00012
Fmt 4701
Sfmt 4700
VII. Statutory and Executive Order
Reviews
A. Executive Order 12866—Regulatory
Planning and Review
Under Executive Order (EO) 12866
(58 FR 51735, October 4, 1993), this
action is a ‘‘significant regulatory
action’’ because it is likely to raise novel
legal or policy issues arising out of legal
mandates, the President’s priorities, or
the principles set forth in the Executive
Order. Accordingly, EPA submitted this
action to the Office of Management and
Budget (OMB) for review under EO
12866 and any changes made in
response to OMB recommendations
have been documented in the docket for
this action.
B. Paperwork Reduction Act
This action does not impose any new
information collection burden. We are
not promulgating any new paperwork
requirements (e.g., monitoring,
reporting, recordkeeping) as part of this
proposed action. However, OMB has
previously approved the information
collection requirements contained in the
existing regulations (40 CFR parts 51
and 52) under the provisions of the
Paperwork Reduction Act, 44 U.S.C.
3501 et seq., and has assigned OMB
control number 2060–0003. The OMB
control numbers for EPA’s regulations
in 40 CFR are listed in 40 CFR part 9.
C. Regulatory Flexibility Analysis
The Regulatory Flexibility Analysis
(RFA) generally requires an agency to
prepare a regulatory flexibility analysis
of any rule subject to notice and
comment rulemaking requirements
under the Administrative Procedure Act
or any other statute unless the agency
certifies that the rule will not have a
significant economic impact on a
substantial number of small entities.
Small entities include small businesses,
small organizations, and small
governmental jurisdictions.
For purposes of assessing the impacts
of this action on small entities, small
entity is defined as: (1) A small business
as defined by the Small Business
Administration’s (SBA) regulations at 13
CFR 121.201); (2) a small governmental
jurisdiction that is a government of a
city, county, town, school district, or
special district with a population of less
than 50,000; and (3) a small
organization that is any not-for-profit
enterprise which is independently
owned and operated and is not
dominant in its field.
After considering the economic
impacts of this final action on small
entities, I certify that this action will not
have a significant economic impact on
E:\FR\FM\19DER2.SGM
19DER2
Federal Register / Vol. 73, No. 245 / Friday, December 19, 2008 / Rules and Regulations
a substantial number of small entities.
In determining whether a rule has a
significant economic impact on a
substantial number of small entities, the
impact of concern is any significant
adverse economic impact on small
entities, since the primary purpose of
the regulatory flexibility analyses is to
identify and address regulatory
alternatives ‘‘which minimize any
significant economic impact of the rule
on small entities.’’ 5 U.S.C. 603 and 604.
Thus, an agency may certify that a rule
will not have a significant economic
impact on a substantial number of small
entities if the rule relieves regulatory
burden, or otherwise has a positive
economic effect on all of the small
entities subject to the rule.
A Regulatory Flexibility Act
Screening Analysis (RFASA) developed
as part of a 1994 draft Regulatory Impact
Analysis (RIA) and incorporated into
the September 1995 ICR renewal
analysis, showed that the changes to the
NSR program due to the 1990 Clean Air
Act Amendments would not have an
adverse impact on small entities. This
analysis encompassed the entire
universe of applicable major sources
that were likely to also be small
businesses (approximately 50 ‘‘small
business’’ major sources). Because the
administrative burden of the NSR
program is the primary source of the
NSR program’s regulatory costs, the
analysis estimated a negligible ‘‘cost to
sales’’ (regulatory cost divided by the
business category mean revenue) ratio
for this source group. Currently, and as
reported in the current ICR, there is no
economic basis for a different
conclusion.
We believe the changes in this final
action will reduce the regulatory burden
associated with the major NSR program
for sources, including small businesses,
that are not included in the section
302(j) list. The requirements of this final
action will not affect sources, including
small businesses, that are included in
the section 302(j) list; regulatory
requirements for these sources will be
unchanged.
These changes will improve the
clarity of the requirements for unlisted
major sources, and may prevent some
physical or operational changes at such
sources from qualifying as major
modifications when they would have
been major modifications under the
currently existing rules. Thus, the effect
of these final changes will be to improve
the operational flexibility of unlisted
major sources. We have therefore
concluded that this final action will
relieve regulatory burden for all affected
small entities.
VerDate Aug<31>2005
17:58 Dec 18, 2008
Jkt 217001
D. Unfunded Mandates Reform Act
This action contains no federal
mandates under the provisions of Title
II of the Unfunded Mandates Reform
Act of 1995 (UMRA), 2 U.S.C. 1531–
1538 for state, local, or tribal
governments or the private sector. The
changes required by this final action are
expected to result in a small, one-time
increase in the burden imposed upon
reviewing authorities in order for the
revised rules to be included in the
state’s SIP (except in states that
determine that they can implement the
approach in this proposed action
without a SIP revision). In addition, we
believe these changes will actually
reduce the regulatory burden associated
with the major NSR program by
improving the operational flexibility of
owners and operators (with an attendant
decrease in the number of major
modification applications that
reviewing authorities must process).
Therefore, this rule is not subject to the
requirements of sections 202 and 205 of
the UMRA.
This action is also not subject to the
requirements of section 203 of the
UMRA because it contains no regulatory
requirements that might significantly or
uniquely affect small governments. As
discussed above, this final rule does not
impose any new requirements on small
governments.
E. Executive Order 13132—Federalism
Executive Order 13132, entitled
‘‘Federalism’’ (64 FR 43255, August 10,
1999), requires EPA to develop an
accountable process to ensure
‘‘meaningful and timely input by state
and local officials in the development of
regulatory policies that have federalism
implications.’’ ‘‘Policies that have
federalism implications’’ is defined in
the Executive Order to include
regulations that have ‘‘substantial direct
effects on the states, on the relationship
between the national government and
the states, or on the distribution of
power and responsibilities among the
various levels of government.’’
This final rule does not have
federalism implications. It will not have
substantial direct effects on the states,
on the relationship between the national
government and the states, or on the
distribution of power and
responsibilities among the various
levels of government, as specified in
Executive Order 13132. In addition, we
believe these final changes will actually
reduce the regulatory burden associated
with the major NSR program by
improving the operational flexibility of
owners and operators, with an attendant
decrease in the number of major
PO 00000
Frm 00013
Fmt 4701
Sfmt 4700
77893
modification applications that
reviewing authorities must process.
Thus, Executive Order 13132 does not
apply to this rule.
In the spirit of Executive Order 13132,
and consistent with EPA policy to
promote communications between EPA
and state and local governments, EPA
specifically solicited comment on the
proposed rule from state and local
officials.
In response to the proposed rule, two
commenters stated that the workload for
them will increase significantly if
permitting authorities are required to
undertake the task of segregating
fugitive emissions from NSR
applicability calculations. They asserted
that they anticipate disputes and
appeals of their determinations on
fugitive emissions. They argued that
including all emissions for all sources is
less resource-intensive for permitting
authorities than making case-by-case
determinations of whether to include
fugitive emissions.
While the change in this rule is
expected to result in a small, one-time
increase in the burden imposed upon
reviewing authorities in order for the
revised rules to be included in the
state’s SIP (except in states that
determine that they can implement the
approach in this proposed action
without a SIP revision), we disagree
with comments that the burden will
increase significantly for permitting
authorities. Calculations and
identification of fugitive emissions are
prepared by the permit applicants and
submitted for review and approval by
the permitting authorities. We believe
the proposed rule changes could
actually reduce the regulatory burden
associated with the major NSR program
by improving the operational flexibility
of owners and operators, with an
attendant decrease in the number of
major modification applications that
reviewing authorities must process.
F. Executive Order 13175—Consultation
and Coordination With Indian Tribal
Governments
This action does not have tribal
implications, as specified in Executive
Order 13175 (65 FR 67249, November 9,
2000). No tribal government currently
has an approved tribal implementation
plan (TIP) under the Act to implement
the NSR program; therefore the federal
government is currently the NSR
reviewing authority in Indian country.
Thus, tribal governments should not
experience added burden from this
proposed rule, nor should their laws be
affected with respect to implementation
of this rule. Thus, Executive Order
13175 does not apply to this action.
E:\FR\FM\19DER2.SGM
19DER2
77894
Federal Register / Vol. 73, No. 245 / Friday, December 19, 2008 / Rules and Regulations
Although Executive Order 13175 does
not apply to this action, EPA solicited
comments from tribal officials in
developing this action. A summary of
the concerns raised during that
solicitation and EPA’s response to those
concerns is provided below.
Two tribal authorities commented
that there was not adequate consultation
with the tribes on the proposed rule and
how it corresponds with the proposed
Tribal Minor Source NSR Permitting
Rule. Also, they believe that the
statement in the preamble of the
proposed rule soliciting tribal input
does not reach the type of outreach and
consultation that is needed and
required. Because they view the
consultation as inadequate, the
commenters believe that EPA’s
statement that the proposed rule will
not put undue burden onto tribes
because the EPA is the reviewing
authority in tribal territories is
presumptuous and not reflective of the
consultation process.
We disagree with the commenters that
adequate consultation with the tribes on
the proposed rule did not take place.
EPA specifically solicited additional
comment on this proposed rule from
tribal officials. While Executive Order
13175, entitled ‘‘Consultation and
Coordination with Indian Tribal
Governments’’ (65 FR 67249, November
9, 2000), requires EPA to develop an
accountable process to ensure
‘‘meaningful and timely input by tribal
officials in the development of
regulatory policies that have tribal
implications,’’ this rule does not have
tribal implications. No tribal
government currently has an approved
TIP under the Act to implement the
NSR program; therefore the federal
government is currently the NSR
reviewing authority in Indian country.
In addition, this rule has no tribal
implications on title V rules (part 71
and part 70) because only one tribe has
a delegated part 71 program and no tribe
has a part 70 program (the delegated
program uses the guidance as proposed
by EPA). Also, because this rule only
provides interpretive guidance relative
to the fugitive source definition of those
rules, no permitting authorities would
likely need to update their title V
program or rules to implement this
federal rule. Thus, tribal governments
should not experience added burden
from this proposed rule, nor should
their laws be affected with respect to
implementation of this rule. Thus,
Executive Order 13175 does not apply
to this rule.
Regarding the Tribal Minor Source
NSR Permitting Rule, we recently
proposed minor NSR and nonattainment
VerDate Aug<31>2005
17:58 Dec 18, 2008
Jkt 217001
major NSR regulations for sources in
those areas of Indian country where
tribes do not have an EPA-approved
implementation plan. (See 71 FR 48703,
August 21, 2006.) We proposed in the
minor NSR rule to require minor
sources to include fugitive emissions to
the extent quantifiable for applicability
purposes for all sources, or include
them only for source categories listed
pursuant to section 302(j), or exclude
them for all sources. In the final tribal
minor NSR rule, we will adopt one of
these proposed approaches and we
expect to address the treatment of
fugitive emissions consistent with this
final rule. The question of how the
requirements of E.O. 13175 have been
met for the tribal minor NSR permitting
rule will be addressed when that rule is
finalized.
G. Executive Order 13045—Protection of
Children From Environmental Health
Risks and Safety Risks
EPA interprets EO 13045 (62 FR
19885, April 23, 1997) as applying only
to those regulatory actions that concern
health or safety risks, such that the
analysis required under section 5–501 of
the EO has the potential to influence the
regulation. This action is not subject to
EO 13045 because it does not establish
an environmental standard intended to
mitigate health or safety risks.
H. Executive Order 13211—Actions
Concerning Regulations That
Significantly Affect Energy Supply,
Distribution, or Use
This action is not a ‘‘significant
energy action’’ as defined in Executive
Order 13211 (66 FR 18355, May 22,
2001), because it is not likely to have a
significant adverse effect on the supply,
distribution, or use of energy. We
believe the changes set out in this final
action may actually reduce the
regulatory burden associated with the
major NSR program, and may therefore
have a positive effect on the supply,
distribution, or use of energy, by
improving the operational flexibility of
owners and operators.
I. National Technology Transfer and
Advancement Act
Section 12(d) of the National
Technology Transfer and Advancement
Act of 1995 (NTTAA), Public Law 104–
113, 12(d) (15 U.S.C. 272 note), directs
EPA to use voluntary consensus
standards in its regulatory activities
unless to do so would be inconsistent
with applicable law or otherwise
impractical. Voluntary consensus
standards are technical standards (for
example, materials specifications, test
methods, sampling procedures, and
PO 00000
Frm 00014
Fmt 4701
Sfmt 4700
business practices) that are developed or
adopted by voluntary consensus
standards bodies. The NTTAA directs
EPA to provide Congress, through OMB,
explanations when the Agency decides
not to use available and applicable
voluntary consensus standards.
This action does not involve technical
standards. Therefore, EPA did not
consider the use of any voluntary
consensus standards.
J. Executive Order 12898—Federal
Actions To Address Environmental
Justice in Minority Populations and
Low-Income Populations
Executive Order 12898 (59 FR 7629
(Feb. 16, 1994)) establishes federal
executive policy on environmental
justice. Its main provision directs
federal agencies, to the greatest extent
practicable and permitted by law, to
make environmental justice part of their
mission by identifying and addressing,
as appropriate, disproportionately high
and adverse human health or
environmental effects of their programs,
policies, and activities on minority
populations and low-income
populations in the United States.
EPA has determined that this final
rule will not have disproportionately
high and adverse human health or
environmental effects on minority or
low-income populations because it does
not affect the level of protection
provided to human health or the
environment. This final action, in
conjunction with other existing
programs, would not relax the control
measures on sources regulated by the
rule and therefore would not cause
emissions increases from these sources.
K. Congressional Review Act
The Congressional Review Act, 5
U.S.C. 801 et seq., as added by the Small
Business Regulatory Enforcement
Fairness Act of 1996, generally provides
that before a rule may take effect, the
agency promulgating the rule must
submit a rule report, which includes a
copy of the rule, to each House of the
Congress and to the Comptroller General
of the United States. EPA will submit a
report containing this rule and other
required information to the U.S. Senate,
the U.S. House of Representatives, and
the Comptroller General of the United
States prior to publication of the rule in
the Federal Register. A major rule
cannot take effect until 60 days after it
is published in the Federal Register.
This action is not a ‘‘major rule’’ as
defined by 5 U.S.C. 804(2). This rule
will be effective January 20, 2009.
E:\FR\FM\19DER2.SGM
19DER2
Federal Register / Vol. 73, No. 245 / Friday, December 19, 2008 / Rules and Regulations
VIII. Judicial Review
Under section 307(b)(1) of the Act,
judicial review of today’s final action is
available by filing of a petition for
review in the U.S. Court of Appeals for
the District of Columbia Circuit by
February 17, 2009. Any such judicial
review is limited to only those
objections that are raised with
reasonable specificity in timely
comments. Under section 307(b)(2) of
the Act, the requirements of this final
action may not be challenged later in
civil or criminal proceedings brought by
us to enforce these requirements.
IX. Statutory Authority
The statutory authority for this action
is provided by sections 101, 107, 110,
and 301 of the Act as amended (42
U.S.C. 7401, 7407, 7410, and 7601).
List of Subjects
40 CFR Part 51
Administrative practice and
procedure, Air pollution control, Carbon
monoxide, Fugitive emissions,
Intergovernmental relations, Lead,
Nitrogen dioxide, Ozone, Particulate
matter, Reporting and recordkeeping
requirements, Sulfur oxides,
Transportation, Volatile organic
compounds.
40 CFR Part 52
Administrative practice and
procedure, Air pollution control, Carbon
monoxide, Fugitive emissions,
Intergovernmental relations, Lead,
Nitrogen dioxide, Ozone, Particulate
matter, Reporting and recordkeeping
requirements, Sulfur oxides,
Transportation, Volatile organic
compounds.
Dated: December 10, 2008.
Stephen L. Johnson,
Administrator.
For the reasons set out in the
preamble, title 40, chapter I of the Code
of Federal Regulations is amended as
follows:
■
PART 51—[AMENDED]
1. The authority citation for part 51
continues to read as follows:
■
Authority: 23 U.S.C. 101; 42 U.S.C. 7401–
7671q.
Subpart I—[Amended]
2. Section 51.165 is amended as
follows:
■ a. By adding paragraph (a)(1)(v)(G).
■ b. By adding paragraph (a)(1)(vi)(C)(3).
■ c. By revising paragraph (a)(1)(ix).
■
VerDate Aug<31>2005
17:58 Dec 18, 2008
d. By revising paragraphs
(a)(1)(xxviii)(B)(2) and
(a)(1)(xxviii)(B)(4).
■ e. By revising paragraphs
(a)(1)(xxxv)(A)(1), (a)(1)(xxxv)(B)(1),
(a)(1)(xxxv)(C), and (a)(1)(xxxv)(D).
■ f. By revising paragraph (a)(2)(ii)(B).
■ g. By removing and reserving
paragraph (a)(4).
■ h. By revising paragraphs (a)(6)(iii)
and (a)(6)(iv).
■ i. By revising paragraph (f)(4)(i)(D).
■
Jkt 217001
§ 51.165
Permit requirements.
(a) * * *
(1) * * *
(v) * * *
(G) Fugitive emissions shall not be
included in determining for any of the
purposes of this section whether a
physical change in or change in the
method of operation of a major
stationary source is a major
modification, unless the source belongs
to one of the source categories listed in
paragraph (a)(1)(iv)(C) of this section.
(vi) * * *
(C) * * *
(3) As it pertains to an increase or
decrease in fugitive emissions (to the
extent quantifiable), it occurs at an
emissions unit that is part of one of the
source categories listed in paragraph
(a)(1)(iv)(C) of this section or it occurs
at an emissions unit that is located at a
major stationary source that belongs to
one of the listed source categories.
Fugitive emission increases or decreases
are not creditable for those emissions
units located at a facility whose primary
activity is not represented by one of the
source categories listed in paragraph
(a)(1)(iv)(C) of this section and that are
not, by themselves, part of a listed
source category.
*
*
*
*
*
(ix) Fugitive emissions means those
emissions which could not reasonably
pass through a stack, chimney, vent or
other functionally equivalent opening.
Fugitive emissions, to the extent
quantifiable, are addressed as follows
for the purposes of this section:
(A) In determining whether a
stationary source or modification is
major, fugitive emissions from an
emissions unit are included only if the
emissions unit is part of one of the
source categories listed in paragraph
(a)(1)(iv)(C) of this section or the
emissions unit is located at a stationary
source that belongs to one of the source
categories listed in paragraph
(a)(1)(iv)(C) of this section. Fugitive
emissions are not included for those
emissions units located at a facility
whose primary activity is not
represented by one of the source
categories listed in paragraph
PO 00000
Frm 00015
Fmt 4701
Sfmt 4700
77895
(a)(1)(iv)(C) of this section and that are
not, by themselves, part of a listed
source category. (See paragraphs
(a)(1)(iv)(C) and (a)(1)(v)(G) of this
section.)
(B) For purposes of determining the
net emissions increase associated with a
project, an increase or decrease in
fugitive emissions is creditable only if it
occurs at an emissions unit that is part
of one of the source categories listed in
paragraph (a)(1)(iv)(C) of this section or
if the emission unit is located at a major
stationary source that belongs to one of
the listed source categories. Fugitive
emission increases or decreases are not
creditable for those emissions units
located at a facility whose primary
activity is not represented by one of the
source categories listed in paragraph
(a)(1)(iv)(C) of this section and that are
not, by themselves, part of a listed
source category. (See paragraph
(a)(1)(vi)(C)(3) of this section.)
(C) For purposes of determining the
projected actual emissions of an
emissions unit after a project, fugitive
emissions are included only if the
emissions unit is part of one of the
source categories listed in paragraph
(a)(1)(iv)(C) of this section or if the
emission unit is located at a major
stationary source that belongs to one of
the listed source categories. Fugitive
emissions are not included for those
emissions units located at a facility
whose primary activity is not
represented by one of the source
categories listed in paragraph
(a)(1)(iv)(C) of this section and that are
not, by themselves, part of a listed
source category. (See paragraph
(a)(1)(xxviii)(B)(2) of this section.
(D) For purposes of determining the
baseline actual emissions of an
emissions unit, fugitive emissions are
included only if the emissions unit is
part of one of the source categories
listed in paragraph (a)(1)(iv)(C) of this
section or if the emission unit is located
at a major stationary source that belongs
to one of the listed source categories,
except that, for a PAL, fugitive
emissions shall be included regardless
of the source category. With the
exception of PALs, fugitive emissions
are not included for those emissions
units located at a facility whose primary
activity is not represented by one of the
source categories listed in paragraph
(a)(1)(iv)(C) of this section and that are
not, by themselves, part of a listed
source category. (See paragraphs
(a)(1)(xxxv)(A)(1), (a)(1)(xxxv)(B)(1),
(a)(1)(xxxv)(C), and (a)(1)(xxxv)(D) of
this section.)
(E) In calculating whether a project
will cause a significant emissions
increase, fugitive emissions are
E:\FR\FM\19DER2.SGM
19DER2
77896
Federal Register / Vol. 73, No. 245 / Friday, December 19, 2008 / Rules and Regulations
included only for those emissions units
that are part of one of the source
categories listed in paragraph
(a)(1)(iv)(C) of this section, or for any
emissions units that are located at a
major stationary source that belongs to
one of the listed source categories.
Fugitive emissions are not included for
those emissions units located at a
facility whose primary activity is not
represented by one of the source
categories listed in paragraph
(a)(1)(iv)(C) of this section and that are
not, by themselves, part of a listed
source category. (See paragraph
(a)(2)(ii)(B) of this section.)
(F) For purposes of monitoring and
reporting emissions from a project after
normal operations have been resumed,
fugitive emissions are included only for
those emissions units that are part of
one of the source categories listed in
paragraph (a)(1)(iv)(C) of this section, or
for any emissions units that are located
at a major stationary source that belongs
to one of the listed source categories.
Fugitive emissions are not included for
those emissions units located at a
facility whose primary activity is not
represented by one of the source
categories listed in paragraph
(a)(1)(iv)(C) of this section and that are
not, by themselves, part of a listed
source category. (See paragraphs
(a)(6)(iii) and (iv) of this section.)
(G) For all other purposes of this
section, fugitive emissions are treated in
the same manner as other, non-fugitive
emissions. This includes, but is not
limited to, the treatment of fugitive
emissions for offsets (see paragraph
(a)(3) of this section) and for PALs (see
paragraph (f)(4)(i)(D) of this section).
*
*
*
*
*
(xxviii) * * *
(B) * * *
(2) Shall include emissions associated
with startups, shutdowns, and
malfunctions; and, for an emissions unit
that is part of one of the source
categories listed in paragraph
(a)(1)(iv)(C) of this section or for an
emissions unit that is located at a major
stationary source that belongs to one of
the listed source categories, shall
include fugitive emissions (to the extent
quantifiable); and
*
*
*
*
*
(4) In lieu of using the method set out
in paragraphs (a)(1)(xxviii)(B)(1)
through (3) of this section, may elect to
use the emissions unit’s potential to
emit, in tons per year, as defined under
paragraph (a)(1)(iii) of this section. For
this purpose, if the emissions unit is
part of one of the source categories
listed in paragraph (a)(1)(iv)(C) of this
section or if the emissions unit is
VerDate Aug<31>2005
17:58 Dec 18, 2008
Jkt 217001
located at a major stationary source that
belongs to one of the listed source
categories, the unit’s potential to emit
shall include fugitive emissions (to the
extent quantifiable).
*
*
*
*
*
(xxxv) * * *
(A) * * *
(1) The average rate shall include
emissions associated with startups,
shutdowns, and malfunctions; and, for
an emissions unit that is part of one of
the source categories listed in paragraph
(a)(1)(iv)(C) of this section or for an
emissions unit that is located at a major
stationary source that belongs to one of
the listed source categories, shall
include fugitive emissions (to the extent
quantifiable).
*
*
*
*
*
(B) * * *
(1) The average rate shall include
emissions associated with startups,
shutdowns, and malfunctions; and, for
an emissions unit that is part of one of
the source categories listed in paragraph
(a)(1)(iv)(C) of this section or for an
emissions unit that is located at a major
stationary source that belongs to one of
the listed source categories, shall
include fugitive emissions (to the extent
quantifiable).
*
*
*
*
*
(C) For a new emissions unit, the
baseline actual emissions for purposes
of determining the emissions increase
that will result from the initial
construction and operation of such unit
shall equal zero; and thereafter, for all
other purposes, shall equal the unit’s
potential to emit. In the latter case,
fugitive emissions, to the extent
quantifiable, shall be included only if
the emissions unit is part of one of the
source categories listed in paragraph
(a)(1)(iv)(C) of this section or if the
emissions unit is located at a major
stationary source that belongs to one of
the listed source categories.
(D) For a PAL for a major stationary
source, the baseline actual emissions
shall be calculated for existing electric
utility steam generating units in
accordance with the procedures
contained in paragraph (a)(1)(xxxv)(A)
of this section, for other existing
emissions units in accordance with the
procedures contained in paragraph
(a)(1)(xxxv)(B) of this section, and for a
new emissions unit in accordance with
the procedures contained in paragraph
(a)(1)(xxxv)(C) of this section, except
that fugitive emissions (to the extent
quantifiable) shall be included
regardless of the source category.
*
*
*
*
*
(2) * * *
(ii) * * *
PO 00000
Frm 00016
Fmt 4701
Sfmt 4700
(B) The procedure for calculating
(before beginning actual construction)
whether a significant emissions increase
(i.e., the first step of the process) will
occur depends upon the type of
emissions units being modified,
according to paragraphs (a)(2)(ii)(C)
through (F) of this section. For these
calculations, fugitive emissions (to the
extent quantifiable) are included only if
the emissions unit is part of one of the
source categories listed in paragraph
(a)(1)(iv)(C) of this section or if the
emissions unit is located at a major
stationary source that belongs to one of
the listed source categories. Fugitive
emissions are not included for those
emissions units located at a facility
whose primary activity is not
represented by one of the source
categories listed in paragraph
(a)(1)(iv)(C) of this section and that are
not, by themselves, part of a listed
source category. The procedure for
calculating (before beginning actual
construction) whether a significant net
emissions increase will occur at the
major stationary source (i.e., the second
step of the process) is contained in the
definition in paragraph (a)(1)(vi) of this
section. Regardless of any such
preconstruction projections, a major
modification results if the project causes
a significant emissions increase and a
significant net emissions increase.
*
*
*
*
*
(4) [Reserved]
*
*
*
*
*
(6) * * *
(iii) The owner or operator shall
monitor the emissions of any regulated
NSR pollutant that could increase as a
result of the project and that is emitted
by any emissions units identified in
paragraph (a)(6)(i)(B) of this section; and
calculate and maintain a record of the
annual emissions, in tons per year on a
calendar year basis, for a period of 5
years following resumption of regular
operations after the change, or for a
period of 10 years following resumption
of regular operations after the change if
the project increases the design capacity
or potential to emit of that regulated
NSR pollutant at such emissions unit.
For purposes of this paragraph (a)(6)(iii),
fugitive emissions (to the extent
quantifiable) shall be monitored if the
emissions unit is part of one of the
source categories listed in paragraph
(a)(1)(iv)(C) of this section or if the
emissions unit is located at a major
stationary source that belongs to one of
the listed source categories.
(iv) If the unit is an existing electric
utility steam generating unit, the owner
or operator shall submit a report to the
reviewing authority within 60 days after
E:\FR\FM\19DER2.SGM
19DER2
Federal Register / Vol. 73, No. 245 / Friday, December 19, 2008 / Rules and Regulations
the end of each year during which
records must be generated under
paragraph (a)(6)(iii) of this section
setting out the unit’s annual emissions,
as monitored pursuant to paragraph
(a)(6)(iii) of this section, during the year
that preceded submission of the report.
*
*
*
*
*
(f) * * *
(4) * * *
(i) * * *
(D) The PAL shall include fugitive
emissions, to the extent quantifiable,
from all emissions units that emit or
have the potential to emit the PAL
pollutant at the major stationary source,
regardless of whether the emissions unit
or major stationary source belongs to
one of the source categories listed in
paragraph (a)(1)(iv)(C) of this section.
*
*
*
*
*
■ 3. Section 51.166 is amended as
follows:
■ a. By revising paragraph (a)(7)(iv)(b).
■ b. By adding paragraph (b)(2)(v).
■ c. By removing the period at the end
of paragraph (b)(3)(iii)(c) and adding
‘‘; and’’ in its place.
■ d. By adding paragraph (b)(3)(iii)(d).
■ e. By revising paragraph (b)(20).
■ f. By revising paragraphs (b)(40)(ii)(b)
and (b)(40)(ii)(d).
■ g. By revising paragraphs (b)(47)(i)(a),
(b)(47)(ii)(a), (b)(47)(iii), and (b)(47)(iv).
■ h. By removing and reserving
paragraph (i)(1)(ii).
■ i. By revising paragraphs (r)(6)(iii) and
(r)(6)(iv).
■ j. By revising paragraph (w)(4)(i)(d).
§ 51.166 Prevention of significant
deterioration of air quality.
(a) * * *
(7) * * *
(iv) * * *
(b) The procedure for calculating
(before beginning actual construction)
whether a significant emissions increase
(i.e., the first step of the process) will
occur depends upon the type of
emissions units being modified,
according to paragraphs (a)(7)(iv)(c)
through (f) of this section. For these
calculations, fugitive emissions (to the
extent quantifiable) are included only if
the emissions unit is part of one of the
source categories listed in paragraph
(b)(1)(iii) of this section or if the
emission unit is located at a major
stationary source that belongs to one of
the listed source categories. Fugitive
emissions are not included for those
emissions units located at a facility
whose primary activity is not
represented by one of the source
categories listed in paragraph (b)(1)(iii)
of this section and that are not, by
themselves, part of a listed source
VerDate Aug<31>2005
17:58 Dec 18, 2008
Jkt 217001
category. The procedure for calculating
(before beginning actual construction)
whether a significant net emissions
increase will occur at the major
stationary source (i.e., the second step of
the process) is contained in the
definition in paragraph (b)(3) of this
section. Regardless of any such
preconstruction projections, a major
modification results if the project causes
a significant emissions increase and a
significant net emissions increase.
*
*
*
*
*
(b) * * *
(2) * * *
(v) Fugitive emissions shall not be
included in determining for any of the
purposes of this section whether a
physical change in or change in the
method of operation of a major
stationary source is a major
modification, unless the source belongs
to one of the source categories listed in
paragraph (b)(1)(iii) of this section.
(3) * * *
(iii) * * *
(d) As it pertains to an increase or
decrease in fugitive emissions (to the
extent quantifiable), it occurs at an
emissions unit that is part of one of the
source categories listed in paragraph
(b)(1)(iii) of this section or it occurs at
an emission unit that is located at a
major stationary source that belongs to
one of the listed source categories.
Fugitive emission increases or decreases
are not included for those emissions
units located at a facility whose primary
activity is not represented by one of the
source categories listed in paragraph
(b)(1)(iii) of this section and that are not,
by themselves, part of a listed source
category.
*
*
*
*
*
(20) Fugitive emissions means those
emissions which could not reasonably
pass through a stack, chimney, vent, or
other functionally equivalent opening.
Fugitive emissions, to the extent
quantifiable, are addressed as follows
for the purposes of this section:
(i) In calculating whether a project
will cause a significant emissions
increase, fugitive emissions are
included only for those emissions units
that are part of one of the source
categories listed in paragraph (b)(1)(iii)
of this section, or for any emissions
units that are located at a major
stationary source that belongs to one of
the listed source categories. Fugitive
emissions are not included for those
emissions units located at a facility
whose primary activity is not
represented by one of the source
categories listed in paragraph (b)(1)(iii)
of this section and that are not, by
themselves, part of a listed source
PO 00000
Frm 00017
Fmt 4701
Sfmt 4700
77897
category. (See paragraph (a)(7)(iv)(b) of
this section.)
(ii) In determining whether a
stationary source or modification is
major, fugitive emissions from an
emissions unit are included only if the
emissions unit is part of one of the
stationary source categories listed in
paragraph (b)(1)(iii) of this section or the
emissions unit is located at a stationary
source that belongs to one of the source
categories listed in paragraph (b)(1)(iii)
of this section. Fugitive emissions are
not included for those emissions units
located at a facility whose primary
activity is not represented by one of the
source categories listed in paragraph
(b)(1)(iii) of this section and that are not,
by themselves, part of a listed source
category. (See paragraphs (b)(1)(iii) and
(b)(2)(v) of this section.)
(iii) For purposes of determining the
net emissions increase associated with a
project, an increase or decrease in
fugitive emissions is creditable only if it
occurs at an emissions unit that is part
of one of the source categories listed in
paragraph (b)(1)(iii) of this section or if
the emissions unit is located at a major
stationary source that belongs to one of
the listed source categories. Fugitive
emission increases or decreases are not
included for those emissions units
located at a facility whose primary
activity is not represented by one of the
source categories listed in paragraph
(b)(1)(iii) of this section and that are not,
by themselves, part of a listed source
category. (See paragraph (b)(3)(iii)(d) of
this section.)
(iv) For purposes of determining the
projected actual emissions of an
emissions unit after a project, fugitive
emissions are included only if the
emissions unit is part of one of the
source categories listed in paragraph
(b)(1)(iii) of this section or if the
emissions unit is located at a major
stationary source that belongs to one of
the listed source categories. Fugitive
emissions are not included for those
emissions units located at a facility
whose primary activity is not
represented by one of the source
categories listed in paragraph (b)(1)(iii)
of this section and that are not, by
themselves, part of a listed source
category. (See paragraph (b)(40)(ii)(b)
and (d) of this section.
(v) For purposes of determining the
baseline actual emissions of an
emissions unit, fugitive emissions are
included only if the emissions unit is
part of one of the source categories
listed in paragraph (b)(1)(iii) of this
section or if the emissions unit is
located at a major stationary source that
belongs to one of the listed source
categories, except that, for a PAL,
E:\FR\FM\19DER2.SGM
19DER2
77898
Federal Register / Vol. 73, No. 245 / Friday, December 19, 2008 / Rules and Regulations
fugitive emissions shall be included
regardless of the source category. With
the exception of PALs, fugitive
emissions are not included for those
emissions units located at a facility
whose primary activity is not
represented by one of the source
categories listed in paragraph (b)(1)(iii)
of this section and that are not, by
themselves, part of a listed source
category. (See paragraphs (b)(47)(i)(a),
(b)(47)(ii)(a), (b)(47)(iii), and (b)(47)(iv)
of this section.)
(vi) For purposes of monitoring and
reporting emissions from a project after
normal operations have been resumed,
fugitive emissions are included only for
those emissions units that are part of
one of the source categories listed in
paragraph (b)(1)(iii) of this section, or
for any emissions units that are located
at a major stationary source that belongs
to one of the listed source categories.
Fugitive emissions are not included for
those emissions units located at a
facility whose primary activity is not
represented by one of the source
categories listed in paragraph (b)(1)(iii)
of this section and that are not, by
themselves, part of a listed source
category. (See paragraphs (r)(6)(iii) and
(iv) of this section.)
(vii) For all other purposes of this
section, fugitive emissions are treated in
the same manner as other, non-fugitive
emissions. This includes, but is not
limited to, the treatment of fugitive
emissions for the application of best
available control technology (see
paragraph (j) of this section), source
impact analysis (see paragraph (k) of
this section), additional impact analyses
(see paragraph (o) of this section), and
PALs (see paragraph (w)(4)(i)(d) of this
section).
*
*
*
*
*
(40) * * *
(ii) * * *
(b) Shall include emissions associated
with startups, shutdowns, and
malfunctions; and, for an emissions unit
that is part of one of the source
categories listed in paragraph (b)(1)(iii)
of this section or for an emissions unit
that is located at a major stationary
source that belongs to one of the listed
source categories, shall include fugitive
emissions (to the extent quantifiable);
and
*
*
*
*
*
(d) In lieu of using the method set out
in paragraphs (b)(40)(ii)(a) through (c) of
this section, may elect to use the
emissions unit’s potential to emit, in
tons per year, as defined under
paragraph (b)(4) of this section. For this
purpose, if the emissions unit is part of
one of the source categories listed in
VerDate Aug<31>2005
17:58 Dec 18, 2008
Jkt 217001
paragraph (b)(1)(iii) of this section or if
the emissions unit is located at a major
stationary source that belongs to one of
the listed source categories, the unit’s
potential to emit shall include fugitive
emissions (to the extent quantifiable).
*
*
*
*
*
(47) * * *
(i) * * *
(a) The average rate shall include
emissions associated with startups,
shutdowns, and malfunctions; and, for
an emissions unit that is part of one of
the source categories listed in paragraph
(b)(1)(iii) of this section or for an
emissions unit that is located at a major
stationary source that belongs to one of
the listed source categories, shall
include fugitive emissions (to the extent
quantifiable).
*
*
*
*
*
(ii) * * *
(a) The average rate shall include
emissions associated with startups,
shutdowns, and malfunctions; and, for
an emissions unit that is part of one of
the source categories listed in paragraph
(b)(1)(iii) of this section or for an
emissions unit that is located at a major
stationary source that belongs to one of
the listed source categories, shall
include fugitive emissions (to the extent
quantifiable).
*
*
*
*
*
(iii) For a new emissions unit, the
baseline actual emissions for purposes
of determining the emissions increase
that will result from the initial
construction and operation of such unit
shall equal zero; and thereafter, for all
other purposes, shall equal the unit’s
potential to emit. In the latter case,
fugitive emissions, to the extent
quantifiable, shall be included only if
the emissions unit is part of one of the
source categories listed in paragraph
(b)(1)(iii) of this section or if the
emissions unit is located at a major
stationary source that belongs to one of
the listed source categories.
(iv) For a PAL for a major stationary
source, the baseline actual emissions
shall be calculated for existing electric
utility steam generating units in
accordance with the procedures
contained in paragraph (b)(47)(i) of this
section, for other existing emissions
units in accordance with the procedures
contained in paragraph (b)(47)(ii) of this
section, and for a new emissions unit in
accordance with the procedures
contained in paragraph (b)(47)(iii) of
this section, except that fugitive
emissions (to the extent quantifiable)
shall be included regardless of the
source category.
*
*
*
*
*
(i) * * *
PO 00000
Frm 00018
Fmt 4701
Sfmt 4700
(1) * * *
(ii) [Reserved]
*
*
*
*
*
(r) * * *
(6) * * *
(iii) The owner or operator shall
monitor the emissions of any regulated
NSR pollutant that could increase as a
result of the project and that is emitted
by any emissions unit identified in
paragraph (r)(6)(i)(b) of this section; and
calculate and maintain a record of the
annual emissions, in tons per year on a
calendar year basis, for a period of 5
years following resumption of regular
operations after the change, or for a
period of 10 years following resumption
of regular operations after the change if
the project increases the design capacity
or potential to emit of that regulated
NSR pollutant at such emissions unit.
For purposes of this paragraph (r)(6)(iii),
fugitive emissions (to the extent
quantifiable) shall be monitored if the
emissions unit is part of one of the
source categories listed in paragraph
(b)(1)(iii) of this section or if the
emissions unit is located at a major
stationary source that belongs to one of
the listed source categories.
(iv) If the unit is an existing electric
utility steam generating unit, the owner
or operator shall submit a report to the
reviewing authority within 60 days after
the end of each year during which
records must be generated under
paragraph (r)(6)(iii) of this section
setting out the unit’s annual emissions,
as monitored pursuant to paragraph
(r)(6)(iii) of this section, during the
calendar year that preceded submission
of the report.
*
*
*
*
*
(w) * * *
(4) * * *
(i) * * *
(d) The PAL shall include fugitive
emissions, to the extent quantifiable,
from all emissions units that emit or
have the potential to emit the PAL
pollutant at the major stationary source,
regardless of whether the emissions unit
or major stationary source belongs to
one of the source categories listed in
paragraph (b)(1)(iii) of this section.
*
*
*
*
*
Appendix S to Part 51—[Amended]
4. Appendix S to Part 51 is amended
as follows:
■ a. By adding paragraph II.A.5(vii).
■ b. By revising paragraph II.A.6(iii).
■ c. By revising paragraph II.A.9.
■ d. By revising paragraphs II.A.24(ii)(b)
and II.A.24(ii)(d).
■ e. By revising paragraphs II.A.30(i)(a),
II.A.30(ii)(a), II.A.30(iii), and II.A.30(iv).
■ f. By removing and reserving
paragraph II.F.
■
E:\FR\FM\19DER2.SGM
19DER2
Federal Register / Vol. 73, No. 245 / Friday, December 19, 2008 / Rules and Regulations
g. By revising paragraph IV.I.1(ii).
h. By revising paragraphs IV.J.3. and
IV.J.4.
■ i. By revising paragraph IV.K.4(i)(d).
■
■
Appendix S to Part 51—Emission Offset
Interpretative Ruling
*
*
*
*
*
II. * * *
A. * * *
5. * * *
(vii) Fugitive emissions shall not be
included in determining for any of the
purposes of this Ruling whether a physical
change in or change in the method of
operation of a major stationary source is a
major modification, unless the source
belongs to one of the source categories listed
in paragraph II.A.4(iii) of this Ruling.
6. * * *
(iii) An increase or decrease in actual
emissions is creditable only if:
(a) The reviewing authority has not relied
on it in issuing a permit for the source under
this Ruling, which permit is in effect when
the increase in actual emissions from the
particular change occurs; and
(b) As it pertains to an increase or decrease
in fugitive emissions (to the extent
quantifiable), it occurs at an emissions unit
that is part of one of the source categories
listed in paragraph II.A.4(iii) of this Ruling or
it occurs at an emissions unit that is located
at a major stationary source that belongs to
one of the listed source categories.
*
*
*
*
*
9. Fugitive emissions means those
emissions which could not reasonably pass
through a stack, chimney, vent or other
functionally equivalent opening. Fugitive
emissions, to the extent quantifiable, are
addressed as follows for the purposes of this
Ruling:
(i) In determining whether a stationary
source or modification is major, fugitive
emissions from an emissions unit are
included only if the emissions unit is part of
one of the source categories listed in
paragraph II.A.4(iii) of this Ruling or the
emissions unit is located at a stationary
source that belongs to one of the source
categories listed in paragraph II.A.4(iii) of
this Ruling. (See paragraphs II.A.4(iii) and
II.A.5(vii) of this Ruling.)
(ii) For purposes of determining the net
emissions increase associated with a project,
an increase or decrease in fugitive emissions
is creditable only if it occurs at an emissions
unit that is part of one of the source
categories listed in paragraph II.A.4(iii) of
this Ruling or if the emission unit is located
at a major stationary source that belongs to
one of the listed source categories. Fugitive
emission increases or decreases are not
included for those emissions units located at
a facility whose primary activity is not
represented by one of the source categories
listed in paragraph II.A.4(iii) of this Ruling
and that are not, by themselves, part of a
listed source category. (See paragraph
II.A.6(iii) of this Ruling.)
(iii) For purposes of determining the
projected actual emissions of an emissions
unit after a project, fugitive emissions are
included only if the emissions unit is part of
VerDate Aug<31>2005
17:58 Dec 18, 2008
Jkt 217001
one of the source categories listed in
paragraph II.A.4(iii) of this Ruling or if the
emission unit is located at a major stationary
source that belongs to one of the listed source
categories. Fugitive emissions are not
included for those emissions units located at
a facility whose primary activity is not
represented by one of the source categories
listed in paragraph II.A.4(iii) of this Ruling
and that are not, by themselves, part of a
listed source category. (See paragraph
II.A.24(ii)(b) of this Ruling.)
(iv) For purposes of determining the
baseline actual emissions of an emissions
unit, fugitive emissions are included only if
the emissions unit is part of one of the source
categories listed in paragraph II.A.4(iii) of
this Ruling or if the emission unit is located
at a major stationary source that belongs to
one of the listed source categories, except
that, for a PAL, fugitive emissions shall be
included regardless of the source category.
With the exception of PALs, fugitive
emissions are not included for those
emissions units located at a facility whose
primary activity is not represented by one of
the source categories listed in paragraph
II.A.4(iii) of this Ruling and that are not, by
themselves, part of a listed source category.
(See paragraphs II.A.30(i)(a), II.A.30(ii)(a),
II.A.30(iii), and II.A.30(iv) of this Ruling.)
(v) In calculating whether a project will
cause a significant emissions increase,
fugitive emissions are included only for those
emissions units that are part of one of the
source categories listed in paragraph
II.A.4(iii) of this Ruling, or for any emissions
units that are located at a major stationary
source that belongs to one of the listed source
categories. Fugitive emissions are not
included for those emissions units located at
a facility whose primary activity is not
represented by one of the source categories
listed in paragraph II.A.4(iii) of this Ruling
and that are not, by themselves, part of a
listed source category. (See paragraph
IV.I.1(ii) of this Ruling.)
(vi) For purposes of monitoring and
reporting emissions from a project after
normal operations have been resumed,
fugitive emissions are included only for those
emissions units that are part of one of the
source categories listed in paragraph
II.A.4(iii) of this Ruling, or for any emissions
units that are located at a major stationary
source that belongs to one of the listed source
categories. Fugitive emissions are not
included for those emissions units located at
a facility whose primary activity is not
represented by one of the source categories
listed in paragraph II.A.4(iii) of this Ruling
and that are not, by themselves, part of a
listed source category. (See paragraphs IV.J.3
and IV.J.4 of this Ruling.)
(vii) For all other purposes of this Ruling,
fugitive emissions are treated in the same
manner as other, non-fugitive emissions. This
includes, but is not limited to, the treatment
of fugitive emissions for offsets (see
paragraph IV.C of this Ruling) and for PALs
(see paragraph IV.K.4(i)(d) of this Ruling).
*
*
*
*
*
24. * * *
(ii) * * *
(b) Shall include emissions associated with
startups, shutdowns, and malfunctions; and,
PO 00000
Frm 00019
Fmt 4701
Sfmt 4700
77899
for an emissions unit that is part of one of
the source categories listed in paragraph
II.A.4(iii) of this Ruling or for an emissions
unit that is located at a major stationary
source that belongs to one of the listed source
categories, shall include fugitive emissions
(to the extent quantifiable); and
*
*
*
*
*
(d) In lieu of using the method set out in
paragraphs II.A.24(ii)(a) through (c) of this
Ruling, may elect to use the emissions unit’s
potential to emit, in tons per year, as defined
under paragraph II.A.3 of this Ruling. For
this purpose, if the emissions unit is part of
one of the source categories listed in
paragraph II.A.4(iii) of this Ruling or if the
emissions unit is located at a major stationary
source that belongs to one of the listed source
categories, the unit’s potential to emit shall
include fugitive emissions (to the extent
quantifiable).
*
*
*
*
*
30. * * *
(i) * * *
(a) The average rate shall include
emissions associated with startups,
shutdowns, and malfunctions; and, for an
emissions unit that is part of one of the
source categories listed in paragraph
II.A.4(iii) of this Ruling or for an emissions
unit that is located at a major stationary
source that belongs to one of the listed source
categories, shall include fugitive emissions
(to the extent quantifiable).
*
*
*
*
*
(ii) * * *
(a) The average rate shall include
emissions associated with startups,
shutdowns, and malfunctions; and, for an
emissions unit that is part of one of the
source categories listed in paragraph
II.A.4(iii) of this Ruling or for an emissions
unit that is located at a major stationary
source that belongs to one of the listed source
categories, shall include fugitive emissions
(to the extent quantifiable).
*
*
*
*
*
(iii) For a new emissions unit, the baseline
actual emissions for purposes of determining
the emissions increase that will result from
the initial construction and operation of such
unit shall equal zero; and thereafter, for all
other purposes, shall equal the unit’s
potential to emit. In the latter case, fugitive
emissions, to the extent quantifiable, shall be
included only if the emissions unit is part of
one of the source categories listed in
paragraph II.A.4(iii) of this Ruling or if the
emissions unit is located at a major stationary
source that belongs to one of the listed source
categories.
(iv) For a PAL for a major stationary
source, the baseline actual emissions shall be
calculated for existing electric utility steam
generating units in accordance with the
procedures contained in paragraph II.A.30(i)
of this Ruling, for other existing emissions
units in accordance with the procedures
contained in paragraph II.A.30(ii) of this
Ruling, and for a new emissions unit in
accordance with the procedures contained in
paragraph II.A.30(iii) of this Ruling, except
that fugitive emissions (to the extent
E:\FR\FM\19DER2.SGM
19DER2
77900
Federal Register / Vol. 73, No. 245 / Friday, December 19, 2008 / Rules and Regulations
quantifiable) shall be included regardless of
the source category.
*
*
*
*
*
*
*
F. [Reserved]
*
*
*
*
IV. * * *
I. * * *
1. * * *
(ii) The procedure for calculating (before
beginning actual construction) whether a
significant emissions increase (i.e., the first
step of the process) will occur depends upon
the type of emissions units being modified,
according to paragraphs II.I.1(iii) through (v)
of this Ruling. For these calculations, fugitive
emissions (to the extent quantifiable) are
included only if the emissions unit is part of
one of the source categories listed in
paragraph II.A.4(iii) of this Ruling or if the
emissions unit is located at a major stationary
source that belongs to one of the listed source
categories. The procedure for calculating
(before beginning actual construction)
whether a significant net emissions increase
will occur at the major stationary source (i.e.,
the second step of the process) is contained
in the definition in paragraph II.A.6 of this
Ruling. Regardless of any such
preconstruction projections, a major
modification results if the project causes a
significant emissions increase and a
significant net emissions increase.
*
*
*
*
*
J. * * *
3. The owner or operator shall monitor the
emissions of any regulated NSR pollutant
that could increase as a result of the project
and that is emitted by any emissions units
identified in paragraph IV.J.1(ii) of this
Ruling; and calculate and maintain a record
of the annual emissions, in tons per year on
a calendar year basis, for a period of 5 years
following resumption of regular operations
after the change, or for a period of 10 years
following resumption of regular operations
after the change if the project increases the
design capacity or potential to emit of that
regulated NSR pollutant at such emissions
unit. For purposes of this paragraph IV.J.3,
fugitive emissions (to the extent quantifiable)
shall be monitored if the emissions unit is
part of one of the source categories listed in
paragraph II.A.4(iii) of this Ruling or if the
emissions unit is located at a major stationary
source that belongs to one of the listed source
categories.
4. If the unit is an existing electric utility
steam generating unit, the owner or operator
shall submit a report to the reviewing
authority within 60 days after the end of each
year during which records must be generated
under paragraph IV.J.3 of this Ruling setting
out the unit’s annual emissions, as monitored
pursuant to paragraph IV.J.3 of this Ruling,
during the year that preceded submission of
the report.
*
*
*
*
*
K. * * *
4. * * *
(i) * * *
(d) The PAL shall include fugitive
emissions, to the extent quantifiable, from all
emissions units that emit or have the
potential to emit the PAL pollutant at the
major stationary source, regardless of
VerDate Aug<31>2005
17:58 Dec 18, 2008
whether the emissions unit or major
stationary source belongs to one of the source
categories listed in paragraph II.A.4(iii) of
this Ruling.
Jkt 217001
*
*
*
*
PART 52—[AMENDED]
5. The authority citation for part 52
continues to read as follows:
Authority: 42 U.S.C. 7401, et seq.
Subpart A—[Amended]
6. Section 52.21 is amended as
follows:
■ a. By revising paragraph (a)(2)(iv)(b).
■ b. By adding paragraph (b)(2)(v).
■ c. By removing the period at the end
of paragraph (b)(3)(iii)(b) and adding
‘‘; and’’ in its place.
■ d. By adding paragraph (b)(3)(iii)(c).
■ e. By revising paragraph (b)(20).
■ f. By revising paragraphs (b)(41)(ii)(b)
and (b)(41)(ii)(d).
■ g. By revising paragraphs (b)(48)(i)(a),
(b)(48)(ii)(a), (b)(48)(iii), and (b)(48)(iv).
■ h. By removing and reserving
paragraph (i)(1)(vii).
■ i. By revising paragraphs (r)(6)(iii) and
(r)(6)(iv).
■ j. By revising paragraph (aa)(4)(i)(d).
■
§ 52.21 Prevention of significant
deterioration of air quality.
(a) * * *
(2) * * *
(iv) * * *
(b) The procedure for calculating
(before beginning actual construction)
whether a significant emissions increase
(i.e., the first step of the process) will
occur depends upon the type of
emissions units being modified,
according to paragraphs (a)(2)(iv)(c)
through (f) of this section. For these
calculations, fugitive emissions (to the
extent quantifiable) are included only if
the emissions unit is part of one of the
source categories listed in paragraph
(b)(1)(iii) of this section or if the
emission unit is located at a major
stationary source that belongs to one of
the listed source categories. Fugitive
emissions are not included for those
emissions units located at a facility
whose primary activity is not
represented by one of the source
categories listed in paragraph (b)(1)(iii)
of this section and that are not, by
themselves, part of a listed source
category. The procedure for calculating
(before beginning actual construction)
whether a significant net emissions
increase will occur at the major
stationary source (i.e., the second step of
the process) is contained in the
definition in paragraph (b)(3) of this
section. Regardless of any such
preconstruction projections, a major
PO 00000
Frm 00020
Fmt 4701
Sfmt 4700
modification results if the project causes
a significant emissions increase and a
significant net emissions increase.
*
*
*
*
*
(b) * * *
(2) * * *
(v) Fugitive emissions shall not be
included in determining for any of the
purposes of this section whether a
physical change in or change in the
method of operation of a major
stationary source is a major
modification, unless the source belongs
to one of the source categories listed in
paragraph (b)(1)(iii) of this section.
(3) * * *
(iii) * * *
(c) As it pertains to an increase or
decrease in fugitive emissions (to the
extent quantifiable), it occurs at an
emissions unit that is part of one of the
source categories listed in paragraph
(b)(1)(iii) of this section or it occurs at
an emission unit that is located at a
major stationary source that belongs to
one of the listed source categories.
*
*
*
*
*
(20) Fugitive emissions means those
emissions which could not reasonably
pass through a stack, chimney, vent, or
other functionally equivalent opening.
Fugitive emissions, to the extent
quantifiable, are addressed as follows
for the purposes of this section:
(i) In calculating whether a project
will cause a significant emissions
increase, fugitive emissions are
included only for those emissions units
that are part of one of the source
categories listed in paragraph (b)(1)(iii)
of this section, or for any emissions
units that are located at a major
stationary source that belongs to one of
the listed source categories. Fugitive
emissions are not included for those
emissions units located at a facility
whose primary activity is not
represented by one of the source
categories listed in paragraph (b)(1)(iii)
of this section and that are not, by
themselves, part of a listed source
category. (See paragraph (a)(2)(iv)(b) of
this section.)
(ii) In determining whether a
stationary source or modification is
major, fugitive emissions from an
emissions unit are included only if the
emissions unit is part of one of the
source categories listed in paragraph
(b)(1)(iii) of this section or if the
emission unit is located at a stationary
source that belongs to one of the source
categories listed in paragraph (b)(1)(iii)
of this section. Fugitive emissions are
not included for those emissions units
located at a facility whose primary
activity is not represented by one of the
source categories listed in paragraph
E:\FR\FM\19DER2.SGM
19DER2
Federal Register / Vol. 73, No. 245 / Friday, December 19, 2008 / Rules and Regulations
(b)(1)(iii) of this section and that are not,
by themselves, part of a listed source
category. (See paragraphs (b)(1)(iii) and
(b)(2)(v) of this section.)
(iii) For purposes of determining the
net emissions increase associated with a
project, an increase or decrease in
fugitive emissions is creditable only if it
occurs at an emissions unit that is part
of one of the source categories listed in
paragraph (b)(1)(iii) of this section or if
the emission unit is located at a major
stationary source that belongs to one of
the listed source categories. Fugitive
emission increases or decreases are not
included for those emissions units
located at a facility whose primary
activity is not represented by one of the
source categories listed in paragraph
(b)(1)(iii) of this section and that are not,
by themselves, part of a listed source
category. (See paragraph (b)(3)(iii)(c) of
this section.)
(iv) For purposes of determining the
projected actual emissions of an
emissions unit after a project, fugitive
emissions are included only if the
emissions unit is part of one of the
source categories listed in paragraph
(b)(1)(iii) of this section or if the
emission unit is located at a major
stationary source that belongs to one of
the listed source categories. Fugitive
emissions are not included for those
emissions units located at a facility
whose primary activity is not
represented by one of the source
categories listed in paragraph (b)(1)(iii)
of this section and that are not, by
themselves, part of a listed source
category. (See paragraph (b)(41)(ii)(b)
and (d) of this section.
(v) For purposes of determining the
baseline actual emissions of an
emissions unit, fugitive emissions are
included only if the emissions unit is
part of one of the source categories
listed in paragraph (b)(1)(iii) of this
section or if the emission unit is located
at a major stationary source that belongs
to one of the listed source categories,
except that, for a PAL, fugitive
emissions shall be included regardless
of the source category. With the
exception of PALs, fugitive emissions
are not included for those emissions
units located at a facility whose primary
activity is not represented by one of the
source categories listed in paragraph
(b)(1)(iii) of this section and that are not,
by themselves, part of a listed source
category. (See paragraphs (b)(48)(i)(a),
(b)(48)(ii)(a), (b)(48)(iii), and (b)(48)(iv)
of this section.)
(vi) For purposes of monitoring and
reporting emissions from a project after
normal operations have been resumed,
fugitive emissions are included only for
those emissions units that are part of
VerDate Aug<31>2005
17:58 Dec 18, 2008
Jkt 217001
one of the source categories listed in
paragraph (b)(1)(iii) of this section, or
for any emissions units that are located
at a major stationary source that belongs
to one of the listed source categories.
Fugitive emissions are not included for
those emissions units located at a
facility whose primary activity is not
represented by one of the source
categories listed in paragraph (b)(1)(iii)
of this section and that are not, by
themselves, part of a listed source
category. (See paragraphs (r)(6)(iii) and
(iv) of this section.)
(vii) For all other purposes of this
section, fugitive emissions are treated in
the same manner as other, non-fugitive
emissions. This includes, but is not
limited to, the treatment of fugitive
emissions for the application of best
available control technology (see
paragraph (j) of this section), source
impact analysis (see paragraph (k) of
this section), additional impact analyses
(see paragraph (o) of this section), and
PALs (see paragraph (aa)(4)(i)(d) of this
section).
*
*
*
*
*
(41) * * *
(ii) * * *
(b) Shall include emissions associated
with startups, shutdowns, and
malfunctions; and, for an emissions unit
that is part of one of the source
categories listed in paragraph (b)(1)(iii)
of this section or for an emissions unit
that is located at a major stationary
source that belongs to one of the listed
source categories, shall include fugitive
emissions (to the extent quantifiable);
and
*
*
*
*
*
(d) In lieu of using the method set out
in paragraphs (b)(41)(ii)(a) through (c) of
this section, may elect to use the
emissions unit’s potential to emit, in
tons per year, as defined under
paragraph (b)(4) of this section. For this
purpose, if the emissions unit is part of
one of the source categories listed in
paragraph (b)(1)(iii) of this section or if
the emission unit is located at a major
stationary source that belongs to one of
the listed source categories, the unit’s
potential to emit shall include fugitive
emissions (to the extent quantifiable).
*
*
*
*
*
(48) * * *
(i) * * *
(a) The average rate shall include
emissions associated with startups,
shutdowns, and malfunctions; and, for
an emissions unit that is part of one of
the source categories listed in paragraph
(b)(1)(iii) of this section or for an
emissions unit that is located at a major
stationary source that belongs to one of
the listed source categories, shall
PO 00000
Frm 00021
Fmt 4701
Sfmt 4700
77901
include fugitive emissions (to the extent
quantifiable).
*
*
*
*
*
(ii) * * *
(a) The average rate shall include
emissions associated with startups,
shutdowns, and malfunctions; and, for
an emissions unit that is part of one of
the source categories listed in paragraph
(b)(1)(iii) of this section or for an
emissions unit that is located at a major
stationary source that belongs to one of
the listed source categories, shall
include fugitive emissions (to the extent
quantifiable).
*
*
*
*
*
(iii) For a new emissions unit, the
baseline actual emissions for purposes
of determining the emissions increase
that will result from the initial
construction and operation of such unit
shall equal zero; and thereafter, for all
other purposes, shall equal the unit’s
potential to emit. In the latter case,
fugitive emissions, to the extent
quantifiable, shall be included only if
the emissions unit is part of one of the
source categories listed in paragraph
(b)(1)(iii) of this section or if the
emissions unit is located at a major
stationary source that belongs to one of
the listed source categories.
(iv) For a PAL for a major stationary
source, the baseline actual emissions
shall be calculated for existing electric
utility steam generating units in
accordance with the procedures
contained in paragraph (b)(48)(i) of this
section, for other existing emissions
units in accordance with the procedures
contained in paragraph (b)(48)(ii) of this
section, and for a new emissions unit in
accordance with the procedures
contained in paragraph (b)(48)(iii) of
this section, except that fugitive
emissions (to the extent quantifiable)
shall be included regardless of the
source category.
*
*
*
*
*
(i) * * *
(1) * * *
(vii) [Reserved]
*
*
*
*
*
(r) * * *
(6) * * *
(iii) The owner or operator shall
monitor the emissions of any regulated
NSR pollutant that could increase as a
result of the project and that is emitted
by any emissions unit identified in
paragraph (r)(6)(i)(b) of this section; and
calculate and maintain a record of the
annual emissions, in tons per year on a
calendar year basis, for a period of 5
years following resumption of regular
operations after the change, or for a
period of 10 years following resumption
of regular operations after the change if
E:\FR\FM\19DER2.SGM
19DER2
77902
Federal Register / Vol. 73, No. 245 / Friday, December 19, 2008 / Rules and Regulations
the project increases the design capacity
or potential to emit of that regulated
NSR pollutant at such emissions unit.
For purposes of this paragraph (r)(6)(iii),
fugitive emissions (to the extent
quantifiable) shall be monitored if the
emissions unit is part of one of the
source categories listed in paragraph
(b)(1)(iii) of this section or if the
emissions unit is located at a major
stationary source that belongs to one of
the listed source categories.
(iv) If the unit is an existing electric
utility steam generating unit, the owner
VerDate Aug<31>2005
17:58 Dec 18, 2008
Jkt 217001
or operator shall submit a report to the
Administrator within 60 days after the
end of each year during which records
must be generated under paragraph
(r)(6)(iii) of this section setting out the
unit’s annual emissions, as monitored
pursuant to paragraph (r)(6)(iii) of this
section, during the calendar year that
preceded submission of the report.
*
*
*
*
*
(aa) * * *
(4) * * *
(i) * * *
PO 00000
Frm 00022
Fmt 4701
Sfmt 4700
(d) The PAL shall include fugitive
emissions, to the extent quantifiable,
from all emissions units that emit or
have the potential to emit the PAL
pollutant at the major stationary source,
regardless of whether the emissions unit
or major stationary source belongs to
one of the source categories listed in
paragraph (b)(1)(iii) of this section.
*
*
*
*
*
[FR Doc. E8–29998 Filed 12–18–08; 8:45 am]
BILLING CODE 6560–50–P
E:\FR\FM\19DER2.SGM
19DER2
]]>Agencies
[Federal Register Volume 73, Number 245 (Friday, December 19, 2008)]
[Rules and Regulations]
[Pages 77882-77902]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-29998]
[[Page 77881]]
-----------------------------------------------------------------------
Part II
Environmental Protection Agency
-----------------------------------------------------------------------
40 CFR Parts 51 and 52
Prevention of Significant Deterioration (PSD) and Nonattainment New
Source Review (NSR): Reconsideration of Inclusion of Fugitive
Emissions; Final Rule
Federal Register / Vol. 73, No. 245 / Friday, December 19, 2008 /
Rules and Regulations
[[Page 77882]]
-----------------------------------------------------------------------
ENVIRONMENTAL PROTECTION AGENCY
40 CFR Parts 51 and 52
[EPA-HQ-OAR-2004-0014, FRL-8752-4]
RIN 2060-AM91
Prevention of Significant Deterioration (PSD) and Nonattainment
New Source Review (NSR): Reconsideration of Inclusion of Fugitive
Emissions
AGENCY: Environmental Protection Agency (EPA).
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The EPA is finalizing revisions to the December 31, 2002 New
Source Review (NSR) Improvement rules to change the requirements of the
major NSR programs regarding the treatment of fugitive emissions.
Specifically, this final rule requires that fugitive emissions be
included in determining whether a physical or operational change
results in a major modification only for sources in the source
categories that have been designated through rulemaking pursuant to
section 302(j) of the Clean Air Act (Act). Also, this action elaborates
on guiding principles for determining fugitive emissions for purposes
of NSR and title V permitting.
DATES: This final rule is effective January 20, 2009.
FOR FURTHER INFORMATION CONTACT: Mr. Joseph Mangino, Air Quality Policy
Division, Office of Air Quality Planning and Standards (C504-03),
Environmental Protection Agency, Research Triangle Park, NC 27711,
telephone number: (919) 541-9778; fax number: (919) 541-5509, e-mail
address: mangino.joseph@epa.gov.
SUPPLEMENTARY INFORMATION:
I. General Information
A. Does this action apply to me?
Entities potentially affected by this action include sources in all
industry groups. The majority of sources potentially affected are
expected to be in the following groups.
------------------------------------------------------------------------
Industry group SIC \a\ NAICS \b\
------------------------------------------------------------------------
Electric Services............... 491............... 221111, 221112,
221113, 221119,
221121, 221122
Petroleum Refining.............. 291............... 324110
Industrial Inorganic Chemicals.. 281............... 325181, 325120,
325131, 325182,
211112, 325998,
331311, 325188
Industrial Organic Chemicals.... 286............... 325110, 325132,
325192, 325188,
325193, 325120,
325199
Miscellaneous Chemical Products. 289............... 325520, 325920,
325910, 325182,
325510
Natural Gas Liquids............. 132............... 211112
Natural Gas Transport........... 492............... 486210, 221210
Pulp and Paper Mills............ 261............... 322110, 322121,
322122, 322130
Paper Mills..................... 262............... 322121, 322122
Automobile Manufacturing........ 371............... 336111, 336112,
336211, 336992,
336322, 336312,
336330, 336340,
336350, 336399,
336212, 336213
Pharmaceuticals................. 283............... 325411, 325412,
325413, 325414
Mining.......................... 211, 212, 213..... 21
Agriculture, Fishing and Hunting 111, 112, 113, 115 11
------------------------------------------------------------------------
\a\ Standard Industrial Classification.
\b\ North American Industry Classification System.
Entities potentially affected by the subject rule for this proposed
action also include state, local, and tribal governments.
B. How Is This Preamble Organized?
The information presented in this preamble is organized as follows:
I. General Information
A. Does this action apply to me?
B. How is this preamble organized?
II. Background
A. What is major New Source Review?
B. What sources are subject to major NSR?
C. What are fugitive emissions, and how do they figure into
major NSR applicability?
D. What is the basis for and history of EPA's treatment of
fugitive emissions in major NSR applicability determinations?
E. Why did EPA reconsider this aspect of the December 2002 NSR
Improvement final rulemaking?
III. What is included in this final action?
A. What are the results of EPA's reconsideration?
B. What are EPA's revisions to the major NSR regulations?
C. What is the effect of this action on the minor NSR program?
IV. What is the rationale for this final action?
A. The Newmont Petition
B. Policy and Legal Rationale
V. When will these changes take effect in the federal PSD Program
and will states be required to revise their State Implementation
Plans (SIPs) to incorporate this proposed action?
VI. What are the guiding principles for determining fugitive
emissions?
VII. Statutory and Executive Order Reviews
A. Executive Order 12866: Regulatory Planning and Review
B. Paperwork Reduction Act
C. Regulatory Flexibility Analysis
D. Unfunded Mandates Reform Act
E. Executive Order 13132: Federalism
F. Executive Order 13175: Consultation and Coordination with
Indian Tribal Governments
G. Executive Order 13045: Protection of Children from
Environmental Health and Safety Risks
H. Executive Order 13211: Actions That Significantly Affect
Energy Supply, Distribution, or Use
I. National Technology Transfer and Advancement Act
J. Executive Order 12899: Federal Actions to Address
Environmental Justice in Minority Populations and Low-Income
Populations
K. Congressional Review Act
VIII. Judicial Review
IX. Statutory Authority
II. Background
A. What is Major New Source Review?
The major NSR program is mandated by parts C and D of title I of
the Act. Major NSR is a preconstruction review and permitting program
applicable to new or modified major stationary sources (major sources)
of air pollutants regulated under the Act. In areas not meeting
National Ambient Air Quality Standards (NAAQS) and in ozone transport
regions (OTR), the program is implemented under the requirements of
part D of title I of the Act. We call this program the
``nonattainment'' major NSR program. In areas meeting NAAQS
(``attainment'' areas) or for which there is insufficient information
to determine whether they meet the NAAQS (``unclassifiable'' areas),
the NSR requirements under part C of title I of
[[Page 77883]]
the Act apply. We call this program the Prevention of Significant
Deterioration (PSD) program. Collectively, we also commonly refer to
these programs as the major NSR program. These regulations are
contained in 40 CFR 51.165, 51.166, 52.21, 52.24, and appendix S to
part 51.
B. What sources are subject to major NSR?
Major NSR applies to (1) construction of new major sources, and (2)
major modifications at existing major sources. In either case, the
initial step in assessing applicability is to determine whether the
source in question qualifies as a ``major source.'' A proposed or
existing source qualifies as a major source if it ``emits or has the
potential to emit'' a regulated NSR pollutant in an amount greater than
the specified annual threshold. We define ``potential to emit'' (PTE)
as the maximum capacity of a source to emit a pollutant under its
physical and operational design, taking into account any physical or
operational limitations on the source that are enforceable as a
practical matter. (See, for example, Sec. 52.21(b)(4) for the full
definition of PTE.)
If a proposed new source's PTE is greater than the applicable major
source threshold for one or more regulated NSR pollutants, it is
subject to preconstruction review under major NSR. For the PSD program,
the major source threshold is 100 tons per year (tpy) for sources in
any of 28 source categories listed in the regulations, and 250 tpy for
any other type of source. (See Sec. Sec. 51.166(b)(1) and 52.21(b)(1)
for the full definition of ``major stationary source'' under PSD.) The
major source threshold under nonattainment major NSR is generally 100
tpy, but is lower for some pollutants in nonattainment areas classified
as serious, severe, or extreme. (See Sec. 51.165(a)(1)(iv) for the
full definition of ``major stationary source'' under nonattainment
major NSR.) These same major source thresholds also apply to
modifications at existing minor sources where the modification by
itself has potential emissions in excess of the applicable threshold.
If an existing major source (i.e., an existing source with actual
emissions and/or PTE greater than the applicable major source
threshold) is planning a physical or operational change, the project is
subject to review under major NSR if it is a ``major modification.'' A
physical or operational change is a major modification if it meets both
of the following two criteria: \1\
---------------------------------------------------------------------------
\1\ On October 20, 2005, we proposed different major NSR
applicability procedures for modifications at electric generating
units. (See 70 FR 61081.) Our rulemaking effort for such units is
ongoing.
---------------------------------------------------------------------------
The physical or operational change, taken by itself, would
result in a significant increase in emissions of a regulated NSR
pollutant; and
The physical or operational change, taken together with
other, contemporaneous emissions increases and decreases at the source,
would result in a significant net emissions increase.
The level of emissions that is considered ``significant'' varies by
pollutant and, in some cases, by a nonattainment area's classification.
For example, an increase of 40 tpy is significant for sulfur dioxide,
while 0.6 tpy of lead is considered a significant increase. (See
Sec. Sec. 51.166(b)(23) and 52.21(b)(23) for the full definition of
``significant'' under PSD and Sec. 51.165(a)(1)(x) for the full
definition under nonattainment major NSR.) In determining the increase
in emissions from a physical or operational change, new emissions units
are evaluated at their PTE, while existing and replacement units are
generally evaluated by comparing their baseline actual emissions before
the physical or operational change to their projected actual emissions
after the change.
C. What are fugitive emissions, and how do they figure into major NSR
applicability?
For purposes of major NSR, we define ``fugitive emissions'' as
emissions that could not reasonably pass through a stack, chimney,
vent, or other functionally equivalent opening. (See, for example,
Sec. 52.21(b)(20).) Examples of fugitive emissions include windblown
dust from surface mines and volatile organic compounds (VOCs) emitted
from leaking pipes and fittings at petroleum refineries.
Quantifiable fugitive emissions are included in a stationary
source's PTE when determining whether the source is a major source only
if they are emitted from one of the source categories specifically
listed in the major NSR regulations. This is consistent with section
302(j) of the Act, and is made clear in the definition of ``major
stationary source'' that is found in the major NSR regulations. (See,
for example, Sec. 52.21(b)(1)(iii).)
Conversely, under the 2002 NSR rules, fugitive emissions, to the
extent quantifiable, are included in determining whether a physical or
operational change is a major modification (i.e., in calculating the
resulting emissions increase and net emissions increase), regardless of
the source category that the emission source belongs to. This is the
case because the definitions of the terms ``projected actual
emissions'' and ``baseline actual emissions'' under the 2002 NSR rules,
which are the definitions used to calculate emission increases at
existing units, include quantifiable fugitive emissions. (See
Sec. Sec. 52.21(b)(41)(ii)(b) and 52.21(b)(48)(ii)(a).) In our
November 13, 2007 (72 FR 63850, November 13, 2007) notice we proposed
to modify this aspect of the current NSR rules to take a consistent
approach as to the inclusion of fugitive emissions in threshold major
source and major modification determinations.
D. What is the basis for and history of EPA's treatment of fugitive
emissions in major NSR applicability determinations?
Section 302(j) of the Act sets out the definition of ``major
stationary source'' that, along with several other provisions of the
Act, provides the basis for the definitions used in the major NSR
regulations. The definition in section 302(j) specifies that fugitive
emissions are included in major source determinations only for source
categories that EPA specifies through rulemaking. As discussed below,
EPA enacted regulations pursuant to section 302(j) that specify the
source categories for which fugitive emissions are included in the
major source determination and has listed these source categories in
the ``major stationary source'' definitions. However, the Act is silent
regarding the treatment of fugitive emissions for purposes of
determining whether a physical or operational change is a major
modification. Below, we discuss the history of this issue leading up to
this final action.
We first created the list of source categories for which fugitive
emissions are included in major source determinations (the ``section
302(j) list'') in the final PSD and nonattainment major NSR rules
issued in 1980 on remand from the DC Circuit. (See 45 FR 52676, August
7, 1980.) The court remanded our initial major NSR rules for a variety
of reasons, including our failure to follow the requirements of section
302(j) in promulgating a partial exemption for fugitive dust. (See
Alabama Power v. Costle, 636 F.2d 323, 369-370 (DC Cir. 1979).)
The promulgated section 302(j) list included the source categories
listed in section 169(1) of the Act, which is the definition of ``major
emitting facility'' for purposes of PSD. Under that definition, the
major source threshold
[[Page 77884]]
for the listed source categories is 100 tpy, rather than the 250 tpy
threshold that applies to other categories of sources. In the preamble
to the 1980 major NSR rules, we noted that the Alabama Power court
stated that ``Congress'' intention, in establishing the list of source
categories in section 169(1) of the Act, was to identify facilities
which, due to their size, are financially able to bear the substantial
regulatory costs imposed by the PSD provisions and which, as a group,
are primarily responsible for emission of the deleterious pollutants
that befoul our nation's air.'' (See 45 FR 52691, August 7, 1980.) In
light of that intent, we determined that as a matter of policy, it
would be appropriate to count all emissions-including fugitive
emissions-in threshold calculations of major NSR applicability for
those source categories. (Again, see 45 FR 52691, August 7, 1980.) In
doing so, we indicated that our listing decisions would be based on
whether sources in the category have the potential to degrade air
quality significantly. We also indicated that we would consider
information raised by commenters that showed that unreasonable
socioeconomic impacts relative to the benefits would result from
subjecting the sources to the relevant PSD or nonattainment programs.
In addition to the source categories listed in section 169(1),
based on application of these criteria, we included on the section
302(j) list ``any other stationary source category which, as of August
7, 1980, is being regulated under section 111 or 112 of the Act.'' We
noted in the 1980 preamble that categories of sources are regulated
under section 111 (New Source Performance Standards or NSPS) or 112
(National Emission Standards for Hazardous Air Pollutants or NESHAP) on
the basis of a determination that their emissions seriously and
adversely impact ambient air quality. We therefore determined that it
was appropriate to include their fugitive emissions in the threshold
calculations for purposes of major NSR applicability. We included the
August 7, 1980 cutoff date because we believed that sources not
regulated by NSPS or NESHAP before the promulgation date of the major
NSR rules could not have been afforded a meaningful opportunity to
comment on the inclusion of their fugitive emissions in threshold
applicability determinations for the source category.
In the preamble to the 1980 NSR rules, we explained that the
Alabama Power court determined that the ``substantive preconstruction
review and permitting requirements of section 165 `apply with equal
force to fugitive emissions and emissions from industrial point
sources,' '' but went on to explain that this meant only that ``section
165 requires that fugitive emissions be taken into account in
determinations of whether NAAQS or allowable increments will be
violated * * * and that fugitive emissions be subjected to BACT
requirements * * *.'' (See 45 FR 52691, August 7, 1980.) Thus, in the
preamble to the 1980 rules, we analytically grouped fugitive emissions
for purposes of the major source definition and major modifications
under the rubric of ``threshold calculations.'' (See 45 FR 52690-91,
August 7, 1980.)
However, the 1980 NSR regulations on their face require fugitive
emissions to be included in threshold applicability determinations for
any project, but then exempt from the relevant PSD or nonattainment
requirements any project that (1) would be ``major'' only if fugitive
emissions were included and (2) does not belong to one of the
categories specifically listed pursuant to the section 302(j)
rulemaking. (See, for example, Sec. 52.21(i)(4)(vii) as promulgated in
1980 at 45 FR 52739, August 7, 1980, respectively. See also the
discussion at 49 FR 43204, October 26, 1984.) Thus, in the 1980 rules,
we included the section 302(j) list in a provision that exempted from
PSD permitting requirements ``a particular major stationary source or
major modification, if * * * [t]he source or modification would be a
major stationary source or major modification only if fugitive
emissions, to the extent quantifiable, are considered in calculating
the potential to emit of the stationary source or modification and the
source does not belong to [any of the categories in the section 302(j)
list].'' (See Sec. Sec. 52.21(i)(4), (i)(4)(vii), 45 FR 52738-52739,
August 7, 1980.) A similar exclusion applied in the nonattainment major
NSR context. (See Sec. 51.18(j)(4), 45 FR 52746, August 7, 1980.) In
our response to a petition for reconsideration of the 1980 rules
submitted on behalf of the American Mining Congress, we continued this
approach, stating that ``EPA * * * intended to establish that any
source which would be `major' only if fugitive emissions were taken
into account is not to be considered `major' for any PSD purpose,
unless the source belongs to one of the categories on the list which
now appears in [Sec. ]52.21(i)(4)(vii). Similarly, EPA intended to
establish that any modification that would be `major' only if fugitive
emissions were taken into account is not to be considered `major' for
any PSD purpose, unless the source * * * belongs to one of the
categories on that list.'' Further, we committed to amend the
regulations to conform them to these intentions. (See letter from
Douglas M. Costle, EPA Administrator, to Robert T. Connery, Holland &
Hart, January 19, 1981.)
On October 26, 1984 (49 FR 43202, October 26, 1984) we affirmed the
interpretation that we had stated in the 1980 NSR rulemaking. (See 49
FR 43208, October 26, 1984.) We also added NSR regulatory provisions
that the fugitive emissions of a stationary source shall not be
included in the threshold determination of whether it is a major
stationary source unless the source belongs to one of the categories of
sources identified by EPA in its section 302(j) rulemaking. (See 49 FR
43209-10, October 26, 1984.)
In a companion notice published on October 26, 1984 (49 FR 43211,
October 26, 1984), we solicited public comment on an ``interpretive
ruling'' regarding section 302(j) of the Act as it relates to the
review of physical or operational changes involving fugitive
emissions.\2\ In this notice, we observed that in our 1980 NSR
rulemaking and when proposing amendments in 1983, we had assumed that
the rulemaking requirement in section 302(j) regarding source
categories for which fugitive emissions should be considered applies to
modification determinations as well as to threshold major source
determinations. However, in this 1984 interpretive proposal, we stated
that we believed our prior assumption in this regard was incorrect. We
proposed to include fugitive emissions for sources in all source
categories, to the extent quantifiable, when determining whether a
physical or operational change meets the significance thresholds for a
modification for purposes of major NSR. (See 49 FR 43213-14, October
26, 1984.)
---------------------------------------------------------------------------
\2\ This was an ``interpretive ruling'' in that we proposed to
change our previous interpretation of the Act. To put the
interpretive ruling into effect, we chose not to finalize the
proposed revision to the major modification definition.
---------------------------------------------------------------------------
On February 28, 1986 (see 51 FR 7090, February 28, 1986), we
reopened the comment period to receive further comment on several of
the issues addressed in our October 26, 1984 proposal. The comment
period ended April 9, 1986. Comments on this proposal are captured in
legacy docket A-84-33.
On November 28, 1989 (see 54 FR 48870, November 28, 1989), we
finalized our 1984 interpretation and concluded that the section 302(j)
limitation on including fugitive emissions applies to the threshold
[[Page 77885]]
determination of whether a source is a major source, but not to the
threshold determination of whether a physical or operational change
constitutes a major modification. We pointed out that the language of
section 302(j) explicitly attaches the rulemaking requirements only to
existing or proposed major sources, and says nothing about major
modifications to existing sources. We also noted that the PSD and
nonattainment major NSR definitions of ``modification'' in section
169(2)(C) and section 171(4) of the Act, respectively, merely cross-
reference section 111(a)(4) of the Act, which is the definition of
``modification'' in the NSPS provisions. Because section 111(a)(4)
defines modification solely in terms of the total amount of pollution
that a change at a source would produce, we believed that Congress
intended to establish no qualitative distinction between stack and
fugitive emissions. Moreover, we stated that the legislative history on
section 302(j) does not refer directly to major modifications, although
the conference report on the PSD construction and modification
definitions in section 169(2)(C) does provide that Congress' general
intent was ``to conform to usage in other parts of the Act'' [123 Cong.
Rec. H 11957, col. 3 (daily ed.) (November 1, 1977)]. We reasoned that
this passage referred not only to section 111(a)(4), but to usage of
these terms in existing EPA regulations under the NSPS and NSR
programs, which did not distinguish between fugitive and stack
emissions. We concluded that an interpretation of section 302(j) to
exempt fugitive emissions from modification calculations ran counter to
EPA's longstanding practice, and that if Congress intended a
legislative change as to major modifications, it would have said so
explicitly. (See 54 FR 48882-83, November 28, 1989.) We further
concluded that EPA's longstanding practice of considering the fugitive
emissions of all sources, not just those on the section 302(j) list,
when determining whether a major modification had occurred was
reasonable. (See 54 FR 48883, November 28, 1989.) In addition, we
related that our interpretation likely would not impose new regulatory
burdens because fugitive emissions from physical or operational changes
would still be excluded from applicability determinations unless the
changes occurred at a major source. We reasoned that under the Act and
EPA regulations, a modification is ``major'' and subject to review only
if the source at which it would occur is also ``major.'' Hence, a
modification to a source of predominantly fugitive emissions that does
not belong to a currently listed category could not be subject to
review, even if its fugitive emissions were taken into account, because
the source would not be ``major.'' (See 49 FR 43213-14, October 26,
1984.) Based on this reasoning, our November 28, 1989 final action
reaffirmed our October 1984 proposed interpretation that the list of
fugitive emissions sources created pursuant to section 302(j) does not
apply to major modifications and that fugitive emissions for sources in
all source categories must be included when determining whether a
physical or operational change meets the significance thresholds for
purposes of major NSR.
In October 1990, we issued the draft ``New Source Review Workshop
Manual,'' \3\ in which we stated that under the federal PSD
regulations, fugitive emissions ``are included in the potential to emit
(and increases in the same due to modification)'' if they occur at one
of the source categories listed pursuant to section 302(j). (See page
A.9 of the Manual, which may be found at https://www.epa.gov/ttn/nsr/
gen/wkshpman.pdf.) This phrasing seemingly contradicts our November
1989 final interpretive ruling, although we did not intend to change
our policy in this area.
---------------------------------------------------------------------------
\3\ The ``New Source Review Workshop Manual'' is in draft form
and the Agency chose not to finalize this manual.
---------------------------------------------------------------------------
In the NSR Improvement final rulemaking published December 31, 2002
(67 FR 80186, December 31, 2002), we promulgated final rules consistent
with our November 1989 final interpretive ruling. In that rulemaking,
we required the inclusion of fugitive emissions in calculating
emissions increases for purposes of determining whether a particular
physical or operational change constitutes a major modification
requiring a PSD or nonattainment major NSR permit for all major
sources, regardless of source category. (See, for example, Sec.
52.21(b)(41)(ii)(b), which includes fugitive emissions, to the extent
quantifiable, in the definition of ``projected actual emissions'' and
Sec. 52.21(b)(48)(i)(a), which includes fugitive emissions, to the
extent quantifiable, in the definition of ``baseline actual
emissions.'')
E. Why did EPA reconsider this aspect of the December 2002 NSR
Improvement final rulemaking?
On July 11, 2003, we received a petition for reconsideration of the
December 2002 NSR Improvement final rules from Newmont USA Ltd., dba
Newmont Mining Corporation (Newmont). Newmont argued that we failed to
comply with the requirements of section 302(j) of the Act in requiring
fugitive emissions to be counted for purposes of determining whether a
physical or operational change constitutes a major modification for
sources in source categories not listed pursuant to section 302(j).
Newmont also argued that we failed to provide notice and an opportunity
for comment on this issue. The EPA Assistant Administrator for Air and
Radiation granted Newmont's petition by letter in January 2004.
III. What is included in this final action?
A. What are the results of EPA's reconsideration?
Based on our review and consideration of comments received on the
issue regarding whether fugitive emissions are to be counted for
purposes of determining whether a physical or operational change
constitutes a major modification, we are revising the provisions of the
December 2002 NSR Improvement final rules related to the treatment of
fugitive emissions. We have decided to reverse our existing policy and
include fugitive emissions in determining whether a physical or
operational change results in a major modification only for sources in
the source categories that have been designated through rulemaking
pursuant to section 302(j) of the Act. In other words, we have decided
to adopt the same approach to fugitive emissions for determining
whether a change is a major modification as is currently used for
determining whether a source is major.
B. What are EPA's revisions to major NSR regulations?
To implement our new approach to fugitive emissions, in this final
action we are revising all four main portions of the major NSR program
regulations: Sec. 51.165, Sec. 51.166, Sec. 52.21, and appendix S to
part 51. The revisions are nearly identical for these regulations
because they contain nearly identical provisions related to major
modifications. As indicated at proposal, we are including specific
revisions for appendix S to part 51 in this action consistent with the
changes that we proposed and are finalizing for Sec. 51.165.
For Sec. Sec. 51.165, 51.166, 52.21, and appendix S to part 51, we
are modifying a number of definitions. In addition, we are finalizing
the following:
[[Page 77886]]
(1) A minor change in the provisions for plantwide applicability
limitations (PALs) to preserve the existing treatment of fugitive
emissions for PALs.
(2) A modification to the paragraph in each rule that explains how
to calculate whether a significant emissions increase will occur as the
result of a physical or operational change.
(3) A minor revision in the provisions on monitoring and reporting
for physical and operational changes that are found not to be major
modifications.
(4) Deletion of a now unnecessary paragraph that provides for a
generalized exemption related to fugitive emissions and repeats the
section 302(j) source category list.
We are also finalizing revisions to the definitions of ``baseline
actual emissions'' and ``projected actual emissions.'' As noted in the
Newmont petition, these definitions (which figure in determining the
increase associated with a physical or operational change) currently
require that fugitive emissions be included, to the extent
quantifiable, without regard to source category. Our revisions will
qualify this requirement so that fugitive emissions (to the extent
quantifiable) must be included for an emissions unit that ``belongs to
one of the source categories listed in [the section 302(j) list that
appears in the definition of `major stationary source'] or is located
at a major stationary source that belongs to one of the listed source
categories.'' For baseline actual emissions, this revision appears in
Sec. 51.165(a)(1)(xxxv)(A)(1), (B)(1), and (C); Sec.
51.166(b)(47)(i)(a), (ii)(a), and (iii); Sec. 52.21(b)(48)(i)(a),
(ii)(a), and (iii); and, II.A.30(i)(a), (ii)(a), and (iii) of appendix
S to part 51. For projected actual emissions, the revision appears in
Sec. 51.165(a)(1)(xxviii)(B)(2) and (4), Sec. 51.166(b)(40)(ii)(b)
and (d), Sec. 52.21(b)(41)(ii)(b) and (d), and II.A.24(ii)(b) and (d)
of appendix S to part 51.
Note that the final language refers to emissions units that are,
themselves, in a source category on the section 302(j) list, as well as
the 302(j) listing status of the entire major stationary source at
which the emission unit is located. An emissions unit under NSR means
any part of a stationary source that emits or has the potential to emit
any regulated NSR pollutant. If either the emissions unit or the parent
source is in a source category on the section 302(j) list, the emission
unit's fugitive emissions, to the extent quantifiable, must be included
for purposes of determining whether a physical or operational change
constitutes a modification. This treatment of fugitives from emission
units in making major modification determinations is thereby consistent
with the treatment of fugitives from emissions units in making major
source threshold determinations. We are also finalizing similar
language throughout this rule. See section IV of this preamble below
for additional discussion of the rationale for this language.
The following example illustrates how to consider fugitive
emissions from an emission unit within a facility. A fossil-fueled
boiler unit that exceeds 250 million British thermal units per hour
heat input (MMBtu/hr), and thus meets the definition of a 302(j) listed
source category by itself, may be located at an industrial facility
whose primary activity is not represented by one of the source
categories listed pursuant to section 302(j). In this case, threshold
determinations for major modifications at the facility would need to
consider fugitive emissions, to the extent quantifiable, from the
boiler unit but not from other non-302(j) emissions units at the
facility. Alternatively, if a boiler unit did not exceed the 250 MMBtu/
hr heat input level, and thus did not meet the definition of a 302(j)
listed source category by itself, but was located at a facility
represented by a source category on the section 302(j) list due to the
facility's primary activity classification, the boiler unit's fugitive
emissions, to the extent quantifiable, must be included for purposes of
determining whether a physical or operational change constitutes a
modification.
We are also finalizing our proposed definition of ``baseline actual
emissions'' to maintain the current requirements for PALs. Plantwide
applicability limitations are an alternative means of determining the
applicability of major NSR to changes at an existing major stationary
source. Instead of evaluating each physical or operational change
individually, the source tracks total emissions from the source to be
sure that they remain below the level of its PAL. Baseline actual
emissions are used in setting the level of the PAL.
We continue to believe that it is appropriate to include fugitive
emissions (to the extent quantifiable) in setting the level of the PAL
and in tracking compliance with it, regardless of the source category.
In the preamble to the December 2002 NSR Improvement rules, we
explained that the benefit of PALs to the public and the environment is
that PALs are designed ``to assure local communities that air emissions
from your major stationary source will not exceed the facility-wide cap
set forth in the permit unless you first meet the major NSR
requirements.'' We further explained that a PAL ``provides a more
complete perspective to the public because in setting a PAL, your
reviewing authority accounts for all current processes and all
emissions units together and reflects the long-term maximum amount of
emissions it would allow from your source.'' (See 67 FR 80206, December
31, 2002.) We therefore do not believe we can exempt fugitive emissions
from being included when setting a PAL. Consequently, we are revising
the subparagraph of this definition that addresses PALs to ensure that
fugitive emissions continue to be included for the purposes of PALs for
all source categories. This revision is found in Sec. Sec.
51.165(a)(1)(xxxv)(D), 51.166(b)(47)(iv), 52.21(b)(48)(iv), and
II.A.30(iv) of appendix S to part 51.
To reinforce our intentions for PALs, we are finalizing a minor
revision to the provisions for PALs to state clearly that a PAL is to
include fugitive emissions, to the extent quantifiable, ``regardless of
whether the emissions unit or major stationary source belongs to one of
the source categories listed in [the section 302(j) list].'' This
revision is found in Sec. Sec. 51.165(f)(4)(i)(D), 51.166(w)(4)(i)(d),
52.21(aa)(4)(i)(d), and IV.K.4(i)(d) of appendix S to part 51.
We are also finalizing a revision to the definition of ``major
modification'' to mirror the existing definition of ``major stationary
source.'' Specifically, we are adding a subparagraph to this definition
saying:
Fugitive emissions shall not be included in determining for any
of the purposes of this section whether a physical change in or
change in the method of operation of a major stationary source is a
major modification, unless the source belongs to one of the source
categories listed in [the section 302(j) list that appears in the
definition of ``major stationary source'' for the rule] of this
section.
This new language is in Sec. Sec. 51.165(a)(1)(v)(G), 51.166(b)(2)(v),
52.21(b)(2)(v), and II.A.5(vii) of appendix S to part 51.
This action also finalizes a revision to the definition of ``net
emissions increase'' to preclude an unlisted major source from
including contemporaneous increases and decreases in fugitive emissions
in the ``netting analysis'' for a physical or operational change. We do
not believe that an unlisted source (which does not include fugitive
emissions in determining the increase in emissions from the current
physical or operational change) should be able to use decreases in
fugitive emissions to ``net out'' of major NSR. Rather, we believe that
unlisted sources should treat fugitive emissions consistently for all
purposes related to determining the applicability of major NSR to
physical
[[Page 77887]]
or operational changes. Accordingly, we are adding language at
Sec. Sec. 51.165(a)(1)(vi)(C)(3), 51.166(b)(3)(iii)(d),
52.21(b)(3)(iii)(c), and II.A.6(iii) of appendix S to part 51 that
states that in order for an increase or decrease in fugitive emissions
(to the extent quantifiable) to be considered ``creditable'' in netting
analyses, it must occur at an emissions unit that belongs to one of the
section 302(j) listed source categories or is located at a major
stationary source that belongs to one of section 302(j) listed source
categories.
The final definitional changes made in this action ensure
consistent treatment of fugitives where fugitive emissions are
referenced in other steps in the major NSR program. For this purpose,
we are adding subparagraphs to summarize how fugitive emissions are to
be addressed in each section and to refer the reader to the relevant
provisions. We believe that the added subparagraphs will aid
understanding of our intentions regarding fugitive emissions. These
revisions are made in Sec. Sec. 51.165(a)(1)(ix), 51.166(b)(20),
52.21(b)(20), and II.A.9 of appendix S to part 51.
The December 2002 NSR Improvement rulemaking added provisions to
the major NSR regulations to clarify the two-step process for
determining whether a physical or operational change is a major
modification. Step 1 is the evaluation of the proposed change to
determine whether it will cause a significant increase in emissions of
a regulated NSR pollutant. If so, the source goes on to Step 2, which
is a ``netting analysis'' to determine whether the change will result
in a significant net emissions increase when taken together with any
contemporaneous, creditable emissions increases or decreases that have
occurred at the source. This action revises the provisions for Step 1
to clarify that fugitive emissions (to the extent quantifiable) are
only included for section 302(j) listed emissions units and source
categories. (Clarifications for Step 2 are handled in our revisions to
the definitions that are discussed above.) This revision appears in
Sec. Sec. 51.165(a)(2)(ii)(B), 51.166(a)(7)(iv)(b),
52.21(a)(2)(iv)(b), and IV.I.1(ii) of appendix S to part 51.
The December 2002 NSR Improvement rulemaking also added provisions
for monitoring and reporting the emissions that actually occur after a
physical or operational change in cases where the change was
determined, prior to construction, not to be a major modification. This
action makes minor revisions to these provisions to be explicit that
fugitive emissions (to the extent quantifiable) need only be monitored
and reported if the emissions unit or major stationary source in
question is on the section 302(j) list. This revision provides for
consistent treatment of fugitive emissions before and after the
physical or operational change. This revision affects Sec. Sec.
51.165(a)(6)(iii) and (iv), 51.166(r)(6)(iii) and (iv),
52.21(r)(6)(iii) and (iv), and IV.J.3 and IV.J.4 of appendix S to part
51.
Finally, we are deleting a paragraph in each of the major NSR
regulations that is no longer necessary. The paragraphs deleted were
the original paragraphs placed in the rules to implement section 302(j)
of the Act. However, after the definition of ``major stationary
source'' was revised to include only the section 302(j) list, and we
later adopted a policy (reversed now by this action) that fugitive
emissions must be counted for all source categories in major
modification determinations, these paragraphs tended to confuse the
issue. With this action, we provide a uniform approach to fugitive
emissions for major source and major modification determinations, and
these paragraphs have now become completely unnecessary. Accordingly,
in this action we are removing and reserving the following paragraphs:
Sec. Sec. 51.165(a)(4), 51.166(i)(1)(ii), 52.21(i)(1)(vii), and II.F.
of appendix S to part 51.
C. What is the effect of this action on the minor NSR program?
Major NSR programs are very similar across the United States,
prescribed in significant detail as they are by the Act and the
implementing federal regulations. In contrast, state and local minor
NSR programs are subject only to general requirements under Sec. Sec.
51.160-164 and, as a consequence, may vary significantly from area to
area.\4\ As a result, we do not know, with certainty, how such programs
typically address fugitive emissions in minor NSR permitting. We
requested comment on this topic.
---------------------------------------------------------------------------
\4\ There are currently no approved tribal minor NSR programs.
---------------------------------------------------------------------------
We believe that it is important for minor NSR programs to be clear
regarding the treatment of fugitive emissions in all areas of the
program. This will afford all sources consistent treatment and a
``level playing field.'' In addition, a common understanding of program
requirements from the outset is important to avoid controversy and
wasted resources during the permitting process. In light of the
importance of clear requirements regarding the treatment of fugitive
emissions, this action requires that each implementation plan as a
minimum element must be explicit in specifying how fugitive emissions
are to be accounted for in all aspects of the minor NSR program. We
discuss this requirement more specifically in section V of this
preamble.
We recently proposed minor NSR and nonattainment major NSR
regulations for sources in those areas of Indian country where tribes
do not have an EPA-approved implementation plan. (See 71 FR 48696.) We
proposed in the minor NSR rule to require minor sources to include
fugitive emissions to the extent quantifiable for applicability
purposes for all sources, or include them only for source categories
listed pursuant to section 302(j), or exclude them for all sources. In
the final tribal minor NSR rule, we will adopt one of these proposed
approaches. When we finalize the minor NSR rule for Indian country, we
expect to address the treatment of fugitive emissions consistent with
this final rule.
We solicited comment on all aspects of our proposal regarding minor
NSR. We also solicited comment on whether we should include rule
language in 40 CFR 51.160 (for example, at Sec. 51.160(e)) to require
state, local, and tribal minor NSR programs to directly address
fugitive emissions in minor NSR rules.
The comments received on the minor NSR program aspects of the
proposed rule generally split into two groups: (1) Those that agreed
with EPA that it is important for minor NSR programs to be clear
regarding the treatment of fugitive emissions and that these
requirements should be explicitly stated in a state's implementation
plan, and (2) those who felt state and local permitting authorities
should not be required to provide an explicit description of how they
treat fugitive emissions in their minor NSR programs.
Several commenters from the second group questioned whether EPA can
require state and local agencies to specify explicitly how they will
treat fugitive emissions in all aspects of their minor NSR programs.
They argued that states have latitude to customize their programs and
that EPA does not have the authority to require states to include this
clarification as a minimal element of their minor NSR program. These
commenters were generally concerned that EPA, by requesting information
on how fugitives were being treated in minor NSR programs, was trying
to extend aspects of the proposed rule to minor NSR programs and thus
extend their authority beyond major NSR program requirements.
[[Page 77888]]
We disagree with commenters that believe EPA is attempting, with
this rule, to establish minimal state minor NSR requirements for
fugitive emissions. The purpose of this rule is not to prescribe
specific requirements or dictate how minor NSR programs should be
constructed and operated to address fugitive emission sources. We fully
recognize that states have considerable latitude to customize their
minor NSR programs as long as they meet the basic purpose of ensuring
that construction and modification of minor sources does not interfere
with attainment and maintenance of the NAAQS.
We do believe, however, that it is important for minor NSR programs
to be clear regarding the treatment of fugitive emissions in all areas
of the program. We disagree with commenters that our requirement in
this action for state, local, and subject tribal authorities to provide
an explanation of how they treat fugitives in their implementation
plans falls outside our authority. Section 110(a)(2)(C) of the Act and
our responsibility to review implementation plans provides us with
authority to specify the inclusion of this minimum element in state,
local, and tribal minor NSR programs. We believe a common understanding
of program requirements from the outset is important to reviewing
program objectives and avoiding controversy and wasted resources during
the permitting process.
IV. What is the rationale for this final action?
A. The Newmont Petition
The thrust of Newmont's petition for reconsideration is two-fold:
1. The EPA did not comply with the requirements of section 302(j)
of the Act when we included fugitive emissions in the definitions of
``baseline actual emissions'' and ``projected actual emissions'' for
purposes of determining whether a change at a facility constitutes a
``major modification.''
2. The EPA did not provide notice or an opportunity for comment on
this approach, since these definitions were not proposed in the 1996
proposed major NSR revisions. (See 61 FR 38250, July 23, 1996).
As we noted in the 1984 and 1989 Federal Register notices where we
proposed and finalized the interpretive ruling that established our
existing approach to fugitive emissions for major modifications, the
language of the Act does not resolve the issue of whether the fugitive
emissions provisions of section 302(j) were intended by Congress to
apply to major modifications as well as major sources. On its face,
section 302(j) mandates rulemaking only for determining whether a new
source is to be considered a ``major stationary source,'' and does not
explicitly address major modifications. Neither does the definition of
``modification'' in section 111(a)(4) address the issue. As discussed
above, in our 1989 notice we also noted that interpreting section
302(j) to exempt fugitive emissions from modification calculations ran
counter to our longstanding practice, and reasoned that if Congress
meant the section 302(j) rulemaking provision to cover major
modifications, it would have said so. We believe this interpretation
remains a permissible construction of the statute, and that since the
time we finalized the interpretive ruling in 1989, we required that
fugitive emissions be included in major modification determinations.
For these reasons, we disagree with the petition on the two counts
summarized above.
As stated in our proposal, we now believe, however, that the
absence of reference to ``major modification'' in section 302(j) simply
does not dispose of the issue to reconsider the inclusion of fugitive
emissions in determining major modifications. For PSD at least,
Congress only added major modifications to the program in ``technical
and conforming amendments'' after enacting the 1977 Clean Air Act
Amendments and even as to nonattainment major NSR, defined
``modification'' only by cross-reference. Similarly, we believe the
legislative history is scant; Congress simply adverted to its desire to
``conform [the PSD definition of construction] to usage in other parts
of the Act.'' (See 123 Cong. Rec. 36331 (Nov. 1, 1977).) We cannot
conclude from the statutory text or the legislative history what
Congress explicitly intended on this point; the evidence is simply too
ambiguous. Accordingly, we believe that we continue to have discretion
under the second prong of Chevron, USA v. NRDC, 467 U.S. 837, 842-43
(1984), to adopt ``a permissible construction of the statute.''
B. Policy and Legal Rationale
We believe that section 302(j) evinces, at a minimum, an intent by
Congress to require a special look at fugitive emissions for purposes
of calculating a source's emissions for NSR purposes. The statute is
silent or ambiguous on the applicability of section 302(j) to the
question of whether a physical or operational change is a modification.
That is, we do not believe that the Act precludes us from applying the
section 302(j) restrictions on counting fugitive emissions to the
methodology for determining whether a physical and operation change
constitutes a major modification for NSR purposes. Moreover, although
no authoritative conference or committee report addresses the issue of
how fugitive emissions should be addressed in NSR permitting, there are
numerous examples in committee hearings on the bills that led up to the
1977 Amendments of industry testimony to the effect that in many cases
fugitive emissions would not be susceptible to control or would be
exceedingly costly to control, or would be infeasible to measure. See
e.g., Hearings on Clean Air Act Amendments of 1977, Subcomm. on Health
and the Environment, House Comm. on Interstate and Foreign Commerce,
March 11, 1977, H.R. Rep. No. 95-59 at 1327 (statement of Earl Mallick,
American Iron and Steel Inst.) (high costs of controlling fugitive
emissions); Id., Part 2, March 18, 1975, H.R. Rept. No. 94-25 at 690
(testimony of Fred Tucker, National Steel Corp.) (impossible to comply
with SIP limits on fugitive emissions); Hearings on Implementation of
the Clean Air Act--1975, Subcomm. on Environmental Pollution, Sen.
Comm. on Public Works, Apr. 22, 1975, S. Rept. No. 94-H10, Pt. 1 at 757
(statement of David M. Anderson, Bethlehem Steel Corp. to effect that
control of fugitive emissions would be enormously costly but would have
``a net negative environmental impact''); Id., Pt. 2, App. A at 2026
(statement of Cast Metals Federation) (fugitive emissions control at
nonferrous metals smelters extremely costly with adverse energy impacts
and no improvement in air quality). But see Id., App. B at 2232-33 (EPA
written responses to Committee questions) (for some industries fugitive
control can be critical to attainment of standards).
In light of this legislative history, it is reasonable to read
section 302(j) of the Act as reflecting a decision by Congress that it
simply did not know enough to make the critical decisions regarding the
extent to which fugitive emissions should be included in threshold
applicability determinations both for purposes of determining whether a
source is a major source, and whether a physical or operational change
constitutes a modification. Rather, we believe Congress assigned the
resolution of these complex issues to EPA.
As stated in the proposal, for policy and programmatic reasons, we
now believe that it is better to adopt a uniform approach to these
threshold determinations as they relate to fugitive emissions. We feel
that this final action is most consistent with EPA's earliest
[[Page 77889]]
and most nearly contemporaneous construction of the statute contained
in the 1980 NSR rules, which required that sources count fugitive
emissions when determining whether an emissions increase qualifies as a
major modification only if the source belonged to a section 302(j)
listed category. By returning to a procedure that removes
differentiation in the treatment of fugitive emissions for major source
and modification threshold determinations, we provide a more uniform
approach that we believe more accurately represents the original intent
of Congress in establishing the section 302(j) provisions and the
resultant 1980 rules that followed.
In addition, with this final action we believe we now have
addressed the additional regulatory burden that was not adequately
recognized in the 1984 notice. (49 FR 43213-14, October 26, 1984.) We
believe our assertion in the 1984 notice (see 49 FR 43213-14, October
26, 1984) that the interpretation that we proposed then ``likely would
not impose new regulatory burdens'' was not correct; our interpretation
proposed in 1984 and finalized in 1989 imposed a new regulatory burden
on major sources in a source category not on the section 302(j) list,
since their fugitive emissions would be counted in determining whether
they had made a change constituting a major modification and thus
possibly subjecting those modifications to NSR review.
Some commenters supported EPA's proposed exclusion of fugitive
emissions in threshold determinations for major modifications at non-
section 302(j) listed sources under the PSD and nonattainment NSR
programs. They believe that EPA's current policy of including these
emissions in such determinations conflicts with EPA's historical policy
of excluding fugitive emissions in applicability determinations for
sources not included on the section 302(j) list and creates confusion
in the permitting process by providing for differential treatment of
fugitive emissions.
Many of those who commented that they support the proposed rule
also argued that EPA's 1989 interpretive ruling, which includes
fugitive emissions in applicability determinations for all sources, was
based on a misreading of section 302(j) and that EPA adopted (in 2002
NSR Improvement final rules) the interpretive ruling policy into its
regulations without notice or comment. They felt that we did not
accurately describe our historical policy in the proposed rule by
failing to state that our previous treatment of fugitives, as read
under the 1989 interpretive ruling and as codified in the 2002 NSR
Improvement final rules, were incorrect interpretations.
We disagree with commenters that there were inaccuracies in
describing our past decisions and discretion to include fugitives in
NSR rule interpretations and guidance materials. While we acknowledge
that our position on inclusion of fugitive emissions for determining
major modifications for all sources has changed over the years, we do
not agree with commenters that any previous interpretations or rulings
were not permissible constructions of the statute. We cannot conclude
from the statutory text at 302(j) or the legislative history what
Congress explicitly intended in regards to inclusion of fugitive
emissions for calculating major modifications. As a result, we believe
that we have used our discretion under the second prong of Chevron, USA
v. NRDC, 467 U.S. 837, 842-43 (1984), to adopt ``a permissible
construction of the statute.'' We have similarly exercised our
discretion to do so with this final action.
Other commenters generally opposed EPA excluding fugitive emissions
from non-section 302(j) listed sources in threshold determinations for
major modifications under the NSR programs and believed that the
proposed revisions to the NSR rules incorrectly implement section
302(j) provisions and are not consistent with past practice and
guidance regarding the treatment of fugitive emissions. They argued
that EPA's own past finding as to the Congressional intent regarding
treatment of fugitive emissions under the NSR program (54 FR 48870,
November 28, 1989) show that section 111(a)(4) of the Act ``defines
modification solely in terms of the total amount of pollution that a
change at a source would produce,'' thus leading the EPA to conclude
that Congress intended to establish no qualitative distinction between
stack and fugitive emissions (72 FR 63854, November 13, 2007). These
commenters urged EPA to reverse the proposed action and to retain the
current policy regarding treatment of fugitives as included in the 2002
NSR Improvement rules.
We disagree with comments that these revisions to the NSR rules
incorrectly implement section 302(j) and that our construction of the
statute included in the 2002 NSR Improvement rules should be considered
the correct interpretation of the Section 302(j) provisions. We believe
now that the absence of reference to ``major modification'' in section
302(j) simply does not dispose of the issue of whether there was
Congressional intent to limit inclusion of fugitive emissions in
threshold applicability determinations for major modifications to
listed section 302(j) sources. Accordingly, we believe that we continue
to have discretion under the second prong of Chevron, USA v. NRDC, 467
U.S. 837, 842-43 (1984), to adopt ``a permissible construction of the
statute.'' As such, we do not believe that the Act precludes us from
applying the section 302(j) restrictions on counting fugitive emissions
to the methodology for determining whether a physical and operation
change constitutes a major modification.
We feel that this final action is most consistent with EPA's
earliest, most nearly contemporaneous construction of the statute in
the 1980 rules, which required that sources count fugitive emissions
when determining whether an emissions increase qualifies as a major
modification only if the source belonged to a section 302(j) listed
category. By returning to a procedure that removes differentiation in
the treatment of fugitive emissions for major source and modification
threshold determinations, we provide a more uniform approach that we
believe more accurately represents the original intent of Congress in
establishing the section 302(j) provisions and the resultant 1980 rules
that followed.
V. When will these changes take effect in the federal PSD Program, and
will states be required to revise their State Implementation Plans
(SIPs) to incorporate this final action?
We are requiring that these changes take effect in the Federal PSD
permit program by February 17, 2009. This means that we will apply
these rules in any area without a SIP-approved PSD Program for which we
are the reviewing authority, or for which we delegated our authority to
issues permits to a state, local or tribal reviewing authority on that
date.
We are also requiring that the requirements of this final action be
established as minimum program elements of the PSD and nonattainment
NSR programs approved by EPA as part of SIPs. Notwithstanding this
requirement, it may not be necessary for a state or local authority to
revise its SIP to begin to implement these changes.\5\ Some state or
local authorities may be able to adopt these changes through a change
in interpretation of existing
[[Page 77890]]
language in the approved SIP without the need to revise their SIP.
---------------------------------------------------------------------------
\5\ Currently, there are no tribal permitting agencies with an
approved Tribal Implementation Plan (TIP) to implement the major NSR
permitting program.
---------------------------------------------------------------------------
For any state or local authority that can implement the changes
without revising its approved SIP, we propose that the changes become
effective when the reviewing authority publicly announces that it
accepts these changes by interpretation. Although no SIP change may be
necessary in certain areas that adopt these changes by interpretation,
we encourage state and local authorities in such areas to make such SIP
changes in the future to enhance the clarity of the existing rules.
For areas that need to revise their SIPs to adopt these changes,
these changes would not be effective in such areas until we approve the
SIP revision. We are requiring that such state and local authorities
submit revisions to SIPs to reflect requirements that are at least as
stringent as the minimum program elements we adopt in this final rule
within 3 years after the rule's promulgation date. We are also allowing
state and local authorities to maintain NSR program elements that have
the effect of meeting the minimum program elements of this rule, but
that, in these cases, the state and local authority must submit an
explanation for that conclusion to EPA by the SIP submission deadline.
We are also requiring state, local, and subject tribal authorities
to explicitly specify in their implementation plans how the reviewing
authority will treat fugitive emissions in all aspects of their minor
NSR program. Section 110(a)(2)(C) of the Act provides us with authority
to specify the inclusion of this minimum element in state, local, and
tribal minor NSR programs. Therefore, we are requiring state, local,
and subject tribal authorities to specify this in their implementation
plan within 3 years from the promulgation date of this action.
We received comments in the proposal on establishing the
requirements of this action as minimum program elements for SIP-
approved PSD programs. One commenter stated that they believed EPA
could not lawfully make the proposed requirements a minimum program
element for SIP-approved PSD programs. Other commenters provided that
section 116 of the Act stipulates that states are free to adopt air
pollution control requirements that are more stringent than those
required by the Act or EPA regulation and therefore should not be
required to adopt any minimum program requirements in the proposal. One
commenter stated that California state law specifically prevents the
relaxation of NSR programs and that forcing California to adopt rule
amendments that are less stringent would require California air
pollution control districts to violate state law.
We disagree with commenters who believe we do not have authority to
establish the revisions to the treatment of fugitive emissions under
the major NSR program, as finalized in this action, as minimum program
elements of the NSR programs. The basis for establishing minimum
program elements is root
