Operating Permit Programs; Flexible Air Permitting Rule, 51418-51440 [E9-23794]
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Federal Register / Vol. 74, No. 192 / Tuesday, October 6, 2009 / Rules and Regulations
ENVIRONMENTAL PROTECTION
AGENCY
40 CFR Parts 70 and 71
[EPA–HQ–OAR–2004–0087; FRL–8964–8]
RIN 2060–AM45
Operating Permit Programs; Flexible
Air Permitting Rule
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AGENCY: Environmental Protection
Agency (EPA).
ACTION: Final rule.
SUMMARY: We are revising the
regulations governing State and Federal
operating permit programs required by
title V of the Clean Air Act (CAA or the
Act) to promote flexible air permitting
(FAP) approaches that provide greater
operational flexibility and, at the same
time, ensure environmental protection
and compliance with applicable laws.
The revisions to our title V
regulations consist of adding definitions
for alternative operating scenario (AOS)
and approved replicable methodology
(ARM) and codifying some clarifications
to existing provisions. These revisions
are intended to clarify and reaffirm
opportunities for accessing operational
flexibility under existing regulations.
We are not finalizing any revisions to
our existing minor or major New Source
Review (NSR) regulations. In particular,
we are withdrawing that portion of the
proposal which relates to Green Groups
and their potential inclusion in NSR
programs required by parts C and D of
title I of the Act. Instead, we are
encouraging States and sources to
investigate in more depth the
flexibilities currently available under
the major NSR regulations.
DATES: This final rule is effective on
November 5, 2009.
ADDRESSES: The EPA established a
docket for this action under Docket ID
No. EPA–HQ–OAR–2004–0087. All
documents in the docket are listed on
the https://www.regulations.gov Web
site. Although listed in the index, some
information may not be publicly
available, e.g., CBI or other information
whose disclosure is restricted by statute.
Certain other material, such as
copyrighted material, is not placed on
the Internet and will be publicly
available only in hard copy form.
Publicly available docket materials are
available either electronically through
https://www.regulations.gov or in hard
copy at the Air and Radiation Docket,
EPA/DC, EPA West, Room 3334, 1301
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Constitution Avenue, Northwest,
Washington, DC. The Public Reading
Room is open from 8:30 a.m. to 4:30
p.m., Monday through Friday, excluding
legal holidays. The telephone number
for the Public Reading Room is (202)
566–1744, and the telephone number for
the Air and Radiation Docket is (202)
566–1742.
FOR FURTHER INFORMATION CONTACT: For
general issues concerning this action,
please contact Michael Trutna, Air
Quality Policy Division (C504–01), U.S.
Environmental Protection Agency,
Research Triangle Park, NC 27711;
telephone (919) 541–5345; fax number
(919) 541–4028; or electronic mail at
trutna.mike@epa.gov.
For specific issues concerning the
pilot permits used to support this
rulemaking, contact David Beck, Office
of Policy, Economics, and Innovation,
Innovative Pilots Division (C304–05),
U.S. Environmental Protection Agency,
Research Triangle Park, NC 27711;
telephone (919) 541–5421; fax number
(919) 541–2664; or electronic mail at
beck.david@epa.gov.
For issues relating to monitoring,
recordkeeping, and reporting for FAPs,
contact Barrett Parker, Sector Policies
and Programs Division, Measurement
Policy Group (D243–03), U.S.
Environmental Protection Agency,
Research Triangle Park, NC 27711;
telephone 919–541–5635; fax number
(919) 541–1039; or electronic mail at
parker.barrett@epa.gov.
For other part 70 issues, contact Juan
Santiago, Operating Permits Group, Air
Quality Policy Division (C504–05), U.S.
Environmental Protection Agency,
Research Triangle Park, NC 27711;
telephone (919) 541–1084; fax number
(919) 541–5509; or electronic mail at
santiago.juan@epa.gov.
SUPPLEMENTARY INFORMATION:
1. Major NSR
2. Minor NSR
IV. Overview of This Final Action
A. What Specific Changes to Parts 70 and
71 Is EPA Finalizing?
B. What Changes to Parts 51 and 52 Is EPA
Finalizing?
C. What Approach Is Being Used To
Discuss the Final Actions?
D. What Are EPA’s Recommendations for
Public Participation in Flexible
Permitting?
E. What Types of Support Does EPA Intend
To Offer?
V. Advance Approval of Minor NSR
A. Background
B. Final Action
VI. Alternative Operating Scenarios
A. Background
B. Final Action
VII. Approved Replicable Methodologies
A. Background
B. Final Action
VIII. Green Groups
A. Background
B. Final Action
IX. Statutory and Executive Order Reviews
A. Executive Order 12866—Regulatory
Planning and Review
B. Paperwork Reduction Act
C. Regulatory Flexibility Act
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 12898—Federal Actions
To Address Environmental Justice in
Minority Populations and Low-Income
Populations
K. Congressional Review Act
X. Judicial Review
The information in this
Supplementary Information section of
this preamble is organized as follows:
A. Does This Action Apply to Me?
Table of Contents
I. General Information
A. Does This Action Apply to Me?
B. Where Can I Get a Copy of This
Document and Other Related
Information?
II. Purpose
III. Background
A. What Is a Flexible Air Permit?
B. What Is the Title V Operating Permit
Program?
C. What Is the New Source Review (NSR)
Program?
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I. General Information
Entities potentially affected by this
final action are facilities currently
required to obtain title V permits under
State, local, Tribal, or Federal operating
permits programs, and State, local, and
Tribal governments that are authorized
by EPA to issue such operating permits.
Potentially affected sources are found in
a wide variety of industry groups. In
particular, we believe based on the
collective experience in implementing
the pilot permit activity that these
groups will include, but are not limited
to, the following:
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Industry group
SIC a
Aerospace Manufacturing ....
Automobile Manufacturing ...
372 ..................................................................................
371 ..................................................................................
Industrial Organic Chemicals
286 ..................................................................................
Chemical Processes ............
281 ..................................................................................
Converted Paper and Paperboard Products.
267 ..................................................................................
Magnetic Tape Manufacturing.
Petroleum Refining ..............
Other Coating Operations ....
369 ..................................................................................
Paper Mills ...........................
Pharmaceutical Manufacturing.
Printing and Publishing ........
262 ..................................................................................
283 ..................................................................................
Pulp and Paper Mills ............
Semiconductors ...................
Specialty Batch Chemical
Processes.
262 ..................................................................................
367 ..................................................................................
282, 283, 284, 285, 286, 287, 289, 386 .........................
51419
NAICS b
291 ..................................................................................
226, 229, 251, 252, 253, 254, 267, 358, 363 .................
275 ..................................................................................
336411, 336412, 332912, 336411, 335413.
336111, 336112, 336712, 336211, 336992,
336312, 33633, 33634, 33635, 336399,
336213.
325191, 32511, 325132, 325192, 225188,
32512, 325199.
325181, 325182, 325188, 32512, 325131,
331311.
322221, 322222, 322223, 322224, 322226,
326111, 326112, 322299, 322291, 322232,
322211.
334613.
336322,
336212,
325193,
325998,
322231,
322233,
32411.
313311, 313312, 314992, 33132, 337122, 337121,
337124, 337215, 337129, 37125, 337211, 337214,
337127, 322221, 322222, 322226, 335221, 335222,
335224, 335228, 333312, 333415, 333319.
322121, 322122.
325411, 325412, 325413, 325414.
323114, 323110, 323111, 323113, 323112, 323115,
323119.
32211, 322121, 322122, 32213.
334413.
3251, 3252, 3253, 3254, 3255, 3256, 3259, except
325131 and 325181.
a Standard
b North
Industrial Classification.
American Industry Classification System.
This table is not intended to be
exhaustive, but rather provides a guide
for readers regarding entities likely to be
affected by this action. If you have any
questions regarding the applicability of
this action to a particular entity, contact
the person listed in the preceding FOR
FURTHER INFORMATION CONTACT section.
B. Where Can I Get a Copy of This
Document and Other Related
Information?
In addition to being available in the
docket, an electronic copy of this final
rule will also be available on the World
Wide Web. Following signature by the
EPA Administrator, a copy of this final
rule will be posted in the regulations
and standards section of our NSR home
page located at https://www.epa.gov/nsr.
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II. Purpose
The purpose of this rulemaking is to
clarify and reaffirm opportunities
within the existing regulatory
framework to encourage the wider use
of the FAP approaches. The Agency has
learned a great deal over the past decade
through the implementation and
evaluation of pilot permits. In light of
that experience and the comments we
received on the proposed FAP
rulemaking (72 FR 52206, September 12,
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2007),1 we are finalizing certain
elements of that proposal.2
III. Background
A. What Is a Flexible Air Permit?
A FAP is a title V permit that by its
design facilitates flexible operations at a
source, allowing it to be marketresponsive while ensuring equal or
greater environmental protection than
that achieved by conventional permits.
In particular, a FAP contains one or
more approaches that allow the source,
under protection of the permit shield, to
make certain types or categories of
physical and/or operational changes
without further review or approval of
1 In addition to written comments submitted on
the proposal, we have received input from
stakeholders in outreach meetings held to discuss
the proposal. These meetings, and the topics
discussed, are documented in the docket for this
rulemaking, Docket No. EPA–HQ–OAR–2004–0087.
For purposes of this preamble, we refer to input
from all these sources as ‘‘comments.’’
2 On January 13, 2009, then Administrator
Stephen L. Johnson signed a final Flexible Air
Permitting Rule and the signed rule was made
publicly available on EPA’s Web site. The signed
rule was submitted to the Office of Federal Register
for publication. Rahm Emanuel, Assistant to the
President and Chief of Staff, issues a memorandum
on January 20, 2009, directing Agencies to
withdraw from the Office of Federal Register ‘‘all
proposed and final regulations that have not been
published in the Federal Register so that they can
be reviewed and approved by a department or
agency head.’’ Administrator Lisa P. Jackson
reviewed and approved the final Flexible
Permitting Rule, and this rule as published is
identical in substance to the rule previously signed
January 13, 2009.
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the individual changes by the
permitting authority as they
subsequently occur. Flexible air permit
approaches, as discussed in this notice,
include advance approvals of minor
NSR, AOSs, and ARMs. In pursuing a
FAP, the source must propose one or
more of these approaches to the
permitting authority who then would
accept those which are judged to be
appropriate in a particular situation. In
order to be effective, the combination of
FAP approaches contained in the title V
permit must address all applicable
requirements and requirements of part
70 relevant to the anticipated changes
being authorized.3 Flexible air permits
cannot circumvent, modify, or
contravene any applicable requirement
and, instead, by their design must
assure compliance with each one as it
would become applicable to any of the
authorized changes.
For more than a decade, we
participated in a pilot permit activity
with certain title V sources and
permitting authorities through which
were tested and evaluated various
3 ‘‘Applicable requirements’’ is a term that is used
in title V. The EPA has defined the term to include,
among other things, State implementation plan
(SIP) rules, the terms and conditions of
preconstruction permits issued under a SIPapproved NSR program, and requirements pursuant
to the new source performance standards (NSPS),
national emission standards for hazardous air
pollutants (NESHAP), maximum achievable control
technology (MACT), and Acid Rain Programs. See
40 CFR 70.2.
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permitting approaches that afford
operational flexibility. The lessons
learned through the pilot permit
experience served, in part, as the basis
for our adoption of the plantwide
applicability limitation (PAL)
provisions of the 2002 NSR
Improvement rule. They also serve as a
basis for this rulemaking, in which we
clarify and reaffirm existing regulatory
provisions that currently afford
reasonable opportunities for operational
flexibility, while ensuring the required
levels of environmental protection. We
intend that this rulemaking provide a
more positive foundation upon which
FAPs can be considered by sources and
permitting authorities and, as
appropriate, be designed and
implemented.
B. What Is the Title V Operating Permit
Program?
When Congress amended the Act in
1990, it established an operating permit
program in title V of the Act for major
(and certain other) stationary sources of
air pollution. Title V mandates that each
State develop and implement an
operating permit program, and requires
EPA to establish minimum standards for
these programs. The purpose of the
program is to improve the
enforceability, and thus the
effectiveness, of the Act’s requirements
by issuing to every covered source a
permit that lists all the requirements
applicable to the source under the Act
and contains other terms as necessary to
assure compliance with those
requirements. States may delegate
program responsibility to local agencies,
and eligible Tribes may develop and
implement a program at their option. In
1992, EPA promulgated regulations
setting forth minimum requirements for
State, local, and Tribal operating permit
programs in part 70 of title 40 of the
Code of Federal Regulations (40 CFR
part 70). Currently all States and many
local agencies administer operating
permit programs approved by EPA
pursuant to the part 70 requirements.
There are 112 such State, territorial, and
local operating permit programs. These
programs are typically referred to
interchangeably as ‘‘title V programs’’ or
‘‘part 70 programs.’’
In addition, title V requires EPA to
implement an operating permit program
in areas lacking an approved or
adequately administered State, local, or
Tribal program. Accordingly, in 1996
EPA promulgated the Federal operating
permit program at 40 CFR part 71. In
1999, EPA amended part 71 specifically
to address Indian country. Currently,
EPA administers the part 71 program in
Indian country, for sources located on
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the outer continental shelf, and for deep
water ports.4 There are currently no
Tribes with approved part 70 programs,
although one Tribe has received
delegation to administer the part 71
Federal program.
The concept of operational flexibility
in title V permits is not a new one. Since
they were initially promulgated in 1992,
the part 70 State operating permit
program regulations have included
operational flexibility provisions. One
of these is the AOS provision found at
40 CFR 70.6(a)(9), which is one subject
of this rulemaking.5, 6 Section 70.6(a)(9)
generally provides that any permit
issued under part 70 must include terms
and conditions for reasonably
anticipated operating scenarios
identified in its application by the
source and as approved by the
permitting authority. Over the years, we
have proposed rulemaking or guidance
to address operational flexibility further,
but none has been finalized.7
Shortly after we promulgated part 70,
we initiated and/or supported pilot
permit activities with interested States.8
4 The EPA may also issue a part 71 permit where
a State permitting authority fails to respond to an
objection by the Administrator to a part 70 permit.
See CAA section 505(c), 40 CFR 71.4(e).
5 The Federal operating permit program at part 71
addresses reasonably anticipated operating
scenarios in the same fashion as part 70. See 40 CFR
71.6(a)(9). This rulemaking affects both parts 70 and
71, and the revisions to each part are virtually
identical. For ease of reference, this preamble
discussion refers to the part 70 provisions, but the
discussion applies equally to the part 71 program
revisions. Section numbers given for the part 70
rules correspond directly to the analogous sections
in part 71. The term ‘‘title V permit’’ refers to
permits issued under either part 70 or part 71.
6 The EPA included other operational flexibility
provisions in the final part 70 regulations,
including 40 CFR 70.4(b)(12), (b)(14), and (b)(15),
which implement section 502(b)(10) of the Act.
This rule does not address those provisions.
7 In the 1990’s, we proposed certain clarifications
and modifications to the part 70 regulations. See
generally 60 FR 45529 (August 31, 1995) and 59 FR
44460 (August 29, 1994). In those proposals, among
other things, we discussed the concept of ‘‘advance
NSR’’ in relation to AOSs, and proposed a
definition for ‘‘alternative operating scenarios.’’ In
August 2000, based in large part on the experience
gained through the pilot permit activity discussed
below, we issued a draft guidance document called
White Paper Number 3 (64 FR 49803, Aug. 15,
2000), on which we solicited comment. That draft
guidance addressed various flexible permitting
approaches, including the use of the AOS
provisions, Clean Buildings, and PALs. In
fashioning the proposal on which this final rule is
based, we considered a summary of those
comments received on the prior proposals that
addressed advance approval and AOSs (which is
available in the docket) and the relevant individual
comments received on the draft guidance (which
are also in the docket).
8 Sources at the following locations participated
in the pilot permit activity: (1) 3M (St. Paul, MN);
(2) Intel (Aloha, OR); (3) Lasco Bathware (Yelm,
WA); (4) Imation (Weatherford, OK); (5) Cytec
(Connecticut); (6) DaimlerChrysler (Newark, DE); (7)
Merck (Elkton, VA); (8) Merck (Barceloneta, PR); (9)
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Companies participating in this activity
sought to reduce the cost, time, and
delays associated with a permit revision
for each operational change at a facility.
We and the States sought to increase the
sources’ operational flexibility, while
assuring compliance with applicable
requirements, ensuring environmental
protection, and facilitating pollution
prevention (P2). These pilots typically
allowed for both changes to operations
of existing emissions units and the
addition of new emissions units,
provided that the changes were
sufficiently well described in the permit
application so that the permitting
authority could confirm that all
applicable requirements were identified
and that the permit contained terms and
conditions assuring compliance with all
applicable requirements.
To evaluate the pilot permit activity,
we conducted a thorough review of the
six pilot permits for which at the time
there was significant implementation
experience.9 We reviewed on-site
records to track utilization of the
flexible permit provisions, assessed how
well the permits worked, evaluated total
emissions reductions achieved, and
analyzed the economic benefits
associated with the permits. Overall, we
found that the flexibility approaches
which States implemented under their
current authorities had worked well for
both the sources and the permitting
authorities, with significant benefits
accruing as follows:
• Environmental—The sources
generally achieved 30 to 80 percent
reductions in actual plantwide
emissions or emissions per unit of
production.
• Informational—Permitting
authorities and the public received
better information about the scope of
planned changes at the sources and the
maximum, cumulative environmental
effects of those changes.
• Economic—Increased permitting
certainty and reduced transaction costs
improved the participating companies’
ability to compete effectively in the
market and enabled them to retain, and
in some cases, create jobs.
• Administrative—Even with the
higher front-end design costs associated
with the pilot permits, permitting
authorities reported a net reduction in
administrative costs over the life of the
Saturn (Spring Hill, TN); (10) BMW (Spartanburg,
SC); (11) Eli Lilly (West Lafayette, IN); (12) 3M
(Nevada, MO); and (13) Imation (Camarillo, CA).
9 The six permits that we analyzed were: (1) Intel
(Aloha, OR); (2) 3M (St. Paul, MN); (3) Lasco
Bathware (Yelm, WA); (4) DaimlerChrysler
(Newark, DE); (5) Saturn (Spring Hill, TN); and (6)
Imation (Weatherford, OK).
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permits as a result of a reduction in
subsequent permit revisions.
For a more extensive discussion of the
findings of the pilot permit evaluation,
see the evaluation report.10
C. What Is the New Source Review
(NSR) Program?
The NSR program is a preconstruction
permitting program that applies when a
source is constructed or modified. The
NSR program is composed of three
different programs:
• Prevention of Significant
Deterioration (PSD);
• Nonattainment major NSR (NA
NSR); and
• Minor NSR.
1. Major NSR
We often refer to the PSD and NA
NSR programs together as the major
NSR program because these programs
regulate only major sources.11 These
programs are mandated by parts C and
D of title I of the Act.
Part C contains the PSD provisions.
The PSD program applies when a major
source that is located in an area that is
designated as attainment or
unclassifiable for any criteria pollutant
is constructed or undergoes a major
modification.12 13 Part D prescribes the
NA NSR program, which applies when
a major source that is located in an area
that is designated as nonattainment for
one or more criteria pollutants is newly
constructed or undergoes a major
modification for any of those pollutants.
The implementing regulations for the
PSD program are found at 40 CFR 52.21,
40 CFR 51.166, and 40 CFR 51.165(b).
For NA NSR, the regulations are found
at 40 CFR 52.24, 40 CFR 51.165, and 40
CFR part 51, appendix S.
As noted above, parts C and D set
forth the statutory requirements for the
PSD and NA NSR programs, and the
implementing regulations include
requirements for State major NSR
programs. As a result, major NSR
programs generally are similar across
the States.
The PSD requirements include but are
not limited to:
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10 ‘‘Evaluation
of the Implementation Experience
with Innovative Air Permits.’’ A copy of this report
is located in the docket for this rulemaking, or can
be accessed at https://www.epa.gov/ttn/oarpg/t5/
memoranda/iap_eier.pdf.
11 The Act uses the terms ‘‘major emitting
facility’’ to refer to sources subject to the PSD
program, and ‘‘major stationary source’’ to refer to
sources subject to NA NSR. See CAA sections 165,
169, 172(c)(5), and 302(j). For ease of reference, we
use the term ‘‘major source’’ to refer to both terms.
12 The term ‘‘criteria pollutant’’ means a pollutant
for which we have set a NAAQS.
13 In addition, the PSD program applies to many
noncriteria regulated pollutants.
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• Installation of Best Available
Control Technology (BACT);
• Air quality monitoring and
modeling analyses to ensure that a
project’s emissions will not cause or
contribute to a violation of any national
ambient air quality standards (NAAQS)
or maximum allowable pollutant
increase (PSD increment);
• Notification of Federal Land
Manager of nearby Class I areas; and
• Thirty-day public comment period
and opportunity for a public hearing on
the permit.
Nonattainment NSR requirements
include but are not limited to:
• Installation of Lowest Achievable
Emission Rate (LAER) control
technology;
• Offsetting new emissions with
creditable emissions reductions;
• Certification that all major sources
owned and operated in the State by the
same owner are in compliance with all
applicable requirements under the Act;
• An alternative siting analysis
demonstrating that the benefits of the
proposed source significantly outweigh
the environmental and social costs
imposed as a result of its location,
construction, or modification; and
• Thirty-day public comment on the
permit.
Based on our pilot permit evaluation
and our 1996 proposed modifications to
the major NSR program, in December
2002 we finalized the NSR Improvement
rule. In that rule, we promulgated
regulations for PALs in the PSD and NA
NSR programs. As explained in the
preamble to the December 2002 final
rule, a PAL is an alternative approach
for determining NSR applicability on a
plantwide basis. See 67 FR 80206.
Sources with PALs can make changes
without triggering the major NSR
preconstruction permitting
requirements, provided such changes
remain below the limit established in
their PAL and do not otherwise violate
the requirements of the PAL. A PAL is
an important technique which is often
used in tandem with other FAP
approaches such as advance approvals
for minor NSR.
2. Minor NSR
Under section 110(a)(2)(C) of the Act,
States are required to have ‘‘minor’’ NSR
programs, which apply to new and
modified sources that do not meet the
emissions thresholds for the NSR
programs that apply to major sources, as
well as permit programs to meet parts C
and D of the Act. In addition, section
110(j) requires all applicants for permits
issued under title I of the Act to show
that they will comply with standards of
performance and all other requirements
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51421
of the Act. The minor NSR program is
part of each State’s ‘‘State
implementation plan’’ (SIP) and is
designed to ensure that the construction
or modification of any stationary source
does not interfere with the attainment of
the NAAQS. Aside from this
requirement, which is stated in broad
terms, the Act includes no specifics
regarding the structure or functioning of
minor NSR programs. The
implementing regulations, which are
found at 40 CFR 51.160 through 51.164,
also are stated in very general terms. As
a result, SIP-approved minor NSR
programs can vary quite widely from
State to State.
IV. Overview of This Final Action
This final action is primarily a
reaffirmation of currently available
flexibility options and the process for
accessing them. This action adds some
new definitions and clarifications to
existing parts 70 and 71 provisions in
order to promote greater certainty and
reasonable consideration of these
options. This notice discusses each of
the FAP approaches (e.g., advance
approvals of minor NSR, AOSs, and
ARMs) and the common process for
their consideration. In this process, the
source first proposes use of one or more
of the FAP approaches to the permitting
authority who then evaluates the
proposal on a case-by-case basis.
Commenters have generally found
these options to be available to the
extent needed and appropriate under
existing authorities. Commenters have
also found the common process to be
sufficient and effective in the reasonable
consideration of the particular options
proposed for a FAP. These commenters
have convinced the Agency that more
prescriptive approaches proposed to
assure greater consistency may well be
counterproductive to our objective for
greater consideration and appropriate
use of FAP approaches. While deciding
not to prescribe specific approaches to
the design and implementation of FAPs,
EPA does intend to monitor State
activities in these areas, to evaluate the
effectiveness of various FAP approaches
periodically, and to assess, on the basis
of new experiences and other
information, whether any additional
rulemaking would be appropriate in the
future.
A. What Specific Changes to Parts 70
and 71 Is EPA Finalizing?
We are finalizing a proposed revision
to the title V permit application
requirements at 40 CFR 70.5(c)(3)(iii) to
facilitate the use of emissions caps,
including those for advance approvals
of minor NSR and for PALs, although
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the wording has been changed slightly
in the final rule. The final revisions
clarify that for emissions units subject to
an annual emissions cap, the
application may report the units’
emissions as part of the aggregate
emissions associated with the cap,
except where more specific information
is needed, including where necessary to
determine or assure compliance with an
applicable requirement.
With respect to AOSs, after
considering the comments we received
on the proposed rules, we are finalizing
only those aspects of our proposal that
would preserve the current levels of
flexibility and add no new
administrative burden. In particular, we
are revising the rules to:
• Add a definition of AOS, but
eliminating the reference to ‘‘physical
and operational changes’’ from the
proposed definition.
• Clarify that the permitting authority
shall require the source to supplement
its application with additional
information when necessary to define
permit terms and conditions to
implement a proposed AOS as
requested by the source.
• Clarify that the compliance plan
requirements for applications must
address proposed AOSs when an
application includes them.
• Clarify that applications must
contain documentation that the source
has obtained all authorizations required
under the applicable requirements
relevant to a proposed AOS or a
certification the source has submitted
all relevant materials for obtaining such
authorizations.
• Clarify that permits must contain all
authorizations as required under the
applicable requirements relevant to an
AOS.
• Use consistent terminology
wherever the rules refer to AOSs.
We are not finalizing other proposed
requirements relating to the specific
content of AOSs in logs and permits and
to the need to report AOS
implementation every 6 months. We
have been persuaded by the commenters
on the proposal that these potential new
requirements would not be necessary
and may, in fact, be counterproductive.
In the final rules with respect to
ARMs, we are adding the proposed
definition of ARM and supplementing it
with two clarifications added in 40 CFR
70.6(a)(1): (1) As is currently the case for
AOSs, the source must identify in its
application a potential ARM and the
permitting authority must then choose
to approve it before the ARM can be
effective; and (2) an ARM cannot be
used to circumvent any other applicable
requirement. Although ARMs can
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reduce the number of potential permit
revisions that a source must otherwise
request, an ARM must be consistent
with and implement an applicable
requirement or requirement of part 70.
We are not finalizing the proposed
requirement for sources to identify in
the 6-month monitoring report any
ARMs implemented during the
reporting period. Instead, we are
clarifying that implementation records
for all ARMs use must be kept on-site
by the source.
Because the final rules represent
clarifications to the existing part 70
regulations, we believe that many States
will be able to implement the final rules
without revising their regulations. This
belief is further based on the pilot
experience and on the comments
received from States who affirmed that
their current authority was sufficient to
implement both AOSs and ARMs (i.e.,
no State rulemaking was thought to be
needed to incorporate the new
definitions and clarified requirements).
However, since the AOS provisions
are impacted by the rule and are one of
the part 70 program minima, and State
part 70 programs differ, some States
may revise their current part 70 program
to add sufficient authority to implement
the final rule or opt to make current
authority on flexible permits more
explicit.
With respect to AOSs, for those States
that believe they lack authority under
their current part 70 programs to
implement the final rule, or that chose
to make current authority more explicit,
such States should submit proposed
revisions to their title V operating
permits program to their EPA Regional
Offices pursuant to 40 CFR 70.4(i). For
other States if, based on their
subsequent efforts to implement the
final rule, we determine in writing that
a particular part 70 program does not
provide sufficient authority to
implement the final rule or is
inconsistent with the final rule, then the
relevant State must revise the program
pursuant to 40 CFR 70.4(i). Accordingly,
the State will have, from the date of our
written determination, 180 days, or such
other period as the Administrator may
specify following notification by the
Administrator, or within 2 years if the
State demonstrates that additional legal
authority is necessary to make the
required program revisions, to submit a
proposed operating permit program
revision consistent with the final rule to
us for review and approval.
With respect to ARMs, States may
choose to send us specific revisions to
their current programs at any time.
There is no mandate for part 70
programs to contain provisions specific
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to ARMs. Thus, States are not obligated
to revise their part 70 programs in this
regard as a result of this final rule.
However, optional rule changes may be
useful to some States in implementing
the final rule more effectively and to
achieve the anticipated administrative
benefits attributed to ARM
implementation.
Regardless of whether States revise
their rules to incorporate the part 70
rule changes that are being finalized in
this action, the Agency wishes to
reiterate that inclusion of AOSs or
ARMs in a title V permit remains an
essentially voluntary activity. A source
owner in deciding whether to propose
one must first determine that an AOS
and/or ARM would be useful in
increasing certainty and flexibility and
then the permitting authority must
determine whether or not to grant the
source’s request for an AOS and/or
ARM. The permitting authority, on a
case-by-case basis, may reject source
proposals as inadequate to assure
compliance with the underlying
applicable requirements or otherwise
inappropriate, depending on the
specific facts of the situation.
B. What Changes to Parts 51 and 52 Is
EPA Finalizing?
We are not finalizing any changes to
the NSR program in parts 51 and 52. We
did not propose any changes to the
regulations for minor NSR based on our
experience with several pilot States.
Comments received on the proposal
affirmed that the relevant pilot
experience was broadly applicable and
that States, in general, have sufficient
existing authority to advance approve
minor NSR, where they determine it
appropriate to do so, and to incorporate
the permit terms accomplishing this
approval into title V permits as
applicable requirements. As a result, we
continue to believe revisions to our part
51 minor NSR regulations are not
necessary. Where States are considering
revisions to their current minor NSR
programs to provide more explicit
authority for authorizing advance
approvals, EPA is willing to discuss
possible revisions and to review any
rule changes proposed by the State,
consistent with 40 CFR 51.160 through
51.164.
We have also decided to terminate our
rulemaking proposal for Green Groups.
As discussed more fully later in this
preamble, we instead intend to support
States and sources who wish to explore
the flexibilities available under the
existing major NSR regulations. Upon
request to do so, EPA is willing to assist
States in an evaluation of their current
SIPs and to discuss possible
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replacement provisions with them
consistent with our 40 CFR 51.165 and
51.166 regulations governing NA NSR
and PSD SIPs.
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C. What Approach Is Being Used To
Discuss the Final Actions?
The final actions relative to parts 70
and 71 and to parts 51 and 52 are
subsequently discussed in four sections
entitled: V. Advance Approval of Minor
NSR; VI. Alternative Operating
Scenarios (AOSs); VII. Approved
Replicable Methodologies (ARMs); and
VIII. Green Groups. Each of these
sections first summarizes what we
proposed and the significant reactions
of commenters to our proposal, and then
describes what EPA is finalizing as a
result. A more comprehensive summary
and analysis of the written comments
received can be found in our Response
to Comments document, which is
available in the public docket for this
rulemaking as described in the
ADDRESSES section of this preamble.
D. What Are EPA’s Recommendations
for Public Participation in Flexible
Permitting?
Based on our experience with pilot
permits, we believe that FAPs provide at
least as much environmental protection
as conventional permits and often
promote superior environmental
performance. Nevertheless, we also
recognize that FAPs will contain
features, such as AOSs, ARMs, or
advance approval of minor NSR, that
may not be familiar to the reviewing
public at least until these approaches
are more widely used. For this reason,
we encourage permitting authorities to
consider using their discretion to
enhance the relevant public
participation process (as currently
required in both title V and NSR
regulations), as appropriate, for a
particular FAP. Some recommendations
which we found to work well in the
context of the pilot permits are
described below.
During the permitting process,
permitting authorities could consider
making the permit application available
to the public soon after receipt. We
found in pilot permits that early
outreach to the community, rather than
waiting until the draft permit was
prepared, was an effective public
participation strategy. Some permitting
authorities have also found it useful to
issue a local press release (in addition
to a conventional notice in the
newspaper) when a permit containing
innovative approaches is released for
comment. Press releases have potential
to reach more people and raise local
awareness of FAP approaches.
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The minimum public comment period
required for a title V permit renewal or
significant permit modification is 30
days. Where a significant amount of a
permit’s content consists of terms to
incorporate operational flexibility, we
suggest that permitting authorities
consider expanding the comment period
to 45 days or more. Note, however, that
for some pilot permits, an up-front
outreach to the public was sufficient to
resolve community questions and
comments early in the process, so that
by the time of the public hearing and
comment period no adverse comments
were received.
Finally, in order to ensure adequate
technical support and accessibility for
the public in their efforts to understand
and comment upon FAPs, we suggest
that permitting authorities provide a
principal point of contact for
responding to technical questions and
ensure the availability of draft permits,
applications, and technical support
documents on an Internet Web site. We
believe that any additional costs here
will be offset by the subsequent
administrative cost savings to the
permitting authority resulting from the
reduced need to process permit
revisions for sources with FAPs.
E. What Types of Support Does EPA
Intend To Offer?
The Agency anticipates that the effort
by States and sources to investigate
FAPs will involve a potentially wide
spectrum of sources (see section I.A). As
a result, EPA intends to provide general
support to States, sources, and the
public on this and other FAP topics,
potentially in the form of a Web site,
workshops, and an EPA network of
contacts. In addition, we will consider
other types of support to individual
States where requested to do so.
V. Advance Approval of Minor NSR
51423
authorization for these changes under
minor NSR (usually categories or types
of changes), an individual review by the
permitting authority typically is
required at the time each change would
be approved.
We refer to up-front, categorical
authorizations as ‘‘advance approvals’’
under minor NSR.14
Upon examining the provisions of
their minor NSR programs, most of the
States in which pilot permits were
conducted (‘‘pilot States’’) found that
they could issue advance approvals
under existing minor NSR authority for
a wide spectrum of changes, provided
that certain boundary conditions were
established in the minor NSR permit.
The conditions established in the minor
NSR permit to accomplish such
approvals varied depending upon the
requirements of the different State
minor NSR programs and the specific
facts of the particular situation.
The pilot permits employed several
types of techniques to authorize, in a
practicably enforceable manner, a
category of changes under minor NSR.
These techniques, while not necessarily
transferable in all aspects to other
permitting situations, do represent fieldtested reference points from which
similar advance approval approaches
can be considered by other permitting
authorities. Ultimately, as with all FAP
approaches, in order for a minor NSR
project proposing use of an advance
approval to be viable, the source must
first propose it to the permitting
authority, and the permitting authority
must then agree to pursue it in the
context of its own SIP-approved minor
NSR rules and the case-specific facts.
Permitting authorities in pilot States
employed the following approaches and
safeguards when authorizing the
advance approval of minor NSR:
• Scope of minor NSR project—
Permitting authorities were able to rely
A. Background
Pursuant to section 110(a)(2)(C) of the
Act and its implementing part 51
regulations (see 40 CFR 51.160 through
51.164), States are required to adopt
minor NSR programs that complement
their major NSR programs required
under parts C and D of title I the Act.
Given the general nature of these
requirements, the content of minor NSR
programs varies widely among the
States. Regardless of their specific
provisions, through the pilot permit
experience, we found that State minor
NSR requirements, where applicable,
are among the most important in
designing a FAP for sources making
frequent and/or rapid physical and
operational changes. Absent an up-front
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14 ‘‘Advance approval’’ generally refers to an
authorization to make certain categories or types of
changes which is issued to a source by its
permitting authority pursuant to a specific
applicable requirement that requires approval prior
to making subject changes (e.g., minor and major
NSR, section 112(g), etc.). Changes within the types
or categories of changes which are advance
approved can subsequently be made over the
duration of the permit without further review or
approval by the permitting authority with respect
to the particular applicable requirement for which
the changes are advance approved. In order to
explore use of a specific advance approval, a source
would first propose its use which then could be
accepted or rejected by the permitting authority, as
appropriate. Advance approvals authorized under
one particular applicable requirement (e.g., advance
approvals under minor NSR) may also address
additional requirements which may or may not
themselves require prior approval before the
specified changes can be made (e.g., MACT, NSPS,
and State air toxics requirements).
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upon available flexibility to interpret
the relevant SIP-approved definitions
(e.g., emissions unit, facility, source) in
order to fashion a reasonable scope and
duration of the minor NSR pilot project
(i.e., ones that provide appropriate
operational flexibility for the particular
situation while ensuring environmental
protection). In general, these advance
approvals (i.e., the minor NSR projects)
consist of several categories of potential
changes anticipated to occur over an
appropriately defined period of time
(e.g., a range of possible types of
changes, such as ‘‘any of various
physical changes to the rollers, drive
mechanism, and other components of
the coating section within a coating
line’’). In their permit applications
requesting advance approval of minor
NSR, pilot sources described these
changes in sufficient detail to allow the
permitting authority to conduct the
relevant ambient air impact and control
technology reviews, to determine
relevant applicable requirements, and to
assess the compatibility of the changes
with the approved emissions reduction
and monitoring approaches. The SIPapproved requirements concerning the
timeliness of the approved construction
project vary among the pilots,
depending upon the content of the
approved SIP and the ability to
characterize the project (as deemed
appropriate by the permitting authority)
as a series of related ongoing changes.
• Non-applicability of major NSR—In
order to assure the types of changes
authorized under the advance approvals
for minor NSR could subsequently
occur without further review and
approval by the permitting authority,
the pilot permits contain terms to
prevent major NSR from also applying
to the same changes. These terms
typically involve either a PAL based on
actual emissions or a potential to emit
(PTE) cap to prevent an existing source
from becoming major, depending on
whether the source is already major or
not for the pollutant(s) involved in the
advance approval of minor NSR.
• Control technology requirements—
Permitting authorities imposed terms in
pilot permits as necessary to assure
compliance with all applicable control
requirements. In all pilot permits, these
terms require compliance with Federal
standards (e.g., MACT, NSPS,
NESHAPs) that continue to apply
regardless of the approach taken to
advance approve minor NSR. In
addition, the advance approved changes
must meet any applicable SIP
requirements, including those in some
States to apply best available technology
(BAT) to certain changes subject to their
minor NSR programs. In those pilot
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permits subject to a State BAT
requirement, permitting authorities also
determined whether the advance
approval allowed discrete changes with
later construction times and whether
any initial BAT determination for them
would require re-evaluation.
• Protection of ambient standards—
Pilot permits contain terms judged
appropriate by the permitting authority
to assure that the minor NSR pilot
project would not interfere with the
attainment and maintenance of the
NAAQS. Typically, since the advance
approvals requested by the pilot sources
involved VOC emissions, pilot projects
primarily focused on protecting the
ozone NAAQS. The plantwide VOC
emissions caps used in the pilots were
determined to be adequate for purposes
of safeguarding the ozone NAAQS, but
for other pollutants (e.g., air toxics)
States sometimes required a replicable
modeling procedure to screen the
impacts of individual emissions
increases relative to acceptable ambient
levels. In the case of one pilot, an
ambient dispersion model, complete
with implementation assumptions, was
included in the permit to evaluate any
new air toxic pollutants of concern, or
increases in existing toxic pollutants.
Failure of a particular change to meet
the screening levels triggered a case-bycase review of that change by the
permitting authority. Additional
safeguards were imposed to a varying
extent, as applicable and as deemed
appropriate, by the permitting authority
to address averaging time concerns
potentially applicable to NAAQSs other
than ozone.
• Public participation—Each pilot
permit project was subjected to an
opportunity for public comment. Often
this process was enhanced to facilitate
better understanding and support for the
project. (See section IV.D.)
To augment initial application
information, pilot States, as part of
authorizing advance approvals under
their existing minor NSR programs,
frequently decided to require sources to
send a notice to the permitting authority
contemporaneous with the operation of
any entirely new emissions unit relying
upon the advance approval. Pilot States
were also able to add other permit
terms, where necessary, to make
enforceable any advance approvals of
minor NSR that were authorized.
Often the permitting authorities were
able in pilot permits to streamline
various permit terms so as to
accomplish multiple objectives and to
simplify the overall permit. For
example, the pilot source frequently
requested its permitting authority to
establish in the minor NSR permit a
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plantwide VOC emissions cap at a
particular level for two purposes. First,
the level was requested to prevent the
applicability of major NSR. In cases
where the existing plantwide VOC
emissions were below the major source
threshold, the permitting authority
approved an emissions cap to constrain
the PTE of the source in a practicably
enforceable fashion so that it would not
be a major source of VOC emissions for
purposes of PSD. In other cases, where
the source was an existing major
stationary source for its VOC emissions,
the source requested a plantwide cap
level to function as a PAL. In response,
the permitting authority approved the
requested PAL consistent with the PAL
provisions of the major NSR regulations
(see, e.g., 40 CFR 52.21(aa)).
Accordingly, compliance with the PAL
ensures that major NSR would not apply
to any future changes made at the
source during the time period over
which the PAL was effective. Second,
the VOC emissions level established in
the PTE cap or in the PAL, as
applicable, was interpreted by the
permitting authority as a sufficient
safeguard to prevent future changes
approved under minor NSR, in
combination with existing source
emissions, from interfering with the
ozone NAAQS. As such, the VOC
emissions cap would both prevent major
NSR from applying to changes at the
source and ensure that the advance
approval of changes under minor NSR
does not jeopardize the NAAQS. Given
the strategic importance of such caps,
pilot sources typically maintained a
significant margin of safety between
their actual plantwide emissions and
the level required by their emissions
cap(s).
Under the current part 70 regulations,
any permit terms accomplishing an
advance approval pursuant to a SIPapproved minor NSR program must be
incorporated into the title V permit as
applicable requirements, and combined
with other permit terms established in
the part 70 permit as necessary to assure
compliance with all requirements that
will apply when the approved changes
are subsequently implemented. Thus,
the part 70 permit would include the
requirements directly addressed in the
minor NSR permit, as well as other
requirements that the minor NSR permit
did not address, if any. Changes
advance approved under minor NSR can
then be implemented without any
further review or approval by the
permitting authority, provided that the
terms of the authorizing minor NSR
permit are effective upon its issuance
and are incorporated into the title V
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permit as applicable requirements
consistent with 40 CFR 70.2.
In our evaluation of pilot permits,15
we found that the use of advance
approvals under minor NSR improved
operational efficiency at the plants
because companies knew in advance
what changes were authorized, making
resource allocation more efficient and
accommodating the typically
incremental, iterative nature of
industrial process improvements. We
also found that P2 projects approved in
advance became more attractive to the
companies because such projects could
be undertaken without the delay and
uncertainty of future case-by-case
approvals. In addition, P2-related
projects reduced emissions and enabled
sources to comply more easily with
emissions limits such as the plantwide
emissions caps that were often features
of the pilot permits.
As mentioned above, pilot permit
experience indicates that obtaining
advance approval under minor NSR is
often a critical element in the design of
a FAP. This experience also suggests
that many State minor NSR programs
may already provide, in situations
judged to be appropriate by the
permitting authority, the legal authority
necessary to issue minor NSR permits
that accommodate various types of
operational flexibility, which can be
readily incorporated into title V permits.
Although we did not propose any
revisions to the minor NSR regulations
at 40 CFR 51.160 through 51.164, we
used the proposal preamble to
encourage States to implement advance
approvals in response to requests by
sources under their existing minor NSR
programs, as appropriate, and to seek
additional authority to consider source
proposals where they do not currently
have such discretion. Based on pilot
experience, we also expressed our belief
that permitting authorities can often
advance approve changes with respect
to other applicable requirements that
require a specific authorization without
regulatory changes. See 72 FR 52215.
We proposed one revision to part 70
to facilitate the use of advance
approvals under minor NSR, which, as
mentioned, often rely upon one or more
emissions caps to accomplish their
authorizations.16 This revision to 40
CFR 70.5(c)(3)(iii) would clarify that for
15 See footnote 9 for information on where to
obtain our report ‘‘Evaluation of the
Implementation Experience with Innovative Air
Permits.’’
16 In the proposal preamble, we discussed this
proposed clarification as a revision for purposes of
AOSs (72 FR 52219). We now believe that it is more
appropriately portrayed as a revision in support of
advance approvals under minor NSR.
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emissions units subject to an annual
emissions cap, the title V permit
application may report the units’
emissions (in tons per year) as part of
the aggregate emissions associated with
the cap, except where more specific
information is needed to determine and/
or assure compliance with an applicable
requirement.
As explained in the proposal
preamble (72 FR 52219), the
introductory text in 40 CFR 70.5(c)
states generally that the application
must include information for each
emissions unit. Existing 40 CFR
70.5(c)(3)(iii) further requires that the
application provide the emissions rate
in tons per year and in such terms as are
necessary to establish compliance
consistent with the applicable reference
test method. We proposed to clarify this
regulatory requirement as it applies to
sources subject to title V permitting
requirements that employ an annual
emissions cap (e.g., caps which are
PALs, limit PTE, and/or enable advance
approval for minor NSR). In particular,
we proposed that for the operation of
any emissions unit authorized under an
annual emissions cap, a source can meet
40 CFR 70.5(c)(3)(iii) by reporting the
aggregate emissions associated with the
cap.
We noted in the proposal preamble
that under the proposed approach, an
emissions cap could be thought of as a
constraint on annual emissions from
each emissions unit under the cap as
well as on the aggregated emissions
from the group of units. That is, in the
extreme, a unit could emit up to the full
amount of the cap if all other units
under the cap had zero emissions. Thus,
for a group of emissions units under an
annual emissions cap, the 40 CFR
70.5(c)(3)(iii) requirement for unit-byunit emissions figures could be met by
reporting in the permit application that
the emissions cap represents the upper
limit on emissions both from each unit
in the group and from the entire group.
The proposed revision to 40 CFR
70.5(c)(3)(iii) would simply clarify that
in this particular situation, more
specificity is not needed in the title V
permit application (unless additional
specificity is necessary to determine
applicability or to assure compliance
with one or more potentially applicable
requirements). Reporting emissions data
in this manner would be permissible
except where the permitting authority
determined that more specific emissions
information was needed (e.g., where an
applicable requirement for a specific
emissions unit depends on the
emissions type or level, or where annual
emissions figures are needed to assess
compliance for the unit).
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51425
We did not propose any other
revisions to part 70 related to advance
approvals under minor NSR. Part 70
already requires incorporation into a
title V permit of the terms of any State
minor NSR permit, including those
issued to advance approved changes.
These permit terms are themselves
applicable requirements as defined in
40 CFR 70.2. Sometimes, however, the
permitting authority may need to
include other terms in the title V permit,
in addition to the terms of a minor NSR
permit authorizing advance approved
changes, so that the changes can be
made without further review or
approval. This would be the case if
there were other applicable
requirements also implicated by the
advance approved changes that were not
addressed in the minor NSR permit. In
such cases, the part 70 permit must
assure compliance with these applicable
requirements as well.
We pointed out in the proposal
preamble that an advance approval that
is incorporated into a part 70 permit
remains subject to all the conditions of
the underlying authorization. For
example, if an underlying minor NSR
permit is contingent upon the source
commencing construction of the
authorized change(s) within a certain
period, the part 70 permit must contain
terms to ensure that the part 70 permit
does not authorize operation if the
source fails to meet the required
deadline. The source is responsible for
obtaining any extensions or additional
authorizations as necessary to keep the
advance approval in the part 70 permit
in effect. See 72 FR 52217, footnote 23.
In the proposal preamble we also
noted that an advance approval under
minor NSR may be added to a title V
permit through permit issuance or
renewal or through the permit revision
process. When an existing permit is to
be revised to incorporate an advance
approval of minor NSR, the appropriate
revision track depends on the nature of
the proposed advance approval and the
process under which it was established
(e.g., whether the authorizing NSR
process also addressed title V
requirements). See 40 CFR 70.7(d) & (e).
Note also that the permit shield (where
available and granted by the permitting
authority) can be extended to advance
approvals added through permit
issuance or permit renewal or to those
added during a significant permit
modification, but not to those added
through other permit revision
procedures.
Commenters generally agreed that no
Federal rulemaking is needed on the
advance approval of changes under
minor NSR because States currently can,
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at their discretion, employ a variety of
advance approval techniques under
their existing rules and authorities.
Some commenters indicated that any
new Federal rules might actually
constrain innovation by the States in
this area, rather than enable greater use
of advance approvals. A commenter
noted that some State minor NSR
programs require contemporaneous
minor source BACT determinations that
are not consistent with the advance
approval of a wide spectrum of changes,
and some expressed concern about the
burden and other costs that advance
approval permits could impose upon
State agencies for uncertain projects and
uncertain environmental gain.
Several industry commenters urged
EPA to further encourage States to issue
advance approvals under minor NSR.
On the other hand, an association of
State and local air agencies indicated
that States do not need our
encouragement to use their minor NSR
programs for advance approvals as
appropriate, and objected that the
discussion in the proposal preamble
could be misinterpreted as having
regulatory force. This commenter
believed that advance approvals cannot
be issued under some minor NSR
programs.
We received few comments on our
proposal to revise 40 CFR 70.5(c)(3)(iii).
One State agency indicated that for a
combined NSR/title V permit program
unit-specific information is often
needed for several purposes, including
control technology assessment,
modeling, compliance assessment,
determining the appropriate level and
frequency of monitoring, etc., even if the
unit is covered by an emissions cap.
This commenter wanted to retain the
ability to require such information as
needed.
B. Final Action
Consistent with our proposal, we are
not revising any part 51 requirement in
order to require or facilitate advance
approvals under minor NSR (or under
any other applicable requirement). We
continue to believe that many States are
able to advance approve changes under
their existing minor NSR programs, to
the extent that they believe it is
appropriate to do so. As mentioned by
a commenter, EPA recognizes, however,
that certain minor NSR rules are not as
amenable to advance approval as are
others. In particular, advance approvals
under State rules that require sources to
employ best available technology
(where such rules are judged to be open
to advance approval by the permitting
authority and appropriate for use in a
particular case) may require additional
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permit terms as necessary to assure that
best available technology will be used.
We would also like to emphasize that
permitting authorities, operating under
their existing minor NSR regulations
and authorities, must include terms as
necessary to ensure the practical
enforceability of advance approvals. For
example, for purposes of tracking
compliance with an emissions cap
established in minor NSR, the minor
NSR permit should contain sufficient
terms that collectively act to monitor
and quantify the relevant emissions at
the site over the applicable time period.
We are finalizing the proposed
revision to the title V permit application
requirements at 40 CFR 70.5(c)(3)(iii)
with minor changes. As proposed, the
final revisions clarify that for emissions
units subject to an annual emissions
cap, the application may report the
units’ emissions as part of the aggregate
emissions associated with the cap,
except where the permitting authority
determines that more specific
information is needed. The EPA agrees
with the commenter who wanted to
assure that permitting authorities
retained the ability to require more unitspecific information as needed to
develop permit terms needed to
determine or to assure compliance with
all applicable requirements relevant to
emissions units included under the
emissions cap. As a result, the final rule
language now indicates that unitspecific information must be provided
whenever it is needed, including where
necessary to determine or assure
compliance with an applicable
requirement.
We believe that the revised 40 CFR
70.5(c)(3)(iii) will facilitate the use of
advance approvals under emissions
caps. This combination of FAP tools
was repeatedly validated in our
evaluation of pilot permits. In addition,
emissions caps were clearly shown to
promote emissions reductions as
sources sought to create ‘‘head room’’
under their caps to allow for additional
growth. No other changes to part 70 are
being made for the purposes of
accomplishing advance approvals under
minor NSR or incorporating them into
part 70 permits. However, we again
stress that an advance approval which is
incorporated into a part 70 permit must
include all the conditions of the
underlying authorization. The source is
responsible for obtaining any extensions
or additional authorizations as
necessary to keep the advance approval
in the part 70 permit in effect.
While we believe that appropriately
crafted advance approvals of minor NSR
can, in certain cases, facilitate
operational flexibility while protecting
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the environment (at least as effectively
as would the individual review of each
change as it occurs), we do not intend
to imply that States should issue such
advance approvals in any cases that
would be inconsistent with their
existing rules or, in their judgment,
would be inappropriate. As a general
matter, the permitting authorities have
authority to decide, on a case-by-case
basis, the merits of granting an advance
approval of minor NSR to a particular
requesting source. Additionally we do
not intend to imply that States must
revise their current rules to facilitate
advance approvals in the future. Rather,
where existing rules may limit advance
approval opportunities, EPA simply
encourages States to consider the
adoption of more flexible minor NSR
rules under the broad governing
regulations in 40 CFR 51.160–51.164. It
is EPA’s policy to support State use of
advance approvals under minor NSR,
where they deem them appropriate, and
particularly where States expect benefits
similar to those found in our evaluation
of pilot permits to occur.
We also acknowledge that States, in
order to respond to requests by sources
for advance approval of minor NSR,
may incur additional up-front
development costs for which they may
have to charge additional service fees.
However, based on the pilot permit
experience, annual administrative costs
associated with FAPs should decline
over time and, over the life of the
permit, be less than those for
conventional permits.
VI. Alternative Operating Scenarios
A. Background
Since they were initially promulgated
in 1992, the part 70 State operating
permit program regulations have
included the AOS provisions found at
40 CFR 70.6(a)(9).17 These provisions
were promulgated consistent with
section 502(b)(6) of the Act, which
requires permit programs to include
provisions for adequate, streamlined
and reasonable procedures for
expeditious processing of the
application and expeditious review of
permit actions. Accordingly, 40 CFR
70.6(a)(9) is a mandatory part 70
program element, but its use is
discretionary on the part of both sources
17 As noted previously, our proposed and final
actions related to AOSs apply equally to part 70 and
part 71. For simplicity, we refer only to part 70 in
this preamble discussion. The provisions of part 71
generally mirror those of part 70, so the part 71
paragraphs that correspond to the cited paragraphs
in part 70 differ only by designating part 71 instead
of part 70 (unless otherwise noted). For example,
the AOS provisions of part 71 are found at 40 CFR
71.6(a)(9) rather than at 40 CFR 70.6(a)(9).
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and permitting authorities. In particular,
40 CFR 70.6(a)(9) provides that any
permit issued under part 70 must
include terms and conditions for
reasonably anticipated operating
scenarios identified by the source in its
application, as approved by the
permitting authority.18
The Agency outlined broad policy on
the design and implementation of AOSs
in our final part 70 rule and then further
explained our policy in the September
12, 2007 proposal. In the final part 70
rule, we emphasized the importance of
40 CFR 70.6(a)(9), noting that a permit
that contains approved AOSs ‘‘will be a
more complete representation of the
operation at the permitted facility.’’ See
57 FR 32276. We also explained that
once a permit with approved AOSs is
issued, the need for additional permit
modifications will be substantially
reduced since the permit will already
contain appropriate terms and
conditions to accommodate the
approved operating scenarios. In the
final part 70 rule, we did not place any
restrictions on the types of operations
that could qualify as a reasonably
anticipated operating scenario. Instead,
the Agency deferred to the process
under which a candidate AOS would be
identified by the source and considered
for approval by the permitting authority
to establish those AOSs which would be
appropriate for streamlining purposes.
In the September 12, 2007 proposal,
the Agency explained that, when
deciding to approve an AOS, the
permitting authority must ensure that
the proposed operating scenarios are
adequately described for each relevant
emissions unit such that all applicable
requirements 19 20 associated with each
18 Alternatively, if a title V permit is issued
without an AOS, it must nonetheless, pursuant to
40 CFR 70.6(a)(1), contain terms sufficient to assure
compliance with all applicable requirements at the
time of permit issuance. While permissible to do so,
failure to address anticipated changes in an AOS
which are not otherwise sufficiently addressed by
the included applicable requirements may result in
the need for a permit revision or, if available under
the State’s part 70 program, an off-permit action
which would require an advance notice and would
not be eligible for the permit shield. On the other
hand, if an AOS were authorized in a title V permit,
then the source could subsequently implement it
without further review or approval, provided that
such implementation was contemporaneously
recorded in an on-site log upon making the relevant
change(s).
19 ‘‘Applicable requirement’’ as defined in 40 CFR
70.2 includes all the separate emissions reduction,
monitoring, recordkeeping, and reporting
requirements of a particular standard or SIP
regulation and all the terms and conditions of
preconstruction permits issued pursuant to
regulations approved or promulgated through
rulemaking under title I of the Act.
20 Failure to anticipate and include a particular
change in a part 70 permit (including under an
AOS) does not in and of itself bar the source from
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scenario are identified and appropriate
terms and conditions to assure
compliance with these requirements
(when they become applicable) are
included in the permit. We also noted
that the source must obtain all specific
authorizations which are required under
any applicable requirements (e.g., those
under minor NSR) in order to
implement any AOS approved by the
permitting authority without any further
review or approval on their part. In
addition, EPA affirmed that, while
States must have sufficient authority in
their part 70 programs to grant an AOS,
if proposed by a source, permitting
authorities retain the discretion as to the
appropriateness of doing so on a caseby-case basis, depending on the specific
facts of each situation. The Agency
further conveyed that changing to an
AOS can not be used to circumvent
applicable requirements or to avoid an
enforcement action. A switch to an AOS
does not affect the compliance
obligations applicable to a source under
its previous operation.
As with advance approvals, we noted
in the proposal preamble that an AOS
may be added to a title V permit through
permit issuance or renewal or through
the permit revision process. When an
existing permit is to be modified, the
appropriate modification track
(significant or minor) depends on the
nature of the proposed AOS (or the
proposed revision to an AOS) and
whether it would qualify for treatment
as a minor permit modification under
existing 40 CFR 70.7(e)(2)(i). We noted
also that the permit shield (where
available and granted by the permitting
authority) can be extended to AOSs
added during permit issuance or
renewal or through a significant permit
modification, but not to those added
through minor permit modification
procedures (per existing 40 CFR
70.7(e)(2)(vi)).
In addition, we pointed out in the
proposal preamble that the contents of
the AOS log, such as its description of
requirements that apply to a particular
AOS, are not permit provisions for
purposes of the permit shield. Thus, a
source would not be deemed to be in
compliance with the applicable
requirements of the Act simply because
it was in compliance with the
description of applicable requirements
contained in the log, if that description
were inaccurate.
On a few occasions prior to our
September 2007 proposal, we proposed
implementing the change, without a permit
revision, if it can satisfy the requirements of the offpermit provisions in an approved part 70 permit
program. Cf. 40 CFR 70.4(b)(12) and (b)(14).
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51427
rulemaking and guidance on AOSs.
These proposals focused primarily on
how AOSs might relate to advance
approvals. We did not finalize our
proposals.21
In the preamble to our September
2007 proposed rulemaking we also
proposed several specific revisions to
the existing part 70 and part 71
regulations as they apply to AOSs. The
Agency stated that the primary purpose
of these revisions to parts 70 and 71 is
to build upon the existing regulatory
framework and to ensure that the
flexible permitting approaches with
which we have experience are more
readily and widely used.
We specifically proposed to define the
term ‘‘alternative operating scenario
(AOS)’’ in 40 CFR 70.2 and to codify
certain related requirements to promote
consistency and a common
understanding of AOSs. The proposed
definition read as follows:
Alternative operating scenario (AOS)
means a scenario authorized in a part 70
permit that involves a physical or operational
change at the part 70 source for a particular
emissions unit, and that subjects the unit to
one or more applicable requirements that
differ from those applicable to the emissions
unit prior to implementation of the change or
renders inapplicable one or more
requirements previously applicable to the
emissions unit prior to implementation of the
change.
The other proposed revisions
included the following:
• Revisions to 40 CFR 70.5(c)(7) to
clarify that the permitting authority may
require the source to include in its
application additional information as
necessary to define permit terms and
conditions implementing any AOS;
• Additional revisions to 40 CFR
70.5(c)(7) to clarify that the application
must include a demonstration that the
source has obtained all authorizations
required under the applicable
requirements that apply to any AOS, or
a certification that the source has
submitted a complete application for
such authorizations;
21 In the 1990s, we proposed certain clarifications
and modifications to the part 70 regulations. See
generally 60 FR 45529 (August 31, 1995) and 59 FR
44460 (August 29, 1994). In those proposals, among
other things, we discussed the concept of ‘‘advance
NSR’’ in relation to AOSs, and proposed a
definition for ‘‘alternative operating scenarios.’’ In
August 2000, we issued a draft guidance document
called White Paper Number 3 (64 FR 49803, Aug.
15, 2000), on which we solicited comment. That
draft guidance addressed various flexible permitting
approaches, including the use of the AOS
provisions. In fashioning the proposal on which
this final rule is based, we considered a summary
of the comments received on the prior proposals
that addressed AOSs (which is available in the
docket) and the relevant individual comments
received on the draft guidance (which are also in
the docket).
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• Revisions to the compliance plan
requirements for applications under 40
CFR 70.5(c)(8) to clarify that such plans
must address AOSs when an application
includes them;
• Revisions to 40 CFR
70.6(a)(3)(iii)(A) to require the source to
identify in the 6-month monitoring
report any AOSs implemented during
the reporting period;
• Revisions to 40 CFR 70.6(a)(9)(i) to
clarify what specific information must
be included in the AOS log (already
required under the existing regulations)
when an AOS is implemented;
• Revisions to 40 CFR 70.6(a)(9)(iii) to
clarify what constitutes an acceptable
description in a title V permit for an
AOS;
• Additional revisions to 40 CFR
70.6(a)(9)(iii) to make clear that the
permitting authority cannot grant final
approval of an AOS until the source has
obtained all the authorizations required
under the applicable requirements
relevant to that AOS; and
• Revisions to use consistent
terminology wherever the rules refer to
AOSs.
The commenters on our proposal
generally indicated an overall consensus
that the proposed additional
requirements for AOSs are not necessary
or useful. They pointed out that AOSs
are already provided for in part 70, and
that permitting authorities have been
implementing these provisions without
difficulty for years. On the other hand,
some commenters believe that use of
AOS provisions, in their experience, has
not been necessary in some States. In
these States, commenters assert that
permitting authorities have been able to
address prospective operating scenarios
identified by the source by simply
including in the title V permit the
applicable requirements and
corresponding compliance assurance
terms (i.e., monitoring, recordkeeping,
and reporting requirements) related to
these scenarios. Commenters further
asserted that in many cases, such terms
are adequate to assure compliances at
all times without AOS-specific logs or
reports. Therefore, they objected to the
level of detail proposed for the content
of AOS logs and permit terms, and to
the requirement to document AOS
implementation in the 6-month
monitoring reports. These commenters
also claim that the proposed
requirements would be unnecessarily
burdensome and would not improve
compliance assurance. Moreover, some
States indicated the rulemaking on
AOSs, as proposed, might have the
unintended consequence of stifling
innovative approaches to operational
flexibility by prescribing a rigid
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approach to AOSs. These commenters
collectively seek to preserve the current
levels of available flexibility and the
avenues for accessing it.
We also received a number of
comments specific to our proposed
definition of AOS. Most of these
commenters objected to the inclusion of
the phrase ‘‘physical or operational
change’’ in the definition, believing that
this will cause confusion with the
similar phrase ‘‘physical change or
change in the method of operation’’
used in the NSR program.
B. Final Action
Based on the comments received, the
States’ current approach to
implementing existing AOS rules
(described above) has proven to be
fundamentally sound and effective. We
are persuaded that the proposed specific
revisions which would be new
requirements would not promote more
widespread use of AOSs and other
effective strategies than does the current
process-based approach and that these
revisions might instead be
counterproductive. The Agency has
therefore decided to not impose any
additional requirements onto an already
working approach. Rather, we intend to
preserve the flexibility available under
existing rules by codifying a definition
of ‘‘AOS’’ (as modified in response to
comments received) and promulgating a
few minor clarifications to the existing
rules intended to improve certainty. The
Agency believes that these actions, in
light of the comments received, are
appropriate and consistent with the
basic streamlining tenets of section
502(b)(6) of the Act on which the
provisions for AOSs are based.
Commenters have convinced us that
permitting authorities are currently able,
in response to a request by a source for
more operational flexibility, to develop
title V permits which allow the source
to shift among identified operating
scenarios. Commenters correctly point
out that, under the current rule, in lieu
of using an AOS, this result might be
achieved by relying on the authority and
provisions contained in the applicable
requirements implicated by the
anticipated scenario. This would be true
where the applicable monitoring and/or
reporting requirements assure
compliance (including requirements for
records that effectively identify when
the scenario operates) or where the
source and permitting authority have
opted to streamline the relevant
applicable requirements consistent with
White Paper Number 2.22 Conversely,
22 In streamlining, the compliance terms are based
on the most stringent requirement applicable to the
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AOSs would be useful where additional
records are needed to document when a
new scenario occurs. We are therefore
agreeing with commenters that, for
flexibility purposes, the current process
is effective in developing: (1)
Appropriate permit design options to
access the inherent flexibility under
relevant applicable requirements to
provide for alternative modes of
operation; and (2) AOSs which are
determined to be adequate and
otherwise appropriate by the permitting
authority in reducing administrative
costs while assuring compliance with
all applicable requirements.
In finalizing these limited revisions,
the Agency wishes to make some
additional observations relative to
AOSs. First, as in the past, an AOS is
essentially defined through the process
used to establish it. This allows AOSs
to encompass situations in which the
relevant applicable requirements might
be sufficient with respect to monitoring
and/or recordkeeping to determine the
compliance status of the unit at a given
time but the source and permitting
authority have nonetheless opted to use
an AOS for greater certainty. We
continue to believe that this result is
acceptable if the source and permitting
authority choose to pursue it. Although
a log is required to record
proposed changes and are effective upon permit
issuance. In guidance generally referred to as
‘‘White Paper Number 2,’’ we interpreted our part
70 rules to allow sources to streamline multiple
applicable requirements that apply to the same
emissions unit(s) into a single set of requirements
that assure compliance with all the subsumed
applicable requirements. See ‘‘White Paper Number
2 for Improved Implementation of the Part 70
Operating Permits Program,’’ March 5, 1996,
(https://www.epa.gov/ttn/oarpg/t5/memoranda/
wtppr-2.pdf). If all the applicable requirements that
apply to a set of changes are streamlined in the
permit and the permitting authority approves the
proposed streamlining, the source need only
comply with the streamlined requirement. This
benefits all parties by simplifying and focusing the
compliance requirements contained in the permit.
As a result, a source relying upon emissions limit
streamlining implicitly has chosen not to pursue
the use of AOSs, since the source would always be
required to meet the worst case scenario at all times
regardless of which scenario was actually operated.
As explained in White Paper Number 2, sources
that seek to streamline applicable requirements
should submit their request as part of their title V
permit application, identifying the proposed
streamlined requirements and providing a
demonstration that the streamlined requirements
assure compliance with all the underlying,
subsumed applicable requirements. Upon approval
of the streamlined requirements, the permitting
authority would place the requirements in the title
V permit (see White Paper Number 2 for the
complete guidance on the streamlining of
applicable requirements). A source can request in
its title V permit application that the permitting
authority streamline an advance approval already
authorized under minor NSR with all other relevant
applicable requirements. For the complete text of
the elements that must be included in a title V
application, see 40 CFR 70.5(c).
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implementation of an AOS, the primary
objectives of section 502(b)(6) are still
met, since the authorized changes can
subsequently occur without further
review or approval by the permitting
authority. On the other hand, in the
absence of an AOS, the title V permit
authorizing multiple operating scenarios
at a particular emissions unit which
implicate different applicable
requirements must require sufficient
records to determine, at any point in
time, which requirements apply to the
unit and whether the unit is in
compliance with each of them. If permit
terms ensuring this result can be written
by relying upon the authority contained
in the relevant applicable requirements
themselves and not that in 40 CFR
70.6(a)(9), then there would be no need
for the permitting authority to approve
an AOS. Conversely, if the permitting
authority would need the authority
contained in 40 CFR 70.6(a)(9), for
example, to require the operational and/
or material use records needed to
determine which scenario is operating
at any time, then the permitting
authority, as appropriate, could either
authorize these changes as AOSs (if first
proposed by the source) or reject the
operating scenario proposed without
this recordkeeping and address future
changes under the applicable off permit
(as available from the permitting
authority) or permit revision provisions.
We have decided to finalize a
definition for ‘‘alternative operating
scenario (AOS)’’ and to revise the
various references to AOSs to use
consistent terminology. We believe that
the term ‘‘AOS’’ should be defined and
used consistently in the regulations.
The final definition reads as follows:
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Alternative operating scenario (AOS)
means a scenario authorized in a part 70
permit that involves a change at the part 70
source for a particular emissions unit, and
that either results in the unit being subject to
one or more applicable requirements which
differ from those applicable to the emissions
unit prior to implementation of the change or
renders inapplicable one or more
requirements previously applicable to the
emissions unit prior to implementation of the
change.
The final definition is different from
the proposed definition in that we no
longer define an AOS as involving a
‘‘physical or operational change.’’ We
agree with the commenters that
inclusion of the phrase ‘‘physical or
operational change’’ invites confusion
with the major NSR provisions.
The deletion of this phrase also helps
to clarify the interface between the
concepts of advance approvals (e.g.,
advance approval of minor NSR) and
AOSs. As mentioned in the previous
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section, we recognized, based on our
evaluation of pilot permits, that
potentially many States could currently
advance approve minor NSR and then
incorporate the terms of the authorizing
minor NSR permit into the title V
permit as applicable requirements.
While not proposing to do so, the
Agency nonetheless took comment on
whether some aspects of such advance
approvals might also involve AOSs.
Commenters strongly affirmed the
current abilities of States to authorize
advance approvals of minor NSR and
that these authorizations should be kept
generally separate and distinct from
AOSs. The EPA agrees with these
commenters and finds that the deletion
of the phrase is useful in maintaining
this separation.23 Thus, in most cases,
advance approval of minor NSR is
simply another example of how the
inherent flexibility in an applicable
requirement can be accessed without
the need for an AOS.
The deletion of the phrase ‘‘physical
or operational’’ is also consistent with
our previously stated decision to
preserve the scope and operation of the
current rule regarding AOSs. That is, the
Agency believes, in light of comments
received, it is not necessary to constrain
the scope of AOSs by limiting them to
those triggered by a ‘‘physical or
operational’’ change when the current
approach only restricts the
establishment of AOSs to those which
both the source and permitting authority
must agree are appropriate and are
consistent with all underlying
applicable requirements, including
those involving NSR. The existing
23 Alternative operating scenarios, in contrast to
advance approvals of minor NSR, more often
involve the reversible shifts in operation of existing
emissions units which implicate different
applicable requirements and require additional
monitoring and/or recordkeeping to determine what
requirements apply at a particular time. On the
other hand, advance approvals of minor NSR
generally involve either: (1) The implementation of
a modification to any existing unit which
irreversibly triggers new applicable requirements
such that the emission unit cannot return to its
preconstruction status in the future; or (2) the
construction and operation of a new unit which
represents the beginning of the initial or baseline
operation of the unit. In some cases, however, one
or more AOSs may be used to complement an
advance approval. For example, a complementary
AOS might be useful where the source anticipates
varying operation of the future or changed existing
emissions unit in a manner that would implicate a
set of applicable requirements different from those
of the minor NSR advance approval.
While AOSs and advance approvals of minor
NSR are typically used as separate FAP approaches,
sources and permitting authorities are not
precluded from relying upon AOS authority to
establish an advance approval of minor NSR in a
title V permit. For example, an AOS might be
appropriate where a different control approach
would not be effective until and unless a particular
change were made to an existing emissions unit.
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51429
process to establish an AOS in a title V
permit also addresses any potential
concerns that too many AOSs might be
proposed, including, for example, those
involving a switch from one compliance
option to another as provided for under
a MACT (or other) standard. We do not
believe that the population of AOSs
actually approved will be impacted by
the deletion. First, the deletion just
preserves the status quo. Moreover,
sources and permitting authorities are
unlikely to establish alternative MACT
compliance options as one or more
AOSs, since the extensive monitoring
and recordkeeping requirements
typically found in MACT standards can
themselves authorize shifts in
compliance options after being
incorporated into a title V permit.
In addition to adding a revised
definition of AOS and standardizing the
part 70 references to AOSs to use
consistent terminology, we have
decided to finalize three other aspects of
our proposed rules which we believe
will also preserve the basic operation of
the current rule while improving
certainty. First, we are essentially
finalizing the proposed revisions to 40
CFR 70.5(c)(7) to clarify that the
permitting authority shall require the
source to include in its application
additional information as necessary to
define permit terms and conditions to
implement any AOS. Note that the final
version obligates the permitting
authority to require, as contained in the
proposal, additional information to
develop and implement AOSs, but this
requirement only extends to situations
where the permitting authority believe
such information is necessary. We
believe that this obligation has always
been implicit in the previously existing
language of the section, but that an
explicit clarification is appropriate.
Second, we are finalizing our proposed
revisions to the compliance plan
requirements for applications under 40
CFR 70.5(c)(8) to clarify that such plans
must address proposed AOSs when an
application includes them. We believe
that this clarification also merely
codifies existing policy and is
appropriate to ensure that all applicants
understand what is required for AOSs
when a source chooses to request one.
Finally, we are finalizing our
proposed revisions to 40 CFR 70.5(c)(7)
to specify that the application must
include a demonstration that the source
has obtained all authorizations required
under the applicable requirements that
apply to any AOS being requested for
approval by the source, or a certification
that the source has submitted a
complete application for such
authorizations, and additional revisions
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to 40 CFR 70.6(a)(9)(iii) to make clear
that the permitting authority cannot
grant final approval of an AOS until the
source has obtained all the
authorizations required under the
applicable requirements relevant to that
AOS. These actions again just codify
existing policy and should be
manageable given the relatively few
AOSs that may also involve an advance
approval (e.g., the preconstruction
approval of a new unit requiring AOSs
for its multiple future operating modes
or for its involvement as a replacement
component unit in an AOS for an
existing emissions unit at the same
source). This clarification will also help
to ensure that any additional resources
required for AOS development are
focused on sources which are likely to
use them and to eliminate any
confusion over a provision approved
without such authorizations.
As noted above, we have been
convinced by numerous commenters
from both State and local permitting
agencies and industry that the other
more specific requirements proposed for
AOSs are unnecessary and potentially
could undermine the streamlining
objectives of the AOS provisions. We
have, therefore, elected to not finalize
them. In particular, proposed revisions
that we are not finalizing are the
following:
• Revisions to 40 CFR
70.6(a)(3)(iii)(A) to require additionally
that the source identify in the 6-month
monitoring report any AOSs
implemented during the reporting
period;
• Revisions to 40 CFR 70.6(a)(9)(i) to
clarify the type of information that must
be included in the AOS log when an
AOS is implemented; and
• Revisions to 40 CFR 70.6(a)(9)(iii) to
clarify what constitutes an acceptable
description in a title V permit for an
AOS.
Based on comments received, the
Agency is persuaded that the new
reporting requirements, as proposed for
inclusion in the 6-month monitoring
report, would not be necessary or
useful. We generally believe that
sufficient information about AOSs and
their use already exists from the
combination of the AOS provisions
contained in the permit and the
required reports concerning annual
compliance certification and the prompt
reporting of deviations from achieving
compliance with the AOS terms of the
permit. In addition, pursuant to 40 CFR
70.6(a)(9)(i), permits must require the
source to keep an on-site log that
contemporaneously records the
implementation of any AOS which
occurred during the duration of the title
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V permit. Pursuant to 40 CFR
70.6(a)(3)(ii)(B), the source owner must
keep these records at their site for at
least 5 years. Under 40 CFR 70.6(a)(6)(v)
the source must submit to the
permitting authority, upon their request,
this and any other on-site information
which is required to be kept by the
permit or is needed by the permitting
authority to determine compliance with
the permit.
The Agency also agrees with
commenters that there is no need to
standardize the content of AOS logs and
permit provisions. While not finalizing
any specific content or format
requirements for permits or logs
involving AOSs, the Agency notes that
there remains an overall obligation that
the information which is required by the
permitting authority for AOSs must be
adequate to assure compliance with all
applicable requirements. Thus, the
structure of the AOS implementation
log required by the permitting authority
is relatively flexible, provided that the
required records are, in total, sufficient
to verify the requirements applicable to
a particular operating scenario and
whether the source was in compliance
with them.
VII. Approved Replicable
Methodologies
A. Background
Under the Act, title V permits are
required to assure compliance with all
applicable requirements. Sometimes,
circumstances change for a source that
bring about the need to recalculate or
update a value used either in
determining the compliance status of
the source with an applicable
requirement or in determining the
applicability of a requirement. An
advance approval under minor NSR or
an AOS can incorporate flexibility into
a permit, but the scope of changes that
can be authorized in them can be
severely limited with respect to a
particular applicable requirement, if
such recalculations or updates are
involved and require case-by-case
review/approval and a permit revision
to ensure ongoing implementation. To
facilitate such implementation, and to
encourage additional permitting
techniques that reduce the need for
permit revisions (in a manner consistent
with part 70), we proposed the use of
ARMs.
In our September 12, 2007 proposal
on flexible air permitting, EPA included
provisions dealing with ARMs. Therein
we stated our belief that ARMs are
available now as one type of permit
term described in 40 CFR 70.6(a)(1) that
can assure compliance with all
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applicable requirements at the time of
permit issuance. In order to establish an
ARM, a source would first propose one
to the permitting authority who would
then consider the appropriateness of
authorizing it on a case-by-case basis,
depending on the specific facts of the
situation. In all cases, the
implementation of the proposed ARM
must be consistent with all underlying
applicable requirements.
While we believed that ARMs as
proposed are generally available
without any rulemaking (depending on
the structure and content of individual
part 70 programs, as approved for
States), we proposed to codify certain
additions to 40 CFR parts 70 and 71 in
order to promote greater certainty and
use of ARMs, where the permitting
authority decides it is appropriate to do
so.
In particular, we proposed to define
ARMs at 40 CFR 70.2 as part 70 permit
terms that: (1) Specify a protocol which
is consistent with and implements an
applicable requirement or requirement
of part 70, such that the protocol is
based on sound scientific/mathematical
principles and provides reproducible
results using the same inputs; and (2)
require the results of that protocol to be
used for assuring compliance with such
applicable requirement or requirement
of part 70, including where an ARM is
used for determining applicability of a
specific requirement to a particular
change. In the proposal preamble we
also noted that within the scope of this
definition, an ARM may be used to
assure that a given requirement does not
apply in a particular situation.
As proposed, the terms of an ARM
must specify when the ARM is to be
used, the applicable methodology (e.g.,
equation or algorithm), and the purpose
for which the output obtained upon the
execution of the prescribed
methodology will be used (e.g., to
determine compliance with an
applicable requirement or to modify the
level of the parameters used to
determine compliance in the future). All
necessary terms and conditions must be
included in the permit at the time the
ARM is approved so that no permit
revision will be required in the future to
implement the ARM.
We emphasized that an ARM, like any
provision of a part 70 permit, cannot
modify, supersede, or replace an
applicable requirement, including, but
not limited to, any monitoring,
recordkeeping, or reporting required
under applicable requirements.24
24 Under the authority of 40 CFR 70.6(a)(3),
however, the permit can also contain additional
streamlined monitoring or gap-filling periodic
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Instead, we proposed ARMs as a
strategic approach for incorporating into
a title V permit relevant applicable
requirements and the requirements of
part 70. The ARM provides a method for
obtaining and updating information
consistent with an underlying
applicable requirement(s) or
requirement(s) of part 70 in such a
manner so as to avoid the need to
reopen or revise the permit to
incorporate the updated information. As
such, an ARM must work within and be
consistent with the applicable part 70
rules that govern permit revisions.
We further explained that the protocol
to obtain information under an ARM
must be objective and scientifically
valid and reliable—such as an EPA test
method or monitoring method (usually
specified in the applicable requirement
itself). We noted that an ARM also
includes the instructions governing how
the results of the protocol are to be used.
For example, an ARM could specify that
firebox temperature measurements
taken during a performance test of a
thermal oxidizer be used to: (1) Define
a temperature level that assures
compliance with a particular applicable
requirement; and (2) revise and update
the minimum firebox operating
temperature of the oxidizer previously
relied upon to assure compliance.
We found permit terms containing
ARMs to be useful in maintaining the
effect of the advance approvals found in
the pilot permits. Pervasively, all the
pilot permits contained ARMs as the
quantification methodology by which
the source would sum VOC emissions
from individual emissions units on an
ongoing basis. These ARMs also
included requirements governing when
the aggregation procedures for
determining total actual VOC emissions
for the site would be compared to the
relevant plantwide emissions cap(s) in
order to assess source compliance. In
some cases, the aggregation ARM relied
on other ARMs to assure that certain
input values were replicably
determined. For example, two of the
pilot permits contained replicable
testing procedures. These procedures,
once implemented, determined the
control device operating parameter
values that the source must monitor to
demonstrate compliance with capture
and destruction efficiency requirements
(i.e., the applicable requirement).
Without the replicable testing
procedures in the permit, those values
would have been included on the face
monitoring as needed to assure compliance with
applicable requirements. We pointed out that an
ARM could operate on the information gathered
under these obligations as well.
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of the permit, and the source would
have had to seek a permit revision each
time it repeated the testing procedures
and the operating parameter values
changed.25 Another pilot permit
specified the process (i.e., compliance
method) by which a source-specific
emissions factor could be updated and
used to determine whether emissions
remained under the source’s PTE cap
where both the emissions cap and the
ARM were established in its minor NSR
permit. By including these replicable
processes (e.g., replicable testing and/or
emissions factor updating procedures)
in the permit instead of specific
operating values and emissions factors,
sources could update those values and
indicate compliance based on the latest
results consistent with the replicable
testing procedures in the title V permit,
and forego a permit revision each time
the values are changed.
In addition to proposing a definition
of an ARM, we also proposed that the
6-month monitoring reports (required
under existing 40 CFR 70.6(a)(3)(iii))
must identify any ARMs implemented
during the reporting period, and that for
ARMs generating values related to
parametric monitoring (e.g., an ARM
used to determine the minimum
operating temperature of a thermal
oxidizer during a performance test), the
source must also include the results of
the ARM in the 6-month monitoring
report. We also proposed to modify 40
CFR 70.6(a)(1) to include a reference to
ARMs, because ARMs are an example of
permit terms that assure compliance
with applicable requirements. Although
we believe that the proposed regulatory
change to 40 CFR 70.6(a)(1) is a
relatively simple clarification, given that
all permits must include terms that
assure compliance with applicable
requirements and the requirements of
part 70, we proposed the change to
promote increased consideration of
ARMs, where appropriate. We
recognized that we could have proposed
to modify other provisions of part 70,
such as 40 CFR 70.6(a)(9), to include a
reference to ARMs, but given the
structure and content of the existing
regulations, we did not believe that such
additional changes were needed.
As with advance approvals and AOSs,
we noted in the proposal preamble that
an ARM may be added to a title V
25 Although an ARM can reduce the number of
permit revisions a source must make, it cannot
modify an applicable requirement. For example,
there are some instances where the applicable
requirement requires a notice to the permitting
authority, such as where the requirement calls for
notice of a performance test or the submission of
certain performance test results. An ARM can not
abrogate these requirements.
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51431
permit through permit issuance or
renewal or through the permit revision
process. When an existing permit is to
be modified, the appropriate
modification track (significant or minor)
depends on the nature of the proposed
ARM (or a proposed change to an ARM
which requires a permit revision) and
whether it would qualify for treatment
as a minor permit modification under
existing 40 CFR 70.7(e)(2)(i). We also
noted that the permit shield (where
available and granted by the permitting
authority) can be extended to ARMs
added through a significant permit
modification, but not to those added
through minor permit modification
procedures (per existing 40 CFR
70.7(e)(2)(vi)). In addition, we pointed
out in the proposal preamble that a
source that incorrectly applies the
procedures and criteria for an ARM will
be considered not to be in compliance
with the terms of the permit (and
therefore not in compliance with the
Act).
In proposing ARMs, we stated our
belief that ARMs are authorized under
title V of the Act and its implementing
regulations. Section 502 sets forth the
minimum elements for a State operating
permit program. Among other things,
section 502 provides that for a State
operating permit program to be
approved, the permitting authority must
have adequate authority to ‘‘issue
permits and assure compliance by all
sources required to have a permit * * *
with each applicable standard,
regulation or requirement’’ under the
Act. See CAA section 502(b)(5)(A).
Section 504(a) of the Act also requires
that each title V permit contain
‘‘enforceable limitations and standards
* * * and such other conditions as are
necessary to assure compliance with
applicable requirements of this Act,
including the requirements of the
applicable implementation plan.’’ The
Act further provides that any State
operating permit program must include
‘‘adequate, streamlined, and reasonable
procedures * * * for expeditious
review of permit actions.’’ See CAA
section 502(b)(6).
Several State commenters indicated
that the rulemaking on ARMs is
unnecessary because States already
issue permits with these sorts of terms
under existing authority, as evidenced
by EPA’s discussion of ARM-like permit
terms in some of the pilot permits.
These commenters also expressed
concern that this Federal rulemaking on
ARMs might have the unintended
consequence of stifling innovative
approaches to operational flexibility by
prescribing a rigid approach to ARMs.
Some commenters expressed concern
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that an ARM could be used to avoid the
applicability of major NSR, which might
otherwise apply when the operating
conditions of a control device are
altered and actual emissions are
anticipated to increase as a result.
Several industry commenters
indicated that the rulemaking and EPA’s
expression of support for ARMs would
help to clarify for States that ARMs are
supported by the Act and viewed
favorably by EPA. However, none of
these commenters expressed support for
the proposed 6-month reporting
requirements for ARMs, and one
industry commenter objected to the
proposed 6-month reporting
requirement for ARMs on the basis that
no additional reporting is warranted for
what is simply a method for showing
compliance.
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B. Final Action
In response to these commenters, EPA
has decided to finalize the proposed
definition with minor changes and to
add certain additional clarifications to
§ 70.6(a)(1). In doing so, we reaffirm the
proposal as summarized in the
preceding section, except as described
below in this section. As previously
mentioned, these final rules with
respect to ARMs do not affect any
specific minima for part 70 programs,
and, due to their clarifying nature, we
do not expect many States to opt to
revise their operating permit programs
(see footnote 13).
While we agree that States currently
have authority to issue ARMs in title V
permits, we do not agree that placing a
definition for ARM in our part 70 rules
will stifle innovation by the States. On
the contrary, we believe that finalizing
the ARM definition will clarify the
availability of this aid to flexible
permitting to those States and sources
that are not aware of it or have had prior
issues concerning its use.
The final definition is nearly identical
to the one proposed (i.e. we added a
minor clarification that the results of the
ARM be recorded as well as used for
assuring compliance with any
applicable requirement or requirement
of part 70). The final definition reads as
follows:
Approved replicable methodology (ARM)
means part 70 permit terms that:
(1) Specify a protocol which is consistent
with and implements an applicable
requirement, or requirement of this part, such
that the protocol is based on sound scientific
and/or mathematical principles and provides
reproducible results using the same inputs;
and
(2) Require the results of that protocol to
be recorded and used for assuring
compliance with such applicable
requirement, any other applicable
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requirement implicated by implementation of
the ARM, or requirement of this part,
including where an ARM is used for
determining applicability of a specific
requirement to a particular change.
We wish to emphasize that, under the
final definition, an ARM may be used as
a means to determine the applicability
of a requirement, not just as an aid for
assuring compliance. The EPA has
included other ARM-like mechanisms
in several of our national standards for
MACT and NSPS. If a source proposes
an ARM to delineate which changes are
subject to one requirement instead of
another, examples should be provided
to the permitting authority and to the
record supporting proposed approval of
the ARM illustrating the prospective use
of the ARM (if approved). We believe
that the permitting process is the best
forum for clarifying how a proposed
ARM would work in the relevant
situations reasonably expected to occur
over the duration of the permit.
However, in the case where the
permitting authority has significant
concerns over how an applicability
ARM would operate in certain
situations, the permitting authority
should not authorize the ARM for those
situations.
We are also revising 40 CFR 70.6(a)(1)
to acknowledge that ARMs may be
considered as one type of part 70 permit
term that assures compliance with
applicable requirements. We are also
adding two clarifications that
appropriately focus ARM
implementation. The Agency believes
that these clarifications in combination
with the mentioned final definition will
promote increased consideration of
ARMs, where appropriate.
This final version of 40 CFR 70.6(a)(1)
incorporates existing policy that a
source must first request an ARM in its
part 70 permit application before it can
be considered by the permitting
authority. Note that this request could
appear as part of the originally
submitted application or in the later
submittal of supplemental application
material (e.g., a letter requesting
consideration of a replicable protocol as
an ARM). As is the case for AOSs, the
permitting authority must then decide
whether to accept the proposed ARM
and may reject it or modify it for several
appropriate reasons, including concerns
over its replicability and/or value in
lowering administrative costs. This
addition is consistent with the basic
process required for the establishment
of AOSs which, based on comments
received, is effective in ensuring that
FAP approaches are appropriately
considered.
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Relevant to the first element of the
final ‘‘ARM’’ definition, sources will
identify candidate protocols that if
judged to be replicable could be
considered further as a potential ARM
by the permitting authority. Candidates
for such protocols would frequently
arise from already established
applicable requirements, such as MACT
standards, NSPS, or preconstruction
permits (e.g., minor or major NSR). If
accepted by the permitting authority as
an ARM, pursuant to the second
element of the final definition, the part
70 permit would contain the ARM (i.e.,
the combination of the replicable
protocol and the instructions for its use,
including the type of data to be
inputted).
The second clarification to 40 CFR
70.6(a)(1) was added in response to
those commenters who were concerned
that ARM implementation of one
applicable requirement might
circumvent the applicability of another
applicable requirement. We believe that
this final clarification adequately
conveys appropriately that an ARM
created under part 70 to streamline the
implementation of one applicable
requirement cannot be used to
contravene compliance with another
requirement under the Act or to
circumvent its applicability as a result
of implementing an ARM. Accordingly,
the terms of an NSR permit, which are
applicable requirements that must be
incorporated into a title V permit,
cannot subsequently be changed using
an ARM created under different
authority. Approved replicable
methodologies can be used to update
values only when the applicable
requirement allows for this to occur. For
example, if an existing NSR permit
includes specific parametric monitoring
levels as compliance indicators, to
automate the updating of such levels the
NSR permit would need to be revised to
establish an ARM. The title V process
could not create an ARM to revise the
NSR conditions directly. Similarly, the
potential applicability of other
requirements implicated by the
implementation of an ARM (e.g., NSR)
must be independently evaluated and
determined.
As noted above, no commenters
specifically supported our proposed
reporting requirements for ARMs, and
one commenter specifically opposed the
reporting requirement. In addition,
numerous States opposed the ARM
proposal in general as being
unnecessary and likely to reduce, rather
than expand, the flexibility available
under the existing rules. Although these
commenters did not specifically refer to
the reporting portion of the ARM
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We proposed to modify the major
NSR regulations in order to create an
alternative means to comply with major
NSR. Specifically, we proposed to allow
a new pathway that would treat a
number of emissions activities as a
single emissions unit (which we termed,
a ‘‘Green Group’’) where the emissions
from each of these activities would be
routed to a common emissions control
device meeting BACT/LAER, and future
emissions increases and other changes
within the Green Group would be
approved for a 10-year period in a major
NSR permit. The proposed approach
was described as an extension of our
December 2002 NSR reform regulations
(67 FR 80186, December 31, 2002). In
particular, Green Groups would
complement the use of plantwide
emissions caps (termed, plantwide
applicability limitations, or PALs) by
providing a flexible permitting option
for a section of a plant. Like PALs, we
proposed that Green Groups would be a
mandatory minimum element of a State
NSR program, but the permitting
authorities would retain discretion as to
when to approve individual Green
Groups requested by sources.27
However, we also solicited comment on
whether Green Groups should be a
voluntary, rather than mandatory,
program element for States.
The Green Group provisions were
proposed to encourage a wide spectrum
of sources to construct specified types of
changes for a 10-year period with
greater certainty and flexibility in
exchange for implementing BACT/
LAER, regardless of whether or to what
extent the source may have been subject
to the current major NSR regulations.
That is, the Green Group provisions, as
an alternative means to comply with
major NSR, did not require an
evaluation of whether conventional
major NSR would otherwise apply.
In its permit application, the source
would be required to describe the new
and existing emissions activities to be
included in a Green Group in sufficient
detail to allow the permitting authority
to determine BACT or LAER (as
applicable) for the Green Group taken as
a whole and to conduct an ambient air
impact analysis to safeguard relevant
ambient increments and standards
(including the determination of any
offsets necessary in nonattainment
areas) or to safeguard air quality values
in any relevant Class I areas. We further
proposed that the type of detail required
in a permit to describe the authorized
changes in the Green Group must be
sufficient to allow the permitting
authority to determine, when a change
subsequently was implemented,
whether the permitting authority
contemplated that change in the scope
of the advance approval contained in
the major NSR permit.
We proposed that, in general, two
types of emissions limits must be set in
the major NSR permit for Green Groups:
(1) An emissions limit to constrain the
overall emissions of the Green Group;
and (2) a limit to ensure that BACT/
LAER technology is being employed and
is effective across the Green Group (e.g.,
lbs/gal, percent reduction). These two
limits would complement each other
and collectively implement the core
requirements for the Green Group. The
amount of any actual emissions increase
from authorized changes above previous
actual emissions would be limited by
the annual emissions cap and by the
26 The authority to impose this requirement
typically arises from the ARMs themselves being
applicable requirements (e.g., provisions within
NSPS or MACT standards or terms of
preconstruction permits) but also can occur under
other authorities such as 40 CFR 70.6(a)(9) authority
where the ARM would be part of an AOS.
27 The major NSR rules refer to the ‘‘reviewing
authority,’’ while part 70 refers to the ‘‘permitting
authority.’’ For purposes of consistency with the
other sections of this preamble, we use the term
‘‘permitting authority’’ in this section. In these
discussions, this term is intended to have the same
meaning as ‘‘reviewing authority.’’
proposal (or most other specifics of the
proposal), we believe that this is one
aspect of the proposal that was targeted
as unnecessary and potentially
restrictive. Finally, several commenters
raised concerns regarding our similar
proposal to require reporting the
implementation of AOSs in the 6-month
monitoring report which we believe are
also appropriate to consider in deciding
whether to require the 6-month
reporting of ARMs. As a result, we have
concluded that the information
contained in the permit about the nature
of any approved ARM and the
instructions for its use along with the
required reports concerning annual
compliance certification and the prompt
reporting of deviations from achieving
compliance with the ARM should
generally be sufficient. In addition,
sources must keep on-site records of
ARM implementation.26 Moreover, any
required on-site records must be
submitted to the permitting authority
upon their request pursuant to 40 CFR
70.6(a)(6)(v). Therefore, we have
decided to drop the proposed
requirement for the 6-month monitoring
report to identify any ARMs
implemented during the reporting
period.
VIII. Green Groups
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A. Background
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51433
BACT/LAER emissions limitation, both
of which would apply to the applicable
emissions unit, in this case designated
as the Green Group, and would be
placed in the major NSR permit.
The major NSR review process must
determine the level of monitoring,
recordkeeping, reporting, and testing
(MRRT) to assure compliance with the
control technology requirement and any
other emissions limit(s) imposed by the
permitting authority on emissions
unit(s) as necessary to meet major NSR.
We proposed specifically for Green
Groups that a source would be required
to monitor all emissions activities that
comprise the Green Group to ensure
compliance with the Green Group limit
using essentially the same approaches
that would meet our requirements for
tracking emissions associated with a
PAL. These monitoring, recordkeeping,
and reporting requirements would be
incorporated into the NSR permit that
established the Green Group.
We proposed that all NSR projects
using a Green Group be of a 10-year
duration, for two reasons. First, we
stated that this time frame represents a
balance between the useful life of the
emissions control system and the time
frame in which additional major NSR
review is likely to result in little, if any,
added environmental benefit. Second,
we stated that a 10-year duration for a
Green Group is supported by the same
rationale we used in choosing a 10-year
period for the duration of PALs. For
PALs we concluded that a 10-year
period was necessary to ensure that the
normal business cycle would be
captured generally for any industry; to
balance the need for regulatory certainty
with the administrative burden; and to
align the PAL renewal with the title V
permit renewal. See 67 FR 80216,
80219. In proposing a 10 year duration
for the Green Group, the Agency also
solicited comment on the
appropriateness of a 15-year period.
The Agency further proposed to
exclude from application to a Green
Group the existing PSD part 52
requirements in 40 CFR 52.21(r)(2) for
timely construction and in paragraph
(j)(4) of both parts 51 and 52 PSD
requirements for the BACT reevaluation
of later independent phases of phased
construction projects. We also clarified,
albeit without proposing specific rule
language, that the provisions of 40 CFR
52.21(r)(4), 51.166(r)(2), and
51.165(a)(5)(ii), which subject a source
to major NSR upon the relaxation of
certain permit terms that had previously
allowed the source to avoid major NSR,
are met during any major NSR process
like one that would establish a Green
Group. Finally, we noted that, under the
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current NSR regulations, an emissions
change is only creditable for netting
purposes to the extent that the
permitting authority has not previously
relied on it in issuing a major NSR
permit. See 40 CFR 52.21(b)(3)(iii).
Accordingly, emissions increases and
decreases that occur at the emission
activities of a source subject to a current
major NSR permit, like those in a Green
Group during its effective period, are
not to be included in future netting
calculations at the same source.
In our proposal, we based the legal
rationale for Green Groups on the
premise that the changes and emissions
activities within a Green Group are
specifically authorized to occur as a
result of undergoing, not avoiding,
major NSR. Conversely, other changes
that a source seeks to implement, but
that are not authorized in the Green
Group, cannot occur without first
obtaining all necessary preconstruction
approvals that would apply to such
changes. The determination of whether
the newly proposed, but unauthorized
changes trigger NSR would be made
using the ‘‘actual-to-projected-actual
test’’ under, for example, 40 CFR
52.21(a)(2)(iv). The Agency noted that
this legal rationale for Green Groups
differs from the legal rationale for Clean
Units, a provision in the 2002 NSR
reform rules that employed an allowable
emissions test for netting purposes
which the U.S. Court of Appeals for the
DC Circuit vacated. New York v. EPA,
413 F.3d at 40 (DC Cir. 2005).
Finally, as discussed in the proposal
preamble, we believe that the
environment and the public would
potentially benefit from Green Groups
for several reasons. First, we believe that
substantial environmental benefits
could occur because a Green Group
would require all included emissions
activities to be controlled to the level of
BACT or LAER. The BACT or LAER
limits would apply to existing emissions
activities (which otherwise would
remain uncontrolled or be subject to less
stringent control requirements), as well
as to emissions activities that are
modified or added pursuant to the
Green Group authorization. In addition,
absent a Green Group, some
modifications and new emissions
activities might not be subject to major
NSR because their emissions would be
below applicability thresholds or
because they would ‘‘net out’’ of review.
Even when individual changes would
prove to be subject to major NSR, the
resulting BACT might in some cases be
less stringent than that required for a
Green Group, given the economies of
scale in evaluating BACT at the same
time for all the activities and authorized
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changes making up a Green Group.
Moreover, we expect that environmental
benefits would accrue from the better
and more frequent type and amount of
monitoring proposed to be required for
Green Groups. Finally, we believe that
Green Groups would also promote
greater administrative efficiency for
permitting authorities and sources,
because a Green Group would eliminate
iterations of permitting processes that
produce little or no environmental
benefit.
The commenters, while mixed in their
overall reaction to the Green Group
concept, generally did not support the
specifics of the Green Group proposal.
State commenters indicated that the
proposed 10-to-15-year term of the
Green Group is inappropriate because
the Act and good environmental
stewardship require BACT/LAER
reviews and air quality analyses to be
conducted contemporaneously with the
time of each change at a facility. These
commenters disagreed with our
assertion that BACT and LAER typically
do not advance significantly over the
proposed 10- or 15-year period. They
added that such permits would unfairly
reserve PSD increments for projects that
might never be built and that the air
quality status in the area of a Green
Group could also change due to, for
example, transported pollution,
revisions to the NAAQS, and natural
events. State commenters also
questioned the environmental benefits
of Green Groups and did not believe
that the pilot permits contained in the
docket supported the Green Group
approach. They also asserted that Green
Groups share the legal flaws of Clean
Units. State commenters further
conveyed that many permitting
authorities already offer considerable
flexibility and that it is the permitting
authorities who can best decide the
structure of their own programs in this
regard. The State commenters generally
believe that the Green Group proposal
should be abandoned, but if it is
finalized it should be a voluntary
element of the major NSR program,
rather than mandatory as proposed.
The environmental group that
commented on the proposal asserted
that the proposed 10-to-15-year term of
the Green Group is inconsistent with the
Act’s requirements for contemporaneous
BACT/LAER and air quality reviews.
The environmental group also indicated
that Green Groups suffer from the same
legal flaws as Clean Units. Like most
State commenters, the environmental
group believes that the Green Group
proposal should be abandoned, but if it
is finalized it should be voluntary for
the States.
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Industry commenters, on the other
hand, typically favored some aspects of
the proposal and believe the Green
Group to be a real incentive for sources
to control beyond their legal
requirements in exchange for greater
regulatory certainty and operational
flexibility. These commenters often
argued that a term of 10 to 15 years
would be necessary to justify the
expenditure for state-of-the-art controls
for a Green Group. They agreed with the
proposal that Green Groups should be a
mandatory element of the major NSR
program and attributed real benefits
such as those associated with lower
administrative costs. They believe that
Green Groups are legally defensible and
clearly different from Clean Units.
However, industry commenters asserted
that the proposal did not reflect how
manufacturing facilities are constructed
and operated. In particular, they stated
Green Groups should not be limited to
a single control device and that
pollution prevention should be allowed
as the primary Green Group control
approach. In addition, they indicated
that the proposed monitoring,
recordkeeping, and reporting
requirements are unnecessarily detailed
and prescriptive.
B. Final Action
Primarily for certain policy reasons
raised by commenters and on our belief
that the current major NSR regulations
already provide considerable flexibility
to States, EPA has decided to withdraw
our proposal on Green Groups. As
described below, the Agency will
consider initiating another rulemaking
related to flexibility under the major
NSR regulations if new data becomes
available after additional field
experience that supports such an
approach. Any such rulemaking would
be an entirely new rulemaking separate
and distinct from the Green Group
proposal being withdrawn in this
action.
Notwithstanding our withdrawal of
the Green Group proposal, we wish to
note that certain statements we made in
support of the proposal are not affected
by the Green Group withdrawal. First,
the requirements of 40 CFR
51.165(a)(5)(ii), 51.166(r)(2), and
52.21(r)(4) are met when an emissions
unit with emissions limits previously
taken to avoid major NSR subsequently
undergoes major NSR review.28 Next,
we continue to believe that a longer28 Sections 51.165(a)(5)(ii), 51.166(r)(2), and
52.21(r)(4) provide that when a source or
modification that took an emissions limit to avoid
major NSR review wishes to relax that limitation,
it must undergo major NSR as if construction had
not yet commenced.
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term major NSR project is clearly
different from a Clean Unit and may be
defended on that basis. Construction of
the later portions of an approved major
NSR project is simply ‘‘building out’’
the permit as authorized and does not
rely on an allowables emissions test.
Finally, pursuant to 40 CFR
52.21(b)(3)(iii), and to analogous
provisions in 40 CFR 51.166(b)(3)(iii)
and 51.165(a)(1)(vi)(C)(2), emissions
increases and decreases that occur as
authorized in a major NSR permit
qualify as having been ‘‘relied upon by
the permitting authority’’ in issuing a
major NSR permit. As such, these
emissions changes are not to be
included in the future netting
calculations at the same source during
the time that the NSR permit would be
effective.
Our decision to withdraw the Green
Group proposal is in large part based on
the significant new information and
policy perspectives conveyed in certain
comments received on this proposal.
Based on the varying types of concerns
raised by commenters, EPA no longer
believes that promulgation of the Green
Group approach—which was EPA’s
effort to develop a single, nationally
uniform approach for Green Groups to
achieving advance approval under
major NSR—is appropriate. While an
approach like that proposed for Green
Groups might be effective in certain
situations, several commenters pointed
out serious reservations about initial air
quality and technology reviews
becoming stale over the 10-year life of
a Green Group. Others were concerned
that the proposed Green Group
approach was not flexible enough to
encompass already tested approaches
involving emissions units serviced by
multiple control approaches. These
commenters also persuaded the Agency
that a mandatory, one-size-fits-all
approach under the major NSR rules
could be counterproductive as well as
too inflexible. Many of the same
commenters believed that national rules
requiring a specific template for Green
Groups across all States could instead
stifle future innovation and flexibility
while adding complexity and
unnecessary administrative burden.
The Agency is also not finalizing our
proposal on Green Groups because we
believe that the current major NSR
regulations already provide States
considerable ability to design and
implement their SIPs in ways that
provide operational flexibility while
addressing the types of concerns raised
by commenters. The major NSR
regulations, in general, are quite
detailed and prescriptive as to what
changes are subject to review, but afford
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considerable flexibility to determine
specifically how subject NSR projects
must be permitted. The inherent
flexibility for States to design and
implement their SIP provisions with
respect to NSR projects arises from the
structure and content of the part 51 PSD
and the nonattainment (‘‘NA’’) NSR
regulations.
First, the definition of ‘‘project’’ can
accommodate a wide spectrum of
physical and operational changes,
provided such changes are authorized
by the permitting authority.29 Similarly,
the definition of ‘‘emissions unit’’ is
elastic in its ability to include several
types of situations, ranging from a
simple piece of equipment to a
collection of them at the same site.30 A
‘‘project’’ involves changes to or
addition of one or more emissions units.
Thus, the permitting authority may
define these terms in its SIP broadly or
narrowly, for a particular case, provided
that the physical and operational
changes included in the project are
covered by the major NSR requirements,
as appropriate.
Moreover, the other provisions of the
part 51 PSD and NA NSR regulations do
not impose limitations on the scope or
implementation of NSR projects once
they are defined by the permitting
authority. The NA NSR regulations do
not contain any specific provisions that
restrict how the permitting authority
might define the scope, duration, and
timeliness of an NSR project. The part
51 PSD regulations only indirectly affect
the acceptable scope of an NSR project
in their requirements and the BACT
reevaluations of certain phases of
phased construction projects.31
As a result, under the current major
NSR regulations, with the exception of
the relatively narrow class of
construction projects with independent
phases for PSD purposes,32 States are
free to design and implement their
major NSR SIPs to address
29 ‘‘Project’’ is defined in the major NSR
regulations as ‘‘a physical change in, or change in
the method of operation of, an existing major
stationary source.’’ See, for example, 40 CFR
52.21(b)(52).
30 ‘‘Emissions unit’’ is defined in the major NSR
regulations as ‘‘any part of a stationary source that
emits or would have the potential to emit any
regulated NSR pollutant. * * *’’ See, for example,
40 CFR 52.21(b)(7).
31 The part 51 PSD requirement related to the
permitting of subject projects only mandates that
States in their SIPs require reevaluations of certain
BACT determinations for the later independent
phases of an approved phased construction project
at the latest reasonable time prior to their
commencement of construction (see 40 CFR
51.166(j)(4)). This longstanding safeguard was
established in order to prevent inappropriate
reserving of the available PSD increment by an
individual source (see 43 FR 26396).
32 See footnote 30.
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51435
contemporaneity of construction,
project scope and duration, number and
types of emissions units comprising the
project which are subject to emissions
tracking, timely construction of
authorized changes, and reevaluation of
initial control technology and/or air
quality impact reviews as they judge to
be reasonable. For example, a SIP may
be structured to allow the permitting
authority to determine these aspects of
a major NSR permit on a case-by-case
basis after balancing appropriately the
benefits of operational flexibility with
the types of concerns raised by
commenters on the Green Group
proposal.
The same part 51 flexibility has
allowed states to adopt voluntarily some
additional PSD regulatory constraints
into their SIPs similar to those
contained in paragraphs (r)(2) and (n)(1)
of the 40 CFR part 52 regulations, which
regulate the timeliness of construction
and the required level of information for
reviewing proposed NSR projects.33 The
part 52 regulations, which apply to
interim EPA implementation of the PSD
program in the absence of an approved
SIP, contain these additional
requirements in paragraphs (r)(2) and
(n)(1) to help preserve the available PSD
air quality increments until the State
can assume full responsibility for the
program under an approved SIP.
The EPA believes that States which
have opted to include these additional
regulatory constraints in their SIPs
retain considerable discretion to
interpret and implement them within
the meaning of their SIP approved
language. Affected States may choose to
implement their programs consistent
with policies that EPA has developed in
our implementation of these provisions
or to explore the adoption of different
policies through their own
administrative procedures. In addition,
in accordance with their plans for
preserving PSD increments and for
protecting the NAAQS, States may
maintain their current SIPs or opt to
revise them as appropriate consistent
with the applicable part 51 and/or part
D requirements in order to allow greater
flexibility to the permitting authority in
reasonably determining how NSR
projects can be approved on a case-bycase basis. The Agency is willing to
work with States to evaluate their
33 Section 52.21(n)(1) requires more specific
detailed information about construction schedules
and plans to be submitted by sources than do the
analogous requirements of part 51 (see 40 CFR
51.166(n)(1)). Section 52.21(r)(2), which has no
counterpart in 40 CFR 51.166, ensures the timely
construction of non-phased projects and provides,
without specification, the opportunity for the
permitting authority to extend these deadlines.
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current SIPs and to assist them in
discussing possible revisions where
requested to do so.
The EPA is interested in learning
more as to whether the flexibility under
existing major NSR regulations to
sources and permitting authorities is
sufficient and appropriate. In order to
gain additional perspectives about the
currently available level of flexibility—
including the need for it; the benefits,
costs, and/or impediments associated
with its use; and any lack of safeguards
to assure its effectiveness—the Agency
is encouraging States and sources to
explore how projects subject to major
NSR might be more flexibly permitted
and administratively managed. Where a
State would agree to investigate such
possibilities with a requesting source,
we ask that the State give us an advance
notice of the project before any permit
is released for comment. In addition,
EPA requests that the State make
available relevant information about
both the development of the permit and
its subsequent implementation so as to
facilitate any future analysis on our part.
We also intend to collect other
information that would be useful to
informing us as to whether a new
rulemaking should be initiated in the
future.
In summary, the concerns of
commenters on the potential
inflexibility of the proposed Green
Group affirms the need, at least for now,
to maintain the relative openness of the
current major NSR rules. These rules
essentially defer to the States as to
whether to adopt more specific
requirements or to resolve flexibility
needs on a case-by-case basis. This
outcome is entirely consistent with the
stated preference contained in State
comments received on the proposal that
States be allowed to structure their own
SIP programs with respect to NSR
flexibility.
IX. Statutory and Executive Order
Reviews
A. Executive Order 12866—Regulatory
Planning and Review
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This action is not a ‘‘significant
regulatory action’’ under the terms of
Executive Order (EO) 12866 (58 FR
51735, October 4, 1993) and is therefore
not subject to review under the EO.
B. Paperwork Reduction Act
The information collection
requirements in this rule have been
submitted for approval to the Office of
Management and Budget (OMB) under
the Paperwork Reduction Act, 44 U.S.C.
3501 et seq. The information collection
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requirements are not enforceable until
OMB approves them.
The information collection
requirements resulting from this final
rule are associated with obtaining FAPs
under minor or major NSR (pursuant to
the requirements of title I of the Act and
the implementing regulations at 40 CFR
51.160 through 51.166, appendix S to 40
CFR part 51, and 40 CFR 52.21) and/or
under the title V operating permit
program (pursuant to the requirements
of title V of the Act and the
implementing regulations at 40 CFR
parts 70 and 71). The NSR and title V
programs are established programs with
approved information collection
requests (ICRs). This final rule will
encourage permitting authorities and
sources to work together to create FAPs,
which will eliminate the need for some
subsequent permits and permit
revisions and thereby reduce the burden
on both the permitting authorities and
sources.
The NSR program requires a permit to
be obtained by the owner or operator
prior to constructing a new stationary
source of air pollutants or modifying an
existing source in such a way that air
pollution emissions increase or a new
air pollutant is emitted. The minor NSR
program applies to minor sources and
minor modifications, while the major
NSR program applies to major sources
and major modifications. The
information collection for sources under
NSR results from the requirement for
owners or operators to submit
applications for NSR permits. In some
cases, sources must conduct
preconstruction monitoring to
determine the existing ambient air
quality. For permitting authorities, the
information collection results from the
requirement to process permit
applications and issue permits, and to
transmit associated information to EPA.
The EPA oversees the NSR program, and
the information collected by sources
and permitting authorities is used to
ensure that the program is properly
implemented.
The title V program requires major
sources and certain other sources of air
pollutants to obtain an operating permit
that contains all the requirements that
apply to the source under the Act. The
information collection for sources under
the title V program results from the
requirement for owners or operators to
submit applications for title V permits
and to submit deviation reports, semiannual monitoring reports, and annual
compliance certifications. For
permitting authorities, the information
collection results from the requirement
to process permit applications and issue
permits, to review the reports submitted
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by sources, and to transmit associated
information to EPA. The EPA oversees
the title V program, and the information
collected by sources and permitting
authorities is used to ensure that the
program is properly implemented.
Flexible air permits are innovative
permits that authorize sources to make
certain anticipated changes to their
operations without being required to
obtain new or revised permits at the
times these changes are implemented,
while assuring that all applicable
requirements of the Act are met and that
the environment is protected at least as
well as it would have been under
conventional permitting procedures.
The initial burden to apply for and issue
a FAP is greater than for a conventional
permit, but this increase in burden is
more than compensated for by the
subsequent burden reduction for
foregone new permits and permit
revisions. Thus, the net effect of this
final FAP rule is a reduction in the
burden the approved ICRs for the NSR
and title V programs.
As a result of this final rule, we
estimate that 845 sources will obtain
FAPs each year over the 3-year period
of this ICR, with a total annual burden
reduction averaging approximately
251,000 hours, or almost 300 hours per
source. We do not expect a burden
increase or reduction in capital costs,
operation and maintenance costs, or
purchase-of-services costs. For the 112
permitting authorities over the 3-year
period of this ICR, we estimate a total
annual burden reduction averaging
about 197,000 hours, or nearly 1,800
hours per permitting authority and 234
hours per permit. Burden is defined at
5 CFR 1320.3(b).
An agency may not conduct or
sponsor, and a person is not required to
respond to a collection of information
unless it displays a currently valid OMB
control number. The OMB control
numbers for EPA’s regulations in 40
CFR are listed in 40 CFR part 9. When
this ICR is approved by OMB, the
Agency will publish a technical
amendment to 40 CFR part 9 in the
Federal Register to display the OMB
control number for the approved
information collection requirements
contained in this final rule.
C. Regulatory Flexibility Act
The Regulatory Flexibility Act (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
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number of small entities. Small entities
include small businesses, small
organizations, and small governmental
jurisdictions.
For purposes of assessing the impacts
of this rule on small entities, ‘‘small
entity’’ is defined as: (1) A small
business as defined by the Small
Business Administration’s 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-forprofit enterprise which is independently
owned and operated and is not
dominant in its field.
After considering the economic
impacts of this final rule on small
entities, I certify that this action will not
have a significant economic impact on
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.
This final rule merely clarifies
existing requirements and allows
regulated entities to seek additional
flexibility for their Clean Air Act
permits. It does not create a new burden
for regulated entities. Because FAPs are
voluntary on the part of all permittees,
including any small entities that are
subject to permitting requirements, only
those permittees who expect to reduce
their permitting burden will seek FAPs.
We have determined there will be cost
savings for small entities associated
with this final rule. We have therefore
concluded that this final rule will
relieve regulatory burden for all affected
small entities.
D. Unfunded Mandates Reform Act
This action contains no Federal
mandate under the provisions of Title II
of the Unfunded Mandates Reform Act
of 1995 (UMRA), 2 U.S.C., 1531–1538
State, local, and Tribal governments, in
the aggregate, or the private sector. This
action imposes no enforceable duty on
any State, local or Tribal governments or
the private sector. As discussed
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previously, we estimate that this rule
will save State, local, and Tribal
permitting authorities an average of
$11.5 million per year over the first 3
years of implementation and result in an
administrative burden reduction
averaging 197,000 hours per year over
that period. Similarly, we estimate that
this rule will save permittees an average
of $20.6 million per year and reduce
their administrative burden by an
average of 251,000 hours per year over
the first 3 years. Therefore, this action
is not subject to the requirements of
sections 202 or 205 of UMRA.
This rule is also not subject to the
requirements of section 203 of UMRA
because it contains no regulatory
requirements that might significantly or
uniquely affect small governments. As
discussed earlier, this rule is expected
to result in cost savings and an
administrative burden reduction for all
permitting authorities and permittees,
including small governments to the
extent that they fall in either category.
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. This rule is
projected to result in cost savings and
administrative burden reductions for
States and will not alter the overall
relationship or distribution of powers
between governments for the part 70
and part 71 operating permits programs
or for the part 51 and part 52 NSR
programs. Thus, Executive Order 13132
does not apply to this rule.
In spirit of Executive Order 13132 and
consistent with EPA policy to promote
communications between EPA and State
and local governments, EPA solicited
comment on the proposed rule from
State and local officials. We believe that
this final rule is generally responsive to
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51437
the comments received from these and
other groups.
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). This action merely clarifies
existing requirements and allows
regulated entities to seek additional
flexibility for their CAA permits. Thus,
Executive Order 13175 does not apply
to this action.
G. Executive Order 13045—Protection of
Children From Environmental Health
and Safety Risks
The 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 Executive Order has the potential to
influence the regulation. This action is
not subject to Executive Order 13045
because it does not establish an
environmental standard intended to
mitigate health or safety risks.
H. Executive Order 13211—Actions
That Significantly Affect Energy Supply,
Distribution, or Use
This action is not a ‘‘significant
energy action’’ as defined in Executive
Order 13211 ‘‘Actions Concerning
Regulations That Significantly Affect
Energy Supply, Distribution, or Use’’ (66
FR 28355, May 22, 2001) because it is
not likely to have a significant adverse
effect on the supply, distribution, or use
of energy. This action merely clarifies
existing requirements and allows
regulated entities to seek additional
flexibility for their CAA permits.
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 (e.g.,
materials specifications, test methods,
sampling procedures, and 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.
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This action does not involve technical
standards. Therefore, EPA did not
consider the use of any voluntary
consensus standards.
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J. Executive Order 12898—Federal
Actions To Address Environmental
Justice in Minority Populations and
Low-Income Populations
Executive Order (EO) 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.
The 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 rule merely
clarifies existing requirements and
allows regulated entities to seek
additional flexibility for their CAA
permits. Such FAPs achieve equal or
better environmental protection than
that achieved using more conventional
permits.
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. The 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
November 5, 2009.
X. Judicial Review
Under section 307(b)(1) of the Act,
petitions for judicial review of this
action must be filed in the United States
Court of Appeals for the District of
Columbia Circuit by December 7, 2009.
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Any such judicial review is limited to
only those objections that are raised
with reasonable specificity in timely
comments. Filing a petition for
reconsideration by the Administrator of
this final rule does not affect the finality
of this rule for the purposes of judicial
review nor does it extend the time
within which a petition for judicial
review may be filed, and shall not
postpone the effectiveness of such rule
or action. 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.
Pursuant to section 307(d)(1)(V) of the
Act, the Administrator determines that
this action is subject to the provisions
of section 307(d). Section 307(d)(1)(V)
provides that the provisions of section
307(d) apply to ‘‘such other actions as
the Administrator may determine.’’ This
action finalizes some, but not all,
elements of a previous proposed
action—the Flexible Air Permitting Rule
proposed on September 12, 2007 (72 FR
52206). That action included proposed
revisions to the PSD regulations under
part C of title I of the Act and was,
therefore, subject to section 307(d)
pursuant to section 307(d)(J).
Consequently, although the proposed
PSD revisions are not being finalized in
this action, the procedural requirements
of section 307(d) have been complied
with for purposes of this action.
List of Subjects
40 CFR Part 70
Environmental protection,
Administrative practice and procedures,
Air pollution control, Intergovernmental
relations, Reporting and recordkeeping
requirements.
40 CFR Part 71
Dated: September 25, 2009.
Lisa P. Jackson,
Administrator.
For the reasons set out in the
preamble, title 40, chapter I of the Code
of Federal Regulations is amended as set
forth below.
■
PART 70—[AMENDED]
1. The authority citation for part 70
continues to read as follows:
■
Authority: 42 U.S.C. 7401, et seq.
2. Section 70.2 is amended by adding
definitions of ‘‘Alternative operating
■
Frm 00022
Fmt 4701
§ 70.2
Definitions.
*
*
*
*
*
Alternative operating scenario (AOS)
means a scenario authorized in a part 70
permit that involves a change at the part
70 source for a particular emissions
unit, and that either results in the unit
being subject to one or more applicable
requirements which differ from those
applicable to the emissions unit prior to
implementation of the change or renders
inapplicable one or more requirements
previously applicable to the emissions
unit prior to implementation of the
change.
*
*
*
*
*
Approved replicable methodology
(ARM) means part 70 permit terms that:
(1) Specify a protocol which is
consistent with and implements an
applicable requirement, or requirement
of this part, such that the protocol is
based on sound scientific and/or
mathematical principles and provides
reproducible results using the same
inputs; and
(2) Require the results of that protocol
to be recorded and used for assuring
compliance with such applicable
requirement, any other applicable
requirement implicated by
implementation of the ARM, or
requirement of this part, including
where an ARM is used for determining
applicability of a specific requirement to
a particular change.
*
*
*
*
*
■ 3. Section 70.4 is amended by revising
paragraph (d)(3)(xi) to read as follows:
§ 70.4 State program submittals and
transition.
*
Environmental protection,
Administrative practice and procedures,
Air pollution control, Intergovernmental
relations, Reporting and recordkeeping
requirements.
PO 00000
scenario (AOS)’’ and ‘‘Approved
replicable methodology (ARM)’’ in
alphabetical order, to read as follows:
Sfmt 4700
*
*
*
*
(d) * * *
(3) * * *
(xi) Approval of AOSs. The program
submittal must include provisions to
insure that AOSs requested by the
source as approved by the permitting
authority are included in the part 70
permit pursuant to § 70.6(a)(9).
*
*
*
*
*
■ 4. Section 70.5 is amended as follows:
■ a. By revising paragraph (c)(2);
■ b. By revising paragraph (c)(3)(iii);
■ c. By revising paragraph (c)(7);
■ d. By adding paragraph (c)(8)(ii)(D);
and
■ e. By adding paragraph (c)(8)(iii)(D).
The additions and revisions read as
follows:
§ 70.5
*
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Permit applications.
*
*
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*
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(c) * * *
(2) A description of the source’s
processes and products (by Standard
Industrial Classification (SIC) Code)
including those associated with any
proposed AOS identified by the source.
(3) * * *
(iii) Emissions rate in tpy and in such
terms as are necessary to establish
compliance consistent with the
applicable standard reference test
method. For emissions units subject to
an annual emissions cap, tpy can be
reported as part of the aggregate
emissions associated with the cap,
except where more specific information
is needed, including where necessary to
determine and/or assure compliance
with an applicable requirement.
*
*
*
*
*
(7) Additional information as
determined to be necessary by the
permitting authority to define proposed
AOSs identified by the source pursuant
to § 70.6(a)(9) of this part or to define
permit terms and conditions
implementing any AOS under
§ 70.6(a)(9) or implementing
§ 70.4(b)(12) or § 70.6(a)(10) of this part.
The permit application shall include
documentation demonstrating that the
source has obtained all authorization(s)
required under the applicable
requirements relevant to any proposed
AOSs, or a certification that the source
has submitted all relevant materials to
the appropriate permitting authority for
obtaining such authorization(s).
(8) * * *
(ii) * * *
(D) For applicable requirements
associated with a proposed AOS, a
statement that the source will meet such
requirements upon implementation of
the AOS. If a proposed AOS would
implicate an applicable requirement
that will become effective during the
permit term, a statement that the source
will meet such requirements on a timely
basis.
(iii) * * *
(D) For applicable requirements
associated with a proposed AOS, a
statement that the source will meet such
requirements upon implementation of
the AOS. If a proposed AOS would
implicate an applicable requirement
that will become effective during the
permit term, a statement that the source
will meet such requirements on a timely
basis. A statement that the source will
meet in a timely manner applicable
requirements that become effective
during the permit term will satisfy this
provision, unless a more detailed
schedule is expressly required by the
applicable requirement.
*
*
*
*
*
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16:38 Oct 05, 2009
Jkt 220001
5. Section 70.6 is amended by revising
paragraphs (a)(1) introductory text and
(a)(9) to read as follows:
■
§ 70.6
Permit content.
(a) * * *
(1) Emissions limitations and
standards, including those operational
requirements and limitations that assure
compliance with all applicable
requirements at the time of permit
issuance. Such requirements and
limitations may include ARMs
identified by the source in its part 70
permit application as approved by the
permitting authority, provided that no
ARM shall contravene any terms needed
to comply with any otherwise
applicable requirement or requirement
of this part or circumvent any
applicable requirement that would
apply as a result of implementing the
ARM.
*
*
*
*
*
(9) Terms and conditions for
reasonably anticipated AOSs identified
by the source in its application as
approved by the permitting authority.
Such terms and conditions:
(i) Shall require the source,
contemporaneously with making a
change from one operating scenario to
another, to record in a log at the
permitted facility a record of the AOS
under which it is operating;
(ii) May extend the permit shield
described in paragraph (f) of this section
to all terms and conditions under each
such AOS; and
(iii) Must ensure that the terms and
conditions of each AOS meet all
applicable requirements and the
requirements of this part. The
permitting authority shall not approve a
proposed AOS into the part 70 permit
until the source has obtained all
authorizations required under any
applicable requirement relevant to that
AOS.
*
*
*
*
*
PART 71—[AMENDED]
6. The authority citation for part 71
continues to read as follows:
■
Authority: 42 U.S.C. 7401, et seq.
7. Section 71.2 is amended by adding
definitions of ‘‘Alternative operating
scenario (AOS)’’ and ‘‘Approved
replicable methodology (ARM)’’ in
alphabetical order, to read as follows:
■
§ 71.2
Definitions.
*
*
*
*
*
Alternative operating scenario (AOS)
means a scenario authorized in a part 71
permit that involves a change at the part
71 source for a particular emissions
PO 00000
Frm 00023
Fmt 4701
Sfmt 4700
51439
unit, and that either results in the unit
being subject to one or more applicable
requirements which differ from those
applicable to the emissions unit prior to
implementation of the change or renders
inapplicable one or more requirements
previously applicable to the emissions
unit prior to implementation of the
change.
*
*
*
*
*
Approved replicable methodology
(ARM) means part 71 permit terms that:
(1) Specify a protocol which is
consistent with and implements an
applicable requirement, or requirement
of this part, such that the protocol is
based on sound scientific and/or
mathematical principles and provides
reproducible results using the same
inputs; and
(2) Require the results of that protocol
to be recorded and used for assuring
compliance with such applicable
requirement, any other applicable
requirement implicated by
implementation of the ARM, or
requirement of this part, including
where an ARM is used for determining
applicability of a specific requirement to
a particular change.
*
*
*
*
*
■ 8. Section 71.5 is amended as follows:
■ a. By revising paragraph (c)(2);
■ b. By revising paragraph (c)(3)(iii);
■ c. By revising paragraph (c)(7);
■ d. By adding paragraph (c)(8)(ii)(D);
and
■ e. By adding paragraph (c)(8)(iii)(D).
The additions and revisions read as
follows:
§ 71.5
Permit applications.
*
*
*
*
*
(c) * * *
(2) A description of the source’s
processes and products (by SIC Code)
including those associated with any
proposed AOS identified by the source.
(3) * * *
(iii) Emissions rates in tpy and in
such terms as are necessary to establish
compliance consistent with the
applicable standard reference test
method. For emissions units subject to
an annual emissions cap, tpy can be
reported as part of the aggregate
emissions associated with the cap,
except where more specific information
is needed, including where necessary to
determine and/or assure compliance
with an applicable requirement.
*
*
*
*
*
(7) Additional information as
determined to be necessary by the
permitting authority to define proposed
AOSs identified by the source pursuant
to § 71.6(a)(9) or to define permit terms
and conditions implementing any AOS
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under § 71.6(a)(9) or implementing
§ 71.6(a)(10) or § 71.6(a)(13). The permit
application shall include
documentation demonstrating that the
source has obtained all authorization(s)
required under the applicable
requirements relevant to any proposed
AOSs, or a certification that the source
has submitted all relevant materials to
the appropriate permitting authority for
obtaining such authorization(s).
(8) * * *
(ii) * * *
(D) For applicable requirements
associated with a proposed AOS, a
statement that the source will meet such
requirements upon implementation of
the AOS. If a proposed AOS would
implicate an applicable requirement
that will become effective during the
permit term, a statement that the source
will meet such requirements on a timely
basis.
(iii) * * *
(D) For applicable requirements
associated with a proposed AOS, a
statement that the source will meet such
requirements upon implementation of
the AOS. If a proposed AOS would
implicate an applicable requirement
that will become effective during the
permit term, a statement that the source
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16:38 Oct 05, 2009
Jkt 220001
will meet such requirements on a timely
basis. A statement that the source will
meet in a timely manner applicable
requirements that become effective
during the permit term will satisfy this
provision, unless a more detailed
schedule is expressly required by the
applicable requirement.
*
*
*
*
*
9. Section 71.6 is amended by revising
paragraphs (a)(1) introductory text and
(a)(9) to read as follows:
■
§ 71.6
Permit content.
(a) * * *
(1) Emissions limitations and
standards, including those operational
requirements and limitations that assure
compliance with all applicable
requirements at the time of permit
issuance. Such requirements and
limitations may include ARMs
identified by the source in its part 71
permit application as approved by the
permitting authority, provided that no
ARM shall contravene any terms needed
to comply with any otherwise
applicable requirement or requirement
of this part or circumvent any
applicable requirement that would
PO 00000
Frm 00024
Fmt 4701
Sfmt 4700
apply as a result of implementing the
ARM.
*
*
*
*
*
(9) Terms and conditions for
reasonably anticipated AOSs identified
by the source in its application as
approved by the permitting authority.
Such terms and conditions:
(i) Shall require the source,
contemporaneously with making a
change from one operating scenario to
another, to record in a log at the
permitted facility a record of the AOS
under which it is operating;
(ii) May extend the permit shield
described in paragraph (f) of this section
to all terms and conditions under each
such AOS; and
(iii) Must ensure that the terms and
conditions of each AOS meet all
applicable requirements and the
requirements of this part. The
permitting authority shall not approve a
proposed AOS into the part 71 permit
until the source has obtained all
authorizations required under any
applicable requirement relevant to that
AOS.
*
*
*
*
*
[FR Doc. E9–23794 Filed 10–5–09; 8:45 am]
BILLING CODE 6560–50–P
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]]>Agencies
[Federal Register Volume 74, Number 192 (Tuesday, October 6, 2009)]
[Rules and Regulations]
[Pages 51418-51440]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-23794]
[[Page 51417]]
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Part III
Environmental Protection Agency
-----------------------------------------------------------------------
40 CFR Parts 70 and 71
Operating Permit Programs; Flexible Air Permitting Rule; Final Rule
Federal Register / Vol. 74, No. 192 / Tuesday, October 6, 2009 /
Rules and Regulations
[[Page 51418]]
-----------------------------------------------------------------------
ENVIRONMENTAL PROTECTION AGENCY
40 CFR Parts 70 and 71
[EPA-HQ-OAR-2004-0087; FRL-8964-8]
RIN 2060-AM45
Operating Permit Programs; Flexible Air Permitting Rule
AGENCY: Environmental Protection Agency (EPA).
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: We are revising the regulations governing State and Federal
operating permit programs required by title V of the Clean Air Act (CAA
or the Act) to promote flexible air permitting (FAP) approaches that
provide greater operational flexibility and, at the same time, ensure
environmental protection and compliance with applicable laws.
The revisions to our title V regulations consist of adding
definitions for alternative operating scenario (AOS) and approved
replicable methodology (ARM) and codifying some clarifications to
existing provisions. These revisions are intended to clarify and
reaffirm opportunities for accessing operational flexibility under
existing regulations. We are not finalizing any revisions to our
existing minor or major New Source Review (NSR) regulations. In
particular, we are withdrawing that portion of the proposal which
relates to Green Groups and their potential inclusion in NSR programs
required by parts C and D of title I of the Act. Instead, we are
encouraging States and sources to investigate in more depth the
flexibilities currently available under the major NSR regulations.
DATES: This final rule is effective on November 5, 2009.
ADDRESSES: The EPA established a docket for this action under Docket ID
No. EPA-HQ-OAR-2004-0087. All documents in the docket are listed on the
https://www.regulations.gov Web site. Although listed in the index, some
information may not be publicly available, e.g., CBI or other
information whose disclosure is restricted by statute. Certain other
material, such as copyrighted material, is not placed on the Internet
and will be publicly available only in hard copy form. Publicly
available docket materials are available either electronically through
https://www.regulations.gov or in hard copy at the Air and Radiation
Docket, EPA/DC, EPA West, Room 3334, 1301 Constitution Avenue,
Northwest, Washington, DC. The Public Reading Room is open from 8:30
a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The
telephone number for the Public Reading Room is (202) 566-1744, and the
telephone number for the Air and Radiation Docket is (202) 566-1742.
FOR FURTHER INFORMATION CONTACT: For general issues concerning this
action, please contact Michael Trutna, Air Quality Policy Division
(C504-01), U.S. Environmental Protection Agency, Research Triangle
Park, NC 27711; telephone (919) 541-5345; fax number (919) 541-4028; or
electronic mail at trutna.mike@epa.gov.
For specific issues concerning the pilot permits used to support
this rulemaking, contact David Beck, Office of Policy, Economics, and
Innovation, Innovative Pilots Division (C304-05), U.S. Environmental
Protection Agency, Research Triangle Park, NC 27711; telephone (919)
541-5421; fax number (919) 541-2664; or electronic mail at
beck.david@epa.gov.
For issues relating to monitoring, recordkeeping, and reporting for
FAPs, contact Barrett Parker, Sector Policies and Programs Division,
Measurement Policy Group (D243-03), U.S. Environmental Protection
Agency, Research Triangle Park, NC 27711; telephone 919-541-5635; fax
number (919) 541-1039; or electronic mail at parker.barrett@epa.gov.
For other part 70 issues, contact Juan Santiago, Operating Permits
Group, Air Quality Policy Division (C504-05), U.S. Environmental
Protection Agency, Research Triangle Park, NC 27711; telephone (919)
541-1084; fax number (919) 541-5509; or electronic mail at
santiago.juan@epa.gov.
SUPPLEMENTARY INFORMATION:
The information in this Supplementary Information section of this
preamble is organized as follows:
Table of Contents
I. General Information
A. Does This Action Apply to Me?
B. Where Can I Get a Copy of This Document and Other Related
Information?
II. Purpose
III. Background
A. What Is a Flexible Air Permit?
B. What Is the Title V Operating Permit Program?
C. What Is the New Source Review (NSR) Program?
1. Major NSR
2. Minor NSR
IV. Overview of This Final Action
A. What Specific Changes to Parts 70 and 71 Is EPA Finalizing?
B. What Changes to Parts 51 and 52 Is EPA Finalizing?
C. What Approach Is Being Used To Discuss the Final Actions?
D. What Are EPA's Recommendations for Public Participation in
Flexible Permitting?
E. What Types of Support Does EPA Intend To Offer?
V. Advance Approval of Minor NSR
A. Background
B. Final Action
VI. Alternative Operating Scenarios
A. Background
B. Final Action
VII. Approved Replicable Methodologies
A. Background
B. Final Action
VIII. Green Groups
A. Background
B. Final Action
IX. Statutory and Executive Order Reviews
A. Executive Order 12866--Regulatory Planning and Review
B. Paperwork Reduction Act
C. Regulatory Flexibility Act
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 12898--Federal Actions To Address
Environmental Justice in Minority Populations and Low-Income
Populations
K. Congressional Review Act
X. Judicial Review
I. General Information
A. Does This Action Apply to Me?
Entities potentially affected by this final action are facilities
currently required to obtain title V permits under State, local,
Tribal, or Federal operating permits programs, and State, local, and
Tribal governments that are authorized by EPA to issue such operating
permits. Potentially affected sources are found in a wide variety of
industry groups. In particular, we believe based on the collective
experience in implementing the pilot permit activity that these groups
will include, but are not limited to, the following:
[[Page 51419]]
------------------------------------------------------------------------
Industry group SIC \a\ NAICS \b\
------------------------------------------------------------------------
Aerospace Manufacturing..... 372................. 336411, 336412,
332912, 336411,
335413.
Automobile Manufacturing.... 371................. 336111, 336112,
336712, 336211,
336992, 336322,
336312, 33633,
33634, 33635,
336399, 336212,
336213.
Industrial Organic Chemicals 286................. 325191, 32511,
325132, 325192,
225188, 325193,
32512, 325199.
Chemical Processes.......... 281................. 325181, 325182,
325188, 32512,
325131, 325998,
331311.
Converted Paper and 267................. 322221, 322222,
Paperboard Products. 322223, 322224,
322226, 322231,
326111, 326112,
322299, 322291,
322232, 322233,
322211.
Magnetic Tape Manufacturing. 369................. 334613.
Petroleum Refining.......... 291................. 32411.
Other Coating Operations.... 226, 229, 251, 252, 313311, 313312,
253, 254, 267, 358, 314992, 33132,
363. 337122, 337121,
337124, 337215,
337129, 37125,
337211, 337214,
337127, 322221,
322222, 322226,
335221, 335222,
335224, 335228,
333312, 333415,
333319.
Paper Mills................. 262................. 322121, 322122.
Pharmaceutical Manufacturing 283................. 325411, 325412,
325413, 325414.
Printing and Publishing..... 275................. 323114, 323110,
323111, 323113,
323112, 323115,
323119.
Pulp and Paper Mills........ 262................. 32211, 322121,
322122, 32213.
Semiconductors.............. 367................. 334413.
Specialty Batch Chemical 282, 283, 284, 285, 3251, 3252, 3253,
Processes. 286, 287, 289, 386. 3254, 3255, 3256,
3259, except 325131
and 325181.
------------------------------------------------------------------------
\a\ Standard Industrial Classification.
\b\ North American Industry Classification System.
This table is not intended to be exhaustive, but rather provides a
guide for readers regarding entities likely to be affected by this
action. If you have any questions regarding the applicability of this
action to a particular entity, contact the person listed in the
preceding FOR FURTHER INFORMATION CONTACT section.
B. Where Can I Get a Copy of This Document and Other Related
Information?
In addition to being available in the docket, an electronic copy of
this final rule will also be available on the World Wide Web. Following
signature by the EPA Administrator, a copy of this final rule will be
posted in the regulations and standards section of our NSR home page
located at https://www.epa.gov/nsr.
II. Purpose
The purpose of this rulemaking is to clarify and reaffirm
opportunities within the existing regulatory framework to encourage the
wider use of the FAP approaches. The Agency has learned a great deal
over the past decade through the implementation and evaluation of pilot
permits. In light of that experience and the comments we received on
the proposed FAP rulemaking (72 FR 52206, September 12, 2007),\1\ we
are finalizing certain elements of that proposal.\2\
---------------------------------------------------------------------------
\1\ In addition to written comments submitted on the proposal,
we have received input from stakeholders in outreach meetings held
to discuss the proposal. These meetings, and the topics discussed,
are documented in the docket for this rulemaking, Docket No. EPA-HQ-
OAR-2004-0087. For purposes of this preamble, we refer to input from
all these sources as ``comments.''
\2\ On January 13, 2009, then Administrator Stephen L. Johnson
signed a final Flexible Air Permitting Rule and the signed rule was
made publicly available on EPA's Web site. The signed rule was
submitted to the Office of Federal Register for publication. Rahm
Emanuel, Assistant to the President and Chief of Staff, issues a
memorandum on January 20, 2009, directing Agencies to withdraw from
the Office of Federal Register ``all proposed and final regulations
that have not been published in the Federal Register so that they
can be reviewed and approved by a department or agency head.''
Administrator Lisa P. Jackson reviewed and approved the final
Flexible Permitting Rule, and this rule as published is identical in
substance to the rule previously signed January 13, 2009.
---------------------------------------------------------------------------
III. Background
A. What Is a Flexible Air Permit?
A FAP is a title V permit that by its design facilitates flexible
operations at a source, allowing it to be market-responsive while
ensuring equal or greater environmental protection than that achieved
by conventional permits. In particular, a FAP contains one or more
approaches that allow the source, under protection of the permit
shield, to make certain types or categories of physical and/or
operational changes without further review or approval of the
individual changes by the permitting authority as they subsequently
occur. Flexible air permit approaches, as discussed in this notice,
include advance approvals of minor NSR, AOSs, and ARMs. In pursuing a
FAP, the source must propose one or more of these approaches to the
permitting authority who then would accept those which are judged to be
appropriate in a particular situation. In order to be effective, the
combination of FAP approaches contained in the title V permit must
address all applicable requirements and requirements of part 70
relevant to the anticipated changes being authorized.\3\ Flexible air
permits cannot circumvent, modify, or contravene any applicable
requirement and, instead, by their design must assure compliance with
each one as it would become applicable to any of the authorized
changes.
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\3\ ``Applicable requirements'' is a term that is used in title
V. The EPA has defined the term to include, among other things,
State implementation plan (SIP) rules, the terms and conditions of
preconstruction permits issued under a SIP-approved NSR program, and
requirements pursuant to the new source performance standards
(NSPS), national emission standards for hazardous air pollutants
(NESHAP), maximum achievable control technology (MACT), and Acid
Rain Programs. See 40 CFR 70.2.
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For more than a decade, we participated in a pilot permit activity
with certain title V sources and permitting authorities through which
were tested and evaluated various
[[Page 51420]]
permitting approaches that afford operational flexibility. The lessons
learned through the pilot permit experience served, in part, as the
basis for our adoption of the plantwide applicability limitation (PAL)
provisions of the 2002 NSR Improvement rule. They also serve as a basis
for this rulemaking, in which we clarify and reaffirm existing
regulatory provisions that currently afford reasonable opportunities
for operational flexibility, while ensuring the required levels of
environmental protection. We intend that this rulemaking provide a more
positive foundation upon which FAPs can be considered by sources and
permitting authorities and, as appropriate, be designed and
implemented.
B. What Is the Title V Operating Permit Program?
When Congress amended the Act in 1990, it established an operating
permit program in title V of the Act for major (and certain other)
stationary sources of air pollution. Title V mandates that each State
develop and implement an operating permit program, and requires EPA to
establish minimum standards for these programs. The purpose of the
program is to improve the enforceability, and thus the effectiveness,
of the Act's requirements by issuing to every covered source a permit
that lists all the requirements applicable to the source under the Act
and contains other terms as necessary to assure compliance with those
requirements. States may delegate program responsibility to local
agencies, and eligible Tribes may develop and implement a program at
their option. In 1992, EPA promulgated regulations setting forth
minimum requirements for State, local, and Tribal operating permit
programs in part 70 of title 40 of the Code of Federal Regulations (40
CFR part 70). Currently all States and many local agencies administer
operating permit programs approved by EPA pursuant to the part 70
requirements. There are 112 such State, territorial, and local
operating permit programs. These programs are typically referred to
interchangeably as ``title V programs'' or ``part 70 programs.''
In addition, title V requires EPA to implement an operating permit
program in areas lacking an approved or adequately administered State,
local, or Tribal program. Accordingly, in 1996 EPA promulgated the
Federal operating permit program at 40 CFR part 71. In 1999, EPA
amended part 71 specifically to address Indian country. Currently, EPA
administers the part 71 program in Indian country, for sources located
on the outer continental shelf, and for deep water ports.\4\ There are
currently no Tribes with approved part 70 programs, although one Tribe
has received delegation to administer the part 71 Federal program.
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\4\ The EPA may also issue a part 71 permit where a State
permitting authority fails to respond to an objection by the
Administrator to a part 70 permit. See CAA section 505(c), 40 CFR
71.4(e).
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The concept of operational flexibility in title V permits is not a
new one. Since they were initially promulgated in 1992, the part 70
State operating permit program regulations have included operational
flexibility provisions. One of these is the AOS provision found at 40
CFR 70.6(a)(9), which is one subject of this rulemaking.5, 6
Section 70.6(a)(9) generally provides that any permit issued under part
70 must include terms and conditions for reasonably anticipated
operating scenarios identified in its application by the source and as
approved by the permitting authority. Over the years, we have proposed
rulemaking or guidance to address operational flexibility further, but
none has been finalized.\7\
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\5\ The Federal operating permit program at part 71 addresses
reasonably anticipated operating scenarios in the same fashion as
part 70. See 40 CFR 71.6(a)(9). This rulemaking affects both parts
70 and 71, and the revisions to each part are virtually identical.
For ease of reference, this preamble discussion refers to the part
70 provisions, but the discussion applies equally to the part 71
program revisions. Section numbers given for the part 70 rules
correspond directly to the analogous sections in part 71. The term
``title V permit'' refers to permits issued under either part 70 or
part 71.
\6\ The EPA included other operational flexibility provisions in
the final part 70 regulations, including 40 CFR 70.4(b)(12),
(b)(14), and (b)(15), which implement section 502(b)(10) of the Act.
This rule does not address those provisions.
\7\ In the 1990's, we proposed certain clarifications and
modifications to the part 70 regulations. See generally 60 FR 45529
(August 31, 1995) and 59 FR 44460 (August 29, 1994). In those
proposals, among other things, we discussed the concept of ``advance
NSR'' in relation to AOSs, and proposed a definition for
``alternative operating scenarios.'' In August 2000, based in large
part on the experience gained through the pilot permit activity
discussed below, we issued a draft guidance document called White
Paper Number 3 (64 FR 49803, Aug. 15, 2000), on which we solicited
comment. That draft guidance addressed various flexible permitting
approaches, including the use of the AOS provisions, Clean
Buildings, and PALs. In fashioning the proposal on which this final
rule is based, we considered a summary of those comments received on
the prior proposals that addressed advance approval and AOSs (which
is available in the docket) and the relevant individual comments
received on the draft guidance (which are also in the docket).
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Shortly after we promulgated part 70, we initiated and/or supported
pilot permit activities with interested States.\8\ Companies
participating in this activity sought to reduce the cost, time, and
delays associated with a permit revision for each operational change at
a facility. We and the States sought to increase the sources'
operational flexibility, while assuring compliance with applicable
requirements, ensuring environmental protection, and facilitating
pollution prevention (P2). These pilots typically allowed for both
changes to operations of existing emissions units and the addition of
new emissions units, provided that the changes were sufficiently well
described in the permit application so that the permitting authority
could confirm that all applicable requirements were identified and that
the permit contained terms and conditions assuring compliance with all
applicable requirements.
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\8\ Sources at the following locations participated in the pilot
permit activity: (1) 3M (St. Paul, MN); (2) Intel (Aloha, OR); (3)
Lasco Bathware (Yelm, WA); (4) Imation (Weatherford, OK); (5) Cytec
(Connecticut); (6) DaimlerChrysler (Newark, DE); (7) Merck (Elkton,
VA); (8) Merck (Barceloneta, PR); (9) Saturn (Spring Hill, TN); (10)
BMW (Spartanburg, SC); (11) Eli Lilly (West Lafayette, IN); (12) 3M
(Nevada, MO); and (13) Imation (Camarillo, CA).
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To evaluate the pilot permit activity, we conducted a thorough
review of the six pilot permits for which at the time there was
significant implementation experience.\9\ We reviewed on-site records
to track utilization of the flexible permit provisions, assessed how
well the permits worked, evaluated total emissions reductions achieved,
and analyzed the economic benefits associated with the permits.
Overall, we found that the flexibility approaches which States
implemented under their current authorities had worked well for both
the sources and the permitting authorities, with significant benefits
accruing as follows:
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\9\ The six permits that we analyzed were: (1) Intel (Aloha,
OR); (2) 3M (St. Paul, MN); (3) Lasco Bathware (Yelm, WA); (4)
DaimlerChrysler (Newark, DE); (5) Saturn (Spring Hill, TN); and (6)
Imation (Weatherford, OK).
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Environmental--The sources generally achieved 30 to 80
percent reductions in actual plantwide emissions or emissions per unit
of production.
Informational--Permitting authorities and the public
received better information about the scope of planned changes at the
sources and the maximum, cumulative environmental effects of those
changes.
Economic--Increased permitting certainty and reduced
transaction costs improved the participating companies' ability to
compete effectively in the market and enabled them to retain, and in
some cases, create jobs.
Administrative--Even with the higher front-end design
costs associated with the pilot permits, permitting authorities
reported a net reduction in administrative costs over the life of the
[[Page 51421]]
permits as a result of a reduction in subsequent permit revisions.
For a more extensive discussion of the findings of the pilot permit
evaluation, see the evaluation report.\10\
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\10\ ``Evaluation of the Implementation Experience with
Innovative Air Permits.'' A copy of this report is located in the
docket for this rulemaking, or can be accessed at https://www.epa.gov/ttn/oarpg/t5/memoranda/iap_eier.pdf.
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C. What Is the New Source Review (NSR) Program?
The NSR program is a preconstruction permitting program that
applies when a source is constructed or modified. The NSR program is
composed of three different programs:
Prevention of Significant Deterioration (PSD);
Nonattainment major NSR (NA NSR); and
Minor NSR.
1. Major NSR
We often refer to the PSD and NA NSR programs together as the major
NSR program because these programs regulate only major sources.\11\
These programs are mandated by parts C and D of title I of the Act.
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\11\ The Act uses the terms ``major emitting facility'' to refer
to sources subject to the PSD program, and ``major stationary
source'' to refer to sources subject to NA NSR. See CAA sections
165, 169, 172(c)(5), and 302(j). For ease of reference, we use the
term ``major source'' to refer to both terms.
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Part C contains the PSD provisions. The PSD program applies when a
major source that is located in an area that is designated as
attainment or unclassifiable for any criteria pollutant is constructed
or undergoes a major modification.12 13 Part D prescribes
the NA NSR program, which applies when a major source that is located
in an area that is designated as nonattainment for one or more criteria
pollutants is newly constructed or undergoes a major modification for
any of those pollutants. The implementing regulations for the PSD
program are found at 40 CFR 52.21, 40 CFR 51.166, and 40 CFR 51.165(b).
For NA NSR, the regulations are found at 40 CFR 52.24, 40 CFR 51.165,
and 40 CFR part 51, appendix S.
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\12\ The term ``criteria pollutant'' means a pollutant for which
we have set a NAAQS.
\13\ In addition, the PSD program applies to many noncriteria
regulated pollutants.
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As noted above, parts C and D set forth the statutory requirements
for the PSD and NA NSR programs, and the implementing regulations
include requirements for State major NSR programs. As a result, major
NSR programs generally are similar across the States.
The PSD requirements include but are not limited to:
Installation of Best Available Control Technology (BACT);
Air quality monitoring and modeling analyses to ensure
that a project's emissions will not cause or contribute to a violation
of any national ambient air quality standards (NAAQS) or maximum
allowable pollutant increase (PSD increment);
Notification of Federal Land Manager of nearby Class I
areas; and
Thirty-day public comment period and opportunity for a
public hearing on the permit.
Nonattainment NSR requirements include but are not limited to:
Installation of Lowest Achievable Emission Rate (LAER)
control technology;
Offsetting new emissions with creditable emissions
reductions;
Certification that all major sources owned and operated in
the State by the same owner are in compliance with all applicable
requirements under the Act;
An alternative siting analysis demonstrating that the
benefits of the proposed source significantly outweigh the
environmental and social costs imposed as a result of its location,
construction, or modification; and
Thirty-day public comment on the permit.
Based on our pilot permit evaluation and our 1996 proposed
modifications to the major NSR program, in December 2002 we finalized
the NSR Improvement rule. In that rule, we promulgated regulations for
PALs in the PSD and NA NSR programs. As explained in the preamble to
the December 2002 final rule, a PAL is an alternative approach for
determining NSR applicability on a plantwide basis. See 67 FR 80206.
Sources with PALs can make changes without triggering the major NSR
preconstruction permitting requirements, provided such changes remain
below the limit established in their PAL and do not otherwise violate
the requirements of the PAL. A PAL is an important technique which is
often used in tandem with other FAP approaches such as advance
approvals for minor NSR.
2. Minor NSR
Under section 110(a)(2)(C) of the Act, States are required to have
``minor'' NSR programs, which apply to new and modified sources that do
not meet the emissions thresholds for the NSR programs that apply to
major sources, as well as permit programs to meet parts C and D of the
Act. In addition, section 110(j) requires all applicants for permits
issued under title I of the Act to show that they will comply with
standards of performance and all other requirements of the Act. The
minor NSR program is part of each State's ``State implementation plan''
(SIP) and is designed to ensure that the construction or modification
of any stationary source does not interfere with the attainment of the
NAAQS. Aside from this requirement, which is stated in broad terms, the
Act includes no specifics regarding the structure or functioning of
minor NSR programs. The implementing regulations, which are found at 40
CFR 51.160 through 51.164, also are stated in very general terms. As a
result, SIP-approved minor NSR programs can vary quite widely from
State to State.
IV. Overview of This Final Action
This final action is primarily a reaffirmation of currently
available flexibility options and the process for accessing them. This
action adds some new definitions and clarifications to existing parts
70 and 71 provisions in order to promote greater certainty and
reasonable consideration of these options. This notice discusses each
of the FAP approaches (e.g., advance approvals of minor NSR, AOSs, and
ARMs) and the common process for their consideration. In this process,
the source first proposes use of one or more of the FAP approaches to
the permitting authority who then evaluates the proposal on a case-by-
case basis.
Commenters have generally found these options to be available to
the extent needed and appropriate under existing authorities.
Commenters have also found the common process to be sufficient and
effective in the reasonable consideration of the particular options
proposed for a FAP. These commenters have convinced the Agency that
more prescriptive approaches proposed to assure greater consistency may
well be counterproductive to our objective for greater consideration
and appropriate use of FAP approaches. While deciding not to prescribe
specific approaches to the design and implementation of FAPs, EPA does
intend to monitor State activities in these areas, to evaluate the
effectiveness of various FAP approaches periodically, and to assess, on
the basis of new experiences and other information, whether any
additional rulemaking would be appropriate in the future.
A. What Specific Changes to Parts 70 and 71 Is EPA Finalizing?
We are finalizing a proposed revision to the title V permit
application requirements at 40 CFR 70.5(c)(3)(iii) to facilitate the
use of emissions caps, including those for advance approvals of minor
NSR and for PALs, although
[[Page 51422]]
the wording has been changed slightly in the final rule. The final
revisions clarify that for emissions units subject to an annual
emissions cap, the application may report the units' emissions as part
of the aggregate emissions associated with the cap, except where more
specific information is needed, including where necessary to determine
or assure compliance with an applicable requirement.
With respect to AOSs, after considering the comments we received on
the proposed rules, we are finalizing only those aspects of our
proposal that would preserve the current levels of flexibility and add
no new administrative burden. In particular, we are revising the rules
to:
Add a definition of AOS, but eliminating the reference to
``physical and operational changes'' from the proposed definition.
Clarify that the permitting authority shall require the
source to supplement its application with additional information when
necessary to define permit terms and conditions to implement a proposed
AOS as requested by the source.
Clarify that the compliance plan requirements for
applications must address proposed AOSs when an application includes
them.
Clarify that applications must contain documentation that
the source has obtained all authorizations required under the
applicable requirements relevant to a proposed AOS or a certification
the source has submitted all relevant materials for obtaining such
authorizations.
Clarify that permits must contain all authorizations as
required under the applicable requirements relevant to an AOS.
Use consistent terminology wherever the rules refer to
AOSs.
We are not finalizing other proposed requirements relating to the
specific content of AOSs in logs and permits and to the need to report
AOS implementation every 6 months. We have been persuaded by the
commenters on the proposal that these potential new requirements would
not be necessary and may, in fact, be counterproductive.
In the final rules with respect to ARMs, we are adding the proposed
definition of ARM and supplementing it with two clarifications added in
40 CFR 70.6(a)(1): (1) As is currently the case for AOSs, the source
must identify in its application a potential ARM and the permitting
authority must then choose to approve it before the ARM can be
effective; and (2) an ARM cannot be used to circumvent any other
applicable requirement. Although ARMs can reduce the number of
potential permit revisions that a source must otherwise request, an ARM
must be consistent with and implement an applicable requirement or
requirement of part 70. We are not finalizing the proposed requirement
for sources to identify in the 6-month monitoring report any ARMs
implemented during the reporting period. Instead, we are clarifying
that implementation records for all ARMs use must be kept on-site by
the source.
Because the final rules represent clarifications to the existing
part 70 regulations, we believe that many States will be able to
implement the final rules without revising their regulations. This
belief is further based on the pilot experience and on the comments
received from States who affirmed that their current authority was
sufficient to implement both AOSs and ARMs (i.e., no State rulemaking
was thought to be needed to incorporate the new definitions and
clarified requirements).
However, since the AOS provisions are impacted by the rule and are
one of the part 70 program minima, and State part 70 programs differ,
some States may revise their current part 70 program to add sufficient
authority to implement the final rule or opt to make current authority
on flexible permits more explicit.
With respect to AOSs, for those States that believe they lack
authority under their current part 70 programs to implement the final
rule, or that chose to make current authority more explicit, such
States should submit proposed revisions to their title V operating
permits program to their EPA Regional Offices pursuant to 40 CFR
70.4(i). For other States if, based on their subsequent efforts to
implement the final rule, we determine in writing that a particular
part 70 program does not provide sufficient authority to implement the
final rule or is inconsistent with the final rule, then the relevant
State must revise the program pursuant to 40 CFR 70.4(i). Accordingly,
the State will have, from the date of our written determination, 180
days, or such other period as the Administrator may specify following
notification by the Administrator, or within 2 years if the State
demonstrates that additional legal authority is necessary to make the
required program revisions, to submit a proposed operating permit
program revision consistent with the final rule to us for review and
approval.
With respect to ARMs, States may choose to send us specific
revisions to their current programs at any time. There is no mandate
for part 70 programs to contain provisions specific to ARMs. Thus,
States are not obligated to revise their part 70 programs in this
regard as a result of this final rule. However, optional rule changes
may be useful to some States in implementing the final rule more
effectively and to achieve the anticipated administrative benefits
attributed to ARM implementation.
Regardless of whether States revise their rules to incorporate the
part 70 rule changes that are being finalized in this action, the
Agency wishes to reiterate that inclusion of AOSs or ARMs in a title V
permit remains an essentially voluntary activity. A source owner in
deciding whether to propose one must first determine that an AOS and/or
ARM would be useful in increasing certainty and flexibility and then
the permitting authority must determine whether or not to grant the
source's request for an AOS and/or ARM. The permitting authority, on a
case-by-case basis, may reject source proposals as inadequate to assure
compliance with the underlying applicable requirements or otherwise
inappropriate, depending on the specific facts of the situation.
B. What Changes to Parts 51 and 52 Is EPA Finalizing?
We are not finalizing any changes to the NSR program in parts 51
and 52. We did not propose any changes to the regulations for minor NSR
based on our experience with several pilot States. Comments received on
the proposal affirmed that the relevant pilot experience was broadly
applicable and that States, in general, have sufficient existing
authority to advance approve minor NSR, where they determine it
appropriate to do so, and to incorporate the permit terms accomplishing
this approval into title V permits as applicable requirements. As a
result, we continue to believe revisions to our part 51 minor NSR
regulations are not necessary. Where States are considering revisions
to their current minor NSR programs to provide more explicit authority
for authorizing advance approvals, EPA is willing to discuss possible
revisions and to review any rule changes proposed by the State,
consistent with 40 CFR 51.160 through 51.164.
We have also decided to terminate our rulemaking proposal for Green
Groups. As discussed more fully later in this preamble, we instead
intend to support States and sources who wish to explore the
flexibilities available under the existing major NSR regulations. Upon
request to do so, EPA is willing to assist States in an evaluation of
their current SIPs and to discuss possible
[[Page 51423]]
replacement provisions with them consistent with our 40 CFR 51.165 and
51.166 regulations governing NA NSR and PSD SIPs.
C. What Approach Is Being Used To Discuss the Final Actions?
The final actions relative to parts 70 and 71 and to parts 51 and
52 are subsequently discussed in four sections entitled: V. Advance
Approval of Minor NSR; VI. Alternative Operating Scenarios (AOSs); VII.
Approved Replicable Methodologies (ARMs); and VIII. Green Groups. Each
of these sections first summarizes what we proposed and the significant
reactions of commenters to our proposal, and then describes what EPA is
finalizing as a result. A more comprehensive summary and analysis of
the written comments received can be found in our Response to Comments
document, which is available in the public docket for this rulemaking
as described in the ADDRESSES section of this preamble.
D. What Are EPA's Recommendations for Public Participation in Flexible
Permitting?
Based on our experience with pilot permits, we believe that FAPs
provide at least as much environmental protection as conventional
permits and often promote superior environmental performance.
Nevertheless, we also recognize that FAPs will contain features, such
as AOSs, ARMs, or advance approval of minor NSR, that may not be
familiar to the reviewing public at least until these approaches are
more widely used. For this reason, we encourage permitting authorities
to consider using their discretion to enhance the relevant public
participation process (as currently required in both title V and NSR
regulations), as appropriate, for a particular FAP. Some
recommendations which we found to work well in the context of the pilot
permits are described below.
During the permitting process, permitting authorities could
consider making the permit application available to the public soon
after receipt. We found in pilot permits that early outreach to the
community, rather than waiting until the draft permit was prepared, was
an effective public participation strategy. Some permitting authorities
have also found it useful to issue a local press release (in addition
to a conventional notice in the newspaper) when a permit containing
innovative approaches is released for comment. Press releases have
potential to reach more people and raise local awareness of FAP
approaches.
The minimum public comment period required for a title V permit
renewal or significant permit modification is 30 days. Where a
significant amount of a permit's content consists of terms to
incorporate operational flexibility, we suggest that permitting
authorities consider expanding the comment period to 45 days or more.
Note, however, that for some pilot permits, an up-front outreach to the
public was sufficient to resolve community questions and comments early
in the process, so that by the time of the public hearing and comment
period no adverse comments were received.
Finally, in order to ensure adequate technical support and
accessibility for the public in their efforts to understand and comment
upon FAPs, we suggest that permitting authorities provide a principal
point of contact for responding to technical questions and ensure the
availability of draft permits, applications, and technical support
documents on an Internet Web site. We believe that any additional costs
here will be offset by the subsequent administrative cost savings to
the permitting authority resulting from the reduced need to process
permit revisions for sources with FAPs.
E. What Types of Support Does EPA Intend To Offer?
The Agency anticipates that the effort by States and sources to
investigate FAPs will involve a potentially wide spectrum of sources
(see section I.A). As a result, EPA intends to provide general support
to States, sources, and the public on this and other FAP topics,
potentially in the form of a Web site, workshops, and an EPA network of
contacts. In addition, we will consider other types of support to
individual States where requested to do so.
V. Advance Approval of Minor NSR
A. Background
Pursuant to section 110(a)(2)(C) of the Act and its implementing
part 51 regulations (see 40 CFR 51.160 through 51.164), States are
required to adopt minor NSR programs that complement their major NSR
programs required under parts C and D of title I the Act. Given the
general nature of these requirements, the content of minor NSR programs
varies widely among the States. Regardless of their specific
provisions, through the pilot permit experience, we found that State
minor NSR requirements, where applicable, are among the most important
in designing a FAP for sources making frequent and/or rapid physical
and operational changes. Absent an up-front authorization for these
changes under minor NSR (usually categories or types of changes), an
individual review by the permitting authority typically is required at
the time each change would be approved.
We refer to up-front, categorical authorizations as ``advance
approvals'' under minor NSR.\14\
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\14\ ``Advance approval'' generally refers to an authorization
to make certain categories or types of changes which is issued to a
source by its permitting authority pursuant to a specific applicable
requirement that requires approval prior to making subject changes
(e.g., minor and major NSR, section 112(g), etc.). Changes within
the types or categories of changes which are advance approved can
subsequently be made over the duration of the permit without further
review or approval by the permitting authority with respect to the
particular applicable requirement for which the changes are advance
approved. In order to explore use of a specific advance approval, a
source would first propose its use which then could be accepted or
rejected by the permitting authority, as appropriate. Advance
approvals authorized under one particular applicable requirement
(e.g., advance approvals under minor NSR) may also address
additional requirements which may or may not themselves require
prior approval before the specified changes can be made (e.g., MACT,
NSPS, and State air toxics requirements).
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Upon examining the provisions of their minor NSR programs, most of
the States in which pilot permits were conducted (``pilot States'')
found that they could issue advance approvals under existing minor NSR
authority for a wide spectrum of changes, provided that certain
boundary conditions were established in the minor NSR permit. The
conditions established in the minor NSR permit to accomplish such
approvals varied depending upon the requirements of the different State
minor NSR programs and the specific facts of the particular situation.
The pilot permits employed several types of techniques to
authorize, in a practicably enforceable manner, a category of changes
under minor NSR. These techniques, while not necessarily transferable
in all aspects to other permitting situations, do represent field-
tested reference points from which similar advance approval approaches
can be considered by other permitting authorities. Ultimately, as with
all FAP approaches, in order for a minor NSR project proposing use of
an advance approval to be viable, the source must first propose it to
the permitting authority, and the permitting authority must then agree
to pursue it in the context of its own SIP-approved minor NSR rules and
the case-specific facts.
Permitting authorities in pilot States employed the following
approaches and safeguards when authorizing the advance approval of
minor NSR:
Scope of minor NSR project--Permitting authorities were
able to rely
[[Page 51424]]
upon available flexibility to interpret the relevant SIP-approved
definitions (e.g., emissions unit, facility, source) in order to
fashion a reasonable scope and duration of the minor NSR pilot project
(i.e., ones that provide appropriate operational flexibility for the
particular situation while ensuring environmental protection). In
general, these advance approvals (i.e., the minor NSR projects) consist
of several categories of potential changes anticipated to occur over an
appropriately defined period of time (e.g., a range of possible types
of changes, such as ``any of various physical changes to the rollers,
drive mechanism, and other components of the coating section within a
coating line''). In their permit applications requesting advance
approval of minor NSR, pilot sources described these changes in
sufficient detail to allow the permitting authority to conduct the
relevant ambient air impact and control technology reviews, to
determine relevant applicable requirements, and to assess the
compatibility of the changes with the approved emissions reduction and
monitoring approaches. The SIP-approved requirements concerning the
timeliness of the approved construction project vary among the pilots,
depending upon the content of the approved SIP and the ability to
characterize the project (as deemed appropriate by the permitting
authority) as a series of related ongoing changes.
Non-applicability of major NSR--In order to assure the
types of changes authorized under the advance approvals for minor NSR
could subsequently occur without further review and approval by the
permitting authority, the pilot permits contain terms to prevent major
NSR from also applying to the same changes. These terms typically
involve either a PAL based on actual emissions or a potential to emit
(PTE) cap to prevent an existing source from becoming major, depending
on whether the source is already major or not for the pollutant(s)
involved in the advance approval of minor NSR.
Control technology requirements--Permitting authorities
imposed terms in pilot permits as necessary to assure compliance with
all applicable control requirements. In all pilot permits, these terms
require compliance with Federal standards (e.g., MACT, NSPS, NESHAPs)
that continue to apply regardless of the approach taken to advance
approve minor NSR. In addition, the advance approved changes must meet
any applicable SIP requirements, including those in some States to
apply best available technology (BAT) to certain changes subject to
their minor NSR programs. In those pilot permits subject to a State BAT
requirement, permitting authorities also determined whether the advance
approval allowed discrete changes with later construction times and
whether any initial BAT determination for them would require re-
evaluation.
Protection of ambient standards--Pilot permits contain
terms judged appropriate by the permitting authority to assure that the
minor NSR pilot project would not interfere with the attainment and
maintenance of the NAAQS. Typically, since the advance approvals
requested by the pilot sources involved VOC emissions, pilot projects
primarily focused on protecting the ozone NAAQS. The plantwide VOC
emissions caps used in the pilots were determined to be adequate for
purposes of safeguarding the ozone NAAQS, but for other pollutants
(e.g., air toxics) States sometimes required a replicable modeling
procedure to screen the impacts of individual emissions increases
relative to acceptable ambient levels. In the case of one pilot, an
ambient dispersion model, complete with implementation assumptions, was
included in the permit to evaluate any new air toxic pollutants of
concern, or increases in existing toxic pollutants. Failure of a
particular change to meet the screening levels triggered a case-by-case
review of that change by the permitting authority. Additional
safeguards were imposed to a varying extent, as applicable and as
deemed appropriate, by the permitting authority to address averaging
time concerns potentially applicable to NAAQSs other than ozone.
Public participation--Each pilot permit project was
subjected to an opportunity for public comment. Often this process was
enhanced to facilitate better understanding and support for the
project. (See section IV.D.)
To augment initial application information, pilot States, as part
of authorizing advance approvals under their existing minor NSR
programs, frequently decided to require sources to send a notice to the
permitting authority contemporaneous with the operation of any entirely
new emissions unit relying upon the advance approval. Pilot States were
also able to add other permit terms, where necessary, to make
enforceable any advance approvals of minor NSR that were authorized.
Often the permitting authorities were able in pilot permits to
streamline various permit terms so as to accomplish multiple objectives
and to simplify the overall permit. For example, the pilot source
frequently requested its permitting authority to establish in the minor
NSR permit a plantwide VOC emissions cap at a particular level for two
purposes. First, the level was requested to prevent the applicability
of major NSR. In cases where the existing plantwide VOC emissions were
below the major source threshold, the permitting authority approved an
emissions cap to constrain the PTE of the source in a practicably
enforceable fashion so that it would not be a major source of VOC
emissions for purposes of PSD. In other cases, where the source was an
existing major stationary source for its VOC emissions, the source
requested a plantwide cap level to function as a PAL. In response, the
permitting authority approved the requested PAL consistent with the PAL
provisions of the major NSR regulations (see, e.g., 40 CFR 52.21(aa)).
Accordingly, compliance with the PAL ensures that major NSR would not
apply to any future changes made at the source during the time period
over which the PAL was effective. Second, the VOC emissions level
established in the PTE cap or in the PAL, as applicable, was
interpreted by the permitting authority as a sufficient safeguard to
prevent future changes approved under minor NSR, in combination with
existing source emissions, from interfering with the ozone NAAQS. As
such, the VOC emissions cap would both prevent major NSR from applying
to changes at the source and ensure that the advance approval of
changes under minor NSR does not jeopardize the NAAQS. Given the
strategic importance of such caps, pilot sources typically maintained a
significant margin of safety between their actual plantwide emissions
and the level required by their emissions cap(s).
Under the current part 70 regulations, any permit terms
accomplishing an advance approval pursuant to a SIP-approved minor NSR
program must be incorporated into the title V permit as applicable
requirements, and combined with other permit terms established in the
part 70 permit as necessary to assure compliance with all requirements
that will apply when the approved changes are subsequently implemented.
Thus, the part 70 permit would include the requirements directly
addressed in the minor NSR permit, as well as other requirements that
the minor NSR permit did not address, if any. Changes advance approved
under minor NSR can then be implemented without any further review or
approval by the permitting authority, provided that the terms of the
authorizing minor NSR permit are effective upon its issuance and are
incorporated into the title V
[[Page 51425]]
permit as applicable requirements consistent with 40 CFR 70.2.
In our evaluation of pilot permits,\15\ we found that the use of
advance approvals under minor NSR improved operational efficiency at
the plants because companies knew in advance what changes were
authorized, making resource allocation more efficient and accommodating
the typically incremental, iterative nature of industrial process
improvements. We also found that P2 projects approved in advance became
more attractive to the companies because such projects could be
undertaken without the delay and uncertainty of future case-by-case
approvals. In addition, P2-related projects reduced emissions and
enabled sources to comply more easily with emissions limits such as the
plantwide emissions caps that were often features of the pilot permits.
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\15\ See footnote 9 for information on where to obtain our
report ``Evaluation of the Implementation Experience with Innovative
Air Permits.''
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As mentioned above, pilot permit experience indicates that
obtaining advance approval under minor NSR is often a critical element
in the design of a FAP. This experience also suggests that many State
minor NSR programs may already provide, in situations judged to be
appropriate by the permitting authority, the legal authority necessary
to issue minor NSR permits that accommodate various types of
operational flexibility, which can be readily incorporated into title V
permits. Although we did not propose any revisions to the minor NSR
regulations at 40 CFR 51.160 through 51.164, we used the proposal
preamble to encourage States to implement advance approvals in response
to requests by sources under their existing minor NSR programs, as
appropriate, and to seek additional authority to consider source
proposals where they do not currently have such discretion. Based on
pilot experience, we also expressed our belief that permitting
authorities can often advance approve changes with respect to other
applicable requirements that require a specific authorization without
regulatory changes. See 72 FR 52215.
We proposed one revision to part 70 to facilitate the use of
advance approvals under minor NSR, which, as mentioned, often rely upon
one or more emissions caps to accomplish their authorizations.\16\ This
revision to 40 CFR 70.5(c)(3)(iii) would clarify that for emissions
units subject to an annual emissions cap, the title V permit
application may report the units' emissions (in tons per year) as part
of the aggregate emissions associated with the cap, except where more
specific information is needed to determine and/or assure compliance
with an applicable requirement.
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\16\ In the proposal preamble, we discussed this proposed
clarification as a revision for purposes of AOSs (72 FR 52219). We
now believe that it is more appropriately portrayed as a revision in
support of advance approvals under minor NSR.
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As explained in the proposal preamble (72 FR 52219), the
introductory text in 40 CFR 70.5(c) states generally that the
application must include information for each emissions unit. Existing
40 CFR 70.5(c)(3)(iii) further requires that the application provide
the emissions rate in tons per year and in such terms as are necessary
to establish compliance consistent with the applicable reference test
method. We proposed to clarify this regulatory requirement as it
applies to sources subject to title V permitting requirements that
employ an annual emissions cap (e.g., caps which are PALs, limit PTE,
and/or enable advance approval for minor NSR). In particular, we
proposed that for the operation of any emissions unit authorized under
an annual emissions cap, a source can meet 40 CFR 70.5(c)(3)(iii) by
reporting the aggregate emissions associated with the cap.
We noted in the proposal preamble that under the proposed approach,
an emissions cap could be thought of as a constraint on annual
emissions from each emissions unit under the cap as well as on the
aggregated emissions from the group of units. That is, in the extreme,
a unit could emit up to the full amount of the cap if all other units
under the cap had zero emissions. Thus, for a group of emissions units
under an annual emissions cap, the 40 CFR 70.5(c)(3)(iii) requirement
for unit-by-unit emissions figures could be met by reporting in the
permit application that the emissions cap represents the upper limit on
emissions both from each unit in the group and from the entire group.
The proposed revision to 40 CFR 70.5(c)(3)(iii) would simply clarify
that in this particular situation, more specificity is not needed in
the title V permit application (unless additional specificity is
necessary to determine applicability or to assure compliance with one
or more potentially applicable requirements). Reporting emissions data
in this manner would be permissible except where the permitting
authority determined that more specific emissions information was
needed (e.g., where an applicable requirement for a specific emissions
unit depends on the emissions type or level, or where annual emissions
figures are needed to assess compliance for the unit).
We did not propose any other revisions to part 70 related to
advance approvals under minor NSR. Part 70 already requires
incorporation into a title V permit of the terms of any State minor NSR
permit, including those issued to advance approved changes. These
permit terms are themselves applicable requirements as defined in 40
CFR 70.2. Sometimes, however, the permitting authority may need to
include other terms in the title V permit, in addition to the terms of
a minor NSR permit authorizing advance approved changes, so that the
changes can be made without further review or approval. This would be
the case if there were other applicable requirements also implicated by
the advance approved changes that were not addressed in the minor NSR
permit. In such cases, the part 70 permit must assure compliance with
these applicable requirements as well.
We pointed out in the proposal preamble that an advance approval
that is incorporated into a part 70 permit remains subject to all the
conditions of the underlying authorization. For example, if an
underlying minor NSR permit is contingent upon the source commencing
construction of the authorized change(s) within a certain period, the
part 70 permit must contain terms to ensure that the part 70 permit
does not authorize operation if the source fails to meet the required
deadline. The source is responsible for obtaining any extensions or
additional authorizations as necessary to keep the advance approval in
the part 70 permit in effect. See 72 FR 52217, footnote 23.
In the proposal preamble we also noted that an advance approval
under minor NSR may be added to a title V permit through permit
issuance or renewal or through the permit revision process. When an
existing permit is to be revised to incorporate an advance approval of
minor NSR, the appropriate revision track depends on the nature of the
proposed advance approval and the process under which it was
established (e.g., whether the authorizing NSR process also addressed
title V requirements). See 40 CFR 70.7(d) & (e). Note also that the
permit shield (where available and granted by the permitting authority)
can be extended to advance approvals added through permit issuance or
permit renewal or to those added during a significant permit
modification, but not to those added through other permit revision
procedures.
Commenters generally agreed that no Federal rulemaking is needed on
the advance approval of changes under minor NSR because States
currently can,
[[Page 51426]]
at their discretion, employ a variety of advance approval techniques
under their existing rules and authorities. Some commenters indicated
that any new Federal rules might actually constrain innovation by the
States in this area, rather than enable greater use of advance
approvals. A commenter noted that some State minor NSR programs require
contemporaneous minor source BACT determinations that are not
consistent with the advance approval of a wide spectrum of changes, and
some expressed concern about the burden and other costs that advance
approval permits could impose upon State agencies for uncertain
projects and uncertain environmental gain.
Several industry commenters urged EPA to further encourage States
to issue advance approvals und
