Approval and Promulgation of Implementation Plans; Oregon: New Source Review/Prevention of Significant Deterioration Rule Revisions and Air Quality Permit Streamlining Rule Revisions, 59090-59102 [2011-24525]

Agencies

• ENVIRONMENTAL PROTECTION AGENCY

[Federal Register Volume 76, Number 185 (Friday, September 23, 2011)]
[Proposed Rules]
[Pages 59090-59102]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-24525]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R10-OAR-2011-0767, FRL-9470-6]


Approval and Promulgation of Implementation Plans; Oregon: New 
Source Review/Prevention of Significant Deterioration Rule Revisions 
and Air Quality Permit Streamlining Rule Revisions

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: EPA is proposing to approve a portion of the State 
Implementation Plan (SIP) revision submitted by the State of Oregon for 
the purpose of addressing the third element of the interstate transport 
provisions of Clean Air Act (CAA or the Act) section 
110(a)(2)(D)(i)(II) for the 1997 8-hour ozone National Ambient Air 
Quality Standards (NAAQS or standards) and the 1997 and 2006 fine 
particulate matter (PM2.5) NAAQS. The third element of CAA 
section 110(a)(2)(D)(i)(II) requires that a State not interfere with 
any other State's required measures to prevent significant 
deterioration (PSD) of its air quality.
    EPA is also proposing to approve numerous revisions to the Oregon 
SIP that were submitted to EPA by the State of Oregon on October 8, 
2008; October 10, 2008; March 17, 2009; June 23, 2010; December 22, 
2010 and May 5, 2011. The revisions include updating Oregon's new 
source review (NSR) rules to be consistent with current Federal 
regulations and streamlining Oregon's air quality rules by clarifying 
requirements, removing duplicative rules, and correcting errors. The 
revisions were submitted in accordance with the requirements of section 
110 and part D of the Act).

DATES: Comments must be received on or before October 24, 2011.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R10-
OAR-2011-0767, by any of the following methods:
     https://www.regulations.gov: Follow the on-line 
instructions for submitting comments.
     E-mail: R10-Public_Comments@epa.gov.
     Mail: Scott Hedges, EPA Region 10, Office of Air, Waste 
and Toxics (AWT-107), 1200 Sixth Avenue, Suite 900, Seattle, WA 98101.
     Hand Delivery/Courier: EPA Region 10, 1200 Sixth Avenue, 
Suite 900, Seattle WA, 98101. Attention: Scott Hedges, Office of Air, 
Waste and Toxics, AWT-107. Such deliveries are only accepted during 
normal hours of operation, and special arrangements should be made for 
deliveries of boxed information.
    Instructions: Direct your comments to Docket ID No. EPA-R10-OAR-
2011-0767. EPA's policy is that all comments received will be included 
in the public docket without change and may be made available online at 
https://www.regulations.gov, including any personal information 
provided, unless the comment includes information claimed to be 
Confidential Business Information (CBI) or other information whose 
disclosure is restricted by statute. Do not submit information that you 
consider to be CBI or otherwise protected through https://www.regulations.gov or e-mail. The https://www.regulations.gov Web site 
is an ``anonymous access'' system, which means EPA will not know your 
identity or contact information unless you provide it in the body of 
your comment. If you send an e-mail comment directly to EPA without 
going through https://www.regulations.gov your e-mail address will be 
automatically captured and included as part of the comment that is 
placed in the public docket and made available on the Internet. If you 
submit an electronic comment, EPA recommends that you include your name 
and other contact information in the body of your comment and with any 
disk or CD-ROM you submit. If EPA cannot read your comment due to 
technical difficulties and cannot contact you for clarification, EPA 
may not be able to consider your comment. Electronic files should avoid 
the use of special characters, any form of encryption, and be free of 
any defects or viruses.
    Docket: All documents in the docket are listed in the https://www.regulations.gov index. Although listed in the index, some 
information is not 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. Publicly available docket 
materials are available either electronically in https://www.regulations.gov or in hard copy during normal business hours at the 
Office of Air, Waste and Toxics, EPA

[[Page 59091]]

Region 10, 1200 Sixth Avenue, Seattle, WA 98101.

FOR FURTHER INFORMATION CONTACT: Scott Hedges at telephone number: 
(206) 553-0296, e-mail address: hedges.scott@epa.gov, or the above EPA, 
Region 10 address.

SUPPLEMENTARY INFORMATION: Throughout this document wherever ``we'', 
``us'' or ``our'' are used, we mean EPA. Information is organized as 
follows:

Table of Contents

I. Purpose of Proposed Action
II. Oregon SIP Revisions
    A. Third PSD Element of Oregon's Interstate Transport SIP for 
the 1997 Ozone and 1997 and 2006 PM2.5 NAAQS
    B. How Oregon's NSR/PSD Permitting Program Meets Federal 
Requirements
    1. Oregon's NSR/PSD Rule Revisions
    2. Analysis of Oregon's NSR/PSD Revisions
    C. Agricultural Operations (as Specified in Oregon Revised 
Statute 468A.020)
    D. Permitting Rule Corrections, Clarifications and Streamlining
    1. Rule Revisions in the October 10, 2008 SIP Submittal
    2. Rule Revisions in the March 17, 2009 SIP Submittal
    3. Rule Revisions in the June 23, 2010 SIP Submittal
    E. Significant Changes to Oregon's SIP
III. EPA's Proposed Action
    A. Rules to Approve Into SIP
    B. Rules on Which No Action Is Taken
IV. Statutory and Executive Order Reviews

I. Purpose of Proposed Action

    EPA proposes to approve a portion of Oregon's Interstate Transport 
SIP revision for the 1997 8-hour ozone and 1997 and 2006 
PM2.5 NAAQS submitted by the Oregon Department of Quality 
(ODEQ) on June 23, 2010, and December 22, 2010.\1\ Specifically, we are 
proposing to approve the portion of the plan that addresses the third 
element of section 110(a)(2)(D)(i), interference with any other State's 
required measures to PSD of its air quality with respect to these 
NAAQS. On June 9, 2011, EPA approved elements one and two of CAA 
section 110(a)(2)(D)(i): (1) Significant contribution to nonattainment 
of these NAAQS in any other State, and (2) interference with 
maintenance of these NAAQS by any other State (76 FR 33650). In 
addition, on July 5, 2011, EPA approved the SIP for the fourth element 
of CAA section 110(a)(2)(D)(i) found the SIP to be adequate for element 
four: interference with any other State's required measures to protect 
visibility (76 FR 38997).
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    \1\ See transmittal letters dated June 23, 2010, from Joni 
Hammond, Deputy Director, ODEQ, and December 22, 2010, from Dick 
Pedersen, Director, ODEQ, to Dennis McLerran, Regional 
Administrator, EPA Region 10.
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    EPA is also proposing to approve multiple revisions to Oregon's SIP 
that were submitted to EPA by ODEQ on October 8, 2008, October 10, 
2008, March 17, 2009, June 23, 2010, December 22, 2010, and May 5, 
2011. The revisions update Oregon's NSR rules to be consistent with 
Federal requirements by regulating PM2.5 and precursor 
pollutants, as well as adding greenhouse gases (GHGs) to the list of 
pollutants whose emissions are subject to control under the State's NSR 
permitting process and establishes a threshold for such regulation. 
Approval of the State's GHG permitting regulations is proposed to be 
accompanied by a simultaneous withdrawal of the Federal Implementation 
Plan (FIP) that EPA promulgated on December 9, 2010 (75 FR 82246). EPA 
also proposes to approve changes to Oregon's Plant Site Emissions Limit 
(PSEL) program which address the method for establishing baseline 
emissions and adopt a threshold or significant emission rate of 10 tons 
per year of PM2.5 as a significant change at an existing 
facility. Other SIP rule changes that are proposed for approval in this 
action streamline and clarify the State's air quality rules that are 
unrelated to NSR and remove duplicative or outdated requirements (such 
as the removal of unused basic permit categories that are covered under 
the general permitting provisions of the Oregon Administrative Rules 
(OAR). The SIP submittals, described in greater detail in this Notice, 
revise and amend OAR, chapter 340, divisions 200, 202, 204, 206, 209, 
210, 214, 216, 222, 224, 225, 228, 234, and 236, currently in the 
Federally approved Oregon SIP (CFR part 52, subpart MM), and add 
portions of OAR chapter 340, division 208 to the Federal approved 
Oregon SIP. The proposed SIP revisions are explained in more detail 
below along with our evaluation of how these rules comply with the 
requirements for SIPs and the basis for our proposed action.

II. Oregon SIP Revisions

    Table 1 provides a list of each SIP submittals by ODEQ (by 
submittal date, and subject) evaluated in this proposed action. The 
paragraphs that follow Table 1 include further information for each SIP 
submittal including a summary of the submittal with relevant background 
information and analysis to support our action.
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    \2\ EPA is not proposing to take action on each of the 
regulatory provisions that were included in the five SIP submissions 
identified in Table 1. Only the SIP revisions and implementing 
regulations specifically identified in Table 2 are being proposed 
for action in today's notice.

                            Table 1--ODEQ SIP Submittals Addressed in This Action \2\
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           Date of submittal                                             Subject
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10/08/2008............................  Statutory Agricultural Operations Exemption.
10/10/2008............................  Permit Streamlining Rules.
                                        (Repealed Rules in Italics).
03/17/2009............................  Plant Site Emission Limit (PSEL) Rule.
06/23/2010 (Report on interstate        Infrastructure SIP Rule Changes.
 transport of PM2.5 and ozone added to
 submittal on 12/22/2010).
05/05/2011............................  NSR, PM2.5, and GHG Permitting Rule Updates.
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    Title I of the CAA, as amended by Congress in 1990, specifies the 
general requirements for States to submit SIPs to attain and/or 
maintain the NAAQS and EPA's actions regarding approval of those SIPs. 
With this action we are proposing approval of the third element of 
Oregon's Interstate Transport SIP revision for the 1997 8-hour ozone 
and 1997 and 2006 PM2.5 NAAQS related to PSD.
    EPA last approved the Oregon major NSR rules (which encompass PSD 
and part D NSR) on December 17, 2002 (published January 22, 2003, 68 FR 
2891). That approval acted on a July 1, 2001, comprehensive version of 
Oregon's NSR rules submitted to EPA on June 26, 2001, prior to the 2002 
NSR Reform Rules (published on December 31, 2002, effective date March 
3, 2003). Since the approval of the State's July 2001 rules, ODEQ has 
submitted several NSR/PSD rule revisions for

[[Page 59092]]

incorporation into the Federally approved SIP including, most recently, 
the changes needed for the permitting of PM2.5 and GHGs 
under ODEQ's major NSR program. The regulations which are proposed for 
approval in this action accordingly include PSD permitting of 
PM2.5 and GHGs and nonattainment NSR permitting of 
PM2.5.
    Finally, EPA is also proposing to approve multiple SIP submittals 
containing ODEQ rule revisions that effectuate structural 
reorganizations of the Oregon code. These rules have been clarified and 
streamlined with duplicative and outdated requirements removed. Further 
background for each one is provided in the section below.

A. Third PSD Element of Oregon's Interstate Transport SIP for the 1997 
Ozone and 1997 and 2006 PM2.5 NAAQS

    On July 18, 1997, EPA promulgated the 1997 8-hour ozone \3\ NAAQS 
and the 1997 PM2.5 NAAQS.\4\ Additionally on December 18, 
2006, EPA revised the 1997 24-hour PM2.5 standard.\5\ 
Today's proposed actions relate to these revised standards (the 1997 8-
hour ozone NAAQS and the 1997 and 2006 PM2.5 NAAQS).
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    \3\ See 62 FR 38856. The level of the 1997 8-hour ozone NAAQS is 
0.08 parts per million (ppm). 40 CFR 50.10. The 8-hour ozone 
standard is met when the 3-year average of the annual 4th highest 
daily maximum 8-hour ozone concentrations is 0.08 ppm or less (i.e., 
less than 0.085 ppm based on the rounding convention in 40 CFR part 
50, appendix I). This 3-year average is referred to as the ``design 
value.''
    \4\ See 62 FR 38652. The level of the 1997 PM2.5 
NAAQS are 15.0 [mu]g/m\3\ (annual arithmetic mean concentration) and 
65 [mu]g/m\3\ (24-hour average concentration). 40 CFR 50.7. The 
annual standard is met when the 3-year average of the annual mean 
concentrations is 15.0 [mu]g/m\3\ or less (i.e., less than 15.05 
[mu]g/m\3\ based on the rounding convention in 40 CFR part 50, 
appendix N section 4.3). The 24-hour standard is met when the 3-year 
average annual 98th percentile of 24-hour concentrations is 65 
[mu]g/m\3\ or less (i.e., less than 65.5 [mu]g/m\3\ based on the 
rounding convention in 40 CFR part 40 appendix N section 4.3). Id. 
These 3-year averages are referred to as the annual PM2.5 
and 24-hour PM2.5 ``design values,'' respectively.
    \5\ See 71 FR 61144. In 2006, the 24-hour PM2.5 NAAQS 
standard was changed from 65 [mu]g/m\3\ to 35 [mu]g/m\3\ (24-hour 
average concentration). The annual PM2.5 standard was not 
changed. 40 CFR 50.13.
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    Section 110(a)(1) of the CAA requires States to submit SIPs to 
address a new or revised NAAQS within three years after promulgation of 
such standards, or within such shorter period as EPA may prescribe. 
Section 110(a)(2) lists the elements that such new SIPs must address, 
as applicable, including section 110(a)(2)(D)(i) which pertains to 
interstate transport of certain emissions. On August 15, 2006, and 
September 25, 2009, respectively, EPA issued guidance for States making 
submissions to meet the requirements of section 110(a)(2)(D)(i) for the 
1997 8-hour ozone and 1997 PM2.5 standards (2006 Guidance) 
\6\ and for the 2006 PM2.5 standards (2009 Guidance).\7\
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    \6\ Memorandum from William T. Harnett entitled ``Guidance for 
State Implementation Plan (SIP) Submissions to Meet Current 
Outstanding Obligations Under Section 110(a)(2)(D)(i) for the 8-hour 
ozone and PM2.5 National Ambient Air Quality Standards,'' 
August 15, 2006.
    \7\ Memorandum from William T. Harnett entitled ``Guidance SIP 
Elements Required Under Sections 110(a)(1) and (2) for the 24-hour 
Particle (PM2.5) National Ambient Air Quality Standards 
(NAAQS),'' September 25, 2009.
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    The interstate transport SIP provisions in section 110(a)(2)(D)(i) 
(also called ``good neighbor'' provisions) require each State to submit 
a SIP that contains provisions that prohibit emissions that adversely 
affect another State in the ways contemplated in the statute. Section 
110(a)(2)(D)(i) identifies four distinct elements related to the 
evaluation of impacts of interstate transport of air pollutants. In 
this rulemaking EPA is addressing the third element in this subsection. 
The third element of section 110(a)(2)(D)(i) requires a SIP to contain 
adequate provisions prohibiting emissions that interfere with any other 
State's required measures to prevent significant deterioration of its 
air quality.
    As a part of its SIP submittal addressing interstate transport, 
ODEQ submitted an analysis entitled ``Oregon SIP Infrastructure for 
Addressing the Interstate Transport of Ozone and Fine Particulate 
Matter'', dated November 5, 2009, to EPA on December 22, 2010.\8\ EPA 
believes that ODEQ's submission is consistent with EPA's 
recommendations in both the 2006 and 2009 Guidance, when evaluated in 
conjunction with the NSR/PSD rule revisions that EPA proposes to 
approve in today's action. EPA's proposed approval of Oregon's SIP 
submission for purposes of meeting the requirements of section 
110(a)(2)(D)(i) is contingent upon the final approval of the NSR/PSD 
rule revisions also included in this proposed action. (In addition to 
this section, see sections II. C through E of this action for a 
discussion of the rule revisions proposed for approval.)
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    \8\ This interstate transport report was inadvertently left out 
of the original June 23, 2010, SIP submittal.
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    EPA proposes to find that the Oregon SIP (40 CFR part 52 subpart 
MM), as amended by today's proposed action, includes the requirements 
under the CAA necessary to avoid interference with another State's SIP 
measures for preventing significant deterioration of air quality.
    Oregon has no EPA designated 8-hour ozone nonattainment areas, and 
has two designated 24-hour PM2.5 nonattainment areas 
(Klamath Falls and Oakridge). For most of the State, ODEQ permits new 
major industrial sources through the PSD program for these pollutants. 
ODEQ's major NSR rules (division 224--which includes both nonattainment 
NSR and PSD rule provisions), as reflected in the rules proposed for 
incorporation into the SIP in today's action, ensure that the programs 
for PSD in other States are not jeopardized by new or expanding 
industrial sources. Specifically, all new industrial sources and major 
modifications to existing industrial sources in attainment areas are 
subject to ODEQ PSD rules requiring pre-construction review, air 
quality analysis, the application of any required emission control 
technology, and air permitting. All new sources and major modifications 
in nonattainment areas are subject to the nonattainment New Source 
Review provisions of these rules, including LAER, offsets, and net air 
quality benefit. ODEQ's PSD program directly regulates PM2.5 
meeting the requirements of NSR/PSD and also includes procedures to 
address Phase-II requirements of the final rule to implement the 8-Hour 
Ozone NAAQS.
    EPA believes that Oregon's regulatory and SIP revision for the 1997 
8-hour ozone NAAQS that makes NOX a precursor for ozone for 
PSD purposes and the PSD revision for the 1997 and 2006 
PM2.5 NAAQS that makes SO2 and NOX 
precursors for PM2.5 for PSD purposes, taken together with 
the other revised PSD rule revisions that EPA proposes to approve in 
this action, satisfy the requirements of the third element of section 
110(a)(2)(D)(i) for the 1997 8-hour ozone NAAQS and the 1997 and 2006 
PM2.5 NAAQS. That is, these provisions ensure that there 
will be no interference with any other State's required PSD measures 
because Oregon's SIP, as proposed for approval in this action, will 
meet current CAA requirements for PSD.

B. How Oregon's NSR/PSD Permitting Program Meets Federal Requirements

    Parts C and D of title I of the CAA, 42 U.S.C. 7470-7515, set forth 
preconstruction review and permitting programs applicable to new and 
modified stationary sources of air pollutants regulated under the CAA, 
known as ``major New Source Review'' or ``major NSR.'' The major NSR 
programs of the CAA include a combination of air quality planning and 
air pollution control technology program requirements. States adopt

[[Page 59093]]

major NSR programs as part of their SIP. Part C is the ``Prevention of 
Significant Deterioration'' or ``PSD'' program, which applies in areas 
that meet the NAAQS (i.e., ``attainment'' areas) as well as in areas 
for which there is insufficient information to determine whether the 
area meets the NAAQS (i.e., ``unclassifiable'' areas). Part D is the 
``Nonattainment New Source Review'' or the ``NNSR'' program, which 
applies in areas that are not in attainment of the NAAQS (i.e., 
``nonattainment areas''). EPA regulations implementing these programs 
are contained in 40 CFR 51.165, 51.166, 52.21, 52.24, and part 51, 
appendix S.
    On December 31, 2002, EPA published final rule changes to the PSD 
and NNSR programs (67 FR 80186) and on November 7, 2003, EPA published 
a notice of final action on the reconsideration of the December 31, 
2002 final rule changes (68 FR 63021). In the November 7, 2003 final 
action, EPA added a definition of ``replacement unit,'' and clarified 
an issue regarding plantwide applicability limitations (PALs). The 
December 31, 2002 and the November 7, 2003, final actions, are 
collectively referred to as the ``2002 NSR Reform Rules.''
    The 2002 NSR Reform Rules made changes to five areas of the major 
NSR programs related to physical and operational changes at existing 
major stationary sources. In summary, the 2002 rules: (1) Provide a new 
method for determining baseline actual emissions; (2) adopt an actual-
to-projected-actual methodology for determining whether a major 
modification has occurred; (3) allow major stationary sources to comply 
with PALs to avoid having a significant emissions increase that 
triggers the requirements of the major NSR program; (4) provide a new 
applicability provision for emissions units that are designated clean 
units; and (5) exclude pollution control projects (PCPs) from the 
definition of ``physical change or change in the method of operation.''
    After the 2002 NSR Reform Rules were finalized and effective (March 
3, 2003), various petitioners challenged numerous aspects of the 2002 
NSR Reform Rules, along with portions of EPA's 1980 NSR rules (45 FR 
5276, August 7, 1980). On June 24, 2005, the DC Circuit Court issued a 
decision on the challenges to the 2002 NSR Reform Rules. See New York 
v. United States, 413 F.3d 3 (DC Cir. 2005). In summary, the DC Circuit 
Court vacated portions of the 2002 NSR Reform Rules pertaining to clean 
units and PCPs, remanded a portion of the rules regarding recordkeeping 
(40 CFR 52.21(r)(6) and 40 CFR 51.166(r)(6)), and either upheld or did 
not comment on the other provisions included as part of the 2002 NSR 
Reform Rules. On June 13, 2007 (72 FR 32526), EPA took final action to 
revise the 2002 NSR Reform Rules to remove from Federal law all 
provisions pertaining to clean units and the PCP exemption that were 
vacated by the DC Circuit Court.
    The 2002 NSR Reform Rules require that State agencies adopt and 
submit revisions to their SIP permitting programs implementing the 
minimum program elements of the 2002 NSR Reform Rules no later than 
January 2, 2006. To meet this requirement, ODEQ submitted an NSR reform 
equivalency demonstration report on December 22, 2005.
1. Oregon's NSR/PSD Rule Revisions
    EPA last approved the Oregon major NSR rules addressing part D NSR 
and PSD on December 17, 2002 (published January 22, 2003, 68 FR 2891). 
This approval acted on a July 1, 2001, comprehensive version of 
Oregon's NSR rules submitted to EPA on June 26, 2001.
    On May 5, 2011, ODEQ submitted a series of rule changes as 
revisions to the Oregon SIP. These rule changes are necessary to align 
its rules with significant changes made to EPA's air quality permitting 
regulations, including the 2002 NSR Reform Rules (published on December 
31, 2002, effective date March 3, 2003), and the permitting of 
PM2.5 and GHG emissions. The SIP submittal covers revisions 
to OAR chapter 340, divisions 200, 202, 216, 224, 225, and 228.
    The rule revisions include the adoption of a threshold or 
significant emission rate of 10 tons per year of PM2.5 as a 
significant change at an existing facility. Facilities would trigger 
NSR/PSD permitting only if a physical or operational change increased 
emissions above this threshold. The rule revisions also include the 
adoption of levels to determine if additional ambient air quality 
analysis is required, track the cumulative impact of emissions growth 
in areas that meet air quality standards, and determine if 
preconstruction monitoring is required for PM2.5.
    The May 5, 2011, SIP submittal also includes rules to allow the 
permitting of GHG emissions under Oregon's NSR/PSD program. Oregon's 
definition of ``federal major source'' is almost identical to EPA's 
definition of ``major stationary source'' and as such, Oregon has 
tailored its PSD rules in a manner identical to EPA's with respect to 
major sources of GHG emissions. That is, for a ``federal major source'' 
to be ``major'' for GHGs under the Oregon PSD program, it must have the 
potential to emit GHGs equal to or greater than 100,000 tons per year 
on a carbon dioxide equivalent (CO2e) basis and a potential to emit 
GHGs equal to or greater than 100/250 tons per year on a mass basis.\9\ 
However, as discussed above, Oregon's definition of ``major 
modification'' is substantially different than (but equivalent to) 
EPA's definition of ``major modification'' so Oregon has tailored its 
PSD rule in a different manner in order to produce the same outcome 
with respect to major modifications for GHGs as EPA's Tailoring Rule.
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    \9\ Carbon dioxide equivalent or CO2e is a unit of measurement 
that allows the effect of different GHGs to be compared using carbon 
dioxide as a standard unit for reference.
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    In order for Oregon's PSEL-based definition to have the same effect 
as EPA's definition of ``major modification'' with respect to GHG 
emissions (i.e., an increase greater than 75,000 tons per year on a 
CO2e basis and an increase greater than ``zero'' on a mass basis), 
Oregon's rule requires the establishment of PSELs on a CO2e basis and 
an increase in the PSEL of more than 75,000 tons per year on a CO2e 
basis, before a ``major modification'' under the Oregon rules will have 
occurred.\10\ This approach is consistent with how the Oregon program 
defines major modifications for all other NSR regulated pollutants and 
results in the same outcome as EPA's Tailoring Rule with respect to 
major modifications for GHG emissions.
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    \10\ Oregon's rules use the terms ``significant emission 
threshold'' or ``significant emission rate (SER)'' for GHG PSD 
permitting purposes. However, these terms do not have the same 
meaning as ``significant'' as used in the context of EPA's PSD 
regulation at 40 CFR 51.166. EPA has not established a significant 
emission rate for GHGs under 40 CFR 51.166(b)(23)(i). Oregon's PSEL 
PSD permitting program establishes a GHG threshold of 75,000 CO2e to 
tailor the application of its PSD permitting program in a manner 
similar to EPA's GHG Tailoring Rule.
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    EPA proposes to find that these provisions are consistent with 
EPA's GHG Tailoring Rule and is proposing to approve this GHG PSD 
permitting revision into the Oregon SIP providing Oregon with the 
authority to issue PSD permits addressing GHG emissions. In addition, 
EPA will rescind the FIP codified in 40 CFR 52.1987(d) that ensures the 
availability of a PSD-permitting authority for GHG-emitting sources in 
Oregon once this proposed action has been approved into the Oregon SIP.
    Additionally the May 5, 2011, SIP submittal includes rule changes 
providing small-scale local energy

[[Page 59094]]

projects more flexibility in obtaining reductions to offset proposed 
emission increases.
    EPA has reviewed these amendments to the ODEQ rules and, as 
discussed below, has determined that they meet EPA's requirements under 
sections 110, part C and part D of title I of the CAA. EPA is therefore 
proposing to approve them as revisions to the Oregon SIP.
2. Analysis of Oregon's NSR/PSD Revisions
    In 1982, EPA approved Oregon's Major NSR/PSD program as equivalent 
to, or more stringent than, EPA's NSR/PSD regulations (47 FR 35191, 
August 13, 1982). Oregon's program includes a Major NSR rule that 
covers non-attainment NSR and PSD applicability provisions as well as a 
separate but related PSEL (plant-wide cap) rule. The PSEL rule employs 
a similar, though not identical, approach to EPA's PAL program and was 
in fact identified as an example of a State program successfully using 
a PAL concept during EPA's development of its PAL regulations.
    In the December 31, 2002, preamble to its 2002 NSR Reform Rules, 
EPA discussed potential state PAL regulatory programs that could differ 
from the Federal rules while still affording equivalent effectiveness 
as an NSR/PSD program. The 2002 NSR Reform rules did not include 
specific requirements for an area-wide PAL program. However, the Agency 
did provide that ``[i]f a State currently has or wants to pursue an 
area-wide PAL program, then it must demonstrate that its program is 
equivalent to or more stringent than our final [PAL] rules.'' \11\ 
Later on, EPA affirmed that ``[e]ver since our current NSR regulations 
were adopted in 1980, we have taken the position that States may meet 
the requirements of part 51 `with different but equivalent 
regulations.' 45 FR 52676. Several states have, indeed, implemented 
programs that work every bit as well as our own base programs, yet 
depart substantially from the basic framework established in our rules. 
A good example is Oregon, where the SIP-approved program requires all 
major sources to obtain plantwide permits not unlike the PALs that we 
are finalizing today * * *'' \12\
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    \11\ 67 FR 80221 (December 31, 2002).
    \12\ 67 FR 80241.
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    Oregon's NSR/PSD program differs from the Federal program in 
several ways. It doesn't subject the same sources and modifications to 
major NSR as would EPA's rules. The program has lower major source 
thresholds for sources in nonattainment areas and maintenance areas, so 
smaller new sources and changes to smaller existing sources are subject 
to review. The program also requires fugitive emissions to be included 
in the applicability determination for all new sources and 
modifications to existing sources. However, as mentioned, the program 
also utilizes a PSEL approach to defining major modifications rather 
than a contemporaneous net emissions increase approach as does EPA's 
main (non PAL alternative) NSR reform approach.
    The effect of Oregon's PSEL approach is that, generally, changes 
which would be subject to review under the PAL provisions in the 2002 
NSR Reform Rules are subject under Oregon's rules. However, there are 
some differences between the Oregon rules and EPA's rules that, 
generally, result in Oregon's program being more protective. For 
example, when a major modification is permitted, BACT and/or LAER is 
required for more new and modified emission units than under EPA's PAL 
rules. Oregon's rules require BACT/LAER for all new and modified units, 
not just significant and major units, as well as defining what 
constitutes a modified unit more broadly than EPA's rules. In addition, 
changes which would result in increased emissions, but would not be 
considered modifications under either the Oregon rules or EPA's reform 
rules are still reviewed for compliance with ambient standards and PSD 
increments under Oregon's PSEL program.
    Overall, EPA has determined that Oregon's PSD program for reviewing 
and controlling emissions from new and modified sources is at least as 
strict as EPA's program. We have reviewed Oregon's NSR/PSD program and 
ODEQ's recent rule revisions included in today's proposed action, and 
have determined that the NSR/PSD program meets the current requirements 
in 40 CFR 51.165 and 51.166. Accordingly, EPA proposes in this action 
to approve the specified changes into the Federally approved SIP.

C. Agricultural Operations (as Specified in Oregon Revised Statute 
468A.020)

    The CAA does not provide an exemption for agricultural operations 
while, prior to 2007, Oregon's State law exempted most agricultural 
operations from air quality regulations. To address this discrepancy, 
the 2007 Oregon Legislature (in accordance with Oregon Senate Bill 235) 
updated Oregon's air quality law (Oregon Revised Statute (ORS) 468.020 
and 468A.020) to be consistent with the Federal CAA enabling the 
regulation of air emissions from agricultural sources if necessary to 
implement the Federal CAA. The Oregon Environmental Quality Commission 
in turn adopted rule amendments to OAR 340-200-0030, 340-210-0205, and 
340-264-0040 to align these rules with ORS 468A.020 and to make 
revisions to Oregon's SIP and the Oregon title V operating permit 
program. The revisions to OAR 340-200-0030, 340-210-0205, and 340-264-
0040 were submitted to EPA by ODEQ on October 8, 2008. OAR rules now 
allow agricultural air quality pollution sources to be regulated in 
Oregon as necessary to meet CAA requirements.
    EPA believes that the revised ORS 468A.020 (in conjunction with the 
corresponding revisions to the OAR 340-200-0030, 340-210-0205, and 340-
264-0040) meet CAA requirements and, therefore, we propose to 
incorporate these revised OAR provisions into the Federally approved 
Oregon SIP.

D. Permitting Rule Corrections, Clarifications and Streamlining

    EPA is proposing to take action on portions of the following three 
SIP submittals by ODEQ that correct previous errors, provide 
clarification and streamline air quality permitting rules in the State 
of Oregon. These rules are described with additional specificity in 
section E of this notice.
1. Rule Revisions in the October 10, 2008, SIP Submittal
    In 2001, ODEQ streamlined the Air Quality Program's permitting 
program which was previously approved by EPA. In 2007, ODEQ's 
rulemaking further streamlined and updated the permitting process by 
clarifying requirements, eliminating duplicative and conflicting 
standards; keeping rules in line with Federal requirements, and 
correcting errors. This rulemaking package was submitted by ODEQ to EPA 
as a SIP revision on October 10, 2008. The SIP submittal covers 
revisions to OAR chapter 340, divisions 200, 208, 209, 214, 216, 218, 
228, 232, 234 and 236 and EPA is proposing to approve incorporation of 
these provisions into the Federally approved SIP. The rule revisions in 
the October 10, 2008 SIP submittal:
    (1) Add the chemical HFE-7300 to a list of compounds exempt from 
the definition of volatile organic compounds (VOC), or ground-level 
ozone precursors to be consistent with Federal regulations;
    (2) Revise Excess Emissions rules to address the factors which ODEQ 
will take into consideration to determine how it will exercise its 
enforcement discretion with respect to excess

[[Page 59095]]

emissions incidents meeting specified criteria;
    (3) Delete unused Basic Permit categories in the Air Contaminant 
Discharge Permit (ACDP) rules that have been replaced by other permit 
categories;
    (4) Update, correct errors, and clarify general permits for asphalt 
plants, boilers, concrete plants, rock crushers, and wood products 
facilities (These changes clarify monitoring, reporting and compliance 
procedures in division 216 (ACDPs) and include a provision that 
facilities with ACDPs may not be operated if the permit expires or is 
terminated, unless a timely renewal application has been submitted or 
another type of permit has been issued. The revisions also clarify that 
for facilities with title V or ACDPs, requirements established in 
preceding permits remain in effect unless specifically modified or 
terminated.);
    (5) Change the averaging time in the sulfur dioxide standards for 
fuel-burning equipment from two hours to three hours to align with 
Federal standards (refer to section D, division 228 of this proposal--
Requirements for Fuel Burning Equipment and Fuel Sulfur Content--for a 
complete discussion of the revised averaging time of the sulfur dioxide 
emission standards);
    (6) Add a requirement for prior notification for those seeking to 
avail themselves of the exemption allowing a higher (currently SIP-
approved) emission rate for burning salt laden wood waste;
    (7) SIP-strengthening measures that replace outdated regulations 
governing wigwam burners with a state-wide prohibition on their use;
    (8) Streamline the kraft pulp mill rules (in division 234) by 
clarifying permitting and compliance determinations, and eliminating 
unnecessary reporting, which includes removing a Director's discretion 
reference in the definition of ``Daily Arithmetic Average'' allowing 
alternatives to emission limits, testing or monitoring methods without 
prior EPA approval, removing a section on submission of plans for 
construction and modification because general permitting regulations in 
division 210 address these requirements, removing a section requiring 
use of obsolete sodium ion probe, as well as clarifying Federal New 
Source Performance Standards requirements that apply to kraft pulp 
mills;
    (9) Specifies average hourly emission rate calculation procedures 
and measurement methods for board products manufacturing.
    These changes clarify, correct and update Oregon's existing rules 
to be consistent with Federal regulations as well as streamline the 
permitting process and are proposed for approval into the SIP.
    It should also be noted that on November 5, 1999, ODEQ submitted a 
complete rule renumbering to EPA for approval. On January 22, 2003 (68 
FR 2891), we approved most of these new divisions but at that time did 
not take action on division 208 (Visible Emissions and Nuisance 
Requirements). We are now proposing to approve rules 0010 
(Definitions), 0100 (Visible Emissions, Applicability), 0110 (Visible 
Emissions,Visible Air Contaminant Limitations), 0200 (Fugitive 
Emissions Requirements, Applicability) and 0210 (Fugitive Emissions 
Requirements) of division 208 into the Oregon SIP which will replace 
division 21, rules 015, 050, 055, and 060.
    Additionally, we are proposing to approve Oregon's current excess 
emission rules (division 214, rules 0300 through 0360) into the Oregon 
SIP. Upon approval, these division 214 rules will replace the 
Federally-approved division 28 which will be removed from the SIP. EPA 
finds that the division 214 rules included in the October 10, 2008, SIP 
submittal conform to Federal guidance related to excess emissions, and 
proposes to incorporate these rules into the SIP. Oregon's excess 
emission provisions specify the factors that the State will take into 
account regarding the exercise of its enforcement discretion in 
response to excess emissions.
    Finally, on January 18, 2007, EPA added 1,1,1,2,2,3,4,5,5,5-
decafluoro-3-methoxy-4-trifluoromethyl-pentane (also known as HFE-7300) 
to the list of compounds \13\ which are excluded from the definition of 
VOC on the basis that these compounds make a negligible contribution to 
tropospheric ozone formation (72 FR 2193--2196). Exempting HFE-7300 
from the definition of VOC in OAR 340-200-0020 is consistent with 
Federal regulations.
---------------------------------------------------------------------------

    \13\ See 40 CFR 51.100(s).
---------------------------------------------------------------------------

2. Rule Revisions in the March 17, 2009, SIP Submittal
    The Stationary Source PSEL rule (OAR chapter 340, division 222) 
sets limits on emissions of specified regulated air pollutants. The 
primary purpose of establishing a PSEL is to assure compliance with 
ambient air standards and PSD increments, which regulate criteria 
pollutants (i.e., particulate matter, ground-level ozone, carbon 
monoxide, sulfur oxides, nitrogen oxides, and lead).
    The March 17, 2009, SIP submittal exempts pollutants regulated by 
the Accidental Release Prevention rules and the Early Reduction High 
Risk Pollutant rules from regulation under the PSEL rule. These 
pollutants were erroneously included in ODEQ's previous rule and have 
subsequently been removed. The Accidental Release Prevention rule (OAR-
244-0230) was established to require businesses storing large 
quantities of hazardous materials to have a Risk Management Plan to 
prevent the accidental release of those regulated substances. The Early 
Reduction High Risk Pollutants rules (OAR 340-244-0120) are used to 
allow a source to make early voluntary emission reductions of listed 
chemicals in order to be allowed greater flexibility later when 
complying with new Federal regulations. These programs are not 
implemented through the PSEL rule and do not depend on that rule for 
implementation.
3. Rule Revisions in the June 23, 2010, SIP Submittal
    Sections 110(a)(1) and (2) of the Federal CAA requires States to 
submit changes to SIP interstate transport provisions to EPA for 
approval. The rule revisions submitted to EPA on June 23, 2010, are 
needed to update Oregon's SIP and meet EPA infrastructure requirements. 
The SIP submittal covers revisions to OAR chapter 340, divisions 200, 
202, 204, and 206.
    These rule revisions include provisions necessary to address 
changes to the NAAQS for PM2.5, ozone and lead. Specifically 
these revisions add PM2.5 to the list of regulated air 
pollutants so that Oregon no longer needs to rely on a surrogacy 
policy; include PM2.5 thresholds for significant harm, 
PM2.5 levels for triggering alerts, warnings, and 
emergencies (developed by ODEQ pursuant to the requirements of 40 CFR 
51.151); include PM2.5 non-attainment area boundary 
descriptions for the cities of Klamath Falls and Oakridge; and, in 
accordance with EPA regulations, exempt dimethyl carbonate and 
propylene carbonate from the definition of VOC. On February 20, 2009, 
EPA added dimethyl carbonate and propylene carbonate to the list of 
compounds (40 CFR 51.100(s)) which are excluded from the definition of 
VOC on the basis that these compounds make a negligible contribution to 
tropospheric ozone formation (74 FR 3437-3441). Exempting dimethyl 
carbonate and propylene carbonate from the definition of VOC in OAR 
340-200-0020 will make Oregon rule consistent with Federal regulations.

[[Page 59096]]

E. Significant Changes to Oregon's SIP

    The docket to today's proposed action includes a technical support 
document which describes in more detail the substantive changes to the 
Oregon rules that have been submitted by ODEQ as revisions to the SIP, 
EPA's evaluation of the changes, and the basis for EPA's action.
    A summary of significant regulatory changes proposed for 
incorporation into the SIP under today's proposal are provided below.
Division 200 General Air Pollution Procedures and Definitions
    This division includes ODEQ's general air quality definitions (rule 
0020), a list of abbreviations and acronyms (rule 0025), general 
exceptions (rule 0030), provisions for compliance schedules (rule 
0050), and rules for conflicts of interest and makeup of boards (rules 
0100 to 0120).
    ODEQ has revised the method of setting the starting emission level, 
or netting basis, for counting emission changes for new and expanding 
facilities when they are initially permitted. Under the current SIP, to 
ensure that Oregon's NSR/PSD program is protective, companies are 
required to evaluate the air quality effects that would occur if a new 
or expanded facility operated at its capacity. Once this level is 
approved, it is added to a facility's netting basis even though the 
facility may never actually operate at that level. This unrealistically 
high starting emission level could allow a future expansion to avoid 
NSR/PSD. To prevent this, ODEQ has added a process to reset the netting 
basis once a new or expanded facility has been operating for up to 10 
or 15 years to establish a realistic level. This applies to major GHG 
sources that were permitted but not yet operating before the GHG rules 
were adopted and to future NSR/PSD sources. The process will not limit 
the ability of a facility to operate permitted equipment, but will 
prevent use of the added netting basis until the level is reset.
General Definitions 340-200-0020
    Actual emissions--The rule revision adds provisions in definition 
of actual emissions for sources that had not begun normal operation 
during the baseline period but were approved or permitted to construct 
and operate. Oregon revised its major source permitting program by 
reducing the netting basis from potential to emit (PTE) down to the 
highest actual emissions at the end of the baseline period for sources 
approved under division 224. This will be required before any future 
netting can take place and will prevent sources from netting out of 
NSR/PSD. Sources that reduce actual emissions because of voluntary 
controls will not lose that portion of the netting basis. This 
reduction will not affect the PSEL so sources with NSR/PSD permits will 
be able to utilize permitted emission units up to their permitted PTE 
without going through NSR/PSD again. ODEQ also revised its major source 
permitting program by reducing the netting basis from PTE down to the 
highest actual emissions in the last 10 years since the date of permit 
issuance for sources permitted under division 224 (Major NSR which 
includes PSD).
    The revision to the definition of actual emissions also adds (1) a 
provision for sources that had not begun normal operation but were 
permitted under division 224 to reset actual emissions, (2) a provision 
to reduce PTE to actual emissions for sources that had not begun normal 
operations but were permitted to construct and operate under division 
224, (3) a provision to reduce PTE to actual emissions for sources 
permitted under division 224 or approved under division 210 (Stationary 
Source Notification Requirements) after the baseline period, and (4) 
adds aggregate insignificant emissions threshold for PM2.5 
in PM2.5 nonattainment areas. This makes PM2.5 
consistent with the PM10 threshold, which is 5% of the 
significant emission rate (SER) of 5 tons in Medford and other 
nonattainment areas in older rules.
    Aggregate insignificant emissions--The revision to the definition 
of aggregate insignificant emissions adds an emissions threshold for 
GHG. The de minimis level for GHG is set at the State of Oregon GHG 
reporting threshold (2,756 tons CO2e).
    Baseline Emission Rate--The revised definition for baseline 
emission rate does not include a specific rate for PM2.5 
because PM2.5 will be ratioed to PM10 for both 
netting basis and PSEL. The revised definition includes a baseline 
emission rate for GHG with the first permit action after July 1, 2011, 
since that is when GHG sources are required to get permits for GHGs 
alone.
    The revised definition further adds a provision for recalculating 
the baseline emission rate if actual emissions are reset in accordance 
with the definition of actual emissions. The revised definition also 
adds a provision for freezing only the production basis used to 
establish the baseline emission rate, not the entire baseline emission 
rate.
    Biomass--The revised rule adds a definition of biomass and defers 
carbon dioxide (CO2) emissions from biomass in accordance 
with EPA's July 2011 deferral. The application of the PSD and title V 
permitting requirements to CO2 emissions from bioenergy and 
other biogenic stationary sources has been deferred for a period of 3 
years.
    Criteria Pollutant--The revised rule adds PM2.5 to the 
definition of criteria pollutant.
    Federal Major Source--The revised rule adds a GHG threshold of 
100,000 tons CO2e per year to definition of Federal Major Source 
consistent with EPA's GHG Tailoring Rule and includes fugitive 
emissions in the definition of major modification. This inclusion 
clarifies that fugitive emissions must be included in the major NSR 
applicability. The GHG threshold in 340-200-0020(55) is consistent with 
the requirements in the GHG Tailoring Rule.
    Major Modification--The definition of major modification has been 
revised. The revised definition adds a provision stating that major 
modifications for precursors are also major modifications for ozone and 
PM2.5. This revision aligns the definition with EPA rules. 
The revised definition also specifies (1) that a major modification is 
triggered if the PSEL exceeds the netting basis, (2) the type of 
accumulation of physical changes and changes in operation that trigger 
a major modification, (3) that fugitive emissions must be included in 
the major NSR applicability, (4) that emissions increases from the 
increased use of equipment permitted or approved to construct are not 
included in major modification applicability, and (5) when sources 
would trigger NSR with only a 1 ton/year increase.
    The revised definition of major modification also states that the 
portion of the netting basis and PSEL that was based on PTE because the 
source had not begun normal operations must be excluded from major 
modification applicability until it is reset and deletes the exception 
for PCPs that has been removed from Federal regulations.
    Major Source--The revised major source definition states that 
fugitive emissions must be included in determining whether or not a 
source is considered major. The revised definition also indicates that 
PTE calculations must include emissions increases due to the new or 
modified source.
    Netting Basis--The revised netting basis definition states that the 
initial netting basis and PSEL for PM2.5 and GHG will be 
established with the first permitting action issued after July 1, 2011, 
provided the permitting action

[[Page 59097]]

involved a public notice period that began after July 1, 2011 (i.e., 
when major GHG sources will be required to obtain permits).
    The revised definition also adds a provision that the initial 
netting basis and PSEL for PM2.5 will be the 
PM2.5 fraction of the PM10 netting basis and 
PSEL. ODEQ treats PM2.5 and PM10 in a comparable 
manner since PM2.5 is a subset of PM10, which is 
a pollutant already addressed by the existing permitting rules. As a 
result, a facility's PM2.5 fraction will be determined and 
used to calculate permitted levels for PM2.5. This approach 
incorporates PM2.5 at this time as if it had been part of 
the program all along; allowing previously approved expansions to 
continue to operate and new expansions to be reviewed consistent with 
State and Federal requirements. It also avoids the need to select a 
unique baseline period for counting changes in PM2.5 
emissions towards triggering NSR/PSD. Because the PM10 SER 
is 15 tons/year and the PM2.5 SER is 10 tons/year, sources 
could retroactively trigger the PM2.5 SER because of past 
approved increases in PM10. As a result, ODEQ may conduct a 
one time 5 ton true up to eliminate this possibility.
    The revised definition also sets the initial source-specific PSEL 
for a source with a PTE greater than or equal to the SER to be equal to 
the PM2.5 fraction of the PM10 PSEL. The revision 
further clarifies when the netting basis is zero and when changes to 
the netting basis are effective and adds a provision to reduce the 
netting basis from PTE for sources permitted under OAR 340-224 (Major 
NSR) after the baseline period.
    Opacity and Source Test--The reference to Director's discretion to 
allow alternatives to emission limits, testing or monitoring methods in 
Federal rules or the SIP without prior EPA approval has been deleted 
from the definitions of opacity and source test.
    PM2.5--The revised PM2.5 definition adds EPA's new 
reference test methods and adds a provision for PM2.5 
precursors. This definition is consistent with EPA's rules for purposes 
of title V and NSR.
    Regulated Pollutant--The revised definition for regulated pollutant 
includes precursors and GHGs and clarifies that only regulated 
pollutants with significant emissions are subject to NSR.
    The revised definitions discussed above are consistent with the EPA 
definition in 40 CFR 51.165(a)(1) and 51.166(b).
Exceptions 340-200-0030
    The rule was revised to clarify that the statutory exemption for 
agricultural operations and equipment do not apply to the extent 
necessary to implement the CAA. This allows agricultural operations and 
equipment to be regulated as necessary in Oregon to meet CAA 
requirements.
Division 200 Tables
    The Significant Air Quality Impact, Significant Emission Rates, De 
minimis Emission Levels, and Generic PSEL tables (Tables 1 through 5) 
in division have also been revised. The tables add: (1) EPA-adopted 
PM2.5 significant impact levels; (2) EPA-adopted SERs for 
GHG, direct PM2.5, PM2.5 precursors and VOC 
precursors; (3) de minimis levels for GHG, for PM2.5 in the 
Medford AQMA, and for direct PM2.5; and (4) a generic PSEL 
for PM2.5 and GHG. The de minimis level for GHG has been set 
at the State of Oregon GHG reporting threshold. The de minimis levels 
for PM2.5 are consistent with PM10 and the 
generic PSEL for GHG is based on proposed SER minus 1000 tpy. In 
addition, the generic PSEL for PM2.5 is based on the 
proposed SER minus 1 tpy, consistent with other criteria pollutants.
Division 202 Ambient Air Quality Standards and PSD Increments
    This division contains the State ambient air quality standards and 
the PSD increments.
Definitions 340-202-0010
    Baseline Calculation--The revised definition clarifies that actual 
emission increases from any source or modification (not just major 
sources and major modifications) on which construction commenced after 
January 6, 1975, cannot be included in the baseline calculation. It 
also adds the baseline concentration for PM10 in the 
Medford-Ashland AQMA from the definition in division 225 (Air Quality 
Analysis Requirements) and the baseline concentration year for 
PM2.5 that is set on the year when ambient monitoring was 
done and when the increment was proposed.
Ambient Air Quality Standards for Suspended Particulate Matter 340-202-
0060, Ozone 340-202-0090 and Lead 340-202-0130
    The revised rules update the Oregon's ambient air quality standards 
to be consistent with Federal NAAQS by adding the 2006 annual average 
and 24-hour Federal standards for PM2.5, the 2008 8-hour 
Federal standard for ozone and the 2010 one-hour Federal standard for 
lead.
Division 204 Designation of Air Quality Areas
    This division identifies the carbon monoxide, PM10, and 
ozone nonattainment areas in the State of Oregon.
Designation of Nonattainment Areas 340-204-0030
    The rule was revised to add two PM2.5 nonattainment 
areas, Klamath Falls and Oakridge, that were designated by EPA to not 
be in attainment of the 2006 24-hour PM2.5 NAAQS (74 FR 
58688, November 13, 2009).
Division 206 Air Pollution Emergencies
    This division establishes criteria for identifying and declaring 
air pollution episodes at levels below the level of significant harm. 
The division was revised to add a significant harm level for 
PM2.5 of 350.5 [mu]g/m\3\ (24-hour average), an air 
pollutant alert level for PM2.5 of 140.5 [mu]g/m\3\ (24-hour 
average), an air pollution warning level of 210.5 [mu]g/m\3\ (24-hour 
average) for PM2.5, and an air pollutant emergency level of 
280.5 [mu]g/m\3\ (2-hour average) for PM2.5.
Division 214 Stationary Source Reporting Requirements
    This division contains ODEQ's provisions for reporting and 
recordkeeping, information requests (section 114 authority), credible 
evidence, business confidentiality, emission statements, and excess 
emissions.
Excess Emissions and Emergency Provisions 340-214-0300 Through 0360 
(Formally in Division 28)
    The applicability of the Excess Emissions and Emergency Provisions 
rule has been revised to align with EPA policy regarding applicability, 
planned start-up and shutdown, schedule maintenance, other excess 
emissions, enforcement action criteria, and affirmative defense by 
clarifying that the affirmative defense of emergency does not take away 
ODEQ's enforcement discretion, but is relevant when evaluating a 
violation to determine the level of penalty. It also clarifies that 
excess emission reports must include whether a source followed approved 
procedures for startup, shutdown or maintenance activity when 
applicable and consolidates and further describes criteria for 
demonstrating emergency as an affirmative defense. The rule revisions 
are consistent with EPA policy

[[Page 59098]]

as specified in 1999 memorandum by EPA.\14\
---------------------------------------------------------------------------

    \14\ Memorandum from Steven A. Herman entitled ``State 
Implementation Plans: Policy Regarding Excess Emissions During 
Malfunctions, Startup, and Shutdown, September 20, 1999.
---------------------------------------------------------------------------

Division 216 Air Contaminant Discharge Permits
    This division is the ODEQ Federally-enforceable State Operating 
Permit program, and is also the administrative permit mechanism used to 
implement the notice of construction and major NSR programs.
    The revisions to the rules in division 216 clarify that facilities 
with ACDPs may not be operated if the permit expires or is terminated, 
unless a timely renewal application has been submitted or another type 
of permit has been issued. The revisions also clarify that for 
facilities with title V or ACDPs, requirements established in preceding 
permits remain in effect unless specifically modified or terminated.
    In addition, the following unused Basic Permit categories currently 
in the Oregon SIP have been deleted from this rule and, following this 
action, are proposed to be removed from the SIP:
    (1) Wood Furniture and Fixtures more than 5,000 but less than 
25,000 board feet/maximum 8 hour input.
    (2) Flour, Blended and/or Prepared and Associated Grain Elevators 
more than 2,000 but less than 10,000 tons per year throughput.
    (3) Grain Elevators used for intermediate storage more than 1,000 
but less than 10,000 tons/year throughput.
    (4) Millwork (including kitchen cabinets and structural wood 
members) more than 5,000 but less than 25,000 bd. ft./maximum 8 hour 
input.
    (5) Non-Ferrous Metal Foundries more than one ton/yr. but less than 
100 tons/yr. of metal charged.
    (6) Pesticide Manufacturing more than 1,000 tons/yr. but less than 
5,000 tons/yr.
    (7) Sawmills and/or Planing Mills more than 5,000 but less than 
25,000 board feet/maximum 8 hour finished product.
    (8) Seed Cleaning and Associated Grain Elevators more than 1,000 
but less than 5,000 tons per year throughput.
    (9) Bakeries, Commercial baking more than 500 tons of dough per 
year.
    (10) Cereal Preparations and Associated Grain Elevators more than 
2,000 but less than 10,000 tons per year throughput.
    (11) Coffee Roasters roasting more than 6 tons coffee beans in a 
year, but less than 30 tons/yr.
    In 2001, ODEQ instituted 19 Basic Permit categories to track small 
air emission sources. ODEQ intended that basic permits function as a 
registration, or means to track sources with potential to grow or 
require a different type of permit and to trigger control requirements. 
The purpose was to anticipate emission increases and reduce potential 
for source violations. Because no basic permits have been issued in the 
above categories, removing these categories does not result in 
termination of any existing permits. A general provision in the ODEQ's 
ACDP rules (division 216) ensures that any facility with significant 
emissions is regulated through a permit.
    The rule revision also delegates authority to Lane Regional Air 
Protection Agency to implement ACDP and Oregon title V operating permit 
programs for regulation of PM2.5 and GHG within its area of 
jurisdiction. It also adds: (1) PM2.5 and GHGs to pollutant-
based source categories requiring ACDPs, (2) a 5 ton PM2.5 
threshold for requiring a permit in nonattainment areas to provide more 
protection for the area through source surveillance, and (3) a 100,000 
ton GHG CO2e threshold for GHG permitting, consistent with the GHG 
tailoring rule. These rule revisions are proposed for approval into the 
SIP.
Division 224 Major New Source Review
    This division contains the ODEQ major source permit to construct 
programs as required by title I, parts C and D of the Act. It requires 
an ACDP prior to beginning construction on a new major source or major 
modification.
    This division applies to new major sources and major modifications 
and requires that no owner or operator begin actual construction 
without first having received an ACDP and having satisfied the 
requirements of division 224.
    The division includes the procedural requirements for the NSR 
program, including specifying the information that must be submitted in 
a permit application, the time period for which the approval to 
construct is valid, the obligation to comply with all applicable 
requirements, and the time period that the new or modified source can 
operate without applying for a title V operating permit, and when a 
title V operating permit must be revised before commencing construction 
or operation. The division also includes the procedures for processing 
permit applications.
    The division also includes the substantive requirements which must 
be met for approval of a new major source or major modification. These 
include the requirement that the owner or operator must demonstrate the 
ability of the source to comply with all applicable requirements.
    ODEQ's major source permit to construct program as revised in 
division 224 complies with EPA's requirements in 40 CFR 51.165 through 
51.166 and ensures that new and modified major sources will not cause 
or contribute to violations of any NAAQS. Therefore, EPA proposes to 
approve these provisions into the Oregon SIP.
Applicability and General Prohibitions 340-224-0010
    The rule revision clarifies that division 224 (Major NSR) applies 
to the regulated pollutant for which the area is designated 
nonattainment or maintenance within nonattainment and maintenance 
areas, as well as to the regulated pollutant for which the area is 
designated attainment or unclassified within attainment and 
unclassifiable areas. It also adds applicability requirements for GHG 
PSD permitting of sources that have already triggered NSR/PSD for other 
pollutants and that are major for GHGs and trigger PSD. This is 
consistent with EPA's Tailoring Rule for purposes of title V and PSD.
Requirements for Sources in Nonattainment Areas 340-224-0050
    The rule revision adds requirements for PM