Code of Colorado Regulations
1000 - Department of Public Health and Environment
1001 - Air Quality Control Commission
5 CCR 1001-30 - CONTROL OF EMISSIONS FROM ENGINES AND MAJOR STATIONARY SOURCES
Part C - Statements of Basis, Specific Statutory Authority and Purpose
Section 5 CCR 1001-30-C-III - December 18-20, 2024 (Revisions to Part B, Sections I.D.4.c., I.D.6.a., II.A.4.g., II.A.5.b., II.A.8.c., III.D., V.A.8.b., and IX.)
Current through Register Vol. 48, No. 6, March 25, 2025
This Statement of Basis, Specific Statutory Authority, and Purpose complies with the requirements of the State Administrative Procedure Act, § 24-4-101, C.R.S., et seq., the Colorado Air Pollution Prevention and Control Act, § 25-7-101, C.R.S., et seq., and the Air Quality Control Commission's (Commission) Procedural Rules, 5 C.C.R. §1001-1.
Basis
The Commission adopted revisions in response to EPA actions on Colorado's state implementation plan (SIP) submissions. Specifically, a disapproval of the provisions requiring implementation of reasonably available control technology (RACT) for refinery fueled process heaters at major NOx stationary sources and a cold mill coil coating operation and a disapproval related to recordkeeping and reporting requirements. See 88 Fed. Reg. 85511 (Dec. 8, 2023); 88 Fed. Reg. 29827 (May 9, 2023).
Specific Statutory Authority
The State Air Act, specifically § 25-7-105(1), directs the Commission to promulgate such rules and regulations as are consistent with the legislative declaration set forth in § 25-7-102 and that are necessary for the proper implementation and administration of Article 7. The Act broadly defines air pollutant to include essentially any gas emitted into the atmosphere (and, as such, includes VOC, NOx, methane and other hydrocarbons) and provides the Commission broad authority to regulate air pollutants. Section 105(1)(a)(I) directs the Commission to adopt a state implementation plan (SIP) to attain the NAAQS. § 25-7-106 provides the Commission maximum flexibility in developing an effective air quality program and promulgating such combination of regulations as may be necessary or desirable to carry out that program. § 25-7-106 also authorizes the Commission to promulgate emission control regulations applicable to the entire state, specified areas or zones, or a specified class of pollution. § 25-7-106(6) further authorizes the Commission to require owners and operators of any air pollution source to monitor, record, and report information. §§ 25-7-109(1)(a) and (2) of the Act authorize the Commission to promulgate regulations requiring effective and practical air pollution controls for significant sources and categories of sources and emission control regulations pertaining to nitrogen oxides and hydrocarbons.
Purpose
The following section sets forth the Commission's purpose in adopting the revisions to Regulation Number 26, and includes the technological and scientific rationale for the adoption of the revisions.
Midstream segment engines
In December 2023, the Commission adopted NOx emission standards for stationary rich burn natural gas fired reciprocating internal combustion engines with a manufacturer's design rate greater than or equal to 100 horsepower but less than 1000 horsepower and lean burn natural gas fired reciprocating internal combustion engines with a manufacturer's design rate greater than or equal to 250 horsepower but less than 1000 horsepower. Owner or operators of engines placed in service, modified, or relocated before January 30, 2024, had to achieve an increasing percentage of compliance starting by May 1, 2025, and through May 1, 2029. During that rulemaking, the Commission recognized that engines in the midstream segment could be impacted by both the Regulation Number 26 requirements as well as the future midstream rulemaking and stated that the Commission did "not intend that operators take on the cost of retrofits and replacements under this rule just to later either replace an engine with an electric unit or to wholly remove an engine from service." The Commission directed the Division to evaluate whether the Regulation Number 26 requirements should be revised during the midstream rulemaking to address potentially conflicting provisions. Therefore, the Commission now adopts an exemption for engines in the midstream segment from the Regulation Number 26 requirements should the owner or operator remove or electrify the engine pursuant to the midstream segment emission reduction program.
Engine clean-up
In December 2022, the Commission adopted SIP-strengthening measures that incorporated requirements for specific 1,000 hp engines (requirements adopted in 2020). Table B in Part B, Section I.D.4.c. was based on operator engine reporting that began in 2021. As part of that reporting, operators identified engines fleet-wide that could achieve emission reductions through permitted emissions reductions, installation of additional controls, engine replacement, and shutdowns. Table B included engines that were scheduled for shutdown in 2021; however, some of the reports received by the Division were not accurate. The revisions to Table B reflect that some engines were listed in error.
Process Heaters
In 2021, the Commission adopted additional requirements for refinery fuel fired process heaters at major NOx sources. In response to EPA's comments and concerns and to allow for further evaluation, the Commission removed the NOx emissions limits for these heaters in 2023. The process heaters continued to be subject to combustion process adjustment requirements, as they have been since the 2021 revisions. Following further evaluation, the Commission now adopts operational and/or NOx emissions limits for these heaters. Additional changes were made to clarify that the limits in Part B, Tables 2, 3, and 4 only apply to process heaters using the primary fuel type that provides the majority of the heat input to the process heater on a calendar year basis. The operational practices identified in Part B, Table 3 identify existing pollution reduction equipment on the listed heaters as of October 2024 as RACT. The identification of existing operational practices is not intended to limit or prevent the voluntary installation and operation of new or different pollution control equipment that further reduce emissions beyond the RACT requirements established in this rule. Additional voluntary reductions might, depending on the circumstances, quality for emission reduction credits if all other requirements of Regulation Number 3, Part A, Section V. are met.
Golden Aluminum (coil coating facility)
In 2020, the Commission evaluated the NOx emission points at Golden Aluminum as it became a major source of NOx emissions under the 50 tpy serious major stationary source threshold. Golden Aluminum is a coil coating operation and, therefore, subject to the coil coating provisions in Regulation Number 25 (formerly in Regulation Number 7, Part C), which were adopted many years ago based on the recommendations in EPA's corresponding coil coating CTG. EPA raised concerns with Colorado's reliance on EPA's long-standing interpretation and position that states may utilize EPA's control techniques guidelines (CTG) recommendations and definition of the subject VOC source category when revising the state's SIP to include provisions that require the implementation of RACT for that particular VOC source category (i.e., SIP RACT). EPA published a limited disapproval because Colorado did not evaluate certain VOC emission points at this coil coating operation. See 88 Fed. Reg. 85511 (Dec. 8, 2023). Therefore, in 2023, the Commission adopted a requirement for Golden Aluminum to conduct and submit a RACT analysis to the Division for further evaluation of the VOC-emitting points at issue in EPA's disapproval. Following the submission of that RACT analysis, the Commission now adopts requirements for owners or operators of cold rolling mill roll coolant at aluminum sheet manufacturing facilities located at a major source of VOC.
Periodic Reporting
To address EPA's concern with the lack of specified reporting and to avoid federal sanctions the Commission included requirements for major sources to include compliance demonstrations with the semi-annual reporting requirements in the operating permit, specifically for certain combustion equipment at major NOx sources and major VOC source foam manufacturing operations. See 88 Fed. Reg. 29827 (May 9, 2023) (EPA's limited disapproval, discussing EPA's perceived lack of periodic reporting sufficient to determine compliance by regulated entities). Submission of records maintained pursuant to Part B, Section II.A.7.f. will generally constitute sufficient "documentation" of compliance with the combustion process adjustment requirements pursuant to Part B, Section II.A.8.c., but the Division may require the submission of additional documentation if deemed necessary to demonstrate compliance.
The Commission also made typographical, grammatical, and formatting corrections throughout the regulation.
Incorporation by Reference
The Commission will update regulatory references as needed as opportunities arrive.
Additional Considerations
Colorado must revise Colorado's ozone SIP to address the severe ozone nonattainment area requirements. The CAA does not expressly address all of the provisions adopted by the Commission. Rather, federal law establishes the ozone NAAQS and requires Colorado to develop a SIP adequate to attain the NAAQS. Therefore, the Commission adopted certain revisions to Regulation Number 26 to satisfy Colorado's nonattainment area obligations and further achieve reductions of ozone precursor emissions. These revisions do not exceed or differ from the federal act due to state flexibility in determining what control strategies to implement to reduce emissions. However, where the proposal may differ from federal rules under the federal act, in accordance with § 25-7-110.5(5)(b), CRS, the Commission determines:
(I) The revisions to Regulation Number 26 address foam manufacturing, a coil coating operation, and process heaters. NSPS J, NSPS Ja, NSPS T, MACT CC, MACT SSSS, MACT ZZZZ, and MACT DDDDD may also apply to and the above listed equipment and operations. However, the revisions to Regulation Number 26 apply on a broader basis.
(II) The federal rules discussed in (I) are primarily technology-based in that they largely prescribe the use of specific technologies or work practices to comply.
(III) The CAA establishes the 2008 and 2015 ozone NAAQS and requires Colorado to develop SIP revisions that will ensure attainment of the NAAQS. The ozone NAAQS was not determined taking into account concerns unique to Colorado. Similarly, EPA develops NSPS or NESHAP considering national information and data, not Colorado specific issues or concerns. In addition, Colorado cannot rely exclusively on a federally enforceable permit or federally enforceable NSPS or NESHAP to satisfy Colorado's ozone nonattainment area RACT obligations. Instead, Colorado can adopt applicable provisions into its SIP directly, as the Commission has done here.
(IV) In addition to the 2008 NAAQS, Colorado must also comply with the lower 2015 ozone NAAQS. These current revisions may improve the ability of the regulated community to comply with new requirements needed to attain the lower NAAQS insofar as RACT analyses and efforts conducted to support the revisions adopted by the Commission may prevent or reduce the need to conduct additional RACT analyses for the more stringent NAAQS.
(V) EPA has established Colorado's SIP RACT implementation deadlines. There is no timing issue that might justify changing the time frame for implementation of federal requirements.
(VI) The revisions to Regulation Number 26 strengthen Colorado's SIP. These sections currently address emissions from foam manufacturing, a coil coating operation, and process heaters, while allowing for continued growth of Colorado's industry.
(VII) The revisions to Regulation Number 26 establish reasonable equity for owners and operators subject to these rules by providing the same standards for similarly situated and sized sources.
(VIII) If EPA does not approve Colorado's SIP, EPA may promulgate a Federal Implementation Plan; thus potentially determining RACT for Colorado's sources. This outcome may subject others to increased costs.
(IX) Where necessary, the revisions to Regulation Number 26 include minimal monitoring, recordkeeping, and reporting requirements that correlate, where possible, to similar federal or state requirements.
(X) Demonstrated technology is available to comply with the revisions to Regulation Number 26. Some of the revisions expand upon requirements already applicable. The revisions concerning major sources of NOx generally reflect current emission controls and work practices.
(XI) As set forth in the Economic Impact Analysis, the revisions to Regulation Number 26 will reduce emissions in a cost-effective manner.
(XII) Alternative rules could also provide reductions in ozone, VOC, and NOx to help to attain the NAAQS. However, a no action alternative would very likely result in an unapprovable SIP.
Findings of Fact
To the extent that § 25-7-110.8, C.R.S., requirements apply to this rulemaking, and after considering all the information in the record, the Commission hereby makes the determination that
(I) These rules are based upon reasonably available, validated, reviewed, and sound scientific methodologies, and the Commission has considered all information submitted by interested parties.
(II) Evidence in the record supports the finding that the rules shall result in a demonstrable reduction of greenhouse gas and VOC emissions.
(III) Evidence in the record supports the finding that the rules shall bring about reductions in risks to human health and the environment that justify the costs to implement and comply with the rules.
(IV) The rules are the most cost-effective alternative to achieve the necessary reduction in air pollution and provide the regulated entity flexibility.
(V) The selected regulatory alternative will maximize the air quality benefits of regulation in the most cost-effective manner.
