How To Roll In A Permit

Transcription

1 Texas Commission on Environmental Quality INTEROFFICE MEMORANDUM To: All Interested Persons Date: May 18, 2005 October 12, 2005 December 9, 2005 Thru: From: Subject: Dan Eden, Deputy Director Office of Permitting, Remediation and Registration Richard A. Hyde, P.E., Director Air Permits Division Office of Permitting, Remediation and Registration Permit By Rule and Standard Permit Incorporation Into Permits DRAFT MEMO TEXT Introduction: Current law allows permitted facilities and processes to be modified if the changes will meet a permit by rule (PBR) or in some cases, meet a standard permit (SP). These permit by rule PBR and SP claims must be incorporated when the permit is next amended or renewed. This memo explains the complexity of mechanisms to incorporate permits by rule PBR and SP into permits which are currently required by and In accordance with recent agreements with EPA to resolve Environmental Justice issues, and legislation requiring consideration of cumulative risks and impacts, the Air Permits Division is providing updated guidance on the mechanisms and requirements to incorporate PBR and SP into related permit authorizations. Issue: The Texas Clean Air Act ( ) requires the commission to vigorously safeguard air quality by protecting public health and welfare, and gives the commission general powers to administer the TCAA through all practical and economically feasible methods. Toward that end, several rules and associated practices have been implemented over the years. Internal: Why are SP s not mentioned in title, but covered by memo? REPLY: Title fixed. BAQC: No environmental benefit to allow stacking of PBR/SP on top of permitted limits, allows circumvention Implementation will distort E.I., prevents attainment, Goes beyond EPA rules, not consistent with FCAA, PBR/SP claims avoid comment, netting, BACT, impacts Since PBR/SP considers project only, may circumvent by breaking up larger changes into small projects. REPLY: TCAA allows for insign changes at permitted facilities ( ). BACT not req d by TCAA for PBRs. When rules adopted with comments, protectiveness ck d. Each claim ck d for netting, related project circumvention. No changes to memo proposed based on comments. Internal: Does this memo cover special exemptions or permit exemptions? REPLY: Since this memo is only applicable to PBR/SP actions as of the date of this memo, special exemptions and permit exemptions are not applicable. Companies may choose to voluntarily roll-in or reference these authorization types, but do not apply for mandatory roll-in (d) Permits by rule under Chapter 106 of this title (relating to Permits by Rule) [may be used] in lieu of [a] permit amendment or alteration. (1) A permit amendment or alteration is not required if the changes to the permitted facility qualify for an exemption from permitting or permit by rule under Chapter 106 of this title unless prohibited by permit condition as provided in of this title (relating to General and Special Conditions). (2) All changes authorized under Chapter 106 of this title to a permitted facility shall be incorporated into that facility's permit when the permit is amended or renewed.

2 DRAFT MEMO TEXT PBRs are claimed for a myriad of facilities, processes, and production changes at permitted sites. Some of these PBR claims authorize changes in the type and quantity of emissions from permitted facilities. Other PBR claims indirectly affect or are related to the operation of permitted facilities. Finally, a number of PBR claims occur at a site with an air permit, but the PBR facilities are independent and unrelated in any way to permitted units. Each of these circumstances meet the requirements of (d) in different ways. SP registrations may also fall into the same categories as PBRs and this memo is also intended to cover their incorporation (3) Standard permit in lieu of permit amendment. All changes authorized by standard permit to a facility previously permitted under of this title (relating to Applicability) shall be administratively incorporated into that facility's permit at such time as the permit is amended or renewed. Action: There are three different scenarios that will determine whether and how a PBR or SP should be incorporated into a permit. Certain PBR/SP incorporations would be mandatory and referred to as rolled into a permit. Other PBR/SP incorporations would be voluntary, but the same procedures will be used (including BACT and impacts review) and therefore will also be referred to as rolled into a permit. Finally, some PBR/SP could be incorporated by reference (does not need BACT or specific impacts review). This memorandum supercedes all previous memos on this subject and is effective immediately and is only for PBR/SP actions from this date forward. Consistent with the policy memo titled Applicable Date of Conditions of an Exemption from Permitting dated 8/31/98, PBR (and SP) claims are effective on the date of facility construction or change, not registration or reply from the commission. This includes BACT determinations and impacts evaluation criteria. URS: Clarify that both mandatory and voluntary roll-in will require BACT & impacts review. If unrelated facilities are rolled-in, it does not seem needed to do this. REPLY: Wording clarified. Unrelated facilities are not required to be rolled-in, but companies may choose to apply BACT and impacts review by requesting a a voluntary roll-in. BAQC: memos circumvent public comment w/o rulemaking process. TPA: Since no commitment to rulemaking time line, this policy change should wait since memo changes existing policies (TAPA (6)) defines rules as describing procedues/practice rqm ts... LOCK: These policies should occur only after rule proposal and adoption process, quotes (6). REPLY: Memo content is procedural, clarifies & 615 rules adopted with PN/comments. New rules scheduled for proposal Dec 14, Minor clarifications to Intro Paragraph added to note that rules already require incorporation. URS: Clarify which PBR/SP are applicable to memo. Will they be determined by submittal date? Registration approval? What about those which do not have registration? REPLY: Consistent with ELD memo 1994, PBR and SP claims are effective upon date of facility construction, not paperwork submittal or reply. Memo updated for clarification. If the implementation of this memo causes a real and practical problem in the field, entities may appeal to the executive director through the appropriate management levels, beginning with the permit reviewer or Team Leader. In addition, the executive director intends to propose rulemaking for PBR/SP incorporation procedures in Chapter 116 and this memorandum will expire upon adoption of any revised rules. This rule proposal is tentatively scheduled for commission consideration December 14, 2005.

3 DRAFT MEMO TEXT Rolling Into Permit PBR/SPs which are rolled into permits following and will be voided and the facilities will become authorized by the permit, including limitations in permit conditions and maximum allowable emission rate table (MAERT), as appropriate. Applicants have the flexibility to represent the maximum potential to emit (PTE) of their facilities based on capacity or design, as long as these values are less than any PBR conditions or the general requirements of If the quantity of emissions is greater than these amounts, the incremental difference is required to be reviewed under permit amendment procedures. Applicants may also voluntarily represent any emission value less than PTE for inclusion on the permit MAERT and the values listed will become federally enforceable limits. It should also be noted that SP representations become limitations and any emission limits in the registration or on a table are already federally enforceable limits. Reference to these voided PBR/SP registrations will also be included in the Technical Review Summary and final action letters. The PBR/SP can only be rolled into a permit during an amendment or renewal review. Due to the definition of modification and facility under law, PBR/SP registrations which authorized new facilities or changes in method of control to existing facilities can only be rolled into a permit during an amendment, not a renewal. All other PBR/SP will be rolled into the permit at renewal or amendment. TCC: No statutory authority to require BACT/impacts for rollin and memo is inconsistent with previous guidance. Definition of modification excludes insignificant increases in emission from BACT and permit review (a) grants agency authority to consolidate PBRs into permits, but does not specify it is mandatory nor requires BACT. PBR/SP upon adoption already show protectivenss and therefore additional impacts reviews should not be done. Impacts reviews and BACT reviews for PBRs is inconsistent with previous guidance (David Duncan memo 7/1/93, Jeff Saitas memo 8/31/94, Victoria Hsu memo 3/10/97). These previous determinations should not be changed. TXOGA: Grave concerns over mandatory BACT and impacts reviews, although support voluntary administrative consolidation. HB: Do not understand legal basis for proposing roll-in vs. by reference to incorporate PBR/SP into permits. There is no statutory authority for roll-in or by reference. No regulatory history for BACT and impacts reviews. Arguments inconsistent, cannot exempt from PN while requiring BACT. True purpose of incorporation was to have all authorizations placed in one document for procedural convenience (SP preamble), but did not mention or require BACT to be reviewed. This policy creates unneeded workload for APD, should instead rely on (c)(2) to prohibit PBR use when impacts of concern. Memo contrary to statutes, including definition of modification. Can only change through formal rulemaking. TIP: Memo ignores authority to construct or change given by statutes which distinguishes between permits, modifications and insignificance. Law does not state roll-in with BACT and impacts is mandatory. Memo contradicts earlier guidance from APD and ELD. Rules do not require incorporation to cover BACT and impacts. TPA: TCAA does not specify that incorporation mandatory 116 rules requiring roll-in do not specify BACT or impacts This memo changes existing reg s and adds rqm ts BACT, impacts not needed since PBR insign, PBR/SP rules similar/equiv to impacts (protective), usually include BACT. Permit BACT, impacts is duplicative/redundant - instead should follow intent of (e) and not require more stringent controls/conditions. URS: No statutory authority to require BACT or impacts and this memo represents a major change in policy, with significant negative consequences for companies. These requirements should be mandated only by legislation. JD: No reg basis for requiring 2 nd tech review to approve facility or change that is already authorized and APD has no authority to require it (b) incorporation is an admin exercise which in no way implies BACT/impacts review and the inference that PBRs are temporary auth for permitted facilities is not at all in 106 or 116. ENBR: disagrees with concept that impacts review and BACT required for PBR/SP being rolled into permit is duplicative review requirements, which is a waste of resources and should not apply to PBR/SP with clearly defined control standards and specifications.

4 since PBRs have been found to make insignificant contribution to air quality and have by design satisfied BACT and have (or were) reviewed for protectiveness at the time of adoption. There is no statutory support for this requirement. TACA: It is not appropriate that BACT/impacts should be required to roll-in PBR/SP, as it may create an untenable situation and shut down of facility. PRINCE: Roll-in should not be mandatory. For previously issued PBR which gets rolled in, if controls different, then no longer legal and company faced with mandatory retrofit or dropping amendment/renewal. CAL: mandatory roll-in with BACT and impacts are not rq d by TCAA, does not meet construction or modification def ns and contradicts previous guidance. When adopted PBR & SP are adopted they meet BACT and are protective and duplicative review should not be required. REPLY TO ALL: After recent agreements with EPA to resolve Environmental Justice issues (June 2003), and legislation requiring consideration of cumulative risks and impacts (2001), APD and ELD re-evaluated the intent and scope of the statute. This memo provides updated guidance on the mechanisms and requirements to incorporate PBR and SP into related permit authorizations. These items are added to the Intro paragraph of the memo. The TCAA requires the commission to vigorously pursue protection of air quality and gives the commission general powers to administer the TCAA through all practical and economically feasible methods. This info is added to the 1 st paragraph under Issue in this memo. It is recognized that while PBrs by themselves are insignificant, when emissions from one or more PBRs are added to emissions at permitted sites, the cumulative emissions need to be evaluated to ensure protectiveness as required by To meet intent of (b) and to roll-in PBR/SP into permit for single authorization under a permit of a facility or related facilities, & requires BACT to be applied for any permit review. SP require BACT at time of rule adoption, but BACT may change from time construction or rule adoption occurs. PBR law does not require BACT review at the time of adoption. Impact reviews always included PBR/SP in certain circumstances to ensure protectiveness, so this is not a change & not duplicative. This memo only clarifies procedures for 116. No substantive changes to memo based on these comments, however, clarification of law is added to memo. TCC: By requiring PBR/SP to be included in MAERTs, this would establish federally enforceable emission limits beyond those specified in original authorization. REPLY: The memo is updated to clarify that applicants have the flexibility to represent the maximum potential to emit (PTE) of their facilities based on capacity or design, as long as these values are less than any PBR conditions or the general requirements of Applicants may also voluntarily represent any emission value less than PTE for inclusion on the permit MAERT. Since mandatory roll-ins limited to changes which directly affect permitted facilities, establishing federally enforceable limits is appropriate. LOCK: No reason or justification for BACT and impacts analysis to be required when roll in PBRs

5 DRAFT MEMO TEXT Facilities authorized by PBR/SP which are rolled into permits will be subject to an impacts review based on the agency s Modeling Effects Review (MERA) Flowchart and Air Quality Modeling Guidelines. As with all authorizations, the intent of the TCAA must be met to ensure protection of public health and welfare. During the rule process for PBR or SP, the impacts of only the changes to permitted units, or new facilities are considered, not the potential of other emissions at the site, and therefore additional evaluation should be performed as a part of subsequent permit reviews. As sites add emissions, the impacts analysis during permit reviews has always required a comprehensive evaluation of all emissions when certain circumstances are met (quantity, character, location). The project increases include all PBR and SP to be rolled into the permit as well as all other changes which are requested in the permit review. This includes the step where the project is compared to 10% of the ESL for modeling applicability. The impacts review referred to in this memo is not a new requirement, but a clarification of the scope expected by the guidance document, MERA flowchart, and the memo titled Incorporating PBR Emissions in Permit Review dated April The results of any analysis or modeling must follow standard procedures and guidance when compared to Effects Screening Levels (ESLs), state regulatory limits, or National Ambient Air Quality Standard (NAAQS). As with any review, if impacts are unacceptable, changes must be proposed by the applicant before a positive recommendation to issue can be made. Facilities/changes previously authorized by PBR/SP can operate during permit review and if needed, the time line for changes will be negotiated in the Special Conditions. Following the modeling guidance documents, impacts reviews may be performed during permit reviews to ensure cumulative site-wide analysis (PBR, SP, and permits). If an impact analysis is submitted as part of a PBR or SP registration which follows the same guidelines that would be covered during a permit review, and would still be current at the next Amendment or Renewal review, additional analysis may not be required if nothing at the site has changed, or APD guidance and policy have not changed. However, depending on the scope and details of the impacts analysis submitted during a PBR or SP review, the registration may be delayed so the impacts analysis can be evaluated and audited in accordance with standard procedures. URS: Please clarify 1) if the Effects Evaluation Flowchart is used for each individual project or for all cumulative projects to be rolled into a permit during amend or renew. 2) if the Effects flowchart considers each PBR as a project to be compared to 10% of the ESL. 3) When is site-wide modeling to determine impacts triggered? What are acceptable exceedance quantities? 4) Is there a different guideline for PBR/SP roll-in verses permit actions? 5) What are the consequences of an unacceptable impact? 6) Can facilities continue to operate under PBR/SP during the permit review? REPLY: The memo is updated to note: 1) the scope of an impacts review using the flowchart should consider all cumulative projects to be rolled into a permit during amend or renewal, as well as all other changes which are included in the permit review. 2) MERA chart step 2 where the project is compared to 10% of the ESL looks at the total project. 3). In addition to the conditions described in the PBR Pilot Study memo, the MERA flowchart steps 9 and 11 describe when site-wide modeling is required. 4) No separate exceedance determinations are expected for PBR/SP roll-in verses permit review. 5) Unacceptable impacts must be resolved before the permit is issued. 6) Facilities/changes previously authorized by PBR/SP can operate during permit review and if needed, the time line for changes will be negotiated in the Special Conditions. DOW/TCC: Can/should impacts review be performed during SP registration instead of waiting until permit amendment or renewal. REPLY: The memo is also updated to offer the following: Impacts reviews should be performed at the permit to ensure cumulative site-wide analysis (PBR, SP, and permits). If an impact analysis is submitted as part of a PBR or SP registration which follows the same guidelines that would be covered during a permit review, and would still be current at the next Amendment or Renewal review, additional analysis may not be required if nothing at the site has changed, or APD guidance and policy have not changed. However, depending on the scope and details of the impacts analysis submitted during a PBR or SP review, the registration may be delayed so the impacts analysis can be evaluated and audited in accordance with standard procedures.

6 DRAFT MEMO TEXT These facilities will also be subject to a best available control technology (BACT) evaluation. BACT review is required since (b) requires incorporation into a permit, meaning become authorized by that permit. To be authorized by a permit a facility must meet (b)(1) BACT standards at the time of permit issuance. As stipulated by the definition of BACT and 3 rd Tier analysis option, economic reasonableness is always available for consideration, especially for incremental increases in emissions authorized by PBR. The exception to the application of BACT follows (a) which states that any pollution control project SP ( ) is exempt from BACT requirements, including during roll-in. Rolling in a PBR will not be required to meet the public notice requirements listed in since this rule is intended for emission increases which are not previously authorized. Rolling in a SP will not be considered for public notice requirements since there will not be an increase in emissions since representations and allowable emissions are enforceable limits. No additional amendment or renewal fees will be charged when rolling in a PBR/SP, as these facilities are previously authorized. All PBR/SP to be rolled in are expected to be an integral part of an amendment or renewal and the length of time for review will depend on the completeness of the application. HILL: Facilities authorized under old SE or PBR which are subsequently rolled-in might have to upgrade to meet current BACT with substantial impact esp to Sm Bus. URS: Consider the potential high cost and uncertainty placed when there is no clear statutory directive for BACT review. REPLY: As noted in the memo revisions, 3 rd Tier BACT analysis is always an option, and economic reasonableness is always available for consideration. URS: During BACT review, will consideration be given to economic feasibility of implementing BACT? REPLY: As allowed by the definition of BACT and Tier 3 economic reasonableness is always available for consideration. TXOGA: Agency should establish guidance document of 10-yr BACT or current BACT to provide certainty to industy REPLY: APD is currently developing BACT guidance for the most common facility types. HILL/URS: Can BACT be determined at the time of construction, not amendment review? REPLY: BACT must be evaluated at the time of amendment or permit issuance to meet This memo is only applicable to PBRs claimed after the date of this memo, a reminder will be added to all letters recognizing PBR registrations at permitted facilities and therefore companies should be aware that they may be subject to retrofit controls in the future. In addition, BACT does not substantially change over time. No memo changes proposed. URS: How will BACT review for PBR/SP facilities affect the timing of applications. If processed simultaneously, will additional review time be required? If yes, how long? REPLY: The memo is updated to note that all PBR/SP to be rolled in are expected to be an integral part of an amendment or renewal and timing will depend on the completeness of the application. DOW/TCC: Please clarify if PCP SP roll-in is subject to BACT review. REPLY: Since exempted by law ( ), PCP does not have to comply with BACT and memo is updated. DOW: Memo focuses on new facilities, but not clear how to review changes to facilities authorized by PBR/SP. Is the entire facility or just the incremental change subject to BACT? REPLY: The initial review for BACT will focus on the entire facility as most control technologies are equipment or process specific. If BACT is not met, the option to focus on only the incremental change in a 3 rd Tier review will be offered to applicants. The memo is updated to note this option. DRAFT MEMO TEXT

7 Referenced in Permit PBR/SPs which are included by reference into permits will remain authorized by the PBR or SP, however the permit will identify the facilities and reference the registration or claim in the permit conditions and MAERT. The facilities will be listed by registration number (if assigned), hourly and annual emissions type and amount, effective date of PBR/SP, and any other unique historical information. Applicants have the flexibility to represent the maximum potential to emit (PTE) of their facilities based on capacity or design, as long as these values are less than any PBR conditions or the general requirements of Applicants may also voluntarily represent any emission value less than PTE for inclusion on the permit MAERT. Registrations for these PBR/SP will not be voided and no additional review is required. These PBR/SP registrations/claims will also be referenced the Technical Review Summary and company final action letter. Mandatory vs. Voluntary The following are three scenarios which describe when rolling in and referencing PBR/SP should occur: Mandatory Roll-in: Facilities, or changes to facilities, authorized by any PBR that directly modified or increased the emissions of a permitted facility, including but not limited to or , must be rolled into the permit during any amendment or renewal. Facilities constructed under PBR/SP or changes to the method of emissions control must also be rolled into the permit during amendment. At this time, this does not include maintenance, start-up or shutdown emissions authorized by PBR or SP. Voluntary Roll-in: Any PBR/SP which does not directly modify or increase the emissions of a permitted facility can be rolled into a permit only at the company s request during an amendment or renewal review. Voluntary rolling in of PBR/SP must meet the requirements for mandatory roll-in as described above. These PBR/SP may include addition of new facilities that does not directly modify or increase the emissions from a permitted facility, but does affect permitted operations. At a minimum, the facilities authorized by these PBR/SP must be referenced in the permit that is being amended or renewed. Voluntary Reference: There are PBR/SP that authorize stand-alone, independent facilities and processes. These PBR/SP do not directly modify or in any way affect permitted facilities. In these cases, it is completely voluntary to roll-in or reference these PBR/SP in the permit during amendment or renewal. In most cases, these PBR/SP may be referenced, following the procedures mentioned above. URS: How will emission limits be determined for PBRs, especially one-liners and those that do not have emission rate limitations other than 106.4? Will these values become maximum limitations? REPLY: The memo is updated to clarify that applicants have the flexibility to represent the maximum potential to emit (PTE) of their facilities based on capacity or design, as long as these values are less than any PBR conditions or the general requirements of Applicants may also voluntarily represent any emission value less than PTE for inclusion on the permit MAERT. ENBR: Three scenarios are not clearly defined and too subjective for certainty. It is frequently difficult to explain unique situations to permit reviews who deal with a wide variety of industries and do not specialize with upstream oil and gas plants, especially to determine when equipment is related or not to a given process. REPLY: The scenarios described are purposefully generalized to allow for interpretation and flexibility of determinations and not require unnecessary reviews. It is incumbent on the applicant to clearly describe their plant and processes and how equipment relates to each other. No changes are proposed. TXOGA: Recommends several exemptions to memo: 1) MSS under since modeling of short-term releases impractical; 2) PBR/SP which have been amended in past 10 yrs should be presumed to have current BACT and protectiveness using statutory precedent of SB1126; 3) Correlative PBR & SP ( and ) should be presumed to have BACT and be protective; 4) Voluntary roll-in of older SE, PBR, SP which have not been used to increase emissons from permitted facilities; 5) flares should be considered control devices and not facilities subject to BACT/impacts requirements per REPLY: 1) MSS modeling is not impractical and permit reviews need to ensure protectiveness, however, whether MSS PBR incorporation will be required will be considered in future rulemaking and at this time the ED is not including them; 2) 10 yr BACT would not meet statute ; 3) Cannot assume correlative PBR & SP ( and ) have BACT and are protective; 4) Voluntary roll-in of older SE, PBR, SP which have not been used to increase emissons from permitted facilities are not subject to mandatory roll-in and may instead use voluntary incorporation by reference; 5) flares are both control devices and facilities and unless authorized by PCP SP, are by law subject to BACT/impacts requirements. Major sites with Title V Permits:Any PBR/SP rolled

8 into an NSR permit would trigger a minor revision to a Title V federal operating permit and can be processed along with any other changes due to the amendment of the NSR permit. Internal: what is effect of Roll-in on Title V permits? What type of revision, if any, would be triggered? DRAFT Response: Since PBR/SP previously authorized, use Admin or Minor Revision, which often would be triggered anyway for amend or renewal. Proposed clarification added to end of memo. Highlights in Yellow are changes from 5/18/05 distributed memos Highlights in Green are proposed changes based on comments received as of 11/21/05 COMMENTOR ABBREVIATIONS TIP = Matt Kurlya, Baker Botts for Texas Industry Project TXOGA = Skip Dees/Cindy Morphew, Texas Oil & Gas Association Exxon = Tom Monahan, ExxonMobil Production Co. - endorses all comments submitted by TIP & TxOGA BAQC = Arturo Blanco, Chief, Bureau of Air Quality, City of Houston TPA = Patrick Nugent, President, Texas Pipeline Assoc HILL = Lisa McCurley, Hill Country Envinonmental HB = James Braddock, Haynes & Boone, LLP URS = Mona Johnson, Project Mgr, URS Corporation TCC = Texas Chemical Council JD = Steve Langevin, J.D. Consulting LOCK = Bob Kramer, Lockheed Martin Aeronautics ENBR = Brady Dodson, Enbridge Energy Company TACA = Nancy Garnett, TXI & Texas Aggregate & Concrete Association PRINCE = Tim Prince, Prince Environmental DOW = Russell Wozniak, Dow Chemical Company Internal = various notes from APD staff CAL = Jan Stavinoha, Calpine Corporation