PSD/Nonattainment Permitting PSD = Prevention of Significant Deterioration Picture : CC SA 1.0, https://commons.wikimedia.org/w/index.php?curid=110538 Chase Perry Air Permits Division Texas Commission on Environmental Quality Environmental Trade Fair and Conference 2017

Federal NSR Permitting Applica-bility NA Review Netting PSD Review Overview PSD = Prevention of Significant Deterioration NSR = New Source Review NA = Nonattainment Federal air permitting programs Texas is SIP-approved to implement Pollutant-specific; oxides of nitrogen (NOX) could be both Simultaneous PSD and Nonattainment New Source Review (NNSR) is possible for same/different criteria pollutant PSD applies anywhere to greenhouse gases Applicability = very strong function of (location’s attainment status) = very strong function of (Yes or No: existing major source) Structural Symmetry: Federal Clean Air Act/Texas Health and Safety Code; Code of Federal Regulations/Texas Administrative Code; PSD/NNSR logic and outcomes

PSD/NNSR: What’s Different? Major source and major modification thresholds Netting applicability thresholds Netting results evaluation thresholds Ensuing technical review of the application PSD/NNSR: WHAT’S DIFFERENT? NNSR = Nonattainment New Source Review

PSD/NNSR: What’s the Same? Some terminology and all applicability logic PTE, Baseline Actual Emissions, Project Increases Creditability criteria, contemporaneous changes Netting window and calculation method PSD/NNSR: WHAT’S THE SAME? Determine the Project Increase: Proposed Potential to Emit (PTE) minus Baseline Actual Compare to major source (MS) definition Project increase < MS, Federal New Source Review (FNSR) is not required Project increase ≥ MS, FNSR is required, and no netting is allowed

Applicability

Federal NSR Applicability Pollutant Federal Modification? Major Project? Significant Net Emission Increase? No Federal NSR Major Site? Project Increase Significant? No Yes Federal NSR Determine Net Emission Increase Determine Site PTE & Project Increase The original flowchart can be found in the Federal NSR Applicability Guidance Document at https://www.tceq.texas.gov/assets/public/permitting/air/Guidance/NewSourceReview/fnsr_app_determ.pdf. Federal NSR Applicability

Modifications Modifications Physical change Change in method of operation Exceptions located in 30 TAC §116.12(20)(B) Routine maintenance, repair, and replacement 30 TAC = Title 30 Texas Administrative Code 30 TAC §116.12(20)(B) can be found at http://texreg.sos.state.tx.us/public/readtac$ext.TacPage?sl=T&app=9&p_dir=F&p_rloc=166845&p_tloc=14713&p_ploc=1&pg=2&p_tac=&ti=30&pt=1&ch=116&rl=12. Elements of modification definition Applicable to the listed criteria pollutants Calculation corrections may entail retrospective federal review

Modification Examples New Facility New boiler New tank Debottle-necking Increased feedstock Decreased downtime Increase efficiency Improve reactor yields Change column packing/trays Modifications Modification Examples Adding a new facility: New boiler New tank Debottlenecking: Providing more feedstock than previously possible Decreasing process downtime with more reliable equipment Increasing process efficiency: Improving reactor yields Changing distillation column packing/trays

CURRENT NONATTAINMENT AREAS IN TEXAS Portion of Titus County Portion of Rusk County Portion of Panola County Portion of Anderson County Portion of Freestone County City of El Paso Houston/Galveston/Brazoria: Brazoria, Chambers, Fort Bend, Galveston, Harris, Liberty, Montgomery, and Waller Counties Dallas/Fort Worth: Collin, Dallas, Denton, Ellis, Johnson, Kaufman, Parker, Rockwall, Tarrant, and Wise Counties Portion of Collin County CURRENT NONATTAINMENT AREAS IN TEXAS The second step in determining federal applicability is identifying whether the site is located in a nonattainment area. Dallas/Fort Worth (DFW) – 1997 Ozone Standard Denton, Collin, Parker, Tarrant, Dallas, Rockwall, Kaufman, Johnson, and Ellis Counties Wise County – 2008 Ozone Standard Portion of Collin County – Lead (Pb) Houston/Galveston/Brazoria (HGB) – 2008 Standard Harris, Galveston, Brazoria, Chambers, Liberty, Montgomery, Waller, and Fort Bend Counties City of El Paso – particulate matter equal to or less than ten microns in diameter (PM10) Portions of Freestone, Anderson, Rusk, Panola, and Titus Counties – Sulfur dioxide (SO2)

DFW Ozone Nonattainment Area Dallas/Fort Worth: Collin, Dallas, Denton, Ellis, Johnson, Kaufman, Parker, Rockwall, Tarrant, and Wise Counties DFW Ozone Nonattainment Area

Collin County Lead Nonattainment Area Portion of Collin County Collin County Lead Nonattainment Area

HGB Ozone Nonattainment Area Houston/Galveston/Brazoria: Brazoria, Chambers, Fort Bend, Galveston, Harris, Liberty, Montgomery, and Waller Counties HGB Ozone Nonattainment Area

El Paso PM10 Nonattainment Area City of El Paso El Paso PM10 Nonattainment Area

SO2 Nonattainment Areas Portion of Titus County Portion of Rusk County Portion of Panola County Portion of Anderson County Portion of Freestone County SO2 Nonattainment Areas

NONATTAINMENT AREA? Nonattainment Area? HGB / O3 / Moderate DFW / O3 / Moderate Portion of Collin County / Pb El Paso / PM10 / Moderate Parts of Freestone, Anderson, Rusk, Panola, and Titus Counties / SO2 O3 = ozone Major source independent of listed status Depends on location/classification DFW (Dallas/Fort Worth) and HGB (Houston/Galveston/Brazoria) exceed O3 NAAQS City of El Paso exceeds PM10 NAAQS Portion of Colin County in DFW exceeds Pb NAAQS Parts of Freestone, Anderson, Rusk, Panola, and Titus Counties exceed SO2 NAAQS

NONATTAINMENT area? Nonattainment Area? Only nonattainment area pollutants New major sources Major modifications of existing major sources Most commonly encountered criteria pollutant in areas: O3 (NOX, VOC) LAER and offsets NOX = oxides of nitrogen VOC = volatile organic compound Applies only to pollutants for which the area is designated as nonattainment New major sources Major modifications of existing major sources Most commonly encountered area: ozone (NOX,VOC) Lowest Achievable Emission Rate (LAER) and offsets

Existing Major Source? EXISTING major source? PSD Criteria Pollutants Named source? 100 TPY of any Unnamed source? 250 TPY of any 100 tons per year (TPY) for all named sources: Any criteria pollutant 28 ‘named’ source categories Listed at 40 CFR §52.21(b)(1)(i) 250 TPY for all unnamed sources not listed above.

Existing Major Source? EXISTING Major source? Nonattainment DFW / O3 / Moderate 100 TPY of NOX or VOC HGB / O3 / Moderate El Paso / PM10 / Moderate 100 TPY of PM10 Major source independent of listed status Depends on location/classification DFW (Dallas/Fort Worth) and HGB (Houston/Galveston/Brazoria) exceed O3 NAAQS City of El Paso exceeds PM10 NAAQS Portion of Collin County in DFW exceeds Pb NAAQS

Determining the Project Project Increase Determining the Project Includes all new, modified, and affected facilities Upstream and downstream effects Emissions increases only Affected facilities see an increase in emissions without a physical change or change in method of operation at the facility.

Project Increase Project Increase Project emissions increase for modified/affected facilities, PTE-BAE=PEI or PAE-BAE=PEI for new facilities, PTE from the facility following project completion PTE = potential to emit BAE = baseline annual emissions PEI = project emissions increase PAE = projected actual emissions Project emissions increase--The sum of emissions increases for each modified or affected facility determined using the following methods: for existing facilities, the difference between the projected actual emissions (excluding capable of accommodating emissions) and the baseline actual emissions; and for new facilities, the potential to emit (PTE) from the facility following completion of the project. Insert Projected Actual rule reference Back on the same road; no distinction in what constitutes a project increase (PI) between PSD and NNSR PI = Proposed PTE – Baseline Actual (Proposed PTE minus Baseline Actual) New allowable emission rates Planned emission rates Proposed PTE Baseline actual emission rates Highest actual TPY average Any consecutive 24 months from last ten years Five years for electric utilities Different two-year TPY avg. acceptable/different pollutants

Project Increase Project Increase Baseline Actual Emissions Emissions, in tons/year, actually emitted during a consecutive 24- month period out of the previous 10 years (previous 5 years for electric utilities) from the date the project is authorized or modifications are operated. Back on the same road; no distinction in what constitutes a project increase (PI) between PSD and NNSR PI = Proposed PTE – Baseline Actual (Proposed PTE minus Baseline Actual) New allowable emission rates Planned emission rates Proposed PTE Baseline actual emission rates Highest actual TPY average Any consecutive 24 months from last ten years Five years for electric utilities Different two-year TPY avg. acceptable/different pollutants

Allowable to Allowable Comparison Project Increase Project Increase Allowable to Allowable Comparison Only 2 scenarios BAE ≥ current PTE New facility within 24 months of initial start-up

MAJOR PROJECT? Major Project? Existing Minor Source: PEI ≥ major source threshold? Existing Major Source: PEI ≥ major modification threshold? Netting necessary? Existing Minor Source: PEI ≥ major source threshold? If yes, federal permitting applies If no, state permitting only Existing Major Source: PEI ≥ major modification threshold? If yes, netting may be performed Netting?

Significant Emission Rates for Major Project? PSD Significant Emission Rates MAJOR PROJECT? Significant Emission Rates for Criteria Pollutants CO ≥ 100 TPY NOX ≥ 40 TPY SO2 ≥ 40 TPY VOC ≥ 40 TPY PM ≥ 25 TPY PM10 ≥ 15 TPY PM2.5 ≥ 10 TPY Pb ≥ 0.6 TPY CO = carbon monoxide NOX = oxides of nitrogen SO2 = sulfur dioxide VOC = volatile organic compound PM = particulate matter PM10 = particulate matter equal to or less than ten microns in diameter PM2.5 = particulate matter equal to or less than 2.5 microns in diameter Pb = lead

Significant Emission Rates for Non-Criteria Pollutants Major Project? PSD Significant Emission Rates MAJOR PROJECT? Significant Emission Rates for Non-Criteria Pollutants Fluorides ≥ 3 TPY Sulfuric acid mist 7 TPY Hydrogen sulfide 10 TPY Total Reduced Sulfur 40 TPY

NNSR Major Modification Thresholds Major Project? MAJOR PROJECT? NNSR Major Modification Thresholds OZONE (VOC, NOX) Netting (TPY) Major Mod Major Source (TPY) HGB 40 100 DFW

Applicability Summary Existing Major Source Project Increase > Netting / MS / MM? Federal NSR Applies? No Yes no netting allowed Perform Netting MS = major source MM = major modification Federal NSR applies if... At a greenfield site or existing minor source with a new project (1 trigger): Project increase is itself a major source (i.e., increase exceeds major source definition) At major sources (2 triggers): Project increase ≥ MM definition (‘significance‘), and Net increase ≥ MM definition (‘significance’)

Netting

Netting Netting Applies to existing major sources only 2nd applicability step for major NSR Ensures smaller projects do not add up to be a major modification

Netting Netting Netting performed if: Existing major source PEI ≥ MM threshold PSD netting threshold equal to Significant Emission Rate Nonattainment DFW – 40 TPY HGB – 40 TPY Federal Permitting triggered if: For new or modified equipment, located at an existing major source, the net emissions increase from the project must be greater than or equal to the applicable major modification significant emission rate.

Netting Netting Conducted for each applicable pollutant Evaluation of: Current project, plus All emission changes in netting window For the first time, decreases are considered.

Netting Contemporaneous Period “the netting window” 5yrs prior to SOC Start of construction (SOC) Start of Operation (SOO) Contemporaneous period (netting window): From five years before start of construction to the proposed start of operation. If the sum of the projects within the period is greater than or equal to the major modification significant emission rate, major NSR is triggered.

Contemporaneous Period Netting Netting Contemporaneous Period All changes must be considered Include planned projects prior to SOO All increases and decreases must be creditable

Netting Netting Creditable Emissions Contemporaneous Not previously “relied upon” Confirmed by Emissions Inventory An increase or decrease in emissions is “creditable” only if the following conditions are met: It occurs during the contemporaneous period. It has not been relied on in issuing a major NSR permit for the source, and the sources/activities authorized by the major NSR permit are not in operation when the current increase is authorized. Reliance on Emissions Inventory

PTE-BAE=Emissions Increase Netting Netting Creditable Increases PTE-BAE=Emissions Increase The new level of emissions in excess of the Baseline Actual Emission Rate PTE = potential to emit BAE = baseline actual emissions Projected actual emissions (PAEs) are not allowed for calculating contemporaneous changes, are not enforceable limits, and therefore, are not creditable.

PTE-BAE=Emissions Decrease Netting Netting Creditable Decreases PTE-BAE=Emissions Decrease Must be enforceable Must be real Must occur prior to SOO Reductions to comply with current or new requirements (e.g., BACT, SIP) don’t count. BACT = best available control technology SIP = State Implementation Plan

Contemporaneous Changes Netting Netting Contemporaneous Changes Identify via TCEQ Table 3F Must include all increases and decreases TCEQ Table 4F for each decrease Table 3F must include: The project number that authorized the change, and An explanation of those changes not included and why Increases and decreases for each project within the contemporaneous period are determined based on a comparison of the following: Baseline Actual Emission Rate, and The PTE of that project (projected actuals are not used in this step except for the current project) Table 3F and Table 4F can be found at https://www.tceq.texas.gov/permitting/air/forms/newsourcereview/tables/nsr_table8.html.

Netting Window Example SOC SOO Prior project 10 years BAE

netting Netting Net Emissions Increase Project Emissions Increase + Contemporaneous Increases - Contemporaneous Decrease Table 3F must include: The project number that authorized the change, and An explanation of those changes not included and why Increases and decreases for each project within the contemporaneous period are determined based on a comparison of the following: Baseline Actual Emission Rate, and The PTE of that project (projected actuals are not used in this step except for the current project)

Major project? Major Project? Compare net emissions increase to SER or MM threshold If net emissions increase is greater than applicable threshold, major NSR is required SER = significant emission rate MM = major modification

Federal NSR Applicability Pollutant Federal Modification? Major Project? Significant Net Emission Increase? No Federal NSR Major Site? Project Increase Significant? No Yes Federal NSR Determine Net Emission Increase Determine Site PTE & Project Increase The original flowchart can be found in the Federal NSR Applicability Guidance Document at https://www.tceq.texas.gov/assets/public/permitting/air/Guidance/NewSourceReview/fnsr_app_determ.pdf. Federal NSR Applicability

Examples

Example 1 New Chemical Production Unit New Facility = Part of Project Increased Use of Facility = Part of Project Fugitives, Tanks, MSS Flares (affected source) Boilers (affected source) MSS = maintenance, start-up, and shutdown Proposing a new chemical production unit: Any new facility is part of the project: Fugitives, tanks, MSS Any increased use of a facility is part of the project: Increased utilization of flares (affected source) Increased steam need from boilers (affected source) Are any by-products used to debottleneck other production units? Debottle-necking? By-products used to debottleneck other production units?

Example 1 New Chemical Production Unit – VOC Increase New Facility = Part of Project Increased Use of Facility = Part of Project Fugitives = 10 TPY* Tanks = 50 TPY* MSS = 5 TPY* Flares = 4 TPY** Boilers = 1 TPY** VOC = volatile organic compounds PTE = potential to emit PAE = projected actual emissions BAE = baseline actual emissions Proposing a new chemical production unit – VOC increase: Fugitives – 10 TPY (new, PTE) Tanks – 50 TPY (new, PTE) MSS – 5 TPY (new, PTE) Increased utilization of flares (affected source) – 4 TPY (existing, PAE-BAE) Increased steam need from boilers (affected source) – 1 TPY (existing, PAE-BAE) Project Increase = 10+50+5+4+1 = 70 TPY VOC 10+50+5+4+1 = 70 TPY VOC * new, PTE ** existing, PAE-BAE

Example 2 EXAMPLE 2 Existing Named Minor Source; PTE = 60 TPY NOX Proposed Minor Project; + 60 TPY NOX Existing Site <100 TPY PTE (minor source) Project not major by itself PSD not required Named source with 60 TPY NOX PTE, project proposed for additional 60 TPY NOX: Existing site < 100 TPY PTE (minor source), project is not major by itself – no PSD

Example 2 – continued EXAMPLE 2 Existing Named Major Source; PTE = 120 TPY NOX Proposed Minor Project; + 60 TPY NOX Existing Site >100 TPY PTE (major source) project is over major modification threshold PSD Netting Project is over major modification threshold PSD Netting

Example 3 – Greenfield site in Moderate ozone nonattainment County Un-named Source; Project Increase: 110 TPY NOX 45 TPY VOC 300 TPY CO 110 TPY NOX > 100 TPY MS Trigger – nonattainment applies to NOX 45 TPY VOC < 100 TPY MS Trigger – nonattainment does not apply to VOC NOT – major for one, major for all Serious Ozone Nonattainment county, not a named source, greenfield site: Project Increase – 110 TPY NOX 45 TPY VOC 300 TPY CO Moderate Ozone Nonattainment – 100/40 TPY (MS/MM), Offset = 1.15:1.0 PSD – 250 TPY MS (40 NOX / 40 VOC / 100 CO MM) Major modification – the project increase of criteria pollutant emissions is greater than or equal to: Carbon monoxide (CO) 100 tons/year Nitrogen oxides (NOX) 40 tons/year Sulfur dioxide (SO2) 40 tons/year Volatile organic compounds (VOCs) 40 tons/year Particulate matter (PM) 25 tons/year PM less than or equal to 10 microns in diameter (PM10) 15 tons/year PM less than or equal to 2.5 microns in diameter (PM2.5) 10 tons/year Lead (Pb) 0.6 tons/year Nonattainment: 110 TPY NOX > 100 TPY MS trigger – Nonattainment applies to NOX 45 TPY VOC < 100 TPY MS trigger – Nonattainment does not apply to VOC: Not major for one, major for all 0.6 tons/year

Example 3 – Greenfield site in Moderate ozone nonattainment County Un-named source; Project Increase: 110 TPY NOX 45 TPY VOC 300 TPY CO 300 TPY CO > 250 TPY MS Trigger – PSD applies to CO 110 TPY NO2 > 40 TPY SER – PSD applies to NO2 PSD does not apply to ozone precursors in NA county PSD: 300 TPY CO > 250 TPY MS trigger – PSD applies to CO: Major for one, major for all 110 TPY NOX > 40 TPY SER – PSD applies to NOX PSD does not apply to ozone in ozone NA county, therefore does not apply to VOC or NOx NA for NOX: PSD for CO, NO2, and VOC: Offset = 132 TPY NOX

Un-named major source for NNSR and PSD; Example 4 – existing major source in Moderate ozone nonattainment County Un-named major source for NNSR and PSD; Project Increase: 110 TPY NOX 45 TPY VOC 300 TPY CO Both NOX and VOC are above netting threshold (MM) for PSD and nonattainment CO is above the netting threshold (MM) for PSD Contemporaneous Increase:50 TPY NOX (nonattainment triggered) 35 TPY NO2 (PSD is not triggered) 30 TPY VOC (nonattainment is not triggered) 85 TPY CO (nonattainment and PSD not triggered) 50 TPY NOX (nonattainment triggered) 35 TPY NO2 (PSD is not triggered) 30 TPY VOC (nonattainment is not triggered) 85 TPY CO (nonattainment and PSD not triggered) Serious Ozone Nonattainment county, not a named source, existing major source (NA and PSD) for all pollutants except VOC: Project Increase – 110 TPY NOX 45 TPY VOC 300 TPY CO Both NOX and VOC are above netting threshold (MM) for PSD and NA, CO (MM) for PSD Contemporaneous Increase – 30 TPY NOX (NA triggered but not PSD) No netting allowed for VOC (PSD triggered but not NA) 85 TPY CO (NA and PSD not triggered)

Example Analysis – Existing Major Site Pollutant Project Emissions (TPY) Major Mod Trigger (TPY) NA Triggered Y/N PSD Triggered VOC 45 40 for NA 40 for PSD Y1 N NOX 21.72 SO2 33.12 100 n/a CO 60.92 PM 32.68 25 Y PM10 32.15 15 PM2.5 31.68 10 1 Applicant chose to undergo nonattainment review regardless of contemporaneous change. Because GHG increases are above 75,000 TPY CO2e, PSD for GHG was also triggered and is being reviewed as Permit No. GHGPSDTX137. GHG = greenhouse gas CO2e = carbon dioxide equivalents For simplicity, assume the site has no contemporaneous increases or decreases. This slide shows what a reviewer would create to give an overview of a major NSR project review. As you read the columns from left to right, the progression of a review can be followed. For instance, first the pollutant is PM. Next, the project increase has been determined. The major modification trigger level has been identified. Last, a comparison of the project emissions to the major modification trigger level occurs, and applicability is determined. Per 40 CFR § 52.21(i)(2 ) – PSD review does not apply to pollutants in an area which is designated as nonattainment for that pollutant.

Netting Netting is required! EXAMPLE 1 EXAMPLE 2 EXAMPLE 3 EXAMPLE 4 Blank Tab Site is a named major source located in a moderate nonattainment area. Current PTE = 10 TPY VOC Proposed PTE = 45 TPY VOC Baseline Actual = 4 TPY VOC Project Increase = 41 TPY VOC Netting is required!

Netting EXAMPLE 1 Example 2 Example 3 Example 4 Example 5 FIN = facility identification number EPN = emission point number

Federal NSR Applicability Pollutant Federal Modification? Major Project? Significant Net Emission Increase? No Federal NSR Major Site? Project Increase Significant? No Yes Federal NSR Determine Net Emission Increase Determine Site PTE & Project Increase The original flowchart can be found in the Federal NSR Applicability Guidance Document at https://www.tceq.texas.gov/assets/public/permitting/air/Guidance/NewSourceReview/fnsr_app_determ.pdf. Federal NSR Applicability

PSD Review

PSD REVIEW PSD Review EPA’s top-down method for BACT Pre-modeling meeting and approved modeling protocol required Class I analysis Top-down BACT: Identify all possible controls for each facility (emission unit) Address each option and whether technically feasible – remove infeasible Rank options by level of control Eliminate options based on collateral impacts Select BACT TCEQ Tier III BACT is considered equivalent to top-down.

NNSR Review

Nnsr review NNSR Review Offsets DFW – 1.15:1 TPY Collin County – 1:1 TPY HGB – 1.15:1 TPY El Paso – 1:1 TPY SO2 Counties – 1:1 TPY Project increase (not contemporaneous increase) must be offset with actual reductions at prescribed ratio DFW – 1.15:1 HGB – 1.15:1 Collin County – 1:1 El Paso – 1:1 SO2 Counties – 1:1 The Air Quality Division, Banking and Trading Programs Team administers offsets. The team tracks emissions available for purchase or trade and ensures the emissions are creditable. Offsets must be acquired prior to start of operations.

Nnsr review NNSR Review LAER Applies to all new and modified facilities Not cost dependent Must have been achieved previously LAER = Lowest Achievable Control Technology

Energy & Combustion Section Contact Information: Air Permits Division (512) 239-1250 Energy & Combustion Section (512) 239-5606 Rick Goertz (512) 239-1347 Chase Perry Chemical Section Jesse Lovegren (512) 239-1284 (512) 239-5542 Arturo J. Garza Contact information Picture : CC SA 1.0, https://commons.wikimedia.org/w/index.php?curid=110538