Aggregation Issues Jesse Lovegren, Ph.D. Air Permits Division Texas Commission on Environmental Quality Advanced Air Permitting Seminar 2015

Presentation Sections Overview Site Aggregation Examples Project Aggregation Examples

Overview Clean Air Act programs applying to "major" sites/sources:  Site Aggregation: “common sense notion of a plant”  Project Aggregation: keeps applicants from improperly avoiding major NSR review

Site Aggregation Affected Programs Major NSR: Modification to existing major source vs. new source; Title V: Applicability of program; and NESHAPs for source categories: Major source vs. Area source

Site Aggregation Site Criteria Same industrial grouping; Located in one or more contiguous or adjacent properties; and Under common control

Site Aggregation Same Industrial Grouping Grouping is 2-digit SIC code “Support Facility” concept Groupings not considered for NESHAP program

Site Aggregation Contiguous/Adjacent Properties Adjoining except for an intervening road, railroad, right-of-way, waterway, etc.; Properties located < ¼ mile apart; and Interdependent (can be > ¼ mile apart)

Site Aggregation Contiguous/Adjacent Properties Oil and Gas Rules SB 1134 applies Proposed EPA rules: Proposal 1: Defines “adjacent”; and Proposal 2: Revises regional consistency regulations Site Aggregation Contiguous/Adjacent Properties Oil and Gas Rules

Site Aggregation Under Common Control Generally, operations under the same company; Evaluated at the highest point of the organization’s structure; and More complex business relationships require case-by-case determination

Example 1 Property A: Crude oil & refined products storage Property B: For-hire storage; includes a boiler

Example 1 Can They be Aggregated? Properties A & B: Owned by the same company On opposite banks of a waterway and < ¼ mile apart at their closest point < ¼ mile

Example 1 Answer Common control Adjacent properties Property A belongs to: Group 5171 Property B belongs to: Group 5169 Boiler is a support facility Yes: Sites can be aggregated.

Example 2 Property A: Soil/groundwater remediation facility Property B: Bulk fuels terminal

Example 2 Can They be Aggregated? On contiguous properties Company B owns a share of both Shared electricity supply Partly Owned by Companies A & B Operated by Company B

Example 2 Answer Not under common control Contiguous properties Property A belongs to: Group 4959 Property B belongs to: Group 5171 Neither is a support facility No: Sites cannot be aggregated.

Project Aggregation Applicability Major NSR; Major modifications to stationary sources; a physical change with an emissions increase; and Projects sufficiently related or treated as a single physical change

Project Aggregation Other Applicability Applies to evaluation of project increase only Source-wide netting comprises all contemporaneous changes at the source, related or not

Project Aggregation Project Criteria Timing of applications Documentation:  Funding applications;  Consumer demand and projected production reports; and  Statements on plans of operation TCEQ analysis

Project Aggregation When Is Evaluation Required? Two or more filed within a short time period; and Major NSR requirement avoided by separate treatment of projects

Example 3 Project 1: PSD application for construction of marine loading dock & storage Project 2: PSD application for additional throughput

Example 3 Is Further Evaluation Needed? Project 1 & 2: Subject to PSD review for VOC (O 3 precursor); and Increases for other pollutants insignificant even when projects considered together

Example 3 Answer Can be considered part of the same physical change No major NSR requirements avoided Analysis for Project 2 may include emissions from Project 1 No further evaluation is needed.

Example 4 Project 1: Permit for changes at 3 units at an aluminum reduction plant Permit  3 Units  Controls Project 2: Request to split into 3 separate reviews/permits Permit  1 Unit Permit  1 Unit Permit  1 Unit

Example 4 Should the Permit Be Split? Considerations: Splitting permit = removal of control device Owner: “Projects were separate business decisions and economic justifications.” Permit  3 Units  Controls Permit  1 Unit Permit  1 Unit Permit  1 Unit

Example 4 Answer Previous owner statements treat the changes as one project Owner should not agree to emission reduction measures to avoid PSD review and then apply to discontinue reduction measures Permit should not be split.

Questions?