1. PSD Background Presentation
May 3rd 2011 John Holmes

2. Prevention of Significant Deterioration (PSD): Overview
Federal preconstruction permitting applies to new major stationary sources and major modifications at existing major sources
Preconstruction NSR permitting:
Prevention of Significant Deterioration (PSD) in attainment areas
Different NSR requirements in nonattainment areas

3. PSD Program: Overview (cont’d)
PSD applies on a pollutant specific basis, depending on local air quality status and the levels of emissions of pollutants covered by PSD.

4. Key Requirements of PSD Permitting
Best Available Control Technology (BACT)
Air quality impacts: NAAQS and PSD increments
Impacts on Class I areas
Impacts on soils, vegetation and visibility
Public comment
Issuance before construction can begin

5. PSD Regulations and Guidance
Federal Regulations:
40 CFR
40 CFR 52.21
State versions of the rules may vary.
EPA Guidance:
Draft 1990 New Source Review Workshop Manual
Determining PSD applicability
Determining BACT
Dated but consistent with agency position on many aspects of PSD permitting

6. PSD Regulations and Guidance (cont’d)
Case specific determinations and policy guidance at agency websites
Environmental Appeals Board decisions
Prevention of Significant Deterioration and Title V Permitting Guidance for Greenhouse Gases

7. Regulated NSR Pollutants
Certain requirements for “criteria pollutants” covered by NAAQS:
PM10, PM2.5 and precursors CO
SO2
VOCs and NOx, as precursors for ozone
NO2
Lead

8. Regulated NSR Pollutants (cont’d)
Pollutants without NAAQS:
GHGs
Total PM
Fluorides
Sulfuric acid mist
Reduced sulfur compounds
Metals
Acid gases
MSW landfill emissions
MWC organics
Ozone-Depleting Substances

9. PSD Applicability: Defining the Source
Stationary source is any building, structure, facility or installation
All pollutant-emitting activities:
Same industrial grouping
Contiguous or adjacent properties
Common ownership or control
Defining modification
All units with physical or operational change
No artificial separation of a project
Few exclusions
Routine maintenance repair or replacement
Increases in hours of operation

10. PSD Major Source Thresholds
Major source thresholds depend on the nature of the source
Potential to emit of 100 TPY or greater, if source is in 28 source categories
Include fugitive emissions
All other sources, PTE of 250 TPY or greater
Exclude fugitive emissions (new sources only)
Include fugitive emissions (modifications)
Additional GHG thresholds (to be discussed later)

11. 28 Source Categories Subject to the 100 TPY Threshold
Coal cleaning plants (with thermal dryers)
Sintering plants
Kraft pulp mills
Secondary metal production plants
Portland cement plants
Chemical process plants
Primary zinc smelters
Fossil-fuel boiler or combination of boilers (total over 250 MMBTU/hr)
Iron and steel mills
Primary aluminum ore reduction plants
Petroleum storage and transfer units (with a total storage capacity exceeding 300,000 barrels)
Primary copper smelters
Taconite ore processing plants
Municipal incinerators (capable of charging more than 250 tons refuse/day)
Glass fiber procession plants
Hydrofluoric acid plants
Charcoal production plants
Sulfuric acid plants
Fossil fuel fired steam electric plants (total over 250 MMBTU/hr)
Nitric acid plants
Petroleum refineries
Lime plants
Phosphate rock processing plants
Coke oven batteries
Sulfur recovery plants
Carbon black plants (furnace process)
Primary lead smelters
Fuel conversion plants

12. Determining PSD Applicability for New Stationary Sources
Define the source
Define applicability emission thresholds for the major source
Assess local NAAQS attainment status
Define project emissions (potential to emit)
Determine if source is major
Determine pollutant(s) subject to PSD review

13. Determining PSD Applicability for Modifications at Existing Stationary Sources
Determine if the source is major under PSD
Identify all units or activities with a physical change or change in method of operation
Determine if there is a "significant net contemporaneous emissions increase" for any PSD pollutant
When assessing emissions increases, consider the indirect impact of “debottlenecking” and include quantifiable fugitive emissions

14. Determining PSD Applicability for Modifications at Existing Stationary Sources (cont’d)
“Significant” Emission Rates:
CO: 100 TPY
Total reduced sulfur or reduced sulfur compounds (including H2S): 10 TPY
NOx: 40 TPY
SO2: 40 TPY
Ozone Depletion Substances (ODS): 0 TPY
PM: 25 TPY
PM10: 15 TPY
GHGs: 0 TPY on mass basis (applicability test for GHGs includes an additional emissions threshold of 75,000 TPY on a CO2e basis)
PM2.5: 10 TPY of direct PM2.5 emissions; 40 TPY of SO2; 40 TPY of NOx (unless demonstrated not be a PM2.5 precursor)
MWC organics: 3.5x10-6 TPY
Ozone: 40 TPY of VOCs or NOx
MWC metals: 15 TPY
Lead: 0.6 TPY
MWC acid gases: 40 TPY
Fluorides: 3 TPY
MSW landfill NMOC: 50 TPY
Sulfuric acid mist: 7 TPY
Hydrogen Sulfide (H2S): 10 TPY

15. Determining PSD Applicability for Modifications of Existing Major Sources
Two-Step Process:
Step 1: Is modification a significant emissions increase?
Adding up increases by unit
For new units, use the Potential to Emit (PTE)
For modified units, difference between baseline actual vs. future actual emissions (or PTE)
No “project netting”, do not include units with emission decreases
If total below significance level, PSD does not apply

16. Determining PSD Applicability for Modifications of Existing Major Sources
Step 2: Is modification a significant net emissions increase?
Sum increases and decreases
Include both the increases and the decreases of the modification and
Include creditable increases and decreases during the contemporaneous period.
Creditable decreases must be based on actual-to- potential test
Creditable increases and decreases must be practically enforceable.
Contemporaneous period usually begins 5 years prior to construction

17. Determining PSD Applicability for Modifications of Existing Major Sources (cont’d)
"Actual-to-projected actual" emissions test:
Baseline actual emissions:
Any consecutive 24-month period in prior 10 years (5 years for electric utility)
New unit baseline emissions are zero
Projected actual emissions:
Maximum annual emissions in the next 5 years (10 years if increase in design capacity or PTE).
Excludes any increase that is unrelated to the project and could be accommodated in baseline period, including demand growth.
Can use “actual-to-potential” comparison instead

18. Issues with Projected Actual Emissions
Inclusion of controls that are not required in a permit
Future maximum operation
Demand growth exclusion

19. Determining PSD Applicability for Modifications of Existing Minor Sources
PSD can be triggered at a minor source if modification is major by itself
Netting is not allowed at a minor source

20. Plantwide Applicability Limits (PALs)
Mechanism to avoid NSR/PSD in future for an existing source.
Plantwide emission limit which is pollutant specific
Created in a formal permitting process.
So long as total emissions after any modification are below the PAL, PSD not triggered.
PAL level is baseline actual emissions plus significant emission rate. GHG PAL would be mass based and significant emission rate is zero.
Effective for 10 years.

21. Legal Ways to Avoid PSD
Change the scope of the project to limit emissions increase
Take enforceable limits on emissions
Add more controls
Carry out contemporaneous reductions

22. PSD Permitting for Sources of GHGs
Under EPA rulemaking, GHGs are a single air pollutant defined as the aggregate group of the following six gases:
Carbon dioxide (CO2)
Methane (CH4)
Nitrous oxide (N20)
Sulfur hexafluoride (SF6)
Hydrofluorocarbons (HFCs)
Perflurocarbons (PFCs)

23. CO2 Equivalency
CO2 equivalent (CO2e) aggregate emissions of GHGs based on relative global warming potential (GWP)
CO2e = Sum of [(mass of the GHG) x (its GWP)]
Current GWPs:
CO2: 1
CH4: 21
N20: 310
SF6 : 23,900
HFCs: 140 to over 11,700
PFCs: 5,210 to 9,200
(Ratios may be revised. Set in Table A-1 of the GHG reporting rule. Subpart A of 40 CFR Part 98.)

24. Introduction to PSD GHG Applicability
There are calculations and thresholds for both CO2e and mass.
CO2e sum used to determine if emissions are “subject to” the PSD regulations
Mass based sum used to determine if major source or major modification

25. PSD Applicability Criteria for New Sources of GHGs
On or after July 1, 2011:
Source is otherwise subject to PSD for another pollutant and GHG PTE is:
Equal to or greater than 75,000 TPY CO2e, and
Greater than 0 TPY mass basis OR
Source has GHG PTE equal to or greater than:
100,000 TPY CO2e and
100/250 TPY mass basis

26. PSD Applicability Criteria for Modified Sources of GHGs
“Step 1” (January 2, 2011 to June 30, 2011)
Modification is otherwise subject to PSD for another regulated NSR pollutant, and
GHG emissions increase and net emissions increase are:
Equal to or greater than 75,000 TPY CO2e, and
Greater than -0- TPY mass basis

27. PSD Applicability Criteria for Modified Sources of GHGs
Step 2 (On or after July 1, 2011)
Modification is subject to PSD under Step 1 of the Tailoring Rule
OR BOTH
Source PTE for GHGs is equal to or greater than:
100,000 TPY CO2e and
100/250 TPY mass basis
Modification GHG emissions increase and net emissions increase:
Equal to or greater than 75,000 TPY CO2e, and
Greater than -0- TPY mass basis OR
Modification alone has GHG emissions equal to or greater than
100,000 TPY CO2e, and

28. Four Applicability Conditions for Modifications of Major Sources
For a modification, four conditions must exist in order
to trigger PSD:
CO2e emissions increase equals or exceeds 75,000 TPY CO2e
“Net emissions increase” of CO2e equals or exceeds 75,000 TPY
GHG mass emissions increase exceeds -0- TPY
“Net emissions increase” of GHGs (on a mass basis) over the contemporaneous period exceeds -0- TPY

29. Determining GHG Emissions
Determine sum of the 6 GHG pollutants on mass basis
Determine sum of 6 GHG pollutants on CO2e basis
All emissions of GHGs:
Includes wastewater
Beyond the reporting rule
No consideration of offsite emissions impacts for applicability
Use best available data. Traditional data quality hierarchy:
Performance tests on similar units;
Mass balances;
Vendor data and guarantees;
Test data from EPA;
AP-42 factors;
Factors from literature