1. Sean O’Brien Air Permits Division Texas Commission on Environmental Quality Advanced Air Permitting Seminar 2014

2. Netting  De minimis threshold test  For PSD and Nonattainment  NSR Reform added: Definition of ‘project emissions increase’ Actual-to-projected-actual applicability test Ability to exclude emissions

3. Actual-to-Projected-Actual  No longer just PTE  5 or 10-year recordkeeping  Not for new facilities  Must be verifiable

4. Emissions Exclusion  Could have accommodated during baseline period  Unrelated to the particular project  Includes increased utilization due to product demand growth

5. Regulatory Guidance  Minimal: TCEQ APD 5881 document Some specific cases in other EPA Regions Georgia Pacific – EPA Region 4  No firm rules about: Time periods Fuel or material usage vs. production One industry vs. another

6. General Guidance  Accommodate: Not a design capacity Accounts for bottlenecks  Accommodate proved by actual data: Indicates non-project PTE Removes uncertainty

7. General Guidance  Projected actual: Less than current allowable or New PTE  Exclusions limited by: Existing PTE Addition of new equipment New sources of emissions

8. Necessary Data  Historical operational data  Representations  Expected business activity  Highest projections of business activity  Company's filings with state or federal regulatory authorities  Compliance plans under approved SIP

9. Past Emissions  Historical data: Emission, production, and/or fuel usage Maintenance records Operating hours  More than a snapshot: Time period process-specific 30 days, months, etc.

10. Demand Growth  Demand growth: Part of projected actuals 5 or 10-year forward look Non-project related increase  More subjective than historical data: Extrapolation Disagreement Debottlenecking not allowed

11. Debottlenecking  Always part of the project: Cannot be excluded Cannot be called demand growth  Determined by past production: Hard to exclude any emissions Includes affected units: ○ Upstream (reactors, etc.) ○ Downstream (distillation columns, tanks, etc.)

12. Hypothetical Example Plant produces widgets: Permitted to produce 200 per year Has never achieved that level 24-month baseline = 100 per year  Plans to install production upgrade: Larger widget dryer (downstream) Debottlenecking

13. Hypothetical Example  Pre-project accommodation: Highest month in baseline annualized: ○ Let’s assume 10 widgets per month (120/yr) ○ Excludable = 20 (120-100) widgets per year  Project increase: Post project = 200 widgets per year Project increase = 80 (200-20-100) per year

14. More Examples

15. Example A  Boiler rebuild at chemical plant: Improvement project (better efficiency) Liquid fuel – chemical byproducts: ○ High ash content ○ High fuel-bound nitrogen  What could have been accommodated?

16. Example A

17.  What to look for: Acidic and corrosive environment: ○ High maintenance, downtime, etc.? Anomalies: ○ Representative month – not outlier  Case specific: No production increase here Different facilities – different criteria

18. Example B  Truck manufacturing increase: More painting VOC actual to projected actual > SER  No new facilities needed: Moving an RTO Operating hour increase

19. Example B

20. Difficult Example

22. Questions?

23. Contact Information Sean O’Brien (512) 239-1137 sean.obrien@tceq.texas.gov Air Permits Division (512) 239-1137 sean.obrien@tceq.texas.gov Sean O’Brien