1. PREVENTION OF SIGNIFICANT DETERIORATION (PSD) NSR PROGRAM Donald Law U.S. EPA Region 8

2. 2 Preconstruction Permit Programs Minor Source NSR State requirements for non-major new sources and modifications PSD Requirements for new major sources and major modifications in attainment/ unclassifiable areas Nonattainment Area NSR Requirements for new major sources and major modifications in nonattainment areas CAA Title I Part A Section 110 Part C Section 165 Part D Section 173 New Source Review

3. 3 Preconstruction Permit Programs Minor Source NSR State requirements for non-major new sources and modifications PSD Requirements for new major sources and major modifications in attainment/ unclassifiable areas Nonattainment Area NSR Requirements for new major sources and major modifications in nonattainment areas CAA Title I Part A Section 110 Part C Section 165 Part D Section 173 New Source Review

4. 4 Major Topics 4  4 steps to determine whether new construction or modification project is subject to PSD  Attainment status  PTE  Identify appropriate threshold (new construction) or emission rate (modification)  Compare proposed emissions to threshold or rate  When a modification may “net out” of PSD  Common applicability issues

5. 5 Which Sources Might be Subject to the PSD Program? 5  Sources locating in areas attaining the National Ambient Air Quality Standards or areas that are unclassifiable  New major sources  Existing major sources making major modifications Physical or operational changes at the source Change should show significant net emissions increase  Some sources have been “grandfathered” or have opted for “synthetic minor permit”

6. 6 How Do You Know When PSD Applies to a Source? 6 1. Assess attainment status of source’s geographic area 2. Determine source’s potential to emit (PTE) 3. Determine which thresholds or emissions rate applies 4. Determine if proposed emissions will exceed the applicable limit

7. 7 Step 1: What is the Attainment Status of Source’s Geographic Area? 7  Determine if area is in attainment for each National Ambient Air Quality Standard (NAAQS) emitted by the source National Ambient Air Quality Standard (NAAQS)  To find this information Contact the appropriate EPA Regional office or applicable permitting authority Check green book http:/www.epa.gov/oaqps001/greenbk/map_download. html http:/www.epa.gov/oaqps001/greenbk/map_download. html Search an EPA database such as: www.epa.gov/air/datawww.epa.gov/air/data

8. 8 What happens if the area is in non- attainment status? 8  Non-attainment status only applies to that particular pollutant  Emission source can be major for non-attainment pollutant (NA-NSR permit) and major for PSD pollutant (PSD permit)

9. 9 Step 1: What is the Attainment Status of Source’s Geographic Area? 9  Example o Denver is o non-attainment for Ozone (VOC and NOx) o Attainment for CO, PM 10, PM 2.5, NO2, Pb, and SO 2

10. 10 Step 1: What is the Attainment Status of Source’s Geographic Area? (cont.) 10  Example o Denver is o Non-attainment for Ozone (VOC and NOx). o Attainment for CO, PM 10, PM 2.5, NO 2, Pb, SO 2 o Therefore PSD requirements apply for o CO, PM 10, PM 2.5, NO 2, Pb, SO 2

11. 11 Step 2: What is the Source’s Potential to Emit (PTE)? 11  Maximum capacity of source to emit a pollutant under its physical and operational design  Based on operating 24 hours a day, 365 days a year (8760 hours/year)  Can include effect of emissions controls, if enforceable by permit or State Implementation Plan (SIP), Tribal Implementation Plan (TIP) or Federal Implementation Plan (FIP) conditions Other mitigating factors (site specific and quite uncommon)

12. 12 Calculating Emissions for NSR Applicability 12  All new and modified units are subject to applicability determinations  New units – based on PTE  Modified units – based on actual emissions (or potential if new unit)  Include all regulated NSR pollutants that the source emits

13. 13 Calculating Emissions for NSR Applicability 13  Source emissions are calculated using  On-site measurement (e.g., stack testing)  Operational records of actual production  Vendor design capacity or rated capacity information  Material balance (i.e., mass balance) calculations  Emission factors  Emissions from all affected emissions units are added for each regulated NSR pollutant

14. 14 Exercise on Potential to Emit 14  American Widget and Doohicky, Inc. constructing brand new widget factory outside Albert, Kansas. Facility will have two 8-hour shifts per day, make 1500 widgets per day. No TIP, SIP, or FIP limitations apply to this facility. Based on testing data from similar AWD Inc. facility, the following emission rates can be expected NOx – 60 lb/hr SO2 – 25 lb/hr VOC –.622 lb/widget  What is the PTE of the new AWD Inc. facility for these 3 pollutants?

15. 15 Exercise on Potential to Emit 15  What is the PTE of the new AWD Inc. facility for these three pollutants? a. What is source’s PTE for NOx? 60 x 8760 / 2000 = 262.8 tpy b. What is source’s PTE for SO2? 25 x 8760 / 2000 = 109.5 tpy c. What is source’s PTE for SO2? 1500 /16 x.622 *8760 / 2000 = 255 tpy

16. 16 Step 3. What is the Applicable PSD Threshold for New Sources? 16  250 tons per year (tpy) for most source categories  100 tpy, if part of the 28 listed source categories (and include fugitive emissions for these source categories)28 listed source categories  250 tpy of GHG and 100,000 tpy of CO2 equivalents Start Determine source’s Potential to Emit (PTE) (per pollutant, may include fugitives) Is PTE ≥ applicable threshold? (per regulated NSR pollutant) Source not subject to PSD Yes No Source subject to PSD

17. 17 Applicability: Thresholds Attainment Areas Regulated NSR PollutantMajor Source Threshold (tpy) Carbon Monoxide (CO) 100 or 250 Sulfur Dioxide (SO 2 ) Ozone - Oxides of Nitrogen (NO x ) Ozone - Volatile Organic Compounds (VOC) PM PM-10 PM-2.5 Lead Fluorides Sulfuric Acid Mist Hydrogen Sulfide (H 2 S) Total Reduced Sulfur (including H 2 S) Reduced Sulfur Compounds (including H 2 S) Municipal Waste Combustor Emissions Municipal Solid Waste Landfills Emissions Greenhouse Gases (Combination of gases CO 2, CH 4, N 2 O, HFC, PFC, SF 6 ) 250 tpy GHGs and 100,000 tpy of CO2e

18. 18 Step 4: How Do You Determine if Proposed Emissions will Exceed the Applicable Limit ? 18  For each pollutant, compare source’s PTE with applicable threshold  If PTE is equal to or higher than threshold, source is major for PSD  Example  Source PTE for NO 2 is 300 tpy  300 tpy > 250 tpy, source is subject to PSD

19. 19 Exercise on Applicability (100 tpy vs. 250 tpy) 19 a. Primary copper smelter has PTE of 150 tpy of NOX. Major source for PSD? b. Glass manufacturing plant plans to operate a dry scrubber designed to meet emission limit of 50 lb/hr of SO2 (or 219 tpy). Major source for PSD? c. A power plant of more than 250 million BTU/hour heat input will burn natural gas and will have PTE of 200 tpy of CO and 82 tpy of NOX. Major source for PSD? For which pollutant(s)?

20. 20 Exercise on Applicability (100 tpy vs. 250 tpy) 20 a. Primary copper smelter has PTE of 150 tpy of NOX. Major source for PSD? Yes. b. Glass manufacturing plant plans to operate a dry scrubber designed to meet an emission limit of 50 lb/hr of SO2 (or 219 tpy). Major source for PSD? No. c. Power plant of more than 250 million BTU/hour heat input will burn natural gas and will have PTE of 200 tpy of CO and 82 tpy of NOX. Major source for PSD? Yes. For which pollutant(s)? CO

21. 21 Significant Emissions Rate 21  If a source is major, PSD applies to attainment pollutants emitted above significant emissions rate  See appendix with table for Significant emissions rates

22. 22 Example 22  A newly proposed natural gas-fired power plant (categorical facility) has potential to emit the following in an attainment area  250 TPY CO  101 TPY NO 2  45 TPY VOC  20 TPY SO 2  20 TPY PM 10/2.5

23. 23 Example 23  A newly proposed natural gas-fired power plant (categorical facility) has potential to emit the following in an attainment area  250 TPY COYES  101 TPY NO 2 YES  45 TPY VOCYES  20 TPY SO 2 NO  20 TPY PM 10/2.5 YES

24. 24 Modifications that are Subject to the PSD Program 24  Major modification = mod that results in (1) significant emissions increase and (2) significant net emissions increase, i.e., increase higher than significant emissions rate (SER)significant emissions rate (SER)  Step 1: calculate proposed emissions  Step 2: if emissions are greater than or equal to SER, calculate Net Emissions Increase. Greater than or equal to SER ? Yes Start Are Proposed modification emissions ≥ SER? (per pollutant) Modification not subject to Major NSR Determine Source’s Net Emissions Increase (NEI), (per pollutant) Is the NEI ≥ SER? Modification is a major modification and subject to Major NSR Yes No

25. 25  Significant Emission Rate (SER) – emissions rate threshold in tpy, by pollutant Significant Emission Rate (SER)  NEI = Sum of contemporaneous emissions increases and decreases to the proposed modification emissions increase/decrease Under PSD, contemporaneous period starts 5 years before source commences construction and ends when source commences operation Applicability: Modifications Yes Start Are Proposed modification emissions ≥ SER? (per pollutant) Modification not subject to Major NSR Determine Source’s Net Emissions Increase (NEI), (per pollutant) Is the NEI ≥ SER? Modification is a major modification and subject to Major NSR Yes No

26. 26 Calculating a Project’s Emissions Increases 26  Emissions are based on actual emissions  Actual emissions = projected emissions after the change minus baseline emissions before the change (actual-to-projected-actual test)  Projected emissions: max. annual emissions (tpy) that will occur during any one of 5 yrs after project  If unit was added, emission increase based on PTE  Include fugitives if source is part of the 28 source category list

27. 27 Determining Net Emissions Increase (NEI) 27  NEI = Sum of contemporaneous emissions increases and decreases to proposed modification emissions increase  Sum of contemporaneous emissions increases and decreases to proposed modification increase NEI = PMEI + CEI – CED (ERC) where: PMEI – Proposed modification emissions increase CEI – Creditable emissions increase CED – Creditable emissions decreases ERC – Emissions reduction credit(s)  Under PSD, contemporaneous period starts 5 years before source commences construction and ends when source commences operation  If NEI is greater than SER, source is major

28. 28 Exercise on Determining if a Modification is Major 28  Gas treating site plans to replace an outdated internal combustion engine with more efficient engine with greater capacity. Engine changeout will eliminate old unit’s NOX and CO emissions (78 and 125 tpy). New unit will emit 100 tpy of NOX and 175 tpy of CO. Do the net emissions increases make this changeout a major modification?  Assume no other emissions changes during the contemporaneous period

29. 29 Exercise on Determining if a Modification is Major 29  Gas treating site plans to replace an outdated internal combustion engine with more efficient engine with greater capacity. Engine changeout will eliminate old unit’s NOX and CO emissions (78 and 125 tpy). New unit will emit 100 tpy of NOX and 175 tpy of CO. Do the net emissions increases make this changeout a major modification?  Assume no other emissions changes during contemporaneous period  No, because emissions increases are below the SER for NOX (40 tpy) and the SER for CO (100 tpy)

30. 30 In What Other Circumstances Can a Source be Subject to PSD? 30  Once determined a source is major for PSD, source must review pollutants below thresholds by comparing PTE to Significant Emissions Rate (SER)Significant Emissions Rate (SER)  Pollutants for which the area is in attainment (NAAQS)  Other pollutants  Emissions equal to or higher than SER make pollutant also subject to PSD  Concept known as “Major for one, Major for all”

31. 31 Common Problem Areas 31  Facilities may try to split major modifications into multiple “minor” modifications  Facilities may insist that their multiple emissions units are not part of the same “source” for PSD purposes  Facilities may try to use emission decreases for netting that are not creditable (i.e., not federally enforceable)  Facilities may try to use emission decreases for netting that were required by rules or consent decrees

32. 32 Defining the New Source 32  Includes all related activities classified under the same 2-digit SIC code number  Has the same owner or operator  Is located on contiguous or adjacent properties  Includes all support facilities

33. 33 Example 33  Rock Crushing operations and aggregate source  Two separate rock crushing operation at separate quarries  Providing raw materials to an aggregate source  All owned by same parent company  Shared staff and equipment

34. 34 PSD Thresholds for GHGs (Permits issued on or after July 1, 2011) 34  PSD applies to GHGs, if  The source is otherwise subject to PSD (for another regulated NSR pollutant) and  The source has a GHG PTE equal to or greater than 75,000 tpy CO2e  OR source has a GHG PTE equal to or greater than:  100,000 tpy CO2e, and  100/250 tpy mass basis

35. 35 Calculating GHG Emissions on a Mass Basis and CO2e Basis 35  To compute mass basis of GHG emissions, simply add tpy for each GHG emitted from facility  To compute CO2e basis, first multiply emissions of each GHG times its Global Warming Potential (GWP) value. Then add tpy of all GHGs  Each GHG is assigned a value based on its Global Warming Potential (GWP) with higher values going to pollutants with the most serious GWP

36. 36 Example Calculation 36  Assume a proposed emissions unit emits 3 of the six GHG compounds in the following amounts  50,000 tpy of CO2 (GWP = 1)  60 tpy of methane (GWP = 25)  3 tpy of PFC-14 (a perfluorocarbon) (GWP = 6,500)  GHGs mass-based emissions  50,000 tpy +60tpy + 3 tpy = 50,063 tpy  CO2e-based emissions  (50,000 tpy x 1) or 50,000 tpy, plus  (60 tpy x 25) or 1,500 typ, plus  (3 tpy x 6,500) or 19, 500  Total: 71,000 tpy

37. 37 Major Modifications and GHGs (for Permits Issued after July 1, 2011) 37 PSD applies to GHGs if  Modification otherwise subject to PSD (for another regulated NSR pollutant), and has GHG emissions increase and net emissions increase  Equal to or greater than 75,000 tpy CO2e, and  Greater than 0 tpy mass basis OR….(cont. next slide)

38. 38 Major Modifications and GHGs (cont.) 38  OR BOTH  Existing source has PTE equal to or greater than 100,000 tpy CO2e and 100/250 tpy mass basis  Modification has GHG emissions increase and net emissions increase Equal to or greater than 75,000 tpy CO2e and Greater than 0 tpy mass basis  OR BOTH  Source is existing minor source for PSD, and  Modification alone has actual or potential GHG emissions equal to or greater than 100,000 tpy CO2e, and 100/250 tpy mass basis

39. 39 Final Applicability Exercise 39  Existing Chemical Processing Plant will add a new process unit modify an existing process unit by removing an existing reactor vessel and adding a larger one  Highest actual emissions from the last five years are 150 tons VOC, 65 tons NOx, 115 tons CO, 145,000 tons CO2e  PTE of new reactor based on similar unit at sister facility 200 tons VOC, 85 tons NOx, 160 tons CO, 219,000 tons CO2, and 50 tons methane

40. 40 Details of Example Chemical Plant 40  Area is in attainment for all pollutants  Source add an emergency generator 4 years ago with a net emission increase of 25 tpy NOx and 45 tpy CO  Is the project a major PSD project, and if so, for what pollutants?

41. 41 Example Solution 41 1. Evaluate for PSD Determine applicable threshold Chemical Process Plants part of 28 listed source categories Major source threshold is 100 tpy, not 250 tpy Determine if the source is major based on the threshold 150 tpy of VOC > 100 tpy threshold 145,000 of CO2e > 75,000 tpy CO2e Plant is a major source for PSD Now review all attainment pollutants for PSD applicability

42. 42 Example Solution 42  Pollutant Net Emissions Increase  VOC: 200 tpy – 150 tpy = 50 tpy increase  NOx: 85 tpy – 65 tpy + 25 tpy = 45 tpy increase  CO: 160 tpy – 115 tpy + 45 tpy = 90 tpy increase  CO2e: 219,000 tpy -145,000 tpy + (50 x 25) tpy = 75,200  Project Applicability  50 tpy VOC > 40 tpy VOC SER - YES  45 tpy NOx > 40 tpy NOx SER - YES  90 tpy CO < 100 tpy CO SER – NO  75,200 tpy CO2e > 75,000 tpy CO2e - YES

43. 43 Summary 43  4 step process used to determine if new construction or modification is subject to PSD  PSD threshold for new construction is based on PTE  PSD emission rate (SER) is based on actual emissions  Higher thresholds and SER apply to Greenhouse gases  Potential applicability issues of concern:  “sham” minor modifications  disaggregation of emissions units  netting

44. 44 Appendix 44

45. 45 2828 Source Categories 28 source categories 1. Coal cleaning plants (with thermal dryers)15. Coke oven batteries 2. Kraft pulp mills16. Sulfur recovery plants 3. Portland cement plants17. Carbon black plants (furnace process) 4. Primary zinc smelters18. Primary lead smelters 5. Iron and steel mills19. Fuel conversion plants 6. Primary aluminum ore reduction plants20. Sintering plants 7. Primary copper smelters21. Secondary metal production plants 8. Municipal incinerators capable of charging more than 250 tons of refuse per day 22. Chemical process plants 9. Hydrofluoric acid plants23. Petroleum storage and transfer units with a total storage capacity exceeding 300,000 barrels 10. Sulfuric acid plants24. Taconite ore processing plants 11. Nitric acid plants25. Glass fiber processing plants 12. Petroleum refineries26. Charcoal production plants 13. Lime plants27. Fossil fuel-fired steam electric plants of more than 250 million British thermal units (BTU)/hour heat input 14. Phosphate rock processing plants28. Fossil-fuel boilers (or combination thereof) totaling more than 250 million BTU/ hour heat input

46. 46 Significant Emission Rates (SERs) PollutantSER (tpy)PollutantSER (tpy) Carbon Monoxide100Sulfuric Acid Mist7 Nitrogen Oxides40Hydrogen Sulfide (H 2 S)10 Sulfur Dioxide40Total Reduced Sulfur (Includes H 2 S)10 Particulate Matter (PM10)15Reduced Sulfur Compounds (Includes H 2 S)10 Particulate Matter (PM2.5)10; 40 for VOCs, NOx or SO 2 Municipal Waste Combustor Organics3.5*10 -6 Ozone40 VOCs or NOxMunicipal Waste Combustor Metals15 Lead0.6Municipal Waste Combustor for Acid Gases40 Fluorides3Municipal Solid Waste Landfills Emissions50 SER SER – a rate of emissions that would equal or exceed any of the following rates: Notwithstanding the above, any emissions rate or any net emissions increase associated with a major stationary source or major modification, which could construct within 10 km of a Class I area, and have an impact on such area equal to or greater than 1  g/m 3 (24-hour average)

47. 47 Global Warming Potentials (GWP) Carbon Dioxide GWP =1 Methane GWP = 21 (25) Nitrous Oxide GWP = 300 Sulfur Hexafluoride GWP = 23,900 HFCs Vary PFCs Vary Full list is found at 40 CFR Part 98, Subpart A Table A-1