Workshop F. Air Permitting How to Determine Whether a Modification Is Triggered Under PTI/PTIO, Title V, PSD, NSPS and/or MACT Rules and Regulations?

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1 Workshop F Air Permitting How to Determine Whether a Modification Is Triggered Under PTI/PTIO, Title V, PSD, NSPS and/or MACT Rules and Regulations? Wednesday, July 19, :45 p.m. to 4:15 p.m.

2 Biographical Information Ron Hansen, Owner/Principal Consultant GT Environmental, Inc., 635 Park Meadow Road, Suite 112, Westerville, OH Phone: (614) ext. 21 Fax: (614) Ron Hansen has over twenty-five years of air permitting, regulatory and stack testing consulting experience. Ron is an owner and Principal Consultant with GT Environmental, Inc. (GT). Ron graduated from the University of Cincinnati with a B.S. in Civil Engineering. Ron is a member of the Air and Waste Management Association (AWMA). Ron has extensive experience in preparing Title V permit applications, PSD permit applications, nonattainment NSR permit applications, minor source permit applications, negotiating permit terms and conditions with state agencies, performance testing programs and assisting clients with enforcement resolution. Ron has prepared permit applications for utilities, steel mills, chemical plants, wood cabinet manufacturers, animal feed manufacturers, municipal solid waste landfills, aggregate mining and processing facilities, and bulk gasoline terminals. Ron has prepared air permit applications for clients located in Ohio, Michigan, Missouri, Kentucky, Indiana, Tennessee, West Virginia, Pennsylvania and Rhode Island. Amy C. Kesterman, Environmental Compliance Specialist III Southwest Ohio Air Quality Agency 250 William Howard Taft Road, Cincinnati, OH Phone: (513) Fax: (513) amy.kesterman@hamilton-co.org Amy Kesterman is an Environmental Compliance Specialist III in the Permits and Enforcement Section of the Southwest Ohio Air Quality Agency (Agency), a Division of the Hamilton County Department of Environmental Services. Amy has been an Environmental Compliance Specialist with the Agency since She is responsible for on-site inspections of air pollution sources and control equipment, determining source compliance with air permits and air pollution regulations, assessing source emissions, responding to air quality complaints, and reviewing and processing permit applications for complex source installations and modifications. Amy serves as a point of contact at the Agency for assisting industry representatives with navigating Ohio EPA s electronic tool, Air Services. She periodically serves as an air permit instructor for Cincinnati State Technical and Community College s Environmental Engineering Technology program and as a guest lecturer for the University of Cincinnati s Environmental Studies program. Amy was awarded a Hamilton County Employee of the Year Award in 2013 for her individual effort to go the extra mile in providing excellent service in her work. In 2014, Amy was awarded her second Hamilton County Employee of the Year Award as a member of an Agency team being recognized for their innovative team approach to processing an air permit for General Electric Aviation. Amy received a B.S. in Environmental Studies from the University of Cincinnati.

3 Biographical Information Kevin J. Kilroy, Safety & Environmental Manager Smithers-Oasis North America, 919 Marvin Street, P.O. Box 790, Kent, OH Phone: (330) Kevin Kilroy has almost forty years of experience in environmental, health and safety programs in a manufacturing setting. He works for Smithers-Oasis, a privately held company headquartered in Kent, Ohio where it has manufacturing and distribution facilities. The company manufactures and markets water-absorbing floral foams, accessories and floral mechanics to the retail floral market worldwide. They manufacture and market a complete line of post-harvest flower care products for the floral industry through its Floralife Division. They also manufacture and market products for the grower/greenhouse industry. At Smithers-Oasis, Kevin has responsibility for the safety and environmental programs of the North American and Floralife Divisions in the North America and provides consulting services to other global operations of the company, particularly on product and safety related issues. Prior to joining Smithers-Oasis, Kevin worked nineteen years for an Ohio based Fortune 500 chemical and aerospace company, mostly at a chemical manufacturing facility where he was responsible for managing the plant s environmental program. Over the course of seventeen years at the plant, he also worked on health and safety programs. Prior to this, he worked for two years in the chemical division environmental department conducting permit review and project environmental impact assessments. Kevin received a B.S. in both Chemical Engineering and Plastic Technology from Lowell Technological Institute and a M.S. in Environmental Studies from the University of Lowell. He is a member of the American Institute of Chemical Engineers (AICHE). He was past chairman of the Akron Section of AICHE. Eric B. Gallon, Of Counsel Porter Wright, Morris & Arthur LLP, 41 S. High Street, Columbus, OH Phone: (614) Fax: (614) egallon@porterwright.com Eric Gallon s environmental practice focuses on Clean Air Act compliance and defense. Eric defends manufacturers, utilities, and other companies in administrative and judicial enforcement proceedings; reviews draft and proposed installation and operating permits; appeals permits and other final actions of the Ohio Environmental Protection Agency to the Environmental Review Appeals Commission; analyzes and comments on proposed state and federal rulemakings; and prepares petitions for reinstatement of debarred companies. Eric also represents electric and natural gas companies in rulemaking, ratemaking, and complaint case proceedings before the Public Utilities Commission of Ohio and in appeals before the Supreme Court of Ohio. Separately, his litigation practice encompasses a variety of complex business and corporate matters, including tort class actions and antitrust matters. In addition, he regularly lectures on the application of the attorney-client privilege and work-product doctrines under Ohio and federal law. Eric earned his B.A. in Political Science from The Ohio State University and his J.D. from the University of Chicago Law School. He has been recognized by Ohio Super Lawyers Rising Stars Edition five times (in 2010, 2011, ).

4 Southwest Ohio Air Quality Agency Cincinnati, Ohio

5 What is a Title V Operating Permit? Federal major source permitting program established by the Clean Air Act. Umbrella permit that includes all emissions units at a facility. Operating permit with a 5 year renewal cycle.

6 How to incorporate changes into the Title V Operating Permit There are six methods for addressing changes Operational Flexibility Off Permit Change Administrative Permit Amendment Minor Permit Modification Significant Permit Modification Reopening for Cause Guidance for Incorporating Facility Changes into a Title V Permit Ohio EPA Engineering Guide #63

7 Engineering Guide #63 epa.ohio.gov/dapc/engineer/eguides.aspx

8 Engineering Guide #63 epa.ohio.gov/portals/27/title_v/visio DecisionTreeA2004.pdf

9 Engineering Guide #63 epa.ohio.gov/portals/27/title_v/visio DecisionTreeB2004.pdf

10 Engineering Guide #63 epa.ohio.gov/portals/27/title_v/visio DecisionTreeC2004.pdf

11 Operational Flexibility When a change is counter to a permit term or condition, but does not require a permit revision or affect the monitoring, record keeping, reporting, or emission limitations. For example, the Title V permit indicates a specific brand of coating be used. Operational Flexibility can be used to change brands, as long as the new brand complies with any emission limitations. Notification of the change must be received 7 days prior to the proposed change. Notification should be made in the form of a certified letter.

12 Off Permit Change When a facility makes a change that is not specifically addressed or prohibited by the Title V permit. Used to incorporate the terms and conditions of a new PTI, a PTI exempt source without applicable requirements, or a de minimis source. For example, a facility plans to install a new emissions unit where the potential to emit does not violate any established emission limitation and is not a modification.

13 Off Permit Change If required, a PTI must first be applied for and issued final before construction of the new unit can begin. Operation of the new unit may begin immediately, once a PTI is issued. An Off Permit Change request must be submitted in Air Services within the time frame specified in the PTI, but not to exceed one year.

14 Administrative Permit Amendment Used for making small administrative changes, such as: Typographical errors to the terms and conditions. Small administrative changes names, addresses, etc. Increases in monitoring or reporting frequency. Changes in ownership or operational control. For example, an emission limit was issued as 8 lbs/hr rather than 80 lbs/hr. Or, it is determined that monitoring should be increased from weekly to daily checks.

15 Minor Permit Modification Used for making non significant changes, such as: Synthetic minor changes. Best Available Technology (BAT) changes. Changes in monitoring, record keeping, or reporting. For example, an increase in capacity, which will increase emissions, but the change does not qualify as a significant modification. A modification to the PTI must be applied for when necessary.

16 Significant Permit Modification Used for making significant changes, such as: Increase in Hazardous Air Pollutants above major source threshold. Changes trigger PSD or Nonattainment NSR. Changes in monitoring, record keeping, or reporting. Relaxation of reporting or record keeping. For example, removing a synthetic minor limitation that had been in place to avoid PSD. Now, PSD review is required. A modification to the PTI must be applied for when necessary.

17 Reopening for Cause Often these changes are initiated by Ohio EPA. Used for making changes, such as: Adding additional requirements that become applicable during the permit cycle. Correcting mistakes. For example, a new MACT becomes applicable with more than 3 years remaining in the permit cycle. Or, a piece of control equipment was mistakenly included in emissions unit terms and must be removed.

18 Air Services Home Page

19 Request Administrative Permit Modification

20 Title V PTO Application Detail Page

21 The Takeaway Contact your Ohio EPA District Office or Local Air Agency to discuss proposed changes. Review Engineering Guide #63 A new or modified PTI may be necessary prior to or in conjunction with making changes to the Title V permit.

22 Thank you! Contact info: Amy Kesterman Environmental Compliance Specialist III co.org (513)

23 Wednesday, July 19, :45 4:15 p.m. Workshop F Presented by Ron Hansen GT Environmental, Inc. Amy Kesterman Southwest Ohio Air Quality Agency Eric Gallon Porter Wright Morris Arthur Kevin Kilroy Smithers Oasis

24 Major Topics PTI/PTIO Title V Modifications PSD/NNSR Modifications NSPS Modifications MACT Modifications Legal Updates New Ozone Standard 21 of 28

25 PTI/PTIO Modifications Definition of New Source OAC rule (WWW) New source means any air contaminant source for which an owner or operator undertakes a continuing program of installation or modification or enters into a binding contractual obligation to undertake and complete, within a reasonable time, a continuing program of installation or modification, after January 1, 1974, and that at the time of installation or modification, would have otherwise been subject to the provisions of this chapter. The replacement of an entire air contaminant source is considered a new source. 22 of 28

26 PTI/PTIO Modifications Definition of Modification OAC rule (SSS) Sometimes referred to as the minor modification definition. Not to be confused with the major modification definition for projects at major stationary sources. Applies to projects at both minor stationary sources and major stationary sources. You can trigger a permit requirement under this definition without triggering a PSD or NNSR permitting requirement under the major modification definition. If you trigger a PSD or NNSR permitting requirement under the major modification definition, then you automatically trigger a permitting requirement under the minor modification definition. 23 of 28

27 Ohio EPA Air Toxics Modeling Policy ORC (F)(4) OAC Rule (Air Toxics List) This is not included in the definition of modification in OAC Rule (SSS). This is not a federally enforceable requirement. Air Toxics permit terms and conditions should appear in the state only section of PTIs/PTIOs/Title V permits. 24 of 28

28 PTI/PTIO Modifications Definition of Modification OAC rule (SSS) Decision Tree 25 of 28

29 PTI/PTIO Modifications Definition of Modification OAC rule (SSS) Decision Tree 26 of 28

30 PTI/PTIO Modifications Definition of Modification OAC rule (SSS) Decision Tree 27 of 28

31 PTI/PTIO Modifications Definition of Modification OAC rule (SSS) Decision Tree 28 of 28

32 PTI/PTIO Modifications Definition of Modification OAC rule (SSS) Decision Tree 29 of 28

33 PTI/PTIO Modifications Definition of Modification OAC rule (SSS) Decision Tree 30 of 28

34 PTI Modifications Definition of Major Modification OAC rule (LLL) Only applies to major stationary sources as defined in OAC rule (NNN). Projects that trigger a major modification will be issued a PTI not a PTIO because major stationary sources will operate under the Title V permitting program (major source operating permit program). Projects can trigger a major modification and a minor modification. 31 of 28

35 PTI Modifications Definition of Major Modification OAC rule (LLL) Decision Tree 32 of 28

36 PTI Modifications Definition of Major Modification OAC rule (LLL) Decision Tree 33 of 28

37 PTI Modifications Definition of Major Modification OAC rule (LLL) Decision Tree 34 of 28

38 PTI Modifications Definition of Major Modification OAC rule (LLL) Decision Tree 35 of 28

39 PTI Modifications Definition of Major Modification OAC rule (LLL) Decision Tree 36 of 28

40 PTI Modifications Definition of Major Modification OAC rule (LLL) Decision Tree 37 of 28

41 PTI Modifications Definition of Major Modification OAC rule (LLL) Decision Tree 38 of 28

42 New Source Performance Standards (NSPS) 40 CFR 60 Regulates emissions of criteria pollutants generated at approximately 97 different source categories. Applies to new sources installed after rule specific dates. Applies to existing sources modified after rule specific dates. Applies to existing sources reconstructed after rule specific dates. 39 of 28

43 New Source Performance Standards (NSPS) 40 CFR 60 Modification Modification is defined in 40 CFR 60.2 and Modification means any physical or operational change to an existing facility which results in an increase in the emission rate to the atmosphere of any pollutant to which a standard applies. Emission rate shall be expressed in kg/hr or lbs/hr. Therefore, an increase in annual emissions without a corresponding increase in hourly emissions is not a modification. Must achieve compliance with all applicable standards within 180 days of the completion of the modification. 40 of 28

44 New Source Performance Standards (NSPS) 40 CFR 60 Exclusions from the Definition of Modification Routine maintenance, routine repair and routine replacement are not modifications. An increase in production rate of an existing facility that can be accomplished without a capital expenditure is not a modification. An increase in the hours of operation is not a modification. Use of an alternative fuel or raw material that the facility is designed to accommodate is not a modification. The addition or use of any system or device designed to reduce air emissions is not a modification. 41 of 28

45 New Source Performance Standards (NSPS) 40 CFR 60 Reconstruction Reconstruction is defined in 40 CFR An existing facility, upon reconstruction, becomes an affected facility even if emissions do not increase. Reconstruction means the replacement of components of an existing facility to such an extent that: (1) The fixed capital cost of the new components exceed 50% of the fixed capital cost that would be required to construct a comparable entirely new facility, and (2) It is technologically and economically feasible to meet the applicable standards. Fixed Capital Cost means the capital needed to provide all the depreciable components. Must notify the Administrator at lease 60 days prior to commencing construction on the proposed reconstruction. 42 of 28

46 Maximum Achievable Control Technologies (MACT) Standards 40 CFR 63 Regulates emissions of 188 hazardous air pollutants (HAPs) generated at approximately 134 different source categories. May apply to both major sources and area sources of HAPs. Applies to new sources, reconstructed sources and existing sources. Requirements for new sources and reconstructed sources are typically more stringent than those for existing sources. Applies to existing sources reconstructed after rule specific dates. Modifications that do not satisfy the definition of reconstruction are still regulated as existing affected sources. Modifications that meet the definition of reconstruction are regulated as new affected sources. 43 of 28

47 Maximum Achievable Control Technologies (MACT) Standards 40 CFR 63 Reconstruction Reconstruction is defined in 40 CFR An existing facility, upon reconstruction, becomes a new affected source, even if emissions do not increase. Reconstruction means the replacement of components of an existing facility to such an extent that: (1) The fixed capital cost of the new components exceed 50% of the fixed capital cost that would be required to construct a comparable entirely new facility, and (2) It is technologically and economically feasible to meet the applicable standards. Fixed Capital Cost means the capital needed to provide all the depreciable components. Must obtain approval from the Administrator prior to commencing construction on a new affected source or reconstruction on an existing affected source. 44 of 28

48 Like Kind Replacement Can you replace a 500 ton/hr grinder with a smaller less emitting 400 ton/hr grinder without obtaining an air permit? Answer: No the 400 ton/hr grinder is considered a new source New Source means any air contaminant source for which an owner or operator undertakes a continuing program of installation or modification or enters into a binding contractual obligation to undertake and complete, within a reasonable time, a continuing program of installation or modification, after January 1, 1974, and that at the time of installation or modification, would have otherwise been subject to the provisions of this chapter. The replacement of an entire air contaminant source is considered a new source. 45 of 28

49 How Do You Define the Full Extent of an Air Contaminant Source or Emissions Unit? Example 1 How Many Air Contaminant Sources Do You See? Answer: 1 46 of 28

50 How Do You Define the Full Extent of an Air Contaminant Source or Emissions Unit? Example 2 How Many Air Contaminant Sources Do You See? Answer: 3 47 of 28

51 Obtaining a Timely Air Permit Modification Presented by Kevin Kilroy Safety & Environmental Manager Smithers Oasis Company Smithers-Oasis Company 1

52 Obtaining a Timely Air Permit Modification Current Actions What you should be doing now Handling the Future Project Management Review System Permit Background Work Obtaining Flexibility & Operational Uptime Permitting What Has Worked 2

53 Current Actions What You Should Be Doing Now Permitting Not just another activity its your legal basis to operate Understand current permitting status and any restrictions that apply Impacts future project options Communicate current circumstances internally Pay attention to agency proposals and be prepared to comment or appeal any rules, which may impact your company s operations 3

54 Current Actions What You Should Be Doing Now Become familiar with a more complicated permitting system This system ranges from permit exemptions to permits by rule to general, synthetic minor and/ or major permits Understand what constitutes a permit modification Communicate internally with examples A very useful exemption is the Deminimis exemption at OAC Summary: Potential or actual emissions < 10 lbs/day with HAP emissions < 1 tpy, and potential emissions from this and similar emission units < 25 tpy. If you use it, remember to keep records of daily and annual emissions 51

55 Handling the Future Project Management Review System Need early on compliance review for projects Impact on scope, costs and ultimately compliance Critical to conduct project scope review and analyze permit options Constraints with project scope and options/alternatives Impacts of wants vs. needs Communicate in writing no surprises Be simple, but address key questions on impact to project, such as timing, costs, restrictions, etc. Target key internal functions (i.e., Tech., R&D, maintenance, etc.) both to educate and to track projects early on 52

56 Permit Background Work Work with project manager to collect basic project data: Purpose, scope, and timing Simple process diagram Emission estimates looking at actual and potential Discuss emission reduction methods, costs, and the emissions Develop with project manager a schedule that includes permitting Establish key data required and timetable to receive it Understand proposed project(s) to be able to describe in general terms in the permit application 53

57 Permit Background Work During permit strategy brainstorming sessions, keep in mind: That some regulated chemicals or source categories have emission reduction and/or monitoring requirements If possible, restructure emission units for best permitting scenario: Separate out operations by source categories or chemicals If a regulated chemical emission is minor and grouping applies a control requirement to much larger source Maximize in the permit application emissions by regulated pollutant classes up to level of permitting selected keeping in mind BAT and/ or Toxic Modeling requirements 54

58 Permit Background Work Participate proactively in permit data development: You are the company representative who is ultimately responsible for data being complete and accurate. Pay attention to key permitting details associated with each project, including data collection; permit strategy and possible terms and conditions Question all emission data and assumptions: Add unit emissions together and compare to overall operations mass balance Document and scrutinize emission assumptions are they realistic and defendable? Pay attention to raw material impurities and/or by product chemistry may change emission/ compliance basis! 55

59 Obtaining Flexibility & Operational Uptime Explore all emission reduction approaches in place of installing expensive controls, including pollution prevention alternatives: Expand existing in process recovery at facility Change handling/ work practices Set limitations on mixture s content, material substitution (of HAPs or OEPA Air Toxics), etc. 56

60 Obtaining Flexibility & Operational Uptime During project review and early permit work, make judgment on most likely agency permit requirements Keep in mind that you as the sources must live with any permit Terms and Conditions (T&Cs) and not the agency Provide your own permit T&Cs to minimize restrictive or poor fitting ones: To expedite permit processing, and Gives the agency an idea of your approach for demonstrating compliance, for example monthly averaging versus daily 57

61 Obtaining Flexibility & Operational Uptime Controls: When controls are required, keep in mind both source economics and operational uptime are variability in agency negotiations. Only agree to a level of control which can be met all the time and not most of the time Design capture and collection system(s) to minimize expenditures while maximizing result Combine vents to minimize monitoring and control costs Separate vents with low flow or pollutant concentration Develop cost analysis for agency discussion Maintain source operation by providing equipment to: Collect Monitor (i.e., LEL), and Regulate process discharge surges 58

62 Obtaining Flexibility & Operational Uptime Monitoring: If options exist, propose monitoring scheme(s), which are simple, reliable and fit your situation Agency personnel tend to think everything can be measured but that may not be true for your circumstances Where possible, propose a surrogate monitoring scheme: For example, propose operational data as appropriate, such as: Equipment hours of operation, or Emissions from material usage, for example: Track hours worked daily, Inventory solvent usage monthly, and Back calculate daily solvent emissions 59

63 Obtaining Flexibility & Operational Uptime Monitoring: Propose monitoring (& control) schemes, which make sense for your operation using proven, cost effective and reliable technology To monitor compliance all the time the source is operating For example, propose monitor exit gas temperature instead of VOC concentration For compliance demonstration establish period of compliance demonstration which are practical and repeatable: Tie compliance monitoring to periods of discharge within process cycle Usually, longer time periods are better, particularly for variable or non routine operations 13

64 Permitting What Has Worked? Submit complete and accurate application: Provide written process/ project description and simplified process flow diagram Answer all standard PTI application questions as applies Provide emission activity category form(s) Provide emission calculations Make sure numbers are consistent even for different averaging times Be specific leave no open ended points Provide listing of applicable requirements from good faith review Propose T&Cs on monitoring and emission reduction Answer key questions from your point of view Have authorized company representative sign application 61

65 Permitting What Has Worked? Make permit reviewer s job easy: Useful to provide narrative describing project and key points Provide summary of applicable regulatory classification of raw materials Meet permit reviewer: To submit application Explain project scope and timing Review any key points Request fast track handling if needed Determine how application will be handled How familiar is permit reviewer with facility? Offer tour 62

66 Permitting What Has Worked? Determine extent of permit writer s discretion and try for best terms Content of many T&Cs is often negotiable Keep making your point(s) and you may persuade agency Permits are public information and if you claim trade secrets, provide two versions (one sanitized ) for agency processing Keep in contact with District Office or Local Air Agency during processing Ask for a copy of the draft permit to review and comment Be ready for agency questions when they come Develop backup materials during preparation of the permit application preparation 63

67 Permitting What Has Worked? Review agency draft or final permit(s) carefully for accuracy and agency written terms and conditions Immediately report errors in draft to agency for revision After permit is issued, it is difficult to get changes made Simple errors may end up being more than little annoyances Provide written comments to unacceptable parts of draft permit within allotted timeframe; establishing possibility of later appeal Involve legal counsel on permit comments or to appeal permit to the Environmental Review Appeals Commission Be courteous and professional in all dealings with agency personnel 64 of 57

68 Permitting What Has Worked? Utilize Consultants and/or Legal Counsel as resources: Assist in permitting needs assessment Assist in permit strategy development and possible ways to obtain Deminimis or Minor Permit status Assist in permit data collection and preparing the application Usually several options exist on permit T&Cs and research may be needed Define data needed and critical questions to be answered Talk with agency (directly or indirectly) If Consultant hired, track and assist with permit data collection by internal personnel 65

69 RECENT LEGAL DEVELOPMENTS IN MAJOR NSR Eric B. Gallon July 19, Porter Wright Morris & Arthur LLP

70 RECENT CHANGES TO OHIO S MAJOR MODIFICATION DEFINITIONS 2017 Porter Wright Morris & Arthur LLP

71 PURPOSE OF AMENDMENTS To comply with EPA s requirements for state plans (SIPs) to attain and maintain the 2012 national ambient air quality standard (NAAQS) for fine particulate matter (PM 2.5 ). 81 Fed. Reg. 58,010 (Aug. 24, 2016) 2017 Porter Wright Morris & Arthur LLP

72 MAJOR MODIFICATION A major modification is a physical change in, or change in the method of operation of, a major stationary source that causes both: (1) a significant emissions increase and (2) a significant net emissions increase of a regulated NSR pollutant. Ohio Adm.Code (LLL)(1) 2017 Porter Wright Morris & Arthur LLP

73 MAJOR STATIONARY SOURCE Attainment Areas: Each source with PTE > 100 tpy of a regulated NSR pollutant in the 26 original NSPS categories, e.g.: o Fossil fuel boilers w/ > 250 mmbtu/hr heat input o Chemical process plants All other sources with PTE > 250 tpy of a regulated NSR pollutant Any change at a non-major source that would itself be a major stationary source Ohio Adm.Code (NNN)(2) 2017 Porter Wright Morris & Arthur LLP

74 MAJOR STATIONARY SOURCE Nonattainment Areas Each source with PTE > 100 tpy of a regulated NSR pollutant New lower thresholds for certain nonattainment areas: 50 tpy VOC in serious ozone nonattainment areas or, generally, in ozone transport regions (OTR) 25 tpy VOC in severe O 3 nonattainment areas 10 tpy VOC in extreme O 3 nonattainment areas 50 tpy CO in serious CO nonattainment areas 70 tpy PM 10 in serious PM 10 nonattainment areas 70 tpy PM 2.5, or any individual precursor for PM 2.5, in serious PM 2.5 nonattainment areas Ohio Adm.Code (NNN)(1) 2017 Porter Wright Morris & Arthur LLP

75 MAJOR STATIONARY SOURCE Ohio currently has: No O 3 nonattainment areas No CO nonattainment areas No PM 10 nonattainment areas No serious PM 2.5 nonattainment areas (Cuyahoga and Lorain Counties are moderate nonattainment) 2017 Porter Wright Morris & Arthur LLP

76 MAJOR STATIONARY SOURCE Ohio is not currently in an OTR, but: Dec. 2013: Nine NE states petitioned EPA in to expand the OTR to include Ohio Jan. 2017: Obama EPA proposed denying that petition < Oct. 27, 2017: Final decision due The NE states will likely sue if EPA denies the petition Addition to OTR would require RACT for VOC emissions, enhanced vehicle I/M programs in large cities, other measures 2017 Porter Wright Morris & Arthur LLP

77 REGULATED NSR POLLUTANT Includes (but is not limited to): Criteria pollutants and their precursors VOCs and NOx are precursors to O 3 SO 2 and NOx are precursors to PM 2.5 Ohio Adm.Code (NNNNN) 2017 Porter Wright Morris & Arthur LLP

78 REGULATED NSR POLLUTANT The control requirements applicable under plans in effect under this part for major stationary sources of PM 10 shall also apply to major stationary sources of PM 10 precursors, except where the Administrator determines that such sources do not contribute significantly to PM 10 levels which exceed the standard in the area. 42 U.S.C. 7513a(e) Porter Wright Morris & Arthur LLP

79 REGULATED NSR POLLUTANT For Nonattainment New Source Review: VOCs and ammonia are PM 2.5 precursors for now, although Ohio EPA submitted a demonstration that emissions of those pollutants do not contribute significantly to PM 2.5 concentrations in the Cleveland area Ohio Adm.Code (WWWW); FINAL.pdf 2017 Porter Wright Morris & Arthur LLP

80 REGULATED NSR POLLUTANT For Prevention of Significant Deterioration: VOCs are not PM 2.5 precursors, unless Ohio EPA or EPA demonstrates that emissions of those pollutants are a significant contributor to PM 2.5 concentrations in the Cleveland area Ohio Adm.Code (NNNNN)(2)(a)(ii)(d) 2017 Porter Wright Morris & Arthur LLP

81 REGULATED NSR POLLUTANT Different pollutants, including individual precursors, are not summed to determine applicability of a major stationary source. Ohio Adm.Code (NNN) Different pollutants, including individual precursors, are not summed to determine applicability of a major modification. Ohio Adm.Code (LLL)(6) 2017 Porter Wright Morris & Arthur LLP

82 SIGNIFICANT Carbon Monoxide: Nitrogen Oxides: Sulfur Dioxide: Ozone (VOCs/NOx): Particulate Matter: PM 10 : PM 2.5 : 100 tpy 40 tpy 40 tpy 40 tpy 25 tpy 15 tpy 10 tpy (direct) 40 tpy (SO 2 ) 40 tpy (NOx) 40 tpy (VOC) Ohio Adm.Code (VVVVV)(1) 2017 Porter Wright Morris & Arthur LLP

83 PROJECTING POST-PROJECT EMISSIONS AFTER DTE II 2017 Porter Wright Morris & Arthur LLP

84 SIGNIFICANT EMISSIONS INCREASE For projects involving only existing units, requires comparing: the projected actual emissions to baseline actual emissions for each affected unit, and then adding up the differences. Ohio Adm.Code (LLL)(3)(a) 2017 Porter Wright Morris & Arthur LLP

85 SIGNIFICANT EMISSIONS INCREASE Baseline Actual Emissions: Existing EUSGUs: Generally high 24/60 Other existing units: Generally high 24/120 Includes quantifiable fugitive emissions Includes SSM emissions Excludes unlawful emissions May use different period for each regulated NSR pollutant Must use same period for each unit Ohio Adm.Code (O) 2017 Porter Wright Morris & Arthur LLP

86 SIGNIFICANT EMISSIONS INCREASE Projected Actual Emissions (tpy): High 24/60 after the project, or High 24/120 after the project, if Project increases the emissions unit s design capacity or PTE the regulated NSR pollutant, and Full utilization of the emissions unit would result in a significant emissions increase or a significant net emissions increase, or PTE Ohio Adm.Code (GGGGG) 2017 Porter Wright Morris & Arthur LLP

87 SIGNIFICANT EMISSIONS INCREASE Projected Actual Emissions (tpy): Must consider all relevant information in projecting actual emission, including: Historical operational data Company representations and filings Expected business activity Compliance plans Includes quantifiable fugitive emissions Includes SSM emissions Excludes increases the source could have accommodated during the baseline that are unrelated to the project 2017 Porter Wright Morris & Arthur LLP

88 NON- MAJOR MODIFICATIONS Certain major stationary sources, under certain circumstances, must still do some or all of the following: Document their pre-project emissions calculations Submit those calculations to Ohio EPA Monitor their post-project emissions Report their post-project emissions to Ohio EPA Ohio Adm. Code Porter Wright Morris & Arthur LLP

89 NON- MAJOR MODIFICATIONS What if EPA later determines that your preproject emissions projections were wrong? United States v. DTE Energy Co., 711 F.3d 643 (6th Cir. 2013) ( DTE I ) United States v. DTE Energy Co., 845 F.3d 735 (6th Cir. 2017) ( DTE II ) 2017 Porter Wright Morris & Arthur LLP

90 DTE PROJECT Monroe Power Plant, Unit 2 Began in March 2010 Required approximately 83 days, 600 construction workers, and $65 million Replaced approx sq. ft. of tubes, economizer, large sections of reheater Installed new exciter Refurbished boiler feedwater pumps 2017 Porter Wright Morris & Arthur LLP

91 DTE PROJECT Projected significant emissions increases: 3,701 tpy SO 2 4,096 tpy NOx Excluded all of it under the demand grown (capable of accommodating) exclusion EPA brought enforcement action, said project was really a major modification NRDC and Sierra Club intervened 2017 Porter Wright Morris & Arthur LLP

92 DTE I The district court in this case appears to have ruled... that no [enforcement] proceeding is permitted until there is postconstruction data [showing a significant emissions increase]. That is not correct Porter Wright Morris & Arthur LLP

93 DTE I While the regulations allow operators to undertake projects without having EPA second-guess their projections, EPA is not categorically prevented from challenging even blatant violations of its regulations until long after modifications are made Porter Wright Morris & Arthur LLP

94 DTE I If operators had to defend every projection to the agency s satisfaction, companies would hesitate to make any changes.... On the other hand, if EPA were barred from challenging preconstruction projections that fail to follow regulations, [NSR] would cease to be a preconstruction review program. The... regulations take a middle road by trusting operators to make projections but giving them specific instructions to follow Porter Wright Morris & Arthur LLP

95 DTE I If there is no projection, or the projection is made in contravention of the regulations guiding how the projection is to be made, then the system is not working. But if the agency can second-guess the making of the projections, then a project-and-report scheme would be transformed into a prior approval scheme Porter Wright Morris & Arthur LLP

96 DTE II On remand, the district court... focus[ed] on language in our first opinion to the effect that the regulations allow operators to undertake projects without having EPA second-guess their projections. The district court apparently (and mistakenly) took this to mean that the EPA had to accept DTE s projections at face value Porter Wright Morris & Arthur LLP

97 DTE II [I]n reviewing an operator's attribution of increased emissions to demand growth, the EPA definitely is not confined to a surface review or cursory examination Porter Wright Morris & Arthur LLP

98 DTE II The Sixth Circuit found DTE could not justify its application of the demand-growth exclusion : Superficial calculation (just results) Couldn t actually accommodate increase during the baseline: Unit 2 was running at full capacity pre-project, and the project was supposed to reduce outages by at least 12 days per year 2017 Porter Wright Morris & Arthur LLP

99 DTE I & II TAKE AWAY EPA may bring enforcement actions for sources not obtaining major NSR permits for at least three reasons: 1) significant post-project emissions increases and net emissions increases; 2) failure to follow the pre-project calculation, recordkeeping, and reporting requirements; 3) faulty pre-project calculations 2017 Porter Wright Morris & Arthur LLP

100 DTE II Interesting Panel Decisions: DTE I: Opinion by Rogers Joined by Daughtrey Dissent by Batchelder DTE II: Opinion by Daughtrey Concurrence by Batchelder Dissent by Rogers Status: Mandate stayed pending cert filing 2017 Porter Wright Morris & Arthur LLP

101 THANK YOU Eric B. Gallon Porter Wright Morris & Arthur LLP

102 2017 Porter Wright Morris & Arthur LLP