Flexible Permitting Workshop

1
Flexible Permitting Workshop

• Presented by
• U.S. EPA Region 4
• Air Permits Section

2
Workshop Overview

• Prevention of Significant Deterioration
• Plantwide Applicability Limits (PALs)
• PSD-PAL Flexible Permits
• Case Studies

3
PSD Scope

• What triggers PSD applicability?
• New Major stationary sources constructed in
  attainment areas
• Major Modifications to existing major
  stationary sources in attainment areas
• Attainment areas are those areas that are meeting
  the various NAAQS
• SO2, NOX, PM10, CO, Ozone, Lead and now PM2.5

4
PSD Scope

• What is a major stationary source under PSD?
• One of 28 listed major source categories with
  PTE gt 100 tons per year (after control) of any
  pollutant regulated by the CAA including fugitive
  emissions (52.21(b)(1)(i)(a))
• Any stationary source (other than the listed 28)
  with PTE gt 250 tons per year of any pollutant
  regulated by the CAA excluding fugitive emissions
  (52.21(b)(1)(i)(b))

5
PSD Scope

• What is a major modification?
• Any physical change in or change in the method of
  operation of a major stationary source that would
  result in a significant net emissions increase of
  any pollutant subject to regulation under the Act
  (52.21(b)(2)(i))

6
Determining PSD Applicability

• Review and define the entire project (i.e.,
  new/modified equipment and affected equipment)
• What project is being proposed?
• What new equipment will be added?
• Is the project part of previous changes?
• Is the project part of future changes?
• Will the operation or emissions from other
  facility emissions units be affected by the
  change (i.e., de-bottlenecking)?
• Will existing equipment be changed/removed?

7
Determining PSD Applicability

• If the proposed change does not affect other
  emissions units or if the affected emissions
  units do not emit regulated PSD pollutants
• The project is limited to the change only
• If the proposed change affects other emissions
  units
• The project will include both the change and the
  equipment affected by the change

8
Determining PSD Applicability

• Evaluate the project-related emissions
• Determine whether the project by itself (i.e.,
  emissions from new or modified emissions unit
  plus incremental changes in emissions from
  affected units) will emit regulated PSD
  pollutants
• Determine baseline actual emissions
• Determine potential emissions increase following
  the modification
• Determine the project-related emissions from new,
  modified and affected emissions units

9
Determining PSD Applicability

• Evaluate the project emissions to determine if
  the project is a major modification using the
  actual to potential test
• Actual emissions average emissions (tpy) over 2
  years preceding the project
• Fugitive emissions must be quantified for 28
  listed source categories
• Potential emissions PTE of the project (tpy)
• Project potential emissions include PTE of
  new/modified sources and incremental increases at
  affected sources
• Potential emissions minus actual emissions
  project emission increase

10
Determining PSD Applicability

• If project emission increases are not
  significant, the project does not trigger PSD
• If project emission increases are significant,
  evaluate contemporaneous changes in emissions
• Contemporaneous changes are site-wide increases
  or decreases in actual emissions that have
  occurred at the site in the 5 years preceding the
  project
• Determine whether the net change in emissions
  is significant

11
PSD Significant Emission Rates
12
PSD Permit Application Content

• Description of proposed project
• Summary of applicable requirements
• Emissions inventory
• Determination and defense of best available
  control technology (BACT) evaluation
• Air quality impact analyses
• Other Class II impacts analysis

13
What is BACT?

• Any major stationary source or major modification
  subject to PSD must conduct an analysis to ensure
  the application of best available control
  technology (BACT)
• BACT is defined at 40 CFR 52.21(b)(12)
• BACT is fundamentally an emissions limitation

14
BACT Applicability (40 CFR 52.21(j))

• (2) A new major stationary source shall apply
  BACT for each PSD-regulated pollutant that it
  would have the potential to emit in significant
  amounts
• (3) A major modification shall apply BACT for
  each PSD-regulated pollutant for which it would
  result in a significant net emissions increase at
  the source. This requirement applies to each
  proposed emissions unit at which a net emissions
  increase in the pollutant would occur as a result
  of a physical change or change in the method of
  operation in the unit.

15
Final NSR Revisions

• Revised Baseline Actual Emission Calculation
  Procedure
• New Actual-to-Projected-Actual Applicability
  Test
• Actuals Based Plantwide Applicability Limits
  (PALs)
• New Clean Unit Designation Vacated June 2005
• Pollution Control Project Exclusion Vacated
  June 2005
• Routine Maintenance, Repair, and Replacement
  (October 27, 2003)

16
Baseline Actual Emissions

• Revised Baseline Calculus for Non-Electric
  Utility Steam Generating Units (Non-EUSGUs)
• The facility may use the annual average emissions
  that occurred during any consecutive 24-month
  period in the past 10 years
• Emissions must be adjusted to reflect current
  emission factors/control requirements
• Baseline emissions cannot exceed applicable
  standards/limits

17
Baseline Actual Emissions

• Revised Baseline Calculus for Non-Electric
  Utility Steam Generating Units (Non-EUSGUs)
• Adequate emissions data must be available
• All emissions units are subject to same 24-month
  period for a given pollutant
• Different 24-month periods may be used for
  different pollutants

18
Plantwide Applicability Limits

• What is a PAL?
• An annual, facility-wide, pollutant specific,
  emission limitation under which the facility can
  make any changes without triggering NSR for that
  pollutant
• PALs ,as defined in 40 CFR Part 52, are
• Set using actual facility baseline emissions
• Pollutant-specific
• Issued for a 10-year term
• Renewable
• A mechanism for increasing PALs is available

19
Actuals Plantwide Applicability Limits

• Who is eligible for an Actuals Plantwide
  Applicability Limit (PAL)?
• Existing major stationary sources that meet
  certain additional criteria
• How does a PAL benefit a major facility?
• Modifications under a PAL are not considered
  major modifications for the PAL pollutant
• Modifications do not have to be approved through
  the major NSR program
• Facility changes are not dictated by major NSR
  concerns

20
Actuals PALs

• How does a facility obtain a PAL?
• Interested facilities must submit a complete
  permit application specifically requesting a PAL
  or PALs
• Minimum application requirements include
• Listing of emissions units
• Size of emissions units (small, significant or
  major)
• All Federal/State applicable requirements
• Emission limits/work practice requirements
• Baseline actual emissions
• Supporting documentation

21
Actuals PALs

• What type of application is required for a PAL?
• PALs must be established via a federally
  enforceable permit
• Minor NSR construction permit
• Major NSR permit (i.e., PSD permit)
• SIP-approved operating permit program
• Regulatory authority must provide opportunity for
  public participation
• 30-day public notice
• Opportunity for public comment

22
Actuals PALs

• How are PAL levels established?
• Establish baseline emissions - select any
  consecutive 24-month period within the 10-year
  period preceding the PAL (5-year period for
  EUSGUs)
• Only one 24-month period may be used per
  pollutant
• Differing baseline periods may be used for
  different pollutants
• Identify all emissions units that were included
  in the baseline period
• Identify any emissions units constructed since
  the baseline period

23
Actuals PALs

• How are PAL levels established? (cont.)
• For each emissions unit that existed during the
  baseline period
• Calculate the average rate, in tons per year, at
  which each of the emissions units emitted the PAL
  pollutant
• Sum the baseline actual PAL pollutant emission
  rates of each emissions unit at the source
• Add an amount equal to the applicable significant
  level for the PAL pollutant

24
Actuals PALs

• How are PAL levels established? (cont.)
• Subtract baseline PAL pollutant emissions
  associated with emissions units that have been
  permanently shut down since the baseline period
• Shutdowns of more than 2 years or that have
  resulted in the removal of the source from the
  States inventory are presumed to be permanent
• Add potential PAL pollutant emissions from units
  from which construction began after the baseline
  period

25
Actuals PALs

• How are PAL levels established? (cont.)
• Baseline PAL pollutant emissions cannot exceed
  emission limits allowed by your permit or newly
  applicable requirements at the time the PAL is
  set
• Adjust baseline PAL pollutants to reflect
  applicable requirements since the baseline period
• RACT, NSPS, BACT, LAER, etc.

26
Actuals PAL Example

• Surface coating facility with 7 emissions units
  defined as Units A through G
• PAL pollutant is VOC
• New State requirement in 1999 affected Unit D
• Unit F was permanently shut down in 2000
• Unit G was added in 2004
• Unit C allowable VOC is 60 tpy

27
Actuals PAL Example
Choose representative baseline period (1997-1998)
1 Emissions in excess of 60 tons are subtracted
from baseline
28
Actuals PAL Example
Correct Unit D for new applicable requirement
(90 VOC control) and re-evaluate baseline periods
A
B
1 Emissions in excess of 60 tons are subtracted
from baseline
29
Actuals PAL Example

• Calculate PAL level - A
• Highest baseline 214 tpy (1997/1998)
• Subtract Unit F baseline emissions (52 tons)
  162 tons
• Add PTE of new Unit G (40 tons) 202 tons
• Add major modification threshold (40 tons) 242
  tons
• Evaluate Alternative Baseline Period - B
• Baseline 205 tpy (1999/2000)
• Subtract Unit F baseline emissions (30 tons)
  175 tons
• Add PTE of new Unit G (40 tons) 215 tons
• Add major modification threshold (40 tons) 255
  tons

30
Actuals PAL Example

• Proposed VOC PAL 255 tons
• Is a 255 tpy PAL viable?
• Recent actual emissions are well below baseline
• Abatement equipment was added to Unit D
• Facility plans to switch to powder and/or
  waterborne coatings on Units A and C within 5
  years resulting in lower emissions
• A 255 tpy PAL is viable for this facility

31
PAL Permits

• What does a PAL permit look like?
• PAL permits must include
• Identification of PAL pollutant(s) and limits(s)
• PAL effective and expiration dates
• PAL renewal/transition provisions
• Requirement to include emissions from start-ups,
  shutdowns,and malfunctions in compliance
  calculations
• Requirement to comply with PAL expiration
  requirements

32
PAL Permits

• PAL permits must include (continued)
• PAL calculation procedures
• Monitoring requirements
• Record retention requirements
• Reporting requirements
• Other necessary requirements

33
PAL Permits

• How long are PALs and PAL permits good for?
• The effective period for a PAL is 10 years
• Can PALs be re-opened by the regulatory
  authority?
• Yes - mandatory reopening of PAL permits to
• Correct errors
• Reduce PAL for creditable reductions
• Revise to reflect a PAL increase

34
PAL Permits

• Can PALs be re-opened by the regulatory
  authority?
• Yes - discretionary reopening of PAL permits to
• Reduce PALs to reflect new federal requirements
• Reduce PALs to reflect new state requirements
• Reduce PALs if necessary to avoid causing or
  contributing to a NAAQS or PSD increment
  violation
• Reopening must be in accordance with public
  participation requirements

35
PAL Permits

• Do PALs/PAL permits expire?
• Yes PALs/PAL permits not renewed expire at the
  end of their effective period (10 years)
• What happens if a PAL is allowed to expire?
• New emission limits are established
• Source proposes distribution of PAL emissions to
  each emissions unit that existed under the PAL
• The reviewing authority decides the ultimate
  distribution of PAL emissions to emissions units

36
PAL Permits
PAL emissions are distributed to individual
emissions units if the PAL expires
1 In this example, emissions were apportioned to
individual emissions units at PAL expiration
based on the distribution of emissions during the
baseline period
37
PAL Permits

• PAL Expiration Notes
• Compliance with new enforceable tpy limits is
  based on a 12-month rolling basis
• Required monitoring systems may be similar to
  those under PALs
• Compliance with a site-wide emissions cap,
  equivalent to the previous PAL, is required until
  a revised permit is issued
• Physical changes or changes in the method of
  operation are subject to major NSR if change is a
  major modification
• State or federal requirements (BACT, LAER, RACT,
  NSPS, etc.) remain applicable

38
PAL Permits

• How are PALs renewed?
• An application for a PAL renewal is required
• The renewal process must include public notice
  and comment period
• A timely renewal application (i.e., 6 months
  prior to expiration) is required
• An application for a PAL renewal must include
• A list of emissions units and classification as
  small, significant, or major
• A list of applicable requirements for each
• Calculations of baseline emissions
• Proposed emission calculation procedures
• Proposed PAL level
• Sum of PTE of all emissions units under the PAL

39
PAL Permits

• Are PALs adjusted when they are renewed?
• Yes PALs are evaluated at renewal using the
  same process used to set the original PALs
• If the new PAL level is gt or 80 of existing
  PAL level, PAL may be reset at original level
• The reviewing authority has discretion in setting
  a new PAL level to
• Be more representative of actual emissions
• Be in accordance with local air quality needs
• Accommodate anticipated economic growth
• Represent advances in air pollution control
  technology

40
PAL Permits

• PAL renewal adjustment notes
• The new PAL may not exceed the facility PTE
• New PAL cannot exceed original PAL level unless
  undergoing PAL modification (increase) procedure
• The PAL must reflect all requirements that became
  applicable during PAL term and that PAL was not
  adjusted for

41
PAL Permits

• How can PAL levels be increased?
• An application for a PAL increase is required
  that
• Identifies all emissions units contributing to
  the increase
• Demonstrates a PAL exceedance after inclusion of
  proposed new/modified emissions units and an
  assumption of current BACT equivalent controls on
  all units
• A major NSR permit is required for emissions
  units associated with the increase, regardless of
  the magnitude of the emissions increase
• Facility must comply with any resulting BACT/LAER
  requirements

42
PAL Permits

• How is a higher PAL level established?
• The regulatory authority establishes a higher PAL
  level based on
• The sum of the allowable emissions from
  new/modified emissions units - PLUS -
• The sum of the baseline actual emissions from all
  significant/major emissions units assuming BACT
  control - PLUS -
• The sum of baseline actual emissions from small
  emissions units
• The end result - the magnitude of the proposed
  increase is minimized by the potential PAL
  decreases by assuming BACT control on significant
  and major emissions units

43
PAL Permits

• What type of monitoring requirements are
  specified in PAL permits?
• PAL general monitoring requirements specify that
• PAL monitoring systems must be based on sound
  science
• Must meet minimum legal requirements for
  admissibility in a judicial proceeding to enforce
  the PAL permit
• Emissions must be quantifiable on an ongoing basis

44
PAL Permits

• Acceptable PAL monitoring techniques include
• Mass Balance Calculations
• For sources using paints, coatings, and solvents
• Continuous Emission Monitoring Systems (CEMS)
• Continuous Parameter Monitoring Systems (CPMS)
• Predictive Emission Monitoring Systems (PEMS)
• Emission Factors
• Alternative methods as approved by the
  administrator

45
PAL Permits

• Mass Balance Calculations
• Requirements include
• A demonstrated means to validate pollutant
  content in material(s)
• Assumption that emissions unit emits all of a
  pollutant if the pollutant cannot be accounted
  for
• The use of the highest value of a pollutant where
  a range of the pollutant content is published
• Mass balance calculations are acceptable and are
  widely used for activities using coatings or
  solvents

46
PAL Permits

• Continuous Emission Monitoring Systems (CEMS)
• Requirements
• Systems must meet applicable Part 60, Appendix B
  Performance Specifications
• Systems must sample, analyze, record data once
  every 15 minutes of operation

47
PAL Permits

• Continuous Parameter Monitoring Systems (CPMS)
  and Predictive Emission Monitoring Systems (PEMS)
• Requirements
• The CPMS/PEMS system must demonstrate a
  correlation between monitored parameters and PAL
  pollutant emissions across the range of unit
  operation
• The CPMS/PEMS system must sample, analyze, record
  data once every 15 minutes of operation

48
PAL Permits

• Emission Factors
• Requirements
• If appropriate, factors must be adjusted for the
  uncertainty or limitations in the factors
  development
• Emissions units must operate within the range of
  the factors development
• If technically practicable, the emission factors
  for significant units must be re-validated within
  6 months of the PAL permit issuance
• Unless reviewing agency determines that testing
  is not required

49
PAL Permits

• How is missing monitoring data handled under a
  PAL?
• Sources must record and report maximum potential
  emissions without considering enforceable
  limitations or operating restrictions
• What happens when a source operates at
  non-correlated operating ranges?
• A default value representing the highest
  potential emissions must be established and used,
  or
• The source is deemed in violation when the unit
  is operating outside of a correlated parametric
  range

50
PAL Permits

• Do emissions monitoring systems under a PAL ever
  have to be re-validated?
• Yes - data re-validation is required once every
  5-years for all methods of monitoring
• Re-validation is accomplished by emission testing
  or or other scientifically valid means
• The PAL applicant may want to consider including
  a re-validation protocol with the PAL application
  addressing each type of monitoring and the
  proposed re-validation procedures

51
PAL Permits

• How long must PAL related compliance records be
  retained?
• Records necessary to demonstrate compliance with
  the PAL regulations must be retained for five (5)
  years from the date of the record
• Other PAL related records must be retained for
  the duration of PAL plus 5 years
• PAL application
• PAL revision applications
• Annual Title V certifications

52
PAL Permits

• What are the reporting requirements under a PAL?
• There are three basic reporting requirements
  under a PAL
• Semi-annual compliance reports
• Prompt deviation reports
• Re-validation tests

53
PAL Permits

• Semi-annual compliance report requirements
• Reports are due 30 days from end of reporting
  period and must include
• Owner/operator/permit number
• Annual tpy emissions for each month (i.e.,
  rolling 12-month total)
• All data relied upon
• A list of new/modified emissions units
• Number/duration/cause of deviations or monitoring
  malfunctions
• Monitoring system shutdowns
• Truth, accuracy and completeness certification

54
PAL Permits

• Prompt deviation report requirements
• Prompt is defined by the regulatory authority in
  accordance with 70.6(a)(3)(iii)(B)
• Reports must include
• Owner/operator/permit number
• PAL condition associated with exceedance/deviation
  
• Emissions associated with the exceedance/deviation
  
• Truth, accuracy and completeness certification
• Re-validation reports
• The results of any re-validation tests must be
  submitted to the reviewing authority within 3
  months of testing

55
PAL Permits

• Pennsylvanias PAL Program
• The NSR Revision PAL rules are applicable in PA
  for attainment pollutants (PA is SIP-approved and
  the PSD rules are incorporated by reference)
• The NSR Revision PAL rules are not applicable to
  non-attainment pollutants in PA (PA is
  SIP-approved with state specific non-attainment
  NSR rules)

56
PAL Permits

• Pennsylvanias PAL Program (cont.)
• The Pennsylvania Department of Environmental
  Protection (DEP) has been issuing PALs to
  facilities located in non-attainment regions for
  several years
• Current DEP policy allows establishing PAL caps
  for individual non-attainment pollutants
• The regulatory basis for PALs in PA
  non-attainment areas is found in the operating
  permit requirements emissions trading at
  facilities with a federally enforceable emissions
  cap

57
PAL Permits

• Pennsylvanias PAL Program (cont.)
• The PA PAL template is similar to the NSR
  Revision PAL rule
• PAL cap established by summing baseline emissions
  and adding applicable significance level (tpy)
• PA uses most recent 2-calendar year period to
  establish the PAL baseline

58
PAL Permits

• Pennsylvanias PAL Program (cont.)
• The PAL cap is adjusted by adding an amount
  slightly less than the major modification
  threshold
• In moderate non-attainment areas, allowable
  emission increases since 1991 are subtracted from
  the major modification threshold
• PAL term 5 years
• Minor NSR applies to all changes under a PAL to
  ensure application of best available technology
  in accordance with current requirements

59
PAL Permits

• Summary
• Actuals PALs are useful tools, but are not
  universally beneficial to all major facilities
• The decision to pursue an actuals PAL is a
  strategic decision dictated by individual
  facility circumstances

60
PSD-PALs

• What are PSD-PALs?
• A flexible permitting option that combines the
  permitting of a new major source or a major
  modification at an existing facility with an
  application for a PAL
• The PALs are based on a combination of baseline
  emissions and projected future actual emissions
• PSD-PALs are issued through a SIP approved NSR
  permitting program

61
PSD-PALs

• There are currently two PSD-PALs in Region 4
• Saturn Corporation - Spring Hill, Tennessee
• BMW Greenville, South Carolina
• The PSD-PAL discussion is based predominantly on
  EPA Region 4 experience with these two sources

62
PSD-PALs

• What type of facility is ideal for a PSD-PAL
  permit?
• Complex, well-controlled existing or new
  facilities with multiple, inter-dependant
  processes
• New facilities are excluded from NSR PAL rules
• Facilities subject to frequent changes with
• A high potential to emit for one or more PSD
  regulated pollutants
• Well characterized emissions
• Effective monitoring systems
• Examples include automobile manufacturers,
  chemical manufacturers, and Kraft pulp mills
• These types of facilities are well represented in
  Region 4

63
PSD-PALs

• What does well controlled mean?
• BACT or equivalent control on new or modified
  sources

64
PSD-PALs

• PSD-PAL Level equals
• Baseline emissions from all unaffected emissions
  units (including shutdown sources where
  applicable)
• PLUS
• PTE from new or modified emissions units
• MINUS
• Baseline emissions from sources permanently
  shutdown

65
PSD-PALs
1 Unit 5 shut down in late 2000, Unit 6 shut down
in late 2004 2 Units 7, 8, and 9 are new units 3
Total corrected VOC excludes emissions from
affected units
66
PSD-PALs

• Establish PAL Contributions
• Unaffected source baseline
• 73.5 tons
• New/affected sources
• 285 tpy
• Shut-down sources in baseline
• 123.5 tpy

67
PSD-PALs

• Compute the PSD-PAL level
• Baseline emissions from unaffected emissions
  units 73.5 tons
• Baseline emissions from shutdown sources 123.5
  tons
• Projected actual emissions from new and affected
  sources 285 tons
• Compute PAL
• 73.5 tons 123.5 tons 285 tons 123.5 tons
  358.5 tons

PAL LEVEL 358.5 TONS PER ROLLING 12-MONTH PERIOD
68
PSD-PALs

• Can PSD-PALs be written with Flexibility
  provisions?
• Yes - PSD-PALs may include flexibility provisions
• Flexibility provisions are those conditions that
  reduce the administrative friction - costs,
  time, delay, uncertainty, and risks experienced
  by sources and permitting authorities when
  implementing a permit or making certain changes
  under a permit
• Flexibility provisions are in addition to the
  inherent PAL benefits

69
PSD-PALs

• What do flexible provisions include?
• Pre-approved NSR
• Ability to add new emissions units
• Ability to make physical changes or changes in
  the method of operation
• Certain requirements may be subsumed
• For example, compliance with PAL levels may be
  deemed to also be in compliance with
• Individual BACT emission limits
• State SIP emission limits
• Flexibility provided in PSD-PAL permits is
  largely dependent upon regulatory authority
  policy and is generally negotiated

70
PSD-PALs

• Flexible components must include safeguards
• Examples of safeguards include
• BACT on all new units gt significance level
• Minor source BACT or Best Available Technology
  (BAT) on all new units lt significance level
• Streamlined registration and public notice for
  all new major units
• Requirement to operate and monitor air pollution
  control systems relied on for BACT
• Requirement to comply with NAAQS and PSD
  increments

71
PSD-PALs

• What type of monitoring procedures are required
  under a PSD-PAL?
• In general, monitoring procedures that are
  equivalent to those required under an NSR
  actuals PAL
• Mass Balance Calculations
• Credible Emission Factors
• Continuous Emission Monitors (CEMs)
• Continuous Parameter Monitoring Systems (CPMS)
• Approved alternative monitoring methods

72
PSD-PALs

• What level of air pollution control device
  monitoring is required?
• In general, air pollution control device
  monitoring and recordkeeping should be equivalent
  to CAM requirements
• Effective air pollution control device monitoring
  could be essential to flexibility provisions
• Compliance with unit specific BACT requirements
  is based on compliance with PAL limits
• BACT compliance is contingent upon proper
  operation of air pollution control equipment
• An effective monitoring system is therefore
  essential to BACT/PAL compliance

73
PSD-PALs

• Emission calculation procedures
• The applicant should develop and propose emission
  calculation procedures to convert monitoring data
  to a mass emission basis
• Calculations should be based on sound
  scientific/engineering principles and should
  compute emissions (tons) on a monthly basis
• Monthly emissions (tons) are summed with the
  preceding 11 months worth of monthly data to
  demonstrate PAL compliance on t rolling 12-month
  basis
• Calculations should be replicable

74
PSD-PALs

• A draft PSD-PAL permit is recommended as part of
  a PSD-PAL application
• Benefits of a draft permit in the application
• Starting point for negotiating conditions
• Clearly articulates source expectations and
  commitments
• Compresses regulatory agency review time
• Draft permit components include
• PAL conditions
• Monitoring requirements
• Recordkeeping requirements
• Calculations
• Flexibility provisions

75
PSD-PALs

• Environmental benefits of a PSD-PAL permit
• Technology forcing
• As the facility grows, actual emissions will
  approach PAL levels
• To retain the flexibility afforded by the permit,
  the PALs must not be exceeded
• To ensure that the PALs are not exceeded,
  pollution prevention, efficiency, and emissions
  abatement become key considerations with regard
  to growth projects

76
PSD-PALs

• Environmental benefits of a PSD-PAL permit
  (cont.)
• Pollution Prevention
• Pollution prevention/pollution control projects
  are integral to the success of the permit
• In order to grow and retain the PAL flexibility,
  the facility must strive to reduce emissions to
  remain under PAL levels
• The dynamics of a PAL are similar to cap and
  trade programs - reductions will be achieved
  where they are most cost effective, not where
  they are mandated

77
PSD-PALs

• Environmental benefits of a PSD-PAL permit
  (cont.)
• Special conditions may be required in exchange
  for flexibility
• Special conditions may include provisions that
  are important to state or regional regulatory
  authorities
• Air toxics reductions
• Pollution prevention targets
• Automatic reductions in PAL levels
• Supplementary environmental projects
• Cross-media benefits

78
PSD-PALs

• Facility benefits of a PSD-PAL permit
• Certainty
• Flexibility
• Timing
• Compliance
• Planning

79
PSD-PALs

• Facility benefits of a PSD-PAL permit (cont.)
• Certainty
• Applicability of major and minor NSR is defined
  within the permit
• Major NSR (i.e., PSD) only required to increase
  PAL limits
• Flexibility
• Changes to existing emissions units are
  pre-approved under the PAL and may be initiated
  without prior agency notification
• Eliminates confusion regarding routine repair,
  maintenance, and replacement exemption
• Enables changes without administrative air
  permitting delays

80
PSD-PALs

• Facility benefits of a PSD-PAL permit (cont.)
• Timing
• Product concept, design, engineering and
  production time frame has decreased significantly
  over last 10 years
• Timing of pre-application air permit process
  (i.e., up to two years for PSD permit) has not
  changed
• As long as emissions remain below PALs, the
  facility can effectively manage timing issues
  associated with new projects

81
PSD-PALs

• Facility benefits of a PSD-PAL permit (cont.)
• Simplified Compliance Determination
• PAL limits can reflect rolled up compliance
  (i.e., compliance with PALs is compliance with
  major/minor NSR and BACT) in conjunction with
  effective pollution control device monitoring
  programs
• Planning
• Decisions regarding facility growth can be made
  on the merits of the change
• Factors beyond facility control (schedule, BACT,
  permit application review, etc.) are neutralized

82
PSD-PALs

• Regulatory authority benefits of a PSD-PAL
  permit
• Reduced administrative burden
• Rigorous source monitoring and recordkeeping
• Simplified compliance determinations
• Effective air pollution control device monitoring
• Greater information regarding source operation

83
PSD-PALs

• Regulatory authority benefits of a PSD-PAL permit
  (cont.)
• Reduced Administrative Burden
• Fewer permit applications to review
• Rigorous Monitoring/Recordkeeping Requirements
• Facility monitoring requirements increased as a
  result of emissions calculation requirements of
  the permit
• Facility recordkeeping requirements (monthly)
  increased in response to need for accurate
  emissions calculation data

84
PSD-PALs

• Regulatory authority benefits of a PSD-PAL permit
  (cont.)
• Pollution Control Device Monitoring
• Data on operation of all air pollution control
  systems at facilities
• Greater Knowledge of Source Operations
• Much more data regarding the source is available
  due the expanded information requirements of PAL
  compliance

85
Case Study A Saturn PSD/PAL

• Overview of the PSD/PAL Permit for the Saturn
  Spring Hill, Tennessee Facility
• The Saturn facility is comprised of three
  business units
• Body Systems - body panels, body fabrication and
  paint shop
• Vehicle Systems - vehicle interior systems and
  final vehicle assembly
• Powertrain - machining, engine assembly, and
  final dress
• Production of Saturn vehicles began in July of
  1990
• The original PSD permit had 54 separate permitted
  emissions units and 333 separate permit
  conditions

86
Case Study A Saturn PSD/PAL

• Planned facility changes for 2001
• New vehicle assembly lines
• Modified coating lines/conveyor changes
• New engine machining/assembly operations
• New AA stamping press
• Overall facility production capacity increase
  from 360,000 to 595,350 vehicles per year

87
Case Study A Saturn PSD/PAL

• Critical facility air permitting issues
• Initial projects triggered PSD applicability
• Facility projects are subject to frequent
  scope/schedule changes
• NSR Revision status was in a state of flux in
  1999
• Saturn air permit objectives
• Obtain an innovative permit regardless of NSR
  Revision status
• Base flexible permit on the PAL concept
• Obtain allowable emissions adequate for 595,350
  vehicles/yr or more
• Accommodate scope/schedule changes without
  triggering the need for a new permit
• Simplify compliance demonstration

88
Case Study A Saturn PSD/PAL

• Final air permitting concept
• Innovative permit obtained through traditional
  PSD permitting process
• PSD permit with BACT levels combined to establish
  multi-pollutant PALs
• Streamlined monitoring and compliance
  determination
• Expedited treatment of additional new units
• Authorized changes to existing units provided
  PALs are not exceeded

89
Case Study A Saturn PSD/PAL

• PSD-PAL permit application
• Common PSD Components (BACT, modeling, etc.)
• Innovative Components
• Proposed PALs based on a combination of baseline
  and potential emissions for criteria pollutants
• Single emissions unit for all combustion related
  emissions
• Documentation of BACT equivalent technology for
  unaffected emissions units (e.g., clean units)
• Sample draft permit language incorporating
  proposed PALs and other innovative provisions
• Submitted application to TDEC in October 1999
• Received final PSD/PAL permit in June 2000

90
Case Study A Saturn PSD/PAL
Emissions Summary, Tons/yr.
a Previous allowable emissions represent
conditions from Saturns original
operating/construction permits and subsequent
modifications. b Baseline actual is the average
1995/1996 annual emission rate c Net change
represents the difference between baseline
emission rates and PAL levels. The project
triggered PSD review for VOC, NOx, and PM10. d
Saturn utilizes natural gas as the sole fuel
on-site. There are no provisions for
alternative or back-up fuels.
91
Case Study A Saturn PSD/PAL

• Permit Innovations
• Operational Flexibility
• Pre-approved new major emissions units
• Registration and BACT requirement
• Saturn may begin construction when BACT is
  approved (i.e., 45 days)
• Pre-approved new minor emissions units
• Registration and mBACT requirement
• Saturn may begin construction when mBACT is
  approved (i.e., 30 days)
• Changes to existing emissions units do not
  require TDEC approval

92
Case Study A Saturn PSD/PAL

• Permit Innovations
• Clear monitoring and recordkeeping requirements
• Ability to increase PALs through the PSD
  permitting process
• Termination provision with return to
  traditional permit
• Streamlined compliance requirements

93
Case Study A Saturn PSD/PAL
Old PSD Versus New PSD/PAL Conditions
94
Case Study A Saturn PSD/PAL

• Summary
• The PAL permit provides significant operational
  flexibility to Saturn within current regulatory
  bounds
• The permit streamlines compliance determinations
  for the facility, TDEC, and the public
• VOC emissions per vehicle produced has declined
  since PAL issuance
• The PSD/PAL permit has improved the environmental
  performance of the facility
• The original PAL permit limits and flexibility
  are retained in the Title V operating permit

95
Case Study B Flexible Permit With Caps

• Overview of a proposed flexible permit with
  emissions caps for a manufacturing facility in
  the upper Midwest
• The facility includes a series of surface coating
  processes (spray and dip coating) and is well
  controlled (units are clean)
• Facility emissions include VOC, PM10, HAPs, and
  products of natural gas combustion (NOx and CO)
• The facility started up in 2001 and has had
  several PSD revisions

96
Case Study B Flexible Permit With Caps

• Critical facility air permitting issues
• NSR Revisions became effective in March 2003
• Attainment status of the region changed
• Baseline emissions were not representative of
  normal facility operations
• Permitting timelines (major and minor) have been
  a recurring facility concern
• Facility air permit objectives
• Obtain a flexible permit with caps that reflect
  future projected actual emissions at maximum
  production
• Obtain flexibility regarding facility
  modifications
• Streamline facility compliance requirements and
  simplify compliance demonstrations

97
Case Study B Flexible Permit With Caps

• Final air permitting concept
• Acquire permit through the state minor NSR
  program
• Re-express the original VOC BACT limits as a
  single site-wide performance limit in terms of
  lbs VOC/unit of production
• Re-express the 112(g) limits on surface coating
  processes in terms of lbs HAP/unit of production
• Establish a VOC cap reflective of projected
  actual emissions at full production
• Permit streamlining to eliminate redundant
  requirements and simplify compliance
• Expedited approval of additional new units
• Allow changes to existing units provided caps are
  not exceeded

98
Case Study B Flexible Permit With Caps

• Minor NSR permit application
• Demonstration of compliance with BACT limits for
  all emissions units
• Emissions inventory
• Baseline calculations
• Calculation of site-wide BACT, 112(g), and VOC
  cap
• Innovative Components
• Proposed site wide BACT and 112(g) limits
• Proposed cap based on full production and
  allowable lb VOC/unit of production limit
• Single emissions unit for all combustion related
  emissions
• Pre-approved major/minor NSR
• Sample draft permit language incorporating
  proposed PALs and other innovative provisions
• Submitted application in July 2004
• Application currently under review

99
Case Study B Flexible Permit With Caps

• Permit Innovations
• Operational Flexibility
• Pre-approved new emissions units
• Regulatory authority notification and
  contemporaneous BACT/LAER for like equipment
• Construction may begin upon written regulatory
  authority approval or 30 days
• Changes to existing emissions units do not
  require regulatory authority approval
• Alternative limits for low production periods
  (e.g., tons VOC per month versus lb VOC/unit of
  production)

100
Case Study B Flexible Permit With Caps

• Permit Innovations (cont.)
• Termination provision with return to
  traditional permit
• Streamlined compliance requirements
• Site-wide VOC performance limit in terms of lb
  VOC/unit of production
• Combined 112(g) limit in terms of lb HAP/unit of
  production
• Site-wide VOC and NOx caps
• Streamlined recordkeeping requirements
• Elimination of redundant permit conditions

101
Case Study C Non-attainment PAL

• Overview of a proposed PAL for an adhesive
  coating facility in Pennsylvania
• The facility includes boilers, reactor vessels,
  mixing and formulation, multiple adhesive coaters
  and dryers, and research and development
  facilities
• Facility emissions include VOC, PM10, HAPs, and
  products of combustion (NOx and CO)
• The facility is well controlled using a vent
  condenser and two existing regenerative thermal
  oxidizers to abate VOC and vHAP emissions

102
Case Study C Non-attainment PAL

• Critical facility air permitting issues
• NSR Revisions became effective in March 2003 for
  attainment pollutants
• The facility is located in an area classified as
  moderately non-attainment for ozone due to its
  location in the Northeast Ozone Transport Region
• Permitting timelines and redundant NSR
  applicability analyses
• Projects in the pipeline that include expedited
  installation schedules

103
Case Study C Non-attainment PAL

• Facility air permit objectives
• Obtain a VOC PAL that provides the facility with
  a manageable cushion between actual and allowable
  emissions
• Obtain operating flexibility
• Eliminate NSR applicability analyses for facility
  changes
• Streamline facility compliance requirements and
  simplify compliance demonstrations

104
Case Study C Non-attainment PAL

• Final air permitting concept
• Acquire a VOC PAL through the Pennsylvania minor
  NSR program
• Since facility is well controlled, use the 40 ton
  major NSR modification threshold to establish a
  VOC PAL
• Ensure expedited state review and approval of
  facility modifications by eliminating required
  non-attainment NSR applicability determinations
• Allow the facility to decide where and how VOC
  emissions are controlled within the facility in
  accordance with Pennsylvania Best Available
  Technology (BAT) requirements

105
Case Study C Non-attainment PAL

• Minor Pennsylvania NSR permit application
• BAT analysis not required since no emissions
  units were being modified
• Emissions inventory
• Baseline calculation - PA PAL policy requires the
  use of the most recent two calendar years to
  develop baseline emission rates or an alternative
  two year period within the past five year if the
  most recent two years is not representative
• PAL calculation - The PAL was established by
  adding an amount slightly less than the major
  modification threshold (i.e., 39 tons for VOC) to
  the baseline minus allowable emission increases
  since 1991

106
Case Study C Non-attainment PAL

• Non-attainment VOC PAL Calculation

107
Case Study C Non-attainment PAL

• Innovative Components
• Proposed site wide VOC PAL set using baseline VOC
  emissions plus adjusted NSR major modification
  threshold
• The facility is well controlled and the VOC PAL
  provides a considerable growth cushion
• For this facility, the ability to manage growth
  internally via a VOC PAL is sufficiently
  innovative
• Submitted application in October 2004
• A proposed draft permit is currently under review
  by DEP and the facility