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and
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September
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1
M.
How
will
the
NSR
program
address
PM2.5
and
its
precursors?

1.
Background
The
existing
regulations
require
both
major
and
minor
New
Source
Review
(
NSR)
programs
to
address
any
pollutant
for
which
there
is
a
national
ambient
air
quality
standard
(
NAAQS)
and
any
precursors
to
the
formation
of
that
pollutant
when
identified
for
regulation
by
the
Administrator.
We
are
proposing
to
amend
the
NSR
regulations
to
clarify
how
States,
local
agencies
and
Tribes
must
implement
NSR
for
the
PM2.5
standard.
This
proposal
also
explains
how
the
existing
rules
will
be
implemented
with
respect
to
PM2.5
during
the
State
Implementation
Plan
(
SIP)
development
period.

The
NSR
program
is
a
preconstruction
permitting
program
that
applies
when
a
source
is
constructed
or
modified.
The
NSR
program
is
composed
of
three
different
programs:


Prevention
of
Significant
Deterioration
(
PSD);


Nonattainment
NSR
(
NA
NSR);
and,


Minor
NSR
We
often
refer
to
the
PSD
and
Nonattainment
NSR
program
as
the
major
NSR
program
because
these
programs
regulate
only
major
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1
The
Act
uses
the
terms
"
major
emitting
facility"
to
refer
to
sources
subject
to
the
PSD
program,
and
"
major
stationary
source"
to
refer
to
sources
subject
to
Nonattainment
NSR.
CAA
Sections
169
and
302(
j).
For
ease
of
reference,
we
use
the
term
"
major
source"
to
refer
to
both
terms.

2
In
addition,
the
PSD
program
applies
to
most
noncriteria
regulated
pollutants.

2
sources.
1
The
PSD
program
applies
when
a
major
source,
that
is
located
in
an
area
that
is
designated
as
attainment
or
unclassifiable
for
any
criteria
pollutant,
is
constructed
or
undergoes
a
major
modification.
2
The
NA
NSR
program
applies
when
a
major
source
that
is
located
in
an
area
that
is
designated
as
nonattainment
for
any
criteria
pollutant
is
constructed
or
undergoes
a
major
modification.
The
minor
NSR
program
addresses
both
major
and
minor
sources
that
undertake
construction
or
modification
activities
that
do
not
qualify
as
major,
and
it
applies
regardless
of
the
designation
of
the
area
in
which
a
source
is
located.

The
national
regulations
that
apply
to
each
of
these
programs
are
located
in
the
Code
of
Federal
Regulations
(
CFR)
as
shown
below:

Applicable
Regulations
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3
PSD
40
CFR
§
52.21
40
CFR
§
51.166
40
CFR
§
51.165(
b)

NA
NSR
40
CFR
§
52.24
40
CFR
§
51.165
40
CFR
Part
51,
Appendix
S
Minor
NSR
40
CFR
§
§
51.160
­
164
The
PSD
requirements
include
but
are
not
limited
to:


Installation
of
Best
Available
Control
Technology
(
BACT),


Air
quality
monitoring
and
modeling
analyses
to
ensure
that
a
project's
emissions
will
not
cause
or
contribute
to
a
violation
of
any
NAAQS
or
maximum
allowable
pollutant
increase
(
PSD
increment),


Notification
of
Federal
Land
Manager
of
nearby
Class
I
areas,
and

Public
comment
on
the
permit.

Nonattainment
NSR
requirements
include
but
are
not
limited
to:


Installation
of
Lowest
Achievable
Emissions
Rate
(
LAER)

control
technology,


Offsetting
new
emissions
with
creditable
emissions
reductions,


Certification
that
all
major
sources
owned
and
operated
in
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and
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agency
September
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2005
4
the
State
by
the
same
owner
are
in
compliance
with
all
applicable
requirements
under
the
Act,


An
alternative
siting
analysis
demonstrating
that
the
benefits
of
the
proposed
source
significantly
outweigh
the
environmental
and
social
costs
imposed
as
a
result
of
its
location,
construction,
or
modification,


Public
comment
on
the
permit.

Minor
NSR
programs
must
meet
the
statutory
requirements
in
Section
110(
a)(
2)(
c)
of
the
Act
which
requires
"...
regulation
of
the
modification
and
construction
of
any
stationary
source...
as
necessary
to
assure
that
the
[
NAAQS]
are
achieved."

This
proposed
rule
on
the
implementation
of
NSR
for
PM2.5
does
not
supersede
existing
PM10
NSR
requirements.
EPA
is
not
planning
to
revoke
the
original
PM10
standards
at
this
time.

Accordingly,
sources
are
subject
to
NSR
for
both
PM10
and
PM2.5.

2.
What
are
the
principal
elements
of
the
proposed
major
NSR
program
for
PM2.5?

The
table
below
summarizes
the
main
elements
of
the
existing
major
NSR
program
that
EPA
is
proposing
to
address
for
PM2.5
as
a
regulated
NSR
pollutant.
The
EPA's
proposal
for
each
element,
or
where
appropriate,
explanation
of
implementation
under
existing
regulations,
is
explained
in
detail
in
the
referenced
sections
of
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and
Deliberative
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agency
September
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2005
5
this
preamble.

Major
NSR
Program
Element
EPA
Proposal
Section
PSD
Major
Source
Threshold
100/
250
TPY
(
no
change)
IV.
M.
4.

NA
NSR
Major
Source
Threshold
100
TPY
(
no
change)
IV.
M.
4.

Significant
Emissions
Rate
PM2.5
Direct
Emissions
­
10
TPY;
SO2
­
40
TPY
If
other
precursors
are
included:

NOx
­
40
TPY
(
no
change)

VOC
&
Ammonia
­
determined
by
SIP
IV.
M.
5
&
6.

Control
technology:

BACT
and
LAER
Applies
for
PM2.5
direct,
SO2
and
other
precursors,
if
included
IV.
M.
9
&

13.

Air
quality
impact
analysis
Applies
for
PM2.5
IV.
M.
11.

Preconstruction
monitoring
Applies
for
PM2.5.
Proposing
five
options
to
address.
IV.
M.
12.

NA
NSR
Statewide
compliance
Applies
for
PM2.5
direct
and
precursors,
if
included
IV.
M.
13.
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September
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2005
6
NA
NSR
offsets
Applies
for
PM2.5
direct
Considering
for
precursor
emissions
IV.
M.
14.

Interprecursor
Offsetting
Allowed
with
modeling
demonstration
(
no
change)
IV.
M.
14.
c.

Transition
for
PSD
Continues
to
apply
with
limited
provisions
for
use
of
PM10
as
a
surrogate.
IV.
M.
16.

Transition
for
NA
NSR
Applies
at
designation
through
an
approved
SIP
or
through
40
CFR
part
51,

appendix
S.
IV.
M.
17.

Minor
NSR
Clarifies
that
State
and
local
regulatory
programs
must
include
PM2.5
requirements
for
minor
sources
IV.
M.
20.

NSR
Transport
Option
Flexible
implementation
for
areas
granted
a
transport
classification
IV.
M.
21.

The
proposed
provisions
of
the
PM2.5
major
NSR
program
will
be
codified
in
the
regulatory
text
as
revisions
to
40
CFR
51.165;
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agency
September
2,
2005
7
51.166;
52.21;
and
40
CFR
part
51,
Appendix
S.
We
have
made
two
assumptions
in
developing
the
proposed
regulatory
text
for
this
rule.

The
first
assumption
is
that
the
ozone
phase
II
rule
will
be
promulgated
prior
to
the
promulgation
of
this
proposed
PM2.5
rule.

Thus,
this
proposed
PM2.5
rule
includes
language
related
to
ozone
precursors
and
offsets
that
make
the
format
of
the
ozone
rule
consistent
with
the
PM2.5
language.
The
ozone
provisions
contained
in
the
regulatory
text
set
forth
below
are
consistent
with
what
we
expect
to
finalize
in
the
ozone
rule,
and
this
PM2.5
proposal
is
not
intended
to
alter
the
substance
of
the
ozone
phase
II
rule.
To
the
extent
there
are
changes
to
the
ozone
phase
II
regulatory
language
when
promulgated
or
the
ozone
rule
is
not
promulgated
prior
to
the
final
PM2.5
rule,
we
would
need
to
make
changes
to
the
proposed
regulatory
text
in
this
PM2.5
rule
at
promulgation.

The
paragraphs
in
the
revisions
to
appendix
S
of
this
proposed
PM2.5
rule
have
not
been
numbered
at
this
time,
based
on
the
second
assumption
that
both
of
the
appendix
S
rule
revisions,

appendix
S
changes
in
the
ozone
phase
II
rule
(
incorporating
the
1990
amendments)
and
the
revisions
to
appendix
S
(
incorporating
NSR
reform),
will
be
promulgated
prior
to
the
final
PM2.5
rule.
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3We
have
proposed
to
amend
the
PSD
regulations
to
expressly
include
NOx
as
an
ozone
precursor.
68
FR
32802
(
June
2,
2003)

8
Depending
on
the
status
of
these
appendix
S
rule
revisions
at
the
time
of
promulgation
of
the
PM2.5
rule,
the
paragraphs
would
be
numbered
accordingly.

3.
Should
precursors
to
the
formation
of
ambient
concentrations
of
PM2.5
be
subject
to
regulation
under
NSR
?

a.
Background
Certain
NAAQS
pollutants
such
as
ozone
and
PM2.5,
are
partially
or
entirely
formed
by
precursors.
Precursors
are
currently
regulated
under
parts
C
and
D
of
the
Act
based
on
either
statutory
presumptions
or
a
scientific
determination
that
the
pollutants
must
be
regulated
to
achieve
attainment.
The
following
table
shows
precursors
that
we
have
identified
for
regulation
under
the
NSR
program
because
of
their
ability
to
cause
or
contribute
to
violations
of
the
ozone
NAAQS.

Criteria
Pollutant
Precursor
Pollutants
Ozone
Nonattainment
Areas
Attainment
Areas
Volatile
Organic
Compounds
(
VOC)
and
Nitrogen
Oxides
(
NOx)

VOC3
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Individual
SIPs
may
identify
additional
precursors
as
regulated
NSR
pollutants.

Scientific
research
has
shown
that
various
pollutants
can
contribute
to
ambient
PM2.5
concentrations,
including
the
following:


PM2.5
(
direct
emissions)


SO2
(
as
a
precursor)


NOx
(
as
a
precursor)


VOC
(
as
a
precursor)


Ammonia
(
as
a
precursor)

b.
Should
NSR
cover
precursor
emissions
in
addition
to
direct
emissions
of
PM2.5?

Contribution
of
precursors
to
PM2.5
nonattainment.
As
discussed
in
Section
II,
precursors
contribute
significantly
to
ambient
PM2.5
concentrations,
producing
approximately
half
of
the
concentration.
In
most
areas
of
the
country,
PM2.5
precursor
emissions
are
the
major
contributors
to
ambient
PM2.5
concentrations.
However,
it
is
technically
difficult
to
determine
impacts
of
source­
specific
precursor
emissions
on
ambient
air
quality
levels.
The
relative
contribution
to
ambient
PM2.5
concentrations
from
each
of
these
pollutants
varies
by
area.

The
relative
effect
of
reducing
emissions
of
these
pollutants
is
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also
highly
variable.

PM2.5
precursors
already
addressed
under
NSR.
Some
PM2.5
precursors
are
already
subject
to
major
NSR
under
other
NAAQS
as
shown
below:

PM2.5
precursor
Existing
Program
coverage
for
major
NSR
applicability
NOx
NA
NSR
for
NO2
and
Ozone
PSD
for
NO2
SO2
NA
NSR
and
PSD
for
SO2
VOC
NA
NSR
and
PSD
for
Ozone
Ammonia
No
coverage
for
NSR
(
Some
areas
regulate
ammonia
for
other
air
quality
purposes.)

The
PM2.5
NSR
program
could
include
some,
all
or
none
of
these
precursors
of
PM2.5.

Legal
Authority.
As
discussed
earlier
in
section
II.
E.
of
this
preamble,
we
interpret
the
Clean
Air
Act
to
provide
explicit
authority
for
EPA
to
regulate
precursors
but
also
to
grant
the
Administrator
discretion
to
determine
how
to
address
precursors
for
particular
regulatory
purposes.
This
reading
is
based
on
section
302(
g)
of
the
Clean
Air
Act
which
defines
the
term
"
air
pollutant"
to
include
"
any
precursors
to
the
formation
of
any
air
pollutant,
to
the
extent
the
Administrator
has
identified
such
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precursor
or
precursors
for
the
particular
purpose
for
which
the
term
`
air
pollutant'
is
used."
The
Administrator's
discretion
to
determine
how
to
address
precursors
under
specific
programs
is
also
supported
by
the
language
in
sections
182(
f)
and
189(
e)

which
identifies
circumstances
where
the
Administrator
may
determine
that
it
is
not
appropriate
to
regulate
certain
precursors.
We
discuss
these
provisions
in
more
detail
in
section
II.
E.

Thus,
we
interpret
section
302(
g)
of
the
Act
to
require
that
the
Administrator
consider
how
to
address
precursors
under
the
NSR
program.
The
term
"
air
pollutant"
is
incorporated
into
the
NSR
provisions
for
various
purposes.
Sections
182(
f)
and
189(
e)

apply
to
State
implementation
plan
provisions
and
control
requirements,
which
include
NSR
programs.

With
regard
to
PSD,
Section
165(
a)(
3)
of
the
Act
states
that
new
or
modified
major
sources
must
demonstrate
that
emissions
"
will
not
cause,
or
contribute
to,
air
pollution
in
excess
of
any
...
NAAQS
in
any
air
quality
control
region."
A
source
could
not
reasonably
make
this
demonstration
without
considering
precursors
that
the
Agency
has
identified
for
this
purpose.
Section
165(
a)(
4)
of
the
Act
states
that
a
new
or
modified
source
must
apply
the
Best
Available
Control
Technology
(
BACT)
"
for
each
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pollutant
subject
to
regulation
under
this
Act
emitted
from,
or
which
results
from,
such
facility."
The
phrase
"
emitted
from,
or
which
results
from"
indicates
that
the
statute
is
not
limited
to
direct
emissions,
but
rather
extends
to
precursors
as
well.

With
regard
to
nonattainment
NSR,
Sections
172(
c)(
4)
and
173
require
States
to
demonstrate,
among
other
things,
that
emissions
from
new
or
modified
major
sources
are
consistent
with
the
achievement
of
"
reasonable
further
progress."
Reasonable
further
progress
is
further
defined
as
reductions
of
the
relevant
air
pollutant,
which
is
defined
in
Section
302(
g)
to
include
precursors
identified
by
the
Agency
as
subject
to
regulation
for
that
purpose.

Treatment
of
Precursors
for
Purposes
of
NSR.
As
discussed
in
section
II.
E.,
where
there
is
a
basis
to
do
so,
we
believe
EPA
may
treat
precursors
of
the
same
pollutant
differently
under
the
same
program.
In
this
action,
we
propose
different
approaches
for
addressing
the
individual
precursors
to
PM2.5
under
the
Act's
NSR
provisions.
Generally,
where
the
scientific
data
and
modeling
analyses
provide
reasonable
certainty
that
the
pollutant's
emissions
from
stationary
sources
are
a
significant
contributor
to
ambient
PM2.5
concentrations,
we
believe
that
pollutant
should
be
identified
as
a
"
regulated
NSR
pollutant"
and
subject
to
the
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PM2.5
NSR
provisions.
Conversely,
where
the
effect
of
a
pollutant's
emissions
from
stationary
sources
on
ambient
PM2.5
concentrations
is
subject
to
substantial
uncertainty,
such
that
in
some
circumstances,
the
pollutant
may
not
result
in
formation
of
PM2.5,
or
control
of
the
pollutant
may
have
no
effect
or
may
even
aggravate
air
quality,
we
generally
believe
it
is
unreasonable
to
establish
a
nationally­
applicable
presumption
that
the
pollutant
is
a
regulated
NSR
pollutant
subject
to
the
requirements
of
NSR
for
PM2.5.
We
also
request
comment
on
whether,
despite
reasonable
scientific
certainty
associated
with
the
effect
of
a
pollutant's
emissions
from
stationary
sources
on
ambient
PM2.5
concentrations,
there
are
circumstances
that
would
support
a
finding
that
the
Administrator
should
not
identify
the
pollutant
as
a
precursor
for
the
purposes
of
the
NSR
program
even
if
the
pollutant
is
so
identified
for
other
programs.

For
the
purposes
of
the
NSR
program,
the
EPA
proposes
the
following
options
for
addressing
SO2,
NOx,
VOCs,
and
ammonia
as
precursors
to
PM2.5,
and
requests
comment
on
these
options.

Commenters
should
provide
detailed
technical
information
supporting
their
comments.

Sulfur
Dioxide.
We
are
proposing
to
regulate
SO2
as
a
precursor
to
PM2.5
for
purposes
of
NSR
in
all
attainment,
unclassifiable
and
Internal
and
Deliberative
Draft
Do
not
quote,
cite,
copy,
or
distribute
outside
the
agency
September
2,
2005
14
nonattainment
areas.
We
believe
that
the
technical
discussion
and
analysis
of
speciated
air
quality
data
described
in
Section
II
provide
an
appropriate
basis
for
requiring
States
to
address
SO2
as
a
precursor
to
PM2.5
for
NSR
purposes.
The
fact
that
sulfate
is
a
significant
contributor
(
e.
g.
ranging
from
9
percent
to
40
percent)
to
PM2.5
nonattainment
and
other
air
quality
problems
in
all
regions
of
the
country
is
a
critical
piece
of
evidence
supporting
this
approach.
Additionally,
sulfates
are
a
major
contributor
to
ambient
PM2.5
concentrations
in
the
Eastern
United
States,
roughly
equaling
the
concentration
of
carbonaceous
particles.

EPA
does
not
believe
that
regulating
SO2
as
a
precursor
to
PM2.5
is
likely
to
add
a
major
burden
to
sources
as
SO2
is
already
regulated
in
these
programs
as
part
of
the
NSR
program
for
the
SO2
NAAQS.
The
EPA
requests
comments
on
this
approach
to
regulate
SO2
as
a
precursor
to
PM2.5
and
a
"
regulated
NSR
pollutant"
for
purposes
of
NSR
in
all
attainment,
unclassifiable
and
nonattainment
areas.

Nitrogen
Oxides.
We
are
proposing
to
regulate
NOx
as
a
precursor
to
PM2.5
for
the
NSR
program.
Under
this
approach,
a
State
or
EPA
would
presume
that
NOx
is
a
significant
contributor
to
an
area's
ambient
PM2.5
concentration.
This
presumption
is
warranted
based
Internal
and
Deliberative
Draft
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quote,
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or
distribute
outside
the
agency
September
2,
2005
15
on
the
well­
known
transformation
of
NOx
into
nitrates,
as
discussed
in
more
detail
in
Section
II.
Nitrates
are
a
significant
component
of
PM2.5
mass
in
northern
regions,
such
as
the
Midwest
and
East
Coast,
and
are
a
main
contributor
to
urban
PM2.5
mass
in
California
(
35­
40
percent).
However,
as
described
in
Section
II,
nitrate
concentrations
vary
significantly
in
other
regions
of
the
country.

Thus,
a
State
could
exempt
NOx
from
its
PM2.5
NSR
program
in
a
specific
area
by
demonstrating
to
the
Administrator's
satisfaction
that
NOx
emissions
from
stationary
sources
in
that
area
are
not
a
significant
contributor
to
that
area's
ambient
PM2.5
concentrations
and
the
area
is
not
in
a
State
identified
by
EPA
as
a
source
of
a
PM2.5
interstate
transport
problem.
Hence,

for
such
an
area,
the
State
would
not
need
to
regulate
construction
and
modification
of
stationary
sources
that
increase
emissions
of
NOx
in
that
area
to
assure
that
these
emissions
do
not
interfere
with
reasonable
further
progress
or
the
ability
of
that
area
to
attain
or
maintain
the
PM2.5
NAAQS.
Otherwise,
this
option
would
make
NOx
a
precursor
for
the
PSD,
NA
NSR
and
minor
source
programs
for
PM2.5.
EPA
does
not
believe
that
this
is
likely
to
add
a
major
burden
to
sources
as
NOx
is
already
a
regulated
NSR
pollutant.
This
is
because
NOx
is
an
identified
Internal
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September
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2005
16
precursor
for
the
ozone
NAAQS
and
an
indicator
for
the
NO2
NAAQS.

Volatile
Organic
Compounds.
The
consideration
of
VOC
for
NSR
applicability
is
complicated
by
the
variations
in
reactions
of
the
different
species
of
VOC
in
the
atmospheric
transformation
into
PM2.5.
Scientific
analysis
demonstrates
that,
while
the
transformation
of
VOC
into
particles
is
a
complex
and
uncertain
process,
all
VOC
potentially
play
a
role
in
the
formation
of
PM2.5.
However
some
specific
compounds
play
a
more
direct
role
than
others.
These
transformations
are
discussed
in
Section
II.

In
light
of
the
complexity
in
assessing
the
role
of
VOC
in
PM2.5
formation,
we
are
not
proposing
to
regulate
VOC
as
a
precursor
to
PM2.5
for
the
NSR
program.

However,
if
a
State
demonstrates
to
the
Administrator's
satisfaction
that
VOC
emissions
from
stationary
sources
in
a
specific
area
are
a
significant
contributor
to
that
area's
ambient
PM2.5
concentrations,
then
the
State
would
regulate
VOC
(
or
a
subset
of
VOC)
as
a
PM2.5
precursor
for
the
NSR
program
in
that
area.
Therefore,
for
such
an
area,
the
State
would
need
to
regulate
construction
and
modification
of
stationary
sources
that
increase
emissions
of
VOC
in
that
area
to
assure
that
these
emissions
do
not
interfere
with
reasonable
further
progress
or
the
ability
of
that
area
to
attain
or
maintain
the
PM2.5
NAAQS.
Internal
and
Deliberative
Draft
Do
not
quote,
cite,
copy,
or
distribute
outside
the
agency
September
2,
2005
17
Under
either
scenario,
as
discussed
in
Section
II,
we
would
still
regulate
high
molecular
weight
VOC
(
with
25
carbon
atoms
or
more
and
low
vapor
pressure)
as
PM2.5
direct
emissions
because
they
are
emitted
directly
as
primary
organic
particles
and
exist
primarily
in
the
condensed
phase
at
ambient
temperatures.

Ammonia.
As
discussed
in
section
II.
E.,
in
some
areas
of
the
country,
ammonia
plays
a
significant
role
in
the
formation
of
ambient
PM2.5
concentrations.
In
other
areas,
ammonia
plays
a
less
significant
role.
Our
understanding
of
emissions
inventories,
and
the
impact
that
reducing
ammonia
emissions
has
on
ambient
PM2.5
concentrations,
is
evolving.
In
some
cases,

undesired
consequences
may
result
from
reductions
of
ammonia,

such
as
increased
acidity
levels
for
particles
and
deposition.

For
these
reasons,
EPA
proposes
that
ammonia
would
only
be
identified
as
a
precursor
to
PM2.5
NAAQS
in
a
nonattainment
area
for
purposes
of
NSR
on
a
case­
by­
case
basis.
If
the
State
demonstrates
to
the
Administrator's
satisfaction
that
ammonia
emissions
from
stationary
sources
in
a
specific
nonattainment
area
are
a
significant
contributor
to
that
area's
ambient
PM2.5
concentrations,
then
the
State
would
regulate
ammonia
as
a
PM2.5
precursor
under
the
NSR
program
in
that
nonattainment
area.

Therefore
the
State
would
need
to
regulate
construction
and
Internal
and
Deliberative
Draft
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quote,
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or
distribute
outside
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agency
September
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2005
18
modification
of
stationary
sources
that
increase
emissions
of
ammonia
in
that
area
to
assure
that
these
emissions
do
not
interfere
with
reasonable
further
progress
or
the
ability
of
that
area
to
attain
or
maintain
the
PM2.5
NAAQS.
However,
in
other
nonattainment
areas,
we
would
not
require
States
to
include
ammonia
in
their
NSR
programs.
We
are
not
proposing
to
identify
ammonia
as
a
regulated
NSR
pollutant
for
purposes
of
PSD
in
any
attainment
or
unclassifiable
areas.

The
EPA
requests
comments
on
this
approach
for
addressing
ammonia
emissions
under
the
NSR
programs.

4.
What
is
a
major
stationary
source
(
major
source)
under
the
major
NSR
program
for
PM2.5?

a.
Background.

The
major
NSR
program
applies
to
construction
of
major
stationary
sources
and
major
modifications
at
major
stationary
sources.
A
stationary
source
is
a
"
major
source"
if
its
actual
emissions
or
its
potential
to
emit
for
a
specific
pollutant
equals
or
exceeds
the
major
source
threshold
for
that
pollutant
established
in
the
CAA.
Different
pollutants
are
not
summed
to
determine
applicability.

b.
Proposed
option
Sections
169
and
302(
j)
of
the
Act
contain
definitions
of
Internal
and
Deliberative
Draft
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copy,
or
distribute
outside
the
agency
September
2,
2005
19
"
major
emitting
facility"
and
"
major
stationary
source"
that
apply
to
programs
implemented
under
part
C
and
subpart
1
of
part
D
of
the
Act.
Accordingly,
we
are
proposing
to
follow
these
definitions
for
purposes
of
defining
a
major
emitting
facility
or
major
stationary
source
that
would
be
subject
to
major
NSR
based
on
direct
PM2.5
emissions
or
emissions
of
pollutants
identified
as
PM2.5
precursors
for
the
NSR
program.
This
approach
is
also
consistent
with
how
we
treat
other
criteria
pollutants
that
are
covered
by
subpart
1
of
part
D
of
the
Clean
Air
Act
and
thus
are
not
subject
to
a
tiered
classification
system
such
as
the
one
required
for
ozone
nonattainment
areas
under
subpart
2
of
the
Clean
Air
Act.
EPA
does
not
interpret
subpart
4
of
part
D
of
the
Act
(
creating
"
serious"
and
"
moderate"
classifications
for
PM10
nonattainment
areas)
to
apply
to
PM2.5.

This
means
the
major
source
thresholds
would
be:

PSD
100
tpy
for
source
categories
listed
in
40
CFR
51.166(
b)(
1)(
i)(
a)
and
52.21(
b)(
1)(
i)(
a)

250
tpy
for
all
other
source
categories
NA
NSR
100
tpy
for
all
source
categories
Thus,
no
regulatory
change
would
be
required.
See
§
§
51.165(
a)(
1)(
iv)(
a);
51.166(
b)(
1)(
i);
52.21(
b)(
1)(
i);
Appendix
S,
Internal
and
Deliberative
Draft
Do
not
quote,
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or
distribute
outside
the
agency
September
2,
2005
20
Section
II.
A.
4.

We
request
comment
on
this
approach
for
establishing
the
major
source
threshold
for
purposes
of
the
major
NSR
program
for
the
PM2.5
NAAQS.
We
also
request
comment
on
whether
the
definitions
in
Section
169
and
302(
j)
are
controlling
for
purposes
of
establishing
the
definition
of
major
stationary
source
for
the
PM2.5
NAAQS,
which
is
being
implemented
under
part
C
and
subpart
1
of
part
D
of
the
Act.

c.
What
is
the
effect
of
this
proposed
option?

Although
our
proposed
approach
is
consistent
with
Sections
169
and
302(
j)
and
Subpart
1
of
part
D
of
the
Act,
this
approach
results
in
a
higher
major
source
threshold
in
PM2.5
nonattainment
areas
than
the
major
source
threshold
that
applies
in
some
PM10
nonattainment
areas
under
Subpart
4
of
part
D
of
the
Act.
This
is
because
Section
189(
b)
of
the
Act
establishes
a
70
tpy
major
source
threshold
for
"
serious"
PM10
nonattainment
areas
while
"
moderate"
PM10
nonattainment
areas
apply
a
100
tpy
major
source
threshold
based
on
the
definition
in
section
302(
j).
We
do
not
believe
the
Act
gives
us
the
discretion
to
promulgate
a
lower
major
source
threshold
for
pollutants
such
as
PM2.5
that
are
only
subject
to
Subpart
1
of
part
D
of
the
Act.

Nevertheless,
we
do
not
believe
this
situation
will
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September
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2005
21
adversely
impact
attainment
of
the
PM2.5
NAAQS.
Data
from
EPA's
emissions
inventory
indicate
that
a
significant
number
of
sources
have
actual
PM2.5
emissions
in
the
100
to
250
tpy
range.

Additionally,
the
more
current
inventory
data
shows
that
the
number
of
sources
that
would
be
covered
as
major
sources
by
a
lower
major
source
threshold
would
not
increase
substantially
unless
the
threshold
were
lowered
to
20
tpy
or
below.
Thus,
even
if
EPA
had
the
discretion
to
adopt
a
70
tpy
major
source
threshold
for
PM2.5
nonattainment
areas,
we
do
not
believe
that
many
additional
sources
would
be
subject
to
the
major
NSR
program
in
PM2.5
nonattainment
areas.

States
should
consider
this
information
in
developing
their
own
SIP­
approved
NSR
programs.
For
example,
if
construction
of
PM2.5
sources
emitting
99
tpy
with
no
major
NSR
controls
and
without
mitigation
would
undermine
a
State's
ability
to
achieve
reasonable
further
progress
or
attain
the
PM2.5
NAAQS,
then
the
State
should
consider
imposing
emissions
controls
or
other
requirements
on
these
sources
through
the
State's
minor
NSR
program.

5.
What
should
the
significant
emissions
rate
be
for
direct
emissions
of
PM2.5?

a.
Background
Internal
and
Deliberative
Draft
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not
quote,
cite,
copy,
or
distribute
outside
the
agency
September
2,
2005
4For
additional
background
on
EPA's
interpretation
of
modification
and
rationale
for
including
significant
emissions
rates
in
defining
major
modifications,
see
61
FR
38253­
54
(
Dec.
31,
2002).

22
The
determination
of
what
should
be
classified
as
a
modification
subject
to
major
NSR
is
based,
in
part,
on
a
significant
emissions
rate.
4
The
NSR
regulations
define
this
term
as
a
rate
above
which
a
net
emissions
increase
will
trigger
major
NSR
permitting
requirements
if
such
increase
results
from
a
major
modification.
Sources
are
exempt
from
major
NSR
requirements
if
an
emissions
increase
resulting
from
a
modification
is
below
this
rate
because
EPA
considers
such
lower
emissions
increase
to
be
de
minimis
for
purposes
of
the
NSR
program.
The
significant
emissions
rates
for
criteria
pollutants
are
given
below:

Criteria
Pollutant
Significant
emissions
rate
(
tpy)

Ozone
VOC:
Any
increase
­
40
tpy
(
dependent
on
NA
classification)

NOx:
Any
increase
­
40
tpy
(
dependent
on
NA
classification)

NO2
NOx:
40
tpy
PM10
15
tpy
CO
100
tpy
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September
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2005
23
SO2
40
tpy
Lead
.6
tpy
The
significant
emissions
rates
listed
in
the
above
table
apply
to
the
direct
and
precursor
pollutants
listed
in
the
table
in
section
III.
M.
3.
a.
Significant
emissions
rates
for
additional
pollutants
that
are
subject
to
the
PSD
program
are
contained
in
the
following
provisions
of
our
regulations:


40
CFR
Section
51.166(
b)(
23)
and

40
CFR
Section
52.21(
b)(
23)

The
EPA
performed
some
preliminary
modeling
analyses
to
determine
an
appropriate
significant
emissions
rate
for
direct
emissions
of
PM2.5.
Several
typical
stack
heights
(
ranging
from
5
to
200
meters
in
height)
were
modeled
using
meteorological
data
from
Pittsburgh
and
Oklahoma
City.
Modelers
ran
ISCST
(
Industrial
Source
Complex
Short
Term
model)
to
assess
the
impact
of
emissions
increases
on
ambient
PM2.5
concentrations.
EPA
ran
models
for
a
variety
of
source
types
with
varying
meteorology,

release
heights,
building
shapes,
and
receptor
locations.

The
modeling
produced
the
following
results
that
we
considered
further
in
developing
the
options
below:


Shorter
stacks
had
much
more
impact
in
the
local
area
than
taller
stacks.


Increases
of
about
5
tons
per
year
from
facilities
with
Internal
and
Deliberative
Draft
Do
not
quote,
cite,
copy,
or
distribute
outside
the
agency
September
2,
2005
24
short
stacks
were
shown
to
cause
a
measurable
increase
in
ambient
PM2.5
concentrations.


Emissions
increases
from
tall
stacks,
100
meters
or
greater,

were
associated
with
a
small
increase
in
ambient
PM2.5
concentrations
in
the
immediate
area.

b.
Proposed
options.

Preferred
option
1:
For
direct
emissions
of
PM2.5,
EPA
is
proposing
to
define
the
significant
emissions
rate
as
10
tons
per
year.
This
proposal
is
based
fundamentally
on
the
same
approach
as
we
used
in
setting
the
significant
emissions
rate
for
total
suspended
particulate
matter
(
TSP)
and
PM10.

Historically,
the
significant
emissions
rate
for
TSP
(
equal
or
exceeding
25
tons
per
year)
was
set
by
analyzing
the
source
size
that
would
be
unlikely
to
cause
impacts
above
4
percent
of
the
standard
(
4
percent
of
260
µ
g/
m3
or
10.4
µ
g/
m3
as
a
24­
hour
average).
Although
a
range
of
source
configurations
can
yield
a
wide
range
of
impacts
per
ton
per
year
of
emissions,
EPA
reviewed
typical
configurations
of
major
TSP
sources
and
concluded
that
a
major
modification
that
increased
emissions
by
25
tons
per
year
or
more
would
be
unlikely
to
increase
24­
hour
average
TSP
concentrations
by
more
than
10.4
µ
g/
m3.

When
EPA
set
the
significant
emissions
rate
for
PM10,
we
Internal
and
Deliberative
Draft
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quote,
cite,
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or
distribute
outside
the
agency
September
2,
2005
25
first
determined
the
ratio
between
the
controlling
standards
for
PM10
and
TSP,
i.
e.
(
150
µ
g/
m3)/(
260
µ
g/
m3)
or
about
3/
5.
Both
of
these
standards
are
based
on
a
year's
second
highest
24­
hour
average
concentration.
The
EPA
then
set
the
PM10
significant
emissions
rate
at
about
3/
5
of
25
tons
per
year,
which
(
with
rounding)
is
15
tons
per
year.
This
reflects
the
fact
that
a
source
emitting
25
tons
of
TSP
per
year
that
has
an
impact
of
4
percent
of
the
TSP
standard
would
show
an
impact
from
15
tons
PM10
per
year
of
approximately
4
percent
of
the
PM10
standard
(
i.
e.,
6
µ
g/
m3).

Conceptually,
EPA
is
proposing
a
significant
emissions
rate
for
PM2.5
based
on
the
same
approach.
However,
the
comparison
of
the
PM2.5
standard
with
earlier
particulate
matter
standards
is
complicated
by
the
difference
in
the
averaging
times
of
the
controlling
standards,
which
are
24­
hour
average
values
for
TSP
and
PM10
but
an
annual
average
value
for
PM2.5.
Because
the
annual
standard
is
the
generally
controlling
standard
for
lowering
both
short­
term
and
long­
term
ambient
PM2.5
concentrations
(
62
FR
at
38669),
EPA
proposes
using
the
annual
standard
to
determine
the
significant
emissions
rate.

We
conducted
additional
modeling
using
the
ISC3
model
to
compare
annual
average
and
24­
hour
average
impacts
of
a
fixed
Internal
and
Deliberative
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quote,
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or
distribute
outside
the
agency
September
2,
2005
26
emissions
rate
for
a
variety
of
source
configurations.
Several
typical
stack
heights
(
ranging
from
5
to
200
meters
in
height)

were
modeled
using
meteorological
data
from
Pittsburgh
and
Oklahoma
City
and
both
with
and
without
downwash
from
different
building
types.

Our
analysis
of
these
modeling
results
shows
that
a
major
modification
that
increases
direct
PM2.5
emissions
by
less
than
10
tons
per
year
would
be
unlikely
to
increase
annual
average
ambient
PM2.5
concentrations
by
more
than
4
percent
of
the
annual
PM2.5
standard.
This
finding
relies
on
EPA's
comparison
of
annual
average
versus
24­
hour
average
concentrations.
As
noted
above,

EPA
previously
concluded
that
a
source
that
increases
PM10
emissions
by
15
tons
per
year
would
likely
cause
an
increase
in
the
24­
hour
average
PM10
concentration
by
6
µ
g/
m3
or
less.
Based
on
the
ratios
between
annual
and
24­
hour
average
concentrations
found
in
EPA's
recent
modeling,
a
source
having
that
impact
would
typically
increase
annual
average
PM10
concentrations
by
about
0.8
µ
g/
m3
or
less.
The
EPA
is
using
a
target
PM2.5
impact
of
4
percent
of
the
annual
PM2.5
standard
or
0.6
µ
g/
m3.
This
target
impact
is
(
0.6
µ
g/
m3)/(
0.8
µ
g/
m3)
or
3/
4
of
the
potential
impact
of
a
15
ton
per
year
emissions
increase.
This
suggests
a
significant
emissions
rate
of
3/
4
of
15
tons
per
year.
By
rounding
the
Internal
and
Deliberative
Draft
Do
not
quote,
cite,
copy,
or
distribute
outside
the
agency
September
2,
2005
27
result,
we
determined
that
an
emissions
increase
below
10
tons
per
year
increase
in
direct
PM2.5
emissions
would
be
unlikely
to
increase
ambient
PM2.5
concentrations
by
more
than
4
percent
of
the
annual
PM2.5
standard.

Option
2:
The
EPA
recognizes
that
a
range
of
source
configurations
can
have
a
range
of
impacts,
that
the
PM2.5
source
population
differs
in
some
respects
from
the
TSP
and
PM10
source
population
and
that
the
acceptable
stationary
source
impact
on
ambient
PM2.5
concentrations
may
warrant
being
defined
differently
from
the
acceptable
impact
for
TSP
or
PM10.
The
EPA
specifically
solicits
comments
on
a
range
of
potential
thresholds
ranging
from
5
to
15
tons
per
year
for
the
significant
emissions
rate
for
PM2.5
direct
emissions.
The
upper
bound
is
a
set
rate
of
15
tons
per
year
because
that
is
the
significant
emissions
rate
for
PM10.
The
lower
bound
is
a
set
rate
of
5
tons
per
year
because
our
modeling
indicates
that
an
increase
in
ambient
PM2.5
concentrations
above
the
target
de
minimis
impact
level
can
occur
where
facilities
with
short
stacks
have
PM2.5
emissions
increases
of
about
5
tons
per
year.

We
solicit
comments
on
the
proposed
significant
emissions
rate
level
and
on
any
other
approaches
for
determining
this
value.
Internal
and
Deliberative
Draft
Do
not
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or
distribute
outside
the
agency
September
2,
2005
28
6.
What
should
be
the
significant
emissions
rates
for
PM2.5
precursors?

c.
Background
It
is
difficult
to
determine
the
ambient
air
quality
effects
that
result
from
a
single
source
of
emissions
of
PM2.5
precursors.

There
are
conservative
screening
models
for
predicting
impacts
of
large
NOx
and
SO2
sources
on
ambient
PM2.5
concentrations.
We
conducted
a
range
of
modeling
analyses
to
determine
the
amount
of
PM2.5
precursor
emissions
needed
to
show
an
increase
in
ambient
PM2.5
concentrations.
These
analyses
showed
that
precursor
emissions
probably
have
some
localized
impacts,
but
that
most
impact
is
farther
downwind
as
precursors
have
the
time
to
convert
to
PM2.5.
In
addition,
the
modeling
available
at
this
time
does
not
provide
sufficient
information
to
estimate
impacts
of
single
source
emissions
of
ammonia
and
VOC
on
ambient
PM2.5
concentrations.

Although
we
have
not
finally
determined
which
pollutants
(
if
any)
will
be
regulated
as
PM2.5
precursors
under
the
NSR
program,

we
are
proposing
significant
emissions
rates
in
the
event
that
the
precursors
under
consideration
are
identified
as
such
for
the
major
NSR
program.
In
the
event
that
EPA
adopts
an
"
opt­
in"

approach
 
that
is,
the
presumption
that
a
precursor
is
not
Internal
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agency
September
2,
2005
29
subject
to
NSR
unless
a
State
demonstrates
to
the
Administrator's
satisfaction
that
it
should
be
included
 
the
State
opting
in
would
be
required
to
adopt
the
significant
emissions
rate
for
the
precursor
as
set
forth
below,
in
the
absence
of
demonstrating
that
another
significant
emissions
rate
is
more
appropriate.

d.
Proposed
options.

Preferred
Option
1:
The
EPA
proposes
the
use
of
existing
significant
emissions
rates
for
those
pollutants
already
included
in
major
NSR
programs
as
shown
below:

Pollutant
Significant
Emissions
Rate
(
equal
or
exceeding)

NOx
40
tpy
SO2
40
tpy
VOC
40
tpy
The
use
of
existing
significant
emission
rates
where
the
PM2.5
precursor
is
also
regulated
under
NSR
for
a
separate
criteria
pollutant
harmonizes
the
NSR
program
for
PM2.5
with
the
NSR
programs
for
those
other
criteria
pollutants.
This
enables
a
source
to
determine
the
NSR
impacts
of
proposed
modifications
by
reference
to
a
single
significant
emissions
rate
for
each
pollutant,
and
enables
streamlining
of
determinations
regarding
the
applicable
control
technology
and
analysis
of
air
quality
impacts
into
a
single
and
comprehensive
decision
making
process
Internal
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distribute
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the
agency
September
2,
2005
30
for
both
PM2.5
and
other
criteria
pollutants
that
also
cover
PM2.5
precursors.
This
also
follows
precedent.
When
ozone
became
a
criteria
pollutant
EPA
used
the
NOx
significant
emissions
rate
from
the
NO2
program.

EPA
has
never
set
a
significant
emissions
rate
for
ammonia
to
determine
major
NSR
applicability.
A
necessary
component
of
our
approach
to
NSR
applicability
for
ammonia
is
that
those
States
who
determine
in
their
SIPs
that
control
of
ammonia
is
necessary
will
set
the
significant
emissions
rate
for
ammonia
based
on
the
information
presented
in
each
attainment
demonstration.

Option
2:
Set
the
precursor
levels
at
the
same
level
as
the
significant
emission
rate
for
PM2.5
direct
emissions,
that
is,
10
TPY.
This
would
make
more
modifications
subject
to
PM2.5
permitting
requirements
and
therefore
could
provide
more
protection
to
the
environment.
This
does
not,
however,
follow
the
precedent
in
the
ozone
NSR
program.
Having
several
different
significant
emissions
rates
for
the
same
pollutant
would
add
additional
complexity
to
an
already
complex
program
without
necessarily
providing
additional
environmental
benefits.

We
request
comment
on
the
options
listed
above
and
on
any
other
approaches
for
establishing
precursor
significant
emissions
Internal
and
Deliberative
Draft
Do
not
quote,
cite,
copy,
or
distribute
outside
the
agency
September
2,
2005
5Memo.
from
Thompson
G.
Pace,
Acting
Chief,
Particulate
Matter
Programs
Branch,
to
Sean
Fitzsimmons,
Iowa
Department
of
Natural
Resources,
(
Mar.
31,
1994)
(
copy
available
at
http://
www.
epa.
gov/
Region7/
programs/
artd/
air/
nsr/
nsrmemos/
cp
m.
pdf).

31
rates.

7.
What
is
the
role
of
condensible
emissions
in
determining
major
NSR
applicability?

Condensible
emissions
commonly
make
up
a
significant
component
of
PM2.5
emissions.
As
discussed
in
Sections
IV.
I.
and
IV.
P,
certain
sources
utilizing
high
temperature
processes
emit
gaseous
pollutants
into
the
ambient
air
which
rapidly
condense
into
particle
form.
The
constituents
of
these
condensed
particles
include,
but
are
not
limited
to,
organic
material,

sulfuric
acid,
nitrates,
and
metals.

The
EPA
has
issued
guidance
clarifying
that
PM10
includes
condensible
particles
and
that,
where
condensible
particles
are
expected
to
be
significant,
States
should
use
methods
that
measure
condensible
emissions.
5
States
are
already
required
under
the
consolidated
emissions
reporting
rule
to
report
condensible
emissions
in
each
inventory
revision
(
see
67
FR
39602,
June
10,

2001),
and
Method
202
in
Appendix
M
of
40
CFR
part
51
quantifies
condensible
particulate
matter.

However,
because
of
the
flexibility
incorporated
into
EPA's
Internal
and
Deliberative
Draft
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agency
September
2,
2005
32
approach
to
the
issue
and
the
inconsistent
implementation
of
the
existing
guidance,
there
have
been
some
misconceptions
as
to
whether
condensible
emissions
must
be
included
in
a
source's
PM10
emissions
under
the
PM10
standard
in
determining
NSR
applicability.
The
rules
at
40
CFR
51.100
define
"
PM
emissions"

and
"
PM10
emissions"
by
reference
to
the
PM
measured
by
applicable
reference
methods,
an
equivalent
or
alternative
method
specified
in
part
51,
or
by
a
test
method
specified
in
an
approved
SIP.

See
40
CFR
§
51.100(
pp),
(
rr),
and
§
52.01
(
incorporating
§
51.100
definitions
by
default).
As
discussed
in
Section
III.
P.,

different
test
methods
measure
condensible
emissions
with
varying
levels
of
accuracy.
In
addition,
sources
often
project
their
emissions
increases
from
new
construction
and
modifications
based
on
emissions
factors,
such
as
AP­
42
factors,
that
in
some
cases
have
not
accounted
for
condensible
emissions.
Sources
have
used
other
methods
to
project
their
PM
emissions
that
do
not
account
for
condensible
emissions
(
e.
g.,
projecting
PM10
impacts
based
on
an
analysis
of
existing
TSP
limits
without
adding
condensible
emissions).

We
are
proposing
to
clarify
in
this
rule
that
condensible
emissions
must
be
included
when
determining
whether
a
source
is
subject
to
the
major
NSR
program.
The
inclusion
of
condensible
Internal
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agency
September
2,
2005
33
emissions
in
a
source's
PM2.5
emissions
is
of
increasing
importance
with
the
change
in
the
indicator
for
particulate
matter
to
PM2.5.
Condensible
emissions
are
essentially
fine
particles,
and
thus
are
a
larger
fraction
of
PM2.5
emissions
than
of
TSP
or
PM10
emissions.
Condensible
emissions
commonly
make
up
a
significant
component
of
PM2.5
emissions,
and
the
failure
to
include
them
may
result
in
adverse
consequences
to
the
environment.

While
EPA
has
always
included
condensible
emissions
in
its
definition
of
particulate
matter
emissions,
insofar
as
these
emissions
are
measured
by
applicable
test
methods
or
included
in
emissions
factors,
we
believe
that
the
greater
significance
of
condensible
emissions
in
addressing
PM2.5
warrants
greater
emphasis
on
including
these
emissions
in
implementing
the
major
NSR
program.
A
key
aspect
of
this
issue
is
the
development
of
the
new
test
method
discussed
in
Section
III.
P.,
which
quantifies
and
can
be
used
to
characterize
the
constituents
of
PM2.5
emissions,
including
both
the
filterable
and
condensible
portion
of
the
emissions
stream.

8.
What
are
the
requirements
of
the
Prevention
of
Significant
Deterioration
(
PSD)
program
for
attainment
areas?

Background.
Sources
subject
to
PSD
must:
Internal
and
Deliberative
Draft
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not
quote,
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or
distribute
outside
the
agency
September
2,
2005
34

Install
Best
Available
Control
Technology
(
BACT),


Conduct
air
quality
modeling
analyses
to
ensure
that
the
project's
emissions
will
not
cause
or
contribute
to:


a
violation
of
any
NAAQS
or
maximum
allowable
pollutant
increase
(
PSD
increment),


any
impact
on
any
Class
I
area
air
quality
related
value,
and

as
required,
perform
preconstruction
monitoring.

Each
of
these
elements
is
discussed
below.

9.
How
should
BACT
be
implemented?

We
are
not
proposing
any
change
to
our
current
policy
for
implementing
BACT
requirements
at
a
major
source
that
is
subject
to
the
requirements
of
the
PSD
program.
Accordingly,
if
a
physical
or
operational
change
at
the
source
will
result
in
a
significant
emissions
increase
and
a
significant
net
emissions
increase
of
a
regulated
NSR
pollutant,
then
the
major
source
must
apply
BACT
(
for
that
pollutant)
to
the
emissions
unit(
s)
that
will
be
physically
or
operationally
changed
as
a
part
of
that
project.
Under
the
PM2.5
major
NSR
program,
BACT
will
be
required
at
an
emissions
unit
if
a
physical
or
operational
change
at
the
unit
causes
a
significant
emissions
increase
and
significant
net
emissions
increase
of
PM2.5
direct
emissions,
or
a
PM2.5
precursor,
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if
applicable
at
the
major
stationary
source.

10.
What
is
EPA's
plan
for
preventing
significant
deterioration
of
air
quality
for
PM2.5?

Background.
The
PSD
provisions
of
the
CAA
limit
the
degradation
of
ambient
air
concentrations
of
certain
pollutants.

The
CAA
does
not
dictate
the
mechanism
to
achieve
this
result
for
pollutants
other
than
PM10
and
SO2.
One
mechanism
involves
a
system
of
"
increments"
and
area
classifications
that
define
significant
deterioration
for
individual
pollutants.
The
PSD
increments
are
the
maximum
allowable
increase
in
ambient
air
concentrations
above
a
baseline
concentration
for
a
criteria
pollutant.
The
current
increments
are:

Pollutant/
averaging
time
Class
I
Class
II
Class
III
PM10
Annual
average
8­
Hour
average
4

g/
m3
8

g/
m3
17

g/
m3
30

g/
m3
34

g/
m3
60

g/
m3
SO2
Annual
average
24­
hour
average
3
Hour
Average
2

g/
m3
5

g/
m3
25

g/
m3
20

g/
m3
91

g/
m3
512

g/
m3
40

g/
m3
182

g/
m3
700

g/
m3
NO2
­
Annual
Average
2.5

g/
m3
25

g/
m3
50

g/
m3
We
are
in
the
process
of
developing
an
approach
for
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36
preventing
significant
deterioration
of
air
quality
which
may
include
PM2.5
increments.
The
EPA
has
placed
this
action
on
a
separate
administrative
track
due
to
the
additional
time
necessary
to
fully
develop
any
potential
proposal.
In
the
interim
period,
States
must
continue
to
implement
the
PM10
increments
in
40
CFR
51.166,
52.21
and/
or
their
SIPs,
as
applicable.

11.
How
will
the
air
quality
analysis
required
under
section
165(
a)(
3)
be
implemented?

Scope
of
the
Requirement.
All
sources
subject
to
PSD
review
must
perform
an
ambient
air
quality
impact
analysis
to
show
that
the
emissions
from
the
source
do
not
cause
or
contribute
to
a
PSD
increment
or
NAAQS
violation.
See
CAA
Section
165(
a)(
3);
40
CFR
51.166(
k),
52.21(
k).
Accordingly,
sources
will
be
required
to
perform
this
analysis
for
the
PM2.5
NAAQS.
Such
analyses
would
consider
how
a
source
impacts
air
quality
at
existing
PM2.5
monitor
locations
as
well
as
at
other
locations
which
are
appropriate
to
allow
the
comparison
of
predicted
PM2.5
concentrations
to
the
NAAQS,
based
on
PM2.5
monitor
siting
requirements
and
recommendations.

Sources
also
will
remain
under
an
obligation
to
perform
the
air
quality
impact
analysis
for
the
PM10
increments
and
the
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37
PM10
NAAQS.

Plan
for
Development
of
Significant
Impact
Levels
for
PM2.5.

The
Agency
has
had
a
practice
of
exempting
sources
from
the
cumulative
air
quality
impact
analyses
where
their
level
of
contribution
is
below
a
significant
impact
level
(
SIL).
If
the
maximum
ambient
impacts
from
the
proposed
project
are
less
than
a
SIL,
the
source

is
presumed
to
not
cause
or
significantly
contribute
to
a
PSD
increment
or
NAAQS
violation,
and

is
not
required
to
perform
multiple
source
cumulative
impact
assessments.

The
EPA
has
long
interpreted
the
"
significant
contribution"

test
set
forth
in
§
51.165(
b)(
2)
to
apply
to
the
PSD
program
since
the
provision
applies
to
major
new
sources
and
major
modifications
located
in
attainment
and
unclassifiable
areas.

We
have
proposed
codifying
this
exemption
in
the
PSD
regulations
in
a
separate
Federal
Register
notice.
See
61
FR
38249,
38293
(
July
23,
1996).
This
exemption
is
based
on
the
de
minimis
nature
of
the
source's
contribution.

The
SIL
(
in
ug/
m3)
have
been
established
for
other
criteria
pollutants
with
PSD
increments
and
are
given
below:
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Criteria
Pollutant
Averaging
time
Class
I
SIL
ug/
m3
(
proposed
7/
23/
96,

not
promulgated)
Class
II
and
III
SIL
ug/
m3
SO2
3
hour
24­
hour
annual
1.0
.2
.1
25.0
5.0
1.0
CO
1
hour
8
hours
N/
A
N/
A
2000
500
NO2
Annual
.1
1.0
PM10
24
hour
Annual
.3
.2
5.0
1.0
Because
the
SIL
benefits
the
NSR
permitting
program
by
exempting
sources
with
de
minimis
impacts
from
the
cumulative
air
quality
analysis,
EPA
is
considering
establishing
PM2.5
SIL
for
emissions
of
PM2.5
direct.
This
would
enable
sources
with
impacts
below
the
SIL
to
avoid
the
cumulative
air
quality
impact
analysis
with
respect
to
their
potential
contribution
to
a
PM2.5
NAAQS
violation,
and
create
a
de
minimis
"
cause
or
contribute"

definition
for
violations.
Direct
PM2.5
emissions
can
be
evaluated
with
current
models.
Therefore,
the
development
of
SIL
for
impact
evaluations
of
direct
PM2.5
emissions
is
technically
achievable.
The
EPA
is
soliciting
comments
on
this
question
and
on
methods
for
the
development
of
PM2.5
SIL.
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39
The
limited
capabilities
of
existing
models
make
it
difficult
to
establish
and
implement
SIL
for
PM2.5
precursors.

Current
models
are
only
able
to
accurately
address
individual
source
impacts
associated
with
direct
PM2.5
emissions
and,
to
a
lesser
degree,
SO2
and
NOx.
They
can
not
accurately
predict
single
source
impacts
on
ambient
PM2.5
concentrations
from
other
precursors.
Without
including
formation
of
PM2.5
from
precursor
emissions,
the
complete
impact
cannot
be
assessed.

EPA
solicits
comments
and
ideas
on
the
direction
to
take
and
possible
approaches
to
setting
PM2.5
SIL
for
direct
and
precursor
emissions.
The
EPA
intends
to
use
these
comments
in
developing
SIL
on
a
separate
administrative
track.

12.
How
should
the
PSD
pre­
construction
monitoring
requirement
be
implemented
for
PM2.5?

EPA
solicits
comment
on
what
preconstruction
monitoring
requirements
should
be
required
by
the
PM2.5
PSD
program.

i.
Background
Sources
subject
to
PSD
are
subject
to
pre­
construction
ambient
air
quality
monitoring
requirements.
See
Sections
165(
a)(
7)
and
165(
e)
of
the
CAA
and
40
CFR
§
51.166(
m),
§
52.21(
m).
The
PSD
permitting
requirements
currently
provide
that
continuous
pre­
construction
ambient
air
quality
monitoring
must
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40
be
conducted
for
any
criteria
pollutant
emitted
in
significant
amounts.
Under
40
CFR
§
51.166(
i)(
5),
and
40
CFR
52.21(
i)(
5)
the
reviewing
authority
has
the
discretion
to
exempt
an
applicant
from
this
monitoring
requirement
if:


the
maximum
modeled
concentration
for
the
applicable
averaging
period
caused
by
the
proposed
significant
emissions
increase
(
or
net
emissions
increase)
is
less
than
the
prescribed
significant
monitoring
concentration
(
SMC);

or

the
existing
monitored
ambient
concentrations
are
less
than
the
prescribed
SMC.
The
following
are
the
SMC
for
criteria
pollutants:

Pollutants
Ambient
Concentration
(
µ
g/
m3)
Averaging
period
CO
575
8
hours
NO2
14
Annual
SO2
13
24
hours
PM10
10
24
hours
A
source
may
also
use
existing
data
as
a
surrogate
for
preconstruction
monitoring
if
the
existing
monitored
data
record
is
determined
to
be
representative
of
the
project's
location.
For
information
on
representative
monitoring
see
"
Ambient
Monitoring
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41
Guideline
for
Prevention
of
Significant
Deterioration
(
PSD)",

EPA­
450/
4­
87­
007.
Under
the
current
regulatory
approach,
the
need
for
pre­
construction
monitoring
by
an
applicant
depends
on
the
spatial
and
temporal
coverage
of
the
current
monitoring
program.
The
expected
gradients
of
concentration
between
existing
monitors
also
need
to
be
considered
in
deciding
whether
there
is
a
need
for
pre­
construction
ambient
monitoring.

The
PM2.5
ambient
monitoring
data
are
used
in
the
PSD
program
to:


establish
current
PM2.5
NAAQS
compliance
status
in
the
project's
impact
area;


determine
a
representative
background
ambient
PM2.5
concentration
which
will
be
included
with
modeled
estimates
to
assess
NAAQS
compliance.

The
PM2.5
ambient
monitoring
measurements
include
particulate
matter
from
PM2.5
direct
emissions
and
those
formed
by
PM2.5
precursors.
If
required
of
a
particular
source,
pre­
construction
monitoring
could
add
one
year
to
the
permitting
process
and
increase
the
cost
of
the
permit.
Such
a
requirement
could
have
the
effect
of
delaying
or
preventing
sources
from
undertaking
environmentally
beneficial
projects.
Accordingly,
today,
we
are
reconsidering
our
current
approach
for
satisfying
the
pre­
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construction
monitoring
requirements
for
the
purposes
of
the
PM2.5
standard.
While
we
are
proposing
to
retain
the
current
approach,

we
are
also
soliciting
comments
on
innovative
options
that
could
provide
better
solutions
for
satisfying
the
preconstruction
monitoring
requirements.

j.
Options
for
PSD
preconstruction
monitoring
Preferred
Option
1:
Require
preconstruction
monitoring
for
all
major
sources
of
PM2.5
direct
and
the
precursors
identified
as
regulated
NSR
pollutants
for
PM2.5,
but
on
a
case­
by­
case
basis
allow
sources
to
satisfy
this
requirement
by
demonstrating
the
existing
PM2.5
network
is
sufficient.
This
option
will
provide
information
on
effects
of
new
construction
on
the
PM2.5
NAAQS
and
increments.
This
option
would
not
require
a
change
to
the
preconstruction
monitoring
regulations.
Concerns
about
this
option
include:


It
is
challenging
to
find
an
appropriate
location
for
any
monitor
because
PM2.5
direct
emissions
typically
affect
nearby
locations
while
precursor
emissions
affect
areas
farther
away.


The
existing
monitors
can
either
measure
total
PM2.5
mass
or
can
provide
data
on
the
mass
of
different
PM2.5
components.

The
latter
type,
a
speciation
monitor,
is
more
expensive
to
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operate
but
provides
useful
information
on
the
contribution
of
sources
of
precursor
and
PM2.5
direct
emissions.

In
cases
where
ambient
PM2.5
concentration
gradients
between
existing
monitors
are
small
with
little
likelihood
of
local
sitespecific
"
hot
spots,"
interpolation
between
existing
monitored
values
may
be
appropriate
for
determining
that
the
existing
PM2.5
monitoring
network
is
sufficient.
We
request
comment
on
this
approach.

Option
2:
Exempt
all
PM2.5
sources
from
doing
monitoring
by
determining
the
existing
PM2.5
network
is
sufficient.

The
use
of
the
acquired
PM2.5
monitored
data
record
in
place
of
applicant
performed
pre­
construction
monitoring
would
follow
the
current
trend
in
PSD
permitting
activities.
This
procedure
would
have
the
advantage
of
reducing
the
time
required
for
permit
preparation
and
reduce
the
costs
of
the
permit
application.
If
ambient
PM2.5
concentration
gradients
between
monitoring
stations
are
small
there
may
be
little
need
for
additional
monitoring
data.
The
need
to
make
discretionary
decisions
on
whether
to
perform
pre­
construction
monitoring
would
be
eliminated.

However,
EPA
favors
the
continued
use
of
the
case­
by­
case
determination
as
to
the
need
to
perform
ambient
PM2.5
preconstruction
monitoring
because
of
the
following
limitations
to
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44
using
the
existing
PM2.5
monitoring
data
record:


The
PM2.5
monitoring
data
record
would
require
spatial
interpolation
between
monitors
for
the
determination
of
appropriate
concentrations
at
the
project's
location.


Use
of
existing
monitored
data
will
not
increase
the
PM2.5
monitoring
data
record
to
confirm
or
contradict
conventional
perceptions.


The
PM2.5
monitoring
data
record
assumes
that
local
hot
spots
of
high
PM2.5
concentrations
do
not
exist
or
are
already
being
monitored,
which
may
not
be
true
in
all
cases.


Automatic
acceptance
of
existing
measurements
does
not
follow
EPA's
current
policy
that
a
case­
by­
case
determination
needs
to
be
made
to
determine
whether
preconstruction
ambient
monitoring
is
necessary.


When
used
with
the
impact
modeling,
separate
concentrations
of
direct
and
precursor
formed
particulate
matter
is
needed.

Because
of
these
limitations,
existing
PM2.5
monitoring
data
must
be
reviewed
for
applicability
and
representativeness
before
being
judged
appropriate
for
use
in
lieu
of
project
acquired
ambient
data.
The
current
PM2.5
network
may
not
be
sufficient
for
all
applicants.
The
EPA
is
soliciting
comments
and
suggestions
on
this
issue.
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Option
3:
Use
Significant
Monitoring
Concentrations
(
SMC)

to
exempt
sources
from
pre­
construction
monitoring
requirements.

The
reviewing
authority
has
the
discretion
to
exempt
an
applicant
from
the
pre­
construction
monitoring
requirement
if
the
modeled
impacts
from
the
proposed
source
are
less
than
the
prescribed
SMC.

Similar
to
the
significant
impact
levels
used
in
modeled
impact
analysis,
the
PSD
process
will
become
simpler
through
the
use
of
SMC.
It
provides
a
definitive
means
for
applicants
with
little
impact
to
opt
out
of
the
resource
intensive,
costly,
and
time
consuming
pre­
construction
ambient
air
quality
monitoring
requirement.
Therefore,
it
is
an
important
component
of
the
PSD
program.

The
form
of
the
SMC
will
be
defined
by
the
form
of
the
impact
modeling.
SMC
must
be
developed
for
direct
PM2.5
emissions
if
the
impact
modeling
only
addresses
direct
emissions
of
PM2.5.

This
may
require
different
direct
and
precursor
SMC.

Because
of
the
advantages
SMC
provide
to
the
NSR
permitting
program,
EPA
is
considering
the
development
of
PM2.5
SMC.
The
EPA
is
soliciting
comments
on
the
development
and
use
of
PM2.5
SMC
in
the
PSD
program.
This
option
could
be
used
in
combination
with
the
other
options
described.
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agency
September
2,
2005
46
Option
4:
Use
of
the
available
large
PM10
data
record,

combined
with
the
recent
PM2.5
acquired
ambient
measurements,
may
provide
a
monitoring
data
base
that
is
sufficiently
distributed
to
provide
representative
ambient
measurements
for
most
applicants.
This
would
alleviate
the
need
for
pre­
construction
monitoring
and
make
the
PSD
program
less
burdensome.
This
would
also
provide
an
interim
means
to
estimate
ambient
PM2.5
concentrations
until
more
extensive
monitoring
data
record
can
be
developed.

However,
the
differences
in
characteristics
between
PM2.5
and
PM10,
and
our
limited
understanding
of
their
relationships,

presents
a
problem.


PM10
conversion
factors
may
not
sufficiently
reflect
important
industry
specific
and
spatially
related
characteristics
of
PM2.5.


Removing
the
obligation
to
provide
pre­
construction
ambient
monitoring
data
would
eliminate
industry's
contribution
to
the
ambient
PM2.5
data
record.

This
may
not
be
a
viable
substitute
to
satisfy
the
need
to
provide
representative
PM2.5
ambient
measurements.
The
EPA
requests
comments
on
these
options
on
pre­
construction
monitoring.
Internal
and
Deliberative
Draft
Do
not
quote,
cite,
copy,
or
distribute
outside
the
agency
September
2,
2005
6
These
sections
actually
cross­
reference
the
list
at
51.166(
i)(
8)(
i)
and
52.21(
i)(
8)(
i),
however
we
renumbered
those
sections
to
subsection
(
i)(
5)(
i)
of
those
provisions
in
December
2002
and
inadvertently
overlooked
correcting
the
cross­
references
in
subsections
(
i)(
5)(
ii)
and
(
i)(
5)(
iii).
See
67
FR
80186.
It
is
is
apparent
from
the
rule
as
originally
promulgated
in
1980
that
subsection
(
i)(
5)(
i)
is
now
the
correct
cross­
reference.
See
45
FR
52676,
52739
(
Aug.
7,
1980.
We
propose
to
correct
this
misnumbering
and
others
in
this
section
when
we
finalize
today's
proposal.

47
Option
5.
Existing
§
52.21(
i)(
5)(
ii)
and
§
51.166(
i)(
5)(
iii)

could
be
interpreted
to
allow
a
reviewing
authority
to
exempt
an
applicant
from
pre­
construction
monitoring
for
any
pollutant
for
which
we
have
not
established
a
SMC.
These
provisions
state
that
a
source
may
be
exempted
from
preconstruction
monitoring
"
if
.
.

.
the
pollutant
is
not
listed
in"
the
list
of
pollutants
for
which
SMC
have
been
set.
6
The
original
rationale
for
this
exemption
is
based
on
the
lack
of
adequate
methods
for
measuring
ambient
concentrations
of
pollutants
not
on
the
list.
45
FR
at
52709,
52723­
24.
We
request
comment
on
this
interpretation
and
any
other
legal
or
policy
rationale
that
could
support
applying
the
text
of
these
provisions
to
exempt
sources
from
preconstruction
monitoring
if
we
do
not
define
a
SMC
for
PM2.5.

13.
Nonattainment
New
Source
Review
(
NA
NSR)
requirements
Background.
Sources
subject
to
NA
NSR
must:


Install
Lowest
Achievable
Emissions
Rate
(
LAER)
control
Internal
and
Deliberative
Draft
Do
not
quote,
cite,
copy,
or
distribute
outside
the
agency
September
2,
2005
48
technology;


Offset
new
emissions
with
creditable
emissions
reductions.


Certify
that
all
sources
owned
and
operated
by
the
same
owner
within
the
State
are
in
compliance;
and,


Conduct
an
alternative
siting
analysis
demonstrating
that
the
benefits
of
the
proposed
source
significantly
outweigh
the
environmental
and
social
costs.

14.
What
are
the
offset
requirements
for
NA
NSR?

Background.
Under
Section
173
of
the
Act,
all
major
sources
and
major
modifications
at
existing
sources
within
a
nonattainment
area
must
obtain
emissions
reductions
to
offset
any
emissions
increases
resulting
from
the
project
in
an
amount
that
is
at
least
equal
to
the
emissions
increase,
and
that
is
consistent
with
reasonable
further
progress
towards
attainment.

In
addition,
these
offsets
must
be:


from
the
same
nonattainment
area
or
a
different
nonattainment
area
that
impacts
the
area
where
the
source
is
located
(
as
long
as
the
other
area
has
the
same
or
higher
classification);


federally
enforceable;
and

affect
air
quality
in
the
area
where
the
emissions
increases
from
the
new
major
source
or
modification
are
occurring.
Internal
and
Deliberative
Draft
Do
not
quote,
cite,
copy,
or
distribute
outside
the
agency
September
2,
2005
49
We
refer
to
the
proportional
difference
between
the
amount
of
the
required
offsets
to
the
amount
of
emissions
increase
as
the
"
offset
ratio."
The
offset
ratios
for
the
other
criteria
pollutants
are:

Pollutant
Offset
Ratio
Ozone
At
least
1:
1
to
1.5:
1
depending
on
ozone
nonattainment
classification
PM10
At
least
1:
1
NOx
At
least
1:
1
SO2
At
least
1:
1
Lead
At
least
1:
1
CO
At
least
1:
1
a.
What
is
the
required
offset
ratio
for
PM2.5
direct
emissions?

The
Act
specifies
an
offset
ratio
for
several
situations.

In
ozone
nonattainment
areas
subject
to
subpart
2,
the
ratio
is
set
between
1.1:
1
and
1.5:
1
depending
on
the
area's
level
of
classification
pursuant
to
subpart
2
of
the
Act.
For
other
nonattainment
areas,
the
Act
establishes
a
minimum
offset
ratio
of
1:
1
pursuant
to
Subpart
1
of
the
Act.
Since
the
PM2.5
program
is
being
implemented
under
subpart
1,
the
applicable
ratio
is
at
least
1:
1
on
a
mass
basis.
We
request
comment
on
establishing
a
required
offset
ratio
of
at
least
1:
1,
and
on
any
other
option
Internal
and
Deliberative
Draft
Do
not
quote,
cite,
copy,
or
distribute
outside
the
agency
September
2,
2005
50
for
establishing
the
required
offset
ratio
for
PM2.5
direct
emissions.

b.
Which
precursors
shall
be
subject
to
the
offset
requirement?

If
we
identify
a
precursor
as
a
regulated
NSR
pollutant
in
our
final
action,
then
that
pollutant
will
be
subject
to
the
offset
requirement.
Accordingly,
consistent
with
our
preferred
approach
for
identifying
SO2
as
a
national
precursor
and
NOx
as
a
presumptive
national
precursor,
we
propose
that
SO2
and
NOx
would
be
subject
to
the
offset
requirement.
VOCs
and
ammonia
would
be
subject
to
the
offset
requirement
if
we
designated
these
pollutants
as
PM2.5
precursors
for
the
purposes
of
major
NSR.
If
we
adopt
an
approach
under
which
the
precursors
are
presumptively
excluded
from
major
NSR
unless
and
until
a
State
NA
NSR
program
specifically
includes
such
a
pollutant,
then
the
precursor
would
not
be
subject
to
the
offset
requirement
until
such
time.

c.
What
is
the
required
offset
ratio
for
PM2.5
precursors?

The
Act
requires
that
a
source
obtain
offsets
for
emissions
increases
that
occur
in
a
nonattainment
area.
As
with
PM2.5
direct
emissions,
the
minimum
offset
ratio
permitted
under
the
Act
would
be
at
least
1:
1.
We
believe
this
ratio
should
apply
where
a
source
seeks
to
offset
an
increase
in
emissions
of
a
PM2.5
precursor
with
creditable
reductions
of
the
same
precursor.
We
Internal
and
Deliberative
Draft
Do
not
quote,
cite,
copy,
or
distribute
outside
the
agency
September
2,
2005
51
request
comment
on
requiring
an
offset
ratio
of
at
least
1:
1
for
any
precursor
identified
by
the
Administrator
as
a
regulated
NSR
pollutant
for
PM2.5
nonattainment
areas.
We
also
request
comment
on
whether
this
mandatory
offset
ratio
should
apply
to
any
other
precursor
identified
by
a
State
for
regulation
through
its
SIPapproved
nonattainment
major
NSR
program,
or
whether
the
State
should
have
the
option
to
establish
a
different
offset
ratio
for
such
pollutant.

d.
Should
EPA
allow
interprecursor
trading
to
comply
with
the
offset
requirement
?

Because
several
different
pollutants
contribute
to
ambient
PM2.5
concentrations,
we
are
proposing
to
allow
flexibility
in
how
major
sources
may
satisfy
the
offset
requirement.
Specifically,

we
are
proposing
to
allow
increases
in
emissions
of
direct
PM2.5
to
be
offset
by
a
decrease
in
PM2.5
precursor
emissions;
and
we
are
proposing
to
allow
an
increase
in
a
PM2.5
precursor
to
be
offset
by
a
decrease
in
emissions
of
a
different
PM2.5
precursor
or
with
PM2.5
direct
emissions.
However,
such
trades
would
only
be
permissible
if
the
State
shows
that
the
trade
is
beneficial
in
reducing
overall
ambient
concentrations
of
PM2.5,
and
the
Administrator
approves
of
the
trade.

This
additional
flexibility
might
make
it
difficult
to
Internal
and
Deliberative
Draft
Do
not
quote,
cite,
copy,
or
distribute
outside
the
agency
September
2,
2005
52
ensure
that
the
ambient
air
concentration
of
PM2.5
continues
to
decrease.
It
may
also
be
administratively
difficult
to
manage.

Nonetheless,
we
are
proposing
to
allow
interprecursor
trading
to
generate
creditable
emissions
reductions
for
use
as
offsets,

because
we
believe
that
reductions
of
a
different
PM2.5
precursor
may
have
an
equal
or
better
impact
in
reducing
ambient
PM2.5
concentrations
if
an
appropriate
offset
ratio
is
determined.

Additionally,
interprecursor
trading
may
provide
a
reliable
source
of
offset
emissions
in
areas
where
availability
may
otherwise
be
limited.

There
are
several
ways
in
which
interprecursor
trading
for
offsets
could
be
implemented.
Under
one
approach,
a
State
would
develop
its
own
interprecursor
trading
rule
for
inclusion
in
its
SIP,
based
on
a
modeling
demonstration
for
a
specific
nonattainment
area.
The
EPA
would
review
a
State
interprecursor
trading
rule
during
the
SIP
approval
process.
Once
approved,
the
State
could
follow
this
approach
on
all
future
NSR
permits
issued.
Another
approach
would
be
to
review
individual
trades
as
part
of
the
major
NSR
permitting
process.
The
EPA
and
the
public
would
have
an
opportunity
to
comment
on
whether
the
modeling
or
other
technical
evidence
presented
by
a
particular
State
is
sufficient
to
support
interprecursor
offsets
for
that
specific
Internal
and
Deliberative
Draft
Do
not
quote,
cite,
copy,
or
distribute
outside
the
agency
September
2,
2005
53
permit
application.
Under
either
approach,
a
State
could
not
allow
interprecursor
trading
without
EPA
approval.
The
EPA
is
requesting
comment
on
whether,
States
should
be
required
to
demonstrate
the
adequacy
of
offset
ratio(
s)
using
modeling
as
part
of
a
State
rule,
in
demonstrations
for
specific
nonattainment
areas,
and/
or
on
a
permit­
by­
permit
basis,
and/
or
on
some
other
basis.
While
EPA
believes
that
such
interprecursor
trading
flexibility
is
more
appropriate
for
offsets
which
are
statutorily
required,
we
are
seeking
comment
on
whether
this
flexibility
should
also
apply
to
netting
analysis
for
a
source.

15.
What
are
the
implementation
and
transition
issues
associated
with
this
rule?

Implementation.
Implementation
of
NSR
for
PM2.5
is
dependent
on:


who
implements
the
program
and

what
regulations
are
used
to
implement
NSR.

The
components
of
the
NSR
programs
are
implemented
by
the
following:


PSD:
States
or
EPA

Nonattainment
NSR:
State
or
EPA

Minor
NSR:
States
only

NSR
in
Indian
country:
Tribes
or
EPA
Internal
and
Deliberative
Draft
Do
not
quote,
cite,
copy,
or
distribute
outside
the
agency
September
2,
2005
7
See
"
Interim
Implementation
for
New
Source
Review
Requirements
for
PM2.5,"
J.
Seitz,
EPA
(
Oct.
23,
1997).

54
Transition.
The
requirements
applicable
to
NSR
SIPs
for
and
the
obligation
to
subject
sources
to
NSR
permitting
for
PM2.5
direct
and
precursor
emissions
are
codified
in
the
existing
federal
regulations,
and
can
be
implemented
without
specific
regulatory
changes.
The
existing
regulations
require
NSR
for
any
NAAQS
pollutant
for
which
an
area
is
designated
attainment
or
nonattainment.
See
40
CFR
§
§
51.160(
b);
51.165(
a)(
2)(
i);

51.166(
a)(
7);
52.21(
a)(
2);
52.24(
k);
40
CFR
part
51,
Appendix
S,

Section
IV.
A.
Thus,
the
obligation
to
implement
PSD
for
the
NAAQS
was
triggered
upon
the
effective
date
of
the
NAAQS,
as
explained
in
prior
guidance.
7
(
In
that
guidance,
EPA
also
explained
that
PSD
permitting
for
PM10
would
be
accepted
as
a
surrogate
approach
for
this
obligation,
as
discussed
in
more
detail
below.)
For
nonattainment
areas,
permits
must
comply
with
the
nonattainment
NSR
requirements
for
PM2.5,
either
in
a
State's
approved
part
D
program
or,
where
that
is
lacking,
as
set
forth
in
40
CFR
part
51,
Appendix
S,
pursuant
to
§
52.24(
k).
To
clarify
how
these
requirements
are
to
be
implemented
for
PM2.5,
we
are
proposing
to
add
provisions
to:

°
40
CFR
§
51.166
­
implementation
plan
requirements
for
major
Internal
and
Deliberative
Draft
Do
not
quote,
cite,
copy,
or
distribute
outside
the
agency
September
2,
2005
55
new
or
modified
sources
in
attainment
or
unclassifiable
areas;

°
40
CFR
§
51.165
­
implementation
plan
requirements
for
addressing
major
new
or
modified
sources
in
nonattainment
areas
and
sources
located
in
attainment
or
unclassifiable
areas
that
would
impact
a
nonattainment
area;

°
40
CFR
§
52.21
­
the
federal
implementation
plan
for
areas
lacking
an
approved
SIP
or
TIP
program
to
regulate
construction
or
modification
of
major
stationary
sources
in
an
attainment
or
unclassifiable
area.

°
40
CFR
part
51,
Appendix
S
­
provisions
for
issuing
permits
before
a
State
has
an
approved
implementation
plan
regulating
construction
or
modification
of
major
stationary
sources.

16.
Implementation
of
PSD
provisions
during
the
SIP
Development
period
i.
Background
On
October
23,
1997,
we
issued
a
guidance
document
entitled
"
Interim
Implementation
for
the
New
Source
Review
Requirements
for
PM2.5,"
John
Seitz,
EPA.
As
noted
in
that
guidance,
Section
165
of
the
Act
suggests
that
PSD
requirements
become
effective
for
a
new
NAAQS
upon
the
effective
date
of
the
NAAQS.
Section
Internal
and
Deliberative
Draft
Do
not
quote,
cite,
copy,
or
distribute
outside
the
agency
September
2,
2005
56
165(
a)(
1)
of
the
Act
provides
that
no
new
or
modified
major
source
may
be
constructed
without
a
PSD
permit
that
meets
all
of
the
Section
165(
a)
requirements
with
respect
to
the
regulated
pollutant.
Moreover,
Section
165(
a)(
3)
provides
that
the
emissions
from
any
such
source
may
not
cause
or
contribute
to
a
violation
of
any
NAAQS.
Also,
Section
165(
a)(
4)
requires
BACT
for
each
pollutant
subject
to
PSD
regulation.
The
1997
guidance
stated
that
sources
would
be
allowed
to
use
implementation
of
a
PM10
program
as
a
surrogate
for
meeting
PM2.5
NSR
requirements
until
certain
difficulties
were
resolved,
primarily
the
lack
of
necessary
tools
to
calculate
the
emissions
of
PM2.5
and
related
precursors,
the
lack
of
adequate
modeling
techniques
to
project
ambient
impacts,
and
the
lack
of
PM2.5
monitoring
sites.
As
discussed
in
this
preamble,
those
difficulties
have
been
resolved
in
most
respects,
and
where
they
have
not
been,
the
proposal
contains
appropriate
provisions
to
account
for
it.
These
issues
will
be
finally
resolved
by
the
Agency
upon
promulgation
of
these
proposed
revisions.
When
final,
these
revisions
will
take
effect
immediately
on
the
effective
date
in
States
that
issue
permits
under
a
delegation
from
EPA.
However,
States
with
a
SIP­
approved
PSD
program
requiring
amendments
to
incorporate
these
rule
changes
will
need
additional
time
to
incorporate
the
final
NSR
Internal
and
Deliberative
Draft
Do
not
quote,
cite,
copy,
or
distribute
outside
the
agency
September
2,
2005
8
We
note
that
we
requested
that
States
submit
certifications
that
their
SIPs
were
adequate
with
respect
to
certain
infrastructure
elements,
including
PSD,
for
the
PM2.5
NAAQS,
by
July
2000,
consistent
with
Section
110(
a)(
1)
and
(
2).
See
Re­
issue
of
the
Early
Planning
Guidance
for
the
Revised
Ozone
and
Particulate
Matter
(
PM)
National
Ambient
Air
Quality
Standards
(
NAAQS)
(
June
16,
1998).
In
accordance
with
a
Consent
Decree
in
Environmental
Defense
and
American
Lung
Ass'n
v.
Johnson,
No.
1:
05CV00493
(
D.
D.
C.
June
15,
2005),
EPA
must
determine
by
October
4,
2008
whether
each
State
has
submitted
SIP
revisions
for
PM2.5
required
under
section
110(
a)(
2)
of
the
Clean
Air
Act.

57
rule
change
for
PM2.5
into
their
SIPs.
For
example,
a
State
may
need
to
amend
their
existing
regulations
to
add
the
specific
significant
emissions
rate
for
PM2.5
or
a
designated
precursor.

We
propose
to
require
that
States
with
SIP­
approved
PSD
programs
submit
revised
PSD
programs
for
PM2.5
at
the
same
time
that
they
must
submit
nonattainment
NSR
programs
for
PM2.5
(
April
5,
2008).
8
However,
during
the
SIP­
development
period,
the
PM2.5
NAAQS
must
still
be
protected
under
the
PSD
program
in
such
States.

b.
Proposed
options
Upon
promulgation
of
this
rule,
States
that
accept
delegation
would
implement
the
PM2.5
program
in
40
CFR
part
52.21
from
the
effective
date
of
this
rule.
However,
for
SIP­
approved
States,
we
seek
comment
on
the
following
options
to
address
implementation
of
the
PSD
program
from
the
time
this
rule
is
final
until
EPA
approves
a
State's
PSD
program
for
PM2.5:
Internal
and
Deliberative
Draft
Do
not
quote,
cite,
copy,
or
distribute
outside
the
agency
September
2,
2005
58
Option
1
­
Continue
implementing
the
1997
guidance
to
use
PM10
program
as
a
surrogate
for
PM2.5
We
are
proposing
that
if
a
SIP­
approved
State
is
unable
to
implement
a
PSD
program
for
the
PM2.5
NAAQS
upon
promulgation
of
these
proposed
revisions,
then
the
State
may
continue
to
implement
a
PM10
program
as
a
surrogate
to
meet
the
PSD
program
requirements
for
PM2.5
pursuant
to
the
1997
guidance
mentioned
above.
However,
to
assure
that
use
of
PM10
is
protective
of
the
PM2.5
NAAQS,
the
State
must
assure
that
two
requirements
are
met.

First,
States
must
require
sources
to
demonstrate
that
emissions
from
construction
or
operation
of
the
facility
will
not
cause
or
contribute
to
a
violation
of
the
PM2.5
NAAQS.
We
believe
that
States
have
the
authority
to
implement
this
requirement
through
existing
SIP­
approved
programs.
Second,
States
will
be
required
to
include
condensible
particulate
matter
emissions
in
determining
major
NSR
applicability
and
control
requirements.
As
discussed
elsewhere,
PM10
already
includes
condensible
emissions,

but
many
States
have
not
regulated
condensible
emissions
in
implementing
the
PM10
NAAQS
because
EPA
has
not
consistently
implemented
its
guidance
on
this
issue.
Because
condensible
emissions
are
essentially
fine
particles
and
a
larger
fraction
of
PM2.5
emissions
in
comparison
to
PM10,
EPA
believes
inclusion
of
Internal
and
Deliberative
Draft
Do
not
quote,
cite,
copy,
or
distribute
outside
the
agency
September
2,
2005
59
condensible
emissions
during
the
SIP
development
period
for
PSD
programs
is
necessary
to
ensure
that
the
PM10
indicator
acts
as
an
adequate
surrogate
for
PM2.5.

Option
2
­
Update
the
1997
guidance
to
include
proposed
provisions
of
this
rule
or
amend
40
CFR
part
51
appendix
S
to
state
that
40
CFR
part
52.21
would
apply
Another
option
would
be
to
update
the
1997
guidance
to
reflect
the
provisions
in
this
proposed
rule
and
allow
States
to
run
a
PM2.5
program
pursuant
to
this
updated
guidance.

Alternatively,
we
would
amend
Appendix
S
and
40
CFR
part
52.24
so
that
the
PSD
requirements
of
40
CFR
part
52.21
would
govern
the
issuance
of
major
NSR
permits
during
the
period
between
the
time
we
finalize
this
implementation
rule
and
when
we
approve
changes
to
the
State's
PSD
program
to
include
PM2.5
as
a
regulated
NSR
pollutant.
This
provision
would
not
apply
to
sources
located
in
Indian
Country
because
they
are
already
directly
subject
to
the
requirements
of
40
CFR
part
52.21.

If
a
State
does
not
believe
it
has
the
authority
to
issue
PSD
permits
consistent
with
Appendix
S,
then
EPA
would
issue
the
permit.
We
specifically
seek
comment
on
whether
we
should
update
the
1997
guidance
or
amend
Appendix
S
to
allow
States
to
run
a
PSD
program
for
PM2.5
in
attainment
areas
during
the
SIP
Internal
and
Deliberative
Draft
Do
not
quote,
cite,
copy,
or
distribute
outside
the
agency
September
2,
2005
60
development
period.

Option
3
­
State
requests
delegation
of
40
CFR
part
52.21
A
third
option
would
be
for
EPA
to
allow
a
State
to
request
delegation
of
just
the
federal
PM2.5
program
(
reflected
in
part
52.21
of
our
regulations)
in
that
State.
A
State
that
otherwise
has
a
SIP­
approved
PSD
program
could
request
delegation
for
PM2.5
by
informing
EPA
that
it
does
not
intend
to
submit
a
PSD
SIP
for
PM2.5
in
the
immediate
future.

After
promulgation
of
a
new
NAAQS,
EPA
may
allow
States
up
to
three
years
to
submit
a
State
implementation
plan
containing
a
PSD
program
for
that
pollutant.
42
U.
S.
C.
§
7410(
a).
EPA's
PSD
regulation
at
§
51.166
gives
SIP­
approved
States
up
to
three
years
to
submit
a
revision
to
their
PSD
program
after
EPA
amends
§
51.166.
§
51.166(
a)(
6).
Under
section
110(
c)
of
the
Act,
EPA
must
promulgate
a
federal
implementation
plan
(
FIP)
upon
finding
that
a
State
has
failed
to
make
a
required
plan
submission
or
that
a
required
submission
is
inadequate.

If
a
State
notifies
EPA
prior
to
the
close
of
the
customary
three­
year
period
that
the
State
does
not
intend
to
submit
a
PSD
SIP
for
PM2.5
in
the
immediate
future
and
requests
delegation,
we
believe
EPA
could
find
that
the
State
has
failed
to
submit
the
requisite
PSD
SIP
for
PM2.5,
promulgate
a
PSD
FIP
for
PM2.5
based
on
Internal
and
Deliberative
Draft
Do
not
quote,
cite,
copy,
or
distribute
outside
the
agency
September
2,
2005
61
40
CFR
part
52.21,
and
delegate
implementation
of
the
federal
PSD
program
to
the
State.
The
State
would
then
be
able
to
implement
a
PSD
program
for
PM2.5
in
accordance
with
the
terms
of
section
52.21,
as
amended
in
this
rulemaking
action.
However,
such
a
State
would
still
have
the
option
to
obtain
EPA
approval
of
a
PSD
SIP
for
PM2.5
if
it
submitted
the
SIP
revision
at
a
later
date.

c.
Rationale
We
believe
option
1
is
reasonable
for
the
following
reasons.

First,
PM10
will
act
as
an
adequate
surrogate
for
PM2.5
in
most
respects,
because
all
new
major
sources
and
major
modifications
that
would
trigger
PSD
requirements
for
PM2.5
would
also
trigger
PM10
requirements
because
PM2.5
is
a
subset
of
PM10.
The
one
situation
where
this
would
not
be
true
is
where
a
source
emitted
significant
amounts
of
condensible
emissions
that
would
not
otherwise
be
counted
under
a
State's
PM10
PSD
program.
This
is
the
reason
EPA
would
ensure
that
States
include
condensible
emissions
in
determining
major
NSR
applicability
as
a
condition
of
using
PM10
as
a
surrogate.
Second,
both
of
the
precursors
proposed
for
regulation
in
this
preamble
 
SO2,
and
NOx,­
are
already
regulated
under
State
NSR
programs
for
other
criteria
pollutants.
Thus,
those
precursors
will
be
subject
to
NSR
through
those
other
programs.
Third,
requiring
immediate
Internal
and
Deliberative
Draft
Do
not
quote,
cite,
copy,
or
distribute
outside
the
agency
September
2,
2005
62
implementation
of
the
Section
165(
a)(
3)
air
quality
analysis
for
the
PM2.5
NAAQS
will
adequately
cover
the
remaining
gap
that
results
from
using
PM10
as
a
surrogate
for
PM2.5.

Upon
promulgation
of
these
rules,
except
in
SIP­
approved
States
which
would
be
running
a
PM10
program
as
a
surrogate
for
a
PM2.5
program
as
stated
in
option
1
above,
a
PM2.5
program
would
apply
in
attainment
areas
of
delegated
States
and
in
nonattainment
areas.
Hence
to
avoid
this
imbalance,
we
are
seeking
comment
on
option
2
which
addresses
whether
there
is
a
need
to
update
the
1997
interim
policy
to
reflect
these
rules
in
SIP­
approved
States
or
whether
we
should
amend
Appendix
S
to
allow
these
States
to
run
a
PM2.5
program
for
PSD
based
on
the
requirements
of
40
CFR
§
52.21
during
the
SIP
development
period
in
attainment
areas.

Option
3
would
also
address
this
imbalance
by
allowing
a
State
to
request
delegation
of
only
the
PSD
program
for
PM2.5
prior
to
the
deadline
for
submitting
a
PSD
SIP
for
PM2.5.
(
April
5,
2008
as
discussed
in
the
background
discussion
of
section
M16)

Because
we
need
to
allow
a
State
enough
time
to
submit
a
PSD
SIP
for
PM2.5,
we
do
not
believe
we
can
unilaterally
issue
a
FIP
for
the
PSD
PM2.5
program
right
away.
However,
if
a
State
informs
EPA
prior
to
April
5,
2008
that
it
does
not
intend
to
submit
a
PM2.5
Internal
and
Deliberative
Draft
Do
not
quote,
cite,
copy,
or
distribute
outside
the
agency
September
2,
2005
63
SIP,
we
would
then
have
cause
to
issue
a
FIP
addressing
the
PSD
program
for
PM2.5
and
then
delegate
that
program
to
the
State.

17.
Implementation
of
the
nonattainment
NSR
provisions
during
the
SIP
development
period
a.
Background
EPA
interprets
section
172(
c)(
5)
of
the
Clean
Air
Act
to
require
that
States
issue
major
NSR
permits
for
construction
and
major
modifications
of
major
stationary
sources
in
any
nonattainment
area.
Thus,
since
the
PM2.5
nonattainment
designations
became
effective
on
April
5,
2005,
States
are
now
required
to
issue
major
NSR
permits
that
address
the
Section
173,

nonattainment
major
NSR
requirements
for
PM2.5.
On
the
date
that
the
PM2.5
non­
attainment
designations
took
effect
(
April
5,
2005),

we
issued
a
guidance
to
address
implementation
of
the
NA
NSR
program
pending
the
completion
of
this
action
to
develop
implementation
rules
for
PM2.5.
Memorandum
from
Stephen
D.
Page,

Director
Office
of
Air
Quality
Planning
and
Standards
to
Regional
Air
Directors,
"
Implementation
of
New
Source
Review
Requirements
in
PM2.5
Nonattainment
Areas"
(
Apr.
5,
2005).

Our
current
guidance
permits
States
to
implement
a
PM10
nonattainment
major
NSR
program
as
a
surrogate
to
address
the
requirements
of
nonattainment
major
NSR
for
the
PM2.5
NAAQS.
A
Internal
and
Deliberative
Draft
Do
not
quote,
cite,
copy,
or
distribute
outside
the
agency
September
2,
2005
64
State's
surrogate
major
NSR
program
in
PM2.5
nonattainment
areas
may
consist
of
either
the
implementation
of
the
State's
SIPapproved
nonattainment
major
NSR
program
for
PM10
or
implementation
of
a
major
NSR
program
for
PM10
under
the
authority
in
40
CFR
part
51,
Appendix
S.
Appendix
S
generally
applies
where
a
State
lacks
a
nonattainment
major
NSR
program
covering
a
particular
pollutant.

Once
this
PM2.5
implementation
rule
is
finalized,
States
will
have
the
necessary
tools
to
implement
a
major
NSR
program
for
PM2.5
States
will
no
longer
be
permitted
to
implement
a
nonattainment
major
NSR
program
for
PM10
as
a
surrogate
for
the
PM2.5
nonattainment
major
NSR
program.
Most
States
will
then
need
to
implement
a
transitional
PM2.5
nonattainment
major
NSR
program
under
Appendix
S
(
as
amended
in
this
rulemaking
action)
until
EPA
approves
changes
to
a
State's
SIP­
approved
major
NSR
program
to
reflect
the
requirements
of
this
rule.

The
NA
NSR
provisions
in
a
State's
existing
SIP­
approved
NA
NSR
program
would
only
apply
in
areas
designated
nonattainment
for
the
PM2.5
NAAQS
if
the
SIP­
approved
regulations
contain
a
generic
requirement
to
issue
part
D
permits
in
areas
designated
as
nonattainment
for
any
criteria
pollutant
and
do
not
otherwise
need
to
be
amended
to
incorporate
the
changes
proposed
in
this
Internal
and
Deliberative
Draft
Do
not
quote,
cite,
copy,
or
distribute
outside
the
agency
September
2,
2005
65
rule.
In
the
situations
described
below,
the
States
will
need
to
revise
their
NA
NSR
regulations
and
submit
them
to
EPA
for
incorporation
into
the
SIP
by
the
date
the
new
implementation
plans
for
PM2.5
are
due
(
April
5,
2008):


States
that
have
nonattainment
regulations
that
need
to
be
amended
to
incorporate
the
new
PM2.5
requirements.


States
that
have
newly
designated
nonattainment
areas
for
PM2.5
and
nonattainment
NSR
regulations
that
specifically
list
the
areas
in
which
NA
NSR
applies
(
i.
e.,
the
list
does
not
include
the
newly
designated
areas).


States
that
currently
have
no
nonattainment
areas
but
have
newly
designated
nonattainment
areas
for
PM2.5.

States
in
the
categories
listed
above
will
have
to
implement
a
transitional
major
NSR
permitting
program
for
PM2.5
pursuant
to
40
CFR
52.24(
k)
and
Appendix
S
until
their
existing
part
D
SIPs
are
revised
to
meet
these
new
PM2.5
NSR
regulations.

j.
Implementation
of
NSR
under
the
Emissions
Offset
Interpretative
Ruling
(
40
CFR
part
51,
Appendix
S)
with
revisions.

In
general,
Appendix
S
requires
new
or
modified
major
sources
to
meet
LAER
and
obtain
sufficient
offsetting
emissions
reductions
to
assure
that
a
new
major
source
or
major
Internal
and
Deliberative
Draft
Do
not
quote,
cite,
copy,
or
distribute
outside
the
agency
September
2,
2005
9In
a
separate
Federal
Register
notice,
we
will
be
revising
Appendix
S
to
incorporate
changes
that
conform
Appendix
S
with
the
minimum
requirements
for
implementation
plans
that
are
set
forth
in
40
CFR
51.165.

66
modification
of
an
existing
major
source
will
not
interfere
with
the
area's
progress
toward
attainment.
Readers
should
refer
to
40
CFR
part
51,
appendix
S
for
a
complete
understanding
of
these
and
other
existing
Appendix
S
requirements.
In
this
action,
we
propose
to
revise
Appendix
S
to
include
provisions
necessary
to
implement
a
transitional
major
NSR
program
for
PM2.5,
including
significant
emissions
rates
applicable
to
major
modifications
for
PM2.5
and,
as
appropriate,
precursors.
9
As
currently
written,
Appendix
S
applies
directly
to
major
stationary
sources.
In
accordance
with
the
requirements
of
Section
110(
a)(
2)(
c)
of
the
Act,
we
believe
that
the
majority
of
States
have
the
legal
authority
to
issue
permits
consistent
with
these
requirements
under
an
existing
SIP­
approved
permitting
program.
Nonetheless,
at
least
one
State
has
reported
that
it
lacks
the
legal
authority
to
issue
permits
implementing
the
requirements
of
Appendix
S
under
its
existing
permitting
rules.

If
a
State
is
unable
to
apply
the
requirements
of
Appendix
S,
EPA
will
act
as
the
reviewing
authority
for
the
relevant
portion
of
the
permit.
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and
Deliberative
Draft
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not
quote,
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or
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outside
the
agency
September
2,
2005
67
We
believe
that
it
is
appropriate
for
EPA
to
issue
the
preconstruction
permits
in
such
circumstances.
As
discussed
earlier,
Congress
amended
the
Act
in
1990
to
remove
the
requirements
that
would
have
applied
a
construction
ban
in
area's
that
lacked
a
SIP­
approved
part
D
permit
program.
Thus,
we
believe
that
it
is
consistent
with
Congressional
intent
that
either
the
State
or
EPA
issue
permits
to
construct
during
the
interim
period.

c.
Legal
basis
for
requiring
States
to
issue
nonattainment
NSR
permits
during
the
SIP­
development
period.

Section
110(
a)(
2)(
C)
of
the
CAA
establishes
a
general
duty
on
States
to
include
a
program
in
their
SIP
that
regulates
the
modification
and
construction
of
any
stationary
source
as
necessary
to
assure
that
NAAQS
are
achieved.
This
general
duty
exists
during
all
periods,
including
before
a
State
has
an
approved
NA
NSR
permit
program.

Section
110(
a)(
2)(
c)
of
the
Act
does
not
define
specific
requirements
States
must
follow
for
issuing
major
source
permits
during
the
period
between
nonattainment
designation
and
EPA
approval
of
a
nonattainment
NSR
SIP
(
the
"
SIP­
development"

period).
However,
EPA
has
historically
recognized
that
the
SIP
development
period
provided
under
Section
172(
b)
of
the
CAA
Internal
and
Deliberative
Draft
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not
quote,
cite,
copy,
or
distribute
outside
the
agency
September
2,
2005
10EPA
has
interpreted
this
requirement
to
require
States
to
issue
permits
that
are
consistent
with
the
requirements
in
Appendix
S.
We
believe
that
many
States
have
the
authority
to
issue
permits
that
are
consistent
with
Appendix
S
for
example,
through
State
minor
NSR
permit
programs.
However,
if
a
State
lacks
authority
to
issue
a
permit,
than
EPA
will
issue
the
permit.

68
leaves
a
gap
in
part
D
major
NSR
permitting
and
has
determined
that
this
gap
is
to
be
filled,
in
general,
with
a
transitional
major
NSR
program
that
includes
the
LAER
and
offset
requirements
from
part
D.
57
FR
18070,
18076
(
Apr.
28.
1992).
This
transitional
NSR
program
has
been
implemented,
to
date,
through
the
Emissions
Offset
Interpretative
Ruling
at
40
CFR
part
51,

Appendix
S.
The
EPA's
regulations
at
40
CFR
§
52.24(
k)
require
that
Appendix
S
govern
permitting
during
this
time.
10
In
addition,
Congress
indicated
in
the
1977
CAA
Amendments
that
major
NSR
permitting
should
apply
during
the
SIP
development
period.
See
Pub.
L.
No.
95­
95,
§
129(
a),
91
Stat.
685
(
1977).

Specifically,
in
1977,
when
Congress
enacted
a
moratorium
on
construction
in
any
area
lacking
an
approved
part
D
SIP,
with
a
delayed
effective
date
of
July
1,
1979,
Congress
directed
that
Appendix
S
govern
permitting
of
sources
constructing
in
such
areas
prior
to
that
date.
Id.
§
108(
b),
§
129(
a).

The
EPA
subsequently
codified
the
use
of
Appendix
S
as
the
transitional
major
NSR
program
in
40
CFR
§
52.24(
k),
reasoning
Internal
and
Deliberative
Draft
Do
not
quote,
cite,
copy,
or
distribute
outside
the
agency
September
2,
2005
11
See
Alabama
Power
Co.
v.
Costle,
636
F.
3d
323,
346­
047
(
D.
C.
Cir.
1980)
(
discussing
Sierra
Club
v.
Ruckelshaus,
344
F.
Supp.
253
(
D.
D.
C.
1972),
aff'd
per
curiam
4
ERC
1815
(
D.
C.
Cir.
1972),
aff'd
by
an
equally
divided
court,
sub
nom
Fri
v.
Sierra
Club,
412
U.
S.
541
(
1973).

69
(
in
the
context
of
implementing
a
delay
in
the
construction
ban
for
then­
recently
designated
nonattainment
areas)
that
Congress
had
directed
that
Appendix
S
remain
in
effect
to
protect
air
quality
while
State
plans
were
being
designed.
45
FR
91604
(
Oct.

2,
1980).
When
Congress
removed
the
construction
ban
(
except
as
provided
in
Section
110(
n)(
3)),
it
left
40
CFR
§
52.24(
k)
in
place,
implementing
the
transitional
major
NSR
program
under
Appendix
S.

The
continued
application
of
appendix
S
through
§
52.24(
k)
is
also
supported
by
one
of
the
purposes
of
the
Clean
Air
Act
"
to
protect
and
enhance
the
quality
of
the
Nation's
air
resources
so
as
to
promote
the
public
health
and
welfare
and
the
productive
capacity
of
its
population."
42
U.
S.
C.
s.
7401(
b)(
1).
This
provision
was
the
basis
for
the
original
judicial
finding
that
the
Act
imposed
an
obligation
to
prevent
significant
deterioration
in
areas
that
meet
the
NAAQS,
prior
to
Congress'

enactment
of
the
PSD
program
at
part
C
of
the
Act.
11
This
policy
of
nondegradation
applies
with
even
greater
force
in
areas
that
fail
to
meet
the
NAAQS.
Thus,
we
believe
that
an
interim
major
Internal
and
Deliberative
Draft
Do
not
quote,
cite,
copy,
or
distribute
outside
the
agency
September
2,
2005
12
The
actual
language
at
40
CFR
52.24(
k)
arguably
allows
States
to
issue
permits
under
Appendix
S
for
a
maximum
period
of
18
months
after
designation.
After
this
time,
if
the
nonattainment
area
does
not
have
an
approved
NA
NSR
permit
program,
a
construction
ban
would
apply.
However,
in
1990,
Congress
altered
the
provisions
of
the
construction
ban
such
that
it
would
not
apply
when
a
State/
Local
lacked
an
approved
NA
NSR
permit
program
in
the
future.
The
EPA
believes
that
Congress'
removal
of
the
construction
ban
from
the
Act
supersedes
the
regulatory
language
at
52.24(
k)
and
EPA
has
reinterpreted
this
language
to
allow
States
to
issue
permits
under
Appendix
S
from
designation
until
the
SIP
is
approved
even
if
this
exceeds
18
months.
See
1991
memo,
"
New
Source
Review
(
NSR)
program
Transitional
Guidance,
John
S.
Seitz,
March
11,
1991.
The
EPA
anticipates
revising
the
language
at
section
52.24(
k)
to
properly
reflect
this
interpretation.

70
NSR
program
for
the
SIP
development
period
­
as
codified
at
appendix
S
and
updated
to
reflect
CAA
amendments
and
the
promulgation
of
the
PM2.5
NAAQS
­
is
supported
by
section
110(
a)(
2)(
C),
section
101(
b)(
1),
Congressional
intent,
and
our
gap­
filling
authority
under
section
301(
a).

Although
EPA
omitted
§
52.24(
k)
from
the
regulatory
text
accompanying
a
proposed
rulemaking
in
1996
(
see
61
FR
38250,

38305
(
July
23,
1996)),
the
preamble
indicated
that
the
change
was
intended
only
to
update
and
clarify
the
regulation
with
regard
to
the
changes
to
the
construction
ban
made
by
the
1990
Amendments.
12
The
proposal
did
not
in
any
manner
indicate
that
EPA
believed
that
NSR
permits
complying
with
Appendix
S,
or
otherwise
satisfying
Section
110(
a)(
2)(
C),
were
not
required
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or
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outside
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agency
September
2,
2005
71
during
the
interim
period.
We
have
discussed
the
continued
applicability
of
§
52.24(
k)
and
Appendix
S
in
implementation
of
the
8­
hour
ozone
NAAQS.
68
FR
at
32846.

18.
NSR
applicability
to
precursors
during
the
interim
period
As
discussed
in
Section
M.
2,
EPA
has
proposed
several
options
for
NSR
applicability
to
the
potential
PM2.5
precursors
(
SO2,
NOx,
VOC,
and
ammonia).
EPA
has
proposed
that
SO2
is
a
national
precursor
to
PM2.5.
EPA
has
also
proposed
that
if
NOx
emissions
are
subject
to
NSR
as
PM2.5
precursor,
States
could
exempt
NOx
from
its
PM2.5
NSR
program
in
a
specific
area
by
demonstrating
that
NOx
emissions
from
stationary
sources
in
that
area
are
not
a
significant
contributor
to
that
area's
ambient
PM2.5
concentrations
and
the
area
is
not
in
a
State
identified
by
EPA
as
a
source
of
a
PM2.5
interstate
transport
problem.
However,

during
the
SIP
development
period,
States
face
substantial
hurdles
in
making
such
a
demonstration
because
they
are
in
the
initial
stages
of
gathering
information
and
analyses
necessary
to
prepare
their
attainment
demonstrations.
Thus,
during
this
period,
a
presumption
that
a
precursor
is
a
regulated
NSR
pollutant
for
PM2.5
may
amount
to
an
irrebuttable
presumption
for
many
States.
Because
of
the
challenges
posed
by
the
SIP
development
period,
EPA
is
considering
whether
NSR
applicability
Internal
and
Deliberative
Draft
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not
quote,
cite,
copy,
or
distribute
outside
the
agency
September
2,
2005
13
Letter
from
Bill
Grantham,
National
Tribal
Environmental
Council,
to
docket
2003­
0079,
providing
comments
on
the
proposed
8­
hour
ozone
implementation
rule
(
66
FR
32802).

72
to
precursors
should
be
stayed
for
one
or
more
precursors
during
the
SIP
development
period.
The
EPA
is
soliciting
comments
on
the
applicability
of
NSR
to
precursors
during
the
SIP
development
period.

19.
Are
there
any
Tribal
concerns?

We
expect
that
some
Tribal
areas
will
be
designated
as
nonattainment
in
part
because
of
pollution
that
is
transported
from
surrounding
State
lands.
Tribal
representatives
have
advocated
for
additional
flexibility
to
address
nonattainment
problems
caused
by
transported
pollution,
such
as
the
provision
of
NSR
offset
set­
asides
(
which
we
expect
would
come
from
State
offset
pools
or
banks),
because
they
have
limited
ability
to
generate
offsets
on
their
own.
Tribal
representatives
have
raised
these
and
other
concerns
in
discussions
on
implementation
of
the
8­
hour
ozone
and
PM2.5
standards,
and
in
comments
on
the
8­

hour
ozone
implementation
rule.
13
We
request
comment
on
whether
emissions
offset
set­
asides,
possibly
generated
by
innovative
measures
to
promote
additional
emissions
reductions,
are
an
appropriate
method
to
help
level
the
playing
field
for
the
Tribes
Internal
and
Deliberative
Draft
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not
quote,
cite,
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or
distribute
outside
the
agency
September
2,
2005
73
and
support
economic
development
in
Tribal
areas.
We
also
request
comment
on
ways
in
which
States
may
help
provide
the
Tribes
access
to
offsets
from
non­
Tribal
areas.

In
addition,
to
address
these
and
other
issues
related
to
implementation
of
the
NSR
program
in
Indian
country,
EPA
is
evaluating
the
impact
of
the
NSR
program
on
Tribes
in
Indian
country.
The
EPA
plans
to
address
these
concerns
in
a
future
Tribal
NSR
rule.

20.
What
must
a
State
or
local
agency
do
about
minor
sources
of
PM2.5?

Pursuant
to
Section
110(
a)(
2)(
C),
States
must
have
a
minor
source
permitting
program.
This
applies
to
new
and
modified
stationary
sources
that
are
not
considered
major
for
a
criteria
pollutants
or
a
precursor
for
a
criteria
pollutant.
At
this
time
States
must
include
the
following
pollutants
in
their
minor
NSR
program:


VOC,


SO2,


NOx,


CO,


PM10,
and

Lead
(
Pb)
Internal
and
Deliberative
Draft
Do
not
quote,
cite,
copy,
or
distribute
outside
the
agency
September
2,
2005
74
States
must
now
amend
their
minor
source
programs
to
include

PM2.5
direct
emissions,
and

Precursor
emissions
as
included
in
PM2.5
major
NSR.

21.
Supplemental
program
option:
rural
transport
areas
a.
What
flexible
implementation
options
should
be
available
for
Transport
areas?

EPA
is
considering
flexible
implementation
for
Nonattainment
NSR
for
areas
that
qualify
for
the
transport
classification.

These
areas
are
designated
nonattainment
due
to
overwhelming
transport,
for
example,
areas
where
pollution
is
from
surrounding
jurisdictions
but
where
there
are
few
or
no
sources
of
PM2.5
in
the
area.
Under
the
current
program
no
flexibility
is
available
under
NA
NSR
for
sources
in
these
areas
overwhelmed
by
transport.

As
mentioned
earlier,
in
this
rule,
we
are
proposing
a
transport
classification
to
provide
some
flexibility
to
address
some
of
the
fairness
issues
associated
with
transport.
This
transport
classification
can
be
used
by
States
and
Tribes
if
they
meet
the
criteria
discussed
below.
If
there
is
no
transport
classification
then
this
option
will
not
be
available
in
the
near­
term.
However,
EPA
intends
to
develop
a
separate
proposed
rule
on
flexible
implementation
of
nonattainment
NSR
for
areas
designated
nonattainment
for
any
criteria
pollutant,
where
Internal
and
Deliberative
Draft
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not
quote,
cite,
copy,
or
distribute
outside
the
agency
September
2,
2005
75
transport
is
the
primary
cause
of
the
area's
nonattainment.
Such
a
proposal
would
not
be
dependent
on
the
incorporation
of
a
transport
classification
in
a
classification
system
for
a
NAAQS.

b.
Which
nonattainment
areas
would
be
eligible
for
the
transport
program?

In
order
to
be
eligible
for
the
transport
option
the
State/
Local
with
jurisdiction
over
a
nonattainment
area
must:

(
1)
have
submitted
an
attainment
plan
which
demonstrates,
through
modeling,
that
the
area
is
designated
nonattainment
due
to
overwhelming
transport
from
an
upwind
area(
s);
and
(
2)
have
submitted
an
attainment
plan
containing
any
additional
local
control
measures
needed
for
attainment
of
the
PM2.5
standard;
and
(
3)
have
submitted
the
attainment
plan
that
commits
the
State/
Local
to
implement
a
program
that
meets
the
requirements
for
transport
areas
discussed
below.

As
described
earlier
in
the
classification
section,
an
area
will
not
be
reclassified
as
a
"
transport"
area
until
after
the
SIP
is
approved
by
the
Regional
Office.
A
transport
area
could
apply
for
single
or
multi­
state/
Local
nonattainment
areas.
Such
areas
will
not
be
able
to
implement
the
nonattainment
NSR
transport
program
until
the
area
is
reclassified
as
a
"
transport"
area.
Internal
and
Deliberative
Draft
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not
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or
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agency
September
2,
2005
76
Until
an
area
is
reclassified,
States
must
continue
to
apply
the
nonattainment
NSR
program.

c.
What
would
be
the
basic
requirements
of
a
transport
nonattainment
NSR
program?

EPA
is
requesting
comment
on
what
type
of
regulatory
flexibility
would
be
beneficial
for
transport
areas
while
providing
equal
environmental
protection.
Specific
examples
of
needed
flexibility
for
areas
which
the
commenter
suggests
would
qualify
as
transport
areas
would
be
helpful.
As
noted
above,
we
anticipate
proposing
a
separate
rulemaking
on
the
details
of
the
NSR
requirements.
