September 11, 2000

Michael Trutna

Information Transfer and Program Integration Division

MD-12

US Environmental Protection Agency

Research Triangle Park, NC 

RE:  COMMENTS ON WHITE PAPER 3

Dear Mr. Trutna,

The Northeast States for Coordinated Air Use Management (NESCAUM) and
the Northeast Waste Management Officials’ Association (NEWMOA) offer
the following comments and suggestions for improving EPA’s draft White
Paper 3, dated August 14, 2000.  NESCAUM is a regional association of
the state air quality management agencies in Connecticut, Maine,
Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, and
Vermont.  NEWMOA is a nonprofit, nonpartisan interstate association with
membership composed of the hazardous waste, solid waste, waste site
cleanup and pollution prevention program directors for the environmental
agencies in Connecticut, Maine, Massachusetts, New Hampshire, New York,
Rhode Island, and Vermont.  Both NEWMOA and NESCAUM have been actively
involved in assisting member states on a variety of permitting and
compliance issues at the state, regional and federal level.  We are also
coordinating P4 evaluation and training efforts for the northeast
states.

The northeast states believe that flexible permits can benefit the
environment, regulated industry and the permitting agencies.  We
enthusiastically support the general concepts outlined in the White
Paper 3 to the extent that they promote the dual goals of enhancing
regulatory flexibility and environmental protection.  If properly
utilized, the concepts and mechanisms outlined in the White Paper could
help to maximize economic competitiveness in a manner that is
environmentally beneficial.  It is our hope and expectation that permit
writers and the regulated industry in the Northeast will look for
opportunities to incorporate the innovative strategies and tools
detailed in the White Paper into the permitting process.  

The northeast states are, however, concerned that pollution prevention,
a basic tenet of the P4 initiative, is largely disregarded in White
Paper 3.  Flexible permits need to incorporate strategies to maximize
the environmental benefits and the effective use of P2 is a key to
achieving this outcome.  The White Paper should include both guidance
and specific tools to increase the use of P2 in flexible permits.  We
offer the following comments and recommendations for improving White
Paper 3.

Comment 1:  Increased Environmental Benefit/Use of Pollution Prevention

The introduction of White Paper 3 lists pollution prevention as a high
priority for EPA and a goal of flexible permits programs. 
Unfortunately, while the White Paper generally encourages pollution
prevention, it passes up numerous opportunities to provide permit
writers with specific guidance on how to craft flexible permits that
promote P2.  We offer the following recommendations for strengthening
and institutionalizing pollution prevention in flexible permitting.  We
believe that such changes will increase the likelihood that flexible
permits will provide environmental benefit for the community. 

Compelling firms to evaluate alternative process chemicals or materials,
processes, or operating parameters, would encourage them to explore
pollution prevention alternatives when analyzing their flexibility needs
and developing alternative operating scenarios.  This type of options
analysis can be required under existing regulations and has been in some
of the P4 pilot projects.  Language should be added to the
Introduction/Overview section to introduce this concept.

In Section III, Replacement Conditions, there is discussion of the terms
used in some minor NSR permits and how they might be modified to provide
increased flexibility.  The guidance suggests eliminating specific
restrictions on materials usage and VOC content.  Although such limits
might be an impediment to flexibility and in some cases might even
impede pollution prevention, categorically eliminating such restrictions
would reduce overall opportunities for pollution prevention.  The
northeast states believe that such limits should be determined on a
case-by-case basis.  In some cases, a better option might be a formula
based upon emissions and use that would compel companies to use higher
emitting products sparingly and encourage the use of lower emitting
products. 

Section IV should include a discussion of the merits of an upfront
analysis of alternative operating scenarios by an applicant seeking
advanced approval.  This analysis would include an evaluation of
alternative process chemicals or materials, processes, or operating
parameters that are less polluting.  A primary rationale for the states
in investing the additional upfront resources into crafting flexible
permits is the prospect of environmental benefits.  By requiring this
analysis of advanced approvals, states would be assured that pollution
prevention options relative to an operation have been adequately
evaluated and will be appropriately utilized by the applicant.

In Section IV, between subsection C and D, a new section should be added
on Options Analysis.  This section should define the components of an
alternative operating scenarios analysis for applicants seeking advanced
approval.  The applicant should be required to describe the steps taken
to evaluate alternative process chemicals or materials, processes, or
operating parameters.

In Section IV, Described Change Categories and Replicable Operating
Procedures (Subsection D), Menu Choices, options analysis should be
included in this menu.

Comment 2: Creating Resources to Support Implementation of White Paper 3
Concepts

While we support the concepts outlined in White Paper 3, proper
implementation of these concepts is critical.  In order to assure proper
implementation, both the states and EPA regional offices will need to
develop expertise regarding the issues and boundaries surrounding
flexible permits.  It is incumbent upon EPA to provide adequate
resources for both the states and the EPA regional offices to develop
the expertise needed to develop and enforce effective flexible permits.

EPA Regional Offices

Title V, NSR and enforcement personnel from the EPA regional offices
need to be trained on the goals and uses of White Paper 3 so that they
may appropriately promote the flexibility concepts while ensuring
continued compliance with all applicable requirements.  Furthermore,
training of regional staff will create a baseline of understanding at
the regional office level that will enhance the likelihood of consistent
interpretation across EPA regions.

In addition to general training of its regional staff, NESCAUM and
NEWMOA recommend that EPA designate at least two staff per regional
office to assist states in the development and review of flexible
permits.  The Northeast experience has shown that the development of
flexible permits that are enforceable and acceptable to EPA requires
substantial coordination with the regional office in the areas of Title
V, NSR and enforcement.  EPA involvement during the initial stages of
permit development is likely to decrease the number of issues that arise
and the time it takes to issue the permit.  Providing adequate resources
at the EPA regional offices should significantly decrease the amount of
time it takes to write these permits, while increasing the quality of
the permit.

States

State staff will also require training to develop the skills needed to
write enforceable and all encompassing, flexible permits.  We strongly
recommend that EPA develop the tools and resources needed to assist
states in developing effective permits.  While the case studies
highlighted in the White Paper are helpful in understanding the
concepts, more detailed information and examples will be required to
assure that the flexible permits meet the same standards as traditional
Title V permits.  The NESCAUM states strongly support the development of
training opportunities and resources such as workbooks to educate state
staff on how to write and enforce flexible permits.

Comment 3: Criteria to Reject Facilities

The White Paper goes into considerable detail regarding the types of
facilities that are appropriate for flexible permitting.  The northeast
states believe it is equally important the EPA make it clear that these
flexibility mechanisms are not suitable for all Title V permits. 
Furthermore, the states would support the addition of criteria that
states could use at their discretion to determine which facilities are
not appropriate for flexible permits.  Suggested criteria include:

Compliance history:  The northeast states feel that the compliance
history is an important indicator as to whether or not a facility is an
appropriate candidate for flexible permits.  While blemishes on a
facility compliance history may not be a reason to rule out the option
of a flexible permit, significant violations could represent the
inability for a facility to properly control emissions.

Status of Title 5 permit:  The northeast states suggest that, generally,
facilities with an existing Title 5 permit would only be eligible for a
flexible permit at renewal or if re-opened for a major modification. 
This would assure that approaches outlined in this White Paper would not
interfere with the Title 5 issuance rates.  States should, however,
retain the right to reopen issued Title 5 permits at their discretion.

Resources to maintain monitoring and reporting requirements:  One of the
major requirements in crafting flexible permits is ensuring that the
facilities are complying with their emission limits.  In most cases,
this requires additional monitoring and record keeping.  If a facility
lacks the resources to adequately address these requirements, they could
be deemed an unsuitable candidate.

Clear need for flexibility:  Additional resources are needed to develop
flexible permits.  States should utilize their limited resources on
those facilities most in need of flexibility and most willing to
incorporate P2 and other environmentally advantageous approaches.

Comment 4: Collection of Additional Fees

The northeast states agree with EPA that flexible permits require
additional resources to develop and support the suggestion that states
should seek additional fees for the development of such permits. 
However, the draft fails to recognize the difficulty permitting
authorities have in obtaining additional resources through Title V fee
increases.  The ability to collect additional fees often requires
approval from the state legislature.  EPA could assist the states in
their permit restructuring efforts by establishing an average additional
cost per ton of pollutant or cost per permit that could be collected to
cover the costs associated with writing a flexible permit.  This
information would provide states with an independent basis for asking
their legislatures to support additional fees for flexible permits.

Comment 5: Clean Building/MOM Concept/Cap & Track

White Paper 3 outlines several concepts that have not yet been piloted. 
These concepts include the Clean Building/Unit Provision, Minor Ongoing
Modification Concept and the Cap and Track program.  While intrigued by
these possible approaches and interested in exploring them further, the
northeast states believe that it is premature to incorporate them into
official EPA policy.  The states need to develop a better understanding
of the implementation issues associated with these concepts before fully
endorsing them.  The northeast states, however, support testing these
concepts in pilot applications.  If successful, detailed guidance for
these approaches, such as that provided in White Paper 3 for
pre-approvals, could be created.

Comment 6: PALs and NSR Reform

The White Paper states, "We anticipate that any PALs issued under
current regulations would need to be reevaluated and updated consistent
with final NSR rule (p.39)”.  While the states understand that
revision to the NSR program may change the formula that PALs are based
upon, the states feel that the PALs should not be revised immediately
due to any rule change.  Instead, the northeast states suggest that a
transition period be established in accordance with Title V requirements
for revising permits based upon rule changes.  This would mean that any
permit with at least 24 months remaining would have its PAL reviewed at
renewal.  We also suggest that all remaining permits be reviewed within
a 24-month period, or at reopening, for a major modification.

Comment 7: Interim Use of AP-42 Emission Factors

In the draft paper, EPA states that AP-42 emission factors should only
be used until actual emissions can be determined.  According to the
draft White Paper, AP-42 emission factors can be used on an interim
basis to determine PALs.  The draft paper further states that when
facilities determine their actual emissions for purposes of reporting to
the permitting authority, those units still relying on AP-42 factors
must be doubled to determine actual emissions under the PAL.  

While the northeast states agree that actual emissions are preferable to
emission estimates, the states feel that there are some small emission
units that should be allowed to continue using AP-42 throughout the
permit term.  Stack testing for small emission units can be expensive. 
To provide this flexibility while ensuring a high degree of certainty
about the overall emissions from a facility, NESCAUM and NEWMOA
recommend that EPA set a de minimus level for emission units under which
AP-42 emission factors could be used on a one-for-one basis.  In
calculating actual emissions for reporting purposes, those units under
the de minimus level would count emissions on a one-to-one basis.  This
would eliminate the need for facilities to perform stack tests for very
small emission units.  Additionally, the states want to retain their
ability to use source-specific emission factors at their discretion.  To
ensure a high level of certainty in emission estimates, the northeast
states recommend that no more than 20 percent of total emissions under a
PAL be allowed to fall under the de minimus level.

Comment 8: PALs to drive environmental performance

The northeast states applaud EPA for embracing the PAL concept.  The
PALs, as currently outlined, provide mechanisms to ensure that they meet
existing environmental protection standards.  The northeast states
encourage EPA to go beyond the status quo and support approaches that
utilize PALs to improve environmental performance.  Such approaches
might include declining PALs and performance goals to eliminate the use
of HAPs. 

Comment 9: Air Toxics

From a public health perspective, it is incumbent upon the states and
EPA to ensure that the use of PALs and pre-approvals does not result in
increased risk to local populations associated with exposure to HAP
emissions.  Of concern to the northeast states is the potential for
facilities to stay below their permitted emissions level while
increasing the relative toxicity of the emissions.  In this situation,
adverse local impacts could occur, even though a facility was in
compliance with the regulatory requirements outlined in White Paper 3.  

As EPA points out in White Paper 3, state air toxic control programs
have risk screening requirements as part of the pre-construction review
process to ensure that potential emissions do not exceed health-based
risk guideline values for HAPs.  NESCAUM and NEWMOA recommend that EPA
expand the discussion of “state-only control programs” (p. 26 of
White Paper 3) to include implications for flexible permits under the
federal risk-based toxics programs.  We also believe that the paper
should include a discussion of:  (1) the possible use of risk screening
for PALs and (2) pre-screening to evaluate potential increases in the
relative toxicity of emissions from changes in operations to ensure that
ambient impacts do not pose additional risks to public health near the
facility. 

 

Comment 10: Clarification requests

NESCAUM and NEWMOA also seek clarification regarding the following
issues discussed in White Paper 3:

Baseline/Pollutant (page 31) The language regarding the use of baseline
emissions to develop a PAL is unclear.  As currently interpreted, the
baseline must be set using actual emissions.  In some cases, actual
emissions may be higher than permitted actual.  Therefore, we suggested
that the language be changed such that the PAL should be set based upon
permitted actual emissions so that baseline credit is not given for
emissions above allowed threshold.

Making Changes (page 33) The second bullet seems to make one facility
two separate sources.  Is such an action allowed under Title V?

We would like to thank EPA for enabling representatives from the
northeast states to meet with key members of your staff in advance of
the formal release of the White Paper.  These discussions provided us
with a better understanding of the issues and underlying concepts
detailed in White Paper 3.  We look forward to working with you on
finalizing this strategy.  NESCAUM and NEWMOA remain committed to
working with EPA to develop methods for permit flexibility and are
encouraged by your efforts to date.   

If you have any questions or desire additional information, please
contact either of us or

Lisa Rector of NESCAUM

Sincerely,

Jason Grumet							William Cass

Executive Director							Executive Director

NESCAUM								NEWMOA

Cc:	Dave Dellarco, US EPA

	Anna Woods, US EPA

	Brendan McCahill, US EPA, Region 1

	Tim Williamson, US EPA, Region 1

	Steve Riva, US EPA, Region 2

              Geri O’Sullivan, STAPPA/ALAPCO

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