September 14, 2000

BY E-MAIL AND FAX

Michael Trutna

Information Transfer and Program Integration Division (MD-12)

Office of Air Quality Planning and Standards

U.S. Environmental Protection Agency

Research Triangle Park, North Carolina 27711

Re: 	Comments on Draft Guidance on Design of Flexible Air Permits (White
Paper 3)

Dear Mr. Trutna:

We, the undersigned parties, appreciate the opportunity that EPA has
provided to submit comments on the Draft Guidance on Design of Flexible
Air Permits (White Paper 3 or Draft Guidance), noticed in the Federal
Register on August 15, 2000.  (65 FR 49803).  We oppose EPA’s adoption
of the Draft Guidance on the grounds that it would: weaken public
participation in air permitting programs; subvert promises made under
EPA’s Project XL; circumvent and short circuit pending Agency
rulemakings; undermine the practical enforceability of air permits; and
represent final agency action that unlawfully amends existing
regulations in violation of the Clean Air Act and Administrative
Procedures Act.  EPA’s adoption of the Draft Guidance will necessitate
prompt legal challenge.

Background

Prior to adopting the Title V operating permits program, Congress
surveyed the nation's labyrinth system of air quality law and determined
that it had become so complex that no one could make sense of it. 
Frequently, regulated sources made errors in interpreting legal
requirements, failed to realize that certain requirements applied, and
sometimes circumvented requirements outright. State and local
environmental agencies were engaged in endless disputes with the
regulated community over which requirements applied to a source. 
Meanwhile, opportunities for public involvement in the oversight of
individual polluters such as factories and power plants were practically
non-existent.

Congress intended for the Title V program to incorporate clarity and
fairness into air quality regulation.  Title V incorporates clarity into
the system by requiring each facility that is covered by the program to
obtain an operating permit that includes every applicable requirement. 
The permit must be clear about what the source must do to comply with
each requirement and include monitoring, record-keeping, and reporting
sufficient to assure the source's ongoing compliance.  Title V
incorporates fairness into the regulatory system by providing members of
the public with extensive rights to participate in permitting decisions,
including the right to comment on a draft permit and permit revisions,
the right to petition EPA to object to a permit that does not satisfy
legal requirements, and the right to file suit against EPA to challenge
its denial of a petition.  

We oppose the Draft Guidance because its implementation will undermine
Title V's fundamental promise of clarity and fairness.  If the guidance
is issued, we and others can no longer be confident that a facility's
permit will inform the public of which requirements apply to a facility.
 Rather, a "flexible" permit will offer up a confusing array of
potentially applicable requirements, returning us to the time when the
initial determination of whether a requirement applies to a facility is
left up to facility operators and ambiguities are only addressed after
it becomes clear that the facility is not complying with an applicable
requirement.  Moreover, a “flexible” permit would advance approve
modifications at a facility, condensing all of the public’s
opportunities to participate in permitting through minor NSR, PSD, major
NSR, and Title V into one fleeting 30-day period every five years.  Our
rights to evaluate proposed changes at a facility on a contemporaneous
basis will be stripped, replaced only by a chance to review a
facility’s speculative forecasts at the time the Title V permit is
developed.  Once again, the public will find itself shut out of the
process and unable to determine whether a facility is complying with
Clean Air Act-based requirements.

In the following detailed comments, we direct EPA’s attention to the
many ways in which the Draft Guidance undermines the goals of the Title
V and NSR programs and violates an array of legal requirements.  In
light of these objections, we urge EPA in the strongest possible terms
not to adopt the Draft Guidance.

I.	Overview of Comments

The Fact Sheet accompanying release of the Draft Guidance explains that
White Paper 3 is “part of the Agency’s efforts to improve
implementation of air permitting programs.”  Our comments discuss the
many ways in which adoption of the polluter “flexibilities” in the
Draft Guidance would weaken and worsen implementation of these
permitting programs from the perspective of environmental organizations,
environmental justice organizations, and the public at large.  We
summarize below the following general objections to the Draft Guidance,
and discuss these objections in greater detail in the sections that
follow:

Adoption of the Draft Guidance would eliminate or substantially curtail
opportunities for public participation that existing regulations and the
statute provide.  And the opportunities for public participation that
remain under the Draft Guidance are made less meaningful and more
convoluted because Title V permits implementing advance approvals will
be much more vague, speculative, and uninformative than proper Title V
permits.

Adoption of the Draft Guidance would subvert the intent of EPA’s
Project XL, and demonstrate abandonment of EPA’s commitments to
publicly evaluate and quantify superior results of reinvention
innovations before adopting them program-wide.  In section III.C of
these comments, we call upon EPA to respond publicly to these concerns.

Adoption of the document’s “flexibilities” through guidance rather
than rulemaking would circumvent and short circuit pending Agency
rulemakings that are addressing many of these same issues.  These
rulemakings under part 70 and the NSR program are ones in which some of
our organizations have been involved as stakeholders for over eight
years, and we consider it deplorable that EPA would treat our sustained
participation as stakeholders so cavalierly.

Adoption of the Draft Guidance, due to its vague and convoluted nature,
would result in misinterpretation and abuse of the NSR and Title V
permitting regulations.

Adoption of the Draft Guidance would undermine the practical
enforceability of air permits and contravene existing Agency policies on
practical enforceability.

Adoption of the Draft Guidance would undermine central purposes behind
the NSR and Title V permitting programs: Title V permits that assure
compliance with all applicable requirements with clarity, certainty and
public oversight; and NSR permits that account for a source’s
pollution impact on the public at the time a source will be built, with
the most advanced pollution control technology applied to the increased
pollution.

Adoption of the Draft Guidance will compel state permitting agencies to
consume tremendous amounts of resources and time developing flexible
permits, and will further impede the ability of these agencies to issue
initial Title V permits.  Most states have already passed the statutory
deadline for issuing initial Title V permits  (CAA § 503(c)), and to
our knowledge EPA has not undertaken actions to compel compliance by
state programs with this statutory mandate.  It will further undermine
this statutory obligation for EPA to issue guidance that imposes
unfounded mandates upon states to develop and issue time-consuming
permits with unauthorized “flexibilities” demanded by polluters.

	Adoption of the Draft Guidance would represent unlawful final agency
action that creates authorizations and rights, and imposes obligations
and requirements, that are not authorized under existing regulations. 
Consequently, such adoption through guidance rather than rulemaking
would violate both the Clean Air Act and the Administrative Procedures
Act.  Other flexibilities in the Draft Guidance are contrary to the
Clean Air Act itself and would be unlawful even if adopted pursuant to
notice and comment rulemaking.

It is evident that Agency staff have devoted considerable effort to the
preparation of this Draft Guidance.  We appreciate that some staff must
believe that this Draft Guidance advances strong Clean Air Act
permitting programs, superior environmental performance, rigorous
enforcement, and a robust role for the public in the pollution decisions
that affect them.  Nonetheless, our analysis forces us to conclude that
the Draft Guidance is seriously misguided and should not be adopted by
EPA.  We are encouraged to see that Agency management to date has made
clear that the Draft Guidance approaches do not represent EPA policy and
are merely preliminary staff views that are nothing more than an “idea
sheet.”  Based upon the objections discussed in these comments, which
point out how bad and dangerous the ideas in the Draft Guidance are, we
urge EPA not to take these notions beyond the staff idea sheet and we
urge the Agency not to adopt the Draft Guidance.

II.	The Draft Guidance Systematically Weakens Opportunities for Public
Participation                                                           
                                

In its July, 1999 “Aiming for Excellence” report, EPA committed to
“identify approaches that provide greater flexibility in the New
Source Review and Title V permitting programs, without sacrificing
environmental results or weakening the role of the public in permit
decisions.”  In a February 16, 1999 memorandum from Peter D.
Robertson, Acting Deputy Administrator, entitled “The Next Generation
in Permitting,” EPA committed to “[i]mproving public participation
– to ensure a meaningful role for the interested community in
permitting decisions.”  And in an April, 2000 report from the Office
of the Administrator entitled “A Decade of Progress: Innovation at the
Environmental Protection Agency,” EPA touts its commitment to reinvent
government and to clean up the environment through innovative
approaches, while creating a “stronger public role” in environmental
decisions and facilitating “greater public participation.”  

However, the Draft Guidance conflicts with the Agency’s stated policy
goals for public participation.  If the Draft Guidance is a harbinger of
what the Agency will accept as reinvention excellence – weakened
opportunities for public participation, reduced enforceability,
unsubstantiated superior environmental performance, a near-exclusive
focus on polluter “flexibilities,” all carried out unlawfully
through guidance rather than rulemaking – it would mark an about-face
for the Agency.  We are optimistic, however, that the Agency will join
us in agreeing that the Draft Guidance fails on these promises and
should not be finalized.

An alarming theme that runs throughout the Draft Guidance is the
promotion of permit “streamlining” and “flexibility” for
polluters at the direct expense of opportunities for public
participation that are otherwise required under existing law.  Because
the Clean Air Act provides the public opportunities to participate and
comment before significant new pollution is added to their neighborhoods
(under NSR), or to ensure that significant changes or new pollution
activities will comply with the law (under Title V), much streamlining
and flexibility for polluters obviously could be achieved by eliminating
or cutting back on these public opportunities.  But it is unacceptable
that this should be the means by which EPA believes it appropriate to
grant “flexibility” to industry.  We discuss below the extent to
which nearly every “flexibility” in the Draft Guidance weakens the
role of the public under the Title V and NSR programs.

		A.	Advance approvals

The Draft Guidance describes an advance approval as “the incorporation
into a title V permit of terms which authorize specified future changes
to occur such that no further approval or title V permit revision is
needed before the source can make these changes.”  Draft Guidance at
10.  By its own terms, then, the very intent of the advance approvals
promoted by the Draft Guidance is to eliminate the need for minor NSR,
PSD, NSR, and Title V permit actions and the opportunities for public
participation that accompany them under existing regulations.  It is the
intent of the Draft Guidance that for every “successful” advance
approval, the public be denied the opportunity to participate at the
time of the change in permit proceedings that would otherwise be legally
required.  We discuss later in these comments the unlawfulness of this
approach, and we discuss below the policy implications of denying the
public its participation rights at the time of changes when the most
information is known and when public involvement will be most meaningful
and effective.  As a threshold matter, however, it is important to make
clear that every advance approval will eliminate an opportunity for
public participation that is otherwise available under existing law.

	1.	Permit application content.

	The first step for public involvement in reviewing Title V permits –
whether issuance, modification, or renewal of a permit -- begins with
the permit application.  See generally 40 CFR § 70.5 (permit
applications).  It is through the permit application that the public
sees, for example, important information about “each emissions unit”
at a source, including an “[i]dentification and description of all
points of emissions” regulated in the permit.  Id. at §§ 70.5(c),
70.5(c)(3)(i).  An obvious and ultimately fatal problem confronting the
concept of advance approvals is that sources will not necessarily know,
and often will not know, what emissions units will be at the facility in
two, three, four or five years.  The trick for the Draft Guidance then
is to authorize permit applications that allow “identification and
description” of emissions units that in truth provide no such thing,
so as to allow the maximum amount of latitude in authorizing the very
widest range of advance approvals.  The Draft Guidance strains to pull
this off within the bounds of the existing regulations, but does not
come close.  

	The telltale signs of this failure are threefold: (1) the Draft
Guidance shies away from discussing the specific elements of part 70’s
permit application provisions that are uncomfortable to the advance
approval enterprise; (2) the document substitutes discussion of vague
generalities for discussion of the regulations; and (3) the document
reverts to coded hints to sources and permitting authorities indicating
that there is “inherent flexibility” and “broad authority” as to
how the regulations are interpreted.  In order for the widest range of
advance approvals to be successfully implemented under the Draft
Guidance, the permit application is allowed to be as non-specific and
open-ended as possible.  The part 70 rules do not support this
enterprise; unsurprisingly, considering that the regulations were
written in 1992 to apply only to specifically identified and existing
units at the facility, and not imaginary future units for purposes of
advance approval.

	The Draft Guidance’s treatment of part 70’s permit application
requirements is unacceptable for there to be meaningful public
participation.  The document reveals its expectation and permission for
sources to submit the most vague and general information possible with
permit applications, all in an apparent effort to expand the
availability of the advance approval enterprise, and with little regard
for the public’s inability to conduct meaningful reviews of advance
approvals.  The Draft Guidance demonstrates this agenda through its
highly revealing discussion of the sparse information required by permit
applications for the identification of specific emissions units and
activities trying to receive advance approval.  This critical issue of
specific identification of emissions units and activities, which proves
to be the undoing of the advance approval enterprise, is limited to one
paragraph in the 54-page document.

	The Draft Guidance gives it all away with the critical word “types”
in the passage that follows:

For example, to advance approve emissions units which are subject to
standards that regulate individual pieces of constituent equipment
(e.g., NSPS applying to magnetic tape coating and polymeric coating) as
opposed to regulating an entire coating line as a single entity, the
source must identify in its advance approval the types of expected
constituent pieces that it may want to add.  As another example, the
title V permit application would focus on the types of new equipment
and other changes which are advance approved to occur in a “clean
building” since the primary objective here is to describe each change
sufficiently well in order to determine the most stringent applicable
requirement that could apply to emissions units within the building and
the compatibility of the changes with the dedicated control device and
established monitoring approach.

Draft Guidance at 18 (emphases added).  Unable to overcome the inherent
inability to identify future emissions units and activities that a
source will undertake with specificity, and thereby facilitate
site-specific applicability determinations, the Draft Guidance
effectively says this information is not necessary.  In effect, the
Draft Guidance converts a site-specific permit into a generic source
category description.  In other words, the Draft Guidance’s apparent
conception of permits resembles the Applicability and Definitions
sections of an NSPS or MACT, where generic “types” of equipment
within a source category are listed in the permit: this refinery permit
will contain types of equipment x, y, and z.  This approach to permit
writing, in addition to being uninformative and non-specific to sources,
runs counter to sound permitting practices and is contrary to part 70. 

	2.	Permit content (including “families” and “menus” of advance 
	approvals).

	

	The content of Title V permits represents the heart of the public’s
and government’s ability to identify sources’ pollution activities,
emissions limits, and work practice standards and monitoring,
recordkeeping, reporting and testing obligations.  The permit is
important to government inspections, the assessment of semi-annual
monitoring reports, compliance certifications, and enforcement efforts. 
It should serve as a clear and informative compliance touchstone for
source owners and operators, the public, EPA, and State and tribal
permitting authorities.

	The Draft Guidance directly undermines these functions of a Title V
permit, and promises to turn permits into a confusing array of
potentially applicable requirements, lists and “menus”, and
permutations of countless construction forecasts.  Any rational source
owner or operator will demand that permitting authorities create permits
with endless arrays of construction possibilities, strings of equipment
configurations, and ranges of potential emissions limits, monitoring,
monitoring parameters, testing, recordkeeping and reporting.   A
flexible permit will resemble a nightmare spreadsheet more than an
enforceable permit.  From this spreadsheet permit, any source will be
able to cobble together permit conditions that it will claim to have
pre-approved whatever future construction modifications or other changes
it may undertake.  And  of course there will be no oversight by the
public or EPA to question such claims.

	This approach to permit writing will also impose immense resource
burdens upon state permitting authorities.  Adoption of the Draft
Guidance would compel these agencies to construct these endless
permutations in permits if demanded by sources, because the Draft
Guidance claims to find authority for advance approvals in a provision
that is a mandatory element of State programs.  See 40 CFR §
70.6(a)(9).  “Reasonably anticipated operating scenarios” under this
provision are inherently bounded by the fact that emissions units do not
and often cannot operate in multiple operational states that trigger
different applicable requirements.  By contrast, advance approvals will
be bounded only by the source’s imagination, as it will always be in a
source’s interest to multiply its speculations about future activities
in order to avoid future permitting and public oversight.  Because many
if not most of these pre-approved possibilities will never materialize,
permitting authorities will end up wasting a tremendous amount of time
and effort in the supposed name of “streamlining”.  This entire
scheme will only further frustrate the Clean Air Act deadlines for
issuing initial Title V permits.  CAA § 503( c )   And it will kill any
chance of meeting the Office of Air and Radiation objective of having
all Title V permits issued by 2001.

			3.	Replicable operating procedures (ROPs).

	The complexities, vagueness, speculations, and permutations that
advance approvals will bring to a Title V permit are apparently intended
to be sorted out by an invention of the Draft Guidance called
“replicable operating procedures” or ROPs.  See Draft Guidance at
13, 19-21.  While ROPs are a recurring element of the Draft Guidance,
they are nowhere to be found in applicable requirements to our
knowledge, and the Draft Guidance does not point to a single source of
legal authority for their high-profile appearance.  This is somewhat
astonishing, considering that the primary focus of the Draft Guidance
– advance approvals – is rooted in large part in the concept of
ROPs.  The Draft Guidance at one point explains ROPs and their
relationship to advance approvals as follows:

	To advance approve changes to existing emissions units within a
described category, the permit must sometimes contain nondiscretionary
instructions or replicable operating procedures (ROPs).  These ROPs are
necessary where shifts in source operations can trigger several
different applicable requirements and these requirements allow several
options to control and/or monitor emissions to meet them.  The ROPs,
which you [the permitting authority] have approved, govern how the
changes are linked to applicable requirements and compliance terms
(e.g., monitoring provisions and/or control approaches already contained
in the permit).  Such ROPs must be judged by you to be scientifically
sound, consist only of repeatable nondiscretionary steps (such as a
mathematical equation), and be operated using only objective data (where
data are required).

Draft Guidance at 13.  Elsewhere the Draft Guidance says this about
ROPs:

	Whether a change is actually advance approved depends on certain
boundary constraints governing use of this menu format.  First, changes
within the described category of advance approved changes would also be
subject to certain ROPs approved by you into the title V permit for
determining the applicable requirements and the resulting compliance
obligations for each change.  Other ROPs would compare the results of
the change with the permit terms which assure compliance.  All ROPs must
be scientifically credible and their use must not require judgment. 
That is, the “replicability” requirement means the procedure for the
same inputs must be capable of yielding the identical result whether
applied by you, the source, a member of the public, or us (i.e., the
results from using these procedures are the same regardless of who uses
them and when).   

Id. at 20.  After untangling the jargon of these excerpts, what one
discovers is quite extraordinary.  Although the Draft Guidance is
tellingly vague as to what qualifies as a ROP (here and throughout the
Draft Guidance), EPA appears to be suggesting that the application of
complex regulations and the interpretation of regulatory terms can be
distilled to the equivalent of a mathematical formula.  This is an
absurd proposition for the Title V program, since, as discussed below, a
principle reason Congress enacted the program was to put an end to
prevailing disputes and confusion about which requirements applied to
specific emitting equipment.

	It is absurd because environmental regulations are not algorithms and
applicability determinations (with their embedded legal interpretations)
do not proceed according to the “rules” of mathematics. The Draft
Guidance describes a mythical methodology for “determining. . .
applicable requirements and the resulting compliance obligations,”
that “must not require judgment.”  The “’replicability’
requirement means the procedure for the same inputs must be capable of
yielding the identical result whether applied by you, the source, a
member of the public, or us (i.e., the results from using these
procedures are the same regardless of who uses them and when).”  Id. 
But legal interpretations, turning as they do on language, necessarily
involve room for judgment, discretion, different contextual
associations, ambiguities, conflicts, gaps, and the near certainty that
different parties, with different motivations, can and will interpret
words differently.

	The Draft Guidance promises just one lonely example of a ROP, pointing
to section VIII.B, the example of a pharmaceutical production facility
flexible permit.  Id. at 20, 46. The promise of just one ROP is
initially surprising in a document that relies upon the concept so
consistently for so many of its “flexibilities.” Id. at 13-15, 17,
22-23, 30, 38-42, 46-48, 52 & 55.  Turning to section VIII.B, one is
more surprised to discover that there is not an actual example of a ROP
at all.  Id. at 46.  Rather, there is further discussion of what a ROP
should look like and what it would do, if there were a ROP.  Id.  One
statement identifies a ROP simply as an “equation.”  Id.  This
occurs in the context of a discussion of “applicability ROPs” for
the pharmaceutical production facility MACT standard, 40 CFR part 63,
subpart GGG. In the end, it is hardly surprising to us that the Draft
Guidance does not (or cannot) provide actual examples of ROPs.  Id. 
After all, it is easier to describe a unicorn than it is to find one.

	It is an extraordinary proposition to practitioners of environmental
law -- particularly practitioners with economically-motivated clients
and agendas -- that there are many or any environmental regulations
incapable of being interpreted in more than one way.  This is not to
say, of course, that a given interpretation will necessarily be strong
or reasonable or the one intended by the authors (whether EPA or a State
or Congress).  But this serves to highlight precisely why the Draft
Guidance’s liberal employment of ROPs is so objectionable: the
document turns over to sources the unilateral responsibility for making
applicability determinations, and the unilateral ability to decide
whether their interpretations are reasonable or not.  All the while,
with the near certainty that sources will claim the protections of part
70’s permit shield for interpretations that they alone reach,
including blatantly improper interpretations.  In order to get to the
heart of this objection, it is useful to remind EPA of one primary
reason behind enactment of the Title V operating permits program.

	One central Congressional purpose behind the Title V operating permits
program in the 1990 Clean Air Act Amendments was to provide for a single
operating permit that would assure compliance with all air requirements
applicable to a source.  The adoption of the operating permits program
represented a break with the past, where sources had made isolated
decisions after sorting through regulations and interpreting them
unilaterally, to determine what federal air requirements applied to
them.  Not infrequently, there were errors in interpretation, failures
to realize that certain regulations applied (and others did not), and
sometimes outright circumvention.  The operating permits program was
adopted, in part, to bring oversight and involvement by EPA, the State
permitting authority, neighboring States, and the public to Clean Air
Act applicability determinations.  The Title V permit, with its
issuance, modification, reopening and renewal opportunities, is the
forum for this oversight.  In return, source owners and operators are
given “permit shields” as an equitable assurance that their
compliance with the applicability determinations that have been overseen
by these parties will not be held against the source if it later turns
out these determinations are in error.  See CAA § 504(f).

	The Draft Guidance and its promotion of ROPs turn this sound structure
on its head.  What ROPs represent is a repudiation of the oversight and
involvement in applicability determinations exercised by EPA, permitting
authorities, and the public, and a return to the pre-1990 Amendments’
unilateral applicability decisions made by sources, under the guise of
so-called “replicable operating procedures.”  The apparent ambitions
of the Draft Guidance with respect to ROPs are far more grand and, we
submit, far more damaging than mathematical equations.  Consistent with
other flexibilities in the document that have the effect, if not the
design, of reducing the role of the public in the air permitting
programs, the Draft Guidance invites sources to develop non-regulatory
ROPs whose very purpose is to cut the public (and EPA and permitting
authorities) out of future applicability determinations.

What is even more astonishing, and thoroughly unlawful, is the
suggestion in the Draft Guidance that permitting authorities and sources
may rewrite federal regulations (and SIP-approved regulations) through
ROPs established during Title V permitting processes.  Permitting
authorities are required to create terms and conditions in Title V
permits that assure compliance with applicable requirements.  See CAA §
502(a); 40 CFR § 70.6(a)(9).  And as we discuss later in these
comments, permitting authorities are required – with one narrow
exception – to create permit terms assuring compliance with
requirements that actually apply to the source at the time its permit is
issued or modified.  See infra section V.C

But the Draft Guidance not only countenances, it encourages permitting
authorities (and sources) to establish in permits a supposed future
process “for determining the applicable requirements and the resulting
compliance obligations for each change.”  Draft Guidance at 20.  There
is nothing in the Clean Air Act or part 70 regulations that authorizes
permitting authorities to hand over to sources alone the responsibility
to determine which applicable requirements will apply to them in the
future, thereby obviating the need to modify permits in accordance with
the regulations, and thereby circumventing the oversight roles granted
to States, EPA, and the public.  The Draft Guidance, of course, fails to
point to any legal authority whatsoever for this remarkable proposition.
 Nor does the Draft Guidance point to a single applicable requirement
that expressly provides for ROPs and, as noted above, the document does
not indicate which, if any, provision of any applicable requirements
represents a ROP.

Finally, countenancing a process for informal and error-prone
“applicability determinations” through the invention of ROPs is
particularly harmful, given the likelihood that sources will assert
their decisions are entitled to the part 70 permit shield.  The permit
shield may cover proper alternative operating scenarios under part 70,
see § 70.6(a)(9)(ii), when those scenarios are fully known and
specifically identified, when the applicable requirements are clear and
certain, and when the applicability determinations are overseen by the
public.  Even if the public and permitting authorities and EPA review a
purported ROP, application of that ROP in the future will not be free of
judgment, unilaterally exercised by sources, of course, so any claim to
a permit shield would fly in the face of its appropriate availability. 
At any rate, part 70 does not grant sources the permit shield as a
matter right with respect to alternative operating scenarios, id., and
EPA’s final part 70 rule should make clear that the permit shield is
not available for any limited form of advance approval the Agency might
adopt.

	EPA’s notion of ROPs ends up being as indeterminate and unhelpful as
former United States Supreme Court Justice Stewart’s infamous
formulation of obscenity: EPA will know it when it sees it.  This is not
the proper way to employ “guidance,” not the way to conduct
environmental law and policy generally, and certainly not the way to
accomplish the rewriting of environmental regulations.  We reject the
implicit assertion in the Draft Guidance that some or many applicable
requirements are “replicable” in the manner defined in the document.
And we reject the proposition that permitting authorities may rewrite
federal regulations through ROPs that are developed during a permit
process, and that are designed to eliminate the rightful role of the
public, EPA and State permitting authorities in overseeing applicability
determinations under the Title V permits program.

			4.	Minor NSR and Major NSR consequences.

	We need not devote too much attention to specific applicable
requirements and the deleterious effect on public participation from
advance approvals, because advance approval of any applicable
requirement short changes public participation.  The applicable
requirements represented by the minor and major NSR permitting programs,
however, are particularly simple and compelling examples of the manner
in which advance approvals weaken public participation.  These programs
are built upon contemporaneous review opportunities for government
agencies and the public.  These opportunities allow an awareness of
real-time air quality impacts; the ability to fine tune permit
requirements to local and regional air quality; the ability to respond
to community concerns when they will arise and matter, not many years in
advance; and the ability to make the most up-to-date pollution control
technology determinations.  Indeed, advance approvals are fundamentally
incompatible as a legal and policy matter with technology-forcing
requirements like BACT, LAER, and state BACT.  Any pretense that these
pre-construction permitting requirements can be advance approved up to
five years before changes will occur flies in the face of the purposes
these programs are designed to serve, the way they have been implemented
for decades, and the basic legal authority governing their
implementation.

	5.	Process for establishing advance approvals.

	The Draft Guidance explains that advance approvals may be established
during permit issuance, renewal, or modifications processes, or during
one of these processes in conjunction with a separate NSR approval
process.  Draft Guidance at 28.  As the document later admits, this
would allow advance approvals to be established in permits pursuant to
part 70 minor permit modifications.  Minor permit modifications under
the current part 70 rules do not provide an opportunity for public
participation.  See 40 CFR § 70.7(h).

As EPA is painfully aware, the minor permit modification procedures
under the current part 70 regulations do not provide for public
participation, in direct violation of the Clean Air Act, due to
Presidential intervention on industry’s behalf to overrule EPA during
the prior Administration.  The Natural Resources Defense Council (NRDC)
and other environmental organizations challenged these regulations,
raising among other issues the rules’ failure to require public
participation for minor permit modifications.  This litigation has been
held in abeyance, however, so that stakeholder discussions could
proceed.  Following lengthy discussions among stakeholders, EPA under
this Administration has demonstrated a commitment to reinstating the
statutorily required public role during Title V permit revisions.  This
is revealed in 1994 and 1995 part 70 proposals, and EPA’s recent draft
final part 70 amendments and associated stakeholder discussions.  

It is unconscionable for EPA to be proceeding with a rulemaking on its
way to reinstating Title V public review opportunities -- while at the
same time pursuing an unfounded guidance approach for eliminating future
public review through the mechanism of advance approvals -- against the
backdrop of current rules that EPA acknowledges would allow advance
approvals to be established without public review. Thus, public
participation is eliminated coming and going.  This is particularly
shocking considering that EPA fought to preserve public participation
within the prior Administration and considering that the present
Administration has pursued – and appears to be still pursuing --  the
sound and required course of returning public review to Title V permit
revisions.

The Draft Guidance is left to weakly pleading that public participation
be provided for in advance approvals, implicitly acknowledging that this
cannot be required and surely realizing that companies will pressure
state permitting authorities to establish sweeping advance approvals in
their permits through part 70 minor permit modifications without
unwelcome public oversight.  Draft Guidance at 29.  The Draft Guidance
also attempts to find some faint positive for public participation from
advance approvals:

A benefit of advance approvals is that they can provide the public with
a more comprehensive and certain understanding of the source’s
operation and the type and amount of changes that a source anticipates
making during the 5-year term of the permit.  This provides an
opportunity for the public to comment on the proposed future changes
more efficiently and knowledgeably than on an ad hoc basis while
providing a greater degree of certainty for you, the public, and the
source in understanding the overall environmental impact of the
anticipated changes.

Id. at 28-29.  These arguments are seriously misguided and approach the
misleading.  

	This one-shot 5-year opportunity for public participation promoted by
the Draft Guidance comes at the expense of the contemporaneous permit
review opportunities available under the minor NSR, PSD, major NSR, and
Title V permit programs. These more meaningful opportunities provide the
public the ability to evaluate the actual and contemporaneous scope,
details, emissions impact, and technology requirements of new pollution
activities, in marked contrast with the speculative forecasting promoted
by the Draft Guidance.  These more meaningful opportunities, available
under existing law, would be eliminated or reduced by the guidance.  We
note with dismay that the apologia at pages 28-29 of the Draft Guidance
is the only meaningful discussion of public participation in a document
that weakens public participation so consistently.  The Draft Guidance
avoids entirely any discussion of the sweeping reductions, elimination
and weakening of opportunities for public participation (discussed in
these comments), while faintly promoting inadequate substitute
opportunities for public participation in two sentences out of a 54-page
document.  These public participation objections alone warrant
abandonment of the Draft Guidance.

			B.	Expedited Permit Revisions

In promoting advance approvals, the Draft Guidance bemoans the
unavailability of public participation for Title V minor permit
modifications, pursuant to which the document admits sources may
establish advance approvals.  Draft Guidance at 29; supra § II.A.5. 
(Of course, it is only the Draft Guidance’s invention of advance
approvals that would result in this situation, so this sentiment must be
received with considerable skepticism.)  Then, incredibly, the Draft
Guidance promotes a “flexibility” whose very unlawful purpose is to
convert Title V significant permit modifications (involving public
review) into minor permit modifications (not involving public review). 
Just as incredibly, the document promotes this particular
“flexibility” – “expedited permit revisions” – on the basis
of inadequate implementation of advance approvals, another
“flexibility.”  Draft Guidance at 35-37.

The Draft Guidance describes expedited permit revisions as follows:

There may be situations where some relatively minor compliance details
for a future project are not known with sufficient specificity to allow
an advance approval to be authorized in its entirety.  Where such a
change can be advance approved to the extent that only these minor
compliance details are missing, it may be possible to add these details
later through the minor, rather than the significant, permit
modification process.

Id. at 35.  What this is saying is that an advance approval that is
unauthorized even under the groundrules invented by the Draft Guidance,
may nonetheless justify further circumvention of the part 70
regulations’ modification provisions when the permit is eventually
modified to assure compliance.  As there is no authority for advance
approvals under part 70, see infra § V. B,, there is certainly no
authority for incomplete, inadequate advance approvals.  Nor is there
authority for so-called expedited permit revisions.  The Draft Guidance,
of course, points to no authority.

	The role of this “flexibility” reveals an even more alarming aspect
of the Draft Document.  The document reveals an awareness of the
inherent fatal flaw of advance approvals as a policy and legal concept:
they will “not [be] known with sufficient specificity to allow an
advance approval to be authorized in its entirety,” which should be
read, “to be authorized at all.”  Our comments discuss the multiple
ways in which this will undermine the role of public participation,
practical enforceability, and the purposes of the NSR and Title V
permitting programs.  So “expedited permit revisions” represent the
Draft Guidance’s “creative” solution to that problem.  It is a
solution based upon counseling circumvention of the significant permit
modification regulations, and thus no lawful solution at all.

	III.	Adoption of the Draft Guidance Would Subvert the Promises of
EPA’s Project 		XL, and Demonstrate Abandonment of EPA’s Commitments
to Publicly 			Evaluate and Quantify Superior Results of Reinvention
Innovations Before 		Adopting Them Program-Wide

	A.	Project XL

	EPA’s Project XL was established as a reinvention initiative based
upon a national pilot program to test approaches designed to achieve
“superior environmental performance” as compared to “existing and
reasonably foreseeable future regulatory requirements.”  See generally
60 FR 27282 (May 23, 1995); 62 FR 19872 (April 23, 1997).  Under Project
XL, facility-specific projects are undertaken in order to test
innovative approaches to environmental protection, to generate
experiences and quantifiable data of environmental results, to evaluate
the innovative approaches tested therein according to core XL criteria,
to compare the results on with existing and reasonably anticipated
future regulations, and to conclude whether a given experiment was
successful or not.  Id.  Successful outcomes were to be considered for
program-wide adoption, following any necessary changes to underlying
regulations or statutes.

EPA’s air programs have participated in a number of XL projects.  Two
of the primary innovations tested in XL projects under the Clean Air
Act’s permitting programs are advance approvals under Title V and PALs
under NSR.  A partial list of the ongoing and developing XL projects
that are still testing advance approvals and PALs follows:

Advance approvals: Andersen Corporation XL Project, Final Project
Agreement (FPA), § II.E.1 (June 30, 1999)
http://www.epa.gov/projectxl/andersen/page1.htm; Imation XL Project,
FPA, § I.C, II.A.5 (Dec. 20, 1999)
http://www.epa.gov/projectxl/imation/page1.htm.

PALs: Andersen Corporation XL Project, FPA § II.E.1; Imation XL
Project, FPA, §§ I.C, II.A.1; Merck XL Project, FPA § (Jan. 16, 1997)
http://www.epa.gov/projectxl/merck/page1.htm; Intel XL Project, FPA
(Nov. 19, 1996) http://www.epa.gov/projectxl/intel/page1.htm.

EPA has committed to evaluating the successes and failures of XL
projects involving Clean Air Act permits, logically, at the end of the
Title V permit’s five-year permit term.  For example, in the Imation
XL Project’s FPA, EPA noted:

At the conclusion of the five year term of this project, a more
comprehensive Project XL evaluation will examine the extent to which
both short-term and long-term goals have been achieved.  This evaluation
will also examine the appropriateness and success of specific components
of the project, such as the pollutant-specific PAL and emission cap
levels, pre-approving new equipment under an alternative operating
scenario, the capture and control efficiencies, the overall
environmental benefit/pollution reduction, the reduction of compliance
costs and burdens, the empowerment of local stakeholders and the level
of community participation, any regulatory or policy flexibilities
granted, and other elements of the XL project. The results of this
review will help assess whether innovations piloted by this Project are
viable alternatives for other sources. It will also provide a basis for
suggestions to improve both the FPA (and title V permit) upon renewal,
and the Agency’s overall XL Program.

Imation FPA, § III.L, at 39.  The importance of the evaluation period
for XL projects occurring at the end of the full five-year period is
obvious.  This allows the innovations to be tested in practice over the
course of an ordinary Title V permit term.  The production cycles, new
construction and modifications, and resulting emissions fluctuations
that occur over a longer period of time may be evaluated.  In turn, EPA
and state permitting agencies will have more emissions data to determine
whether superior environmental results are being achieved, and to
“[quantify] data [that] is generated from the innovation.”  EPA
Office of Policy and Reinvention, Project XL 1999 Comprehensive Report
(Oct. 1999), at 74, 75 (Figure 2).  EPA and the States will have the
opportunity to conduct regular inspections and compliance audits over
time to assess the practical enforceability of the flexibilities and the
sources’ compliance with the innovations.  There will be real-world
opportunities for the public to compare public participation under an XL
construct over the course of a Title V permit term, with the more
frequent opportunities for public participation available under
otherwise applicable regulations.

	EPA’s first XL project involving any one of the flexibilities
described in the Draft Guidance will not be completed until December 31,
2001.  The other XL FPAs noted above are not close to completion, with
several having just begun recently and their Title V permits issued only
very recently.  Obviously, then, these XL projects have not run their
course, to allow the Agency to evaluate completed projects.  Consistent
with this reality, available information on EPA’s web site does not
indicate that the Agency has completed its evaluation of any of the XL
projects noted above (or any XL projects, for that matter, to our
knowledge) with respect to how well they – and the flexibilities
tested therein -- do or do not meet the core XL criteria.  And
completion of projects and project evaluations obviously must precede
transfer of successful innovations (but not unsuccessful ones) to
program-wide adoption.

B.	Pollution Prevention in Permitting Program (P4)

The Draft Guidance announces that the “insights” on which the
document is based have “largely” come from ongoing pilot permitting
projects known as the “pollution prevention in permitting program
(P4).”  Draft Guidance at 3.  EPA’s web site describes P4 as a
program that “seeks to incorporate operational flexibility and
pollution prevention into permits.”  As an initial matter, the Draft
Guidance does not specify which of the “flexibilities” contained
therein are or are not based upon P4 project experience.  And because
the Draft Guidance is only “largely” based upon even these pilots,
the document also does not indicate on what possible basis certain
flexible approaches are justified if the Agency has no experience with
them.

The far bigger problem, however, is that the Draft Guidance suggests
that EPA move forward with program-wide adoption of the same innovations
that are still being tested, and in some cases barely underway, in
Project XL.  The Draft Guidance claims that its “flexibilities” are
appropriate for program-wide adoption by reference to innovations under
P4 projects that appear to differ from XL projects only in name.  We
cannot believe, however, that the Agency would subvert the integrity of
Project XL in this fashion through the manipulation of nomenclature. 
Adoption of the Draft Guidance would, however, subvert the relevance and
meaningfulness of the ongoing XL projects identified above, undermine
the very integrity of Project XL, and throw into question the
credibility of EPA’s reinvention efforts generally.

It does not appear from EPA’s web site or other published materials
that P4 permits are selected based upon Project XL’s more rigorous
core criteria.  See supra note 23.  In addition, it is not clear whether
P4 permits will also involve public evaluation of successes and
failures, and commitment to quantification of superior environmental
results before program-wide adoption, as in XL.  If the Draft Guidance
is any indication, apparently not.  As we understand them, P4 permits
are not noticed in the Federal Register for public comment; P4 permits
do not invite or involve broad opportunities for public participation by
national, state, and regional environmental organizations in the same
way that Project XL does; and P4 permits do not appear to undertake
site-specific rulemakings to authorize the very same innovations for
which the Agency adopts site-specific rulemakings in XL Projects.

While it is abundantly clear that P4 permits confer many of the very
same “flexibilities” upon companies as Project XL, it does not
appear from EPA’s web site materials that P4 permits commit to
superior environmental results.  Even more disturbing is a recent report
by the EPA Innovations Task Force, entitled “Aiming For Excellence.”
 See supra note 3.  In the midst of “key actions” for program-wide
adoption of environmental innovations in the report, there appears the
startling indication that EPA is abandoning the core XL commitment to
“superior environmental performance” in exchange for a relaxed
standard of “equal” environmental performance.  Action 7 establishes
the following objective for “flexible air permitting”:

Based on our experience in pilot projects, we will identify those
approaches that increase permitting flexibility while providing equal or
better levels of environmental and public health protection, provide
incentives for pollution prevention, and ensure public participation in
permitting decisions.

Aiming for Excellence, supra note3, at 58 (emphasis added).  One might
be prepared to chalk up this relaxed performance standard to some
separate, unknown Agency pilot projects (while still questioning why
these separate projects do not undermine Project XL).  But then one
reads the Background paragraph that immediately follows this passage:

For the past 6 years, we have looked for ways to provide greater
flexibility under the air permit program without sacrificing
environmental protection.  We have done this in connection with ongoing
rule development, and through a number of experimental pilot projects in
Project XL and the “Pollution Prevention in Permitting Project”
(P4).

Id.  

This Background passage inexplicably associates Project XL with these
relaxed environmental performance standards, suggesting that Project
XL’s commitment to superior environmental performance has been not so
subtly downgraded to a commitment not to “sacrifice environmental
protection.”  Id.  It is evident that this is not an isolated,
inadvertent reference to Project XL, since the entire “Aiming for
Excellence” report makes clear that it is rooted as much in Project XL
“experiences” as in other Agency initiatives (like P4).  

As we have noted previously, however, nomenclature is not the point. 
What matters is whether the Agency is moving forward with program-wide
adoption of “flexibilities” – like proposed adoption of the Draft
Guidance – that would subvert Project XL, that have not been proven in
practice to the public, that have been held only to a relaxed
environmental performance standard, and that dramatically weaken the
role of the public in permit decisions.  See id. at 59; supra at 16. 
Suggesting that this is indeed the case, the Draft Guidance alarmingly
reflects these relaxed performance standards.  Draft Guidance at 1
(claiming “more operational flexibility without sacrificing
environmental protection,” and “equal or better environmental
protection.”).   

It would be one thing for EPA to have established a shadow process in P4
to replicate many of the same “innovations” and “flexibilities”
as XL projects, with none of XL’s more rigorous elements and
commitments.  Such a parallel process alone would be cause for question
and potential concern.  But it would be another matter entirely for EPA
to rely upon this shadow process to supersede and subvert Project XL
itself, to dispense with the Agency’s testing and evaluation
commitments, to relax the commitment to superior environmental
performance, and to jump straight to program-wide adoption.

	EPA released the Draft Guidance for public comment unaccompanied by any
factual support for or substantiation of its many explicit and implicit
claims.  The Agency inexplicably failed to establish an administrative
docket for the Draft Guidance, despite the document’s claim that it is
based upon experiences with P4 permits and demonstrated benefits.  Draft
Guidance at 3-4.  With Project XL, at least, based upon prior
commitments made by EPA, there will be an open and honest evaluation of
the successes and failures of these projects after they have run their
course, with superior environmental results quantified, and a rigorous
comparison between results achieved under these projects and results
achieved under other applicable background regulations and reasonably
foreseeable future regulations.  Release of the Draft Guidance
represents an utter failure by these standards, and apparently there is
no intention for P4 to meet these standards of rational justification
either.  The even more fundamental problem with all of this, of course,
is that the Agency should be proceeding under rulemaking to adopt the
Draft Guidance’s authorizations and requirements, as we note below, in
which case the Agency would be required to develop a complete
administrative record to justify and defend the rationality of its
decisions.  See section V infra.

	In view of the absence of any factual support accompanying the Draft
Guidance or any other obvious substantiation of its claims, NRDC
submitted a Freedom of Information Act (FOIA) request to EPA concerning
the Draft Guidance on August 23, 2000.  As of the date of these
comments, the Agency has not provided any documents requested by this
FOIA submittal.  We attach a copy of this FOIA request to these comments
for your information.

	The NRDC FOIA request is directed in large part at discerning EPA’s
empirical, policy, and legal basis for the claims and conclusions set
forth in the Draft Guidance.  In the absence of an administrative docket
for the Draft Guidance, this appears to be the only way for the public
to evaluate whether the Draft Guidance is supported by factual evidence,
a sound policy basis, legal justifications and, ultimately, rational
decisionmaking.  Among other things, NRDC has requested: all Project XL
and P4 permits that EPA considered in developing any aspect of the Draft
Guidance; all documents discussing whether these permits or the
“flexibilities” in the Draft Guidance achieve equal, superior, or
less environmental protections, including resulting pollution prevention
achievements; all documents discussing the effects of these permits and
the Draft Guidance flexibilities on public participation; all documents
concerning EPA inspections, audits, or reports directed at EPA’s
experience with the permits that are the basis for the Draft Guidance;
and all documents discussing the practical enforceability of these
permits or the Draft Guidance flexibilities.  We are dismayed that EPA
has failed to produce the requested documents within the
statutorily-required time frame in order to assist with the submission
of these comments, but we eagerly await the Agency’s responses
nonetheless.

C.	Call for EPA responses

	In a November 3, 1995 “Joint Statement on the Clinton
Administration’s Project XL Announcement,” a broad coalition of
environmental organizations expressed support for efforts by the
Administration “to improve the environmental performance of programs
that protect public health and our air, water, and land.”  Joint
Statement at 1.  This Joint Statement also underscored “several key
features that are essential to the success of Project XL”, including:

the achievement of superior environmental results that assure worker
safety and environmental justice when the project is implemented; and

an effective stakeholder process that provides for participation by
local affected communities and workers and by groups with interests in
the environmental, health and community issues affected by proposed
projects, and that operates by broad consensus.

EPA’s Project XL has been founded upon a promise – and therefore an
expectation by the public – that XL experiments would be rigorously
tested and allowed to run their course; that open and honest evaluation
of these experiments would be conducted, with respect to any superior
environmental results, pollution prevention achievements, shifting of
risk burdens, and impacts on enforceability, public participation, and
regulatory flexibility, for example; and that EPA would publicly
quantify any superior environmental results and identify any resulting
drawbacks and failures.  For the reasons explained in these comments,
the Draft Guidance raises serious doubts as to whether these
expectations will be met.

	Should the Agency proceed, over our strong objections to issue the
Draft Guidance, we hereby call upon EPA to:

(1) explain publicly why adoption of the Draft Guidance would not
undermine the relevance and meaningfulness of the XL projects identified
above as genuine experiments designed to test innovations, undergo
public analysis and evaluation, and qualify for program-wide adoption
only upon clear demonstration of superior results;

(2) explain why adoption of the Draft Guidance would not undermine the
promises, objectives and core criteria of Project XL as set forth by EPA
in numerous statements and publications;

(3) repudiate any implications that the need for superior environmental
performance in exchange for increased regulatory “flexibilities” has
been relaxed to the mere need to provide “equal” levels of
environmental and public health protection, under Project XL or any
other EPA reinvention initiative; and

(4) reaffirm the Agency’s commitment to testing XL projects to
completion, publicly evaluating the successes and failures of these
projects according to the core XL criteria, and quantifying any superior
environmental results prior to program-wide adoption of only
demonstrably successful innovations.

 

IV.	The Draft Guidance Undermines the Practical Enforceability of the
NSR and 	Title V Permitting Programs                                    
                                         

	In other sections of these comments we devote considerable attention to
the extent to which adoption of the Draft Guidance would weaken the
general enforceability of the NSR and Title V permitting programs.  For
example, the chaos that would be wrought to Title V permits as a result
of the open-ended speculations of advance approvals would make these
permits greatly more difficult to enforce.  Replicable operating
procedures would turn over to sources the unilateral responsibility to
make applicability determinations, potentially shielded by the part 70
permit shield no matter how improper those interpretations, and
effectively foreclosing enforcement over those unlawful interpretations.
 In this section of our comments we address particular concerns over
practical enforceability and compliance assurance measures raised by the
Draft Guidance.

	Before turning to these individual topics, however, it is worth
singling out a particular passage in the Draft Guidance that contains
what strikes us as improper coded promises to sources and permitting
authorities that follow the guidance, notwithstanding what federal rules
and EPA-approved state rules require.  We specifically call upon EPA to
either clarify this passage in a satisfactory manner or to repudiate it
entirely.  In a passage discussing advance approval of applicable
requirements arising out of SIPs, the Draft Guidance states: 

While some applicable requirements appear to be amenable to advance
approval, it may not be easy and/or appropriate to advance approve those
which require case-by-case decisions and significant, contemporaneous
judgments.  We will in this instance grant reasonable deference to you
in interpreting your own rules, provided in part that any resulting
interpretations are plausible within the language of the approved SIP. 
Where a concern arises as to whether this guidance is consistent with
your EPA-approved rules, we will work with you to make this
determination.  Sources should be aware, however, that our exercise of
discretion does not shield them from citizen suit.

Draft Guidance at 14.  There appear to be two levels of code operating
in this passage.

	First, the passage makes reference to the difficulty and
inappropriateness of advance approving certain applicable requirements
arising out of SIPs, those that “require case-by-case decisions and
significant, contemporaneous judgments.”  This would clearly include
all SIP-approved preconstruction permitting programs, namely minor NSR,
major NSR, and PSD, and potentially other requirements like RACT.  The
difficulty and impropriety of advance approving these requirements is
obvious, since they require air quality impacts review and often
technology reviews (e.g., BACT, state BACT), both contemporaneous with
the construction activity.  This is the way these programs are written
and the way they are administered today, reflecting the shared
understanding when they were approved into SIPs and the concept of
advance approvals was not a glimmer in anyone’s eye.

	In light of this, the passage’s promise to grant “reasonable
deference” to “plausible” State interpretations amounts to a coded
Agency pledge to accept marginal SIP interpretations finding applicable
requirements like those above not to require contemporaneous review. 
States and sources will surely get this message, that when faced with
applicable requirements that by their nature cannot be advance approved,
EPA intends to look the other way in order to promote the broad adoption
of advance approvals.   

	Second, with respect to the last sentence of this passage, we can only
presume – and sources certainly will -- that the “exercise of
discretion” referred to here is EPA’s enforcement discretion, as
this reference is coupled with an invocation of citizen suit enforcement
authority.  In the context of this passage, in turn, the promise of
enforcement discretion plainly refers to EPA’s acceptance of
“plausible” interpretations about the acceptability of advance
approvals.  This clearly represents a coded promise of enforcement
amnesty to sources that seek and obtain dubious advance approvals.  This
represents an abuse of any appropriate enforcement discretion held by
government.  Not only because the grant of amnesty is not linked to any
particular known facts that would warrant the exercise of discretion,
but because the promise of amnesty is so clearly linked to promotion of
an unlawful guidance.  The Draft Guidance “flexibilities” thus not
only weaken programmatic practical enforceability, the document’s
self-promotion promises to abandon enforcement entirely.  We trust that
EPA cannot and will not support this.

A.	The Draft Guidance weakens practical enforceability 

The “replacement conditions” flexibility conflicts with EPA 

       policies on practical enforceability and undermines State minor  
   

       NSR programs.

	The Draft Guidance promotes a “flexibility” called “replacement
conditions” whose purpose is the replacement of operational
restrictions and short-term emissions limits designed to ensure
practical enforceability with a more “flexible” approach based upon
“replicable” formulae.  Draft Guidance at 7-10.  What this approach
really replaces is practical enforceability under EPA guidance
identified in the Draft Guidance.  Id. at 8  (“Guidance on Limiting
Potential to Emit in New Source Permitting,” Terrel E. Hunt, Office of
Enforcement and Compliance Monitoring, and John S. Seitz, Office of Air
Quality Planning and Standards (June 13, 1989) (June 1989 Guidance)).

	This EPA guidance recognized that blanket emissions limits alone are
not practically enforceable in the manner required by governing case
law.  See June 1989 Guidance at 5-6 (discussing United States v.
Louisiana-Pacific Corp., 682 F. Supp. 1122 (D. Colo. 1987)), and 682 F.
Supp. 1141 (D. Colo. 1988.))  Practically enforceable permits must
contain short-term production or operational limitations, which must be
enforceable independently of one another, in addition to emission
limitations.  Id.   The June 1989 Guidance includes an exception to this
for volatile organic compound (VOC) surface coating operations, which is
the issue that appears to be the target of the replacement conditions
“flexibility” in the Draft Guidance.  See June 1989 Guidance at 8;
Draft Guidance at 7-10.

	The June 1989 Guidance provides that where permitting authorities
determine that “operating and production parameters (e.g., gallons of
coating, quantities produced) are not readily limited due to the wide
variety of coatings and products and due to the unpredictable nature of
the operation, emission limits coupled with a requirement to calculate
daily emissions may be used to restrict potential to emit.  The source
must be required to keep the records necessary for this calculation,
including daily quantities and the VOC content of each coating used.” 
 June 1989 Guidance at 8.  The Draft Guidance advocates the replacement
of daily calculations, which allow for greater practical enforceability,
with a rolling 12-month average and verification on a monthly basis. 
Draft Guidance at 9-10.  The document says that the replacement
conditions in the lithographic printer case examples given will “allow
the source to prorate monthly data to compute daily data,” id. at 10,
but this is not explained further and it is unclear how this would
calculate actual daily emissions as accurately as the expectation of the
June 1989 Guidance.

	The Draft Guidance also takes it upon itself to criticize State minor
NSR permitting practices that employ prohibitions or limits on the VOC
content of coatings or solvents.  Draft Guidance at 7.  EPA itself, of
course, elsewhere agrees that regulating the VOC content of coatings is
effective and appropriate.  See, e.g., 63 FR 48792, 48848 (Sept. 11,
1998) (40 CFR § 59.400).  We are perplexed why it is incumbent upon EPA
in the Draft Guidance to counsel State permitting authorities on ways to
weaken the practical enforceability of permit terms in State-issued
minor NSR permits.  Any States that developed air permits with these
conditions ostensibly did so out of a belief that such limits and
restrictions are easier to verify, monitor, report and enforce.  Perhaps
it was because these practices are more consistent with EPA’s own
guidance on practical enforceability, which recognizes the need for
short-term limits and associated verification methods in order to assure
continuous compliance.  In that every example and discussion in this
section of the Draft Guidance relates to VOC-containing coating and
solvent usage and lithographic printers, this raises the disturbing
question whether members of the printing industry have been lobbying EPA
to relax more rigorous emissions limits established in State minor NSR
permits.  This in turn raises the even more disturbing question of
whether the Draft Guidance represents EPA’s response to any such
efforts.

The vague and convoluted nature of the Draft Guidance will result in 

       misinterpretation and abuse of  the NSR and Title V Programs.

	We are surely not alone in believing the Draft Guidance to be one of
the most convoluted, vague, question-begging, and jargon-filled examples
of  “guidance” we have seen from any government agency.  For an
agency that claims to have embraced “plain language” in its public
documents, one wonders whether the Draft Guidance is an example of how
not to write plainly in a “Before and After” exercise.  The result
is not simply confusion, which approaches incoherency in places.  The
result is also a document that calls itself “guidance” for the NSR
and Title V permitting programs that will only degrade the proper
implementation and practical enforceability of those programs.

	Clarity and certainty of legal obligations are necessary for compliance
by sources and practical enforceability by government agencies and
citizens.  The Draft Guidance threatens each of these objectives. 
Stylistically, the document confuses regulatory obligations and fails to
clarify any regulation for us, that is to the extent one even manages to
figure out which regulatory provision is being addressed. 
Substantively, the document is a deplorable mix of non-regulatory
inventions, misinterpretations, coded hints, and unanswered questions. 
These characteristics can only undermine practical enforceability,
redounding to the benefit of polluters and to the detriment of public
health and the environment.

	If EPA even considers adoption of the Draft Guidance, we request that
Agency management at the highest levels simply read the document, to see
if they can understand it, and to see if they believe it will improve
Clean Air Act compliance and practical enforceability

B.	EPA must require continuous, direct emissions monitoring to assure 
continuous compliance with emissions caps                               
       

	When EPA adopts regulations authorizing PALs, we agree with the
recognition in the Draft Guidance that monitoring must be required that
will be sufficient to “quantify emissions with certainty.”  Draft
Guidance at 37.  Any less rigorous and certain form of monitoring will
be incapable of providing the careful and continuous accounting of
emissions that are necessary to track emissions under a PAL. 
Accordingly, we commend EPA for this recognition.  And we urge EPA to
remain resolute against the expected onslaught of industry complaints
about the need for rigorous monitoring and strong emissions
quantification measures.  Unfortunately, some monitoring accepted by the
Draft Guidance for purposes of assuring compliance with “flexible”
permits falls well short of any plausible ability to quantify emissions
with certainty.

	In the first section of the Draft Guidance addressing specific types of
monitoring claimed to be adequate to “assure the integrity of an
emissions cap,” the Draft Guidance already starts to back away from
this assurance by the time the end of the very first sentence is
reached: “While no one monitoring method or type of monitor is
appropriate for every situation, we require use of CEMS or their
equivalent, whenever either is feasible.”  Draft Guidance at 38.  The
Draft Guidance does not explain what “feasibility” has to do with
the need to quantify emissions with certainty in order to assure the
integrity of an emissions cap.  The document effectively suggests that
infeasibility will win out if these objectives are at odds, in which
case the conclusion should be that an emissions cap or other
flexibilities are unavailable.  Somehow, one does not get the impression
that this is the conclusion shared by the Draft Guidance, and it is a
foreboding entrée into the topic of compliance assurance.

	Following an all too brief and uninformative discussion of continuous
monitoring systems, including a passing suggestion that is too
outlandish for serious attention, the Draft Guidance turns to other
forms of monitoring that it calls “CEMS equivalent (i.e., they provide
reliable and timely data which are used to determine compliance with the
emissions cap).”  Id. at 39.  This discussion is all too brief as
well.  We note our dismay that the Draft Guidance’s discussion of
compliance assurance measures, like the document’s earlier discussion
of public participation, is given such short shrift in comparison to the
overwhelming amount of attention and “creativity” devoted to the
polluter “flexibilities” and “streamlining.”  We are dismayed
further that this represents our assessment of the document’s relative
priorities.

Nothing more is said about so-called “CEMS equivalent” monitoring,
for example, than the following: “sources may use certain
non-instrumental methods, such as equations for mass balance or
stoichiometric calculations or records of fuel or raw material purchases
or usage.”  Id.  No effort is made to explain or justify why these
forms of monitoring are capable of quantifying emissions with certainty,
sufficient to assure the integrity of emissions caps, and our experience
in some cases is directly to the contrary.  While we applaud the
Agency’s position that CEMS or CEMS-equivalent monitoring is required,
we reject the claim that mass balance approaches should be regarded as
CEMS equivalent.  We ask the Agency to provide specific analytical
information, if any exists, to support this claim and to provide us an
opportunity to comment on any information that the Agency claims is
relevant to this proposition.  More generally, we ask the Agency to
provide information supporting the proposition that the identified forms
of monitoring are CEMS equivalent.

	The Draft Guidance next allows “emissions factors” to be used on an
interim basis for purposes of determining compliance with flexible
permits and PALs in particular.  EPA’s own publications demonstrate
that emissions factors are not remotely up to this task.  In fact, EPA
recommends against the very usage promoted by the Draft Guidance:

Use of these factors as source-specific permit limits and/or as emission
regulation compliance determinations is not recommended by EPA.  Because
emission factors essentially represent an average of a range of emission
rates, approximately half of the subject sources will have emission
rates greater than the emission factor and the other half will have
emission rates less than the factor.  As such, a permit limit using an
AP-42 emission factor would result in half of the sources being in
noncompliance.

AP-42, Introduction at 2.  This recognition by EPA, echoed in numerous
other Agency materials, demonstrates that usage of emissions factors in
the manner allowed by the Draft Guidance would be arbitrary.

	The Draft Guidance itself appears to reflect some understandable level
of discomfort with emissions factors, however, and accordingly
“suggests” that emissions factors may be used for compliance
determination purposes “provided that . . . the emissions factors are
appropriately adjusted to avoid future compliance issues.”  Draft
Guidance at 39 (suggesting adjustment by a factor of two).  While the
use of the word “provided” might indicate a mandate, several
sentences later the Draft Guidance makes clear that any adjustment is a
simple suggestion.  Id.  But of course, as discussed below (§ V), this
suggestion can be freely ignored, and will be ignored in the rush to
adopt PALs with little concern about accurate emissions factors and
certain quantification methods.  Even as a suggestion, however,
adjustment by a factor of two is a startling statement by EPA about the
significant room for error in the methodology that the Draft Guidance
would allow to quantify emissions “accurately” under a PAL.

	There is something even more remarkable about this discussion.  In two
separate places, there are initially puzzling references to enforcement
consequences from the use of emissions factors.  Id. (discussing
emissions factor adjustment to “avoid future compliance issues” and
“source [assumption of] the risk that the factors may be
erroneous.”).  Putting these references together with the document’s
recommended adjustment by a factor of two, along with AP-42’s
recognition that “a permit limit using an AP-42 emission factor would
result in half of the sources being in noncompliance,” the references
to enforcement consequences become more clear.  What the Draft Guidance
appears to be suggesting and acknowledging is that the use of emissions
factors, which the document accepts as a compliance demonstration
method, will result in significant error and serious risk of
noncompliance by sources.  For those that recognize emissions factors to
be nothing more than averages, this outcome is perhaps unsurprising. 
But it is shocking that the Draft Guidance would accept this state of
affairs, all the while speaking matter of factly of “compliance
issues” that will inevitably result.  What the Draft Guidance refers
to euphemistically as “compliance issues” is excess air pollution
for the public.

	All of this calls into serious question the manner in which compliance
would be demonstrated with PALs and flexible permits under the Draft
Guidance.  It also fatally undermines the document’s claim that the
allowed forms of monitoring will be able to “quantify emissions with
certainty.”  Draft Guidance at 37.  We contend that the use of
emissions factors allowed by the Draft Guidance would be arbitrary and
should not be allowed for PALs in the future.  In addition, we call upon
EPA to demonstrate that other allowed forms of compliance monitoring
will be able to meet this necessary standard.

The Draft Guidance Represents Unlawful Final Agency Action

The Draft Guidance purports to serve merely as guidance, and accordingly
makes the claim that it does not represent final agency action.  Draft
Guidance at 5.  It is clear, however, that the Draft Guidance does set
forth settled and final agency legal interpretations, a fact that is
apparent throughout the document.  Among other interpretations, the
Draft Guidance stakes out the legal positions that advance approvals are
authorized under the current part 70 regulations for all applicable
requirements; that a whole series of requirements and permissions
defining advance approvals arise out of part 70 too; that the notion of
“expedited permit revisions” (i.e., incomplete advance approvals) is
authorized under part 70; that PALs and a whole series of PAL elements
are authorized under current NSR regulations; and that partial PALs are
authorized under current NSR regulations.  Below, these comments address
some of the Draft Guidance’s legal interpretations that are unlawful,
either because they contradict or effectively amend existing
regulations, because they contradict previously adopted Agency
interpretations, or because they are not otherwise authorized under
current regulations or the Clean Air Act.

The Draft Guidance’s very purpose is to create rights and authorize
actions that are not allowed under current law, and would not be allowed
or undertaken without the imprimatur of EPA permission and approval. 
For example, any company and permitting authorities remotely familiar
with EPA’s pending part 70 and NSR rulemakings will be aware that the
Agency has proposed to amend federal regulations to adopt advance
approvals (under part 70) and PALs (under NSR and PSD regulations).  As
a result, these parties would not hazard to claim that these approaches
are available under existing regulations without EPA giving them the
green light; clearly it is the aim of the Draft Guidance to give this
green light.

In carrying out this authorization agenda, moreover, the Draft Guidance
also creates requirements and obligations that are not authorized under
current law – albeit, apparently, to erect necessary safeguards
against the excesses resulting from the flexibilities created by the
Draft Guidance.  As such, the Draft Guidance is plainly “final
action” within the meaning of Clean Air Act (CAA) § 307(b)(1) and
will be subject to judicial review in the United States Court of Appeals
for the District of Columbia Circuit (D.C. Circuit) upon issuance.

Of greater significance and concern, however, the legal interpretations
set forth in the Draft Guidance are unlawful and cannot stand.  As
discussed below, in some instances the Draft Guidance interpretations
alter or contradict previously adopted Agency interpretations without
doing so first through the requisite notice and comment legislative
rulemaking.  In some of these same instances, the interpretations
effectively amend existing regulations without doing so through notice
and comment legislative rulemaking.  And finally, in some instances the
Draft Guidance interpretations run directly counter to the Clean Air Act
itself and may not be instituted through legislative or interpretative
rulemaking, much less through guidance.

	We devote the bulk of our legal comments below to instances in which
the Draft Guidance unlawfully creates authorizations and rights that are
not available under current part 70 and NSR regulations.  It is these
permissions that most threaten the integrity of the permitting programs,
the role of the public and opportunities for contemporaneous review, and
the associated environmental and health protections.  It is also
instructive to identify, however, some instances in which the Draft
Guidance imposes obligations and requirements -- mainly on industry --
that do not appear to be within the scope of the current regulations. 
We identify some of these instances not out of a lack of sympathy or
appreciation for these aims of the Draft Guidance; namely, to add some
measure of rigor, enforceability and environmental protection to the
loopholes, dangers, and lack of accountability associated with the
flexibilities in the main.  Instead, these instances reinforce our
overall objections to the negative consequences that would result from
adoption of the Draft Guidance.

An example of these apparently unauthorized requirements in the Draft
Guidance includes the requirement that “the worst-case scenario from
an environmental protection standpoint should be assumed and defended in
communicating any proposed advance approval.”  Draft Guidance at 15.

There is nothing in the regulations to our knowledge that compels the
assumption of a “worst-case scenario from an environmental protection
standpoint” in developing advance approvals.  Id. The Draft Guidance
points to no authority, and the authority that the document does claim
to rely upon for advance approvals (40 CFR § 70.6(a)(9), Draft Guidance
at 13-14) requires no such assumption.  This of course means that
industry and some permitting authorities will simply ignore this
particular bit of hortatory advice from EPA.  And of course this course
of action will be easily accomplished through part 70 minor permit
modification procedures, where there is no possibility of public
oversight.

	A related issue is the Draft Guidance’s frequent resort to
non-regulatory urgings and suggestions.  By our rough count, the
document on well over a dozen separate occasions mentions non-required
actions that EPA “recommends,” “urges,” or suggests that sources
or permitting authorities “should” undertake.  Examples include the
encouragement to permitting authorities to provide opportunities for
public participation when advance approvals are established, id. at 29,
and the suggestion that emissions factors should be doubled or halved,
as appropriate, to account for the inherent inadequacies of these
averages as emissions quantification methods.  Id. at 39.

  

	These unauthorized obligations, requirements, and urgings may be
perfectly fine and desirable safeguards.  Our points, however, are
threefold: (1) the unlawful flexibilities in the Draft Guidance are so
excessive, that the document must invent requirements (or encourage
other measures) not present in the regulations, in an effort to
constrain those flexibilities; (2) this creates a perverse one-way
dynamic, in which polluters will take full advantage, and then some, of
the legally improper flexibilities bestowed upon them by this guidance;
at the same time, they can be expected to ignore the non-regulatory
mandates and urgings contained in final guidance, on the perfectly
rational and lawful grounds that these things are not required by
regulations; and (3) these invented requirements demonstrate that the
current regulations simply are not suited to accommodate the elaborate
regulatory structures created in the Draft Guidance.  What these
“requirements” and urgings in the Draft Guidance reflect is an
awkward effort to add some measure of balance to the “flexibilities”
that are plainly the document’s objective.  In effect, these aspects
of the Draft Guidance suggest an accommodation of competing interests
(clearly unbalanced, in our view) that is the essence of notice and
comment rulemaking.

	The role of these safeguards, then, ends up not being protective and
reassuring, as perhaps intended by EPA, but misleading.  If these
safeguards are not backed up by current regulations, as we contend in
large part, then they serve only to mask the negative consequences that
will result from granting polluter “flexibilities” unbounded by the
measures developed to constrain the flexibilities.  In doing so, they
also mislead the public into believing that the overarching relaxations
wrought by the Draft Guidance are constrained or accompanied by
meaningful, enforceable safeguards.  Such “safeguards” only do a
disservice to the term.

In appropriate rulemaking proceedings, rather than this unlawful
guidance enterprise, the undersigned parties would be the first to
commend EPA for accompanying responsible industry flexibilities with
rigorous environmental safeguards, enforceable compliance assurance
mechanisms, superior environmental results, and opportunities for public
participation.  In the enterprise at hand, however, the legally
unauthorized safeguards provide a false sense of balance with the
legally unauthorized flexibilities, for the simple reason that polluters
will ignore the former and take advantage of the latter.  Anything but
balance will result.  The Agency simply needs to dispense with this
elaborate but doomed guidance exercise and conduct or proceed with the
actual rulemakings required by law.

A.	Adoption of the Draft Guidance flexibilities through guidance rather 
than rulemaking would circumvent and short circuit pending 	Agency
rulemakings                                                             
                                  

	Adoption of the Draft Guidance would not just effectively amend EPA’s
current part 70 and NSR regulations through unlawful means.  It would do
so against the backdrop of pending rulemakings to amend the part 70 and
NSR regulations through lawful means on some of these same issues.  In
this respect, the Draft Guidance is in an even more untenable posture
than other recent EPA guidance documents set aside by the D.C. Circuit. 
Accordingly, adoption of the Draft Guidance would not only unlawfully
avoid rulemaking generally; it would unlawfully avoid rulemakings that
have been underway since 1994 and 1996, respectively, and are near
completion.  We condemn in the strongest terms the Draft Guidance’s
attempt to circumvent and short circuit these pending rulemakings.

	In addition, adoption of the Draft Guidance would do more than just
represent an abuse of Clean Air Act rulemaking procedures.  It would
represent an affront to the many commenters and stakeholders who have
participated in the rulemaking process since 1992 on a sustained basis. 
We are mystified as to the imperative to move forward unlawfully through
guidance with approaches – advance approvals and PALs, in particular
– that are the subjects of these ongoing rulemakings.

	Advance approvals and the 1994 and 1995 part 70 proposals.

	Perhaps it is useful, even necessary, to remind EPA of the history
associated with these outstanding proposals and comments submitted on
these proposals.  In an August 29, 1994 Federal Register notice, EPA
proposed to amend part 70 to adopt the concept of “advance NSR.”  59
FR at 44472.  EPA solicited comment specifically on how this proposed
advance NSR would work.  Id.  Even the terms of this proposal only
covered advance approval of NSR, with comment solicited on whether
advance approvals should cover nonattainment NSR, PSD, minor NSR and
section 112(g) modifications.  Id.  (This entire discussion totals two
paragraphs in the preamble of the 1994 notice, in contrast to the
twenty-page advance approval discussion in the Draft Guidance.)  There
is no suggestion in the 1994 preamble that the 1992 part 70 regulations
– the ones we are still operating under today, of course -- already
authorized advance approvals of all applicable requirements.  Indeed,
the proposal “to allow the use of alternative scenarios to provide
advance approval of construction or modification subject to NSR”
clearly indicates that the 1992 regulations did not -- and do not --
allow advance approval of NSR activities, much less all applicable
requirements.  Id. (emphasis added).

	In an August 31, 1995 Federal Register Notice, EPA again proposed to
amend part 70.  This time, the Agency’s proposal “[built] upon its
August 1994 proposal by defining in § 70.2 advance NSR” to include
minor and major NSR and section 112(g) regulations.  See 60 FR at 45545
(proposed § 70.2).  The Agency proposed regulatory language for
“advance NSR” out of a likely recognition that the 1994 proposal’s
failure to do so would still not have authorized advance NSR under the
language of the 1992 regulations.  The 1995 notice did not indicate that
EPA had received comments on the 1994 notice arguing that the 1992
regulations already authorized advance approvals of all applicable
requirements.  Nor did the 1995 notice acknowledge that this authority
already existed under the 1992 regulations.  One has to wait five years
later and eight years after the 1992 regulations, until August 2000 with
release of the Draft Guidance, for EPA to have magically discovered this
authority.

	NRDC, one of the signatories to these comments, submitted comments on
the August, 1995 part 70 proposal.  These comments stated the following
in response to the proposal for advance NSR:

The concept of advance NSR as explained in the preamble appears to be
limited to inclusion of specific identified changes into an operating
permit in advance of the change being implemented.  When limited to
changes whose impact has already been evaluated, this approach can
provide a means of streamlining procedures without risking adverse
environmental consequences.  However, the defined term “Advance NSR”
needs to be clarified to express the limited scope of the concept. 
Specifically, the words “one or more specifically identified” should
be added before the phrase “new units”.

Second, EPA’s part 70 rule should not mandate States to include
Advance NSR in their programs.  Accordingly, we urge deletion of the
reference to “advance NSR conditions” in proposed §
70.4(b)(3)(xiv).

NRDC 1995 Part 70 Comments, at 2.  These comments are instructive for
several reasons.

	First and foremost, it is evident that these comments are based on the
understanding that the 1992 regulations did not authorize any advance
approvals, and that the proposal was just that, a proposal.  This is
hardly surprising, considering that this was the second notice to
propose advance approvals, each of which failed to suggest that advance
approvals of all (or any) applicable requirements were already
authorized under part 70.  Rest assured that if either the 1994 or 1995
proposals had suggested this, NRDC would have objected strongly, an
assurance supported by the criticisms made on the 1995 proposal.  

Second, these comments urged EPA to improve the proposal, due to
inadequacies in the proposed language.  Notably, these comments
indicated that the concept needed to be limited to “specifically
identified” emissions units, and changes whose emissions impacts have
been fully evaluated.  As discussed in today’s comments, the Draft
Guidance also falls short on both these fronts.  Finally, the NRDC
comments noted that the “advance NSR” concept should not be made
mandatory on States, in part out of a recognition that some States would
not find the concept compatible with their NSR and 112(g) programs, that
States might consider the process to be highly resource-intensive, and
that States might simply find the concept ill-advised.  In addition,
there is certainly nothing in the Clean Air Act that makes advance NSR
or any advance approval scheme a mandatory minimum element of a State
part 70 program.  As we understand the Draft Guidance, by claiming
authority for advance approvals in 40 CFR § 70.6(a)(9), the document
appears to be suggesting that its conception of advance approvals is
mandatory on States.

No amount of historical revisionism can establish that the 1992 part 70
regulations have always authorized advance approvals and that EPA has
always intended this.  (In actuality, the Draft Guidance does not bother
with examination of the historical record or even with historical
revisionism.  It simply and baldly asserts that advance approvals are
authorized and skirts entirely all inconvenient contradictions.)  Even
if there were evidence of this authorization in the 1992 rule record,
which as we discuss below is completely barren of such support (see
section V. B infra), EPA’s proposals in 1994 and 1995 would have
served to overcome this evidence, by making clear to the public that
part 70 needed to be amended in order to authorize advance approvals. 
Accordingly, we urge EPA to reject adoption of advance approval
authority through guidance. 

2.	PALs and the 1996 NSR/PSD proposal and 1998 Solicitation for Comment.

	“In the July 23, 1996 Reform package, EPA proposed a new method for
determining major NSR applicability for existing sources in attainment
or unclassifiable areas and existing and proposed sources in
nonattainment areas.  Under this proposal, an existing major source, if
the State’s SIP provides, may apply for a permit which bases the
source’s major NSR applicability on a pollutant-specific plantwide
emissions cap, termed a PAL.”  These words are EPA’s, of course, not
ours.  They are taken from the Agency’s July 24, 1998 Notice of
Availability and Solicitation for Comment concerning Alternatives for
NSR Applicability for Major Modifications.  63 FR 39857, 39862.  The
Draft Guidance, however, reflects an apparent ignorance of those words,
or at least a wish that they be forgotten.  In one of the more extreme
and remarkable claims of the document, the Draft Guidance claims that
current NSR and PSD regulations in fact already contain all necessary
legal authority for PALs.  Draft Guidance at 31.

	The 1996 NSR proposal and the 1998 NSR Notice of Availability discussed
and solicited comment on a host of issues addressing PALs and their
development, evaluation, implementation, enforcement, alteration,
retirement, and post-retirement consequences. EPA recognized then at
least that regulatory resolution of these issues is necessary in order
to implement and enforce a NSR and PSD program consistent with the Clean
Air Act and sound environmental policies.  Unfortunately, as NRDC has
recognized in earlier comments submitted to EPA on one of these notices,
the alternatives put forward by EPA to date “fail to implement the
basic purposes of the Clean Air Act’s New Source Review (NSR) and
Prevention of Significant Deterioration (PSD) programs for
pre-construction review of new sources and modifications in dirty air
and clean air regions.”  Our comments address elsewhere the Draft
Guidance’s halting claim of present regulatory authority for PALs. 
Because the Draft Guidance does not begin to address every one of the
PAL-related issues raised by the Agency in these earlier notices, the
conception of PALs promoted by the Draft Guidance also fails to
implement the basic purposes of the Act’s pre-construction permitting
programs.  Any authorization of PALs through final guidance that fails
to address each of the issues deemed necessary to resolve by EPA, in a
manner consistent with current regulations and the statute, will be
arbitrary and unlawful.

The Draft Guidance claims that “[t]he intent of this guidance is not
to present our final positions on these issues, nor is it to prejudge
the outcome of that rulemaking.”  Draft Guidance at 31.  Of course,
EPA can make whatever claims it wishes, but that does not make them
true.  Adoption of the Draft Guidance would absolutely “prejudge the
outcome” of the pending NSR rulemaking vis-à-vis PALs.  This is so
obvious as to cause one to question the seriousness of these claims. 
These claims ask us to believe that adoption of the Draft Guidance will
not prejudge EPA’s decisions as to whether PALs will be adopted,
whether they should be adopted, and what form of PALs should be adopted,
including the elements of PALs discussed in the document (e.g.,
baseline, duration).  Id. at 30-33.  They also ask us to believe that
EPA might adopt PALs that are more rigorous, and less “flexible”
than the PALs asserted to be already available under existing
regulations.  Because EPA’s NSR rulemaking presents PALs as a
“voluntary” method for major NSR applicability, no rational source
that prefers the Draft Guidance PAL would bother with the final NSR
rulemaking, once EPA has informed them that a weaker PAL is available
under current regulations.  Yet another perverse one-way dynamic would
be created by the Draft Guidance: adoption of the document’s PAL
approach would set an intolerably low ceiling for rigor and
environmental protection, and any future PAL rulemaking would plummet
further below any rational or defensible floor.  Even if more rigorous
PALs were intended to be mandatory in a final rule, adoption of the
Draft Guidance would so thoroughly skew the legal and policy dynamic of
the NSR rulemaking underway that this rulemaking would be inescapably
prejudiced.

The proposal of PALs as a voluntary future alternative for State NSR
programs raises another question: whether the Draft Guidance considers
PAL to be permissible under existing federal and SIP-approved State
programs pursuant to a legal mechanism that is a mandatory element of
those programs.  EPA cannot fail to realize, of course, that States have
SIP-approved NSR regulations that are very similar if not virtually
identical to federal regulations.  The Agency should also be aware that
some states simply do not favor PALs and likely will not choose to
authorize PALs following finalization of the 1996 NSR proposal.  It is a
crucial question, therefore, whether the Draft Guidance believes PALs to
be authorized under a federal regulatory mechanism (whatever that may
be) that is a present, necessary element of the NSR regulations.  If so,
the Draft Guidance would render PALs mandatory for delegated state
programs, and effectively mandatory for SIP-approved State programs.  In
other words, sources will demand that State permitting authorities grant
them PALs so long as state regulations contain language similar to
federal regulations (which they mostly do), notwithstanding whether the
State supports PALs or whether the State would have declined to adopt
voluntary PALs after EPA promulgates its final NSR rule.  Thus, adoption
of the Draft Guidance would directly undercut the 1996 proposal’s
intention to make PALs voluntary, and would foist unwelcome PALs, with
all of their attendant resource burdens, upon unwilling states.  

	It is not necessary to devote further discussion to the many ways in
which adoption of the Draft Guidance would circumvent and short circuit
the NSR rulemaking process.  Serious discussion of these issues should
take place through rulemaking processes, where PAL discussions began and
where they belong.  Of course, we are prepared to discuss these issues
before a court, if necessary, but we hope that this will not prove
necessary.  We urge EPA not to undermine the pending NSR rulemaking
through adoption of the Draft Guidance.

B.	Advance Approvals

	The Draft Guidance claims that “advance approvals” of all
applicable requirements – for new emissions units or modifications to
existing units -- are authorized under the current part 70 regulations
(40 CFR § 70.6(a)(9)) as “reasonably anticipated operating
scenarios.”  Draft Guidance at 11.  This legal interpretation is
wholly unsupported by the existing part 70 regulations and the 1992
administrative record for this rulemaking.  EPA itself recognized these
things in 1994 and again in 1995 when it proposed to amend part 70 to
authorize “advance NSR.”  See supra section V.A.1.  And as noted
earlier, even these proposals are much more limited in scope than the
Draft Guidance, in that they only proposed amending part 70 to allow
advance approval of minor and major NSR and section 112(g) requirements.
 Id.; see 60 FR at 45545.  The Draft Guidance claims to have discovered
authority for advance approvals of all applicable requirements in the
1992 part 70 rules.  Draft Guidance at 11-27.

	The Draft Guidance attempts to expand § 70.6(a)(9) dramatically beyond
its present narrow confines.  This provision simply allows a source
owner or operator to accommodate different operational states of
existing emissions units, usually based upon these units’ operational
histories.  EPA has described this understanding as follows: “there
are alternative operating scenarios for existing emissions units and
activities at a part 70 source, covering specifically identified
operational states or configurations for specified emissions units. In
its simplest form, this category is exemplified by an emissions unit
such as a fossil fuel-fired boiler that has two fuel burning options,
which are each subject to a different applicable requirement with
different monitoring obligations.”  63 FR at 50318.  As a result, an
emissions unit that has burned fuel oil or natural gas in the past, with
different applicable requirements for each fuel type, may be permitted
with alternative operating scenarios to continue to accommodate these
scenarios during a permit term.

	This understanding is reinforced by other governing provisions in part
70.  First, the permit application requirements of § 70.5(c) make clear
that permits cover only existing emissions units, not future emissions
units, for purposes of determining currently required permit fees
(linked to current emissions) and presently applicable requirements
(with one exception noted next).  See, e.g., 40 CFR § 70.5(c)(3)(i) &
(ii).  And there is no suggestion in part 70 that applications or
permits may cover existing emissions unit in a future, post-modification
state, thus controverting EPA’s notion that advance approvals may
cover future modifications to existing units.

	Second, part 70’s definition of applicable requirement makes clear
that permits only include requirements that “apply to emissions units
in a part 70 source.”  § 70.2.  Thus, applicable requirements by
definition are limited to existing emissions units at the source, and
moreover, to presently applicable requirements, since “apply” is in
the present tense.  There is one narrow exception in the definition of
“applicable requirement” to the rule of present application.  This
exception concerns “requirements that have been promulgated or
approved by EPA through rulemaking at the time of issuance but have
future-effective compliance dates,” such as federal MACT standards. 
Id.  This exception does not cover the Draft Guidance’s conception of
future applicable requirements under advance approvals.  Moreover, it
reinforces the understanding that applicable requirements are limited to
those that are presently applicable, since § 70.2 specifically sets
forth the one narrow exception to the rule of present application.

	Finally, even if the Draft Guidance interpretation were possible under
the existing part 70 regulations, that interpretation is contrary to the
Clean Air Act.  Adoption of the interpretation with respect to advance
approvals in final guidance will be subject to legal challenge.  The
“advance approvals” that the Draft Guidance describes, while not
legally permissible for several reasons, would nonetheless be
constrained by Clean Air Act section 502(b)(10) if they were
permissible.  In other words, if advance approved changes were already
accommodated for in a part 70 permit, with emissions units and
applicable requirements specifically identified and linked, and air
quality impacts fully assessed, then a change to the advance-approved
scenario would still require 7 day advance notice.  See CAA §
502(b)(10).  (This  still assumes for the sake of argument that some
notion of “advance approvals” would be appropriate under the
statute.)  It is fair to add that part 70 “alternative operating
scenarios” also suffer from the same statutory deficiency, a failing
that will be addressed in the eventual part 70 litigation.

	Adoption of the Draft Guidance’s legal interpretation that advance
approvals are currently authorized under the part 70 regulations would
represent final agency action that effectively amends part 70.  This
conclusion is supported by the language of part 70, the 1992
administrative record, the 1994 and 1995 part 70 proposals, governing
caselaw in the D.C. Circuit, and the arguments presented in these
comments.  As a result, adoption of the Draft Guidance will be subject
to legal challenge on this issue.

C.	Plant-wide Applicability Limits (PALs) 

	The Draft Guidance claims that “plant-wide applicability limits” or
“PALs” are authorized under current nonattainment NSR and PSD
regulations.  Draft Guidance at 31.  As discussed above, in 1996 EPA
proposed to amend these regulations to authorize PALs, proposing
regulatory language and soliciting comment on a host of issues
concerning the development, implementation, and enforcement of PALs. 
See generally 61 FR at 38264 - 66.  As recently as a July 24, 1998
notice of availability, in the midst of intensive stakeholder
discussions, EPA solicited comment on the basic legal framework for
establishing, implementing, enforcing, adjusting, and retiring PALs. 
See generally 63 FR at 39862-65.  Together, the 1996 proposal and 1998
notice of availability discuss or solicit comment on dozens of issues
relating to PALs.  

Yet EPA now claims in the Draft Guidance that it has gotten this all
sorted out, more or less, apparently having made the remarkable
discovery that the current regulations held all the answers all along. 
More or less, because in the Draft Guidance discussions about the
purported current legal authority for PALs, the relevant passages are a
remarkable patchwork of threads of argument that are contradictory,
question-begging, missing, and frayed.  The Hamlet-like indecisiveness
and confusion that characterize these passages is perhaps best captured
by the following question: to net, or not to net?

	The discussion of the supposed authority for PALs under current
regulations begins by summarizing the rules for “netting” under NSR
and PSD.  The Draft Guidance notes correctly that emissions limitations
associated with netting transactions must be made federally enforceable
(usually through minor NSR permit terms or federally enforceable state
operating permit (FESOP) terms) and, accordingly, that Title V permit
conditions will result.  Draft Guidance at 31.  It is at this point that
the contradictions and confusion begin.

The next paragraph begins by holding up PALs in contrast to the
preceding netting paragraph: “When a source with a PAL adds or
modifies a unit that would increase emissions within the PAL, the source
need not undertake a specific netting calculation to avoid major NSR. 
It need only demonstrate that its plant-wide emissions of the relevant
pollutant(s) including the effects of any changes, remain below the
applicable PAL(s).”  Id.  The document states this, without explaining
why this is so, or without explaining (yet) under what regulatory
authority PALs are permissible if they are not netting.  (The document
also fails to address either the minor NSR or Title V implications of
these PAL changes.)  Having suggested that PALs are not subject to
EPA’s netting rules and their “specific netting calculations,” a
sentence follows that is both an apparent non sequitur and question
begging:

Under our present rules (which are reflected in most SIPs), when a
source makes a change that, by itself without considering decreases,
results in a significant emissions increase, the source also must sum
all contemporaneous increases and decreases from prior changes.  If the
sum of emissions increases from the new construction and the
contemporaneous emissions changes constitutes a significant net
emissions increase, the source will be subject to major NSR.

Id.  These sentences leave us puzzled.  Structurally, they complete the
paragraph that begins by discussing PALs, yet they do not mention PALs. 
Substantively, they are a recitation of EPA’s netting rules and their
netting calculations, yet the preceding two sentences in the same
paragraph claim that PALs need not follow these practices.  At this
point in the patchwork one is left asking whether the Draft Guidance
considers PALs to be authorized under EPA’s netting regulations or
not: to net, or not to net?  And if not netting, then what?  Unhappily,
the passages that follow serve to fray rather than mend these
contradictory threads of argument.

	Abruptly, the next paragraph jumps to a discussion of the 1996 NSR
proposal in which EPA proposed PALs and solicited comment on “a number
of PAL issues,” reaffirming in the PAL “justification” section --
perhaps unwittingly – that PALs are not justified at all under current
regulations.  Id.; see supra at § V.A.2.  And then a sentence appears
that promises to get to the heart of the matter: “We believe that PALs
are permissible under existing regulations.”  Id.  Finally, at this
point in the document, one anticipates learning why and how the Draft
Guidance considers PALs to be allowed under current regulations. 
Incredibly, the document does not say.  The sentences and paragraphs
that follow, through the remainder of this section (§ V.B), do not
explain why or how the Draft Guidance considers PALs to be
“permissible under existing regulations.”  If anything, later
passages only add further to the confusion of the tapestry, with a
statement discussing consequences from retirement of a PAL suggesting
that “[c]hanges occurring under the PAL would not be included in
future netting and traditional NSR.”  Id. at 33.  And while another
stray statement mentions that the July 24, 1998 notice of availability
concerning NSR indicated that “PALs may be characterized as a form of
netting,” this statement is not developed further, it is contradicted
by numerous other indications in the document, the 1998 notice took
comment on this question, and the notice plainly indicates PALs are a
proposed amendment to current regulations.  Id. at 31; 63 FR at
39862-63.  At any rate, the Draft Guidance highlights EPA’s own
uncertainty concerning this matter, considering that this notice of
availability “solicited comment on whether the contemporaneity
requirement for netting might also need to be applied to PALs.”  Draft
Guidance at 31.

	It is worth focusing on the lengthy paragraph at the bottom of page 31
further because of even more astonishing statements that it holds.  As
discussed above (§ V.A.2 ), this passage asserts that “[t]he intent
of this guidance is not to present our final positions on these issues,
nor is it to prejudge the outcome of that rulemaking,” a facially
incredible assertion.  Id.  Rather, the document goes on to explain, the
Draft Guidance “is intended to clarify that a PAL approach, while not
explicitly defined, may be available under your current NSR rules.” 
Id.  Following this briefly refreshing acknowledgment that PALs are not
“explicitly defined” under SIP-approved (or federal) NSR rules, the
Draft Guidance expresses its intent to “clarify” that PALs “may be
available under your current NSR rules.”  Id. 

	This really proves too much.  The clear aim of the Draft Guidance is to
prod States into determining PALs to be authorized under their current
SIPs, or to provide fodder to industry to compel States to reach this
same conclusion.  If one is rationally engaged in an exercise to
determine whether something is true (whether, for example, PALs are
authorized under current SIP-approved NSR rules), one evaluates the
issue following investigation, application of first principles,
reasoning, and one reaches a conclusion (PALs are not authorized under
current SIP-approved NSR rules).  Instead, the Draft Guidance indicates
quite matter of factly that EPA has not investigated SIPs on this
question, does not indicate what legal principle should be brought to
this question, withholds the Agency’s apparent reasoning from public
view (see below), and reaches the conclusion that the Draft Guidance
wants States to reach: “PALs are permissible under existing
regulations.”  Id.  

The paragraph then continues in one of the most remarkable passages of
the entire document: 

The actual extent to which a PAL can be developed in practice in any
given State depends on the extent to which a PAL can be developed in the
approved SIP and on several site-specific factors.  For these reasons,
we require that sources proposing use of PALs submit their permit
applications directly to you and a copy to the appropriate EPA Regional
Office, unless you otherwise provide one to us.

Id.  First, this passage “informs” the reader that the extent to
which a PAL can be lawfully developed depends upon the extent to which a
PAL can be lawfully developed.  This intrinsically circular formulation
does nothing to enlighten.  Giving it a more generous interpretation,
one is left to conclude that EPA has not evaluated the SIPs that the
Agency has approved to determine whether they legally support PALs,
notwithstanding the broad -- thus far unsupported – claim of the Draft
Guidance that PALs are permissible under existing regulations.

But the Draft Guidance goes on to identify other considerations upon
which development of a PAL depends: “several site-specific factors.”
 Id.  In a document that calls itself “Guidance” on page one, the
document resorts to nothing more than uninformative words at the crucial
point at which the Draft Guidance finally promises to reveal the present
legal authority on which development of a PAL depends.  This is a
disservice to the public.  EPA cannot expect a “guidance” document
to be given serious consideration if the document fails to disclose to
the public the legal authority upon which one of its centerpiece
flexibilities depends.

The very next sentence suggests that EPA does have some theory about the
current authority for PALs -- and is prepared to discuss it with sources
proposing PALs.  Id.  (“For these reasons, we require that sources
proposing use of PALs submit their permit applications directly to you
and a copy to the appropriate EPA Regional Office, unless you otherwise
provide one to us.”)  Any possible suggestion that the Agency would
not discuss the authority and factors upon which PALs depend in public
guidance, but would do so privately with sources seeking to establish
PALs, would be so astounding, and so profoundly wrong that we cannot
believe it is the meaning intended by EPA.  This would be not just a
disservice to the public, but a disservice to the rule of law.  We call
upon the Agency to explain the meaning and intent behind this passage,
and to explain the “site-specific factors” upon which authority for
a PAL purportedly depends.

 

At the end of it all, one has no more clear sense of whether the Draft
Guidance considers PALs to be authorized under existing netting rules,
than one has of the asserted regulatory authority for PALs at all. 
Certainly, the excerpt above from the PAL retirement discussion, id. at
33, contravenes any notion that PALs are authorized as a form of
netting, since all changes under a PAL – as with all increases and
decreases during a contemporaneous period – would need to be included
in present and future netting transactions.  And the other contradictory
threads hardly tie things together either.

The basic problem with EPA’s laborious “rationale” is that the
current NSR and PSD regulations are ill-suited to the Draft Guidance’s
vague conception of PALs, or any conception of PALs for that matter. 
This is precisely why EPA proposed to amend its regulations in 1996 and
why, even then, the Agency was compelled to solicit further comment in
1998 in order to flesh out a host of PAL issues and to request comment
(again) on the basic legal theory behind the future adoption of PALs. 
If EPA cannot explain why or how PALs are authorized under current
regulations, including how a whole range of PAL elements and
consequences are addressed, it is not the fault of EPA, but the reality
of these regulations.  Considering the fatal uncertainty of the
arguments set forth in the Draft Guidance concerning the present
authority for PALs, the adoption of PAL authority appropriately through
rulemaking rather than guidance will do more than just “provide more
certainty for sources and permitting authorities about the regulatory
requirements for PALs.”  Draft Guidance at 31.  It will provide more
certainty for EPA as well.

	It is worth addressing an additional legally improper interpretation
advanced in the PALs section of the Draft Guidance.  The Draft Guidance
authorizes permitting authorities to establish a part 70 “permit
shield” in permits with PALs: “you may provide that changes
occurring in compliance with the PAL do not trigger major NSR, provided
all the conditions of a properly established PAL are met.”  Draft
Guidance at 33.  It is contrary to the existing part 70 regulations to
apply a permit shield to a PAL and future unidentified non-applicability
determinations for changes beneath a PAL.

Section 70.6(f) sets forth the part 70 permit shield:

(1) Except as provided in this part, the permitting authority may
expressly include in a part 70 permit a provision stating that
compliance with the conditions of the permit shall be deemed compliance
with any applicable requirements as of the date of permit issuance,
provided that:

 (i) Such applicable requirements are included and are specifically
identified in the permit; or

(ii) The permitting authority, in acting on the permit application or
revision, determines in writing that other requirements specifically
identified are not applicable to the source, and the permit includes the
determination or a concise summary thereof.

40 CFR § 70.6(f).  This provision makes clear that a part 70 permit
shield may only cover applicability determinations made with respect to
requirements that are known, in existence, and presently applicable --
or not applicable, as the case may be -- “as of the date of permit
issuance.”  Id.  A part 70 permit shield may not cover requirements
that may or may not become applicable in the future – that is a shield
may not cover future applicability determinations – except in one
narrow circumstance.  This circumstance does not include PALs or major
NSR requirements.  

	D.	“Aggregation of specified changes”

	The Draft Guidance describes two additional flexibilities that are
under consideration, one for possible adoption in the guidance called
“minor ongoing modifications” or “MOMs,” and one for possible
adoption in future pilot projects called “cap and track.”  Draft
Guidance at 34-35.  We recommend that EPA go back to the drawing board
because each approach, poorly described as it is, would not serve the
purposes of NSR permitting programs, undermines the practical
enforceability of these programs, and would not advance any stronger
environmental protections that we can discern.  We offer only brief
comments below because these concepts are roughly outlined at best in
the Draft Guidance, and we may follow up with additional comments to the
Agency.

			1.	Minor ongoing modifications or MOMs.

Easily the most inaptly named acronym in the document, MOMs appear to
implicate two main concerns under governing NSR regulations.  The first
is that MOMs appear to be nothing more than partial PALs, which are no
more authorized under current NSR regulations than are PALs.  The second
concern is that MOMs would appear to facilitate, if not encourage
circumvention of major NSR permitting requirements, in contravention of
EPA guidance, the NSR regulations, and the Act.

In prior EPA guidance, the Agency has made clear that it is a violation
of the Clean Air Act to construct a source or major modification with a
minor NSR permit when there is intent to operate the changes or series
of changes as a major source or major modification.  Minor NSR permits
that do not reflect a source’s planned operations are “sham”
permits, void ab initio, and will not relieve a source from the legal
obligation to undergo major NSR permitting.  See, e.g., Maplewood Memo
at 2.  Whereas existing Agency guidance provides guidance against
practices that circumvent major NSR permitting requirements, White Paper
3 would acquire the moniker of “New Source Review Circumvention
Guidance” for quite a different reason.

  

The Draft Guidance is frustratingly vague on the concept of MOMs, and it
is a well-worn criticism by now that the document does not identify any
legal authority for the concept.  But the Draft Guidance appears to have
in mind a system in which sources would forecast “interrelated changes
[that] can be grouped for advance approval in such a way so as to be one
MOM.”  Draft Guidance at 34.  These grouped changes would live under
an “emissions cap” (introducing the partial PAL concept),
established at “representative actuals plus the applicable
significance level.”  Id.  

In direct contrast with the ordinary advance approval, it will be in a
source’s self-interest in developing MOMs to limit its forecast of
future emissions increases as much as possible.  This is because a
source will wish to exclude as much of the facility’s aggregate
emissions increases from contemporaneous activities as possible, in
order to qualify for the emissions cap and in order to avoid major NSR,
when eventual future emissions increases otherwise would show the source
to have exceeded significance levels.  This improper desire would result
in circumvention of major NSR, and it is this outcome that EPA should
not allow or facilitate.

The Agency’s Maplewood memorandum provides guidance on how EPA
approaches this topic under its NSR regulations, including 40 CFR §
52.21(r)(4), which concerns the relaxation of permit limits.  This
memorandum states the following:

	Where a source is permitted for several minor modifications that may in
good faith be intended to be separate, but result in the source’s
aggregate increases to be (sic) major even considering decreases over a
short time period (e.g., one year or 18 months), the modifications may
require major new source review.  Such modifications could require NSR
if they are viewed as being consistent with the source’s overall
production goals or plans for a short planning period.

Maplewood memo at 4.  The touchstones, then, for whether modifications
should be aggregated for major NSR permitting purposes are whether they
are “consistent with the source’s overall production goals or plans
for a short planning period” and “whether they serve the plant’s
overall basic purpose.”  Id. at 4-5.  EPA should follow its own
interpretations and policies in the development of any future guidance,
or undertake rulemaking to alter them.  See supra note  34.

	So long as a source receives minor NSR permits that do not involve
circumvention of major NSR permitting requirements, and do not run afoul
of § 52.21(r)(4), this outcome may not be objectionable as a policy or
legal matter.  If the same result were carried out through the advance
approvals described in the Draft Guidance, however, it would be
objectionable as a policy and legal matter for the reasons set forth in
these comments on advance approvals.  And it appears to us that the
poorly conceived MOMs would not lead to the results required by current
law, but would instead facilitate circumvention of major NSR permitting
requirements, contrary to the law and EPA’s own policies.

		E.	“Cap and track”

	This particular “flexibility” is too poorly described and conceived
in the Draft Guidance to warrant much discussion.  Draft Guidance at 35.
 If the Agency does pursue the concept further, however, we are
interested in learning more about its intent, its legal basis, how it
would be implemented and enforced, and what the consequences on the NSR
and Title V permitting programs would be.  To the extent that the
so-called “cap and track” concept implicates other flexibilities
addressed in the comments, e.g., advance approvals or partial PALs, we
will bring the same legal and policy objections to bear on this concept
too.  We do note, however, that once the concept gets past the task of
setting a numeric emissions cap, it seems to represent a nightmare for
any citizen or government agency to track.  As such, any practical
enforceability of the concept would appear to be dubious if not absent
altogether.  It’s also evident that continuous compliance assurance
monitoring would be necessary in order to accurately track and quantify
the cumulative emissions increases.  Finally, we are most interested in
a discussion that proceeds from legal first principles rather than a
vaguely described result that the Draft Guidance is trying to reach.   

	For all the reasons set forth in these comments, we urge EPA not to
adopt the Draft Guidance.

                                                                     
Sincerely,

CALIFORNIA

Jane Williams 

California Communities Against Toxics

Rosamund, CA

Lyle Talbot

Desert Citizens Against Pollution

Lancaster, CA

Suma Peesapati

Communities for a Better Environment

Oakland, CA

Marc Chytilo

Committees for Law, Air, Water and Species

Santa Barbara, CA

DISTRICT of COLUMBIA

David Hawkins, Senior Attorney

Natural Resources Defense Council

Washington, DC

John Coequyt

Environmental Working Group

Washington, DC

James W. Clarke, Vice President

Washington Regional Network

Washington, DC

Jeff Ruch, Executive Director

Public Employees for Environmental Responsibility

Washington, DC

FLORIDA

Joy Towles Ezell, President

Help Our Polluted Environment 

Taylor County,FL

GEORGIA

Justine Thompson

Georgia Center for Law in the Public Interest

Atlanta, GA

ILLINOIS

Jacky Grimshaw, Coordinator

Transportation and Air Quality Division

Center for Neighborhood Technology

Chicago IL

American Bottom Conservancy

East St. Louis, IL

East St. Louis Community Action Network

East St. Louis, IL

Madison County Conservation Alliance

Edwardsville, IL

Brian Urbaszewski, Director of Environmental Health Programs

American Lung Association of Metropolitan Chicago

Chicago, IL

INDIANA

Stephan J. Sullivan

Environmental Health Committee (OVCG)

Evanville, IN

Bobby W. Schroader

Izaak Walton League of America, Indiana Division

Griffith, IN

Jamie Wesseler, President

Citizen’s Organized Watch, Inc.

Whitley & Allen Counties, IN

John Blair 

Valley Watch, Inc.

Evansville, IN

Thomas R. Anderson, Executive Director

Save the Dunes Council

Michigan City, IN

Robert Rust, Secretary

Ohio Valley Common Ground

Mt. Vernon, IN

KENTUCKY

Tom Fitzgerald, Director

Kentucky Resources Council, Inc.

Frankfort, KY

Craig Williams, Director

Chemical Weapons Working Group

Berea, KY  

Elizabeth Crowe, Director

Non-Stockpile Chemical Weapons Citizen Coalition

Berea, KY 

Peter Hille, Chair

Kentucky Environmental Foundation

Berea, KY 

Namoi Shultz, Steering Committee

Common Ground

Berea, KY

LOUSIANA

Nancy Hirshfeld

Informed Choices

Slidell, LA

MAINE

Sue Jones

Natural Resources Council of Maine

Augusta, ME

MARYLAND

Jonathan Birdsong

Izaak Walton League of America

Gaithersburg, MD

MASSACUSETTS

Howard Hirsch

National Environmental Law Center

Boston, MA

MICHIGAN

Alex J. Sagady

Alex J. Sagady & Associates

East Lansing, MI

Jeff Gearhart, Campaign Director

Ecology Center

Ann Arbor, MI

MONTANA

Darrell Geist

Executive Director

Cold Mountain, Cold Rivers

Missoula, MT

NEVADA

Grace Marie Potorti

Rural Alliance for Military Accountability

Reno, NV

NEW JERSEY

Joe Parrish

NJ/NY Environmental Watch

Elizabeth, NJ

NEW YORK

Anne Rabe 

Citizens' Environmental Coalition

Albany, NY

Keri Powell

New York Public Interest Research Group

New York, NY

NORTH CAROLINA

Chuck Rice

North Carolina Wildlife Federation

Raleigh, NC

E.M.T. O’Nan, Director

Protect All Children’s Environment

Marion, NC

Denise Lee, President

Anson County  Cactus

Wadesboro, NC

OHIO

Anjali Mathur, Director

Sustainable Cleveland Partnership

Earth Day Coalition

Cleveland, OH

OREGON

Connie Earnshaw

Swan Island Airshed Committee

Portland, OR

PENNSYLVANIA

Joseph Otis Minott, Esq.

Executive Director

Clean Air Council

Philadelphia, PA 

TENNESSEE

Katey Culver

RecycleSource Paper

Nashville, TN

Donald B. Clark

United Church of Christ

Network for Environmental & Economic Responsibility

Pleasant Hill, TN

Walter Stark

Cumberland Countians for Peace & Justice

Pleasant Hill, TN

Charles Lord

Obed Watershed Association

Pleasant Hill, TN

Ulla Reeves, Clean Air Program Director

Southern Alliance for Clean Energy

Knoxville, TN

TEXAS

Karen Hadden

SEED Coalition

Austin, TX

LaNell Anderson

Grandparents of East Harris County

Kingwood, TX

Judy Starns

North Channel Citizens Against Pollution

Channelview, TX

UTAH

Kathy Van Dame

Wasatch Clean Air Coalition

Salt Lake City, UT

VIRGINIA

Jeff Gleason

Southern Environmental Law Center

Charlottesville, VA

WEST VIRGINIA

Vivian Stockman

Concerned Citizens’ Coalition

Spencer, WV

Dianne Bady

Ohio Valley Environmental Coalition

Huntington, WV

WISCONSIN

Melissa K. Scanlan, Legal Director

Midwest Environmental Advocates

Madison, WI



cc:	Jay Benforado, OPEI

Rob Brenner, OPAR

Bruce Buckheit, OECA

Alan Eckert, OGC

Bill Harnett, OAQPS

Barry Hill, OEJ

Caroline Petti, OA

Roger Powell, OAQPS

John Seitz, OAQPS

	

	

	

	

	

	

 	Fact Sheet - Draft Guidance on Designing Flexible Air Permits (White
Paper Number 3) (Aug. 8, 2000), at 1,
http://www.epa.gov/ttn/oarpg/new.html.

 

 	See EPA is Considering Increased Flexibility in Issuing Industry
Air-Pollution Permits, Wall St.  J. (June 5, 2000) (Robert W.
Perciasepe, U.S. EPA Assistant Administrator for Air, referring to
prematurely released version of document substantially the same as Draft
Guidance as “very preliminary staff work” that has not been reviewed
by EPA lawyers or top officials); EPA Considers Relaxing Pollution Rules
on Industrial Plants, Seattle Daily Journal of Commerce (A.P. Wire)
(June 6, 2000) (“The draft paper ‘has not been seen by anyone in
senior management of the agency,’ said EPA spokesman Dave Cohen. 
‘This thing is very embryonic.  It doesn’t represent much of
anything.’  He characterized it as ‘an idea sheet’ by midlevel
staff members in the agency’s air pollution control offices.”); see
also Draft Guidance cover page (Does Not Represent Agency Policy).

 	Office of the Administrator, Report of the EPA Innovations Task Force,
Aiming For Excellence: Actions to Encourage Stewardship and Accelerate
Environmental Progress (July 1999), at 59, EPA 100-R-99-006 (Aiming For
Excellence).

 	“The Next Generation in Permitting,” at 1,
http://www.epa.gov/permits/papmem.htm.

 	“A Decade of Progress: Innovation at the Environmental Protection
Agency,” U.S. EPA, Office of the Administrator, EPA 100-R-00-020
(April 2000), at 3-4, 29-34 (Decade of Progress) (“Well-informed
citizens who are actively involved in environmental decisions are a
powerful new force in achieving environmental results.  Increasingly,
Americans are getting involved in environmental issues and it’s clear
that they want a say in decisions that affect them.”  Id. at 3. 
“Because Americans want to be actively involved in environmental
decision-making, we are increasing public participation in our programs
and providing more environmental information to help the public
understand critical, and often complex, issues.”  Id. at 29.)

 	See generally Draft Guidance at 16-18.  For example, the Draft
Guidance lists requirements that permit applications must contain for
advance approvals, including identification of applicable requirements,
permit terms that assure compliance, and boundaries on the magnitude of
the advanced approved change.  Id. at 16.  Notably absent from this list
is any requirement that the specific emissions units and emissions
activities be identified in the permit application, in direct violation
of § 70.5(c).  This does not appear to be an accidental omission,
either, as we discuss above.

 	For example, the document’s discussion of White Paper 1 rather than
the part 70 regulations is both telling and misplaced, considering that
White Paper 1 itself skirts and mischaracterizes part 70’s permit
applications requirements.  

 	See generally Draft Guidance at § IV.B, 16-18; see id. at 17 (“The
concept of reasonably anticipated alternative operating scenarios and
the requirements in section 70.5(c) requiring ‘descriptions’ of the
advance approved activities inherently provide flexibility to you.  You
have broad authority to require sources to submit information regarding
proposed advance approvals.”)

 	Although its exact heritage is uncertain, and clearly not discussed in
the Draft Guidance, the apparent first and only EPA usage of the term
“replicable operating procedures” or ROPs in a Clean Air Act Federal
Register notice is in the preamble for the final rulemaking for the
National Emission Standards for Hazardous Air Pollutants for Source
Categories: Pharmaceuticals Production, 63 FR 50280 (Sept. 21, 1998)
(Subpart GGG).  This Federal Register notice makes clear that the use of
ROPs as part of a Title V “change management” strategy involving
advance approvals is in turn part of an “experimental permitting
approach” for implementing Subpart GGG, the pharmaceutical MACT
standard.  Id. at 50310, 50312.  Considering that the compliance date
for this MACT standard is not until October 21, 2002, see 65 FR 52588,
52596 (Aug. 29, 2000) (§ 63.1250(f)), it is impossible for the Agency
to have had any implementation or enforcement experience with ROPs for
the “experimental permitting approach” for this MACT standard.  We
are mystified as to how the Agency has any experience with ROPs
sufficient to say anything at all about them in the Draft Guidance.  We
cannot believe that the Agency would so quietly, yet willfully abandon
any pretense that this experimental change management approach was both
genuine and experimental, and jump straight to adoption before the
“experiment” had even begun.  Yet this belief is discouragingly
consistent with the Project XL record discussed in section III of these
comments.

 	For a landmark treatment of the ambiguities of language and its
capacity for multiple interpretations, see William Empson, Seven Types
of Ambiguity (3d ed. 1966).

 	As noted earlier, supra note 9, considering that the compliance date
for this MACT standard is two years in the future, it is logically
impossible for EPA to have any implementation and enforcement experience
with the “applicability ROP” concept that the Draft Guidance roughly
describes.  This raises the obvious question of why this pharmaceutical
example is in the Draft Guidance at all.  Draft Guidance at 44-46.

 	For example, as EPA is well aware, industry groups and corporations
are presently before the United States Supreme Court in a multi-million
dollar campaign arguing the outrageous and offensive position that the
term “public health” in Clean Air Act § 109(b) requires a
cost-benefit test in establishing the health-based national ambient air
quality standards.  See, e.g., Brief for Respondents Appalachian Power
Co., et al., In Support of Petitioners, American Trucking Assoc., Inc.,
et al. v. EPA (No. 99-1426) (July 20, 2000).  If these companies are
willing to take this extreme position in a high-profile, public case
such as this, one shudders to imagine what interpretations they would be
capable of adopting under the secretive world of ROPs.

 	The Draft Guidance addresses the application of the permit shield to
ROPs with the remarkable and circular declaration that a such a shield
is available “but only if the source applies the procedures
correctly.”  Draft Guidance at 21.  This confounds a fundamental
principle of the Title V permitting program, that sources are not
eligible for the benefits of the permit shield when public review is not
available.  See, e.g., 40 CFR § 70.7(e)(2)(vi) (permit shield
unavailable for part 70 minor permit modifications because public review
unavailable).  The Draft Guidance invents a problem for itself, by
allowing advance approvals and ROPs to be a two-stage applicability
determination process, with the second stage – unilateral source
application of “ROPs” – never having public review.  The only
possible conclusion is that ROPs and advance approvals, even if
permissible, should never be able to qualify for the permit shield.  The
Draft Guidance apparently cannot abide that conclusion, however, so it
must resort to the above circularity.  The result is an illogical and
unlawful inquiry into the propriety of a permit shield after-the-fact,
rather than before-the-fact, which turns any notion of a shield on its
head.   

No doubt unwittingly, the Draft Guidance’s declaration above also
gives lie to the notion that approvable ROPs “must not require
judgment,” id. at 20, since here the document acknowledges that
sources will have judgment to apply these ROPs incorrectly.  This is the
obvious point we make earlier, but the Draft Guidance acknowledges it
here since it proves too much even for the this document to allow
sources to be shielded from enforcement based upon unlawful
interpretations reached solely by them.  Of course, the Draft Guidance
does not grapple with the issue of how one is supposed to discover that
sources made incorrect determinations, or the point that Title V is
supposed to prevent incorrect applicability determinations from being
made by sources in the first place.  And of course the real conclusion
to be drawn from this, which the Draft Guidance will not reach, is that
ROPs are simply improper.

 	Even the part 70 provision governing reasonably anticipated operating
scenarios, which EPA relies upon (improperly) to authorize “advance
approvals,” requires permit terms at the time the permit is issued to
“ensure that the terms and conditions of each such alternative
scenario meet all applicable requirements and the requirements of this
part.”  40 CFR § 70.6(a)(9)(iii) (emphasis added).  There is nothing
in even this misused provision supporting the Draft Guidance’s
assertion that this obligation may be deferred to a future process
administered solely by sources.

 	Jacobellis v. Ohio, 378 U.S. 184, 197 (1964) (Stewart J., concurring).

 	Id. at 29.  It is worth singling out an unlawful legal interpretation
in this section of the Draft Guidance that leads the Agency to conclude
erroneously that minor NSR permit actions may be incorporated into Title
V permits through minor permit modifications.  The Draft Guidance
states: “[i]f advance approved changes were only subject to minor NSR
and the advance approval provisions were established after the title V
permit has been issued, the advance approval provisions could then be
incorporated into the title V permit as a minor permit modification.”
 Id.  Embedded within this statement is the legal interpretation that
minor NSR permit actions do not constitute “title I modifications,”
which are ineligible for minor permit modification procedures under part
70.  See 40 CFR § 70.7(e)(2)(i)(A)(5) (disallowing minor permit
modification procedures for title I modifications).  This interpretation
is plainly unlawful and will be subject to legal challenge upon adoption
of the Draft Guidance.  See infra note 33.

	In 1994 comments to EPA, NRDC supported what was then EPA’s
interpretation of the term “title I modification” to include
modifications processed pursuant to State minor NSR permit programs. 
See Letter from David G. Hawkins, Senior Attorney, NRDC, to EPA Air
Docket No. A-93-50 (Oct. 28, 1994).  We hereby incorporate these
comments by reference.  These comments expressed agreement with EPA that
“[m]odifications covered by [State minor NSR] programs clearly are
title I modifications: § 110(a)(2)(C) expressly uses the term
‘modifications’ to refer to the changes which such programs must
address; and, of course, this section is a part of Title I of the [Clean
Air] Act.”  Id. at 1.

	Not only is this the only defensible interpretation of the term
“title I modification” under the Act.  It is the interpretation
definitively adopted by EPA in the preamble to the 1994 proposal for
revisions to part 70.  Following discussion in this notice of disputes
over the meaning of the phrase “modifications under any provision of
title V,” EPA made clear its own interpretation: “EPA believes that
‘modifications under any provision of title I’ should be interpreted
to include minor NSR modifications.”  59 FR 44460, 44462 (Aug. 29,
1994).  Even if EPA could change this interpretation to the unlawful
Draft Guidance interpretation, an agency may only change its first,
definitively adopted legal interpretation pursuant to subsequent notice
and comment rulemaking, not through an illegal guidance enterprise.  See
generally Paralyzed Veterans v. D.C. Arena, 117 F.3d 579, 586 (D.C. Cir.
1997).

 	See, e.g., Bush Curbs Clean Air Provision; EPA Is Overridden On Public
Notice Rule For Emission Increases, Wash. Post,  May 17, 1992, at A1.

 	See Clean Air Implementation Project et al. v. EPA, No. 92-1303 (and
consolidated cases).

 	59 FR 44460 (Aug. 29, 1994) & 60 FR 45530 (Aug. 31, 1995).

 	See, e.g. 62 FR 30289 (June 3, 1997).

 	This section of the Draft Guidance notes in passing that permits
employing this particular “flexibility” should “contain the
authorization to use the minor permit modification process for
incorporating the new monitoring approach, once selected.”  Id. at 36.
 EPA-approved State regulations govern part 70 permit modifications and
the other procedural elements of the permit program; permits may not
contain conditions that predetermine and bias future application of
those regulations.  EPA points to no authority for this extraordinary
proposition and we know of no such authority.

 	See EPA Office of Reinvention, XL Project Progress Report: Intel
Corporation (March, 1999), at 1, EPA/100/F-99/005,
http://www.epa.gov/projectxl/intel/page5.htm (testing PALs).

 	These criteria include a project’s superior environmental
performance; costs savings and paperwork reduction; stakeholder support;
pollution prevention achievements; transferability for adoption
program-wide; feasibility; monitoring and reporting; and shifting of
risk burdens.  See generally 60 FR 27282 (May 23, 1995).  Apart from
these generalities, the Agency’s published XL materials are
frustratingly sparse on the questions of how XL projects will be
evaluated and whether the public will be involved in such evaluations
before claimed successes are adopted.  See, e.g., 62 FR 19872, 19881
(April 23, 1997) (admitting that “this notice does not provide
substantial guidance on the role of stakeholders in project
implementation and evaluation”).

 	See, e.g., Project XL 1999 Comprehensive Report, at 74-76.

 	For example, the “Example Approaches” in Section VIII of the Draft
Guidance bear a striking resemblance to the incomplete XL project for
Intel (semiconductor manufacturing facility) and the only recently
initiated XL project for Imation (magnetic tape manufacturing facility).
 See Draft Guidance at 42-44, 46-48; see generally Intel FPA, supra at
16; Imation FPA, supra at 16.  The final example from this section
relates to a pharmaceutical production facility and the MACT standard
for this source category, a curious example for a document purportedly
based upon implementation experience since, as noted above, this MACT
standard does not even have a compliance date until October 21, 2002. 
See supra note 9.

 	Indeed, it is not clear whether P4 permits even require enforceable
pollution prevention measures.  Support for this conclusion is provided
by the Draft Guidance’s acknowledgment almost in passing that
pollution prevention is not “mandatory” in P4 permits.  See Draft
Guidance at 4.

 	See generally 60 FR 27282 (May 23, 1995) (establishing commitment to
superior environmental results in inaugural announcement of Project XL);
62 FR 19872, 19873-76 (April 23, 1997) (reaffirming commitment to
superior environmental performance under Project XL).

 	These organizations were Citizens for a Better Environment,
Communities for a Better Environment, Ecology Center of Ann Arbor,
Environmental Action, Environmental Defense Fund (now Environmental
Defense), Environmental Justice Working Group, Friends of the Earth,
Minnesota Center for Environmental Advocacy, National Environmental Law
Center, National Wildlife Federation, Natural Resources Defense Council,
New Mexico Environmental Law Center, People for Community Recovery,
Santa Clara Center for Occupational Safety and Health, Sierra Club,
Silicon Valley Toxics Coalition, Southern Organizing Committee, and U.S.
PIRG.  Joint Statement at 1. 

 	The Draft Guidance states: “In developing a linkage between
emissions and operational parameters, we believe that you may allow a
source to exceed its units’ emissions limits during testing without a
need for any type of enforcement action, provided that appropriate terms
and conditions appear in the permit (e.g., the emissions limitations
apply at all times, except during emissions testing to develop
operational parameter ranges), and that the source sends you an advance
notice to perform such testing.”  Id. at 38-39.  EPA cannot possibly
be suggesting that state permitting authorities allow sources to violate
emissions limits.  The passage is confusing in that it suggests the
emissions limitations would not be legally applicable during testing, in
which case exceedances within the allowable ranges during testing would
not appear to be violations.  While we are willing to attribute this
latter reading to the passage, the Draft Guidance still does not explain
why it is permissible or protective of the environment for permitting
authorities to do what the document recommends, that is, allow emissions
limits to be exceeded during testing.

 	See also Draft Guidance at 43 (claim that a mass balance monitoring
approach for a semiconductor manufacturing facility “was determined to
be CEMS equivalent monitoring”).  

 	Id. at 39.  The Agency’s leading publication on the subject
describes an emissions factor as: 

a representative value that attempts to relate the quantity of a
pollutant released to the atmosphere with an activity associated with
the release of that pollutant.  These factors are usually expressed as
the weight of pollutant divided by a unit weight, volume, distance, or
duration of the activity emitting the pollutant (e. g., kilograms of
particulate emitted per megagram of coal burned).  Such factors
facilitate estimation of emissions from various sources of air
pollution.  In most cases, these factors are simply averages of all
available data of acceptable quality, and are generally assumed to be
representative of long-term averages for all facilities in the source
category (i. e., a population average).

Compilation Of Air Pollutant Emission Factors, Volume I: Stationary
Point And Area Sources, Introduction at 1, Fifth Edition, AP-42, U. S.
Environmental Protection Agency, Research Triangle Park, NC (Jan. 1995),
http://www.epa.gov/ttn/chief/ap42.html (AP-42).  Emissions factors are
usually used for estimation purposes for areawide emissions inventories.
 Id., Introduction at 2.

 	As EPA is aware, the Office of Inspector General has designated the
Office of Air and Radiation’s emission factor development program “a
significant weakness that impedes achievement of major air program goals
and is, therefore, a material weakness under the Federal Managers'
Financial Integrity Act (FMFIA).”  Emission Factor Development, EPA
OIG Report No. 6100318 (Sept. 30, 1996); see also The Effectiveness and
Efficiency of EPA’s Air Program, EPA OIG Report No.
E1KAE4-05-0246-8100057, at 6, 33-35 (Feb. 27, 1998).  This latter report
has noted that emissions factors are unavailable for many sources of air
pollution, and those that are available are often unreliable.  Id. at
34.  The report notes further that without reliable emission factors,
OAR and the states cannot be sure that proper emission limits are
established and that air permitting programs are effective, in which
case “the nation’s air quality could be adversely affected and
people could be subjected to the health hazards associated with
excessive exposure to air pollutants.”  Id. at 35.

 	See generally Bennett v. Spears, 520 U.S. 154, 178 (1997) (agency
action final if action is one by which “'rights or obligations have
been determined,” or from which “legal consequences will flow”);
NRDC v. EPA, 22 F.3d 1125, 1132-33 (D.C. Cir. 1994) (finding final and
ripe for judicial review three documents authorizing conditional
approval of committal SIP submissions); see also Appalachian Power Co.
v. EPA, 208 F.3d 1015, 1021-22 (D.C. Cir. 2000).

 	See generally Paralyzed Veterans v. D.C. Arena, 117 F.3d 579, 586
(D.C. Cir. 1997).  The D.C. Circuit has held that “[o]nce an agency
gives its regulation an interpretation, it can only change that
interpretation as it would formally modify the regulation itself:
through the process of notice and comment rulemaking.”  Id. at 586. 
Accordingly, because the Draft Guidance interpretations plainly are not
being set forth pursuant to notice and comment rulemaking, any
interpretations in the Draft Guidance that alter previous Agency
interpretations violate the Administrative Procedures Act and CAA the
Clean Air Act

 	See generally Appalachian Power, 208 F.3d at 1028; Barrick Goldstrike
Mines, Inc. v. Browner, 2000 WL 725727 (D.C.Cir.).  Where legal
interpretations set forth in guidance documents are found to have
effectively amended existing regulations, or found to be ultra vires as
a statutory interpretation, a court may set aside the guidance in its
entirety and prohibit EPA and state agencies from relying upon the
guidance interpretations.  See, e.g., Appalachian Power, 208 F.3d at
1028.

	One EPA Region has even opined, incorrectly we believe, that
alternative operating scenarios may be established in operating permits
under the 7-day notice provisions of 40 CFR § 70.4(b)(12).  See 61 FR
2983, 2986 (Jan. 30, 1996) (Region 2’s proposed interim approval of
New Jersey operating permits program).  Presumably, as supposed
alternative operating scenarios, advance approvals may be established in
the same manner.  The 7-day notice procedures of EPA’s current part 70
rules, which are the subject of pending legal challenge, allow sources
unilaterally to change their own permit without permit revision, and
without prior involvement by the permitting authority, much less EPA or
the public.  This of course confounds any pretense that advance
approvals (under the current regulations) would be subject to rigorous
or even meaningful oversight.  See Draft Guidance at 29.  Of course,
even if there were public oversight, the public would join EPA Regions
in protesting in vain that a permit’s advance approval failed to
adhere to EPA guidance that has no basis in the regulations.

 	Elsewhere in these comments, see section IV.A.2, we discuss the
serious ambiguities, gaps, and unanswered questions presented by the
Draft Guidance.  These problems will redound fully to the benefit of
industry, contrary to the interests of government enforcement personnel
and citizen suit enforcers, because adoption of the non-regulatory Draft
Guidance will obfuscate and compromise regulatory obligations.  It will
be fully in the interest of polluter defendants to erect the ambiguities
and permissions of final guidance as a shield to enforcement of
regulatory requirements.

	A related but separate issue is the consequences of intentional
“misinterpretation” of EPA regulations through the prism of
ambiguous Agency guidance.  Quite apart from negative enforcement
consequences, compliance with EPA’s regulations and achievement of the
environmental and health protections promised by these regulations will
suffer as a result of this guidance clouding regulatory obligations and
permits.

 	See, e.g., Appalachian Power, 208 F.3d 1015 ( D.C. Cir. 2000); 
Barrick Goldstrike Mines, Inc., 2000 WL 725727 ( D.C. Cir. 2000)

 	59 FR 44460 (Aug. 29, 1994) (proposed part 70 amendments) & 60 FR
45530 (Aug. 31, 1995) (proposed part 70 amendments); 61 FR 38250 (July
23, 1996) (proposed PSD & NSR amendments).

 	The limited scope of applicable requirements under this proposal and
solicitation for comment – covering as they do just nonattainment NSR,
PSD, minor NSR and section 112(g) modifications – alone demonstrates
the absurdity of claiming that the 1992 regulations always have
authorized advance approval of all applicable requirements.  See Draft
Guidance at 11.  Why would EPA have proposed to cut back on the scope of
applicable requirements eligible for advance approval, while at the same
time proposing to grant itself authority (with respect to these four
applicable requirements) that it already had, all the while not
acknowledging that it was doing either?

 	See Letter from David G. Hawkins, Senior Attorney, NRDC, to Air and
Radiation Docket A-93-50 (Oct. 30, 1995) (NRDC 1995 Part 70 Comments).

 	A partial list of these issues includes: preauthorization of minor NSR
approvals under a major NSR PAL; increased operational flexibility of
PALs; emissions certainty regarding the triggering of major NSR;
elimination of the need for specific modification baselines; calculation
of contemporaneous emissions increases and decreases; elimination of
traditional NSR exemptions; resource burdens under different permitting
approaches; room for pollution prevention; reduction of “paper”
allowable emissions; availability of voluntary PALs for major
modifications, as an alternative to otherwise applicable NSR rules;
definition for “PAL” and “PAL major modification”; PAL levels;
operating margins in establishment of a PAL; PAL baselines; the federal
enforceability of PALs; the practical enforceability of PALs; control
technology application; public notice and comment procedures; periodic
reevaluation of a PAL; changes under a PAL; adjustment of a PAL;
application of BACT/LAER at sources with PALs; HAP reductions and VOC
PALs; PALs in serious and above ozone nonattainment areas; and
termination of a PAL.  See generally 61 FR 38250, 38264-66 (July 23,
1996).  The 1998 NSR Notice of Availability addresses even further
issues.  See generally 63 FR 39857 (July 24, 1998).   	

 	See Comments of NRDC on Notice of Availability; Alternatives for NSR
Applicability for Major Modifications, at 1, 63 FR 39857-39866 (July 24,
1998), Docket No. A-90-37 (Oct. 8, 1998).

 	For example, the Draft Guidance does not even address the specific
statutory provisions governing nonattainment NSR in serious, severe and
extreme areas that conflict with the document’s vague conception of a
PAL, and that would constrain any possible PAL concept under the Act. 
See CAA §§ 182(c), (d) & (e).

  

 	See Draft Guidance at 31 (“Under the current major NSR regulations,
an existing major source proposing a project that will result in a
‘significant’ emissions increase may net out of major NSR by
providing creditable actual emissions decreases during a
‘contemporaneous’ period to offset the increases from the project
and other creditable increases during the contemporaneous period. 
Although such sources can avoid major NSR by netting, title V permit
terms are nonetheless generated in each netting transaction because any
limits on PTE for the project, as well as any decreases used to generate
netting credit, must be made enforceable.”).  

This is a useful spot to note that the Draft Guidance throughout suffers
from a serious failure to cite, quote, or explain the specific
regulations that it purports to interpret.  This failing is particularly
true in this section of the Draft Guidance, which addresses some of the
NSR program’s most complex regulations.  On top of this, EPA grafts a
completely new (and unfounded) concept – PALs.  This approach to
guidance writing poses a significant and unnecessary obstacle to the
public’s ability to understand EPA regulations, EPA guidance, and the
interpretive links that EPA claims to be drawing between the two.  In
addition, it promotes rule by fiat rather than rule by law.  We trust
that this poor draftsmanship is stylistic rather than calculated. 
Although we do not expect EPA to adopt the Draft Guidance following
consideration of these comments, we would urge EPA to be mindful of
these concerns in the future.

 	As noted earlier, this exception is to be found in part 70’s
definition of “applicable requirement”: “[a]pplicable requirement
means all of the following as they apply to emissions units in a part 70
source (including requirements that have been promulgated or approved by
EPA through rulemaking at the time of issuance but have future-effective
compliance dates).”  Id. at § 70.2; see also supra at 36.  The one
exception for future requirements, then, concerns “requirements that
have been promulgated or approved by EPA through rulemaking at the time
of issuance but have future-effective compliance dates.”  A federal
MACT standard is an example.  A permit may include terms reflecting such
applicable requirements with future effective compliance dates, and a
permit shield may cover a source’s future compliance with those permit
terms.

	The principle preventing application of a permit shield to a PAL and
NSR applicability determinations has already been adopted by EPA.  In a
June 29, 1995 letter from Ann Pontius, Chief,

Air Compliance and Permitting Section, U.S. EPA Region X to John J.
Ruscigno, P.E., Manager,

Program Operations Section, Air Quality Division, Oregon Department of
Environmental Quality, EPA determined that a blanket permit shield could
not be applied to claims of past NSR non-applicability.  Id. at 1-2. 
EPA explained that a permit shield was improper unless and until the
permitting authority specifically determined that requirements did not
apply, and that “[a] source seeking a determination of
nonapplicability of new source review requirements to a particular
change would need to provide the permitting authority with detailed
information regarding that change.”  Id. at 2.  EPA rejected the
company’s blanket assertion that it had not triggered NSR in the past,
thereby qualifying for the permit shield.  Id. at 2-3.  

	These conclusions hold even more true with respect to future,
unidentified and unknown activities that may trigger NSR under a PAL. 
Even if a permit shield could apply to future (non)applicability
determinations, which it may not, it could apply only after a source
provided detailed information regarding the future change and the
permitting authority determined that NSR would not apply to the change. 
Because sources cannot and will not know with sufficient specificity
what future activities they may undertake under a PAL and what the NSR
implications may be, a permit shield may not be applied to a PAL and
future activities occurring under a PAL.

 	See, e.g., 54 FR 27274 (June 29, 1989); “Applicability of New Source
Review Circumvention Guidance to 3M - Maplewood, Minnesota,” John B.
Rasnic, Director, Stationary Source Compliance Division, to George T.
Czerniak, Chief, Air Enforcement Branch, Region V (Maplewood Memo).

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