Operating Permit Programs; Flexible Air Permitting Rule

Response to Comments

Air Quality Policy Division

Office of Air Quality Policy and Standards

U. S. Environmental Protection Agency

Research Triangle Park, NC  27711

January 2009TABLE OF CONTENTS

  TOC \o "1-3" \h \z \u    HYPERLINK \l "_Toc219196855"  LIST OF
ACRONYMS AND ABBREVIATIONS	  PAGEREF _Toc219196855 \h  iii  

  HYPERLINK \l "_Toc219196856"  1	Introduction	  PAGEREF _Toc219196856
\h  1  

  HYPERLINK \l "_Toc219196857"  1.1	Background	  PAGEREF _Toc219196857
\h  1  

  HYPERLINK \l "_Toc219196858"  1.2	The Commenters	  PAGEREF
_Toc219196858 \h  1  

  HYPERLINK \l "_Toc219196859"  1.3	Organization of This Document	 
PAGEREF _Toc219196859 \h  1  

  HYPERLINK \l "_Toc219196860"  2	General Comments on the Proposal	 
PAGEREF _Toc219196860 \h  7  

  HYPERLINK \l "_Toc219196861"  3	Comments on Advance Approval	  PAGEREF
_Toc219196861 \h  9  

  HYPERLINK \l "_Toc219196862"  3.1	Comments on Proposal Preamble
Discussion of Advance Approval	  PAGEREF _Toc219196862 \h  9  

  HYPERLINK \l "_Toc219196863"  3.2	Comments on Revision to Application
Requirements for Emissions Caps [§70.5(c)(3)(iii)]	  PAGEREF
_Toc219196863 \h  11  

  HYPERLINK \l "_Toc219196864"  4	Comments on Alternative Operating
Scenarios (AOSs)	  PAGEREF _Toc219196864 \h  14  

  HYPERLINK \l "_Toc219196865"  4.1	General Comments on AOSs	  PAGEREF
_Toc219196865 \h  14  

  HYPERLINK \l "_Toc219196866"  4.2	Comments on the Definition of AOS	 
PAGEREF _Toc219196866 \h  17  

  HYPERLINK \l "_Toc219196867"  4.3	Comments on Proposed Uses of AOSs	 
PAGEREF _Toc219196867 \h  21  

  HYPERLINK \l "_Toc219196868"  4.3.1	Comments on Switching Between
Compliance Options	  PAGEREF _Toc219196868 \h  21  

  HYPERLINK \l "_Toc219196869"  4.3.2	Comments on the Relationship
Between AOSs and Advance Approvals	  PAGEREF _Toc219196869 \h  22  

  HYPERLINK \l "_Toc219196870"  4.4	Comments on Revisions for Consistent
AOS Terminology	  PAGEREF _Toc219196870 \h  23  

  HYPERLINK \l "_Toc219196871"  4.5	Comments on Revisions to Application
Requirements for AOSs	  PAGEREF _Toc219196871 \h  24  

  HYPERLINK \l "_Toc219196872"  4.5.1	Comments on the Clarification of
the Types of Additional Information that May Be Requested on AOSs
[§70.5(c)(7)]	  PAGEREF _Toc219196872 \h  25  

  HYPERLINK \l "_Toc219196873"  4.5.2	Comments on Requirements for
Documentation of Necessary Authorizations [§70.5(c)(7)]	  PAGEREF
_Toc219196873 \h  25  

  HYPERLINK \l "_Toc219196874"  4.5.3	Comments on Requirement for
Compliance Plans [§70.5(c)(8)]	  PAGEREF _Toc219196874 \h  26  

  HYPERLINK \l "_Toc219196875"  4.6	Comments on Revisions to Permit
Content Requirements for AOSs (§70.6)	  PAGEREF _Toc219196875 \h  26  

  HYPERLINK \l "_Toc219196876"  4.6.1	Comments on Semiannual Reports
[§70.6(a)(3)(iii)(A)]	  PAGEREF _Toc219196876 \h  26  

  HYPERLINK \l "_Toc219196877"  4.6.2	Comments on Log Content
[§70.6(a)(9)(i)]	  PAGEREF _Toc219196877 \h  27  

  HYPERLINK \l "_Toc219196878"  4.6.3	Comments on Permit Shields for
AOSs [§70.6(a)(9)(ii)]	  PAGEREF _Toc219196878 \h  29  

  HYPERLINK \l "_Toc219196879"  4.6.4	Comments on Permit Content to
Describe AOSs [§70.6(a)(9)(iii)]	  PAGEREF _Toc219196879 \h  29  

  HYPERLINK \l "_Toc219196880"  4.6.5	Comments on Requirement for All
Needed Authorization [§70.6(a)(9)(iii)]	  PAGEREF _Toc219196880 \h  30 


  HYPERLINK \l "_Toc219196881"  4.7	Other Comments on AOSs	  PAGEREF
_Toc219196881 \h  30  

  HYPERLINK \l "_Toc219196882"  5	Comments on Approved Replicable
Methodologies (ARMs)	  PAGEREF _Toc219196882 \h  34  

  HYPERLINK \l "_Toc219196883"  5.1	General Comments on ARMs	  PAGEREF
_Toc219196883 \h  34  

  HYPERLINK \l "_Toc219196884"  5.2	Comments on the Use of ARMs to
Adjust Operating Parameter Limits	  PAGEREF _Toc219196884 \h  37  

  HYPERLINK \l "_Toc219196885"  5.3	Other Comments on ARMs	  PAGEREF
_Toc219196885 \h  41  

  HYPERLINK \l "_Toc219196886"  6	Comments on Green Groups	  PAGEREF
_Toc219196886 \h  44  

  HYPERLINK \l "_Toc219196887"  6.1	Overall Summary of Comments and
EPA's Final Action	  PAGEREF _Toc219196887 \h  44  

  HYPERLINK \l "_Toc219196888"  6.2	General Comments on Green Groups	 
PAGEREF _Toc219196888 \h  48  

  HYPERLINK \l "_Toc219196889"  6.2.1	Comments on Whether Green Groups
Should Be Mandatory	  PAGEREF _Toc219196889 \h  49  

  HYPERLINK \l "_Toc219196890"  6.2.2	Comments on the Benefits of Green
Groups	  PAGEREF _Toc219196890 \h  52  

  HYPERLINK \l "_Toc219196891"  6.2.3	Comments on Public Participation	 
PAGEREF _Toc219196891 \h  53  

  HYPERLINK \l "_Toc219196892"  6.2.4	Other General Comments	  PAGEREF
_Toc219196892 \h  53  

  HYPERLINK \l "_Toc219196893"  6.3	Comments on the Scope Green Groups	 
PAGEREF _Toc219196893 \h  53  

  HYPERLINK \l "_Toc219196894"  6.3.1	Comments on Removing Units in a
Green Group	  PAGEREF _Toc219196894 \h  53  

  HYPERLINK \l "_Toc219196895"  6.3.2	Comments on Emissions Units Being
Routed to a Common Control Device	  PAGEREF _Toc219196895 \h  54  

  HYPERLINK \l "_Toc219196896"  6.3.3	Comments on Green Groups
Authorization	  PAGEREF _Toc219196896 \h  56  

  HYPERLINK \l "_Toc219196897"  6.3.4	Other Comments on the Scope of
Green Groups	  PAGEREF _Toc219196897 \h  60  

  HYPERLINK \l "_Toc219196898"  6.4	Comments on the Emissions Limits of
Green Groups	  PAGEREF _Toc219196898 \h  61  

  HYPERLINK \l "_Toc219196899"  6.4.1	Comments on Baseline Emissions	 
PAGEREF _Toc219196899 \h  61  

  HYPERLINK \l "_Toc219196900"  6.4.2	Comments on Fugitive Emissions	 
PAGEREF _Toc219196900 \h  62  

  HYPERLINK \l "_Toc219196901"  6.4.3	Comments on Prior Limits	  PAGEREF
_Toc219196901 \h  62  

  HYPERLINK \l "_Toc219196902"  6.4.4	Comments on Pollution Prevention
(P2)	  PAGEREF _Toc219196902 \h  63  

  HYPERLINK \l "_Toc219196903"  6.4.5	Comments on an Aggregate Emissions
Limit	  PAGEREF _Toc219196903 \h  65  

  HYPERLINK \l "_Toc219196904"  6.4.6	Comments on the Annual Emissions
Limit	  PAGEREF _Toc219196904 \h  65  

  HYPERLINK \l "_Toc219196905"  6.4.7	Comments on Advance Approvals	 
PAGEREF _Toc219196905 \h  67  

  HYPERLINK \l "_Toc219196906"  6.4.8	Comments on Offsets	  PAGEREF
_Toc219196906 \h  67  

  HYPERLINK \l "_Toc219196907"  6.4.9	Other Comments on the Emission
Limits of Green Groups	  PAGEREF _Toc219196907 \h  68  

  HYPERLINK \l "_Toc219196908"  6.5	Comments on the Monitoring,
Recordkeeping, Reporting, and Testing (MRRT) Requirements for Green
Groups	  PAGEREF _Toc219196908 \h  68  

  HYPERLINK \l "_Toc219196909"  6.6	Comments on the Duration and Renewal
of the Green Group Designations	  PAGEREF _Toc219196909 \h  71  

  HYPERLINK \l "_Toc219196910"  6.6.1	Comments on Contemporaneity of
Construction Requirements [§§52.21(r)(2) & 52.1666(j)(4)]	  PAGEREF
_Toc219196910 \h  71  

  HYPERLINK \l "_Toc219196911"  6.6.2	Comments on Renewal of Green
Groups	  PAGEREF _Toc219196911 \h  73  

  HYPERLINK \l "_Toc219196912"  6.6.3	Comments on the Dividing Up Green
Groups After Expiration	  PAGEREF _Toc219196912 \h  74  

  HYPERLINK \l "_Toc219196913"  6.6.4	Comments on the Duration for a
Green Group Designation	  PAGEREF _Toc219196913 \h  74  

  HYPERLINK \l "_Toc219196914"  6.6.5	Comments on the Advancement of
Control Technology	  PAGEREF _Toc219196914 \h  78  

  HYPERLINK \l "_Toc219196915"  6.6.6	Other Comments on the Duration and
Renewal of Green Group Designations	  PAGEREF _Toc219196915 \h  79  

  HYPERLINK \l "_Toc219196916"  6.7	Comments on the How Green Groups are
Similar to PALs	  PAGEREF _Toc219196916 \h  80  

  HYPERLINK \l "_Toc219196917"  6.8	Comments on the Legal Rationale for
Green Groups	  PAGEREF _Toc219196917 \h  81  

  HYPERLINK \l "_Toc219196918"  7	Miscellaneous Comments	  PAGEREF
_Toc219196918 \h  85  

 

LIST OF ACRONYMS AND ABBREVIATIONS



Act	Clean Air Act (42 U.S.C. 7401 - 7671q)

AOS	Alternative Operating Scenario

ARM	Approved Replicable Methodology

BACT	Best Available Control Technology

BARCT	Best Available Retrofit Control Technology

CAA	Clean Air Act (42 U.S.C. 7401 - 7671q)

CAM	Compliance Assurance Monitoring

CFR	Code of Federal Regulations

D.C. Cir. 	D.C. Circuit Court of Appeals

EGU	Electrical Generating Unit

EPA	Environmental Protection Agency

FAP	Flexible Air Permit

FIP	Federal Implementation Plan

FR	Federal Register

LAER	Lowest Achievable Emission Rate

MACT	Maximum Achievable Control Technology

MRR	Monitoring, Recordkeeping, and Reporting

NA	Nonattainment

NAAQS	National Ambient Air Quality Standards 

NACAA	National Association of Clean Air Agencies

NA NSR	Nonattainment Major New Source Review

NEI	National Emissions Inventory

NESHAP	National Emission Standard for Hazardous Air Pollutants

NOx	Nitrogen Oxides

NSPS	New Source Performance Standards

NSR	New Source Review

P2	Pollution Prevention

PAL	Plantwide Applicability Limitation

PSD	Prevention of Significant Deterioration

R&D	Research and Development

RACT	Reasonably Available Control Technology

SIC	Standard Industrial Classification

SIP	State Implementation Plan

SSM	Startup, Shutdown, and Malfunction

TIP	Tribal Implementation Plan

TPY	Tons Per Year

TRI	Toxic Release Inventory

VOC	Volatile Organic Compound

Introduction	

Background 

The EPA (we) proposed the Flexible Air Permitting Rule on September 12,
2007 (72 FR 52206).  This action proposed to revise the regulations
governing state and federal operating permit programs required by title
V of the Clean Air Act (the Act) and the New Source Review (NSR)
programs required by parts C and D of title I of the Act to explicitly
allow for certain approaches to flexible air permits (FAPs). 
Specifically, we discussed and proposed regulatory revisions for advance
approval of types or classes of changes under minor NSR, alternative
operating scenarios (AOSs), approved replicable methodologies (ARMs),
and Green Groups.

The original deadline for public comments on the proposal was November
13, 2007.  However, after we received timely requests to extend the
comment period, we extended the deadline to January 14, 2008 (72 FR
59065, October 18, 2007).

This document presents a summary of the significant public comments that
we received on the September 12, 2007 proposal, along with our responses
to those comments.  The document supports the final rulemaking,
“Operating Permit Programs; Flexible Air Permitting Rule.”  We refer
to this rulemaking as the “FAP Rule” in the remainder of this
document.  The responses presented in this document are intended to
augment the responses to comments that appear in the preamble to the
final rule or to address comments not discussed in the preamble to the
final rule.  Although portions of the preamble to the final rule are
paraphrased in this document where useful to add clarity to responses,
to the extent any ambiguity is introduced by this paraphrasing, the
preamble itself remains the definitive explanation of the final rule.

The Commenters  

We received a total of 38 unique comments (i.e., not including
duplicates) on the proposal.  The commenters can be broken down by
general type as follows: 16 state/local air agencies or air agency
associations, 12 industry or industry association commenters,
1 environmental advocacy group, 1 federal government agency, 3 private
citizens, 4 tribes, and 1 "other" commenter.  The commenters are
listed in Table 1, which appears at the end of this section.  

Organization of This Document

After this introductory section, this document is divided into six
additional sections.  The sections address the following topics: 

Section 2 – General Comments.

Section 3 – Advance Approval.

Section 4 – Alternative Operating Scenarios (AOSs). 

Section 5 – Approved Replicable Methodologies (ARMs). 

Section 6 – Green Groups. 

Section 7 – Miscellaneous Comments.

Table 1.  List of Commenters

DOCKET ID a, b 	COMMENT DESCRIPTION	TYPE OF COMMENTER	COMMENTS

0053	Comment submitted by A. Grimes 	Private Citizen

	0055	Comment submitted by M. Hibbs 	Private Citizen

	0056	Comment and attachment submitted by M. Peloso 	Private Citizen

	0057	Comment and attachment submitted by Cindy McComas, Director,
Minnesota Technical Assistance Program (MnTAP) 	Other

	0059	Comment submitted by Mark Steinberg, Air Quality Manager, S. C.
Johnson & Son, Inc (SCJ) 	Industry

	0061	Comment and attachment submitted by Robin Clark, Air Quality
Specialist, Environmental Services Department, Little Traverse Bay Bands
of Odawa Indians 	Tribe

	0062	Comment and attachment submitted by John A. Paul, Administrator,
Regional Air Pollution Control Agency (RAPCA) 	State/Local	Supported
comments made by NACAA (0089)

0063	Comment submitted by Roy Wood, Kodak Health Safety and Environment
Division, Eastman Kodak Company (Kodak) 	Industry

	0064	Comment submitted by Daniel Muray, Assistant Commissioner Office
of Air Quality, Indiana Department of Environmental Management (IDEM) 
State/Local

	0065	Comment and attachment submitted by Barry R. Wallerstein, Doctor
of Environmental Sciences and Engineering, Executive Officer, South
Coast Air Quality Management District (SCAQMD) 	State/Local	Supported
comments made by NACAA (0089)

0066	Comment and attachment submitted by Brandy Toft, Air Quality
Specialist, Leech Lake Band of Ojibwe 	Tribe

	0067	Comment submitted by Brandy Toft, Air Quality Specialist, Leech
Lake Band of Ojibwe 	Tribe	Duplicate of 0066

0068	Comment and attachment submitted by Bernard Paul, Eli Lilly and
Company 	Industry

	0069	Comment and attachment submitted by Jeff J. Smith, Manager, Air
Quality Permits Section, Industrial Division, Minnesota Pollution
Control Agency (MPCA) 	State/Local

	0070	Comment and attachment submitted by Robert D. Bessette, President,
Council of Industrial Boiler Owners (CIBO) 	Industry

	0071	Comment and attachment submitted by David Friedman, Director,
Environmental Affairs, National Petrochemical and Refiners and
Association (NPRA) 	Industry

	0072	Comment and attachment submitted by Maida O. Lerner, Hunton &
Williams on behalf of Utility Air Regulatory Group (UARG) 	Industry

	0073	Comment and attachment submitted by Leslie Sue Ritts, Counsel to
National Environmental Development Association's Clean Air Project
(NEDA/CAP) 	Industry

	0074	Comment and attachment submitted by Terry Behrman, Manager,
Environmental Affairs, Alliance of Automobile Manufacturers 	Industry

	0075	Comment and attachment submitted by Kirk A. Saffell, Vice
President, Health, Safety and Environmental, Valero Energy Corporation 
Industry

	0076	Comment and attachment submitted by Ted Steichen, Advisor,
American Petroleum Institute (API) 	Industry

	0077 	Comment and attachment submitted by Air Permitting Forum 
Industry

	0078	Comment submitted by Karen R. Diver, Chairwoman, Fond du Lac
Reservation Business Committee, Fond du Lac Band of Lake Superior
Chippewa 	Tribe

	0079	Comment submitted by Ram K. Singhal, Vice President, Technology &
Environmental Strategy, Flexible Packaging Association (FPA) 	Industry

	0080	Comment and attachment submitted by Thomas K. Fidler, Deputy
Secretary for Waste, Air and Radiation Management, Pennsylvania
Department of Environmental Protection (PADEP) 	State/Local

	0081	Comment submitted by William O’Sullivan, Director, Division of
Air Quality, New Jersey Department of Environmental Protection (NJDEP) 
State/Local	Supported comments made by NACAA (0089)

0082	Comment and attachment submitted by Jon E. Kallen, Manager,
Environmental Policy and Strategy, MidAmerican Energy Company 	Industry

	0083	Comment and attachment submitted by Harold P. Quinn, Jr.,
Executive Vice President and General Counsel, National Mining
Association (NMA) 	Industry

	0084	Comment submitted by Russell A. Wozniak, Environment, Health and
Safety Operations Regulatory Management, The Dow Chemical Company (Dow) 
Industry

	0085	Comment and attachment submitted by David J. Shaw, Director,
Division of Air Resources, New York State Department of Environmental
Conservation (NYSDEC)	State/Local

	0086 	Comment and attachment submitted by Air Permitting Forum 
Industry	Duplicate of 0077

0087	Comment submitted by Ali Mirzakhalili, Administrator, Division of
Air and Waste Management, Department of Natural Resources &
Environmental Control, State of Delaware 	State/Local

	0088	Comment submitted by John D. Walke, Director, Clean Air Program,
Natural Resources Defense Council (NRDC) 	Environmental

	0089	Comment and attachments submitted by Bob Hodanbosi and Ursula
Kramer, Co-Chairs, Permitting Committee, National Association of Clean
Air Agencies (NACAA) 	State/Local

	0090	Comment and attachments submitted by Alan R. Newman, P.E., Senior
Air Quality Engineer, Washington State Department of Ecology 
State/Local

	0091	Comment and attachment submitted by Terry Behrman, Manager,
Environmental Affairs, Alliance of Automobile Manufacturers 	Industry
Duplicate of 0074

0092	Comment and attachment submitted by Nancy C. Wrona, Director, Air
Quality Division, Arizona Department of Environmental Quality (ADEQ) 
State/Local	Supported comments made by NACAA (0089)

0093	Comment and attachment submitted by Rosa Maria S. Abreu, Assistant
Director, San Diego County Air Pollution Control District 	State/Local
Supported comments made by NACAA (0089)

0094	Comment submitted by James L. Kavanaugh, Director, State of
Missouri Department of Natural Resources 	State/Local

	0095	Comment submitted by Mark V. Goodin, Olympic Regional Air Agency
and Alan R. Newman, Senior Air Quality Engineer, State of Washington
Department of Ecology 	State/Local	Duplicate of 0090

0096	Comment submitted by William H. Lewis, Counselor at Law, Morgan,
Lewis & Bockius LLP, on behalf of the Clean Air Implementation Project
and American Chemistry Council 	Industry

	0097	Comment submitted by John A. Paul, Administrator, Regional Air
Pollution Control Agency (RAPCA) 	State/Local	Duplicate of 0062



0098	Comment submitted by Jeff J. Smith, Manager, Air Quality Permits
Section, Industrial Division, Minnesota Pollution Control Agency (MPCA) 
State/Local	Duplicate of 0069

0099	Comment submitted by Andrew C. Lawrenc, Director, Office of Nuclear
Safety and Environment, Department of Energy (DOE) 	Federal

	0100	Comment submitted by Barry R. Wallerstein, Executive Director,
South Coast Air Quality Management District (SCAQMD) 	State/Local
Duplicate of 0065

0101	Comment submitted by Karen R. Diver, Chairwoman, Fond du Lac
Reservation Business Committee 	Tribe	Duplicate of 0078

0102	Comment submitted by Kirk A. Saffell, Vice President, Health,
Safety and Environmental, Valero Energy Corporation (Valero) 	Industry
Duplicate of 0075

0103	Comment submitted by Rosa Maria Abreu, Assistant Director, Air
Pollution Control District, County of San Diego 	State/Local	Duplicate
of 0093



0104	Comment submitted by Ali Mirzakhalili, P.E, Administrator,
Department of Natural Resources & Environmental Control, Division of Air
& Waste Management, State of Delaware 	State/Local	Duplicate of 0087



a  Docket ID identifies comments found in Docket No.
EPA-HQ-OAR-2004-0087 by document number.

b  Documents submitted to the docket together appear in the docket as
multiple documents with the same 4-digit “root number” followed by a
unique extension.  For example, comments received via email are
generally assigned two numbers.  First, the email message itself is
assigned the root number (e.g., 0137).  Second, the attached comment
document is assigned an extended number based on the root number (e.g.,
0137.1).  Additional attachments, if any, would follow the same pattern
(e.g., 0137.2, 0137.3, etc.).  For the purposes of this table, we list
all related documents under the root number (e.g., 0137).  In the text
of the comment summary, we identify the source by the entire document
number (e.g., 0137.1).

General Comments on the Proposal

Supportive Comments:

One air agency (0064), eight industry commenters (0059, 0068.1, 0070.1,
0071.1, 0072.1, 0074.1, 0082, 0084), one federal agency (0099), and two
private citizens (0053, 0056) generally supported EPA’s efforts to
facilitate the use of flexible air permits (FAPs).  The commenters
generally stated that FAPs will increase permit efficiency, provide
greater administrative flexibility and regulatory certainty, and promote
continuous improvement at regulated facilities.  The industry commenters
also generally stated that the FAPs will provide greater operational
flexibility.  A number of the commenters noted that many of the
flexibility approaches addressed in the proposal are already being
implemented by states under their existing regulations.  Some of the
commenters described the benefits that would accrue from FAPs.  (Despite
this overall support for the concept of flexible permits, many of these
commenters suggested changes to the specific elements of the proposal
and did not necessarily support additional requirements to facilitate
increased consideration of FAPs.)  

Opposing Comments:

Seven air agencies (0065.1, 0080.1, 0085.1, 0087, 0089, 0090.1/0090.2,
0092.1), and three tribes (0061.1, 0066.1, 0078) generally opposed
EPA’s proposed FAP rule.  Several of the commenters stated that many
of the aspects of EPA's proposed rule are already being implemented
through the existing title V regulations, and that the provisions will
only further complicate the existing permitting process.  Some provided
examples of current state programs to simplify existing permitting
programs or implement flexible permitting, which they believe make the
proposed rule unnecessary.  Others indicated that the pilot permits do
not provide a basis for the proposed FAP rule and that the proposed rule
would not provide the benefits that EPA claimed.  Several of the
commenters also stated that provisions of the proposed FAP rule are best
left to the permitting authorities to implement on a voluntary,
case-specific basis.  In addition, the commenters generally opposed the
proposed Green Group provisions.

Response:

	Because commenters (both supportive and opposing) have generally found
that the flexibility approaches addressed in the proposal are available
to the extent needed and appropriate under existing authorities, and
that the existing permitting processes generally are sufficient and
effective for the reasonable consideration of FAP approaches, EPA is
convinced that more prescriptive approaches and additional requirements
as proposed to assure greater consistency may well be counterproductive
to our objective for greater consideration and appropriate use of FAP
approaches.  Consequently, the final action is primarily a reaffirmation
of currently available flexibility options and the process for accessing
them.  The final rule adds some new definitions and clarifications to
existing parts 70 and 71 provisions in order to promote greater
certainty and reasonable consideration of these options.  While deciding
not to prescribe specific approaches to the design and implementation of
FAPs (e.g., provisions for Green Groups), EPA does intend to monitor
state activities in these areas, to evaluate the effectiveness of
various FAP approaches periodically, and to assess, on the basis of new
experiences and other information, whether any additional guidance or
rulemaking would be appropriate in the future. 

	The comments on specific aspects of the proposed rules are summarized
in Sections 3 through 6 of this document.  Where the comments are
related to actions taken in the final rule, we provide specific
responses.  Section 7 of this document summarizes other comments that
are related more to the subsequent implementation of FAP activities than
to the content of the final rule.  



Comments on Advance Approval

Comments on Proposal Preamble Discussion of Advance Approval

Supportive Comments:

	One air agency (0087) and six industry commenters (0059, 0068.1,
0073.1, 0074.1, 0076.1, 0077.1) agreed with EPA statements in the
preamble encouraging advance approval of changes subject to minor new
source review (NSR).  Two of the these industry commenters (0074.1,
0077.1) stated that using advance approvals of minor NSR changes is
sound policy because it reduces permit revisions, increases awareness of
the public to planned changes at a facility, and minimize costs for both
sources and state agencies.  One of these industry commenters (0074.1)
stated that one of the most beneficial aspects of this proposal is its
encouragement of states to use flexible permitting approaches and to
bring such approaches into mainstream permitting rather than making them
the exception to the rule.  The commenter concurs with EPA that advance
minor NSR approvals should and can be included in title V permits under
the existing regulations, and believes EPA’s encouragement of advance
approvals in this rulemaking is helpful.  One air agency (0087) agreed
with developing widespread understanding and use of advance approvals,
and agreed that modification of any federal rule to codify the technique
is unnecessary and would likely do more harm than good.  One of the
industry commenters (0059) stated that the advance approval process will
also complement the flexibility provided by title V alternative
operating scenario (AOS) provisions.

	Another air agency (0069.1) and two additional industry commenters
(0084, 0096) also supported EPA's decision not to propose NSR rule
changes for advance approvals.  The air agency (0069.1) stated that
since many permits approve some sort of change or modification, there is
no need to call out a specific term or additional authority to grant
such an approval.  The commenter stated that states would use their
existing authorities and permit processes (e.g., minor NSR, major NSR,
etc.) to grant the necessary approval.  The two industry commenters
(0084, 0096) noted that EPA's proposal recognizes that many states have
issued advance approvals under their existing minor NSR programs.  These
industry commenters stated that the nature of advance approvals varies
and will, of necessity, require that they be tailored according to the
needs of specific facilities.

Opposing Comments:

	Two air agencies (0085.1, 0089) opposed the proposal preamble's
discussion of advance approvals.  One of these air agencies (0089)
stated that states do not want or need federal “encouragement” to
use and revise their minor NSR programs for advance approvals.  The
commenter stated that if EPA retains this rule (i.e., for areas other
than minor NSR, for which the Agency did propose rule revisions), which
the commenter recommends withdrawing, EPA should expunge the preamble of
encouraging advance approvals and other ambiguous language that could be
misinterpreted as having regulatory force.  The commenter also stated
that some of states lack an integrated title V/NSR permitting program,
and would have difficulty with advance-approved minor NSR changes.  The
commenter added that some state and local air agencies are simply unable
to carry out aspects of the proposed rule, for example, because their
minor NSR programs require BACT or LAER to be installed
contemporaneously on an emissions-unit basis.  The commenter stated that
in these jurisdictions, permitting authorities are unlikely to make
changes in their minor NSR programs, as they believe that such changes
would have detrimental impacts on their clean air obligations.

	One industry commenter (0065.1), while not opposing advance approvals
in general, stated that some of the examples EPA gives appear to be
inappropriate.  The commenter gave one such example, where EPA appears
to support the idea that an advance approval could be given to a source
even where the source does not know the size or number of new tanks it
will propose, or what materials will be stored in them.  The commenter
stated that in this case, it seems unlikely that the permitting
authority could determine what applicable requirements would have to be
imposed, or what offsets or BACT/LAER should be required, and therefore
suggested that the source should not be able to obtain advance approval
in this case.

Response:

Consistent with our proposal, we are not revising any part 51 provision
in order to require advance approvals under minor NSR (or under any
other applicable requirement).  We continue to believe that many states
are able to advance approve types or categories of changes under their
existing minor NSR programs, to the extent that they believe it is
appropriate to do so.  As mentioned by a commenter, EPA recognizes that
certain minor NSR rules are not as amenable to advance approval as are
others.  In particular, advance approvals under state rules that require
sources to employ best available technology, where judged to be open to
advance approval by the permitting authority and appropriate for use in
a particular case, may require additional permit terms as necessary to
assure that best available technology will be used.  Permitting
authorities, operating under their existing minor NSR regulations and
authorities, must include terms as necessary to ensure the practical
enforceability of advance approvals.  For example, for purposes of
tracking compliance with an emissions cap established in minor NSR, the
minor NSR permit should contain sufficient terms that collectively act
to monitor and quantify the relevant emissions at the site over the
applicable time period.

	While we believe that appropriately crafted advance approvals of minor
NSR can, in certain cases, facilitate operational flexibility while
protecting the environment (at least as effectively as would the
individual review of each change as it occurs), we clearly state in the
preamble to the final rule that the Agency does not intend to imply that
states should issue such advance approvals in any cases that would be
inconsistent with their existing rules or, in their judgment, would be
inappropriate.  As a general matter, the permitting authorities have
authority to decide, on a case-by-case basis, the merits of granting an
advance approval of minor NSR to a particular requesting source. 
Additionally we state that EPA does not intend to imply that states must
revise their current rules to facilitate advance approvals in the
future.  Rather, where existing rules may limit advance approval
opportunities, EPA simply encourages states to consider the adoption of
more flexible minor NSR rules under the broad governing regulations in
40 CFR 51.160-51.164.  It is EPA’s policy to support state use of
advance approvals under minor NSR, where they deem them appropriate, and
particularly where states expect benefits similar to those found in our
evaluation of pilot permits to occur.

We also acknowledge that states, in order to respond to requests by
sources for advance approval of minor NSR, may incur additional up-front
development costs for which they may have to charge additional service
fees.  However, based on the pilot permit experience, annual
administrative costs associated with FAPs should decline over time and,
over the life of the permit, be less than those for conventional
permits.

We continue to believe that permitting authorities can consider, in the
context of their SIP-approved minor NSR programs, a wide spectrum of
situations for advance approval.  This would include the example
contained in the proposal preamble involving the potential addition of
new tanks to an existing tank farm, which was questioned by one
commenter as not being appropriate.  In disagreeing with the commenter,
we wish to point out that where a permitting authority opts to pursue
such an authorization, it must be able to ensure that each advance
approved change would be controlled to meet applicable requirements for
the pollutant(s) for which the advance approval is effective and that
the combination of emissions from these changes together  with existing
emissions at the source would not interfere with the relevant National
Ambient Air Quality Standards (NAAQS).  In the mentioned example, the
permitting authority accomplishes this for volatile organic compound
(VOC) emissions by including a table in the minor NSR permit that
replicably determines the required level of control based on the type
and size of new tank to be added and including a plantwide VOC emissions
cap set at a level both to function as a plantwide applicability
limitation (PAL) (i.e., major NSR for VOC would not apply) and to
safeguard the ozone NAAQS.  Note that this example addresses the advance
approval of minor rather than major NSR (which the commenter may have
misunderstood). 

Comments on Revision to Application Requirements for Emissions Caps
[§70.5(c)(3)(iii)]

Supportive Comments:

	Two industry commenters (0073.1, 0096) supported the proposed addition
of language to clarify that a source with an approved annual emissions
cap can meet the title V permit application requirements of 40 CFR
70(c)(5)(3)(iii) by reporting only the aggregate emissions associated
with the cap in the permit application.

Opposing Comments:

	One air agency (0069.1) disagreed with the proposed rule changes to 40
CFR 70.5(c)(3)(iii) and believes that the current language is adequate. 
The commenter stated that under a combined permit program, the permit
application must include all information needed to evaluate a given
activity which may include unit-by-unit potential or actual short or
long term emissions data.  The data may be used for several things
including control technology assessment, modeling, compliance
assessment, determining the appropriate level and frequency of
monitoring, etc., even if the unit is covered by an emissions cap.  The
commenter stated that if a unit is truly only subject to just the annual
emissions cap, the current language in 40 CFR 70.5(c)(3)(iii) should be
adequate to limit the need for further detail, and that adding the
sentence as proposed will lead to arguments with permittees over whether
or not the data is truly “needed to determine an applicable
requirement.” 

Other Comments:

	Without explicitly supporting or opposing the proposal, one air agency
(0094) stated that EPA needs to explain the statements about reporting
emissions data for individual emissions units participating in an
emission cap (e.g., PALs, Green Groups, etc.).  The commenter stated
that the preamble seems to ignore the fact that federal regulations
require state agencies to collect emissions data from sources annually
and to include them as boilerplate attachments to permits.  These
emissions data requirements are much more specific than that indicated
in the explanation and were believed to be "applicable requirements" by
the commenter.  In addition, the emissions calculations or monitoring
conducted to aggregate the emissions to determine compliance with the
cap are not provided.  The commenter stated that without an explanation
of how cap determinations are derived, it is not possible to determine
if calculations are correct.

Response:

The Agency has decided to finalize the proposed revision to the title V
permit application requirements at 40 CFR 70.5(c)(3)(iii) with minor
changes.  As proposed, the final revisions clarify that for emissions
units subject to an annual emissions cap, the application may report the
units’ emissions as part of the aggregate emissions associated with
the cap, except where the permitting authority determines that more
specific information is needed.  The EPA agrees with the commenter who
wanted to assure that permitting authorities retained the ability to
require more unit-specific information as needed to develop permit terms
needed to assure compliance with all applicable requirements relevant to
emissions units included under the emissions cap.  As a result, the
final rule language now indicates that unit-specific information must be
provided whenever it is needed, including where necessary to determine
or assure compliance with an applicable requirement.

Regarding the comment about requirements for states to collect annual
emissions data from sources, we note that the revised provision applies
only to the content of the title V permit application for emissions
units under an annual emissions cap.  Thus, the rule revision has no
bearing on information that sources must report under other, independent
programs.  While annual emissions data collection activities may not be
"applicable requirements" as defined at 40 CFR 70.2, any such
requirement that meets the definition (e.g., by virtue of being
contained in the SIP or an NSR permit) must be included in the title V
permit and must be complied with by the source.  We agree that any
permit that includes an emissions cap must include specific requirements
for quantifying emissions and determining compliance with the cap and,
therefore, the permitting authority may require any necessary
information on how to compute emissions under the cap to be included in
the permit application.

	We believe that the revised 40 CFR 70.5(c)(3)(iii) will facilitate the
use of advance approvals under emissions caps.  This combination of FAP
tools was repeatedly validated in our evaluation of pilot permits.  



Comments on Alternative Operating Scenarios (AOSs)

General Comments on AOSs

Supportive Comments:

One air agency (0064), one federal agency (0099), and three industry
commenters (0068.1, 0071.1, 0075.1) expressed general support for
EPA’s intent to provide greater permitting flexibility through the use
of AOSs, although some also expressed reservations about some aspects of
the proposal as discussed in the succeeding sections of this document. 
One of these industry commenters (0068.1) appreciated EPA's clarifying
the meaning and purpose of AOSs and providing specific examples of how
the concept works.  The federal agency (0099) particularly supported the
permitting flexibilities afforded in the proposed revisions involving
AOSs for research and development (R&D) activities.  The commenter
recommended adding "Research and Development" to the list of potentially
affected source categories in order to better recognize the need for
flexible air permitting for R&D facilities. 

Opposing Comments:

	Six air agencies (0080.1, 0085.1, 0087, 0089, 0090.2, 0092.1) and five
industry commenters (0072.1, 0074.1, 0076.1, 0077.1, 0083.1) explicitly
opposed EPA’s proposed AOS provisions.  The commenters generally
believe that these revisions are unnecessary and burdensome, and that
they would cause additional confusion.  The six air agencies (0080.1,
0085.1, 0087, 0089, 0090.2, 0092.1) and one industry commenter (0077.1)
stated that the proposed amendments are not likely to improve permitting
efficiency or flexibility because these concepts already exist and are
being used in many state programs to the extent that they are needed.  A
number of the industry commenters indicated that states do not typically
use the existing AOS provisions because they are not needed to assure
compliance.  Four of the industry commenters (0072.1, 0074.1, 0076.1,
0083.1) believe that the revisions would impose redundant recordkeeping
and/or reporting.  One of the air agencies (0087) recommended the
approach that EPA has taken for advance approval, that is, to use the
technique under existing rules and not modify them to accept a
particular format of the advanced approval method the AOS provisions. 

	One of the industry commenters (0072.1) who generally opposed the AOS
proposal nevertheless supported EPA’s reminding sources and permitting
authorities that the rules already provide for identification of AOSs
and that those provisions may be used at the source’s option to the
extent the source deems it useful.  However, the commenter was concerned
that EPA’s proposed revisions would force the AOS concept to be
applied much more broadly than it is currently being used. 
Specifically, the commenter fears that the revisions might be used to
require sources to carve up all of their applicable requirements into
separate AOSs based on a definition that is subject to varying
interpretations, and that the revisions might be used to impose new
substantive requirements or limitations on those AOSs, contrary to the
limited authority provided permitting officials under title V.  

	Another of these industry commenters (0077.1) stated that any final
rule should make clear that AOSs are normally not even necessary for the
typical source but are used in unusual circumstances where a source’s
operations would invoke wholly different and mutually exclusive
requirements that otherwise do not require recordkeeping to show which
rule applies at a given time.  

	A third industry commenter (0083.1) stated that revisions to the AOS
provisions are not necessary to implement title V because permits
already are required to include terms addressing all applicable
requirements.  This commenter also strongly disagreed with any
suggestion by EPA that a source would be prohibited from operating
consistent with applicable requirements that are set out in a permit
simply because those requirements had not been identified as an AOS and
“approved” by the permitting authority.  The commenter also
disagreed with any suggestion that title V would allow the permitting
authority to craft new terms and conditions to ensure compliance with
those applicable requirements simply because they were identified as, or
satisfied the definition of, an AOS.  Finally, the commenter disagreed
with the suggestion that permitting authorities could impose new
operational restrictions on a source simply to delineate the scope of an
AOS.  While opposing the proposed revisions for AOSs, the commenter
supported a reminder to sources and permitting authorities that the
rules already provide for identification of AOS and that those
provisions may be used at the source's option to the extent the source
deems it useful.

	One of the opposing air agencies (0080.1) also believes that the
proposed AOS provisions are unnecessary, but added that clarifying
guidance from EPA would ensure that the existing provisions are fully
implemented.  Another of the air agencies (0087) similarly suggested
that EPA prepare a White Paper # 4 to train state regulatory agencies in
the application of these techniques under differing situations.

	One industry commenter (0070.1) did not explicitly oppose the AOS
provisions, but indicated that many of the proposed requirements for
AOSs are unnecessary and burdensome and will discourage AOS use.  In
addition, the commenter stated that some of the situations mentioned in
the proposal where AOSs (or ARMs) can be used are handled today without
using AOSs (or ARMs), for example, a boiler that is permitted to use
both gas and distillate oil.  The commenter believes that states have
the flexibility to permit such common operational alternatives without
using AOSs.

Other General Comments:

One industry commenter (0073.1) expressed confusion about AOSs.  The
commenter indicated that the only circumstance in which an AOS might be
contemplated would be if the source wanted to retain the option for
combusting different fuels in a boiler or heater that it anticipated in
advance in the permit and that different equipment would be operated in
lieu of equipment already permitted.  However, the commenter believes
that this mode of operation can receive an “advance permit approval”
without the inclusion of AOS.

	Without expressing support or opposition, one industry commenter
(0065.1) noted that the basic concept of AOSs is already allowed under
title V.

Response:

Based on the comments received, the states’ current approach to
implementing existing AOS rules has proven to be fundamentally sound and
effective.  We are persuaded that the proposed specific revisions which
would be new requirements would not promote more widespread use of AOSs
and other effective strategies than does the current process-based
approach and that these revisions might instead be counterproductive. 
The Agency has therefore decided to not impose any additional
requirements onto an already working approach.  Rather, we intend to
preserve the flexibility available under existing rules by codifying a
definition of “AOS” (as modified in response to comments received)
and promulgating a few minor clarifications to the existing rules
intended to improve certainty.  The Agency believes that these actions,
in light of the comments received, are appropriate and consistent with
the basic streamlining tenets of section 502(b)(6) of the Act on which
the provisions for AOSs are based.

Commenters have convinced us that permitting authorities are currently
able, in response to a request by a source for more operational
flexibility, to develop title V permits which allow the source to shift
among identified operating scenarios.  Commenters correctly point out
that, under the current rule, in lieu of using an AOS, this result might
be achieved by relying on the authority and provisions contained in the
applicable requirements implicated by the anticipated scenario.  This
would be true where the applicable monitoring and/or reporting
requirements assure compliance (including requirements for records that
effectively identify when the scenario operates) or where the source and
permitting authority have opted to streamline the relevant applicable
requirements consistent with White Paper Number 2.  Conversely, AOSs
would be useful where additional records are needed to document when a
new scenario occurs.  We are therefore agreeing with commenters that,
for flexibility purposes, the current process is effective in
developing: (1) appropriate permit design options to access the inherent
flexibility under relevant applicable requirements to provide for
alternative modes of operation; and (2) AOSs which are determined to be
adequate and otherwise appropriate by the permitting authority in
reducing administrative costs while assuring compliance with all
applicable requirements.

Comments on the Definition of AOS

Comment:

	One air agency (0094) and one industry commenter (0068.1) supported the
proposed action to define "alternative operating scenario."  The
industry commenter (0068.1) explicitly supported the proposed definition
of "AOS."

Five industry commenters (0072.1, 0074.1, 0076.1, 0077.1, 0083.1)
opposed adding a definition of "AOS" to the title V regulations.  These
commenters believe that an AOS definition is unnecessary, generally
because they believe that AOSs are not needed and are rarely used.  One
of the commenters (0077.1) stated that adding a definition of "AOS" at
this stage of title V implementation is likely to be more confusing than
helpful and could even call into question the validity of permits that
have been issued containing all applicable requirements, but do not use
AOSs.

	Several commenters took issue with the wording of the proposed
definition, including some of those who opposed including a definition
at all.  Some suggested alternative wording as discussed below.

	Five industry commenters (0063, 0072.1, 0074.1, 0077.1, 0083.1) opposed
inclusion of the phrase “physical or operational change” in the AOS
definition.  These commenters generally believe that this wording is too
similar to language used in other programs (e.g., major NSR) and will
cause confusion.  One of these industry commenters (0063) stated that
the phrase “physical or operational change” could be construed in a
manner that would inappropriately limit the scope of scenarios that
could be covered by an AOS.  The commenter stated that if the phrase
“physical or operational change” remains in the definition of
“AOS,” EPA should explain that it has no NSR implications so long as
the AOS has been appropriately authorized in the Part 70 permit, and
should clearly describe how the phrase “physical or operational
change” establishes boundaries for what activities require an AOS. 
Two of these industry commenters (0072.1, 0083.1) do not believe EPA’s
attempt to define an AOS based on whether some activity involves a
“physical or operational change” is useful.  The commenters noted
that at some level almost every change a source makes could be
considered an operational change.  The commenters explained that if
sources are free to interpret their baseline operations (as they do
now), EPA’s proposed revisions would have little impact since sources
themselves would define what constitutes a change.  Another industry
commenter (0077.1) urged EPA to be cautious about concluding that one or
another activity constitutes a physical or operational change as these
terms have meaning in the context of other programs and their meaning
varies depending on the past operation of a given plant, including its
authorizations.  However, if EPA limits the use of AOSs to facilitating
advance approvals (the only situation in which the commenter believes
AOSs can be useful), the commenter stated that EPA could define the term
AOS with respect to a physical or operational change but should add that
such change is being incorporated through a title I approval.

	One of the industry commenters (0063) had additional concerns with the
proposed definition of “AOS” as described below:

The definition does not emphasize the fluidity that is provided by
having multiple authorized AOSs.

The definition of “AOS” is not clear that the use of multiple
compliance options within an applicable requirement does not require an
AOS.  The commenter believes that permitting authorities may often view
"applicable requirement" narrowly as the separate, individual
requirements within a rule or standard (e.g., 95 percent control,
monitoring parameter, recordkeeping requirement, etc.) rather than the
rule or standard in its entirety constituting the applicable
requirement. 

The definition of “AOS” should highlight that compliance with a
single set of streamlined applicable requirements per White Paper Number
2 is an option that does not require the use of AOSs.  To the extent
that a Part 70 source has worked with its permitting authority to
streamline the applicable requirements that may apply to an emissions
unit, there is no need for AOS in the permit. 

	Based on his concerns, this industry commenter (0063) proposed the
following definition for "AOSs" for EPA’s consideration:

Alternative Operating Scenarios (AOS) – Scenarios in a Part 70 permit
for different modes of operation of an emissions unit, including modes
of operation that may involve authorized physical or operational
changes, when the shift from one mode of operation to another causes the
emissions unit to be subject to a different set of applicable
requirements and the permit does not reflect a single set of streamlined
applicable requirements representing all authorized modes of operation. 
An emissions unit may shift between compliance options provided within a
single applicable requirement (e.g., a NESHAP, VOC RACT rule, etc.)
without an AOS.

	One air agency (0069.1) stated that the definition needs to include
language that implies that this authorization either could happen under
separate or combined NSR and title V programs.  In addition, it should
clarify that the AOS may include more than one emissions unit.  The
commenter proposed the following AOS definition:  

 Alternative Operating Scenario (AOS) means a scenario authorized in a
part 70 permit that involves a physical or operational change at the
part 70 source for a particular emissions unit or group of emissions
units, and that subjects the unit or group of units to one or more
applicable requirements that differ from those applicable to the
emissions unit or group of emissions units prior to implementation of
the change or renders inapplicable one or more requirements previously
applicable to the emissions unit prior to implementation of the change.
The change, in order to be eligible for an AOS, must be allowable under
all applicable requirements.

	One industry commenter who believes the definition should be deleted
(0074.1) stated that, if it is retained, it should be revised as
follows:

Alternative operating scenario (AOS) means a scenario authorized in a
part 70 permit where an activity that involves a physical or operational
 change at in at the part 70 source for a particular emissions unit, and
that subjects the unit to one or more applicable requirements that
differ from those applicable to the emissions unit previously prior to
implementation of the change or renders inapplicable one or more
requirements previously applicable to the emissions unit prior to
implementation of the change.

	Another industry commenter (0096) stated that EPA should revise the
definition to clarify that switches from one compliance option to
another are not to treated as AOSs, specifically by adding the following
proviso at the end: 

; provided, however, that switching from one compliance option to
another under terms established under federal or state regulations or
construction or operating permits and advance approvals for new units or
changes to existing units authorized under construction permits shall
not be treated as AOSs .

Response:

Overall, adding a definition is consistent with preserving current
practices as affirmed by commenters.  The Agency believes that the term
“AOS” should be defined and used consistently in the regulations. 
The final definition reads as follows:

Alternative operating scenario (AOS) means a scenario authorized in a
part 70 permit that involves a change at the part 70 source for a
particular emissions unit, and that either results in the unit being
subject to one or more applicable requirements which differ from those
applicable to the emissions unit prior to implementation of the change
or renders inapplicable one or more requirements previously applicable
to the emissions unit prior to implementation of the change.  	

The final definition is different from the proposed definition in that
we no longer define an AOS as involving a “physical or operational
change.”  We agree with the commenters that inclusion of the phrase
“physical or operational change” invites confusion with the major
NSR provisions. 

 The deletion of this phrase also helps to clarify the interface between
the concepts of advance approvals (e.g., advance approval of minor NSR)
and AOSs.  We recognized, based on our evaluation of pilot permits, that
potentially many states could currently advance approve minor NSR and
then incorporate the terms of the authorizing minor NSR permit into the
title V permit as applicable requirements.  While not proposing to do
so, the Agency nonetheless took comment on whether some aspects of such
advance approvals might also involve AOSs.  Commenters strongly affirmed
the current abilities of states to authorize advance approvals of minor
NSR and that these authorizations should be kept generally separate and
distinct from AOSs.  The EPA agrees with these commenters and finds that
the deletion of the phrase is useful in maintaining this separation. 
The deletion of the phrase “physical or operational” is also
consistent with our previously stated decision to preserve the scope and
operation of the current rule regarding AOSs.  The existing process to
establish an AOS in a title V permit also addresses any potential
concerns that too many AOSs might be proposed, including, for example,
those involving a switch from one compliance option to another as
provided for under a MACT (or other) standard.  We do not believe that
the population of AOSs actually approved will be impacted by the
deletion.  First, the deletion just preserves the status quo.  Moreover,
sources and permitting authorities are unlikely to establish alternative
MACT compliance options as one or more AOSs, since the extensive
monitoring and recordkeeping requirements typically found in MACT
standards can themselves authorize shifts in compliance options after
being incorporated into a title V permit.  Thus, we do not believe it is
necessary to specify in the AOS definition that AOSs are not necessary
for switches among compliance options.

We agree with the commenters who pointed out that streamlining of
applicable requirements per White Paper Number 2 can obviate the need
for AOSs in the title V permit.  As pointed out above in footnote 1, a
source relying upon emissions limit streamlining implicitly has chosen
not to pursue the use of AOSs, since the source would always be required
to meet the worst-case scenario at all times regardless of which
scenario was actually operated.  Nevertheless, we do not believe it
appropriate to specify this fact in the AOS definition.

Comments on Proposed Uses of AOSs

Comments on Switching Between Compliance Options

Comment:

	One air agency (0069.1) and 14 industry commenters (0063, 0068.1,
0069.1, 0070.1, 0072.1, 0073.1, 0074.1, 0075.1, 0076.1, 0077.1, 0079,
0082, 0084, 0096) supported EPA’s proposal that a source should be
able to switch between compliance options within a given applicable
requirement (if allowed to do so under that applicable requirement)
without viewing this as an AOS.  Some of the commenters explained that
these compliance option changes do not constitute a “physical or
operation change” and therefore do not require an AOS.  

Two of these industry commenters (0073.1, 0079) stated that under the
respective applicable requirements, information on the method of
compliance already is collected and reported in semi-annual monitoring
reports and compliance certifications making additional AOS logs
unnecessary.

	Another of these industry commenters (0084) suggested, as another
option, that some state title V permitting programs list only the
current compliance option in the title V permit; in such cases changes
to an alternate approved compliance option should be allowed by noting
the change in the next periodic report.  The commenter stated that such
change should be recognized by the regulatory agency as an
administrative change vs. an AOS.  The commenter also suggested that EPA
include examples in the preamble to the final rule which show how a
switch from one compliance option to another can be characterized as
allowable under an existing permit. 

	

	Two industry commenters (0076.1, 0077.1) agreed with EPA that the
various compliance options in duly promulgated MACT standards do not
constitute alternative operating scenarios.  The commenters stated that
requiring compliance options in MACT standards to be explicated in title
V permits as alternative operating scenarios is also inappropriate
because it adds unneeded length to the title V permit, and that title V
permits have already become unduly lengthy.

Response:

	Under the final rule, MACT (or other standards) compliance options
could represent different AOSs, but are unlikely to be designated as
such.  As mentioned in the last response, AOSs must first be proposed by
the source and then not rejected by the permitting authority.  As a
practical matter, based on the comments received, few sources are likely
to propose AOSs for switching among well-defined compliance options. 
Moreover, few permitting authorities are likely to find them necessary.

	We do not believe, in general, that MACT compliance options beyond
those initially incorporated into the title V permit can, upon their
future implementation, be merely noted in the next periodic report and
then added administratively to the permit.  Instead, subsequently
implemented compliance options should be added through the appropriate
permit revisions process which can vary depending on the significance of
the change.  In order to minimize future permit revisions, the source
and the permitting authority can expand the number of permitted option
to include both ones which are currently used and those which are
reasonably anticipated to be used during the term of the title V
permit. 

Comment:

	One air agency (0069.1) commented on language in the proposal preamble
that the permit should include the allowed compliance options “that a
source may reasonably anticipate using during the term of the permit.”
 The commenter found that this practice minimizes the need for permit
amendments, but noted that requests are received from permittees to
include all possible options, even if they intend to only use one of two
of them.  The commenter stated that this approach adds significantly to
the time needed to draft the permit and makes it more difficult to use
as a compliance tool.

	One industry commenter (0074.1) stated that EPA should clarify that
compliance and monitoring options in rules are part of the applicable
requirements to be included in a title V permit if the source requests
them and cannot be eliminated at the discretion of the permitting
authority.  The commenter stated that nothing in the statute or the
rules indicates that states should have authority to remove compliance
options from sources or to erect hurdles to their implementation through
the title V program.

	Another industry commenter (0082) stated that including all
possible/potential compliance options in permit application information
is burdensome and not necessary.

Response:

	Permitting authorities need not accept those proposed compliance
options which are not reasonably anticipated to occur.  However,
permitting authorities are encouraged to err on the side of inclusion
where the source believes that an alternative compliance approach could
reasonably occur and that its incorporation into the permit is not
burdensome.

Comments on the Relationship Between AOSs and Advance Approvals

	Two industry commenters (0084, 0096) supported EPA's proposal to
distinguish AOSs from all advance approvals, including those involving
the addition of new units.  One of these commenters (0084) supported
existing state permitting programs that already included advance
approval mechanisms that are analogous to the AOSs which EPA is
proposing.  The commenter also generally supported EPA’s statements in
the preamble that, in some cases, an AOS is not needed to supplement an
advance approval; and in some cases, EPA’s proposal for construction
and operation of a new unit authorized in advance may not necessarily be
an AOS.

	One air agency (0094) and one industry commenter (0079) stated that new
unit additions should not be characterized as AOSs.  Another air agency
(0069.1) and another industry commenter (0070.1) concurred with the
proposal preamble discussion indicating that an advance approval of a
new emissions unit does not require an AOS unless the particular unit,
once operational, requires the flexibility to make subsequent changes
that will cause different applicable requirements to apply.  The latter
two commenters also believe that an AOS should not be required for an
advance approved change to an existing emissions unit unless the change
is reversible.  One of the air agencies (0069.1) stated that requiring
non-reversible authorizations to be viewed as AOSs would add needless
complexity to the permit requirements.  The other air agency (0094),
however, supported using an AOS for an advance approved change to an
existing emissions unit, regardless of whether the change is reversible.

	Three industry commenters (0074.1, 0076.1, 0077.1) who believe that
AOSs are generally unnecessary (for advance approvals or any other use)
indicated that the one situation where AOSs might potentially be useful
is to reflect the point at which a source implements an advance approved
change on a permanent basis.  The commenters stated that whether an AOS
should be under such circumstances should be worked out by the source
and permitting authority on a case-by-case basis.  Two of the commenters
(0076.1, 0077.1) noted that the NSR permit likely would include
appropriate notification requirements, but construction permits vary in
their content and an AOS could be used to ensure that appropriate
records are kept.  

Response:	

The EPA agrees with commenters that affirmed the current abilities of
states to authorize advance approvals of minor NSR and that these
authorizations should be kept generally separate and distinct from AOSs
and finds that the deletion of the phrase "physical or operational
change" is useful in maintaining this separation.  Thus, in most cases,
advance approval of minor NSR is simply another example of how the
inherent flexibility in an applicable requirement can be accessed
without the need for an AOS.  See footnote 2 above for more on this
topic.

Comments on Revisions for Consistent AOS Terminology

Comment:

	One industry commenter (0068.1) explicitly supported the proposed
revisions to make the AOS provisions more consistent by using the same
terminology uniformly throughout the regulations.

Response:

	The EPA agrees and has promulgated revisions to implement this
approach.

Comments on Revisions to Application Requirements for AOSs

Comment:

	One industry commenter (0059) stated that the proposed rule improves
AOS provisions, specifically by clarifying the kinds of changes that
qualify and identifying information that needs to be provided with
renewal applications to satisfy title V permitting requirements.

	

	One industry commenter (0084) stated that prescriptive rule changes are
not needed in order to define the minimum elements for an AOS
application.  The commenter noted that existing state title V programs
and regulations require facilities to comply with all applicable
requirements by the compliance date.  Because Part 70 programs vary from
state to state, the commenter believes that each state permitting agency
should define the necessary elements of a permit application in order to
establish an AOS.  The commenter also agreed that permit applications
should include sufficient detail to properly describe the AOS.  The
commenter added that the detail should be sufficient that the permitting
authority understands the concept of the described AOS, and noted that
it should be the decision of the permitting authority in determining
whether additional information is needed to further describe the AOS in
the application or conditions of the permit.

	Another industry commenter (0070.1) stated that per the proposal, AOS
applications must include the SIC code, a description of each unit
involved and emission rates in TPY for each unit (except where operating
under a cap), terms necessary to determine an appropriate reference test
method, the anticipated changes and applicable requirements for each, an
explanation as to how the source will comply with those requirements, a
description of the baseline operating scenario, and a certification
demonstrating the source has obtained necessary authorizations; and a
compliance schedule.  The commenter believes that these new
requirements should be streamlined substantially so that sources can
reasonably apply for, and obtain, an AOS.   

Response:

	In finalizing the FAP rule, EPA has decided to finalize the proposed
revisions to the permit application requirements of 40 CFR 70.5 and
71.5.  The specific provisions, along with specific comments on them,
are discussed in the sections that follow.

	We note that the last commenter's list of information required in the
application for AOSs includes a number of items that are already
required under the existing rules.  These items were included in the
proposed regulatory language when other changes were made to the
existing paragraphs containing them.  The commenter's list also includes
a number of items that were proposed to be added to the required permit
content for AOSs in 40 CFR 70.6(a)(9)(iii) and 71.6(a)(9)(iii).  These
additions have not been finalized, as discussed in Section 4.6.4 of this
document below.

Comments on the Clarification of the Types of Additional Information
that May Be Requested on AOSs [§70.5(c)(7)]

Comment:

	One industry commenter (0084) who opposed adding to the application
requirements for AOSs stated that it should be the decision of the
permitting authority in determining whether additional information is
needed to further describe the AOS in the application or conditions of
the permit.

Response:

The Agency has decided to finalize the proposed revisions to 40 CFR
70.5(c)(7) to clarify that the permitting authority shall require the
source to include in its application additional information as necessary
to define permit terms and conditions to implement any AOS.  Where the
final version obligates the permitting authority to require, as
contained in the proposal, additional information to develop and
implement AOSs, we believe this requirement only extends to situations
where the permitting authority believes such information is necessary. 
We believe that this obligation has always been implicit in the
previously existing language of the section, but that an explicit
clarification is appropriate.

Comments on Requirements for Documentation of Necessary Authorizations
[§70.5(c)(7)]

Comment:

	One industry commenter (0070.1) stated that EPA's proposed revisions to
40 CFR 70.5(c)(7) seem unnecessary, because the permit authority is the
same authority that would authorize an AOS, and the agency would
certainly know whether or not advance approvals needed for the AOS have
been authorized.  The commenter stated that EPA provided no explanation
for the requirement of additional documentation and the facts do not
support this additional burden.

Response:

We are finalizing our proposed revisions to 40 CFR 70.5(c)(7) to specify
that the application must include a demonstration that the source has
obtained all authorizations required under the applicable requirements
that apply to any AOS being requested for approval by the source, or a
certification that the source has submitted a complete application for
such authorizations.  This action just codifies existing policy and
should be manageable given the relatively few AOSs that may also involve
an advance approval (e.g., the preconstruction approval of a new unit
requiring AOSs for its multiple future operating modes or for its
involvement as a replacement component unit in an AOS for an existing
emissions unit at the same source).  This clarification will also help
to ensure that any additional resources required for AOS development are
focused on sources which are likely to use them and to eliminate any
confusion over a provision proposed without such authorizations.

Comments on Requirement for Compliance Plans [§70.5(c)(8)]

Comment:

	One industry commenter (0096) supported EPA’s revisions to 40 CFR
70.5(c) that provide for information to be included in permit
applications regarding AOSs, including the compliance plan provisions
that provide for a statement to be included in the application that the
source will meet applicable requirements associated with an AOS on a
timely basis.

	One industry commenter (0084) who opposed adding to the application
requirements for AOSs nevertheless agreed that a statement should be
included in the application that the source will meet the applicable
requirements upon implementation of the AOS.

	One industry commenter (0063) found the proposed compliance plan
provisions related to AOS to be unnecessary because circumstances are
suitably covered by 40 CFR 70.5(c)(8)(ii)(A) and (B) and
70.5(c)(8)(iii)(A) and (B).  The commenter stated that there is no need
to add the proposed special provisions for AOS that would likely require
permitting authorities to amend their regulations and permit application
forms unnecessarily. 

Response:

We are finalizing our proposed revisions to the compliance plan
requirements for applications under 40 CFR 70.5(c)(8) to clarify that
such plans must address AOSs when an application includes them.  We
believe that this clarification merely codifies existing policy and is
appropriate to ensure that all applicants understand what is required
for AOSs when a source chooses to request one.  Based on comments
received, we believe that most states can implement this requirement
without additional rulemaking.

Comments on Revisions to Permit Content Requirements for AOSs (§70.6)

Comments on Semiannual Reports [§70.6(a)(3)(iii)(A)]

Comment:

	Five industry commenters (0068.1, 0071.1 0073.1, 0077.1, 0096) opposed
the proposal to require a source to submit a periodic report of all the
changes the source made under its AOSs.  Several of the commenters
stated that these additional reporting requirements will provide little
information and will not tell the permitting authority anything about
“compliance” with the applicable requirement. 

	One of these industry commenters (0068.1) noted that the permit will
identify the applicable requirements for any scenario under an AOS, the
source must report on deviations from any permit conditions, including
AOS, and the source will provide a compliance certification with respect
to all permit conditions, including AOS.  As a result, the commenter
believes that a report of all the changes under an AOS provides little
meaningful information to the state permitting authority.  The commenter
added that if an agency would like to know more details about the
changes that occurred during a reporting period, it can request the
source to submit the log of AOS changes that the source is already
required to maintain.  Similarly, another of these industry commenters
(0077.1) stated if a particular source requires additional reporting
based on factors unique to that source, the state can include that as a
separate requirement for the semi-annual report.

	One industry commenter (0071.1) believes that if the proposal expands
these reporting requirements it will be not beneficial to the refining
and petrochemical industries.  Another of these industry commenters
(0096) stated that such changes are not deviations and thus are not
properly addressed in deviation reports.  The commenter added that the
log is itself sufficient.

Response:

	Based on comments received, the Agency is persuaded that the new
reporting requirements, as proposed for inclusion in the 6-month
monitoring report, would not be necessary or useful.  We generally
believe that sufficient information about AOSs and their use already
exists from the combination of the AOS provisions contained in the
permit and the required reports concerning annual compliance
certification and the prompt reporting of deviations from achieving
compliance with the AOS terms of the permit.  In addition, pursuant to
40 CFR 70.6(a)(9)(i), permits must require the source to keep an on-site
log that contemporaneously records the implementation of any AOS which
occurred during the duration of the title V permit.  Pursuant to 40 CFR
70.6(a)(3)(ii)(B), the source owner must keep these records at their
site for at least 5 years.  Under 40 CFR 70.6(a)(6)(v) the source must
submit to the permitting authority, upon their request, this and any
other on-site information which is required to be kept by the permit or
is needed by the permitting authority to determine compliance with the
permit.

Comments on Log Content [§70.6(a)(9)(i)]

Comments:

	Seven industry commenters (0063, 0070.1, 0071.1, 0073.1, 0079, 0084,
0096) opposed EPA’s proposal to include expanding information required
to be kept in logs (40 CFR 70(c)(9)(i)).  These commenters generally
believe some of the information EPA proposes to require is unnecessary
and overly burdensome.

	One of these industry commenters (0063) questioned the value added by
including the applicable requirements and permit conditions in the log
even in the form of a cross-reference to the permit.  The commenter
noted that the source generally will not rely on the log to ensure
compliance; in addition, for inspection and enforcement purposes, the
permitting authority will ultimately rely on the permit itself and not
the log to determine what requirements apply under any given AOS. 
Therefore, the commenter suggested EPA delete the requirement to
maintain in the log “the applicable requirements and other permit
terms and conditions that apply to the AOS”.  If this requirement is
maintained, the commenter believes it should be revised to make clear
that it is acceptable to merely reference the permit.  Another of these
industry commenters (0073.1) stated that failure to comply with an
applicable requirement would already be reported in the deviation report
and annual compliance report, therefore, repetition of all of the
information in the log is excessive, unnecessary, and burdensome for
operating sources and regulators.  This commenter also believes the
proposed regulation is ambiguous regarding whether cross referencing is
allowed for AOS in permits and in logs.  The commenter suggested that
the final rule clearly allow the use of cross referencing to the permit
in the case of logs for AOS, and to other applicable requirements in the
permit itself.

	Two of these industry commenters (0073.1, 0079) stated that requiring
recordation of more information in a log could confuse the operator. 
One of these industry commenters (0073.1) urged EPA not to revise the
log requirements for AOS, or to simplify the information required.  The
commenter stated that the relevant information should be the emissions
unit, its operating mode, and what pollution control device (if
required) is operating.  Another industry commenter (0079) stated
relevant information is that controls are in place at the time of a
shift in operating scenario.  The commenter stated it is not necessary
to repeat the applicable requirement or even cross reference the permit
if the log book headings are correct.  

	Two of these industry commenters (0084, 0096) stated that in most
instances it will only be necessary that the source indicate the date it
began to operate the AOS.  Accordingly, the commenters stated that EPA
should not require that the log include a description of the change that
triggered the AOS, the emissions units included in the AOS, and the
applicable requirements and other permit terms and conditions that apply
to the AOS.  The commenters also stated that typically, it also will not
be necessary for there to be a description of the change or the
emissions units involved in order for compliance with the AOS to be
determined.  These industry commenters (0084, 0096) stated that the
first sentence of the provisions, "to record in a log at the permitted
facility a record of the AOS under which it is operating,” is
sufficient.  The commenters stated that EPA should delete the following
sentence which prescribes information to be included in the log that
goes beyond what is necessary for determining compliance with applicable
requirements.  The commenters also stated that if, however, EPA feels
that any provision should be established beyond the simple requirement
to record in a log the AOS under which a source is operating, it should
simply add language to the first sentence as follows: ", including the
date the source began to operate the AOS."

Another of these industry commenters (0070.1) stated that all of the
proposed requirements would already be spelled out in the permit, except
for the current requirement to log when the change to the AOS is made. 
The commenter stated that the benefit of adding this repetitive
information to a log is not identified and it should not be required. 
The commenter added that EPA should require the log entry to reference
the permit conditions for the AOS. 

	Another of these industry commenters (0071.1) believes that, if the
proposal expands these recordkeeping requirements, it will be not
beneficial to the refining and petrochemical industries.

Response:

	The Agency agrees with commenters that there is no need to standardize
the content of AOS logs provisions.  While not finalizing any specific
content or format requirements for logs involving AOSs, the Agency notes
that there remains an overall obligation that the information which is
required by the permitting authority for AOSs must be adequate to assure
compliance with all applicable requirements.  Thus, the structure of the
AOS implementation log required by the permitting authority is
relatively flexible, provided that the required records are, in total,
sufficient to verify the requirements applicable to a particular
operating scenario and whether the source was in compliance with them.

Comments on Permit Shields for AOSs [§70.6(a)(9)(ii)]

Comment:

	One industry commenter (0096) supported EPA’s proposed revision to 40
CFR 70.6(a)(9)(ii) that provides for a permit shield to be authorized
for terms and conditions under AOSs .

Response:

	We note that the existing 40 CFR 70.6(a)(9)(ii) and 71.6(a)(9)(ii)
provide that the permitting authority may provide the permit shield to
AOSs.  Our only revision to this paragraph of the rules is to use
consistent terminology, i.e., to refer to "each such AOS."  We are
finalizing this rule revision.

Comments on Permit Content to Describe AOSs [§70.6(a)(9)(iii)]

Comment:

One industry commenter (0096) supported EPA’s revision to 40 CFR 70.6
providing for incorporation of permit terms that properly describe the
AOS.

Another industry commenter (0070.1) believes that the proposed new
requirements for AOSs should be streamlined substantially so that
sources can reasonably apply for, and obtain, an AOS.  Among the
provisions that the commenter believes are too burdensome are the
requirements to describe the baseline operating scenario, the
anticipated changes and applicable requirements for each, and the
measures the source will use to comply with those requirements. 

Response:

	As discussed in Section 4.1 of this document, numerous air agencies
(0080.1, 0085.1, 0087, 0089, 0090.2, 0092.1) opposed the AOS proposal in
general as being unnecessary and likely to reduce, rather than expand,
the flexibility available under the existing rules.  Although these
commenters did not specifically refer to the permit content portion of
the AOS proposal (or most other specifics of the proposal), we believe
that this is one aspect of the proposal that was targeted as unnecessary
and potentially restrictive.  In response to these comments, the Agency
has decided that there is no need to standardize the permit provisions. 
While not finalizing any specific content or format requirements for
permits involving AOSs, the Agency notes that there remains an overall
obligation that the information which is required by the permitting
authority for AOSs must be adequate to assure compliance with all
applicable requirements.

Comments on Requirement for All Needed Authorization [§70.6(a)(9)(iii)]

 

Comment:

	One air agency (0094) and one industry commenter (0096) supported the
clarification that NSR approval is necessary prior to incorporation of
an AOS into the title V permit.

	One air agency (0069.1) stated that permit applications for AOS for
combined title V/NSR programs such as Minnesota’s require that these
applications contain the needed information for the pre-construction
authorization as well as the information to meet the title V permit
content requirements.  The commenter stated that rule language that is
inclusive of this scenario would be useful to avoid confusion and
conflict between what states require and what is listed in this rule. 
The commenter suggested that 40 CFR 70.6(a)(9) [and 40 CFR 70.5(c)(7)]
be amended to reflect the available option of combined programs.

Response:

	In general, we are finalizing revisions to 40 CFR 70.6(a)(9)(iii) to
make clear that the permitting authority cannot grant final approval of
an AOS until the source has obtained all the authorizations required
under the applicable requirements relevant to that AOS.  These actions
just codify existing policy and should be manageable given the
relatively few AOSs that may also involve an advance approval (e.g., the
preconstruction approval of a new unit requiring AOSs for its multiple
future operating modes or for its involvement as a replacement component
unit in an AOS for an existing emissions unit at the same source).  This
clarification will also help to ensure that any additional resources
required for AOS development are focused on sources which are likely to
use them and to eliminate any confusion over a provision approved
without such authorizations.

	The Agency did not propose any specific provisions regarding combined
programs and, thus, is not finalizing any.  We continue to believe that
states with combined programs are best able to design provisions to
implement their specific approach.

Other Comments on AOSs

Comment:

	One industry commenter (0073.1) urged EPA to repeat in the final
notice, the information on the off-permit provisions of part 70
contained in footnote 22 of the proposal.  Another industry commenter
(0075.1) similarly supported EPA's statement in footnote 22 regarding
off-permit changes that "failure to anticipate and include a particular
change under an AOS does not in and of itself bar the source from
implementing the change" if it can be done using the off-permit
provisions.  However, the commenter believes that EPA should provide
further clarification of the definition of "off-permit" so that the
scope of this statement is clear.  One air agency (0094) thanked EPA for
including the discussion of the off-permit provisions in footnote 22 of
the proposal preamble.

Response:

	The EPA has reaffirmed the substantive content of footnote 22 in the
proposal by inclusion of footnote 19 in the preamble to the final rule.

Comment:

	Four industry commenters (0074.1, 0076.1, 0077.1, 0084) noted that
there is some discussion in the preamble to the proposed rule regarding
the need for AOS to contain sufficient monitoring to assure compliance. 
These commenters requested that EPA clarify in the final rule that the
use of AOSs does not create a new authorization for states to supplement
the monitoring in existing rules, and that any action to add monitoring
must be consistent with EPA’s interpretation of 40 CFR 70.6(a)(3) and
70.6(c)(1) that applicable requirements which already contain periodic
monitoring are not to be supplemented in the title V permitting process.
 One of these industry commenters (0077.1) pointed out that only where
there is no periodic monitoring in the underlying applicable requirement
do the part 70 rules provide any authority for adding monitoring in the
title V issuance process.  The commenter requested that EPA clarify in
the final rule that the discussion in this rule does not change that
interpretation.

Response:

	Where a permit contains an AOS, it must also contain monitoring,
recordkeeping and reporting requirements for periods when the source is
operating under that scenario that are consistent with the requirements
of title V and part 70 (in the same manner as for the baseline
scenario).  In addition, the Agency believes that 40 CFR 70.6(a)(9)
requires the permitting authority to augment existing applicable
monitoring requirements (including recordkeeping) as necessary to
establish AOSs to the extent that the applicable monitoring requirements
are insufficient to determine what operating scenario and applicable
requirements are in effect at any particular time.

Comment:

	One air agency (0089) and three industry commenters (0070.1, 0073.1,
0079) disagreed with the concept that EPA should prioritize
implementation assistance for flexible permitting to companies that have
opted into EPA’s Performance Track program.  The commenters believe
that flexible permitting should be a mainstream practice available to
all types of sources.

Response:

	The Agency has decided to delete this topic from the rulemaking.  We
intend to provide support to a potentially wide spectrum of states and
sources which might request assistance.

Comment:

	

One industry commenter (0096) supported EPA’s revised provisions in
40 CFR 70.4(d)(3)(xi) which provide that state programs "must include
provisions to ensure that AOSs requested by the source and approved by
the permitting authority are included in the part 70 permit . . . ."  

Response:

	This change was not a substantive one but one intended primarily to
assure consistent use of the AOS terminology.  This revision also adds
"and approved by the permitting authority," again for purposes of rule
consistency.

Comment:

	One industry commenter (0063) noted that “baseline scenario” is not
a defined term, nor does it appear to be used in the rule, however, it
is used in the preamble discussion.  The commenter stated that its
description may be appropriate under certain circumstances, however,
when emissions units switch between AOS more frequently, the baseline
scenario should not be determined by chance, i.e., by what AOS the unit
happens to be operating at the moment the permit is issued.  The
commenter stated that under those circumstances, a baseline scenario
would be more appropriately characterized as the scenario that reflects
the predominant operation of the emissions unit and the corresponding
applicable requirements.

Response:

	The final rules, like the proposal, do not define the term "baseline
scenario."  The permitting authority and source are therefore free to
define it for a particular situation if they choose to do so.  In any
event, the permitting authority must define any accepted AOS in the
permit.

Comment:

	One industry commenter (0084) suggested EPA allow and support continued
state agency flexibility in the AOS approvals.  A proposal would be for
EPA to provide special grants (e.g. matching funds not required) to fund
program implementation.

Response:

	The preamble to the final rule conveys EPA's intent to support FAP
implementation potentially in several ways (e.g., a website, workshops,
an EPA network of contacts).  While we have no particular plans to use
the grant mechanism at this time, we will consider it as well as other
possible forms of implementation support as the particular situation
warrants.  Note also that states may charge more for flexible permits to
the extent that they are more costly to develop.

Comment:

	One industry commenter (0075.1), while generally supporting the
proposed AOS rules, believes that the rules would not provide the
intended flexibility and will have limited utility because it will be
very difficult for applicants to identify and adequately describe all
possible AOSs and all associated applicable requirements at the time the
title V application that contains the AOSs is submitted.  The commenter
proposed that EPA revise all appropriate provisions of the proposed AOS
rules to require that the title V application that contains the AOSs
identifies and adequately describes all AOSs that are known or can be
reasonably anticipated at the time the title V application is submitted,
and identifies all applicable requirements associated with those AOSs,
but that the AOS rules would allow the permittee to operate under an AOS
that is not identified in the title V application, provided that (i)
within a specified period of time, the permittee submits to the agency a
notification that identifies and adequately describes the new AOS and
identifies all associated applicable requirements, and (ii) the
permittee has obtained all necessary NSR authorizations for the new AOS.

Response:

	We do not believe that AOSs are appropriate for operating scenarios
that are not reasonably anticipated at the time of permitting.  Based on
pilot experience and the comments received, AOSs are not often needed
since applicable requirements frequently contain sufficient
documentation to determine which requirement(s) apply at all times and
to assure compliance with each one.  The situation described by the
commenter also could be addressed by a permit revision or by off-permit
procedures, where available and applicable to the particular situation.

Comments on Approved Replicable Methodologies (ARMs)

General Comments on ARMs

Comments Supporting ARMs:

Two air agencies (0064, 0069.1) and eight industry commenters (0070.1,
0072.1, 0074.1, 0076.1, 0077.1, 0083.1, 0084, 0096) generally supported
the ARM concept.  Several of these commenters predicated their support
on the understanding that ARMs are voluntary on the part of sources. 
Three of the industry commenters (0074.1, 0076.1, 0096) provided general
support for the proposed ARM rule revisions as well, and one additional
industry commenter (0084) stated that it did not object to EPA’s
proposed definition, but it did not explicitly support it.  

One of the industry commenters (0074.1) stated that the proposal
regarding ARMs was helpful because it provides a national statement
regarding how permits can and should be written to minimize the costs of
the program, provide flexibility to industry, and develop permit terms
that assure compliance.  Another of these industry commenters (0076.1)
stated that this proposed definition will help the title V program
function more smoothly.  Another of these industry commenters (0084)
agreed that states must have sufficient authority to grant ARMs (and
AOSs) if proposed by a source.  The commenter stated that the permitting
authority should have control independent of EPA when deciding the
appropriateness of the alternative methodology.  Another of the industry
commenters (0096) further noted that a number of air quality standards,
including MACT standards, have included approved replicable
methodologies for determining applicable compliance obligations, making
the ARM requirements consistent with continuing to authorize such
revisions where appropriate for assuring reasonable ongoing compliance
obligations.

One air agency (0069.1), and four industry commenters (0072.1, 0076.1,
0077.1, 0083.1) pointed that permitting authorities have already used
such approaches for many years.  Most of the commenters stated that
EPA’s endorsement of this approach is helpful in explaining how these
approaches are beneficial, and could help make its application more
routine.  Several of the commenters also stated that the use of ARMs has
significant potential to reduce the number of permit revisions required
in title V permits.

One of the industry commenters (0077.1) opposed the proposed 6-month
reporting requirement for ARMs.  The commenter stated that no special
reporting is warranted for ARMs because an ARM is simply a method for
showing compliance.  The commenter added that hundreds of permits have
been issued with ARMs without any special reporting requirements.

Comments Opposing ARMs:

	Six air agencies (0080.1, 0081, 0085.1, 0087, 0089, 0090.2) opposed
EPA’s proposed ARM rule revisions.  Five of the air agencies (0080.1,
0085.1, 0087, 0089, 0090.2) stated that the proposed amendments are not
likely to improve permitting efficiency or flexibility because these
concepts already exist and are being used in many state programs.  The
commenters believe that state and local clean air agencies already have
the authority and tools needed to issue flexible title V permits.  The
proposed ARM (and AOS) provisions will unnecessarily complicate an
already complex title V program, resulting in delays and frustrations
for both sources and permitting authorities.  One air agency (0087)
recommended that EPA use the approach it has taken for advanced approval
projects, that is, to implement ARMs under existing rules and not modify
the rules to specify a particular format for the ARM provisions.  

	 

Comments on Further Regulatory Language:	

	In response to our request for comment on whether regulatory revisions
beyond those proposed are needed for ARMs, one air agency (0069.1) who
supported EPA’s ARM proposal indicated that further rule changes are
not needed to encourage the use of ARMs.  One industry commenter (0084)
who supported the ARM proposal believes that there is a need for more
clarification of how the ARMs can be used as an efficient permitting
technique, including additional preamble language.  Both the air agency
(0069.1) and the industry commenter (0084) suggested EPA provide
additional examples that EPA has approved so that state agencies and EPA
can have a common understanding when utilizing this approach.

Response:

In response to these commenters, EPA has decided to finalize the
proposed definition with minor changes and to add certain additional
clarifications to 40 CFR 70.6(a)(1).  In doing so, we reaffirm the
proposal, but have made more explicit in the final rule certain
safeguards concerning the use of ARMs.  For example, §70.6(a)(1)
requires that no ARM shall contravene any terms needed to comply with
any otherwise applicable requirement or part 70 requirement or
circumvent any applicable requirement that would apply as a result of
implementing the ARM.  See section 5.2 below for more discussion of the
commenters' concerns that prompted us to add this safeguard to the final
rule.

We agree that states currently have authority to issue ARMs in title V
permits; however, we do not agree that placing a definition for ARM in
our part 70 rules will stifle innovation by the states.  On the
contrary, we believe that finalizing the ARM definition will clarify the
availability of this aid to flexible permitting to those states and
sources that are not aware of it or have had prior issues concerning its
use.  	

	The final definition is nearly identical to the one proposed (i.e., we
added a minor clarification that the results of the ARM be recorded as
well as used for assuring compliance with any applicable requirement or
requirement of part 70).  The final definition reads as follows:

Approved replicable methodology (ARM) means part 70 permit terms that:

	(1)  Specify a protocol which is consistent with and implements an
applicable requirement, or requirement of this part, such that the
protocol is based on sound scientific and/or mathematical principles and
provides reproducible results using the same inputs; and

	(2)  Require the results of that protocol to be recorded and used for
assuring compliance with such applicable requirement, any other
applicable requirement implicated by implementation of the ARM, or
requirement of this part, including where an ARM is used for determining
applicability of a specific requirement to a particular change.

	

We wish to emphasize that under the final definition, an ARM may be used
as a means to determine the applicability of a requirement, not just as
an aid for assuring compliance.  The EPA has included other ARM-like
mechanisms in several of our national standards for MACT and NSPS.  If a
source proposes an ARM to delineate which changes are subject to one
requirement instead of another, examples should be provided to the
permitting authority and to the record supporting proposed approval of
the ARM illustrating the prospective use of the ARM (if approved).  We
believe that the permitting process is the best forum for clarifying how
a proposed ARM would work in the relevant situations reasonably expected
to occur over the duration of the permit.  However, in the case where
the permitting authority has significant concerns over how an
applicability ARM would operate in certain situations, the permitting
authority should not authorize the ARM for those situations.

	We are also revising 40 CFR 70.6(a)(1) to acknowledge that  ARMs may be
considered as one type of part 70 permit term that assures compliance
with applicable requirements.  We are also adding two clarifications
that appropriately focus ARM implementation.  The Agency believes that
these clarifications in combination with the mentioned final definition
will promote increased consideration of ARMs, where appropriate.  The
revised 40 CFR 70.6(a)(1) reads as follows:

§70.6  Permit content.

	(a)   * * *

	(1)  Emissions limitations and standards, including those operational
requirements and limitations that assure compliance with all applicable
requirements at the time of permit issuance.  Such requirements and
limitations may include ARMs identified by the source in its part 70
permit application as approved by the permitting authority, provided
that no ARM shall contravene any terms needed to comply with any
otherwise applicable requirement or requirement of this part or
circumvent any applicable requirement that would apply as a result of
implementing the ARM.

	This final version of 40 CFR 70.6(a)(1) incorporates existing policy
that a source must first request an ARM in its part 70 permit
application before it can be considered by the permitting authority. 
Note that this request could appear as part of the originally submitted
application or in the later submittal of supplemental application
material (e.g., a letter requesting consideration of a replicable
protocol as an ARM).  As is the case for AOSs, the permitting authority
must then decide whether to accept the proposed ARM and may reject it or
modify it for several appropriate reasons, including concerns over its
replicability and/or value in lowering administrative costs.  This
addition is consistent with the basic process required for the
establishment of AOSs which, based on comments received, is effective in
ensuring that FAP approaches are appropriately considered.

	Relevant to the first element of the final “ARM” definition,
sources will identify candidate protocols that if judged to be
replicable could be considered further as a potential ARM by the
permitting authority.  Candidates for such protocols would frequently
arise from already established applicable requirements, such as MACT
standards, NSPS, or preconstruction permits (e.g., minor or major NSR). 
If accepted by the permitting authority as an ARM, pursuant to the
second element of the final definition, the part 70 permit would contain
the ARM (i.e., the combination of the replicable protocol and the
instructions for its use, including the type of data to be inputted).  

	As summarized above, no commenters specifically supported our proposed
reporting requirement for ARMs, and one commenter specifically opposed
the reporting requirement.  In addition, numerous states opposed the ARM
proposal in general as being unnecessary and likely to reduce, rather
than expand, the flexibility available under the existing rules. 
Although these commenters did not specifically refer to the reporting
portion of the ARM proposal (or most other specifics of the proposal),
we believe that this is one aspect of the proposal that was targeted as
unnecessary and potentially restrictive.  Finally, as discussed
previously in Section 4.6.1 of this document, several commenters raised
concerns regarding our similar proposal to require reporting of AOSs in
the 6-month monitoring report which we believe are also appropriate to
consider in deciding whether to require the 6-month reporting of ARMs. 
As a result, we have concluded that the information contained in the
permit about the nature of any approved ARM and the instructions for its
use along with the required reports concerning annual compliance
certification and the prompt reporting of deviations from achieving
compliance with the ARM should generally be sufficient.  In addition,
sources must keep on-site records of ARM implementation.  Moreover, any
required on-site records must be submitted to the permitting authority
upon request pursuant to 40 CFR 70.6(a)(6)(v).  Therefore, we have
decided to drop the proposed requirement for the 6-month monitoring
report to identify any ARMs implemented during the reporting period.

Comments on the Use of ARMs to Adjust Operating Parameter Limits	

Comment Opposing ARMs for this Purpose:

	Five air agencies (0065.1, 0080.1, 0081, 0085.1, 0089) opposed EPA’s
concept that use of an ARM can avoid a permit revision when a new
compliance test results in a change to the operating parameter which is
monitored for compliance assurance.  The commenters stated the use of
ARMs may allow changes to operating parameters that will result in
increases in actual emissions that should trigger NSR.  Several of these
commenters stated changes in operating parameters cause violations to
several aspects of the Act such as PSD/NSR, NAAQS, and title V, and
specifically to the court's decision in New York v. EPA, 413 F.3d 3
(D.C. Cir. 2005) since the plain language of the CAA indicates that
Congress intended to apply NSR to physical or operational changes that
increase actual emissions.  The commenters stated since NSR is triggered
by changes to physical or operating parameters that increase actual
emissions, a change in operating parameters from those currently in the
permit cannot be allowed without a minor or major NSR permit, as
applicable.  One of these commenters (0089) is also troubled that
EPA’s codification of ARMs may lead to operating procedures that
deviate from the original permit conditions without the permitting
authority’s knowledge or approval—leading to widespread problems in
achieving the goals of SIP planning.  One of these air agencies (0065.1)
believes this would be contrary to the existing requirements of title V
that provides that a “significant change in existing monitoring terms
or conditions” shall be considered a “significant” permit revision
subject to full public review. 

	Another of the air agencies (0081) listed the following additional
arguments as to why the commenter believes that EPA’s proposal to
include ARMs as permit terms in operating permits would violate the
Clean Air Act:

Because section 504(f) of the Act provides for “permit shields”
whereby compliance with a permit issued under title V of the Act is
deemed compliance with section 502 of the Act, 42 U.S.C.  7661a, a
permittee in compliance with a permit that incorporates an ARM could
escape compliance with applicable requirements of the Act but still be
protected by a “permit shield.”  Therefore, by including an ARM in a
permit, a source could inappropriately circumvent other requirements of
the act.

Under the proposal, sources would no longer have to provide the detailed
information in operating permit applications that is currently required
under 40 CFR 70.5(c).

Comments Supporting ARMs for this Purpose: 

Five industry commenters (0072.1, 0073.1, 0074.1, 0076.1, 0079, 0083.1)
stated that if a rule or permit requires a source to establish an
operating parameter range or limit during performance testing, the title
V permit is sufficient as long as it incorporates the requirement to
establish the limit and to comply with it when it is established.  The
commenters added that the permit itself is not required to reflect the
actual limit established during an individual test, or to be revised to
reflect changes in that limit during subsequent testing.  Several of the
commenters indicated that many states issue permits that reference
values established through performance testing or another described
methodology as indicators of performance.  One of the commenters
(0074.1) noted that such approaches minimize the need for permit
revisions while still providing transparency in terms of how compliance
is determined.

Response:

	As noted above, we have finalized ARMs nearly as proposed.  However, we
have added a clarification in 40 CFR 70.6(a)(1) in response to those
commenters who were concerned that ARM implementation of one applicable
requirement might circumvent the applicability of another applicable
requirement.  We believe that this final clarification adequately and
appropriately conveys that an ARM created under part 70 to streamline
the implementation of one applicable requirement cannot be used to
contravene compliance with another requirement under the Act or to
circumvent its applicability as a result of implementing an ARM. 
Accordingly, the terms of an NSR permit, which are applicable
requirements that must be incorporated into a title V permit, cannot
subsequently be changed using an ARM created under different authority. 
Approved replicable methodologies can be used to update values only when
the applicable requirement allows for this to occur.  For example, if an
existing NSR permit includes specific parametric monitoring levels as
compliance indicators, to automate the updating of such levels the NSR
permit would need to be revised to establish an ARM – the title V
process could not create an ARM to revise the NSR conditions directly. 
Similarly, the potential applicability of other requirements implicated
by the implementation of an ARM (e.g., NSR) must be independently
evaluated and determined. 

 

Comments on Compliance Assurance Monitoring (CAM):

	

	Two air agencies (0085.1, 0089) stated that the application of ARMs
runs counter to the CAM requirements under 40 CFR part 64 which requires
the establishment of performance indicators for applicable control
devices as a means of ensuring their proper operation for compliance
purposes.  One of these commenters (0085.1) stated that it is unclear
how a permitting authority would handle a situation where an ARM results
in a parameter change outside of the range established by CAM.  The
commenter added that should the proposed rule be adopted, there is
potential for duplicative and conflicting monitoring requirements.  Two
of these commenters (0089, 0093.1) stated that the goals of ARMs and CAM
do not appear to mesh, with ARM monitoring aimed at effectuating changes
that may increase actual emissions without permit revisions, and CAM
aimed at correcting control devices that are not functioning properly so
that emissions are minimized consistent with the control technology
being used and there is an adequate compliance margin.  The commenter is
also concerned that EPA is layering another monitoring procedure on top
of CAM procedures and the pending Periodic Monitoring rule without
considering that complexity, duplication, and conflicts among monitoring
requirements and methods may ensue.

Response:

	Commenters are mistaken that the application of ARMs runs counter to
the CAM rule requirements under 40 CFR part 64.  The CAM rule, at 40 CFR
64.4(a)(2), first endorsed the concept from which ARMs developed by
allowing CAM submissions to specify "… the process by which such
indicator ranges or designated conditions shall be established …." 
While it is possible for permitting authorities to maintain separate
approaches for the CAM rule and for ARMs, it is not a requirement. 
Sources may request and permitting authorities may allow use of an ARM
to satisfy a CAM rule requirement.  Under such approval, which could be
accomplished via title V permit streamlining [see 40 CFR
70.6(a)(3)(i)(A)], sources relying on an ARM would have data
determinative of compliance, since ARM development requires correlation
of measurements with emissions.  The CAM rule requirements would accept
this type of correlation, but the majority of subject sources choose to
provide "reasonable assurance of compliance" with emissions limits by
focusing on proper emissions control device operation, rather than a
strict correlation between measurements and emissions.  In cases where a
source and permitting authority maintain separate CAM and ARM
requirements, should a parameter value occur outside the range included
in the CAM plan, but within the range established by the ARM, then the
source would need to continue to comply with the response to excursions
or exceedances requirements of 40 CFR 64.7(d) and the source may choose
to re-establish the indicator ranges via a title V permit modification
[see 40 CFR 64.7(e)].  Of course, in cases where a source and permitting
authority use an ARM to satisfy the CAM rule and a parameter value
occurs outside the range established for the ARM, then the source would
need to demonstrate its emissions at the parameter value, and either
expand the ARM range (if emissions were within limits) or report
noncompliance with emissions limits.

Comment: 

One air agency (0069.1) addressed the issue of whether or not monitoring
parameters can be determined and/or revised after permit issuance
without the permit being amended through a process involving a public
notice in Minnesota’s Part 70 Program.  Minnesota was required to
commit to determining and revising such parameters using a public
noticed permit amendment even though stack testing rules approved in the
Minnesota SIP allow for this authorization without a major permit
amendment.  The commenter stated that this rule proposal deviates from
this approach, but the preamble implies that the ARM approach is
technically allowed under the current rule and that the rule proposal is
only a clarification.  The commenter requested that EPA address this
inconsistency in EPA position in any final rule making so that there is
clear direction on this issue.

The same air agency (0069.1) stated that the preamble discusses how the
ARM replaces the specific parameter in the permit – it suggests
putting the ARM in the permit instead of a specific value (e.g.,
temperature, pressure drop, emissions factor, etc.).  The commenter
stated from its experience, the state of Minnesota typically puts the
ARM in the permit as well as the current value.  For example, the ARM
for revising and updating emissions factors appears in the permit, but
an appendix to the permit lists all of the factors that were approved as
of permit issuance.  The permit is generated by a multi functional
database that is used for permitting, inspections, tracking of testing,
etc.  Ideally, the system is used to actually keep track of the current
approved value.  If a value is changed via an ARM, the commenter
believes the value can be updated in the permit (and the database) via
an administrative amendment (reopening) or at the next permit amendment.
 The commenter prefers to not delete the value entirely from the permit.
 The commenter requested EPA clarify whether or not the agency can
continue to use this approach under the proposed revisions or whether
the ARM concept prohibits any value from appearing anywhere in the
permit.

Response:

	In general, ARMs, where proposed by a source and approved by the
permitting authority, can update monitoring parameters used to assure
compliance with an applicable requirement contained in the part 70
permit (e.g., an emissions standard).  If, however, the operating
parameter level itself is an applicable requirement on the face of the
part 70 permit (e.g., because the limit appeared as a term of a minor
NSR permit which was incorporated into the source's part 70 permit), an
ARM may only be used to revise the parameter level without permit
revision where the ARM and the expectation and procedure for its use are
also set out in the same applicable requirement (e.g., as other terms of
the same minor NSR permit).  The permit would require the source to
comply with each new value of the parameter resulting from
implementation of the ARM, and could require attachment to the permit of
each new value without revising the permit.  Note that this potential
use of an ARM, the limitations on such use, and the consequences of a
changed level must be specifically considered and approved by the
permitting authority in reviewing the potential ARM to ensure that the
ARM does not contravene or circumvent any other applicable requirement. 
Where the parameter limit is contained in a minor NSR permit, this
review would occur in both the applicable NSR and part 70 processes.

	The situation described by the commenter appears to involve a part 70
permit that contains both the ARM and the current value of a given
parameter used to determine compliance (e.g., temperature, pressure
drop, emissions factor, etc.).  Under this approach, the permit must be
modified to incorporate new values.  If the commenter does not believe
that the approach described in the preceding paragraph is appropriate
for their situation (i.e., using an ARM to update and attach new
parameter levels without revising the permit), then the commenter should
contact EPA to determine how best to revise the permit in order to
incorporate each new parameter level. 

Other Comments on ARMs

Comment:

	One industry commenter (0084) suggested that EPA clarify in the final
rule that existing title V permit or state minor NSR terms and
conditions can be treated as ARMs provided they satisfy the proposed
definition in 40 CFR 70.2.  The commenter also agreed that ARMs can be
part of the title V permitting process as described in 40 CFR
70.6(a)(3), however, it should be left to the discretion of the
permitting authority to determine whether the permit needs to contain
additional streamlined monitoring or gap-filling periodic monitoring
requirements for a particular source.  The commenter also understood the
proposal so that ARMs are used in conjunction with AOSs.  Therefore, the
commenter stated that ARM concept as proposed could also be satisfied by
either state minor NSR or title V permitting programs.

Response:

	We agree that existing permit terms from existing part 70 permits and
state minor NSR permits can contain replicable protocols which can then
be established as ARMs in a part 70 permit, provided the appropriate
instructions for recordkeeping and ARM use are also incorporated into
the permit.  Permitting authorities can also consider allowing the
applicable protocol to function like an ARM prior to its incorporation
into the part 70 permit.  Depending on the applicable SIP-approved minor
NSR regulations, one or more replicable protocols with appropriate
requirements for their use might bridge the time from source
construction to its initial operation.

Comment:

	One industry commenter (0074.1) sought clarification from EPA that, in
the future, ARMs (and AOSs) will not be required when existing permit
terms, including permit streamlining and worst case conditions, can be
drafted to ensure compliance with the applicable requirements.

Response:

	We agree with the commenter that streamlining of applicable
requirements (per White Paper Number 2) can obviate the need for an ARM
(or an AOS) in the title V permit.  Specifically, in cases where an ARM
could be used to determine which applicable requirement is currently
applicable to an emissions unit, streamlined requirements would make the
ARM (or the AOS) unnecessary because a source relying upon a streamlined
emissions limit would always be required to meet the worst-case, most
stringent applicable requirement at all times regardless of which
applicable requirement actually applied.

Comment:

	One air agency (0069.1) stated that EPA should clarify whether or not
the term “Approved Replicable Methodology” must be specifically
defined in the state program in order for this concept to be implemented
if states believe their current rules are adequate.

Response:

	Because the final rules represent clarifications to the existing part
70 regulations, we believe that many states will be able to implement
the final rules without revising their regulations.  This belief is
further based on the pilot experience and on the comments received from
states who affirmed that their current authority was sufficient to
implement ARMs (i.e. no state rulemaking was thought to be needed to
incorporate the new definitions and clarified requirements).

	Nevertheless,  states may choose to send us specific revisions to their
current programs at any time.  There is no mandate for part 70 programs
to contain provisions specific to ARMs.  Thus, states are not obligated
to revise their part 70 programs in this regard as a result of the final
rule.  However, optional rule changes may be useful to some states in
implementing the final rule more effectively and to achieve the
anticipated administrative benefits attributed to ARM implementation.

Comment:

	Referring to the proposed ARM provisions, one air agency (0094)
supported EPA's efforts to expand "administrative amendments" to cover
routine changes to the title V permit.  The commenter asserted that
providing public review of the process that will occur is certainly much
better than having to provide notice of each change that has followed
the same process.

Response:

	We agree that incorporating an ARM into the title V permit provides for
public review of the process that will occur, which gives the public an
adequate understanding of how the source will operate in the future. 
However, we would not characterize this as the use of an "administrative
amendment," which has specific meaning and governing provisions as set
out in 40 CFR 70.7(d).  Administrative amendments are a means to revise
the title V permit.  As previously discussed, an ARM is used to provide
flexibility by precluding the need for a permit revision. 

Comment:

	One industry commenter (0077.1) requested that EPA clarify the preamble
discussion regarding the interpretations of the “assure compliance”
language at 72 FR 52222 where we discussed the legal basis for ARMs. 
The commenter noted that contrary to what is there-implied, title V does
not provide authority for states or EPA to impose operational
requirements in any way that would change the applicable requirement or
make it more stringent. 

Response:

	Under the terms of the final rule, an ARM, by definition, must be
consistent with and must implement an applicable requirement or
requirement of part 70.  As is generally true for other terms and
conditions of a title V permit, ARMs must assure compliance with
applicable requirements but do not alter those requirements.

Comments on Green Groups

Overall Summary of Comments and EPA's Final Action

Comment:

	The commenters, while mixed in their overall reaction to the Green
Group concept, generally did not support the specifics of the Green
Group proposal.  State commenters indicated that the proposed
10-to-15-year term of the Green Group is inappropriate because the Act
and good environmental stewardship require BACT/LAER reviews and air
quality analyses to be conducted contemporaneously with the time of each
change at a facility.  These commenters disagreed with our assertion
that BACT and LAER typically do not advance significantly over the
proposed 10- or 15-year period.  They added that such permits would
unfairly reserve PSD increments for projects that might never be built
and that the air quality status in the area of a Green Group could also
change due to, for example, transported pollution, revisions to the
NAAQS, and natural events.  State commenters also questioned the
environmental benefits of Green Groups and did not believe that the
pilot permits contained in the docket supported the Green Group
approach.  They also asserted that Green Groups share the legal flaws of
Clean Units.  State commenters further conveyed that many permitting
authorities already offer considerable flexibility and that it is the
permitting authorities who can best decide the structure of their own
programs in this regard.  The state commenters generally believe that
the Green Group proposal should be abandoned, but if it is finalized it
should be a voluntary element of the major NSR program, rather than
mandatory as proposed.

	The environmental group that commented on the proposal asserted that
the proposed 10-to-15-year term of the Green Group is inconsistent with
the Act’s requirements for contemporaneous BACT/LAER and air quality
reviews.  The environmental group also indicated that Green Groups
suffer from the same legal flaws as Clean Units.  Like most state
commenters, the environmental group believes that the Green Group
proposal should be abandoned, but if it is finalized it should be
voluntary for the states.

	Industry commenters, on the other hand, typically favored some aspects
of the proposal and believe the Green Group to be a real incentive for
sources to control beyond their legal requirements in exchange for
greater regulatory certainty.  These commenters often argued that a term
of 10 to 15 years would be necessary to justify the expenditure for
state-of-the-art controls for a Green Group.  They agreed with the
proposal that Green Groups should be a mandatory element of the major
NSR program and attributed real benefits such as those associated with
lower administrative costs.  They believe that Green Groups are legally
defensible and clearly different from Clean Units.  However, industry
commenters asserted that the proposal did not reflect how manufacturing
facilities are constructed and operated.  In particular, they stated
Green Groups should not be limited to a single control device and that
pollution prevention should be allowed as the primary Green Group
control approach.  In addition, they indicated that the proposed
monitoring, recordkeeping, and reporting requirements are unnecessarily
detailed and prescriptive.

Response:

	Primarily for certain policy reasons raised by commenters and based on
our belief that the current major NSR regulations already provide
considerable flexibility to states, EPA has decided to withdraw our
proposal on Green Groups.  As described below, the Agency will consider
initiating another rulemaking related to flexibility under the major NSR
regulations if new data become available after additional field
experience that supports such an approach.  Any such rulemaking would be
an entirely new rulemaking, separate and distinct from the Green Group
proposal being withdrawn in this action.

	Notwithstanding our withdrawal of the Green Group proposal, we wish to
note that certain statements we made in support of the proposal are not
affected by the Green Group withdrawal.  First, the requirements of 40
CFR 51.165(a)(5)(ii), 51.166(r)(2), and 52.21(r)(4) are met when an
emissions unit with emissions limits previously taken to avoid major NSR
subsequently undergoes major NSR review.  Next, we continue to believe
that a longer-term major NSR project is clearly different from a Clean
Unit and may be defended on that basis.  Construction of the later
portions of an approved major NSR project is simply “building out”
out the permit as authorized and does not rely on an allowables
emissions test.  Finally, pursuant to 40 CFR 52.21(b)(3)(iii), and to
analogous provisions in 40 CFR 51.166(b)(3)(iii) and
51.165(a)(1)(vi)(C)(2), emissions increases and decreases that occur as
authorized in a major NSR permit qualify as having been “relied upon
by the permitting authority” in issuing a major NSR permit.  As such,
these emissions changes are not to be included in the future netting
calculations at the same source during the time that the NSR permit
would be effective.

	Our decision to withdraw the Green Group proposal is in large part
based on the significant new information and policy perspectives
conveyed in certain comments received on this proposal.  Based on the
varying types of concerns raised by commenters, EPA no longer believes
that promulgation of the Green Group approach – which was EPA’s
effort to develop a single, nationally uniform approach for Green Groups
to achieving advance approval under major NSR – is appropriate.  While
an approach like that proposed for Green Groups might be effective in
certain situations, several commenters pointed out serious reservations
about initial air quality and technology reviews becoming stale over the
10-year life of a Green Group.  Others were concerned that the proposed
Green Group approach was not flexible enough to encompass already tested
approaches involving emissions units serviced by multiple control
approaches.  These commenters also persuaded the Agency that a
mandatory, one-size-fits-all approach under the major NSR rules could be
counterproductive as well as too inflexible.  Many of the same
commenters believed that national rules requiring a specific template
for Green Groups across all states could instead stifle future
innovation and flexibility while adding complexity and unnecessary
administrative burden.

	The Agency is also not finalizing our proposal on Green Groups because
we believe that the current major NSR regulations already provide states
considerable ability to design and to implement their SIPs in ways that
provide operational flexibility while addressing the types of concerns
raised by commenters.  The major NSR regulations, in general, are quite
detailed and prescriptive as to what changes are subject to review, but
afford considerable flexibility to determine specifically how subject
NSR projects must be permitted.  The inherent flexibility for states to
design and implement their SIP provisions with respect to NSR projects
arises from the structure and content of the part 51 PSD and the
nonattainment (“NA”) NSR regulations.

	First, the definition of “project” can accommodate a wide spectrum
of physical and operational changes, provided such changes are
authorized by the permitting authority.  Similarly, the definition of
“emissions unit” is elastic in its ability to include several types
of situations, ranging from a simple piece of equipment to a collection
of them at the same site.  A “project” involves changes to or
addition of one or more emissions units.  Thus, the permitting authority
may define these terms in its SIP broadly or narrowly, for a particular
case, provided that the physical and operational changes included in the
project are covered by the major NSR requirements, as appropriate.  

	Moreover, the other provisions of the part 51 PSD and NA NSR
regulations do not impose limitations on the scope or implementation of
NSR projects once they are defined by the permitting authority.  The NA
NSR regulations do not contain any specific provisions that restrict how
the permitting authority might define the scope, duration, and
timeliness of an NSR project.  The part 51 PSD regulations only
indirectly affect the acceptable scope of an NSR project in their
requirements and the BACT reevaluations of certain phases of phased
construction projects.  

	As a result, under the current major NSR regulations, with the
exception of the relatively narrow class of construction projects with
independent phases for PSD purposes, states are free to design and
implement their major NSR SIPs to address contemporaneity of
construction, project scope and duration, number and types of emissions
units comprising the project which are subject to emissions tracking,
timely construction of authorized changes, and reevaluation of initial
control technology and/or air quality impact reviews as they judge to be
reasonable.  For example, a SIP may be structured to allow the
permitting authority to determine these aspects of a major NSR permit on
a case-by-case basis after balancing appropriately the benefits of
operational flexibility with the types of concerns raised by commenters
on the Green Group proposal.

	The same part 51 flexibility has allowed states to adopt voluntarily
some additional PSD regulatory constraints into their SIPs similar to
those contained in paragraphs (r)(2) and (n)(1) of the 40 CFR part 52
regulations, which regulate the timeliness of construction and the
required level of information for reviewing proposed NSR projects.  The
part 52 regulations, which apply to interim EPA implementation of the
PSD program in the absence of an approved SIP, contain these additional 
requirements in paragraphs (r)(2) and (n)(1) to help preserve the
available PSD air quality increments until the state can assume full
responsibility for the program under an approved SIP.

	The EPA believes that states which have opted to include these
additional regulatory constraints in their SIPs retain considerable
discretion to interpret and implement them within the meaning of their
SIP approved language.  Affected states may choose to implement their
programs consistent with policies that EPA has developed in our
implementation of these provisions or to explore the adoption of
different policies through their own administrative procedures.  In
addition, in accordance with their plans for preserving PSD increments
and for protecting the NAAQS, states may maintain their current SIPs or
opt to revise them as appropriate consistent with the applicable part 51
and/or part D requirements in order to allow greater flexibility to the
permitting authority in reasonably determining how NSR projects can be
approved on a case-by-case basis.  The Agency is willing to work with
states to evaluate their current SIPs and to assist them in discussing
possible revisions where requested to do so.

	The EPA is interested in learning more as to whether the flexibility
under existing major NSR regulations to sources and permitting
authorities is sufficient and appropriate.  In order to gain additional
perspectives about the currently available level of flexibility –
including the need for it; the benefits, costs, and/or impediments
associated with its use; and any lack of safeguards to assure its
effectiveness – the Agency is encouraging states and sources to
explore how projects subject to major NSR might be more flexibly
permitted and administratively managed.  Where a state would agree to
investigate such possibilities with a requesting source, we ask that the
states give us an advance notice of the project before any permit is
released for comment.  In addition, EPA requests that the state make
available relevant information about both the development of the permit
and its subsequent implementation so as to facilitate any future
analysis on our part.  We also intend to collect other information that
would be useful to informing us as to whether a new rulemaking should be
initiated in the future.

 	In summary, the concerns of commenters on the potential inflexibility
of the proposed Green Group affirms the need, at least for now, to
maintain the relative openness of the current major NSR rules.  These
rules essentially defer to the states as to whether to adopt more
specific requirements or to resolve flexibility needs on a case-by-case
basis.  This outcome is entirely consistent with the stated preference
contained in state comments received on the proposal that states be
allowed to structure their own SIP programs with respect to NSR
flexibility.

	Given our decision to withdraw the Green Group proposal for the reasons
discussed above, we do not believe it is useful to respond directly to
the many comments received on specific aspects of the proposal. 
Nevertheless, because our decision was based on the comments we
received, the comments are summarized below.

General Comments on Green Groups

Comments Generally Supporting Green Groups:

	Two air agencies (0064, 0068.1) and ten industry commenters (0068.1,
0071.1, 0072.1, 0074.1, 0075.1, 0076.1, 0077.1, 0079, 0083.1, 0084,
0096) generally supported the proposed revisions to the proposed Green
Group rules because they provide flexibility and certainty to sources. 
Although though they supported the proposed revisions, at least one air
agency (0068.1) and four industry commenters (0071.1, 0075.1, 0079,
0084) explicitly stated that the proposed Green Group rules needed some
revisions before they could be approved.

One air agency (0068.1), and two industry commenters (0071.1, 0075.1)
believe that the proposed Green Group rules contain certain provisions
that would severely limit the operational flexibility the rules could
potentially provide to emissions activities in Green Groups.  The
commenters believed that the proposed rules can be revised so that they
will provide enough operational flexibility to be beneficial to the
regulated community, and yet will not jeopardize either of the
environmental benefits (compliance with BACT or LAER, and with the more
stringent PAL-based MRRT requirements), and will not be inconsistent
with current PSD or nonattainment NSR rules.  One air agency (0068.1)
stated that although they supported the idea of the Green Group, they
envisioned a somewhat broader concept than that proposed by EPA.  	

Two industry commenters (0071.1, 0075.1) concurred with EPA's goal
underlying the proposed Green Group rules to provide permittees with
increased operational flexibility to make physical or operational
changes "rapidly in response to market demands without the need to
undergo additional preconstruction permitting review" (i.e., PSD or
non-attainment NSR).

One industry commenter (0079) believes that Green Groups could be a
powerful incentive for companies to consider making accommodations for
future growth when installation state of the art controls on existing
equipment.  The commenter specified that it could be very attractive for
industries such as flexible packaging where printing and coating lines
are typically housed in buildings that are vented to pollution controls
because there is a very significant economy of size related to the types
of pollution control used in the industry. This type of mechanism is not
only consistent with company investment planning, but with the time it
would take to begin to recoup the expense of a new control device that
meets BACT or LAER that could handle loadings from a building.  However,
before a Green Group could be approved in this industry, EPA would need
to revise the definition in the proposed minimum permit requirements and
make several other clarifications.

	One industry commenter (0084) suggested that Green Groups be
incorporated into a facility’s NSR or title V permit by using State
Minor NSR programs. The Minor NSR program is as effective as a Major NSR
program provided that BACT and/or LAER are met.

Comments Generally Opposing Green Groups:

Six air agencies (0085.1, 0087, 0089, 0090.2, 0092.1, 0093.1) one
environmental group (0088), and two tribes (0066.1, 0078) generally
opposed the proposed Green Group concept.  

	One air agency (0090.2) stated the Green Group proposal would allow
permitting to occur on a number of emissions units long before they are
actually constructed, while simultaneously allowing essentially
unregulated increases in emissions during the lifetime of the Green
Group approval.  Another air agency (0093.1) stated that the Green Group
proposal appears to present significant opportunities for abuse by
applicants.  A third air agency (0089) did not believe that the pilot
programs can be considered a basis for Green Groups.  The commenter
highlighted significant differences from the Green Group proposal and
the six pilot flexible permits analyzed by EPA.  One tribe (0078)
believes the implementation of this proposed rule will not make the
overall permitting process less burdensome or efficient regardless if
the timeframe is extended past the five-year mark.  Changes to current
SIPs and future TIPs or FIPs would take immense amount of time that the
permitting agency may not be able to invest.  The commenter stated that
the EPA’s potential projected time-savings may instead result in a
transfer of agency burden to the enforcement branches.  The commenter
stated that smaller permitting authorities may not be able to absorb the
increased permit analysis and inspection time at all, particularly the
amount of paperwork that will dramatically increase.  The commenter is
concerned in both large and small agencies this type of permitting could
easily slip through the cracks, with facilities knowingly or unknowingly
emitting more emissions than permitted due to the lack of oversight and
enforcement.

Comments on Whether Green Groups Should Be Mandatory

Comments Supporting:

Five industry commenters (0071.1, 0074.1, 0075.1, 0082.1, 0096) and one
private citizen (0053) agreed with the proposal that the Green Group
rules would be a mandatory minimum element of states' PSD and
non-attainment permitting programs.  Several of these commenters stated
that these provisions should be required because they afford permitting
flexibility while remaining protective of the environment.  Three of
these commenters (0071.1, 0074.1, 0075.1) pointed out that, even with
Green Groups as a mandatory program element, the permitting authority
will retain discretion as to whether to approve individual Green Groups.
 

	One industry commenter (0082.1) stated that EPA required that PALs be a
mandatory program element under the 2002 NSR Reforms rulemaking and
Green Groups would serve to complement the use of these source-wide
emissions caps or PALs.  Another of these industry commenters (0096)
stated that simply treating the Green Group rule as a voluntary measure
would signal to state permitting authorities that EPA does not place a
high priority on having this concept implemented.  One private citizen
(0053) supported the mandatory element within State implementation
plans, however, the commenter suggested the timeframe for States should
be either extended or be made more responsive to some States who express
concern in adopting the revisions.  The commenter believes that it is in
the best interest of State and local agencies who have no existing Green
Groups-like permitting programs and who demonstrate possible problems in
their ability to appropriately and effectively revise elements of their
own regulatory schemes, to be afforded more time to execute a Green
Groups program. This could assure State and regional air quality goals
are better met and state oversight capacity is not hindered by sudden
administrative changes.  The commenter proposed that the 3-year deadline
for State and local agencies to revise implementation plans either be
extended to a general 5-year maximum or preserve the 3-year provision
and grant permissible extensions up to five years on a case-by-case
basis if a permitting authority proves that it needs a period exceeding
the three years.

Comments Opposing:

	Eight air agencies (0062.1, 0065.1, 0080.1, 0085.1, 0089, 0090.2,
0092.1, 0093.1), one industry commenter (0084), one environmental group
(0088), and three tribes (0061.1, 0066.1, 0078) opposed the proposal
that the Green Group rules would be a mandatory minimum element of
states' PSD and non-attainment permitting programs.  

	Three air agencies (0065.1, 0085.1, 0093.1) and one industry commenter
(0084) explicitly suggested that EPA make the Green Group concept
voluntary rather than mandatory program element for States.  One
industry commenter (0084) believes that if EPA develops an innovative
Green Group permitting program, then the majority of State permitting
agencies will incorporate the concept into their program on a voluntary
basis.  The commenter added that EPA funding could be used as incentives
for state agencies to voluntarily incorporate this concept into their
existing permitting programs.

	Six air agencies (0062.1, 0065.1, 0080.1, 0085.1, 0089, 0092.1) stated
that such mandatory language ignores the ability of a state or local
agency to have a more stringent new source review regulation.  Four of
these commenters (0065.1, 0080.1, 0089, 0092.1) stated that if
finalized, would violate Section 116 of the CAA, 42 U.S.C. 5 7416,
because Section 116 provides, with limited exceptions, that nothing in
the CAA "shall preclude or deny the right of any State or political
subdivision thereof to adopt or enforce (1) any standard or limitation
respecting, emissions of air pollutants or (2) any requirement
respecting control or abatement of air pollution."  Accordingly, States
are free to adopt rules more stringent than the federal requirements. 
In addition, each State has "primary responsibility for assuring air
quality" within its borders and may adopt implementation plans that
specify the manner in which the NAAQS will be met.  The commenters
stated that because the CAA clearly authorizes state and local agencies
to implement more stringent requirements than the CAA requires, EPA has
no power to adopt a rule preventing a state from doing so.  Two of these
commenters (0065, 0085.1) added that because the Green Group provision
is on its face less stringent than existing NSR, since it allows new
sources to escape updated BACT/LAER for a period of up to 15 years, it
cannot be made mandatory upon the states.  Commenter 0065 stated that
EPA is apparently taking the view that this proposal actually results in
environmental benefit, so that it is in effect “more stringent” than
the prior rules, and can therefore be made mandatory.  Under this
theory, it is crucial that EPA clearly prove the environmental benefit
of the proposed rule.  Commenter 0085.1 citied Duquesne Light Co. v.
EPA, 1998, where Pennsylvania’s definition of “actual emissions”
was more stringent that EPA’s because it limited industry flexibility
to “look back” to set its baseline for purposed of calculating
emissions reduction credits.

	Three air agencies (0085.1, 0089, 0090.2) are concerned SIP revisions
would be required to incorporate a rule that arguably allows source
modifications to bypass NSR requirements.  The commenters stated the
proposal would force a lengthy regulatory effort to revise SIPs to
accommodate the program.  The commenters believe being forced to develop
the regulatory authority to incorporate a program that will not be used
is senseless and wasteful.  One of these commenters (0089) stated that
many jurisdictions will simply choose not to implement the rule if it is
promulgated, exercising their right to do so under section 116 of the
Act.  Another of these commenters (0090.2) believes the process will be
actively ignored by the regulatory community if it is required to be
included in its state air quality program, just as the PAL process has
been ignored.

	One air agency (0065.1) and one environmental group (0088) stated that
EPA lacks authority to require any element of the instant proposal to be
a mandatory minimum element of state or local operating permit programs
under title V of the CAA.

	One air agency (0065.1) is concerned about the EPA’s use of voluntary
pilot programs as the basis for the new proposal.  The commenter noted
that a recent Evaluation Report issued on September 25, 2007 by the
Office of Inspector General titled “Voluntary Programs Could Benefit
from Internal Policy Controls and a Systematic Management Approach”
suggests that there is no Agency-wide policy at EPA to collect
comparable data or conduct regular evaluations for such programs, in
which, EPA cannot determine the overall environmental impact of its
voluntary programs.  EPA lacks internal controls that outline specific
ways to determine the success or failure of EPA’s overall voluntary
program effort.  As a result, EPA cannot determine which voluntary
programs are succeeding or failing.  EPA also cannot determine which
programs should serve as models for future program development. 
Similarly, one air agency (0093.1) stated that the Green Group proposal
represents a significant change in how existing, modified, and new
sources would be regulated under NSR to what agencies may have already
in place flexible permitting approaches.  The commenter stated that this
change will create an unwarranted burden on permitting agencies forced
to defend themselves against potential EPA sanctions or industry
challenges rather than collaborating with state and local interests to
create a workable version.

	Three tribes (0061.1, 0066.1, 0078) stated that the mandatory Green
Group option restricts the permitting authorities' ability to choose
appropriate sources and methods for flexible permitting.  The commenters
stated that Green Group provisions do not provide for adequate
consideration of critical issues specific to the source, permitting
authority, and environment, such as local topography; population
variables; Class designations; attainment/nonattainment designation;
exceptional events; compliance history; status of title V permit;
resources needed/available to maintain monitoring and reporting
requirements; and clear need for flexibility.  One of these commenters
(0066) believes a one size fits all does not work.  Another of these
commenters (0078) stated that the need for agency discretion is echoed
by comments made by the Northeast States for Coordinated Air Use
Management and the Northeast Waste Management Officials’ Association
in their September 11, 2000, comment letter on White Paper #3 that
relevant criteria should be used to determine whether a facility should
receive flexible permits.	

Comments on the Benefits of Green Groups

 

	Three air agencies (0064, 0065.1, 0090.2), and four industry commenters
(0068.1, 0071.1, 0074.1, 0075.1) commented on the benefits of Green
Groups.

	One air agency (0068.1) and two industry commenters (0071.1, 0075.1)
agreed with the benefits of the program that EPA has identified in the
preamble to the proposal.  The industry commenters (0071.1, 0075.1)
concurred with EPA's statement that the proposed Green Group rules would
provide environmental benefits because they will require "all emissions
activities [in a Green Group] to be controlled to the level of BACT or
LAER," even those emissions activities that would otherwise not be
subject to BACT or LAER.

One air agency (0065.1) stated that the proposal does not demonstrate
that allowing sources to avoid NSR through the Green Group proposal will
actually have any environmental benefit.  The commenter added since EPA
has not discussed other supporting data, it must be presumed there is
none.  The commenter provided extensive examples that EPA’s additional
arguments for environmental benefits under Green Groups are unsupported.
 

	The air agency (0065.1) also stated that there is little room for
voluntary improvements to reduce emissions as EPA assumes will occur
under the flexible permit concept in California.  The commenter noted
that under state law, all California air districts with “serious”
ozone pollution or worse are required to implement a control program
which requires “best available retrofit control technology” (BARCT),
which under state law is defined the same way as federal BACT.  Thus,
existing sources in much of California are already controlled to levels
that make it highly unlikely that substantial emissions reductions may
be made on a voluntary basis.  Thus, the supposed benefits of the
flexible permit program are unavailable in much of California.  Thus,
there is no basis for the conclusion that the proposed rule will provide
an environmental benefit, and could thus be considered “more
stringent” than the existing program.

	One air agency (0064) stated that the use of Green Groups will provide
more opportunities to reduce air pollution by encouraging the use of
pollution prevention and applying BACT requirements to existing units.

Comments on Public Participation 

	One air agency (0080.1) believes that the public should have a right to
comment on proposed projects prior to the commencement of construction
or modification of a source.

	One air agency (0089) believes that opportunity for public involvement
is necessary at the time of construction.  The commenter noted that the
proposal suggests that permitting authorities use their discretion to
enhance the public participation process when warranted for a particular
flexible permit, and that the written comment period for a title V
permit renewal or significant permit modification should be expanded
from 30 to 45 days.  However, the commenter believes that these
proposals do not address the problem.

	Two tribes (0061.1, 0078) stated that there is no provision for public
notice or comment periods within the proposed ten-year life of Green
Group permits.  The commenters also believe that these opportunities for
public participation should take place at least every five years, to
allow for new developments at the source and in the local area.  One of
these commenters (0061.1) stated that the greatest problem within the
Green Group option is the opportunity provided for facilities to avoid
fundamental NSR modification, "best available control technologies"
(BACT), and "lowest achievable emissions rate" (LAER) requirements. 
Another of these commenters (0078) also believes that these
opportunities for public participation should take place before initial
publication.

Other General Comments 

	One federal agency (0099) recommended adding a new 40 CFR 51.165(j) to
the proposed rule, as follows: "Alternative flexible air permitting
plans may be approved by State or local authorities."  The commenter
supported approaches such as that used in the state of California in
which a facility following the general procedures of the local air
district was allowed to issue permits for minor changes, providing the
air district with an annual summary of its permit actions.  In this way,
the facility benefits from regulatory flexibility while the air district
collects the usual fees and maintains final approval authority over any
modifications and additions made by the facility.

Comments on the Scope Green Groups

Comments on Removing Units in a Green Group

Comments Supporting Removing Units in a Green Group:

One air agency (0069.1) agreed with the proposal that if a source
removes a particular emissions activity from an established Green Group,
the removed activity will be subject to major NSR, however, the proposed
rule language is silent on the issue of removing an emissions activity
from a Green Group.  The commenter suggests that a new paragraph be
added stating that the Administrator may remove an emissions activity
from a Green Group during its effective period only if the emissions
activity is contained in a new major NSR permit.  This requirement must
apply to both existing Green Group emissions activities as well as those
that have not yet been constructed but are included in Green Group
designation.

Comments Opposing Removing Units in a Green Group:

	

Six industry commenters (0070.1, 0071.1, 0073.1, 0074.1, 0075.1, 0077.1)
opposed the proposal that removal of an emission unit under a Green
Group would subject that unit to additional NSR review.  One of these
industry commenters (0070.1) believes that this requirement may be
appropriate if the unit has been modified during the period of time it
was in the Green Group; however, this requirement is inappropriate in
cases when the removed unit was unchanged.  The commenter added that if
the unit has been changed, the change should be reviewed against NSR
applicability criteria rather than automatically taken through NSR. 
Another of these industry commenters (0073.1) stated that that this
feature of the proposal also is unnecessary and could greatly diminish
opportunities for manufacturers to use Green Groups.  The commenter
suggested that companies should be able to remove equipment from a Green
Group so long as the removal of the unit from the Green Group would not
result in a significant emissions increase; in no way should the removal
of a unit nullify the Green Group.  The commenter pointed out that
manufacturers remove and replace equipment for different products and
maintenance and the Green Group provides that flexibility by
guaranteeing the Green Group meets BACT/LAER without resulting in a
significant increase in a regulated pollutant, thus unless the removed
unit is significant or is changed, additional NSR makes no sense. 
Another of these industry commenters (0075.1) requested that EPA revise
the proposed rules such that emissions units removed from a Green Group
would be required to meet the BACT/LAER level for that source as
calculated in determining the original Green Group emission cap. 
Another of these industry commenters (0077.1) also agreed that EPA
should provide flexibility for a unit to withdraw without obtaining a
major NSR permit.  The commenter explained that while the Green Group
limit should be reduced to account for the emissions from the withdrawn
unit, it does not necessarily follow that the unit should obtain its own
minor NSR permit.  Another of these commenters (0071.1) requests that
EPA revise the proposed rules to provide that the removal of an
emissions activity from a Green Group designation will have to be
handled as a major modification only if the emissions attributed to that
emissions activity in the Green Group emissions limit are greater than
the applicable PSD or non-attainment “major modification”
significance level for the Green Group pollutant. 

Other Comment on Removing Units in a Green Group:

	One industry commenter (0079.1) requested clarification that if a line
or other unit is removed from the Green Group, a Green Group does not
need to be re-permitted.

Comments on Emissions Units Being Routed to a Common Control Device

	Ten industry commenters (0068.1, 0070.1, 0071.1, 0073.1, 0074.1,
0075.1, 0076.1, 0077.1, 0079, 0084) opposed that EPA’s proposed
definition of a Green Group is limited to a collection of emissions
units routed to a common control device that meets BACT or LAER.  

	Seven of these industry commenters (0070.1, 0071.1, 0073.1, 0074.1,
0075.1, 0076.1, 0077.1) stated that the important principle under this
proposal is that BACT or LAER be applied.  One of these industry
commenters (0071.1) requests that EPA revise the proposed Green Group
rules to require that a Green Group as a whole be controlled to meet
BACT or LAER, rather than requiring that in meeting BACT or LAER, the
emissions activities in a Green Group must use a “common, dedicated
air pollution control device” that meets BACT or LAER.  Another of
these industry commenters (0073.1) suggested that for other equipment,
the addition of an additive rather than a control device may constitute
BACT/LAER.  The commenter suggested that EPA revise the definition of
Green Group by eliminating the phrase “common dedicated air pollution
control device” and substituting instead “pollution reduction
measures that are determined by the Administrator to meet BACT or
LAER.”  Two of these industry commenters (0071.1, 0075.1) requested
that EPA revise 40 CFR 51.166(z)(3)(v) and 52.21(dd)(3)(v) (entitled
“control technology demonstration”) as follows:

(v) Control technology demonstration.  A demonstration that the proposed
control technology represents for the Green Group equals or exceeds
BACT.  Such a demonstration shall confirm that the average level of the
emissions control for the

emissions activities in the Green Group equals or exceeds BACT emissions
reduction capacity of the proposed common control device is sufficient
to meet the relevant emissions reduction requirement, considering the
maximum total emissions from the Green Group and the associated
characteristics of the combined emissions streams that will be ducted to
the common air pollution control device.  The BACT demonstration shall
be based on worst-case emissions from the new and existing emissions
activities authorized for the Green Group.

	Nine industry commenters (0068.1, 0071.1, 0073.1, 0074.1, 0075.1,
0076.1, 0077.1, 0079.1, 0084) were concerned the proposed scope of Green
Groups is unworkable for manufacturing facilities because it fails to
recognize the complexity and variation present in industry operations
(i.e. coating lines).  The commenters noted that emissions from such
emissions activities usually are not controlled by a single “common,
dedicated air pollution control device,” and instead uses a range of
control approaches, including pollution prevention. As a result, the
requirement to route to a single control device would eliminate all but
the smallest possible configurations of units from qualifying for the
Green Group flexibility.  One of these commenters (0074.1) added that if
every emission point were controlled by a “device,” there will be
multiple control devices, so that it is not practical to create several
Green Groups – and thus obtain several major NSR permits.  Another of
these industry commenters (0076.1) commented specifically on this
approach’s effect on the oil and refining industry, stating that this
approach is infeasible for refining and many other oil industry
operations.  Two of these commenters (0071.1, 0075.1) requested that the
term “a common, dedicated air pollution control device,” as that
term appears in the proposed definition of “Green Group,” be revised
to read “BACT/LAER-equivalent air emission limits” (with appropriate
contextual changes), and that the term “control device”, as that
term appears in the proposed Green Group rules, be revised to reflect
the fact that “BACT/LAER-equivalent emissions” can be achieved
without the use of a control device.  Another of these commenters
(0079.1) suggested that EPA revise the definition of “Green Group,”
to clarify that a “single” dedicated control device is not required
for such a flexible permit to be approved.  The commenter stated that
because they combine pollution prevention (i.e., low VOC emissions),
with partial enclosures and traditional pollution controls like
oxidizers, this definition would constrict these sources ability to
obtain a flexible permit when in fact, the controls individually all
meet BACT and/or LAER.  The commenter also stated that it is typical in
their industry to tie multiple oxidizers together into a singular
control system for a number of reasons, including iterative controls
when a unit is down for maintenance. Another of these commenters (0084)
believes that EPA should allow some expansion of the definition to
include situations similar to these two cases where Pollution Prevention
(P2) practices are being practiced.  The commenter offered the following
definition in (dd)(2)(i) for EPA’s consideration:

Green Group means a group of new and/or existing emission sources and
activities that is characterized by the use of BACT or LAER (depending
on the applicable rule) and that has been designated as a Green Group by
the Administrator in a permit issued pursuant to this section.  All
sources contained within a Green Group are considered a single emissions
unit for purposes of this section.

	One air agency (0093.1) stated that to ensure that the Green Group
BACT/LAER requirement will result in meaningful emission reductions or
constraints to future emission increases, EPA should propose a minimum
and substantial emission reduction standard for existing baseline and
future emissions to ensure that a project results in real emission
reductions in exchange for the permitting certainty received by Green
Group operators- presumably comparable to a common control device
meeting BACT/LAER requirements.

	One industry commenter (0068.1) stated that this may result in some
lost opportunities for the flexible permit concepts to be applied to
otherwise worthy emission sources.  The commenter asked a series of
questions regarding the definition of a Green Group, as follows: 

Does the Green Group have to be a collection of emissions units, or can
it be a single emission unit that is equipped with BACT/LAER? 

Can a source have more than one Green Group at the site? 

Should the flexible permit concept be limited to only those emissions
units that employ emission control devices? 

Why couldn’t Green Groups extend to emissions units that utilize other
techniques, such as BACT approved work practices and operational
controls to reduce or minimize emissions?

Comments on Green Groups Authorization

	Four industry commenters (0068.1, 0071.1, 0075.1, 0076.1) believe that
a requirement to specifically identify and describe in a Green Group
permit application the changes that would be authorized under the Green
Group authorization would unnecessarily and severely limit the
operational flexibility that Green Groups could provide.  The commenters
stated it would be extremely difficult, if not impossible, for
companies, especially in certain industries, to identify and describe
future changes that will occur during the Green Group term in the permit
application.  The commenters noted that the PAL rules do not have a
similar requirement.  The commenters also added that since the Green
Group rules are based on the same principles as the PAL rules, it makes
no sense and is not supportable for the operational flexibility for
Green Groups to be limited to physical or operational changes that are
identified and described in the Green Group applications.  In addition,
the commenters are aware that the state of Texas offers a flexible
permit program that, like PALs, does not limit operational flexibility
to physical or operational changes that are identified and described in
the permit application.  Instead, it allows any physical or operational
change to be made as long as the total source-wide emissions remain
below the flexible permit limit.  One of the industry commenters
(0076.1) stated that the level of detail to describe anticipated
activities should be limited to the minimum information needed to
validate that BACT/LAER requirements, as applicable, are being met;
because, though a company generally knows the categories of activities
that will occur and how they will impact emissions, it will not possess
detailed specifications for those activities until they occur.  The
commenter requested that EPA clarify that detailed specifications are
not needed in the permit and that categories of activities can be
included in the permit to provide the maximum flexibility possible.  Two
of these commenters (0071.1, 0075.1) requested that EPA revise all
appropriate parts of the proposed Green Group rules so that a Green
Group authorizes all physical or operational changes that may be made at
any of the emissions activities in the Green Group, provided that the
total Green Group emissions do not exceed its limit and the Green Group
continues to meet BACT or LAER.  Finally, the commenters request that
EPA revise 40 CFR 51.165(i)(1)(i), (i)(3)(iv), and (i)(7)(ii),
51.166(z)(1)(i), (z)(3)(iv), and (z)(7)(ii), and 52.21(dd)(1)(i),
(dd)(3)(iv), and (dd)(7)(ii), as follows:

(1) Applicability.

. . .

(i) Changes at a Green Group. Any physical change in or change in the
method of

operation authorized for a of any of the new or existing emissions
activities in the Green Group pursuant to the requirements in …”.

. . .

(3) Permit application requirements.

. . .

(iv) Description.  A description of the equipment that comprises the
Green Group, including a description of all of the new and existing
emissions activities in the Green Group, proposed physical changes or
changes the method of operation (which may the addition of new emissions
activities), and the common air pollution controls used for the Green
Group device.  The description must provide information about maximum
total emissions that will be generated by the Green Group’s new and
existing emissions activities and the associated characteristics of any
combined emissions streams (including the worst-case emissions stream)
that will be ducted to the a common air pollution control device.  The
description must be sufficient:

(a) To allow the reviewing authority to distinguish changes proposed to
be authorized in the Green Group from unauthorized changes; and

(b) Tto enable the reviewing authority to determine BACT for the Green
Group consistent with paragraphs . . .”.

. . .

(7) Content of Green Group permit.

. . .

(ii) A description of the equipment that comprises the Green Group,
including a description of all of the new and existing emissions
activities in the Green Group, any authorized physical changes or
changes the method of operation, and the common air pollution controls
used for the Green Group device. The description must provide
information about maximum total emissions that will be generated by the
Green Group’s new and existing emissions activities and the associated
characteristics of any combined emissions streams that will be ducted to
the a common air pollution control device. The description must be
sufficient to distinguish, when a change is subsequently made in the
Green Group, whether the change was authorized under the Green Group
permit.

	One industry commenter (0084) suggested to EPA that permitting agencies
should have the ability to establish a Green Group designation through a
State minor NSR permitting process, especially in cases where the
facilities have already been constructed and are currently operating. 
The commenter suggested the following changes to the regulation in
(dd)(3): 

(dd)(3) – Permit application requirements.  The owner or operator of a
major stationary source must request approval for a Green Group in an
application for a permit that meets the requirements of paragraphs (j)
and (r)(5) of this section, as applicable

Two industry commenters (0074.1, 0077.1) stated that the final rule
should clarify the ability to describe categories of anticipated
changes.  One of the industry commenters (0074.1) stated EPA should
clarify that the level of detail for anticipated changes used in
previous flexible permits is sufficient description for federal
purposes.  The commenters stated that companies generally know the
categories of activities that will occur and how those will impact
emissions but it will not possess detailed specifications for those
activities until they occur.  Another of these industry commenters
(0077.1) stated that for the future growth/anticipated changes element
of the proposal to work for participating companies, the level of detail
to describe anticipated activities should be limited to that which is
needed to validate that BACT or LAER, as applicable, is being met.  The
commenter believes that EPA’s discussion in the preamble is consistent
with allowing general categories of changes to be described without the
detail we know will be unavailable when permits are initially issued. 
One of the commenters (0074.1) stated that EPA should state in the
regulatory language that it is acceptable for sources to list
“categories” of changes or activities. Specifically, EPA could
revise the “Description” paragraph (under 51.165, 51.166, 52.21) to
read as follows and make conforming changes to the other provisions of
the rules:

(iv) Description.  A description of the equipment that comprises the
Green Group, including a description of existing emissions activities,
proposed physical changes or changes in method of operation (which may
include the addition of new emissions activities and may involve
descriptions based on categories of physical changes or changes in
method of operation)….  The description must provide information about
maximum total emissions that will be generated by the Green Group's
emissions activities and the associated characteristics of the combined
emissions streams (including the worst-case emissions stream) that …. 
The description must be sufficient: 

(A) To allow the reviewing authority to distinguish changes proposed to
be authorized in the Green Group from unauthorized changes; and 

(B) To enable the reviewing authority to determine [LAER/BACT] for the

Green Group ….

	One air agency (0069.1) stated that the permit application requirements
should be revised to include potential emissions for each emission
activity in the proposed Green Group.  The commenter stated that 40 CFR
52.21(dd)(13)(vii) requires that a source and the permitting agency
agree on the “maximum potential emissions without considering
enforceable emissions limitations or operational restrictions for an
emissions activity” for time periods when monitoring data is not
available.  This has been an area of confusion for PALs.  Finally, the
commenter stated that without potential emissions information for each
emissions activity, permitting authorities would be unable to confirm
the maximum total emissions and the worst-case emissions stream during
application review and at the Green Group, to reduce the Green Group
emissions limit to reflect newly applicable Federal requirements, and to
verify whether an emissions activity was taken into consideration (as an
existing, modified, or new emissions activity) in the establishment of
the Green Group during a compliance inspection. 

	One air agency (0069.1) stated that the concern for Green Groups using
worst-case estimates versus actual emissions at various operating
conditions, which could lead to inflation of the actual emissions, is
unfounded.  The commenter asked then if, indeed, emission inflation is
not a great concern, could monitoring approaches for the Green Group
limit rely on worst-case emission rate approaches?

	One air agency (0069.1) noted that 40 CFR 52.21(dd)(13)(vi)(c) refers
to significant and major emissions activities, terms not defined for
Green Groups, but instead, in the PAL portion of the rules (40 CFR
52.21(aa)(2)(iv) and (xi)) (but not emissions activities) based on PAL
pollutants.  The commenter requested EPA define these terms in (dd). 
The commenter added that because Green Group pollutant monitoring is
dependent on this size definition, the permit application must include
activity-by-activity potential to emit data in enough detail to
determine if any given activity is significant or major.  

One air agency (0069.1) stated that the proposed Green Group
requirements neglect the emissions increases that may occur at emission
units outside (i.e. new emissions units, modified emissions units) of
the Green Group but which are directly related to the increases in
emissions that would be authorized within the Green Group.  The
commenter stated that provided that the increases and decreases in
emissions that occur outside of the Green Group are taken into
consideration is the establishment of the Green Group, these emission
changes would not be creditable for purposes of netting or offsets since
the changes would be relied upon in the issuance of the Green Group
permit.

	

Other Comments on the Scope of Green Groups 

	One air agency (0093.1) stated that EPA's Green Group proposal appears
to present significant opportunities for abuse by applicants.  The
commenter gave an example that the proposal does not exclude a "Green
Group" project from being proposed that consists primarily or
exclusively of new equipment, which would allow a facility to circumvent
future and potentially more stringent BACT/LAER requirements that would
have applied under current permitting procedures.  The commenter also
added that it is not clear from EPA's proposal that any new applicable
requirements that go into effect after a Green Group proposal is
approved would be applied to existing (and new) emission activities
where the Green Group BACT/LAER has not yet been implemented or where
the applicable requirements go beyond the pre-approved BACT/LAER either
in technology, monitoring or other respects.  The commenter stated that
EPA should make clear that Green Groups are not immune from applicable
future requirements, nor can such Groups delay compliance by virtue of
the Green Group provisions allowing delayed implementation of BACT/LAER,
because without these protections, it may be possible for a source to
avoid or delay compliance with future requirements to the disadvantage
of the public and other businesses.

	One industry commenter (0068.1) stated the Green Group concept should
take into account the uniqueness of the source and the appropriate
BACT/LAER determination for that source.  The commenter also stated that
any emission unit that has been determined to have BACT or LAER should
not be subject to NSR for some period of time, especially for emissions
units with emission controls or work practices in place that represent
either a significant investment in capital or resources.	

	One industry commenter (0076.1) supported the Green Group approach
allowing for a pre-described set of anticipated activities to be
included within the scope of the major NSR permit.  The commenter stated
that the approach is appropriate from an operational and legal
standpoint, and ensures appropriate emissions planning.

	One industry commenter (0079) requested clarification that if low VOC
Coatings are being utilized during a process, pollution controls can be
shut off or idled without negating the Green Group. 

	One industry commenter (0084) supported the concept of a “Green
Group” designation and urged EPA to make the definition broader to
allow individual permitting authorities the option to establish “Green
Groups” for multiple emission sources.

	Two tribes (0061.1, 0066.1) were concerned that not all emission points
of a process will be included in a Green Group.  The commenter stated
that a process or emission source could be rerouted to another part of
the facility, thus meeting the requirements for the Green Group but
overall increasing the emissions for the facility.  Thus, the commenter
stated the permitting agency and/or EPA have to be careful with the
analysis and demonstration of base level limits for Green Groups.  The
commenter was also concerned that combined units or processes within a
Group could produce emission levels higher than if assessed as
individual emission points. 

Comments on the Emissions Limits of Green Groups

Comments on Baseline Emissions

	Two air agencies (0065.1, 0087) and one industry commenter (0084)
disagreed with the proposed rule that provides that baseline emissions
should include “emissions associated with startup, shutdown, and
malfunction (SSM).”  One air agency (0087) stated that the addition of
SSM to baseline emissions as these emissions are by definition erratic
and may not represent future performance.  The commenter added that
choosing a period of high SSM emissions as the baseline will likely
provide a larger Green Group emissions limit allowing the source more
latitude in installation of uncontrolled emissions units with consequent
adverse impact on states efforts to manage attainment status.

One air agency (0065.1) and one industry commenter (0084) stated that
baseline actual emissions should not include emissions associated with
malfunctions.  The commenters stated that adding malfunction emissions
to the baseline has the net effect of increasing the actual emissions
when determining the baseline.  One industry commenter (0084) stated
that because of the variability and inconsistency when quantifying these
emissions, including emissions associated with malfunctions will not
provide consistency in determining baseline Green Group emissions or
complying with the associated emission limit.  The commenter suggested
the following changes to the regulation: 

(dd)(3)(ii) – Baseline actual emissions.  Calculations of the baseline
actual emissions from included emissions activities (with supporting
documentation). Baseline actual emissions are to include emissions
associated not only with operations of the activity, but also emissions
associated with startup and shutdowns.

(dd)(7)((ix) – A requirement that emissions calculations for
compliance purposes must include emissions from startups and shutdowns.

	One industry commenter (0077.1) noted that in some cases, separate,
additional BACT/LAER limits may be needed for “low concentration”
and “to address startup, shutdown, and malfunction” situations.  The
commenter agreed that the permit should address how compliance is
determined in such situations but we would not agree that BACT/LAER
needs to be applied to malfunctions.  Sources should be subject to the
general duty to minimize emissions during malfunction events but they
should not be required to do more in such situations.  The commenter
suggested EPA clarify in the final rule that this statement is not
intended to imply more than the standard requirement to minimize
emissions.

	One air agency (0087) has concerns about the inclusion of the apparent
unregulated inclusion of actual emissions from proposed physical,
operational, and other changes.

Comments on the 10-year Baseline Period:

One industry commenter (0074.1) supported using the 10-year baseline
period for baseline emission calculations for Green Groups.  The
commenter stated that the 10-year baseline period for baseline emission
calculations for Green Groups is necessary to accommodate cyclical
industries like automobile manufacturing.  The commenter stated that
under the prior approach that often relied on the 2 years immediately
preceding a change to set the baseline, economic downturns can penalize
companies just as they are trying to recover.  

	One air agency (0087) opposed using the 10-year baseline period for
baseline emission calculations for Green Groups.  The commenter also
objected to this approach for a PAL as shown in the 12/31/02 NSR
Reforms.  The commenter stated that an unrestricted look back as
proposed allows the source the opportunity to select a period of the
highest emissions experienced (adjusted for any intervening rule
promulgations), thus allowing emissions at a level in excess of current
experience which may necessitate additional control measures in the
state to bring emissions in line with attainment requirements.

	

Comments on Fugitive Emissions

	One air agency (0093.1) disagreed with EPA’s proposal that fugitive
emissions from Green Group activities would be addressed as they would
under major NSR.  This seems inconsistent with the concept of a Green
Group consisting of a number of emission activities being controlled by
a common air pollution control device, and the definition of fugitive
emissions.  The commenter stated that EPA should clarify whether the
intent is to allow processes with fugitive emissions to participate in a
Green Group and, if so, whether such fugitive emissions must be captured
and controlled or whether separate P2 measures and/or BACT/LAER controls
would be required for both existing and new fugitive emissions.

	One industry commenter (0077.1) stated if fugitives are no longer
considered in NSR analyses, Green Group limits should not require
tracking of fugitive emissions.

Comments on Prior Limits

	Three industry commenters (0073.1, 0076.1, 0077.1) agreed with EPA’s
proposed Section 52.21(dd)(1)(ii) that “(r)(4)” limits are gone and
should never apply once a unit is approved as an emission activity
because “(r)(4)” cannot be circumvented once the group of activities
is subject to BACT/LAER.  Thus, any prior limit on potential to emit
that was taken is to eliminate NSR review and BACT or LAER is no longer
necessary once the activity is subject to the Green Group.

	Three industry commenters (0074.1, 0076.1, 0077.1) also noted that when
EPA explains in the preamble that when the major NSR permit is issued,
minor NSR permit limits that the source had previously accepted to avoid
major NSR would be eliminated.  EPA explains that it does not believe
regulatory language is needed to effectuate this change.  The commenters
agreed with the proposed policy, which is consistent with prior practice
implementing Section 52.21(r)(4), but is concerned that some of the
proposed regulatory language could be read as undermining the proposed
approach.  Specifically, proposed Section 52.21(dd)(1)(ii) states:

Prior requirements.  Except as provided under paragraph (dd)(1)(i)(c) of
this section, a major stationary source shall continue to comply with
all remaining applicable Federal or State requirements, emissions
limitations, and work practice requirements that were established prior
to the effective date of the Green Group.

	The referenced paragraph (dd)(1)(i)(c) only mentions Sections
52.21(j)(4) and 52.21(r)(2), whereas the relevant provision at issue is
52.21(r)(4).  Although EPA’s preamble explanation makes sense, the
blanket preservation of “prior requirements” with a narrow
“except” clause could be misread to mean that Section 52.21(r)(4)
limits are being retained for purposes of the Green Group approach.  One
of these commenters (0074.1) stated that this result should be clear on
the face of the regulation by including an amendment to 52.21(r)(4) to
indicate that Section 52.21(r)(4) is fulfilled by creating the Green
Group limit under these rules based on the assumption that the original
Section 52.21(r)(4) limit had never been accepted.  Two of the
commenters (0076.1, 0077.1) requested that EPA include a clarifying
sentence at the end of 52.21(dd)(1)(i)(c) that states: “Limits
accepted in previous permits to avoid imposition of major NSR are not
retained when the Green Group permit is issued.”

	One air agency (0094) stated EPA should reconcile the emission
limitations issued under (dd)(4)(i) with those of (dd)(4)(ii).  The
commenter stated that it is unclear from the discussion whether EPA
intends there to be a Green Group emission limit in addition to the BACT
emission limit.  The commenter stated that EPA should clarify that the
BACT emission limit should be determined consistent with the CAA
requirements for BACT.

Comments on Pollution Prevention (P2)

Comments Supporting Use of a P2 Approach, Rather Than a Common Air
Pollution Control Device:

	One air agency (0069.1) and five industry commenters (0071.1, 0073.1,
0076.1, 0077.1, 0084, 0096) supported EPA’s proposed authorization of
P2 as an alternative to required BACT/LAER controls, and expand option
by allowing a green group to be based exclusively on use of pollution
prevention, rather than a common air pollution control device.  One of
these industry commenters (0096) stated that the benefits to the
environment would be the same or greater with the P2 approach.  Another
of these industry commenters (0073.1) supported P2 as an optional
feature of a Green Group, but opposed it being mandated as a
pre-condition for approval of the use of any flexible permit, because
such a requirement could be incompatible with certain production
processes, and interfere with the approval of certain types of Green
Groups where environmental benefits and cost-savings are clear.  The
commenter added that EPA needs to clarify why P2 activities that never
use the common air pollution control device do not meet BACT or LAER and
cannot be approved as part of a Green Group.  The commenter stated that
such a provision would appear to reject P2 by itself for a group of
equipment that might use.  

	One industry commenter (0073.1) though supporting EPA’s proposed
authorization of P2, objected to requiring the P2 related activities to
have ductwork extending to the common air pollution control device at
all times, even if it is being by-passed.  This seems to involve the
agency unnecessarily in engineering decisions and is not required when
there is little opportunity to evade BACT/LAER requirements.  P2 is
capable of being monitored and also is subject to semi-annual compliance
reports and semi-annual compliance certification requirements.  In
processes where emission equipment is “campaigned,” meaning it is
rearranged in a building or on a production line given a particular
product, it may be unnecessary or imprudent to always maintain a hard
connection to a pollution control device.  Therefore, the commenter
urged EPA to reconsider these limitations on Green Groups that rely in
whole or in part on P2.

Comments Opposing Use of a P2 Approach, Rather Than a Common Air
Pollution Control Device:

	One air agency (0087) and one industry commenter (0079) opposed EPA
permitting an assemblage of control techniques, P2, work practices, and
operational standards to supplant BACT.  The air agency (0087) stated
that such practices not represented in any past BACT determinations will
surely degrade such determinations and provide an insurmountable task in
determining under actual performance conditions if BACT is really BACT. 
The commenter cannot agree with this approach and soundly recommended
EPA stick with the tried and true definition of BACT.  The industry
commenter (0079) stated the specification of certain types of products
preclude the use of P2 in order to meet applicable specifications and
CAA requirements. 

	Three air agencies (0057, 0085.1, 0089) stated that P2 measures should
complement, not provide an alternative to, BACT and LAER controls.  One
air agency (0085.1) stated that the statutory definitions of BACT and
LAER do not allow indefinite replacement of air pollution control
technology with pollution prevention measures.  

Other Comments on Use of a P2 Approach:

	Two air agencies (0057, 0069.1) stated that if P2 is to be authorized
for some periods of operation instead of requiring continuous operation
of the control device, this option should require two different BACT
analyses.  The first analysis would assume that all emissions are vented
to the control device with no reduction in emissions due to P2.  This
would ensure that by including P2 as part of a Green Group, a control
technology could not become economically infeasible because the
emissions that otherwise would be controlled by the device would no
longer be included in the economic analysis.  The second analysis should
demonstrate that the P2 option independently satisfies the requirement
for BACT.

Comments on an Aggregate Emissions Limit

	One industry commenter (0070.1) agreed with EPA that an aggregate limit
is appropriate for emissions activities that comprise the Green Group,
and that individual emissions activities that comprise the Green Group
should not have additional tons-per-year activity allocations.

	One air agency (0093.1) opposed EPA’s proposal that there be only an
aggregate emissions limit for a Green Group in lieu of individual
activity/process unit emission limits.  The commenter stated that an
aggregate emission limit that is based on the entirety of a future
project will not be adequate during interim periods where that project
may be implemented incrementally.  The commenter stated that a single
aggregate limit, based on the aggregate emissions of all future changes,
may create a relaxation of emission limits for existing activities,
especially during any interim period between approval and when
implementation of the first change triggers pre-approved BACT/LAER
requirements.  Existing emission limits for existing activities should
remain in effect until more stringent emission limits are in effect. 
The commenter stated that allowable emissions for a Green Group should
reflect the timing of the addition or modification of emitting
activities.  Further, there may be cases where some emission discharge
limits should be applied to each individual activity unit discharge to
ensure proper and adequate performance of the common control device and
associated emission collection systems.  Permitting agencies should not
be constrained from enforcing activity/process unit-specific emission
limits in addition to aggregate Group emission limits where necessary.

	

Comments on the Annual Emissions Limit

Comments Supporting:

	Two industry commenters (0074.1, 0076.1, 0084) supported the proposal
that a source may seek to increase its Green Group annual limit,
provided that the BACT/LAER is revalidated and additional offsets to the
extent applicable are required.  The commenters stated that this should
not be require reissuing the major NSR permit; and the Green Group
permit should include standard language describing the procedures for
increasing the limit and how such re-validation of the technology
determination or assessment of necessary offsets would occur. 

	One of these commenters (0084) suggested that this concept be contained
in proposed (dd)(12) as follows:

(12) Increasing a Green Group emission limit during its effective
period.  The Administrator may increase a Green Group emissions limit
during its effective period only if the increase is contained in a new
permit incorporating the increase into a new Green Group consistent with
the requirements of this section.  Alternatively, the applicant can opt
to terminate the Green Group while retaining appropriate emission limits
and other requirements and then subject the emissions of new project(s)
to the applicable NSR process.

	One industry commenter (0084) supported EPA’s second step in setting
the annual emissions limit for the Green Group, which involved the
calculation of an emissions increase from any new emissions activities
or planned changes to existing activities that are approved as part of
the permit emissions increase increment to address the planned changes
over a 10-year period.  The commenter also stated that the additional
amount of emissions added to the baseline should be consistent with
expected economic growth, even if specific new emissions activities
cannot be identified at the time of the Green Group permit application.

Comment on Short Term Emissions Limit:

	One industry commenter (0084) noted that the proposed regulatory text
could have the unintended effect of requiring permitting agencies to
establish a short-term emissions limit as part of the Green Group
program.  The commenter stated that in order to avoid potential
confusion over short-term emission limits, EPA should delete the
proposed (dd)(6)(iv) from the rule and simply rely on the permitting
agencies to add short-term emission limits if needed to satisfy their
obligations to prepare permits which meet the other aspects of the NA
NSR or PSD permitting regulations.

Comments on Individual Limits:

	Three industry commenters (0074.1, 0076.1, 0077.1) supported EPA’s
proposal that there should not be individual limits on emission points
within the Green Group emissions unit so that proposal retains its
flexibility goals.  One of these commenters (0076.1) stated that sources
will likely not be willing to invest the time and effort in obtaining a
Green Group permit if the overall limit is divided in a way that
constrains the operations of individual units.  However, if units must
be constrained so that shifting production needs cannot be accommodated,
companies will simply not enter into Green Group permits and continue to
operate under the traditional NSR program.

Comments on Emissions Limit Measurement:

One air agency (0069.1) stated the current proposal only allows Green
Groups where, in addition to the appropriate BACT/LAER limits, a given
group of activities is also subject to an overall emissions limit in
tons per year on a 12-month rolling basis.  The commenter requested that
EPA consider whether other types of limits could be allowed.  In some
cases, continuous direct measurement and/or calculations of emissions is
less reliable or significantly more burdensome than some other
enforceable operating parameter that could affectively limit the
emissions from a facility.  The commenter requested that EPA consider if
Green Groups could be established using production or operating limits
that effectively limit the total emissions from the Green Group.

	One air agency (0094) opposed dictating that the emission limit be
expressed in only tons per year.  The commenter stated that multiple
averaging times are involved in air quality analysis of pollutants even
if there is a common air pollution control device and a single emission
release point.

Comments on Advance Approvals

	One air agency (0093.1) stated that if a facility's forecasted
additions and modifications that receive advanced approval turn out to
be incorrect and the facility must seek changes to its Green Group
permit after several years, the permitting authority should have the
authority to update and apply a new BACT/LAER determination to ensure
that the advanced approval process is not abused.  The commenter also
stated that EPA must allow permitting agencies to require that the
BACT/LAER requirement be reevaluated, and modified as appropriate, if
the initial BACT/LAER technology has not been implemented within a
specified period after initial approval.  The commenter stated that this
would ensure that the emission reductions from existing activities that
were an anticipated benefit in exchange for the certainty of advanced
approval are realized within a reasonable time, and perhaps help to
avoid gaming of the Green Group approval process.

	One air agency (0090.2) stated that the "advance approval" process EPA
envisions as part of the green group proposal contravenes Washington
state law.  The commenter also stated that the “advance approval”
process is not needed.  The commenter stated that if a major source
wants to get a ‘prior approval’ for future projects, they can do so
through the phased project approval process already in the federal major
NSR programs and state minor NSR programs.  The commenter stated that
the main impediment to using the phased project approval process has
been that companies don’t want to commit to projects that are more
than 2 years in the future.  Finally, the commenter stated that nothing
in the Green Group proposal would make this future commitment aspect of
the phased project any more palatable except for the lack of a
re-evaluation of BACT for future phases.

Comments on Offsets

Three industry commenters (0071.1, 0074.1, 0084) recommended instead of
requiring that offsets be obtained by the time the first new or modified
source commences operation, EPA should provide that offsets will be
timely as long as they are obtained in sufficient quantities prior to
commencement of the operation that necessitates obtaining the offsets. 
The commenters also stated that the source should have the option to
base the timing of the offsets on either (1) the actual changes within
the Green Group as they occur, or (2) each phase of construction before
its operation.

	

	One industry commenter (0073.1) stated that EPA should clarify that
offsets are not required unless the increase is “significant.”

	One industry commenter (0084) supported the added language in
establishing offsets for creditable decreases that occur with emission
activities within a Green Group.  However, the commenter stated that EPA
should allow facilities to use those creditable emission decreases from
the Green Group as offsets for other projects within the facility.  The
commenter stated that they are reductions that are surplus,
quantifiable, permanent, and enforceable from a practical standpoint,
and facilities installing air pollution control abatement or developing
P2 projects that produce creditable emission decreases should be allowed
incentives for using those offsets or credits for use with other
facility projects.  This, too, can provide flexibility in market
sensitive production units that have to respond quickly to global market
changes.

	One air agency (0093.1) stated that the EPA proposal to require
emission offsets at applicable regulatory offset ratios for all
increases of non-attainment pollutants above baseline actual emissions
for a Green Group could provide an incentive in non-attainment areas for
an operator to propose using the most effective air pollution control
technology feasible at the time of initial approval.  However, the
commenter noted that while the Supplementary Information of the EPA
Green Group proposal discusses this emissions offset requirement, it
does not appear to have been incorporated into the proposed revisions to
EPA's NSR regulations.

	One air agency (0093.1) stated that when offsets are initially provided
they must be sufficient to cover any remaining emission increases from
existing equipment after the required BACT/LAER adjustments in addition
to the emission increases associated with the first modification or
addition.  However, the commenter stated that the emissions offset
requirements described in the preamble do not appear to have been
carried out in the proposed amendments to regulation 40 CFR 51.165.

Other Comments on the Emission Limits of Green Groups

	One air agency (0069.1) noted that the proposed rule allows the removal
of (r)(4) limits on an emission unit if it is included in a Green Group
and it is treated as if construction had not yet commenced on it.  The
commenter stated that for this to be acceptable, all emission units that
were part of the source or modification that established the (r)(4)
limitation must be treated as if construction had not yet commenced and
not just the emission units that will be included in the Green Group.

	One air agency (0069.1) noted that the preamble states that a permit
establishing a Green Group must include a limit to ensure that BACT/LAER
technology is being employed and effective.  The commenter stated that
this is inconsistent with the requirement of 40 CFR 52.21(j) stating
that Green Groups should be subject to BACT which is an emissions limit
that may be based on a percent reduction, but percent reduction, in and
of itself, is not a substitute for a BACT emissions limit.  The
commenter stated that the requirements and types of limits to meet BACT
should be no different for Green Groups.

	One industry commenter (0084) stated that section 52.21(a)(2)(v) should
be corrected to 52.21(b)(2)(v).  The changes identified on page 52253 do
not indicate a change to 52.21(a)(2)(v).

Comments on the Monitoring, Recordkeeping, Reporting, and Testing (MRRT)
Requirements for Green Groups

Comments Opposing the Proposed MRRT Requirements for Green Groups:

Three industry commenters (0074.1, 0076.1, 0077.1) believe the proposed
monitoring, recordkeeping, and reporting (MRR) requirements for Green
Groups go well beyond what is required to provide a reasonable assurance
of compliance.  The commenters believed the proposed rule’s MRR
provisions should be revised to provide more flexibility and to
eliminate redundancies with title V.  Two of these industry commenters
(0076.1, 0077.1) provided extensive suggestions on subparagraph (13),
and to a lesser extent, subparagraphs (14), (15), and (16) on how the
proposed rule’s monitoring, recordkeeping, and reporting provisions
should be revised (and substantially cut back) to provide more
flexibility and to eliminate redundancies with title V.  Another of
these industry commenters (0074.1) excerpted and provided suggested
edits to the MRR provisions of the proposal to try to make them more
consistent with general MRR requirements and with other programs as well
as to eliminate the many instances in which these provisions are
redundant with – and often slightly different from – title V
requirements.

One industry commenter (0074.1) stated that all of the MRR provisions in
the proposal should be deleted with the exception of a provision that
states that Green Group permits are subject to the same enforceability
standards for MRR that apply to all major NSR and PSD permits. 
Similarly, another of these commenters (0077.1) recommended including a
general monitoring provision that simply requires the permit to be
practically enforceable.	

Comments on Missing Data Requirements:

	Three industry commenters (0070.1, 0073.1, 0077.1) opposed EPA’s
proposed missing data procedures under section (dd)(13)(vii) which
provides that if monitors are not operating, the operator must report
maximum potential emissions.  Two of these commenters (0070.1, 0073.1)
claimed it is unreasonable to presume emissions of the maximum potential
emissions for any period where the primary monitoring data is not
available.  Both commenters also claimed this proposal is inconsistent
with the credible evidence rule, where credible evidence can and should
be used to determine emissions if a monitor malfunctions or a data gap
occurs.  One industry commenter (0073.1) urges EPA to remove
sub-subparagraph (dd)(13)(vii) because it is unreasonable, particularly
when instrumental monitors or human error, causes the missing data and
other emissions information is reliable and available.  Another industry
commenter (0070.1) stated that EPA's missing data requirements should be
revised, however, if EPA insists on maintain these requirements EPA will
be discouraging sources from considering Green Groups and devaluing the
environmental benefits that they should be encouraging.  The commenter
also stated that is no reason to penalize the source operator in the
event of a malfunction of a device, when even a well maintained
monitoring device will inevitably fail to operate.  Another industry
commenter (0077.1) stated the proposal provides the most extreme
approach possible for periods of missing data with no justification. 
The commenter stated permitting authorities should have flexibility to
include appropriate ways to fill data gaps.  The commenter also stated
that the same should be true for Subsection (13)(viii)(A) which also
addresses gap-filling.

Other Comments on MRRT Requirements:

	One industry commenter (0084) supports reporting to be consistent with
the existing semiannual reporting provision of Part 70.  The commenter
encouraged permitting authorities to combine this semiannual report with
the 6-month monitoring report otherwise required under part 70 (see 40
CFR 70.6(a)(3)(iii)(A)).  The commenter stated that requiring
notification during the semi-annual report is a preferable alternative
than using separate reports as currently practiced in some states,
because it will potentially reduce the reporting burden for facilities
that are required to report.  

	One industry commenter (0084) suggested that EPA make revisions to
(dd)(13)(ix) of the proposal for re-validation and allow permitting
authorities to waive the requirement on a permit-by-permit basis. 

	The commenter suggested the following rule revisions for (dd)(13)(ix):

	(ix) Re-validation. The permitting authority shall establish a process
for revalidation of all data used to establish the Green Group pollutant
emissions.  This may involve performance testing or other scientifically
valid means approved by the Administrator.  The permitting authority may
also waive the requirement for re-validation on a permit by permit
basis.  All data used to establish the Green Group pollutant emissions
must be re-validated through performance testing or other scientifically
valid means approved by the Administrator.  Such testing must occur at
least once every 5 years after issuance of the Green Group.

One industry commenter (0070.1) the requirement to adjust emission
factors for uncertainty from Green Group monitoring requirements.  The
commenter stated that EPA should delete the Green Group monitoring
requirement for use of emission factors that states "[a]ll emissions
factors shall be adjusted, if appropriate, to account for the degree of
uncertainty or limitations in the factors' development;"  because it
will only confuse agencies, the public and the regulated community.  The
commenter stated that the only qualifier guiding the decision whether to
adjust factors – "if appropriate" – is too elastic to ensure any
consistency in its application among sources and among states.  In
addition, most permitting authorities do not possess the resources
necessary to determine whether or not a particular adjustment might be
appropriate.  The commenter also stated that it will result in an
immediate tightening of the Green Group cap unless it is clear that the
factor adjustment is to be applied to both the base actual emissions and
the compliance determinations.  The commenter also stated an artificial
inflation of the best available emissions factor will create intentional
over-reporting of emissions that will (1) be at odds with the goal of
creating accurate inventories; (2) be inconsistent with toxic release
inventory (TRI) and national emissions inventory (NEI) reporting; and
(3) make future NSR analyses inconsistent and inaccurate.  The commenter
stated that EPA's goal should be to improve general factors in AP-42,
when appropriate, and not to create two sets of books for emissions
tracking and reporting.  The commenter also stated that EPA should not
include rule language requiring the adjustment of all emission factors
without evaluating and addressing comments received on its Draft
Emission Factor Uncertainty Assessment.  The commenter also stated that
EPA fails to distinguish between EPA's AP-42 emission factors,
vendor-developed emission factors, or even factors that have been
developed using site-specific stack test data. EPA's requirement ignores
the quality of the emission factor and the fact that many facilities use
emission factors developed using site-specific data, which in the past
EPA has presumed is representative of site operations.

Comments on the Duration and Renewal of the Green Group Designations

Comments on Contemporaneity of Construction Requirements
[§§52.21(r)(2) & 52.1666(j)(4)]

Comments Supporting Eliminating Requirements:

	One air agency (0094) and six industry commenters (0071.1, 0072.1,
0075.1, 0082.1, 0083.1, 0096) supported EPA’s proposed elimination of
requirements designed to ensure that NSR permitting decisions would be
contemporaneous with the commencement of construction or modification of
a source or facility; specifically, EPA has proposed to eliminate the
provisions in 40 CFR 52.21(r)(2) that invalidate approvals to construct
if projects are not commenced within 18 months and 52.21(j)(4) and 40
CFR 51.166(j)(4), requiring BACT review and modification no later than
18 months before commencement of construction before each phase of the
project.  Two of these industry commenters (0072.1, 0083.1) stated these
requirements were intended by EPA to strike a balance between affording
a project with certainty as to the emission control requirements it must
meet going forward and assuring that those requirements are based on
up-to-date information requiring emission control capabilities and air
quality impacts.  However, the commenters stated that the “balance”
achieved by these requirements in fact unnecessarily constrains a source
and tips heavily against its ability to rely upon the certainty of a
permit even after the conditions in the permit are subject to lengthy
and detailed scrutiny and after the source agrees to the application of
highly efficient pollution control technology.  One industry commenter
(0072.1) stated that this not only makes economic sense, but also it
will not adversely affect the environment, at least for EGUs.  Another
industry commenter (0082.1) stated that the nature of advance approval
for a Green Group will require more upfront planning and the development
of more costly and more extensive controls that meet BACT.  The
commenter stated that these more extensive controls could lead to an
extended construction schedule; therefore, EPA is correct in allowing
Green Groups the flexibility to be exempt from these current
construction timeframes.  One air agency (0094), though supporting
excluding Green Groups from the 18-month construction requirement and
phased construction determinations, stated that EPA should explain how
to determine PSD increments for pollutants that have PSD increments
defined. Specifically, PSD increment consumption analyses depend on
actual emissions (typical 24-month operational period), so emissions
levels used by CAA-authorized agencies for the increment analysis should
be specified.

	One industry commenter (0072.1) believes an extended permit term –
which allows a source to preserve a preconstruction permit even if
construction is not commenced within 18 months after issuance of a
permit – makes good environmental and economic sense for all types of
affected facilities, including EGUs, even if those facilities do not opt
to take advantage of the proposed Green Group approach.

Comments Opposing Eliminating Requirements:

	Five air agencies (0065.1, 0080, 0087, 0089, 0092.1), one tribe
(0066.1), and one environmental group (0088) opposed EPA’s proposed
elimination of requirements designed to ensure that NSR permitting
decisions would be contemporaneous with the commencement of construction
or modification of a source or facility; specifically, EPA’s proposed
elimination of the provisions in 40 CFR 52.21(r)(2) that invalidate
approvals to construct if projects are not commenced within 18 months
and 52.21(j)(4) and 40 CFR 51.166(j)(4), requiring BACT review and
modification no later than 18 months before commencement of construction
before each phase of the project.  One of these air agencies (0065.1)
disagreed with this exemption, because BACT can and does progress over
time.  One air agency (0080.1) stated that existing PSD provisions,
which allow the permitting authority to extend an authorization beyond
an 18 month period on a case-by case basis, should be retained.  Another
of these air agencies (0087) stated that a Green Group under EPA’s
proposal may “tie-up” increment for 10-years (15 if the Green Group
term is extended).  One environmental group (0088) noted that
independently of them believing Green Groups are unlawful as a whole,
they argued that by eliminating these regulatory obligations for any
major NSR permitting activities, BACT and LAER determinations would grow
state, weaker, and therefore unlawful, as technology and emissions
limitations steadily improve over time.

	Another of these air agencies (0089) believes that excluding Green
Groups from these requirements and allowing construction to occur as
long as 10 or 15 years after permitting raises serious concerns: 

As National Ambient Air Quality Standards (NAAQS) are revised, the
emissions locked in by Green Groups at the beginning of a 10-to 15-year
permit term could, when utilized, have far more serious negative
repercussions for air quality than could have originally been foreseen
at the time of permitting. 

The commenter is concerned that no air quality modeling and analysis
would occur near the actual time of construction. 

The public should have a right to comment on construction near the time
that it commences—taking into account contemporaneous air quality, as
well as factors relating to population, land use, and economic trends,

One air agency (0089) and two tribes (0066.1, 0078) were concerned that
by not mandating that BACT determinations be revisited if the unit is
not built within eighteen months of permit issuance, to account for new
technologies or updated pricing data, only the initial BACT analysis is
required for the term of the permit and increases in emissions are
allowed without violating NSR or the use of P2 as a surrogate for BACT,
leading to hoarding of increment allocations.  Similarly, two air
agencies (0085.1, 0087) were concerned that the Green Group proposal may
have the effect of reserving available increment in an area for a single
source that may never construct its proposed Green Group project(s),
thereby limiting growth options in the area.  One air agency (0087)
opposed approving changes at the source that are not clearly defined and
definite because they think sources may inflate the Green Group annual
limit with changes that they never intend to build.  The commenter
stated that allowing the addition of actual emissions from proposed
Green Group physical changes, etc. will permit wholesale skirting of
current NSR requirements.  The commenter is concerned that sources may
propose additions that are never installed to (a) insure sufficient
operating room under the Green Group emissions limit so as not to exceed
it, or (b) provide sufficient “slack” in the emissions limit to
absorb emissions from unknown equipment to be installed in the future. 
In either case, increment is consumed or reserved so others cannot use
it and state air quality projections may prevent other worthy sources
from expanding operations.

Other Comments on Commencement of Construction Requirements:

One industry commenter (0072.1) encourages EPA to delete 40 CFR
52.21(r)(2) and (j)(4) and 51.166(j)(4) from the PSD regulations, for
the same reasons that it supports EPA’s proposal to remove Green
Groups from the 40 CFR  52.21(r)(2) and (j)(4) and 51.166(j)(4)
requirements.

Comments on Renewal of Green Groups

Comments Supporting: 

	Two industry commenters (0076.1, 0077.1) agreed with EPA’s proposal
that if the permitting authority does not act on the renewal in a timely
manner, sources can continue to operate under the existing Green Group
permit if it has applied for renewal.

Comments Opposing: 

One air agency (0065.1) disagreed with EPA’s proposal that a Green
Group remains in effect until the permitting authority acts on a renewal
application as long as the source has timely submitted a renewal
application.  The commenter explained that should a permit be extended
for more years, and potentially indefinitely, it would shield Green
Group modifications from a BACT/LAER evaluation for yet more years.  The
commenter believes the rule should provide that the Green Group
automatically terminates unless the permitting authority acts on the
renewal application within a reasonable time, such as one year.  The
commenter believes this situation is very different from the case of a
renewal of a title V permit, under which the “application shield”
protects the source from enforcement of the requirement to have a permit
as long as it has applied in a timely fashion, because the title V
permit has no effect on applicable requirements.

Comments on Application Deadline for Renewal:

Two industry commenters (0077.1, 0084) supported the proposed EPA’s
proposed application deadline for renewal of a Green Group in
(dd)(11)(ii).  One of these industry commenters (0084) believes that
this timing provides ample time for the permitting authority to review
and renew the Green Group designation.  The commenter added that EPA
could also rely on the language currently in Part 70 for a timely
renewal of an application for States that have the Green Group concept
in the Part 70 Operating Permit Program.

Other Comments on Renewal of Green Groups:

Two industry commenters (0076.1, 0077.1) believe that sources should
have the option to renew by providing simple revalidation of BACT or
LAER.  The commenters added that for agreeing to another 10-year cap,
the source should be able to describe new categories of changes to the
extent necessary for the coming 10-year permit term.

Comments on the Dividing Up Green Groups After Expiration 

	Two air agencies (0069.1, 0094) opposed the ability of a source with an
expired Green Group to divide up the Green Group in to smaller emissions
units and to allocate the emissions limit correspondingly if such a
provision would allow some emission units to operate without control or
would allow the source to later demonstrate that the controls were no
longer economically feasible.  One of these commenters (0094) stated
that if sources want to divide into smaller emission units, they should
have to propose another Green Group, not simply separate emission units.

 	Five industry commenters (0071.1, 0074.1, 0075.1, 0076.1, 0077.1,
0096) requested that EPA revise the Green Group rules to provide that
when a permittee chooses to not renew a Green Group, it should have the
option to follow the requirements that are in the proposed rules, or it
can divide the Green Group into emissions activities or sub-groups of
those activities that comprise the Green Group, and allocate the Green
Group emissions limits to those activities or sub-groups of those
activities, provided that the individual emissions activities or
sub-groups of those activities meet BACT or LAER.  One of these industry
commenters (0096) stated that by authorizing the division of emissions
activities into more than one unit, EPA will assure that sources will
continue to have the same flexibility in terms of designation of
emissions activities as separate emissions units as previously existed
and, as a result, will not be penalized for having obtained the Green
Group permit.

Comments on the Duration for a Green Group Designation

Comments Supporting 10-year Effective Period:

	Two air agencies (0093.1, 0094), two industry commenters (0068.1,
0079), and two private citizens (0053, 0056), supported the proposed
10-year Green Group advanced permitting effective period.  One air
agency (0093.1), two industry commenters (0068.1, 0079), and one private
citizen (0053) agreed with EPA’s assertion that improvements in
technology do not occur within a 10-year period; control technology is
typically quite stable within a 15 year period and not likely that a
subsequent BACT/LAER determination at a Green Group will require a new
control device within a 15 year period.

	One of these air agencies (0093.1) stated that EPA should not consider
longer than 10 years, and should allow permitting agencies the
flexibility to prescribe shorter periods.  The commenter stated that few
industries will be able to reliably predict future facility changes 10
years in advance, fewer still 15 years in advance, except those with
very narrow product/process parameters and/or long permitting and
construction lead times. The commenter suggested that whatever maximum
period EPA ultimately incorporates, EPA should allow advanced approvals
over shorter time frames than the maximum to address cases where a
business cannot predict further ahead with reasonable confidence. 
Another of these air agencies (0094) stated that a 15-year duration is
too long.  One of these industry commenters (0079) in the packaging
industry, noted that current “control” equipment such as oxidizers
typically are capable of emissions reductions in excess of 95%, so we
would point out that BACT/LAER for these sources cannot improve that
much in terms of pollution control efficiencies.  The commenter added
that the improvements that are seen in new control devices relate more
to more reliability and improved fuel efficiency than in increases in
oxidation efficiency.  One of these private citizens (0053) the
commenter believes the rule is already going far enough to offer
businesses operational flexibility and this aspect of the revisions
should err on the side of environmental caution.  Maintaining the
general 10-year duration offers a sufficient time period for a facility
to experience regulatory certainty and lessens administrative burdens on
permitting authorities.  Another of these private citizen (0056) stated
that though a 10-year duration would be most advantageous; in order to
address the concerns about the duration being too long, the ideal middle
ground would be for the agency to create a procedure by which it could
go back and redefine BACT within the Green Group title V permit when
certain conditions are met.  Another of these industry commenters
(0068.1) supported EPA’s proposal of 10 years as a minimum amount of
time for sources using emission control systems or low-emission design. 
The commenter suggested creating a system that provided flexibility
commensurate with the degree of emission controls in place and amount of
time controls have been utilized, enabling technological advances to
catch up more quickly where the BACT/LAER is advancing from no add-on
controls to more advanced technologies.  The commenter explained that
the more the source has invested in technology to reduce emissions then
it should be entitled to longer periods of flexibility; likewise, if the
investment in technology is more recent, then the source should be
provided a longer period of flexibility. 

Comments Opposing 10-year Effective Period:

	Two air agencies (0062.1, 0085.1), and three tribes (0061.1, 0066.1,
0078) believe that the proposed 10-year Green Group advanced permitting
effective period is too long.  Four of these commenters, including one
air agency (0085.1) and three tribes (0061.1, 0066.1, 0078) disagree
with EPA’s assertion that improvements in technology do not occur
within a 10-year period.  The commenters expressed that the advancement
of pollution control technologies occurs at a more rapid pace than
expressed in the EPA proposal.  One of these air agencies (0062.1)
stated that this is much too long a period of time for a source to
"hold" the rights to install a new source without contemporaneous
review.  Another of these air agencies (0085.1) stated that locking in
BACT or LAER for 10 years is likely to result in a reduction in
technologically advances, as there would be little incentive for
industry to continue to improve emissions control technology.  An
additional concern for the commenter was that there is no requirement in
the Proposed Rule for a contemporaneous air quality modeling analysis at
the time of actual construction of a proposed “Green Group” project.
 The commenter stated during the time between the establishment of the
“Green Group,” and actual construction of a proposed “Green
Group” project, there could be significant changes in air quality that
would be ignored under the Proposed Rule.  Finally, the commenter stated
that it appears that many other changes, some affecting other
environmental quality areas of interest, such as water quality or
wetlands, could occur within the 10-year “Green Group” Designation
period without undergoing an impact analysis or public scrutiny.  There
is no discussion in the preamble on how this type of situation would be
affected by the “Green Group” proposal.  Two tribes (0061.1, 0078)
stated that the duration of Green Group permits beyond 5 years offers
increasingly questionable environmental protection.  One tribe (0061.1)
noted that the six success stories of the US. EPA Flexible Permit
Implementation Review were all based on flexible permits approximately
five years in duration or less; the proposed lifespan of a Green Group
permit is two to three times the lifespan of the flexible permits
studied and used as the foundation of the proposed rule.  Another tribe
(0078) stated that it is impossible to extrapolate the accomplishments
or problems from these 5-year pilot projects to 10 or 15 year permits.  

Comments Supporting 15-year Effective Period:

	Five industry commenters (0070.1, 0071.1, 0075.1, 0082.1, 0096), felt
the proposed 10-year Green Group advanced permitting effective period
was too short, and instead, supported EPA’s suggested duration of 15
years instead.  Five industry commenters (0070.1, 0071.1, 0075.1,
0082.1, 0096) agreed with EPA’s general statements that a reasonable
average equipment life is 15 years and that there is no data to suggest
that improvements in control technology occur in sufficient magnitude to
lead to different control technologies constituting BACT within 15 years
of the date a Green Group is issued.

Two industry commenters (0071.1, 0075.1) believe that a 15-year term is
more appropriate and that it is supportable.  The commenters believe
that 15 years represents a reasonable balance between the useful life of
air pollution control devices and the time frame in which a new BACT
determination would require additional emissions control.

One industry commenter (0070.1) noted that obtaining a Green Group
provision requires substantially more effort than obtaining a PAL.  The
commenter explained that since the lifetime of a given piece of control
equipment is at least 15 years, and the business payout of
pre-permitting and installing these best controls is speculative, thus,
EPA should allow for more time for sources to recoup the costs of these
newest controls.  The commenter believes that a 15-year period or longer
would make the Green Group option more attractive to sources, given the
complex decision-making, capital investment and long-term commitment of
personnel and other resources that will be required if a company elects
to participate.  Another of these industry commenters (0096) stated by
providing that the duration of a Green Group permit will be 15 years,
rather than 10 years, EPA would encourage significantly the use of the
Green Group authorization.  This would result not only in greater
flexibility for the Green Group permitted source, but also significant
emissions reductions.  If the duration is limited to 10 years, sources
are much less likely to take the necessary steps to obtain a Green Group
permit.  The commenter concluded a life shorter than 10 years would make
the Green Group concept of no value.

Comments Supporting Both 10-year and 15-year Effective Period:

	Seven industry commenters (0072.1, 0073.1, 0074.1, 0076.1, 0077.1,
0083.1, 0084), supported both the proposed 10-year and 15-year Green
Group advanced permitting effective period.  Six industry commenters
(0072.1, 0073.1, 0076.1, 0077.1, 0083.1, 0084) agree with EPA’s
general statements that a reasonable average equipment life is 15 years
and that there is no data to suggest that improvements in control
technology occur in sufficient magnitude to lead to different control
technologies constituting BACT within 15 years of the date a Green Group
is issued.

	Two industry commenters (0072.1, 0083.1) stated that once a technology
is broadly applied on a commercial basis and shown to operate
efficiently and reliably it is not likely that it will further evolve.
Thus, the commenters stated that allowing a permit to remain intact for
the proposed 10, or even 15 year, permit term is a reasonable and
flexible approach that will help eliminate some unnecessary
administrative burdens without compromising environmental
considerations.  Two industry commenters (0076.1, 0077.1) agree that the
environmental benefits EPA discusses of the Green Group approach would
be enhanced by a longer potential permit term for the Green Group.  The
commenters stated that sources would clearly have a greater incentive to
voluntarily enter the Green Group process with a longer period of
certainty for changes.  The commenters suggested one possible approach
would be to issue the rule with authority to allow a 15-year permit term
but also the authority to shorten the period to no less than 10 years if
there is evidence that control technology approaches are likely to
change in the future for the types of emission points included in the
Green Group.  One industry commenters (0073.1) stated a 15-year period
is justified because in contrast to PALs the overall controls are more
stringent and the unit has been subject to NSR impact analyses.  It also
would be helpful to make Green Group investments more viable, even if
the control decision was reviewed as a condition for continued operation
after 10 years.  The commenter believes that if companies can be assured
that they can obtain 10-15 year pre-approval for new equipment that will
be vented to these controls, then there will be a significant incentive
to install cleaner equipment sooner instead of avoiding modifications
all-together.  Another of these industry commenters (0074.1) suggested
EPA provide a 10-15 year period in the regulations with the 10-year term
as the minimum and the 15-year term being granted based on an assessment
by the permitting authority of historical advances in technology and
expected advances in the coming years for the pollutant and emissions
units in question.  The commenter added that EPA could also allow
permits to include a 5-year extension if no significant advances in
control technology have occurred during the first 7 years of the permit,
allowing the source to obtain the extension in year 8 or 9 of the permit
so it could evaluate in a timely manner whether it wished to seek
renewal.  The commenter stated that in order for companies to have an
incentive to enter into a Green Group permit and make the associated
investments in control technologies and administrative costs, a 10-year
period is the absolute minimum time frame that would allow this to
occur.  The commenter explained that if companies are given only 5
years, for example, to recoup the investment in obtaining the permit and
installing the controls before potential additional requirements could
apply, they will be unlikely to enter into such permits.  However, the
commenter added if the rules provided a 15-year term for such permits,
sources would be even more likely to enter into these permit
arrangements voluntarily, because the sources would be controlling
emissions from the entire group to the BACT or LAER level of control
even when a traditional NSR analysis might consider many of the changes
authorized by the permit to be minor NSR changes not requiring BACT or
LAER.  Finally, the commenter stated that because EPA is proposing that
the effective date be the date of issuance of the permit, a 15-year
period would help to make up for time that the source is in construction
rather than operation.  Moreover, the risk to the environment is
extremely low in these cases as well because BACT and LAER do not
increase in stringency at a rapid pace.  Another of these industry
commenters (0084) stated where the technology is aggressively changing
and improving, then the states should be allowed to evaluate whether the
BACT /LAER determinations are still effective for the Green Group for a
particular entity.  But, where the technology hasn’t changed as being
BACT/LAER, the commenter believes states should have the flexibility to
extend the Green Group reevaluation up to 15 years.  The commenter urges
EPA to provide flexibility in the final rule to allow the State
permitting authorities to use a range of 10 to 15 years for the Green
Group effective period; this would allow States to tailor the program to
best suit their needs.  The commenter stated at a minimum, the Green
Group life should be at least 10 years to be consistent with the
BACT/LAER determination.	 

	 

Comments on the Advancement of Control Technology

Comments Supporting:

	Thirteen industry commenters (0068.1, 0070.1, 0071.1, 0072.1, 0073.1,
0075.1, 0076.1, 0077.1, 0079, 0082.1, 0083.1, 0084, 0096) and one
private citizen (0053) agreed with EPA’s assertion that control
technology is typically quite stable within a 15 year period and that it
is not likely that a subsequent BACT/LAER determination at a Green Group
will require a new control device within a 15 year period.  The
commenters expressed that once a technology is broadly applied on a
commercial basis and shown to operate efficiently and reliably it is not
likely that it will further evolve.  One of these industry commenters
(0073.1) submitted that there is little if any room for improvement in
oxidizer efficiencies since 1990, since such equipment is capable of
emissions reductions in excess of 95-98%. 

Comments Opposing:

	Seven air agencies (0065.1, 0080.1, 0085.1, 0087, 0089, 0090.2, 0093.1)
and three tribes (0061.1, 0066.1, 0078) disagreed with EPA’s assertion
that improvements in technology do not occur within a 10-year period. 
The commenters expressed that the advancement of pollution control
technologies occurs at a more rapid pace than expressed in the EPA
proposal.

Two air agencies (0085.1, 0089), one tribe (0078) stated that locking in
BACT or LAER for 10 years or longer is likely to result in a reduction
in technologically advances, because there would be little incentive to
continue to improve emissions control technology.  One air agency
(0065.1) provided evidence and data that contradicted EPA’s conclusion
that BACT/LAER does not advance over 10 years.  Similarly, one industry
commenter (0089) provided examples of many dramatic improvements in
control technology made within a 10-year time frame.  Another of these
air agencies (0080.1) believes stated that there is a corresponding
relationship between regulatory requirements and technology advances
that would likely be affected by a widespread 10- to 15-year freeze in
technology.  The commenter is concerned that no air quality modeling and
analysis would occur at the actual time of construction.  Another of
these air agencies (0087) believes that technological growth tends to be
stepwise rather than linear and that predicting when advances will be
made is still a “game of chance.”  The commenter also stated that
there is no restriction on issuing an NSR Green Group permit for an
existing assemblage of equipment ducted to a common BACT control device
still deemed to be BACT, of whatever age. This BACT then will be
10-years + old when the Green Group permit expires. There is no way
states intent on controlling the growth of local emissions can, in good
conscience, approve permits that may allow continued operation of
technologically “out-of-date” pollution control equipment; and what
of the impact of upwind states using the proposed rule’s procedure
whose “excess” pollution impacts downwind states through transport? 
The Green Group permit should not be issued for a period in excess of
the standard title V permit – 5 years. After review by the permitting
authority, if the control apparatus is still considered to be viable,
the permit could be renewed for an appropriate period not to exceed
5-years.  Another of these air agencies (0089) stated that there is a
synergistic relationship between regulatory requirements and technology
advances that would likely be affected by a widespread 10- to 15-year
freeze in technology.  Another of these air agencies (0090.2) stated
that while control technology does not change over 10 year periods in
some states that are limited to implementing only what EPA requires,
other states like Washington, routinely see changes in control equipment
capability over periods of even a relatively few months because of our
requirement to install BACT.  Another of these air agencies (0093.1)
stated that EPA’s assertion doesn't consider that the applicability of
a BACT/LAER technology may change more significantly and rapidly based
on future cost-effectiveness considerations and demonstrations of
technical feasibility.  

		 

Other Comments on the Duration and Renewal of Green Group Designations

	Two industry commenters (0076.1, 0077.1) supported EPA’s proposal
that existing units can continue to operate under a Green Group permit
while the BACT or LAER technology is being installed to avoid disruption
of existing operations.  The commenters stated that without this
allowance, companies would be unlikely to enter into Green Group
permits.  If the permit requires the controls upon issuance, it could be
extremely disruptive to operations.

	Two air agencies (0085.1, 0089) are concerned that there is no
requirement in the proposed rule for a contemporaneous air quality
modeling analysis at the time of actual construction of a proposed
“Green Group” project.  The commenters are concerned that many
changes (including unanticipated changes in transported air pollution,
increases or decreases in mobile source emissions, or natural events,
such as wildfires) some affecting other environmental quality areas of
interest, such as water quality or wetlands, could occur within the
10-year “Green Group” Designation period without undergoing an
impact analysis or public scrutiny.  

	

	One air agency (0064) noted that unlike a standard BACT/LAER
determination that could remain the same for the life of the emissions
units, the Green Group determination will last only for the length of
the permit approval.  The commenter stated that this would allow the
permitting authority to conduct a new BACT/LAER determination, with
possible further emissions reductions, when the source applies to renew
the Green Group permit.

	One air agency (0094) stated that the "discretionary reopenings" only
make sense if the Green Group emission units cannot be separated after
permit expiration.

	

Comments on the How Green Groups are Similar to PALs

Comments on whether a Green Group is a form of PAL:

	One air agency (0090.2), and four industry commenters (0073.1, 0075.1,
0079, 0084) believe that a Green Group is similar to PALs.  One industry
commenter (0073.1) stated that the two types of flexible permits are
related but they also differ in significant ways.  One air agency
commenter (0090.2) believes the PAL process available in the major NSR
programs already serves the same function as the proposed green group
permitting approach, and contains greater air quality protections than
proposed for the green groups.  The commenter also noted that no
Washington source has requested to use the PAL process in the past four
years, calling into question its utility.  One industry commenter
(0075.1) believes that since the Green Group rules are based on the PAL
rules, and since Green Groups, unlike PALs, must meet BACT or LAER, EPA
should revise the proposed Green Group rules to provide that in
determining a Green Group's emissions limit, the applicable PSD or
non-attainment significance level can be included as an emission limit
if it is higher than the amount of actual emissions consistent with the
growth approved for the Green Group.  The commenter requests that EPA
revise proposed 40 CFR 51.165(i)(6)(iii)(b), 51 .166(z)(6)(iii)(b), and
52.21(dd)(6)(iii)(b), as follows: "an additional amount of actual
emissions consistent with the growth approved for the Green Group , or
establish the limit at the applicable significance level for the Green
Group pollutant in [include "(a) (1)(x) ", (b)(23) ", (b)(23)" here,
depending on whether the quoted language is from Section 51.165, 51.166,
or 52.21, respectively] of this Section, whichever is larger". 

	Two industry commenters (0073.1, 0079) stated that though the two types
of flexible permits are closely related, there is no question that a
Green Group is in fact more rigorous than a PAL.  The commenters
explained the Green Group not only prevents any significant increase in
a regulated air pollutant over 10 years, it also requires all units
designated as the Green Group to meet BACT/LAER requirements even after
expiration of the Green Unit.  One of these commenters (0073.1) stated
emission units under a PAL operate with lesser degrees of controls
although the PAL “cap” may drive the operator to install BACT or
LAER to maintain the cap or make room for additional equipment under the
PAL.  Similarly, one industry commenter (0073.1) stated that the two
types of flexible permits are related legally because they are both ways
of defining an “increase,” but they differ in significant ways.  The
commenter stated, first, existing and future emissions units that are
permitted under a Green Group are subject to major NSR review process
and all that it entails – including the various ambient air quality
impact and increment analysis, but, no such analysis is required for
approval of a PAL.  The commenter also stated, second, a Green Group is
in a sense “forever” in that the emission activities, once
designated as a “single emission unit,” remain subject to BACT/LAER
if the approval for the Green Group expires.  The commenter added that
renewal of the Green Group after 10 years requires a “new” NSR
review.  The commenter also stated Green Group meets state-of-the art
controls (BACT or LAER) and caps emission increases from the Green Group
to prevent “significant” emission increases, in contrast to the NSR
exclusion for a “Clean Unit,” which the federal appeals court found
violated the Clean Air Act by potentially allowing significant increases
in actual emissions without NSR review. State of New York v. EPA, supra.

	One industry commenter (0084) believes that the Green Group concept is
a logical extension of the PAL concept as it allows a smaller grouping
of sources to be treated as a single source for federal NSR purposes.

Comments on whether the Green Group is a permissible application of the
PAL principles as applied to a logical collection of emissions
activities that are ducted to a common control device:

	One industry commenter (0084) agreed that Green Groups can be a
permissible application of the PAL principles as applied to a logical
collection of emissions activities that are ducted to a common control
device.  The commenter stated that this is a common practice, and
recommends the approach outlined below regarding the level of increase
in emissions for existing emissions activities and/or increases for new
emissions activities that can be authorized to occur under a major NSR
permit:

EPA’s proposal for Green Groups only considers emission sources being
directed to one pollution abatement source.  The commenter does agree
that the Green Group is a practical extension of the PAL concept. It
should be considered to be more similar to PAL, such as a partial site
PAL or similar equipment PALs, i.e. combustion sources, storage tanks,
and/or fugitive emission programs.

Since the Green Group consists of multiple emission activities being
controlled as BACT/LAER, the emission control device sources should be
considered in the NSR review.  Any increase above the potential to emit
of the control device and above the significance level for the pollutant
would require NSR review.

One industry commenter (0084), stated whether the emission activities
are new or existing would not matter for a PAL or Green Group that are
ducted to a common pollution control device.  The commenter stated Green
Groups only consider emission sources being directed to one pollution
abatement source.  The commenter supported expanding the definition from
just new activities.

	One air agency (0094) supported EPA's extension of the PAL principles
to Green Groups, with the caveat that it is only appropriate for VOC
emissions at this time.  The commenter stated that VOC emissions have no
PSD increments and have considerably less air quality analysis than
other pollutants, which make them ideal for this type of permitting, as
demonstrated by EPA's pilot permit program. 

	

Comments on the Legal Rationale for Green Groups

Comments on Green Groups Being Illegal:

	Four air agencies (0080.1, 0085.1, 0089, 0090.2), one environmental
group (0088), and two tribes (0066.1, 0078) believe that Green Groups
provisions would be unlawful under New York v. EPA, 413 F.3d 3, 38-40
(D.C. Cir. 2005) and CAA.  The commenters stated that in New York, the
D.C. Circuit vacated EPA’s “Clean Unit” regulations, which
authorized sources that had undergone BACT/LAER to undertake changes
that significantly increased actual emissions without going through NSR.
 The court held that the plain meaning of Section 111(a)(4) of the Act
requires that sources that undertake changes that increase actual
emissions to obtain an NSR permit.  The commenters noted that a facility
having a Green Group would be allowed to increase actual emissions
without NSR requirements nine years after the initial installation of
BACT.  The commenters believe that there is no meaningful legal
distinction between the “Green Group” and “Clean Unit”
provisions, and that the Green Group provision is contrary to the CAA. 
One of these air agencies (0089) disagreed with EPA’s legal rationale
that states Green Groups are based on the premise that the changes and
emissions activities that occur within a Green Group are specifically
authorized to occur as a result of undergoing, not avoiding, Major NSR. 
One environmental group (0088) provided extensive comments on how the
legal rationale for Green Groups is the same as the Clean Unit
provision.

 

	One air agency (0065.1) does not believe that the Green Group program
may lawfully be applied in an “extreme” ozone nonattainment area,
because the CAA defines as NSR “modification” any change resulting
in an emissions increase from “any discrete operation, unit, or other
pollutant emitting activity.”  The commenter recognized that EPA’s
Green Group proposal states that all the activities included in the
Green Group are to be considered as one “unit” for NSR purposes. 
However, the commenter does not believe that EPA can simply adopt a
regulation that appears to fly in the face of the CAA definition.  The
commenter gave an example on the South Coast Air Basin, which is
currently classified as “severe-17”, California has requested EPA to
“bump-up” the Basin to “extreme” status.  Therefore, once the
request is granted, the Green Group program could no longer be applied
for ozone precursors such as VOCs and NOx in our area.

	One air agency (0089) stated that the provisions in the proposal for P2
may also be problematic in nonattainment areas, Green Group
permitting—and increases in emissions without NSR—are likely to
result in violations of the antibacksliding provisions of the Act.

	

	One environmental group (0088) provided extensive comments on numerous
other ways that the Green Groups exemption violates the Act, by
contravening the inherently technology-forcing and contemporaneous air
quality concerns of major NSR. 

Comments on Green Groups Being Legal:

	Four industry commenters (0074.1, 0076.1, 0077.1, 0096) stated that the
Green Group concept is consistent with the CAA, particularly the D.C.
Circuit’s decision in New York v. EPA.  The commenters stated that in
New York, the Court of Appeals upheld EPA’s NSR improvement rules in
particular with respect to the calculation of baseline actual emissions
using a 10-year lookback period and for PALs.  In upholding the PAL
provisions of the 2002 NSR improvement rules, the Court emphasized the
importance of both the 10-year lookback period and 10-year term of the
PAL, stating that “EPA has ‘discretion, within reason, to define
which changes are substantially contemporaneous’ and noting that a PAL
term of 10 years was permissible because of EPA’s determination that 5
“years would not provide ‘a sufficient period of regulatory
certainty’” to induce sources to expend the “initial commitment of
substantial resources” necessary to establish a PAL. The Court also
found it was permissible for the Agency to provide an appropriate time
of regulatory certainty and a sufficient period of time for planning
long-term capital improvements.  The Court further recognized that
individual increases resulting from changes that do not reach
significant levels do not trigger NSR and that with the PAL such
increases would “count toward source-wide emissions and can trigger
NSR if they exceed the PAL level.”  The commenters stated that the
EPA’s proposed approach for Green Groups fits squarely within the
Court’s analysis and affirmation of both the 10-year lookback period
and the PAL regulations in New York.  Specifically, the Green Group
approach would set the annual emissions level using a baseline of the
preceding 10 years.  Like the PAL approach, the Green Group would impose
an annual cap on emissions and would pre-authorize a range of changes
within that cap.  The commenters explained that while the cap imposed
under the Green Group differs from the PAL approach, it is clearly
within EPA’s discretion because the Green Group includes the added
requirement that the Green Group units obtain a major NSR/PSD permit.
Thus, even though the Green Group comprises less than the entire plant
and authorizes emission increases above baseline more than significant
levels, it does so in the context of the units undergoing new source
review.  Finally, the commenters stated that under the Green Group
approach, the permitting authority will make its determinations
regarding control technology, offsets where required, and air quality
impacts for the “proposed facility” and the “proposed permit”. 
This is entirely consistent with the statutory and existing regulatory
provisions and of course, makes sense in that there is always a time lag
between the issuance of a permit, the completion of construction, and
the initiation of operation as constructed or modified.  The Green Group
merely formalizes a process and safeguards for NSR permits that span an
admittedly longer period of time than traditional NSR permits have
covered.  One industry commenter (0077.1) stated that the Green Group
proposal is clearly distinguishable from the Clean Unit provisions that
the New York Court invalidated.  The commenter stated that the
difference is the Clean Unit provisions relied on a definition of
increase that was based on allowable rather than actual emissions.  For
Green Groups, EPA is using an actual emissions baseline to calculate the
limit and is applying the actual controls determined to be BACT or LAER
to determine the permissible emission levels.  Thus, the Green Group
approach is based on actual, not allowable, emissions and the emission
limit reflects actual operating levels proposed by the source.  This
construct is consistent with longstanding Agency practice in issuing NSR
permits.  Moreover, in this proposal, the changes that are anticipated
will be described and specifically permitted with a growth allowance.  A
BACT/LAER and appropriate air quality analysis will also be conducted. 
Another of these industry commenters (0096) stated that the Green Group
authorization is a straightforward implementation of the Act's
requirements.  When EPA or a state permitting authority issues a Green
Group permit, it will review planned emissions increases and other
changes and make a judgment regarding the controls that must be imposed
to satisfy the BACT or LAER technology requirement.  In addition, the
commenter stated in the case of nonattainment NSR permits, appropriate
offsets will be required, therefore, EPA does not run afoul of the D.C.
Circuit's ruling that emissions increase determinations must be based on
actual emissions not allowable emissions.

	One industry commenter (0074.1) stated that EPA clearly has the legal
discretion to authorize a Green Group for 10 years, since like a PAL, no
emission increases are allowed to occur from the Green Group over this
period.

	One industry commenter (0073.1) agreed that EPA has the legal authority
to modify the provision of the NSR requirements that limit phased
construction projects at 51.166(r)(2) and 52.21(r)(2).  The commenter
cited that such discretion is evident in the 1978 original regulations
themselves, which already allow the Administrator to use his or her
discretion to approve construction extensions for another 18 month
period, beyond the initial 18 month permit construction period without
additional BACT/LAER review (or further rulemaking). Such extensions are
routinely granted by both EPA and the states.  There also have been
instances when periods exceeding five years and up to 10 years have been
approved by permit authorities, including EPA regional permit engineers.
 To the extent that approved Green Groups provide for pre-approval and
installation immediately for existing and future activities in the Green
Group, the policy purpose for constraining construction projects to an
18 month period disappears because the BACT/LAER investment and
installation on new and existing equipment designated in the Green Group
is undertaken immediately.  In fact, if no further construction were to
be undertaken, despite its pre-approval under the Green Group, emission
reductions will in fact be optimized.

  

Miscellaneous Comments

Comment:

One industry commenter (0070.1) supported EPA’s effort, but encouraged
EPA to provide additional approaches to accelerate the permit amendment
process and to construct flexible permit terms.

Response:

	Development of such policy is outside scope of this rulemaking which
focuses on design of FAPs, not processes to establish them.  However,
see the appendix to this document where commenters describe lean
permitting and other approaches that states are currently using which
have significantly reduced processing times.  

Comment:

One industry commenter (0073.1) stated that EPA acknowledges that all of
the elements of the proposed FAP rules are available under current law. 
Therefore, the commenter indicated that EPA should affirm in the final
agency action on this proposal that these elements are available under
current law and affirm that approved flexible permits are not subject to
additional requirements that are being finalized.

Response:

	Because this rulemaking does not include substantive new requirements,
nothing in this action would require existing FAPs that meet current
requirements to be revisited.

Comment:

	One air agency (0094) stated that the proposed approaches can be
beneficial if limited to the pollutant for which local air quality
analysis is not performed, namely VOCs.  The commenter pointed out that
pilot permits and associated environmental improvements discussed in the
proposal preamble deal almost exclusively with VOCs as the major
pollutant.  The commenter recommended that EPA should seriously consider
limiting the rulemaking to VOCs, and when permitting authorities gain
more experience with other pollutants, then it may be appropriate to
expand the flexible permitting for additional pollutants.

Response:

	The pilot permits often focused on VOCs, but in many cases also
included other pollutants.  While states and sources are free to
negotiate FAPs for any regulated air pollutant, as appropriate, we agree
that FAPs involving VOCs can be more straightforward and thus more
likely to be pursued.

Comment:

One industry commenter (0073.1) urged EPA to provide training for
regional EPA personnel and State permit engineers for review and
approval of flexible permits. 

Response:

	The EPA intends to provide general support to states, sources, and the
public on FAP topics, potentially in the form of a website, workshops,
and an EPA network of contacts.  In addition, we will consider other
types of support to individual states where requested to do so.

Comment:

	One air agency (0094) is concerned that this rulemaking apparently
excluded NSR projects from the air quality analysis rather than provide
a sure means of performing the analysis.  The commenter suggested that
EPA explore developing a permitting framework that creates advance
approval of air quality analysis for major facilities.  This would be
the same concept as the mass emission cap except that it establishes the
ground-level ambient concentrations within which a facility can make
changes.

One industry commenter (0075.1) suggested that EPA use as a model the
State of Texas' flexible permitting program.  The commenter stated that
for over a decade, that program has successfully provided permittees
with operational flexibility, while significantly reducing emissions
from the emissions sources covered by flexible permits.  The commenter
stated that the Texas program offers operational flexibility through the
use of emission caps in return for achievement of BACT/LAER equivalent
emission levels.  This operational flexibility has been the incentive
for many Texas industrial facilities to install control equipment on
sources that would never have been trigged or required under a
conventional PSD/NSR permitting program.

Response:

	The EPA is prepared to investigate potentially viable new approaches
when suggested by states and sources to the extent such approaches are
allowed under the statute and the applicable regulations governing their
implementation.  The merits of an approach such as the one suggested for
an air quality analysis screen might be appropriate to explore in the
context of a new FAP approach.

Comment:

	One air agency (0089) stated that under the Administrative Procedures
Act, the preamble to the rule should only explain the regulatory
provisions, rather than set forth suggestions that may be conflated with
regulatory provisions.  The commenter is concerned that such
“suggestions” are likely to be considered regulatory requirements,
even though they appear only in the preamble.  

Response:

	The Agency believes that the preamble to the final rule contains
valuable insights and explanations relating to FAP approaches.  We
disagree with the commenter that the Administrative Procedures Act
restricts the preamble in the manner asserted by the commenter.  In any
event, we believe that we have clearly articulated where the preamble
content clarifies and explains regulatory obligations versus where it
merely communicates suggestions for states to consider as they implement
their minor NSR and part 70 programs.  Finally, we continue to believe
that a rulemaking preamble is an appropriate forum to convey both types
of information. 

 In streamlining, the compliance terms are based on the most stringent
requirement applicable to the proposed changes and are effective upon
permit issuance.  In guidance generally referred to as “White Paper
Number 2,” we interpreted our part 70 rules to allow sources to
streamline multiple applicable requirements that apply to the same
emissions unit(s) into a single set of requirements that assure
compliance with all the subsumed applicable requirements.  See “White
Paper Number 2 for Improved Implementation of the Part 70 Operating
Permits Program,” March, 5, 1996,
(http://www.epa.gov/ttn/oarpg/t5/memoranda/wtppr-2.pdf).  If all the
applicable requirements that apply to a set of changes are streamlined
in the permit and the permitting authority approves the proposed
streamlining, the source need only comply with the streamlined
requirement for the relevant emissions unit(s).  This benefits all
parties by simplifying and focusing the compliance requirements
contained in the permit.  As a result, a source relying upon emissions
limit streamlining implicitly has chosen not to pursue the use of AOSs,
since the source would always be required to meet the worst case
scenario at all times regardless of which scenario was actually
operated.

As explained in White Paper Number 2, sources that seek to streamline
applicable requirements should submit their request as part of their
title V permit application, identifying the proposed streamlined
requirements and providing a demonstration that the streamlined
requirements assure compliance with all the underlying, subsumed
applicable requirements.  Upon approval of the streamlined requirements,
the permitting authority would place the requirements in the title V
permit (see White Paper Number 2 for the complete guidance on the
streamlining of applicable requirements).  A source can request in its
title V permit application to streamline an advance approval already
granted under minor NSR with all other relevant applicable requirements.
 For the complete text of the elements that must be included in a title
V application, see 40 CFR 70.5(c).

 Alternative operating scenarios, in contrast to advance approvals of
minor NSR, more often involve the reversible shifts in operation of
existing emissions units which implicate different applicable
requirements and require different monitoring and/or recordkeeping to
determine what requirements apply at a particular time.  On the other
hand, advance approvals of minor NSR generally involve either: (1) the
implementation of a modification to any existing unit which irreversibly
triggers new applicable requirements such that the emission unit cannot
return to its preconstruction status in the future; or (2) the
construction and operation of a new unit which represents the beginning
of the initial or baseline operation of the unit.  In some cases,
however, one or more AOSs may be used to complement an advance approval.
 For example, a complementary AOS might be useful where the source
anticipates varying operation of the future or changed existing
emissions unit in a manner that would implicate a set of applicable
requirements different from those of the minor NSR advance approval.

While AOSs and advance approvals of minor NSR are typically used as
separate FAP approaches, sources and permitting authorities are not
precluded from relying upon AOS authority to establish an advance
approval of minor NSR in a title V permit.  For example, an AOS might be
appropriate where a different control approach would not be effective
until and unless a particular change were made to an existing emissions
unit.

 The authority to impose this requirement typically arises from the ARMs
themselves being applicable requirements (e.g., provisions within NSPS
or MACT standards or terms of preconstruction permits) but also can
occur under other authorities such as 40 CFR 70.6(a)(9) authority where
the ARM would be part of an AOS.  

 Sections 51.165(a)(5)(ii), 51.166(r)(2), and 52.21(r)(4) provide that
when a source or modification that took an emissions limit to avoid
major NSR review wishes to relax that limitation, it must undergo major
NSR as if construction had not yet commenced.

 “Project” is defined in the major NSR regulations as “a physical
change in, or change in the method of operation of, an existing major
stationary source.”  See, for example, 40 CFR 52.21(b)(52).

 “Emissions unit” is defined in the major NSR regulations as “any
part of a stationary source that emits or would have the potential to
emit any regulated NSR pollutant....”  See, for example, 40 CFR
52.21(b)(7).

 The part 51 PSD requirement related to the permitting of subject
projects only mandates that states in their SIPs require reevaluations
of certain BACT determinations for the later independent phases of an
approved phased construction project at the latest reasonable time prior
to their commencement of construction (see 40 CFR 51.166(j)(4)).  This
longstanding safeguard was established in order to prevent inappropriate
reserving of the available PSD increment by an individual source (see 43
FR 26396).

 See footnote 7.

 Section 52.21(n)(1) requires more specific detailed information about
construction schedules and plans to be submitted by sources than do the
analogous requirements of part 51 (see 40 CFR 51.166(n)(1)).  Section
52.21(r)(2), which has no counterpart in 40 CFR 51.166, ensures the
timely construction of non-phased projects and provides, without
specification, the opportunity for the permitting authority to extend
these deadlines.

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