POLLUTION CONTROL ~j' '" ;~, ..~ :+ i.)

Finding Pollution Prevention Opportunitiesin the Clean Air Act .by Gregory S. Wolffea and C. Flint Webbb

aSAIC, San Diego, and bSAIC, Reston, Va.

Environmental laws and regulations have notalways been implemented in a manner thatallows the consideration of pollution preven­

tion (P2) alternatives as a means of achievingprogress toward air quality goals. The historicalimpetus for P2 programs has been to curb solid orhazardous waste disposal problems. This is becausethe P2 "Measures of Merit" established under thePollution Prevention Act l were associated mostlywith reductions in solid waste and/or hazardouswaste, and because it has traditionally been easierto track solid waste or hazardous waste costs toshow paybacks for source reduction. In P2 analysesemissions into the air are addressed, but for mostfacilities the cost of disposal has been the maindriver for implementing P2 programs.

The impetus for the Clean Air Act (CAA) is to­wards eliminating immediate hazards to the publiccaused principally by criteria pollutants. It is alwayseasier to prove that an end-of-the-pipe solution willattain the desired environmental reduction goal; itis far more difficult to prove that a P2 solution canmeet the same goal. Because of these differing per­spectives the CAA has unintentionally put in disin­centives for facilities to follow good P2 practices.

But even as the CAA has created unintentionaldisincentives it has also created unintentional in­centives for P2 projects through programs such asthe emissions trading and emissions-based feestructures. P2 analyses need to take into consider­ation these costs and opportunities associated withthe CAA. This article first identifies the contrastinggoals of P2 and the CAA programs. Then discussedare several CAA programs that offer facilities theopportunity to consider P2 alternatives to meet airquality compliance requirements including newsource standards, emissions trading, and facilitypermitting.

POLLunoN PIIIVIInION UD ..... CUAN ..RACT CON'I'IIASTP2 options are encouraged not through regulationbut through cost savings and flexible compliancegoals. They are not entrenched in laws that carrypossibilities of heavy fines or imprisonment, as does

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the CAA. The P2 approach treats all releases intothe environment equally and only to be used as alast resort. P2 emphasizes using less of a hazardousmaterial first, reusing it in its same form, recyclingit into new products, and finally releasing it into theenvironment in a safe way. The P2 hierarchy for aCAA program is similar to the P2 hierarchy from thePollution Prevention Act: (1) reduce at source; (2)recycle; (3) treat; and (4) dispose or other releaseinto the environment.

The primary goal of the CAA is to "protect thepublic" from air pollution with an "adequate marginof safety".2 The emphasis is on emissions that crossthe property boundary and affect the public. TheCAA regulates only what is released into the airand, for the most part, does not consider releases toother media and certainly does not consider themequally as important as releases to the air. Whatmatters under the CAA is only what goes into the airand leaves the property. Efforts to be fair end up inregulations written or interpreted to imply a certainlevel of control, putting the emphasis on treatment,a tertiary consideration in the P2 hierarchy. In ad­dition emission controls that may have a secondaryimpact on other media are not normally given anydifferent treatment than those that do not.

NIW SOU__ STUDAIIDSNew source standards can be broadly characterizedas either emission-based or technology-based. Whenpermitting a new source or a modification to anexisting source most regulatory agencies rely ontechnology controls designed as end-of-the-pipestandards. This approach is taken because it is eas­ier to prove the effectiveness and verify complianceof end-of-the-pipe solutions.

The EPA has recognized this inherent problemwith technology-based standards in its report toCongress on Sustainable Development.3 As a resultEPA allows facilities to substitute equivalent emis­sion-based standards;4 however, proving that a newinnovative technology is equivalent is difficult atbest.5 For instance, how would one prove that a newpaint system is as effective at reducing VOCs as athermal incinerator? The practice ofapplying a tech­nology-based standard, in most cases, is, therefore, a

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disincentive to finding a P2 alternative because ofthe narrow focus in satisfying the regulatory re­quirement. Facilities interested in pursuing P2 al­ternatives should avoid the more stringent technol­ogy-based standards if at all possible, opting insteadfor emission standards that offer a greater degree offlexibility for achieving compliance.

NIW _IIC. PIRPOIIIIANa .MlD....New Source Performance Standards (NSPS) are de­veloped to regulate emissions for specific industrialsources such as surface coating of beverage cans,metal furniture, and large appliances. NSPS wereintended to provide source operators with some flex­ibility in compliance by specifying emissions-basedstandards; however, the sources that first becameregulated under the NSPS had to push through theregulatory hurdles to get permitted and in doing soestablished defacto technology standards. Other in­dustrial sources that wanted to avoid getting trippedup by regulators that interfered or possibly sus­pended production saw that more standardizationwas called for so the precedent was established forthe low-risk "boiler-plate" control technology optionfor meeting new source performance standards.

...AVAIlAIIU COIITIIOL TlCHN0L08YWhen properly implemented, Best Available ControlTechnology (BACT) does allow consideration of P2approaches and may help facilities recognize optionsthey may not have otherwise considered. These areemission control technology standards that havebeen demonstrated in practice for similar equip­ment. The critical difference with other technologystandards is that BACT takes into considerationeconomic, energy, and other environmental factorsas part of its cost-effectiveness evaluation. BACT isdesigned to be a top-down analysis starting from themost stringent control technology achieved in prac­tice, and disqualifying technologies, usually on thebasis of economics, until the most stringent technol­ogy that can be justified is reached.6 Once this anal­ysis has been conducted and approved the solution isentered in the BACT clearinghouse. Similar sourcescan then skip the detailed analysis and rely on thesolution contained in the BACT clearinghouse.

Unfortunately, facilities commonly skip over thetop-down case-by-case analysis because it is timeconsuming and more likely to be scrutinized byregulators, which could lead to project delays. Reg­ulators also find it expedient to approve the "stan­dard solution" because they do not have to reviewthe detailed analysis; however, it is a fact that inno­vative P2 solutions are more likely to be considered

November 1999

when performing a full top-down analysis primarilybecause of the process of compiling the necessarycost information. Similarly, other environmental im­pacts, such as releases to other media, are also morelikely to be considered. Also, a full top-down analysismay reveal special operating conditions or assump­tions, such as physical limitations, about the processthat outright disqualify the "standard solution."

LOWBT ACRID..._I..... RAnIn a nonattainment area, if a source is already amajor source of the pollutant of concern, instead ofBACT, the facility is held to the more stringentLowest Achievable Emission Rate (LAER) require­ment. Facilities wishing to implement P2 technolo­gies should avoid LAER. LAER must be the lowestemissions achieved in practice; it does not take intoconsideration economic, energy, or other environ­mental factors. A proper LAER analysis would in­vestigate all possible ways of doing the job, whichcould decrease emissions. The only requirement isthat the solution must be achieved in practice.7 Theeffects on other emissions or other media are ig­nored. For instance a LAER solution may decreaseNOx emissions but increase particulate emissions.Innovative or P2 solutions may be considered butthey must be proven to be at least as good as the"standard" solution. It is usually hard to prove thisso the previously approved solution from the BACTILAER clearinghouse is usually selected. P2 solu­tions are made even harder to qualify because thereis no consideration of other factors, such as releasesto other media and cost, and the standards only lookat the emissions of the pollutant of concern and notother pollutants.

.......... 1IIADINGNew Source Review (NSR) trading is the oldest andmost established of the emission trading programs.The value of bankable emissions could be a signifi­cant incentive to P2 projects and is often overlookedwhen calculating life-cycle costs of P2 projects. NSRemissions trading provisions come into play whenpermitting new emissions units or expanding oper­ations. Banking may take place whenever there is adownturn in production, installation of new pollu­tion control equipment that is more than is requiredby existing rules or regulations, or whenever there isa process change or material substitution such as achange to a lower emission coating system like pow­der coat. NSR trading and banking is particularlyimportant in ozone (smog) nonattainment areassince without these programs businesses in theseareas could not increase emissions.s As the new

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ozone standard is implemented the program willhave increased utilization. They typically only allowtrading within a state and usually only within an airbasin; however, trades can be made across basin9

and state lines. lO Emissions must be: ll

1. Surplus, meaning that the reductions are notrequired by other regulations

2. Real, meaning that the reductions have alreadyoccurred and that production will not lead to anincrease elsewhere in the air basin

3. Quantifiable, meaning that the reductions can bemeasured

4. Enforceable, meaning that violations can be en­forced by the agencies allowing the trade, and

5. Permanent, meaning that the reductions willcontinue in perpetuity.

For P2 projects it may be difficult to prove manyof these; for instance, a substituted product mayhave a lower vac content, but ifmore of the productis needed there may not be a permanent reduction inemissions. If a plant stops making a product that isparticularly bad environmentally, it may be that thenew substituted product is not acceptable to thepublic and a competitor in the same air basin endsup increasing production and emissions, in whichcase the reductions are not real.

Emissions can be reduced five ways wheneverthey are banked or traded:

1. If a new Reasonably Available Control Technol­ogy (RACT) standard is planned to go into effectfor the equipment being retired or replaced, theactual emissions credit could be decreased by thereduction, which would be expected from the newtechnology. This is because the emissions are notconsidered surplus.

2. When emissions are being taken out of the "bank"they may again be eroded by the expected emis­sions reductions, which could come from RACTrequirements on the new equipment. Again theemissions are not considered surplus in this case.

3. Depending on the attainment status of the localair basin, emissions are further eroded by theoff-set ratio for the pollutant of concern. This is arequirement of offsetting.

4. The traded actual emissions must be sufficient tocover the potential emissions of the new equip­ment. This is because the emission reductionsmust be real, and when they are applied to thenew project they must be permanent.

5. Finally, if trading across air basin lines is al­lowed, which it usually is not, the emissions willbe further eroded to account for the impact of the

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traded source on the air basin of the new source.California is one of the few areas where tradesacross air basin lines are allowed9 even thoughground-level pollution problems also cross air ba­sin lines as has been recognized in the CAA. 12

By creating a value for decreased emissions, thesetrading provisions give facilities a significant incen­tive for pursuing P2 projects; however, because ofthe RACT provisions, offset ratio, and lack of amarket of the NSR trading programs, facilities arenot likely to take full advantage of these programs.Frequently when they think about considering emis­sions banking after implementing a new P2 solutionthey have been using the new technology for a while,and are confident that they will not have to go backto the old way of doing things. As a result it is hardto prove the reductions are actual and real. Thevalue of emissions vary greatly depending on the airbasin, local market conditions, and the source of the ,emissions, but the value generally falls in the rangeof from $1,000 to $2,000 per ton for NOx emissionsand $3,000 to $4,000 per ton for VOC emissions. 13

FACILITY PIRMITSThe most significant change in the CAA, arguably,was the requirement for Federal Permits covered inTitle V of the 1990 CAA Amendments. This programrequires major sources (defined by the nonattain­ment status of the air basin; or sources that emitmore than 10 tons per year of a Hazardous AirPollutant (HAP), or combination ofHAPs totaling 25tons per year) to have a federally enforceable permitcovering all activities at the facility. As written theprogram does not add any new emission controlrequirements not already in existing law, but in­stead requires that all current operating conditionsbe put together, raising the stakes for noncompli­ance. The program has some features that can helpP2 solutions become implemented:

1. The most significant benefit of the Facility permitprogram from the standpoint of P2 is that facili­ties usually first calculate their actual and poten­tial emissions to determine whether they need toapply for a Title V permit or not. These emissionscalculations may be the first time facilities evertried to calculate the emissions from each piece ofequipment and process in the facility. Knowingthe emissions is the first step to reducing themand is a great help for identifying possible P2opportunities.

2. Potential emissions are the maximum possibleemissions that could be generated by the facility.This requires looking at the maximum capacity of

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equipment, determining the limiting steps in aprocess, and calculating the emissions from theprocess based on this limiting step. For facilities,such as power plants, with only one possibleproduct this is a relatively straightforward pro­cess. But for many other facilities this could bevery difficult, as is the case for many organicmetal-finishing facilities. This is particularly truefor facilities with capabilities to make many dif­ferent products or where the production limitstep is not directly associated with the emissionsprocess. This normally requires much more de­tailed record keeping than is required to supportthe Toxics Release Inventory (TRI) requirementsof the Emergency Planning and CommunityRight-to-Know Act. TRI reporting only looks atactual releases into the environment. The in­creased effort of performing a detailed inventorymay payoff if the facility ever wants to bank ortrade emissions.

3. Ifa facility is close to a Title V threshold they willfrequently modify their processes to decrease theemissions potential and apply for a "syntheticminor" facility permit, which avoids most of thepublic notification and reporting requirements.Unfortunately, this does not usually translateinto actual emissions decreases; since the Title Vthresholds are based on potential emissions, notactual emissions, facilities can usually avoid theTitle V permit requirements by accepting limit·ing conditions, which are no more stringent thantheir current operations; but if they are alreadyconsidering a P2 reduction project, this may beenough of an incentive to initiate the project. Thefees for Title V permits are tied to the facilityemissions and are at a minimum $25 per ton. 14

This creates a recurring cost for air emissions andcan form a powerful and frequently overlookedincentive to P2 projects.

COIICLIISIOfIThe notion of applying P2 alternatives to achieve airquality goals is relatively new. The implementationof CAA programs has resulted in many practicesthat discourage facilities from evaluating P2 alter­natives. For instance encouraging the use of theBACTILAER clearinghouse was only intended tomake these analyses less onerous for facilities. Theywere not meant to stifle improvements in technol­ogy. Obstacles, such as the threat ofhaving delays inagency approval of permit application or that a reg­ulator will be more critical of an unproven solution,are sometimes difficult for a manager to justify andovercome.

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Nowadays the "mass balance" relationship be­tween the various environmental media, primarilyair, water, and waste, has been clearly established.With so many reformulated materials coming tomarket, new information technologies developed,international interests, and the redesign of busi­ness processing from other industry sectors, thesuccessful environmental and pollution preventionmanager cannot simply follow the leader. It is theresponsibility of the environmental manager topull away from the entrapment of standard solu­tions to regulatory requirements and seek evalua­tions that consider P2 alternatives, and that mayultimately result in a significant cost savings totheir business.

1. Pollution Prevention Act of 1990 [42 USC 13101(b»)2. Clean Air Act Section 109 [42 USC 7409<b»)3. EPA, Sustainable Development and the Environmen·

tal Protection Agency, EPA 230-R-93-005, June 21,1993

4. 61 FR 142 (AD·FRIr5455-7) Prevention of SignificantDeterioration and Nonattainment New Source Re­view; Proposed Rule, July 23, 1996.

5. Garelick, B., Discussion of EPA's proposed rule re­garding Undemonstrated Technology and Applica­tions and Pollution Prevention Technology, Unpub­lished, July 1996

6. 40 CFR 52.21(b)(12) Best available control technology7. 40 CFR 51.165(a)(1)(xiii) Lowest achievable emission

rate8. 40 CFR 52.24(a) and 42 USC Sec. 7503(A)(l) Permit

requirements9. California Health and Safety Code section 39607.5

10. Massachusetts Department of Environmental Protec­tion, 310 CMR 7.27, NOxAllowance Program, July 17,1997

11. Federal Register, Economic Incentive Program Rules:Final Rule (FRL-4853·8) April 7, 1994

12. 42 USC 7406, 7426, 7506a and 7511c13. Air Bank Web page, http://www.airbank.coml.Re­

vised January 2, 199814. 42 USC 7661a(b)(3)(B).

lIICMIIIAPIIIaGregory S. Wolffe is a Senior Air Quality Scientistwith SAIC's Environmental Services Div. in SanDiego. Wolffe has over 10 years of experience inenvironmental research and consulting includingrisk reduction, environmental compliance auditingand information management needs, air emissionsinventories, health risk assessments, and top-downBest Available Control Technology (BACT) analy­ses. Wolffe is a certified permitting professional with

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the South Coast Air District and has worked as atechnical consultant and represented clients in pub­lic notifications and regulatory negotiations.

C. Flint Webb, P.E., is a Senior Engineer with thePollution Prevention Div. of Science ApplicationsInternational Corp. (SAIC) in Reston, Va. A gradu­ate of Rensselaer Polytechnic Institute (RPI) inTroy, N.Y., Webb is a registered professional engi-

neer in both California and Virginia. He has over 18years of experience in engineering analysis, air per­mitting and compliance, site assessment and miti­gation, risk assessment, and pollution prevention.He currently helps government and commercial cus­tomers find solutions to P2 technology needs thatcomply with national and local laws and regulations.

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November 1999 23