October 30, 2013 – AWMA Fall Conference

Session 3 – Hot Air Topics

Presented by

Michael Carbon

Practical Applications for

Applying PSD Actual-to-

Projected Actual Analysis

Overview of Presentation

1. Very brief overview of New Source Review (NSR)

2. Review applicability options post-2002 NSR Reform

3. Review the steps required to perform a NSR

applicability analysis with emphasis on the baseline

actual-to-projected actual emissions analysis including

practical examples and relevant EPA policy

determinations

My Introduction to NSR……

What is NSR?

• NSR is a preconstruction permitting program

designed to support NAAQS attainment and

maintenance

• NSR permitting is required for – New major sources

– Major modifications at existing major sources

• NSR is comprised of two separate programs– Prevention of Significant Deterioration (PSD) - PSD applies in

attainment areas

– Nonattainment New Source Review (NNSR) - NNSR applies in

nonattainment areas

Post‐2002 NSR Reform Applicability Tests

Baseline Actual Emissions‐to‐PTE (A2P)

• Required for new emissions units and can also be used for existing

emissions units

• Project-Only Emissions Change = Potential Emissions – Baseline Actual

Emissions

Baseline Actual Emissions‐to‐Projected Actual Emissions (A2PA)

• Can only be used for existing emissions units (including replacement

units)

• Project-Only Emissions Change = (Projected Actual Emissions – Baseline

Actual Emissions) – Excluded But Could Have Been Accommodated

Emissions

*For today’s presentation, we will focus on the applicability criteria for non-EUSGUs

NSR Applicability Options

Steps of NSR Applicability Analysis

1. Define your project, determine the project-affected emissions units, and categorize project-affected emissions units (new, existing, or replacement)

2. Determine the baseline actual emissions (BAE) for each affected emissions unit

3. Determine the projected actual emissions (PAE) or potential to emit (PTE) for each affected emissions unit

4. Determine the project emissions increases only for each pollutant

5. Determine contemporaneous increases and decreases for any pollutant with significant project emissions increase

6. Determine net emissions increase for each pollutant subject to netting

Step 1a: Define the Project

• Define scope of the Project….

– Could include multiple capital projects in multiple process units

occurring over several years

– When performing an NSR aggregation analysis for multiple projects

you should consider whether the projects are economically or

technically linked following EPA’s 3M-Maplewood memo guidance

and the more recently stayed NSR aggregation amendments

Step 1b: Determine Project-Affected

Emissions Units

• What is an emissions unit?

– “Emissions unit” is any part of a major stationary source which emits

or would have the potential to emit any regulated pollutant

– Heaters, boilers, tanks, flares, fugitive components, etc.

• What is a project-affected emissions unit?

– Any new emissions unit installed as part of the project

– Any emissions unit physically modified as part of the project

– Any emissions unit that experiences the following due to the project:

an increase in feed or production, a change in fuel or raw material, a

shift to higher emitting yield….

Step 1c: Categorize Project-Affected

Emissions Units

• New emissions unit

– Is, or will be, newly constructed and has existed for less than two

years from the date the unit first operated

• Existing emissions unit

– Not a new emissions unit

– Replacement unit is an existing emissions unit

• Replacement unit

– Reconstructed per NSPS or “completely takes the place”

– Identical to or functionally equivalent

– Does not alter basic design parameters of the process unit

– Replaced unit is permanently removed, disabled or barred from

operation by permit

Step 2: Baseline Actual Emissions

• Determine baseline actual emissions (BAE) for each project-

affected emissions unit

• Definition of BAE depends on the type of emissions unit

– New emissions units, proposed with this project

– New emissions units, proposed with a different project

– Existing emissions units

– Replacement units

Step 2a: Baseline Actual Emissions for

New Emissions Units

• For new emissions units proposed to be constructed

with the project

– Baseline actual emissions equal zero

• For new emissions units affected by the project (i.e.,

emissions units that have existed for less than two years

since first operated)

– Baseline actual emissions equals the PTE

– Avoids redundant review for new emissions units that were part

of another project

Step 2a: Baseline Actual Emissions for

New Emissions Units (cont’d)That sounded easy…..or did it. What if an emissions unit has

operated less than two years at the time a permit application is

submitted but by the time start of construction of the project

occurs the unit will have operated for at least two years?

– Would state/EPA expect the emissions unit to be treated as a

new or existing emissions unit?

• If you treat it as an existing emissions unit, then the baseline actual

emissions would have to be based on less than 24 months of actual

emissions data….

• Alternatively, if it were treated as a new emissions unit (PTE-to-

PTE) in the application, would there be an obligation to revisit the

applicability analysis after the unit has operated for 24 months if that

occurs prior to construction or start-up?

– To date, no applicability determinations have addressed this

specific issue

Step 2b: Baseline Actual Emissions –

Existing Units

• The average rate of actual emissions, in tons per year

• During any consecutive 24 months

• Within the 10-year period immediately preceding

– either the date the owner or operator begins actual construction of the project

– or the date a complete permit application is received by LDEQ

• For a given pollutant, the same baseline period must be used for all affected emissions units

– A different baseline period may be selected for each pollutant

Step 2b: Baseline Actual Emissions –

Existing Units (cont’d)

• Include fugitive emissions

• Include authorized emissions associated with Startups,

Shutdowns and Malfunctions

• Adjust downward to exclude any non-compliant emissions that

occurred while the source was operating above any emission

limitation that was legally enforceable during the consecutive

24-month period

• Adjusted downward to exclude emissions that would have

exceeded an emission limitation with which the source must

currently comply, had such source been required to comply

with such limitations during the consecutive 24-month period

Step 2b: Baseline Actual Emissions –

Existing Units (cont’d)

Some considerations when picking your baseline period:

– Must have adequate information and data quality to make the

required adjustments

– Older time periods typically require more adjustments

– May need to revise emissions using new factors (make sure you’re

not comparing apples to oranges….or you get mixed fruit)

– May not have enough information to evaluate compliance with limits

that didn’t apply at the time

– More recent time periods generally have more reliable, better quality

emissions data

– For first pass review, typically use most recent two years’ data

Step 2c: Baseline Actual Emissions –

Replacement Units

• Replacement units, by definition, are considered to be

existing units

• Baseline period emissions of the unit being replaced are

used to establish BAE

Step 3: Projected Actual Emissions (PAE) or

Potential to Emit (PTE)

Determine post-project emissions for each project affected

emissions unit

• Calculation of post-project emissions depends on the type of

emissions unit

– New emissions units

• Must use Potential to Emit

– Existing emissions units, including replacement units

• Can use Projected Actual Emissions or Potential to Emit

• Option to use PTE to represent post-project emissions

– PTE is always the most conservative

– PTE is easy

– Use PTE as the first pass in project reviews

Step 3a: Post-Project Emissions –

New Units

• For new units being proposed with the project

– Post-project emissions equal PTE

• Potential to emit is the maximum capacity of a stationary source to

emit a pollutant under its physical and operational design

• For new units affected by the project (i.e. less than two

years since first operated)

– Post-project emissions equal PTE

• As discussed previously, BAE also equal to PTE so project increase

is always zero

• Avoids redundant review for new units that were part of another

project

Step 3b: Post-Project Emissions - Existing

Units• For existing emissions unit, select either

– Projected actual emissions or potential to emit

• Projected actual emissions for non EUSGU is – the max annual rate, in tpy, at which an existing emissions unit is projected

to emit a regulated pollutant – in any one of the five years (12-month period) following the date the unit

resumes regular operation after the project– or in any one of the 10 years following that date,

- if the project involves increasing the emissions unit’s design capacity or- if its potential to emit would result in a significant emissions increase or

a significant net emissions increase at the source.

• Projected actual emissions - The first year begins on the day the emissions unit resumes regular operation following the change and includes the 12 months after this date. So not always consistent with calendar year emissions.

Step 3b: Post-Project Emissions -

Existing Units (cont’d)

Projected Actual Emissions must• Include fugitive emissions

• Include authorized emissions associated with startups,

shutdowns, and malfunctions

• Consider all “relevant information”

– Historical operation

– Company representations, filings with authorities

– Highest projections of expected business activity

Step 3b: Post-Project Emissions -

Existing Units (cont’d)Projected Actual Emissions may

• Exclude, in calculating any increase in emissions that

results from the particular project,

– emissions the existing unit could have accommodated during the

baseline period and

– that are also unrelated to the particular project

– including any increased utilization due to product demand growth

• This is called the Demand Growth Exclusion

– The intent of the NSR Reform rule is to limit PSD applicability to

consideration of emissions that will result from the project

Step 3b: Post-Project Emissions -

Existing Units (cont’d)

So what guidance is out there regarding PAE emissions:

– April 20, 2010 Region 3 letter to Pennsylvania Department of

Environmental Protection regarding the Northampton Generating

Company PSD/NSR Analysis

• “EPA has observed that a common mistake is to assume that a unit “could” have

emitted up to its permitted amount during the baseline period and this is the

amount that can be excluded from the PAE. This notion and any variation of this

notion is incorrect.”

• “…facility can only subtract that portion of the projected actual emissions that the

unit(s) could have already physically and legally emitted during the baseline

year. For instance, a facility is permitted to burn coal with a sulfur content up to

two percent but actually burns coal with one percent sulfur during the baseline

period. The company bases the projected actual emissions on continuing to

burn one percent sulfur coal. Emissions that can be excluded would be limited

to emissions associated with burning one percent coal, regardless of the limit

that would allow them to burn a higher sulfur coal.”

Step 3b: Post-Project Emissions -

Existing Units (cont’d)

– March 18, 2010 Region 4 letter to Georgia-Pacific Wood

Products LLC

• “We acknowledge that Georgia Pacific may use the highest

demonstrated average monthly operating level during the baseline

period as an approximation of the level of operation that the units

“could have accommodated” during the baseline period.”

– Note that if the facility cannot achieve the demonstrated average monthly

operating level for a sustained period (2 years) of time due to process

limitations……it can’t justify that it is capable of accommodating up to that

rate.

Step 3b: Post-Project Emissions -

Existing Units (cont’d)

Common examples of emissions excluded from

PAE• Low market demand during the baseline period

• Natural disasters (Hurricanes, floods, power outages) that occurred

during baseline period

• Non project related upsets due to equipment failures that occurred

during the baseline period if the particular failure is not routine

• Products/materials at a loading rack that are not impacted by the

project

• Process vents routed to a flare or thermal oxidizer that are not

impacted by the project

Step 4 – Determine Project Emissions

Increases

• Calculate the difference between PAE or PTE (Step 3) and BAE

(Step 2) for each emissions unit

• Sum only the increases for each emissions unit

- Decreases are not counted at this step

- There can be no negative numbers! If a unit’s post change emissions are

lower than the baseline actual emissions, the increase is zero, i.e. there is

no actual emissions increase.

- Creditable decreases can be taken in netting, if applicable

• Compare the project-related emissions increases to the PSD

Significance Levels for each pollutant to determine if the project

results in a significant emissions increase for any NSR-

regulated pollutant.

Step 5 – Determine Contemporaneous

Emission Increases

• If Step 4 results in a significant emissions

increase for a regulated pollutant

– Determine all creditable contemporaneous increases

and decreases for that pollutant

– Actual-to-potential test is the only test allowed for

contemporaneous increases and decreases• Per Federal Register/Vol. 67, No. 251/Tuesday, December 31, 2002/Rules

and Regulations 80203; and April 4, 2011 Region 5 letter to Indiana

Department of Environmental Management

• Sum project increases and creditable contemporaneous

emission increases and decreases

• If above significance threshold NSR review is applicable

Step 6 – Determine Net Emissions

Increase

Don’t forget the applicable “reasonable

possibility” pre-change recordkeeping, post-

change recordkeeping (including emissions

monitoring), and reporting requirements.

Remember…….

Questions….so do you know squat?

So do you no squat?