On January 12, 2009, U.S. EPA took final action related to the three (3) proposals.  First, in response to comments received on the 2006 notice, it withdrew the proposed debottlenecking rule changes.  Any clarity that the regulated community had hoped for on this lingering NSR issue is gone.  With regard to project netting, U.S. EPA announced that they would not be taking any action at this time. However, U.S. EPA is still considering the proposal.  They were careful to note that any statements made in the 2006 notice about project netting do not change U.S. EPA's interpretation of the current rules.  This is not helpful since the regulatory language of the actual rule can be interpreted (and is interpreted by several state regulatory authorities) to allow project netting.  The good news is that the proposal was not withdrawn, so there is still hope.

The bulk of the recent action centered on the aggregation issue.  Simply put, U.S. EPA's position on aggregation as stated in the January 12, 2009 notice is that "multiple nominally-separate activities that are sufficiently interrelated should be grouped together and considered a single project for the purpose of Step 1 in the NSR applicability test."  This basic position has evolved over time as U.S. EPA policy.  In the 2006 proposal, U.S. EPA proposed regulatory changes that were intended to codify this policy.  Specifically, the definition of the term "project" was expanded to require that multiple projects that are dependent on each other to be economically or technically viable must be considered as a single project.  In this recent action, U.S. EPA withdrew the proposed rule changes and instead clarified the existing policy in the language of the notice. 

One item of note with respect to the U.S. EPA's position on aggregation is explained in the January 2009 notice.  They stated that they "believe that if a previous physical or operational change has operated for a period of three or more years, permitting authorities may presume that the newly constructed change is not substantially related to the earlier change."  They then went on to state that this is a rebuttable presumption paving the way for decisions to the contrary if an agency deems it appropriate.  They avoided specifying that projects occurring with that same time frame, or a lesser one, were presumed to be interrelated. 

 

The bottom line is that when evaluating NSR applicability to proposed projects at your facility, debottlenecked units will still need to be considered.  In addition, U.S. EPA's position regarding "project netting" has not changed (i.e., emissions decreases that result from your project can only be included in the Step 2 netting analysis).  Finally, when your facility is planning multiple projects you must consider U.S. EPA's position on aggregation.  Are the projects technically or economically dependent?  Is one project viable without the other?  You will want to know the answers before you do the permitting, not when you receive a Section 114 letter from U.S. EPA. 

One final note as we go to press: on February 9, 2009, U.S. EPA announced that the Agency's final action on aggregation discussed above was being stayed until May 18, 2009.  This was done in response to the memo on regulatory review issued by the White House on January 20, 2009.  The stay will allow the new administration more time for review and reconsideration of comments previously received regarding the rule.  

Please contact ALL4's John Egan at 610.933.5246 x14 or jegan@all4inc.com should you have any questions regarding how these decisions may impact permitting at your facility.

However, facilities in these counties should now calculate the facility baseline emissions for VOC and NOX and compare the baseline to the facility's current emissions, as the fee will be assessed based on recent emissions and the baseline information.  Typically the baseline emissions are those recorded by the states in the attainment year, but U.S. EPA has also provided guidance for alternative methods for calculating the baseline emissions.  The nonattainment penalty fees are paid on VOC and NOX emissions in excess of 80 percent of the baseline at a rate of $5,000 per ton, which is based upon the 1990 fee set in the Clean Air Act and adjusted for inflation according to the Consumer Price Index.  This would result in a 2008 penalty fee of $7,951 per ton.  Keep in mind that the nonattainment penalty fees will be in effect until the region meets the 1-hour ozone NAAQS. 

 

This issue was discussed at the February 9, 2009 New Jersey Industrial Stakeholder Meeting. The New Jersey Department of the Environment (NJDEP) understands the nature of this issue and is working with U.S. EPA to understand the requirements and flexibility regarding the nonattainment penalty fees and expects to issue a guidance memorandum regarding how New Jersey will collect the penalty fee.  

 

Please contact ALL4's Cara Fox at 610.933.5246 x23 or cfox@all4inc.com for additional information.

On January 30, 2009, Commonwealth Court Judge Dan Pellegrini ruled that Pennsylvania's regulations limiting mercury air emissions from coal-fired Electric Generating Units (EGUs) were unlawful, invalid, and unenforceable.  The primary basis for the ruling was the District of Columbia Circuit Court's decision that U.S. EPA had improperly delisted EGUs from the Clean Air Act (CAA) Section 112 list of source categories that are subject to Maximum Achievable Control Technology (MACT) standards.  In the judge's opinion, since EGUs were technically still regulated under Section 112, Pennsylvania had not properly promulgated its regulations.  

This decision is not a final action (pending appeal) and Pennsylvania has 30 days to respond to the decision.  The State could have sought a settlement of the case or could have requested a review of the decision by the full 3-judge panel of the Commonwealth Court.  However, on February 6, 2009, the State chose to appeal the Commonwealth Court's decision to the Pennsylvania Supreme Court.  Considering the complexity of the inter-relationship between the Federal CAA and the State Air Pollution Control Act, the State Supreme Court may be a better venue for the Commonwealth's arguments for the need to act in the absence of Federal rules. 

Now that the State has filed an appeal, it is up to the State Supreme Court to decide if it should hear the appeal.  If the State Supreme Court agrees to hear the appeal, this agreement will act as an automatic stay of the Commonwealth Court decision to vacate Pennsylvania's mercury regulations.  This means that any company affected by the Pennsylvania mercury regulations should continue taking actions to be in compliance with the mercury regulations.  Stay tuned for updates.  

Please contact ALL4's John Slade at 610.933.5246 x36 or jslade@all4inc.com should you have any questions regarding the status of the Pennsylvania mercury rule.

EnviroReview is ALL4's regulatory update product which summarizes multimedia environmental changes at the Federal, state, and local level.  Being on top of the regulatory development process is paramount to continued environmental compliance.  "EnviroReview Extract" is a monthly feature sharing several highlights of the previous month's EnviroReview.  This month's highlights include:

  

At ALL4, we are constantly growing: personally, professionally, and as a company.  Because growth is so present in our organization, we are continually looking to hire environmental professionals that share our same vision and passion for helping our clients be successful.  If you are an environmental professional that wants to......  

 

 

Kristin M. Gordon, P.E.