On October 14, 2022, the Environmental Protection Agency (EPA) published proposed updates to the Clean Air Act’s New Source Review (NSR) regulations. The proposed amendments focus on fugitive emissions and how they factor into determining whether or not a facility is subject to NSR permitting requirements.
Before making a physical or operational facility change, owners and operators of stationary sources are required to determine if facility-wide potential-to-emit (PTE), including the emissions increase from the proposed facility change, exceeds the major source threshold. Fugitive emissions are not considered when making a major source determination unless the facility is one of 27 facility types listed in 40 CFR Part 52.21(b)(1)(iii), which includes petroleum refineries, chemical process plants, and Portland cement plants. EPA’s proposed regulatory update does not affect how fugitive emissions are considered when facilities are determining if a proposed change results in major source classification.
Owners and operators of stationary sources classified as major emitting facilities must also determine if the emissions increase from the proposed facility change represents a “major modification.” If the modification is major, facility owners and operators become subject to major NSR permitting requirements, which stipulate additional emission control measures to prevent emissions from proposed facility changes from degrading air quality. Only the 27 listed facility types have had to include fugitive emissions in making the major modification determination since the 2008 Fugitive Emissions Rule was stayed. EPA’s proposed NSR update will require all existing major sources to include fugitive emissions when determining whether a proposed facility change constitutes a major modification.
Background
Established as part of the 1977 Clean Air Act Amendments, the NSR permitting program requires many stationary sources of air pollution to obtain permits before beginning construction. Until 2008, EPA required all sources to include fugitive and non-fugitive emissions toward major modification thresholds when determining whether a change to an existing major stationary source represented a major modification. However, in 2008, EPA finalized a rule (Fugitive Emissions Rule) that required only certain types of major stationary sources belonging to certain industrial source categories include fugitive emissions when performing a major modification determination. In 2009, EPA stayed the 2008 Fugitive Emissions Rule, and it has had no legal effect since then. However, portions of the rule have remained in NSR, leading to confusion and regulatory uncertainty.
What’s new?
The proposed rule will require all existing major stationary sources to consider non-fugitive and fugitive emissions when determining whether a physical or operational change constitutes a major modification. The newly proposed amendment also removes a 1980 provision that exempts certain stationary sources from major NSR permitting requirements if including fugitive emissions is the sole reason a facility change is considered major modification.
The actual proposed regulatory changes are subtle; the changes remove existing exemption language in 40 CFR Parts 51 and 52, as opposed to proposing new language (see the last page of the proposal). However, the proposed requirement to include fugitive emissions to calculate project emission changes will likely result in many projects exceeding major permitting thresholds, particularly in areas that are nonattainment for the relevant fugitive pollutant.
What it means
If finalized as proposed, all major emitting facilities, not just those 27 facility types listed, will need to include estimated fugitive emissions in their calculations to determine whether or not a proposed change will be classified as a major or minor modification in relation to NSR permitting. In the past, the accuracy of fugitive emission estimates for many facilities was not a critical factor. Under the proposed rule, more precise fugitive emissions estimates will be crucial.
Major source permitting thresholds in attainment areas under the Prevention of Significant Deterioration (PSD) program are generally 250 tons/year for each regulated air pollutant, or 100 tons/year for each regulated air pollutant from sources listed in 40 CFR § 51.166(b)(1). Major source permitting thresholds in nonattainment areas under the Nonattainment New Source Review (NNSR) program are specific to the nonattainment area classification and pollutant, and may be significantly lower.
How to comment
EPA is accepting comments through February 14, 2023. Comments can be submitted through the Federal eRulemaking Portal, email, or fax and must reference Docket ID No. EPA–HQ– OAR–2004–0014.
