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Non-Attainment NSR Program

Donald LawEPA Region 8

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Major Topics

•Applicability• NA NSR Program Requirements• Lowest Achievable Emissions Rate

(LAER)• Offsets• Statewide Compliance Certification• Alternatives Analysis

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What is Non-Attainment NSR?NSR is a

Pre-construction review program required for New Major Sources or Major Modifications at existing Major Sources locating in areas designated as not attaining a National Ambient Air Quality Standard (NAAQS). • An NSR program must be approved by the Administrator

and incorporated into the State Implementation Plan (SIP) - Plan requirements are codified in 40 CFR Part 51.165. • State implementation Plans (SIP) and Tribal

Implementation Plans (TIP) must meet these requirements

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Non-Attainment NSR Applicability

• Like PSD, follow the 4 steps to determine whether new construction or modification project is subject to non-attainment NSR. • Unlike PSD, however, review is only for the

non-attainment pollutant. Being major for PSD does not trigger non-attainment NSR review

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Major Source Thresholds – NA Areas

Non-Attainment Area Major Source Thresholds Pollutant Nonattainment Classification Major Source Threshold

Ozone

Marginal 100 tpy of VOC or NOx

Moderate 100 tpy of VOC or NOx

Serious 50 tpy of VOC or NOx

Severe 25 tpy of VOC or NOx

Extreme 10 tpy of VOC or NOx

PM10Moderate 100 tpySerious 70 tpy

Carbon Monoxide Moderate 100 tpySerious 50 tpy

SO2 --- 100 tpyNO2 --- 100 tpyPM2.5 --- 100 tpyLead --- 100 tpy

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Applicability – Example 1• New Age Widgets wants to construct a new widget

making plant in a serious Ozone non-attainment area and a moderate PM10 non-attainment area. All other pollutants are in attainment• Widget making is not one of the 28 source categories.

• Source’s potential to emit is shown on the table below• Is this source subject to PSD or Non-attainment

NSR?• If so, for which pollutants?

Widget Plant Potential to EmitPollutant NOx VOC PM10 PM2.5 CO SO2

PTE (tpy) 60 80 110 20 260 35

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Applicability: Example 1 Solution – New Age Widgets

Pollutant PTE (tpy) Designation Classification Subject to PSD?

Subject to Non-

attainment NSR?

NOx 60 Non-Attainment Serious No YesVOC 80 Non-Attainment Serious No Yes

PM10 110 Non-Attainment Moderate No YesPM2.5 20 Attainment --- Yes NoCO 260 Attainment --- Yes NoSO2 35 Attainment --- No No

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Applicability – Example 2

• Old World Skidgets wants to construct a new skidget making plant in a moderate Ozone non-attainment and a serious PM10 non-attainment area. All other pollutants are in attainment.• Skidget making is not one of the 28-source categories

• Old World Skidgets potential to emit is shown below• Is Old World Skidgets subject to PSD, Nonattainment

NSR, or both?• If so, for which pollutants?

Skidget Plant Potential to EmitPollutant NOx VOC PM10 PM2.5 CO SO2

PTE (tpy) 200 80 90 30 300 35

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Applicability: Example 2 Solution – Old World Skidgets

Pollutant PTE (tpy) Designation Classificat

ionSubject to PSD?

Subject to Non-

attainment NSR?

NOx 200 Non-Attainment Moderate No Yes

VOC 80 Non-Attainment Moderate No No

PM10 90 Non-attainment Serious No Yes

PM2.5 30 Attainment --- No NoCO 300 Attainment --- Yes NoSO2 35 Attainment --- No No

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Major Modification

(1)Significant emissions increase of a regulated NSR pollutant

and (2) A significant net emissions increase of that pollutant from the major stationary source

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Net Emissions Increase

1. The increase in emissions from a particular physical change or change in the method of operation at a stationary

and2. Any other increases and decreases in actual

emissions at the major stationary source that are contemporaneous with the particular change and are otherwise creditable

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Actual Emissions

• Actual emissions as of a particular date shall equal the average rate, in tons per year, at which the unit actually emitted the pollutant during a consecutive 24-month period which precedes the particular date and which is representative of normal source operation • Reviewing authority shall allow use of a

different time period upon a determination that it is more representative of normal source operation (cont.)

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Actual Emissions (cont.)

• A different consecutive 24-month period can be used for each regulated NSR pollutant •When a project involves multiple

emissions units, only one consecutive 24-month period must be used to determine the baseline actual emissions for the emissions units being changed

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Major Modification Thresholds

Non-Attainment Area Major Modification Thresholds

PollutantNonattainment Classification Major Source Threshold

Ozone

Marginal 40 tpy of VOC or NOx

Moderate 40 tpy of VOC or NOx

Serious 25 tpy of VOC or NOx

Severe 25 tpy of VOC or NOx

Extreme Any increase of VOC or NOx

PM10Moderate 15 tpySerious 15 tpy

Carbon Monoxide

Moderate 100 tpySerious 100 tpy

SO2 --- 40 tpyNO2 --- 40 tpyPM2.5 --- 10 tpyLead --- 0.6 tpy

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Applicability for Modification• Modern Day Smidgets wants to expand by constructing a

new Smidget making production line. The plant currently is a major source for NOx, CO and PM10 and is located in a moderate ozone non-attainment area and a moderate PM10 non-attainment area. All other pollutants are in attainment.• Smidget making is not one of the 28 source categories.

• Source’s potential to emit before and after is shown on the table below.

Smidget Plant Potential to EmitPollutant (TPY) NOx VOC PM10 PM2.5 COPTE Before 200 80 110 30 300

PTE After 249 90 130 30 300

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Applicability for ModificationSolution

Pollutant

SER (TPY)

Increase TPY

Subject to PSD?

Subject to Non-

attainment NSR?

NOx 40 49 No YesVOC 40 10 No NoPM10 15 20 No YesPM2.5 10 0 No NoCO 100 0 No No

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Non-Attainment NSR Requirements

• Program has 4 basic requirements• Lowest Achievable Emissions Rate (LAER)• Offsets• Statewide Compliance Certification• Alternatives Analysis

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LAER- Federal Definition

Lowest achievable emission rate (LAER) means, for any source, the more stringent rate of emissions based on the following;

• (A) The most stringent emissions limitation which is contained in the implementation plan of any State for such class or category of stationary source, unless the owner or operator of the proposed stationary source demonstrates that such limitations are not achievable; or

• (B) The most stringent emissions limitation which is achieved in practice by such class or category of stationary sources. This limitation, when applied to a modification, means the lowest achievable emissions rate for the new or modified emissions units within or stationary source. In no event shall the application of the term permit a proposed new or modified stationary source to emit any pollutant in excess of the amount allowable under an applicable new source standard of performance.

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LAER Basics

• The most stringent emission limitation contained in the SIP of any State for such class or category or source; or• The most stringent emissions limitation

achieved in practice by such class or category of source

• Does not consider: economic, energy, environmental or other factors

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LAER

• Achieved in Practice • Usually defined as 1 year• Ability to be purchased

• Class or category of source• Simple cycle turbine versus a combined cycle turbine• Can include process changes or basic equipment

• LAER changes over time• Databases for BACT and LAER Determinations• CARB, California Air Districts, Other States • U.S. EPA RBLC

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Offsets

• Sources must provide emissions reductions that demonstrate the following•Must offset the emissions increase

from the new source or modification•Provide a net air quality benefit

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Required Offset Ratios

• Marginal at least 1.1:1• Moderate at least 1.15:1• Serious at least 1.2:1• Severe at least 1.3:1*• Extreme At least 1.5:1*

*may be 1.2:1 if approved plan requires all major sources to use BACT

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Milestones for Securing Offsets• A complete offset package identified and

quantified at the time of submission.• Letters of intent signed by the time of public

notice.• Offsets secured and in place prior to operation of

the power plant.*

*Some emission trades may include emission reductions that are contemporaneous; that is, occurring within a designated period ending shortly after commencement of operation.

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Offset Criteria(Real)• Must be emissions that have occurred. Cannot take

credit for stopping emissions that never occurred in the first place.

Federally Enforceable• The manner in which the offsets are created must be

enforceable as a practical matter and legally enforceable. • E.g. Conditions on a permit

Permanent• The reductions have to be permanent. If they can be emitted

again, then they are not permanent.• Elastic sources (gas stations, dry cleaners)

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Offset Criteria (cont.)Quantifiable• Must be able to quantify the emissions. If not

quantifiable, then they can not be used to mitigate emissions increases.• Requires records to substantiate claims

Surplus • Must be reductions that are not already required by an

air quality plan, a compliance document, a permit, or have been used elsewhere.• Surplus at the time of use versus creation

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Creating OffsetsA. An existing source wants to create emissions

reductions that are eligible for offsets. What are the steps?

1. Determine baseline actual emissions2. Determine new potential to emit3. Subtract new PTE from baseline actual

emissions4. Subtract reductions that were federally required

such as an approved rule, enforcement action, or another permitting action

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Creating Offsets (cont.)

B. Submit Application/Fees to District within required timeframe.

C. District analysis including discount factors (if required)

D. Public NoticeE. Response to commentsF. ERC’s are “Banked”

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Offset Programs

• SIP approved NSR rules usually contain offsets banking rules.• Regulates generation, transfer, use

• Non-traditional offset generation to be used for a major source requires a SIP approved rule

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Baseline Actual emission for offsets

•Average actual emissions in TPY of the last 24 month period prior to actual reduction•Another 2-year period within the last 5 may be chosen if justified

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Statewide Compliance Certification

•Source must certify to permitting authority that all sources owned or operated within that state are in compliance or on a schedule of compliance

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Alternatives Analysis

• Source must submit an analysis of alternative• Sites• Sizes• Production processes• Environmental control techniques• Source must consider multiple locations

and demonstrate that chosen location is best for project, considering its impacts

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Using the Alternatives Analysis to Raise Potential “Costs” to the Tribe

• Section 173(a)(5) of the CAA requires the permitting authority to determine whether “an analysis of alternative sites, sizes, production processes, and environmental control techniques … demonstrates that benefits of the proposed source significantly outweigh the environmental and social costs imposed as a result of its location, construction, or modification. • This section has been used to successfully to

challenge projects

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Summary

• NA NSR rules apply to major sources located in non-attainment areas• Applicability is based on a source’s emissions of

the pollutant for which the area is in nonattainment• Major sources must achieve LAER (Lowest

Achievable Emission Rate), which is more restrictive than BACT• Major sources must get offsets and demonstrate

that benefits of the source outweigh costs