EPA’s New Source Review (NSR) reform efforts have been in full swing over the past month or so as the Agency released two final guidance documents, issued a pre-publication version of a proposed rule, took final action to end a years-old reconsideration of a 2007 rulemaking, and released its Fall Unified Agenda detailing dates for a number of upcoming NSR-related actions. While these actions may not have immediate consequences for many regulated sources, they are evidence that EPA continues to pursue its NSR reform agenda.
Final “Ambient Air” Guidance Issued December 2, 2019
When determining whether emissions from a source impact an area’s ability to achieve or maintain the National Ambient Air Quality Standards (NAAQS), EPA has historically excluded certain areas owned or controlled by the source that cannot be accessed by the general public due to “fences or other physical barriers.” In this guidance, EPA has updated its “ambient air” policy by making a “limited change” to account for the fact that public access can be precluded by measures other than a fence or physical barrier. Such measures include video surveillance, monitoring, clear signage, and routine security patrols. EPA’s updated guidance emphasizes that determinations of the adequacy of such measures to prevent public access, alone or in combination, must be made on a case-by-case basis.
Final “Adjacency” Guidance Issued November 26, 2019
Under EPA’s NSR and Title V regulations, a permitting authority must consider three factors when determining whether multiple pollutant-emitting activities must be treated as a single source for permitting purposes: whether the activities 1) belong to the same industrial grouping, 2) are located on one or more contiguous or adjacent properties, and 3) are under control of the same person. EPA has expanded its interpretation of the “adjacency” factor under previous administrations to include consideration of whether operations at two or more facilities are “functionally interrelated,” even if they are not located directly next to each other. EPA’s final guidance reins in the definition of “adjacent” for all industries other than oil and gas (for which EPA has already issued a rule clarifying the meaning of “adjacent”). Under the new guidance, EPA interprets “adjacent” to relate exclusively to the physical proximity between sources and abandons “functional interrelatedness” as a consideration. The guidance does not, however, establish a bright-line test for when two properties would be in close enough physical proximity to be deemed “adjacent.”
Proposed NSR “Error Corrections” Rule Release November 22, 2019
EPA released a pre-publication draft of a proposed rule on November 22, 2019 which makes a number of corrections to the agency’s NSR regulations. The Agency describes the changes as “administrative in nature,” noting that they “do not alter the substantive requirements of the NSR regulations.” The corrections proposed by EPA address typographical, grammatical, and punctuation errors, incorrect and outdated references, regulations that were vacated by court order but never removed, updates needed to conform with the 1990 Clean Air Act amendments, and permitting exemptions that are now outdated because the time period for which they were relevant has long since passed.
November 5, 2019 Withdrawal of Administrative Reconsideration of “Reasonable Possibility” Rule
In 2007, EPA adopted final rules clarifying a 2002 requirement for sources to conduct recordkeeping and reporting when the projected emissions increase from a project has a “reasonable possibility” of exceeding 50 percent of Clean Air Act significance thresholds. The State of New Jersey petitioned EPA for administrative reconsideration of the rule, claiming that it did not adequately protect air quality, and then challenged the rule in the D.C. Circuit, which has held the case in abeyance pending final action from EPA. More than 10 years after granting the reconsideration, EPA has notified New Jersey that it will no longer reconsider the rule, paving the way for resumption of the D.C. Circuit challenge. Whether New Jersey will pursue its judicial challenge remains to be seen, given that most states have already developed their own approaches to implementing the “reasonable possibility” rule, some of which are more stringent than EPA’s 2007 rule.
Fall Unified Agenda Issued November 20, 2019
EPA has released its Fall semi-annual regulatory agenda with projected dates for a number of upcoming NSR actions. Most notable on the list is a March 2020 target date to finalize an hourly emissions increase test for triggering NSR. This test was originally proposed as part of the Affordable Clean Energy (ACE) rule in August 2018, but was not finalized as part of the final ACE rule published in June 2019.