NSR—the program imposing onerous permitting requirements on the construction of new sources and “major modification” projects at existing sources—requires industrial sources of air emissions to determine whether the projects they propose will increase those emissions. EPA adopted regulations in 2002 to provide a new structure for those critical emission calculations, which specifies that sources must calculate the “sum of the differences” between a baseline and a future projection for each existing emission unit. That language is particularly important for individual projects that may cause emissions to go down at one unit but up at another.
On March 1, 2018, the U.S. Environmental Protection Agency’s (“EPA”) Administrator, E. Scott Pruitt, signed a notice seeking public comment on the proposed withdrawal of the control techniques guidelines (“CTG”) for the oil and natural gas industry. The oil and natural gas CTGs make recommendations for reducing volatile organic compound emissions from oil and natural gas equipment and processes in ozone nonattainment areas classified as Moderate or higher and states in the Ozone Transport Region by addressing reasonably available control technology review requirements in their state implementation plans.
On February 14, 2018, the House Committee on Energy and Commerce held a hearing on the Environmental Protection Agency’s (“EPA”) New Source Review (“NSR”) permitting program as an initial step towards NSR reform. See https://energycommerce.house.gov/hearings/new-source-review-permitting-challenges-manufacturing-infrastructure/. Six witnesses presented testimony at the hearing, with four in favor of and two against reform. There is wide anticipation that EPA will move to adopt some sort of reform of the NSR program, although exactly how and when is not known. The EPA Administrator this past December issued a Memorandum to the EPA regional administrators providing guidance on “Enforceability and Use of the Actual-to-Projected-Actual Applicability Test in Determining Major Modification Applicability,” and it is expected that further guidance or rulemakings may be forthcoming. In addition, it is expected that a new effort will be made to reform the program through legislation, with Rep. Morgan Griffith (R-Va.) having introduced two bills last June on that subject.
On January 25, 2018, EPA’s Assistant Administrator, William Wehrum, issued a memorandum addressing when a “major source” subject to a section 112 maximum achievable control technology (“MACT”) standard of the Clean Air Act (“CAA”) can be reclassified as an “area source,” and thus avoid any more stringent requirements that only apply to “major sources.” The memorandum departs from and supersedes EPA’s longstanding “Once in Always in” (“OIAI”) policy articulated in the May 1995 Seitz Memorandum. Under the OIAI policy, a major source of hazardous air pollutants (“HAPs”) was permanently subject to the MACT standard at the “first compliance date” of the standard even if the source was able to later limit its potential to emit (“PTE”) HAPs below the major source thresholds. EPA’s new policy explains that a major source will become an area source once it takes enforceable limits on its PTE to ensure emissions cannot exceed the applicable major source thresholds for HAPS.
On January 9, 2018, the EPA published the third round of final area designations under the 2010 SO2 NAAQS. In this round, the EPA identified six (6) nonattainment areas located in Florida, Indiana, Louisiana, Puerto Rico and Guam. EPA designated 23 areas as unclassifiable and all other areas as attainment/unclassifiable. The primary focus in this round was on those areas electing to rely on ambient air quality modeling to assess attainment with the standard.
On December 7, 2017, EPA Administrator Scott Pruitt issued a memorandum explaining EPA’s future approach concerning enforcement of the New Source review program, considering the uncertainty created by the Sixth Circuit’s decisions in the DTE NSR cases (U.S. v. DTE Energy Co., 711 F.3d 643 (6th Cir. 2013) and U.S. v. DTE, 845 F.3d 735 (6th Cir. 2017)). NSR requires new major sources and major modifications at existing sources to obtain a permit before construction commences. In determining whether a permit is needed for a major modification, owners or operators are required to conduct a pre-construction applicability analysis to determine whether the proposed project would cause a significant emission increase, calculated using the actual-to-projected-actual applicability test that compares past actual emissions to future projected emissions. The memorandum’s main focus is on circumstances where sources have used that test in determining NSR applicability and the pre- and post-project source obligations. Continue Reading New Source Review Memorandum Alters EPA’s Enforcement Approach Concerning Actual-to-Projected-Actual Applicability Test