The Clean Air Act (CAA) directs the Environmental Protection Agency (EPA) to define “hazardous air pollutants (HAPs)” that may pose acute health hazards, and to impose regulations to reduce those hazards. EPA requires permits for “major sources” of HAPs based on “Maximum Achievable Control Technologies (MACT),” and lesser controls for non-major “area sources.” Since the Trump Administration took office, EPA has pursued several initiatives to make it easier for sources to reclassify from “major” to “area” in order to reduce their regulatory responsibilities. For example, in January 2018 EPA ended a decades-old policy declaring that every emission source that met major source criteria at the time a MACT became effective was “once in, always in” and could not requalify as a less-regulated area source by accepting legally binding controls that reduce its “potential to emit (PTE).” (I wrote about this change here).
Now, EPA is proposing to allow a source that is presently “major” to reduce its PTE below the relevant major source threshold(s) and change its formal status to an “area” source. EPA published the proposal on July 26, and held a public hearing on August 15. After considering comments, I assume the agency will move to finalize its proposal. The remainder of this note discusses CAA requirements for HAP sources, and the proposed revisions.
How are Major and Area Sources Defined and Regulated?
CAA addresses sources of HAPs, and directs EPA to list emissions of particular HAPs by source categories that become subject to National Emission Standards for Hazardous Air Pollutants (NESHAPs). Since the 1990 CAA Amendments, most NESHAPs are based on MACT standards defined by EPA. Major sources require extensive permits, while area sources typically do not.
CAA defines a major source of HAPs as follows:
“‘major source’ means any stationary source or group of stationary sources located within a contiguous area and under common control that emits or has the potential to emit considering controls, in the aggregate, 10 tons per year [tpy] or more of any hazardous air pollutant or 25 [tpy] or more of any combination of hazardous air pollutants. “ [emphasis added; see below]
In contrast, area source means any stationary source of HAPs that is not a major source. Readers should note that this determination may not be as obvious as it seems. For example, EPA may:
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Aggregate sources within a single facility (such as multiple production or combustion lines) to determine that the facility as a whole reaches the “major source” threshold.
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Establish a lesser quantity (or for radionuclides different criteria), for a major source than that specified in the quoted text above, based on the potency, persistence, potential for bioaccumulation, or other characteristics of the pollutant, or other relevant factors.
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Consider a source’s potential to emit, not just its present emissions
A major source generally requires the following:
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Preconstruction review, to establish emissions and PTE, and to evaluate and define the relevant MACT standard
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Operating permit, which includes:
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Emissions limitations and other conditions to ensure the source’s compliance with applicable emissions standards.
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Inspection, entry, monitoring, compliance certification, record-keeping, and reporting requirements.
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Provisions under which the permit can be revised, terminated, modified, or reissued.
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Conditions allowing a permit with a term longer than three years to be “reopened” to accommodate new standards or regulations.
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Provisions for operational flexibility allowing certain narrowly defined changes without a permit revision.
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A provision that the permit has no bearing on allowances under the CAA acid rain program.
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Fees sufficient to cover the permit agency’s administrative costs; and
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Any other conditions necessary to ensure compliance with CAA.
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In comparison, requirements for area sources tend to be less restrictive. For example, area sources may be:
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Required to meet Generally Achievable Control Technology (GACT) standards, which are less restrictive than MACT.
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Required to implement “management practices” specified by EPA.
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Exempt from specified CAA requirements that EPA deems “impracticable, infeasible, or unnecessarily burdensome”.
How is EPA Proposing to Change its Approach to Potential to Emit?
EPA is proposing to revise its approach to defining major and area sources, by emphasizing the “potential to emit” quoted in the definition above. In doing so, it also provides more details about changes and controls that sources may adopt and implement in order to qualify as (non-major) area sources. Formally, this involves a proposed revision to the applicability section in EPA’s NESHAP rules (40 CFR 63.1(c)) by adding the following:
“A major source may become an area source at any time by limiting its potential to emit (PTE) hazardous air pollutants, as defined in this subpart, to below the major source thresholds established in [these rules].” (new 40 CFR 63.1(c)(6))
To clarify, EPA clarifies the regulatory definition of “potential to emit,” providing for technical and/or administrative limitations on emissions:
“Potential to emit means the maximum capacity of a stationary source to emit a pollutant under its physical and operational design. Any physical or operational limitation on the capacity of the stationary source to emit a pollutant, including air pollution control equipment and restrictions on hours of operation or on the type or amount of material combusted, stored, or processed, shall be treated as part of its design if the limitation or the effect it would have on emissions is legally and practicably enforceable as defined in this subpart (i.e., effective).” (revised 40 CFR 63.2)
EPA is also proposing to add conforming cross-references into a host of regulations governing individual source categories. In general, sources will have to demonstrate these PTE restrictions at the time they qualify as area sources, although EPA gives itself the flexibility to allow up to 3 years to install equipment or make other physical changes to implement these new restrictions.
Now What?
EPA will review comments, and presumably finalize these changes substantially as proposed. The agency notes that the revised rules will apply in three basic scenarios:
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An existing facility presently operates in ways that produce emissions less than major source thresholds, and will be able to formalize its PTE and receive regulatory benefits.
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An existing facility may choose to add physical and/or operational efficiencies or restrictions that will qualify it as an area source.
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A new facility may be developed in ways that provide for a PTE that can be formalized to avoid major source status.
I have not found any clear indications whether or not there will be lawsuits to delay or overturn these changes. If there are not, I expect that environmental advocates and others will pay close attention to individual permit processes, to ensure that any restrictions are valid and put into operation.
Self-Assessment Checklist
Do any of the organization’s present activities emit regulated hazardous air pollutants in quantities that may exceed CAA thresholds for a “major source?”
Is the organization considering new or expanded activities that would emit regulated hazardous air pollutants in quantities that may exceed CAA thresholds for a “major source”, but which can be redesigned to establish a lower PTE.
If so, has the organization evaluated whether to negotiate binding limitations on the activity’s potential to emit in order to qualify as an “area source” subject to reduced regulation?
Where Do I Go For More Information?
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EPA webpage for rulemaking
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EPA 1/25/18 policy memorandum rescinding “once in always in” policy
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EPA’s proposal (7/26/19 Federal Register)
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EPA’s notice of public hearing for 8/15/19 (7/31/19 Federal Register)
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About the Author
Jon Elliott is President of Touchstone Environmental and has been a major contributor to STP’s product range for over 30 years.
Mr. Elliott has a diverse educational background. In addition to his Juris Doctor (University of California, Boalt Hall School of Law, 1981), he holds a Master of Public Policy (Goldman School of Public Policy [GSPP], UC Berkeley, 1980), and a Bachelor of Science in Mechanical Engineering (Princeton University, 1977).
Mr. Elliott is active in professional and community organizations. In addition, he is a past chairman of the Board of Directors of the GSPP Alumni Association, and past member of the Executive Committee of the State Bar of California's Environmental Law Section (including past chair of its Legislative Committee).
You may contact Mr. Elliott directly at: tei@ix.netcom.com