Magazine article Occupational Hazards

Making Sense of the New: New Source Review; despite a Pending Court Challenge, Recent Changes to the Clean Air Act's "New Source Review" Regulation May Make It Easier to Expand or Modify Your Facility

Magazine article Occupational Hazards

Making Sense of the New: New Source Review; despite a Pending Court Challenge, Recent Changes to the Clean Air Act's "New Source Review" Regulation May Make It Easier to Expand or Modify Your Facility

Article excerpt

For more than a decade, the Clean Air Act's new source review (NSR) process has sparked dismay in the hearts and pocketbooks of plant managers across America. The NSR process applies to two types of activities: construction of "new sources" of air emissions, and major modifications at existing facilities. Whether a particular process or equipment change at an existing facility triggers NSR has been a major headache from the beginning.

Background

As EPA itself acknowledged, the complexity of the NSR process generated regulatory uncertainty while adding a year or more to the time needed to review plant modifications at an estimated additional cost of $1 million. From a plant manager's perspective, an incorrect analysis of whether NSR applies could mean fines and penalties, as well as the possibility of enforcement actions by citizens' groups for "unpermitted" air emissions. For environmentalists, however, any modification to a permitted process should mandate an upgrade to the best available emissions control technology because these upgrades would hasten industry's progress to achieve health-based air quality standards to the benefit of all.

Against this background, EPA began a rulemaking proceeding that has spanned 10 years and three administrations from beginning to final rulemaking. The lengthy process culminated in rules that became effective at the end of 2003. The effective date of one component of the new regulations--the equipment replacement rule--has been halted by a court order pending a court appeal of the rules.

In what follows, I will explain how the old NSR process worked for plant modifications, discuss the highlights of new NSR rules, and provide examples of how these new regulations work.

The Old NSR

If the facility was an existing major stationery source, a major modification triggering NSR was defined as "a physical change or a change in a method of operation" that results either in an "increase in existing emissions" or that "emits a new pollutant." Simple examples of physical or operational changes that required NSR are: a new production line, reconfiguration of a process or installation of new equipment in an existing production line.

Not all changes, however, automatically triggered NSR. First, the changes must have resulted in a "significant net increase" of a pollutant for NSR to come into play. These levels varied by type of pollutant and whether the plant was in an "attainment" or "nonattainment" area. (Attainment areas are places with good air quality; nonattainment regions have poor air quality.)

Second, the changes must not have fallen under a number of exemptions to the NSR rules that allow for changes such as routine maintenance or changes in hours of operation.

To determine whether there is a net increase in emissions, one had to know current emissions (usually based on 2 years of data) and estimate future emissions using the "potential to emit" test developed by EPA. This test has been among the most controversial regulations in the NSR process because it focuses on the change's maximum capacity to emit, using a 24 hour-per-day, 365 day-per-year operating schedule, even if the physical change or change in method of operation would never, in reality, operate at the maximum capacity. Industry viewed this test as unjustifiably hampering its ability to make beneficial operational changes without triggering the costly NSR process.

To illustrate this concern, EPA cited the following simple example as part of its explanation of why NSR reform was necessary. A refinery wanted to install a heat exchanger to recover waste heat from one of its gasoline-producing units. The recovery of waste heat from this unit would mean that the heaters and boilers at the refinery would be used less, thereby reducing overall energy usage and emissions from those heaters and boilers. However, because NSR assumed future operations would be at full capacity, the project showed "potential" emissions increases that could trigger NSR. …

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