EPA’s Tailoring Rule for Greenhouse Gases

New Regulation Complicates Determination of PSD Program Status

By Robynn Andracsek, PE

The U.S. Environmental Protection Agency (EPA) has added greenhouse gases (GHG) to the family of regulated criteria pollutants, but in a unique (and often confusing) way. Regardless, understanding how the Prevention of Significant Deterioration (PSD) program applies to GHG is crucial to  understanding the permitting requirements for your facility or project.

The PSD program regulates construction of new major sources or major modifications at existing major sources. A PSD construction permit requires the installation of Best Available Control Technology (BACT) and a demonstration of compliance with the National Ambient Air Quality Standards (NAAQS) using a dispersion modeling analysis. These permits take at least 12 months longer to be issued than a state construction permit.

You may already have been exposed to GHG requirements through the mandatory reporting rule (MRR) for greenhouse gases program; however, PSD permitting differs from the mandatory reporting rule in several important ways. (See Table 1.)

The regulation of greenhouse gases is new to the Clean Air Act. It's best to start by understanding a few basic concepts:

  1. Mass versus equivalents
  2. Subject to regulation
  3. "Anyway" sources
  4. Major and minor can switch back and forth depending on different factors

The first concept is how the mass of a greenhouse gas (in tons) differs from equivalents (in carbon dioxide equivalents, or CO2e). EPA has determined that only a finite list of chemicals are greenhouse gases and that each chemical has its own global warming potential (GWP). This is spelled out in 40 CFR 98 and a few of the most common are shown in Table 2.

In order to calculate your total greenhouse gases, you take the tons of each chemical and multiply by its GWP, then total those amounts. The result is CO2e. Take care to understand what kind of tons are being calculated. An English short ton is 2,000 pounds but a metric ton is 2,204.6 pounds. It is possible to have over 100,000 tons per year (tpy) CO2e but less than 100 tpy of GHG by mass. For example, 10 tons of SF6 is 239,000 tpy CO2e. Therefore, it is best to calculate actual and potential emissions in metric tons and English short tons for both each greenhouse gas and for CO2e. Armed with all this information, you'll have sufficient information to determine the applicability of each GHG program.

The second concept to understand is the unique method by which greenhouse gases are made subject to regulation. 40 CFR 52.21 (48)(v) 

Beginning July 1, 2011, ... the pollutant GHGs shall also be subject to regulation:

( a ) At a new stationary source that will emit or have the potential to emit 100,000 tpy CO2e;

or

( b ) At an existing stationary source that emits or has the potential to emit 100,000 tpy CO2e, when such stationary source undertakes a physical change or change in the method of operation that will result in an emissions increase of 75,000 tpy CO2e or more.

This definition means that determining if a source is major or minor for the PSD program is no longer a simple matter. The other criteria pollutants (SO2, NO2, CO2, volatile organic compounds, PM10 and PM2.5) remain subject to a major source threshold of 250 tpy for a non-listed source (such as a simple cycle combustion turbine plant) or 100 tpy for a listed source (such as a large coal-fired boiler plant). Beginning July 1, 2011, GHGs alone can make a source PSD major. Remember that for PSD, CO2e is measured in English tons.

If an existing facility's actual CO2e emissions are over 100,000 tpy, then the next modification that increases CO2e more than 75,000 tpy makes CO2e a regulated pollutant. If the facility were PSD minor before the modification, then it is now PSD major. All other pollutants are then subject to the major project thresholds. In order to keep the source PSD minor, the facility can take a project limit of less than 75,000 tpy CO2e on each modification. A new facility that wants to stay PSD minor must keep potential emissions of CO2e under 100,000 tpy as well as keeping each other criteria pollutant under 250 or 100 tpy, depending on whether or not the source is listed.

Thirdly, there are also so-called "anyway" sources to understand. If a project triggers PSD for a pollutant other than CO2e, and CO2e increases by 75,000 tpy, then CO2e is subject to PSD permitting since the project is going through PSD "anyway" for the other pollutant. This is true regardless of the existing facility's CO2e "potential to emit." This is best illustrated with an example, as in Table 3.

Lastly, it is possible for an initial increase to be subject to PSD but a subsequent, similar increase to not be subject to PSD. This can only be explained by reading the EPA example at http://www.epa.gov/nsr/ghgdocs/TriggeringPSDatnonAnywaySourcesandMods.pdf.

The logic behind the applicability of PSD to GHG challenges everything we've been taught about PSD over the last 30 years. It will take time for both regulators and industry to fully absorb how greenhouse gases are permitted. Your best defense is to document your potential and actual emissions so that you can analyze each project for applicability to this important new regulation.


About the Author

Robynn Andracsek, PE, is an associate environmental engineer in the Burns & McDonnell Environmental Studies & Permitting. She specializes in air quality regulations.

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