1. Update on the 2015 Ozone Standard Texas Commission on Environmental Quality Environmental Trade Fair May 3, 2016

2. 2015 Eight-Hour Ozone NAAQS On October 1, 2015, the EPA lowered the NAAQS for ground-level ozone to 70 ppb. Based on preliminary air monitoring data for 2015, the Dallas-Fort Worth, Houston- Galveston, San Antonio and El Paso areas are measuring levels above the new ozone standard. –State recommendations expected to be based on the 2015 Design Value –Final EPA designation expected to be based on the 2016 Design Value 2

3. Calculating Ozone Design Values

4. Calculating Design Values Design values are not averaged across monitors When you see a design value for an area, it is the highest monitor in the area 75 80 67 70 67 69 71 72

6. Texas Air Quality Trends:

7. 2015 Ozone Design Values by County CSA/CBSACounty 2015 8Hr Ozone DV (ppb) Dallas—Fort WorthDenton83 Dallas—Fort WorthTarrant80 Houston—The WoodlandsBrazoria80 Houston—The WoodlandsHarris79 San Antonio—New Braunfels Bexar78 Dallas—Fort WorthCollin76 Dallas—Fort WorthDallas75 Dallas—Fort WorthParker75 Dallas—Fort WorthHood73 Houston—The WoodlandsMontgomery73 Dallas—Fort WorthJohnson73 Houston—The WoodlandsGalveston73 El Paso—Las CrucesEl Paso71 Dallas—Fort WorthRockwall70 Killeen-TempleBell69 Austin—Round RockTravis68 Beaumont—Port ArthurJefferson68 Dallas—Fort WorthEllis68 Longview-MarshallGregg68 Dallas—Fort WorthKaufman67 Tyler-JacksonvilleSmith67 WacoMcLennan67 Amarillo-BorgerRandall66 Beaumont—Port ArthurOrange66 Longview-MarshallHarrison66 Dallas—Fort WorthNavarro66 Corpus Christi—Kingsville— Alice Nueces65 Dallas—Fort WorthHunt64 No CSABrewster64 No CSAPolk64 Victoria—Port LavacaVictoria64 LaredoWebb59 Brownsville-HarlingenCameron59 McAllen-EdinburgHidalgo56 **The Brewster County, Randall County, and Polk County monitors are part of the Clean Air Status and Trends Network (CASTNET) of monitors and report data directly to the EPA. *2015 design values are calculated as of 12/1/2015 and subject to change

8. 2015 Ozone Design Values by CSA CSA/CBSA 2015 8Hr Ozone DV (ppb) Dallas—Fort Worth83 Houston—The Woodlands80 San Antonio—New Braunfels78 El Paso—Las Cruces71 Killeen-Temple69 Austin—Round Rock68 Beaumont—Port Arthur68 Longview-Marshall68 Tyler-Jacksonville67 Waco67 Amarillo-Borger66 Corpus Christi—Kingsville—Alice65 Brewster County (No CSA)64 Polk County (No CSA)64 Victoria—Port Lavaca64 Laredo59 Brownsville-Harlingen59 McAllen-Edinburg56 **The Brewster County, Randall County, and Polk County monitors are part of the Clean Air Status and Trends Network (CASTNET) of monitors and report data directly to the EPA. *2015 design values are calculated as of12/1/2015 and are subject to change.

9. Estimated Impacts of 2016 4 th High Values on Classification CBSAPrelim 4th High in 2015 (ppb) 4 th High in 2016 for Potential Marginal (ppb) Austin7377-106 BPA7472-101 Corpus6582-112 DFW8848-77 El Paso7271-100 HGB8650-79 Killeen-Temple6774-103 San Antonio8061-90 Tyler-Longview6879-109 Victoria7081-111 Waco6882-112

10. 2015 Eight-Hour Ozone Standard Timeline October 2015 EPA announces new primary ozone standard; secondary same as primary December 2015Texas/TCEQ files petition for review October 2016 State designation recommendations due to the EPA June 2017 EPA sends letter to states with proposed nonattainment area designations October 2017 EPA to sign (finalize) designations and classifications; EPA finalizes implementation rule October 2019 Emissions inventory due for all nonattainment area October 2020 - 2021 SIPs due

11. Potential Classification Ranges Example Classification Thresholds Based on Percent-Above-Standard Approach 0.070 ppm Marginal0.071 up to 0.081 ppm Moderate0.081 up to 0.093 ppm Serious0.093 up to 0.105 ppm Severe – 150.105 up to 0.111 ppm Severe – 170.111 up to 0.163 ppm Extreme0.163 ppm or more 11

12. Potential Attainment Deadlines Based on Section 181(a)(1) of the Federal Clean Air Act: –Marginal2020 –Moderate2023 –Serious2026 –Severe2032 or 2034 –Extreme2037 12

13. State Implementation Plan (SIP) A plan to reduce pollution to meet federal air quality standards that: –in most cases, applies to areas not meeting federal air quality standards (nonattainment areas); –establishes control strategies and target dates for reducing emissions; –describes how the state will monitor air quality and determine compliance with the standards; and –includes technical and regulatory processes for demonstrating attainment.

14. Nonattainment: What It Could Mean for an Area More stringent permitting requirements including emission offsets for new major sources or major source modification More stringent controls for major sources of nitrogen oxides (NO X ) and volatile organic compounds (VOC); possibly minor sources as well SIP revisions 14

15. Nonattainment: What It Could Mean for an Area Vehicle inspection and maintenance (I/M) for some areas –Current Program:  Model-year two through 24-year old gasoline vehicles (except motorcycles) are required to undergo annual emissions inspections.  Conducted in 17 counties.  Motorists must successfully pass an emissions and safety inspection to obtain a vehicle inspection report to use for registration.

16. SIP Requirements for Ozone Nonattainment Areas

19. Nitrogen Oxides Emissions 2014 Nitrogen Oxides Emissions Contributions by Source Category Source category RegionPointAreaMobile El Paso (El Paso County) 16%5%79% San Antonio (Bexar, Comal, Guadalupe, and Wilson Counties) 34%8%58% Dallas-Fort Worth (Collin, Dallas, Denton, Ellis, Johnson, Kaufman, Parker, Rockwall, Tarrant, and Wise Counties) 10%12%78% Houston-Galveston- Brazoria (Brazoria, Chambers, Fort Bend, Galveston, Harris, Liberty, Montgomery, and Waller Counties) 26%7%67%

20. Next Steps State Designation Recommendation –Nonattainment:  Areas designated nonattainment for 2008 ozone standard  Additional counties with monitoring data over 70 ppb –Attainment- areas with monitored DV of no more than 70 ppb –Unclassifiable/attainment – areas without monitors The TCEQ posted this proposal and requested public comment from March 15-April 15 August 3 rd Agenda item for Commissioner consideration

21. QUESTIONS?

22. NSR NSPS Quad O/Oa Source Determination EPA and methane PBR CTG Flyovers Flaring Information Collection Request Ozone Self-Audit Q/A Panel Concerning Air Issues Affecting the Oil and Gas Sector