Flexible Permitting Workshop Presented by: U.S. EPA Region 4 Air Permits Section FINAL PRESENTATION 1-24-05

PSD Scope What triggers PSD applicability? New “Major” stationary sources constructed in attainment areas “Major Modifications” to existing major stationary sources in attainment areas Attainment areas are those areas that are meeting the various NAAQS SO2, NOX, PM10, CO, Ozone, Lead and now PM2.5 FINAL PRESENTATION 1-24-05

PSD Scope What is a major stationary source under PSD? One of 28 “listed” major source categories with PTE > 100 tons per year (after control) of any pollutant regulated by the CAA including fugitive emissions (52.21(b)(1)(i)(a)) Any stationary source (other than the listed 28) with PTE > 250 tons per year of any pollutant regulated by the CAA excluding fugitive emissions (52.21(b)(1)(i)(b)) FINAL PRESENTATION 1-24-05

PSD Scope What is a major modification? Any physical change in or change in the method of operation of a major stationary source that would result in a significant net emissions increase of any pollutant subject to regulation under the Act (52.21(b)(2)(i)) FINAL PRESENTATION 1-24-05

PSD Significant Emission Rates Pollutant Major Modification Threshold Particulate Matter (TSP) 25 tpy Particulate Matter < 10 microns (PM10) 15 tpy Sulfur Dioxide (SO2) 40 tpy Oxides of Nitrogen (NOX) Volatile Organic Compounds (VOC) Carbon Monoxide (CO) 100 tpy Lead (Pb) 0.6 tpy Fluorides 3 tpy Sulfuric Acid Mist 7 tpy Hydrogen Sulfide (H2S) 10 tpy Total Reduced Sulfur (TRS) Any increase resulting in a > 1 µg/m3 24 hour concentration if the source is within 10 km of a Class I area FINAL PRESENTATION 1-24-05

Determining PSD Applicability Review and define the entire project (i.e., new/modified equipment and affected equipment) What project is being proposed? What new equipment will be added? Is the project part of previous changes? Is the project part of future changes? Will the operation or emissions from other facility emissions units be affected by the change (i.e., de- bottlenecking)? Will existing equipment be changed/removed? FINAL PRESENTATION 1-24-05

Determining PSD Applicability If the proposed change does not affect other emissions units or if the affected emissions units do not emit regulated PSD pollutants: The project is limited to the change only If the proposed change affects other emissions units: The project will include both the change and the equipment affected by the change FINAL PRESENTATION 1-24-05

Determining PSD Applicability Evaluate the project-related emissions Determine whether the project by itself (i.e., emissions from new or modified emissions unit plus incremental changes in emissions from affected units) will emit regulated PSD pollutants Determine baseline actual emissions Determine potential emissions increase following the modification Determine the project-related emissions from new, modified and affected emissions units FINAL PRESENTATION 1-24-05

Determining PSD Applicability Evaluate the “project” emissions to determine if the project is a major modification using the “actual to potential test” Actual emissions = average emissions (tpy) over 2 years preceding the project Fugitive emissions must be quantified for 28 listed source categories Potential emissions = PTE of the project (tpy) Project potential emissions include PTE of new/modified sources and incremental increases at affected sources Potential emissions minus actual emissions = project emission increase FINAL PRESENTATION 1-24-05

Determining PSD Applicability If project emission increases are not significant, the project does not trigger PSD If project emission increases are significant, evaluate “contemporaneous” changes in emissions Contemporaneous changes are site-wide increases or decreases in actual emissions that have occurred at the site in the 5 years preceding the project Determine whether the “net” change in emissions is significant FINAL PRESENTATION 1-24-05

PSD Permit Application Content Description of proposed project Summary of applicable requirements Emissions inventory Determination and defense of best available control technology (BACT) evaluation Air quality impact analyses Other Class II impacts analysis FINAL PRESENTATION 1-24-05

What is BACT? Any major stationary source or major modification subject to PSD must conduct an analysis to ensure the application of best available control technology (BACT) BACT is defined at 40 CFR 52.21(b)(12) BACT is fundamentally an emissions limitation FINAL PRESENTATION 1-24-05

BACT Applicability (40 CFR 52.21(j)) (2) A new major stationary source shall apply BACT for each PSD-regulated pollutant that it would have the potential to emit in significant amounts (3) A major modification shall apply BACT for each PSD-regulated pollutant for which it would result in a significant net emissions increase at the source. This requirement applies to each proposed emissions unit at which a net emissions increase in the pollutant would occur as a result of a physical change or change in the method of operation in the unit. FINAL PRESENTATION 1-24-05

NSR Revision - Background Why was NSR Revised? General industry concern over NSR regarding: Complicated applicability determinations Extended permit preparation and review timelines Volumes of precedent decisions, policy memos, and guidance documents pertaining to NSR NSR Revision discussions began in the early 1990’s EPA initially proposed changes in 1996 FINAL PRESENTATION 1-24-05

NSR Revision - Final Rules Most of the proposed Revisions were finalized and published in the Federal Register on December 31, 2002 Effective in delegated States March 3, 2003 SIP approved States have 3 years to incorporate revisions into SIP rules (Region 4 States are SIP approved) The Routine Maintenance, Repair, and Replacement (RMRR) Rule was Published in the Federal Register on October 27, 2003 FINAL PRESENTATION 1-24-05

NSR Revision - Final Rules How are the NSR Revisions characterized by EPA? “These changes are intended to provide greater regulatory certainty, administrative flexibility, and permit streamlining, while ensuring the current level of environmental protection and benefit derived from the program and, in certain respects, resulting in greater environmental protection.” FINAL PRESENTATION 1-24-05

Final NSR Revisions Revised Baseline Actual Emission Calculation Procedure New “Actual-to-Projected-Actual” Applicability Test Actuals Based Plantwide Applicability Limits (PALs) New “Clean Unit” Designation – Vacated June 2005 Pollution Control Project Exclusion – Vacated June 2005 Routine Maintenance, Repair, and Replacement (October 27, 2003)-Vacated FINAL PRESENTATION 1-24-05

Baseline Actual Emissions Revised Baseline Calculus for Non-Electric Utility Steam Generating Units (Non-EUSGUs) The facility may use the annual average emissions that occurred during any consecutive 24-month period in the past 10 years Emissions must be adjusted to reflect current emission factors/control requirements Baseline emissions cannot exceed applicable standards/limits FINAL PRESENTATION 1-24-05

Baseline Actual Emissions Revised Baseline Calculus for Non-Electric Utility Steam Generating Units (Non-EUSGUs) Adequate emissions data must be available All emissions units are subject to same 24-month period for a given pollutant Different 24-month periods may be used for different pollutants (Note: some state rules may require a common 24-month period) FINAL PRESENTATION 1-24-05

Actual-to-Projected-Actual Applicability Test New applicability determination option for all emissions units Baseline emissions are compared to projected actual emissions following the change Facility must project post change actual annual emissions by source for 5 years (10 years post change if change increases unit’s PTE or capacity) Emissions that the unit could accommodate pre-change may be excluded (i.e., demand exclusion) Facility must maintain records of actual annual emissions for 5 or 10 years, and report to regulatory authority if projection is exceeded FINAL PRESENTATION 1-24-05

Plantwide Applicability Limits What is a PAL? An annual, facility-wide, pollutant specific, emission limitation under which the facility can make any changes without triggering NSR for that pollutant PALs ,as defined in 40 CFR Part 52, are: Set using actual facility baseline emissions Pollutant-specific Issued for a 10-year term Renewable FINAL PRESENTATION 1-24-05

“Actuals” Plantwide Applicability Limits Who is eligible for an Actuals Plantwide Applicability Limit (PAL)? Existing major stationary sources that meet certain additional criteria How does a PAL benefit a major facility? Modifications under a PAL are not considered “major modifications” for the PAL pollutant Modifications do not have to be approved through the major NSR program Facility changes are not dictated by major NSR concerns FINAL PRESENTATION 1-24-05

“Actuals” PALs How does a facility obtain a PAL? Interested facilities must submit a complete permit application specifically requesting a PAL or PALs Minimum application requirements include: Listing of emissions units Size of emissions units (small, significant or major) All Federal/State applicable requirements Emission limits/work practice requirements Baseline actual emissions Supporting documentation FINAL PRESENTATION 1-24-05

“Actuals” PALs What type of application is required for a PAL? PALs must be established via a federally enforceable permit Minor NSR construction permit Major NSR permit (i.e., PSD permit) SIP-approved operating permit program Regulatory authority must provide opportunity for public participation 30-day public notice Opportunity for public comment FINAL PRESENTATION 1-24-05

“Actuals” PALs How are PAL levels established? Establish baseline emissions - select any consecutive 24-month period within the 10-year period preceding the PAL (5-year period for EUSGUs) Only one 24-month period may be used per pollutant Differing baseline periods may be used for different pollutants Identify all emissions units that were included in the baseline period Identify any emissions units constructed since the baseline period FINAL PRESENTATION 1-24-05

“Actuals” PALs How are PAL levels established? (cont.) For each emissions unit that existed during the baseline period: Calculate the average rate, in tons per year, at which each of the emissions units emitted the PAL pollutant Sum the baseline actual PAL pollutant emission rates of each emissions unit at the source Add an amount equal to the applicable significant level for the PAL pollutant FINAL PRESENTATION 1-24-05

“Actuals” PALs How are PAL levels established? (cont.) Subtract baseline PAL pollutant emissions associated with emissions units that have been permanently shut down since the baseline period Shutdowns of more than 2 years or that have resulted in the removal of the source from the State’s inventory are presumed to be permanent Add potential PAL pollutant emissions from units from which construction began after the baseline period FINAL PRESENTATION 1-24-05

“Actuals” PALs How are PAL levels established? (cont.) Baseline PAL pollutant emissions cannot exceed emission limits allowed by your permit or newly applicable requirements at the time the PAL is set Adjust baseline PAL pollutants to reflect applicable requirements since the baseline period RACT, NSPS, BACT, LAER, etc. FINAL PRESENTATION 1-24-05

“Actuals” PAL Example Surface coating facility with 7 emissions units defined as Units A through G PAL pollutant is VOC New State requirement in 1999 affected Unit D Unit F was permanently shut down in 2000 Unit G was added in 2004 Unit C allowable VOC is 60 tpy FINAL PRESENTATION 1-24-05

“Actuals” PAL Example Choose representative baseline period (1997-1998) Year Unit A Unit B Unit C Unit D Unit E Unit F Unit G Total Baseline 1995 52 10 50 199 19 54 384 --- 1996 46 12 200 23 51 1997 42 16 681 205 22 399 392 1998 45 15 651 201 394 397 1999 49 20 60 210 30 393 2000 55 21 59 395 2001 161 278 2002 44 18 671 162 2003 160 2004 17 621 40 180 1 Emissions in excess of 60 tons are subtracted from baseline FINAL PRESENTATION 1-24-05

“Actuals” PAL Example Correct Unit D for new applicable requirement (90% VOC control) and re-evaluate baseline periods Year Unit A Unit B Unit C Unit D Unit E Unit F Unit G Total Baseline 1995 52 10 50 20 19 54 205 --- 1996 46 12 23 51 204 1997 42 16 681 21 22 215 209 1998 45 15 651 213 214 1999 49 60 30 203 208 2000 55 59 206 2001 161 184 2002 44 18 671 162 2003 160 2004 17 621 40 200 180 A B 1 Emissions in excess of 60 tons are subtracted from baseline FINAL PRESENTATION 1-24-05

“Actuals” PAL Example Calculate PAL level - A Highest baseline = 214 tpy (1997/1998) Subtract Unit F baseline emissions (52 tons) = 162 tons Add PTE of new Unit G (40 tons) = 202 tons Add major modification threshold (40 tons) = 242 tons Evaluate Alternative Baseline Period - B Baseline = 205 tpy (1999/2000) Subtract Unit F baseline emissions (30 tons) = 175 tons Add PTE of new Unit G (40 tons) = 215 tons Add major modification threshold (40 tons) = 255 tons FINAL PRESENTATION 1-24-05

“Actuals” PAL Example Proposed VOC PAL = 255 tons Is a 255 tpy PAL viable? Recent actual emissions are well below baseline Abatement equipment was added to Unit D Facility plans to switch to powder and/or waterborne coatings on Units A and C within 5 years resulting in lower emissions A 255 tpy PAL is viable for this facility FINAL PRESENTATION 1-24-05

PAL Permits What does a PAL permit look like? PAL permits must include: Identification of PAL pollutant(s) and limits(s) PAL effective and expiration dates PAL renewal/transition provisions Requirement to include emissions from start-ups, shutdowns,and malfunctions in compliance calculations Requirement to comply with PAL expiration requirements FINAL PRESENTATION 1-24-05

PAL Permits PAL permits must include (continued) PAL calculation procedures Monitoring requirements Record retention requirements Reporting requirements Other “necessary” requirements FINAL PRESENTATION 1-24-05

PAL Permits How long are PALs and PAL permits good for? The effective period for a PAL is 10 years Can PALs be re-opened by the regulatory authority? Yes - mandatory reopening of PAL permits to: Correct errors Reduce PAL for creditable reductions Revise to reflect a PAL increase FINAL PRESENTATION 1-24-05

PAL Permits Do PALs/PAL permits expire? Yes – PALs/PAL permits not renewed expire at the end of their effective period (10 years) What happens if a PAL is allowed to expire? New emission limits are established Source proposes distribution of PAL emissions to each emissions unit that existed under the PAL The reviewing authority decides the ultimate distribution of PAL emissions to emissions units FINAL PRESENTATION 1-24-05

Emissions at PAL Expiration (tpy) PAL Permits PAL emissions are “distributed” to individual emissions units if the PAL expires Emissions Unit PAL Level (tons) Emissions at PAL Expiration (tpy) A   61.7 B 24.5 C   255 70.6 D 25.0 E 25.5 G 47.4 1 In this example, emissions were apportioned to individual emissions units at PAL expiration based on the distribution of emissions during the baseline period FINAL PRESENTATION 1-24-05

PAL Permits PAL Expiration Notes Compliance with new enforceable tpy limits is based on a 12-month rolling basis Required monitoring systems may be similar to those under PALs Compliance with a site-wide emissions “cap,” equivalent to the previous PAL, is required until a revised permit is issued Physical changes or changes in the method of operation are subject to major NSR if change is a major modification State or federal requirements (BACT, LAER, RACT, NSPS, etc.) remain applicable FINAL PRESENTATION 1-24-05

PAL Permits Are PALs adjusted when they are renewed? Yes – PALs are evaluated at renewal using the same process used to set the original PALs If the new PAL level is > or = 80% of existing PAL level, PAL may be reset at original level The reviewing authority has discretion in setting a new PAL level to : Be more representative of actual emissions Be in accordance with local air quality needs Accommodate anticipated economic growth Represent advances in air pollution control technology FINAL PRESENTATION 1-24-05

PAL Permits PAL renewal adjustment notes: The “new” PAL may not exceed the facility PTE New PAL cannot exceed original PAL level unless undergoing PAL modification (increase) procedure The PAL must reflect all requirements that became applicable during PAL term and that PAL was not adjusted for FINAL PRESENTATION 1-24-05

PAL Permits How can PAL levels be increased? An application for a PAL increase is required that: Identifies all emissions units contributing to the increase Demonstrates a PAL exceedance after inclusion of proposed new/modified emissions units and an assumption of current BACT equivalent controls on all units A major NSR permit is required for emissions units associated with the increase, regardless of the magnitude of the emissions increase Facility must comply with any resulting BACT/LAER requirements FINAL PRESENTATION 1-24-05

PAL Permits How is a higher PAL level established? The regulatory authority establishes a higher PAL level based on: The sum of the allowable emissions from new/modified emissions units - PLUS - The sum of the baseline actual emissions from all significant/major emissions units assuming BACT control - PLUS - The sum of baseline actual emissions from small emissions units The end result - the magnitude of the proposed increase is minimized by the potential PAL decreases by assuming BACT control on significant and major emissions units FINAL PRESENTATION 1-24-05

PAL Permits What type of monitoring requirements are specified in PAL permits? PAL general monitoring requirements specify that: PAL monitoring systems must be based on “sound science” Must meet “minimum legal requirements for admissibility in a judicial proceeding to enforce the PAL permit” Emissions must be quantifiable on an ongoing basis FINAL PRESENTATION 1-24-05

PAL Permits Acceptable PAL monitoring techniques include: Mass Balance Calculations For sources using paints, coatings, and solvents Continuous Emission Monitoring Systems (CEMS) Continuous Parameter Monitoring Systems (CPMS) Predictive Emission Monitoring Systems (PEMS) Emission Factors Alternative methods as approved by the administrator FINAL PRESENTATION 1-24-05

PAL Permits Mass Balance Calculations Requirements include: A demonstrated means to validate pollutant content in material(s) Assumption that emissions unit emits all of a pollutant if the pollutant cannot be accounted for The use of the highest value of a pollutant where a range of the pollutant content is published Mass balance calculations are acceptable and are widely used for activities using coatings or solvents FINAL PRESENTATION 1-24-05

PAL Permits Continuous Emission Monitoring Systems (CEMS) Requirements Systems must meet applicable Part 60, Appendix B Performance Specifications Systems must sample, analyze, record data once every 15 minutes of operation FINAL PRESENTATION 1-24-05

PAL Permits Continuous Parameter Monitoring Systems (CPMS) and Predictive Emission Monitoring Systems (PEMS) Requirements The CPMS/PEMS system must demonstrate a correlation between monitored parameters and PAL pollutant emissions across the range of unit operation The CPMS/PEMS system must sample, analyze, record data once every 15 minutes of operation FINAL PRESENTATION 1-24-05

PAL Permits Emission Factors Requirements If appropriate, factors must be adjusted for the uncertainty or limitations in the factor’s development Emissions units must operate within the range of the factor’s development If technically practicable, the emission factors for significant units must be re-validated within 6 months of the PAL permit issuance Unless reviewing agency determines that testing is not required FINAL PRESENTATION 1-24-05

PAL Permits How is missing monitoring data handled under a PAL? Sources must record and report maximum potential emissions without considering enforceable limitations or operating restrictions What happens when a source operates at non-correlated operating ranges? A default value representing the highest potential emissions must be established and used, or The source is deemed in violation when the unit is operating outside of a correlated parametric range FINAL PRESENTATION 1-24-05

PAL Permits Do emissions monitoring systems under a PAL ever have to be re-validated? Yes - data re-validation is required once every 5-years for all methods of monitoring Re-validation is accomplished by emission testing or or other scientifically valid means The PAL applicant may want to consider including a re-validation protocol with the PAL application addressing each type of monitoring and the proposed re-validation procedures FINAL PRESENTATION 1-24-05

PAL Permits How long must PAL related compliance records be retained? Records necessary to demonstrate compliance with the PAL regulations must be retained for five (5) years from the date of the record Other PAL related records must be retained for the duration of PAL plus 5 years PAL application PAL revision applications Annual Title V certifications FINAL PRESENTATION 1-24-05

PAL Permits Received multiple PAL applications under NSR Reforms Paper mill, chemical mfg., commercial printer/laminator, automobile assembly Others in development Is it right for your Facility? FINAL PRESENTATION 1-24-05

PSD-PALs What are PSD-PALs? A flexible permitting option that combines the permitting of a new major source or a major modification at an existing facility with an application for a PAL The PALs are based on a combination of baseline emissions and projected future actual emissions PSD-PALs are issued through a SIP approved NSR permitting program FINAL PRESENTATION 1-24-05

PSD-PALs There are currently two PSD-PALs in Region 4 Saturn Corporation - Spring Hill, Tennessee BMW – Greenville, South Carolina The PSD-PAL discussion is based predominantly on EPA Region 4 experience with these two sources FINAL PRESENTATION 1-24-05

PSD-PALs What type of facility is ideal for a PSD-PAL permit? Complex, well-controlled existing or new facilities with multiple, inter-dependant processes New facilities are excluded from NSR PAL rules Facilities subject to frequent changes with: A high potential to emit for one or more PSD regulated pollutants Well characterized emissions Effective monitoring systems Examples include automobile manufacturers, chemical manufacturers, and Kraft pulp mills These types of facilities are well represented in Region 4 FINAL PRESENTATION 1-24-05

PSD-PALs PSD-PAL Level equals: Baseline emissions from all unaffected emissions units (including shutdown sources where applicable) PLUS PTE from new or modified emissions units MINUS Baseline emissions from sources permanently shutdown FINAL PRESENTATION 1-24-05

Projected Actual at BACT PSD-PALs   Unit 1 Unit 2 Unit 3 Unit 4 Unit 51 Unit 61 Unit 72 Unit 82 Unit 92 Total Unaffected Affected Down New Corrected Year VOC (tons) VOC3 (tons) 1995 52 50 19 54 87 ---- 212 1996 46 20 23 51 85 205 1997 42 60 21 22 82 200 1998 45 58 88 206 1999 49 62 30 97 199 2000 55 68 90 195 2001 59 89 156 2002 44 67 18 154 2003 65 16 158 2004 17 92 Baseline N/A 21.5 93.5 197 Projected Actual at BACT 25 75 285 Last BACT 2005 1 Unit 5 shut down in late 2000, Unit 6 shut down in late 2004 2 Units 7, 8, and 9 are new units 3 Total corrected VOC excludes emissions from affected units FINAL PRESENTATION 1-24-05

PAL Contribution (tons) PSD-PALs Unit Status PAL Contribution (tons) 1 Unaffected 52 2 Affected 85 3 25 4 21.5 5 Shutdown 93.5 6 30 7 New 75 8 50 9   Total 482 Establish PAL Contributions Unaffected source baseline 73.5 tons New/affected sources 285 tpy Shut-down sources in baseline 123.5 tpy FINAL PRESENTATION 1-24-05

PSD-PALs Compute the PSD-PAL level: Baseline emissions from unaffected emissions units = 73.5 tons Baseline emissions from shutdown sources = 123.5 tons Projected actual emissions from new and affected sources = 285 tons Compute PAL 73.5 tons + 123.5 tons + 285 tons – 123.5 tons = 358.5 tons PAL LEVEL = 358.5 TONS PER ROLLING 12-MONTH PERIOD FINAL PRESENTATION 1-24-05

PSD-PALs Can PSD-PALs be written with “Flexibility” provisions? Yes - PSD-PALs may include flexibility provisions Flexibility provisions are those conditions that reduce the administrative “friction” - costs, time, delay, uncertainty, and risks experienced by sources and permitting authorities when implementing a permit or making certain changes under a permit Flexibility provisions are in addition to the inherent PAL benefits FINAL PRESENTATION 1-24-05

PSD-PALs What do flexible provisions include? Pre-approved NSR Ability to add new emissions units Ability to make physical changes or changes in the method of operation Certain requirements may be subsumed For example, compliance with PAL levels may be deemed to also be in compliance with: Individual BACT emission limits State SIP emission limits Flexibility provided in PSD-PAL permits is largely dependent upon regulatory authority policy and is generally negotiated FINAL PRESENTATION 1-24-05

PSD-PALs Flexible components must include safeguards Examples of safeguards include: BACT on all new units > significance level Minor source BACT or Best Available Technology (BAT) on all new units < significance level Streamlined “registration” and public notice for all new major units Requirement to operate and monitor air pollution control systems relied on for BACT Requirement to comply with NAAQS and PSD increments FINAL PRESENTATION 1-24-05

PSD-PALs What type of monitoring procedures are required under a PSD-PAL? In general, monitoring procedures that are equivalent to those required under an NSR “actuals” PAL Mass Balance Calculations Credible Emission Factors Continuous Emission Monitors (CEMs) Continuous Parameter Monitoring Systems (CPMS) Approved alternative monitoring methods FINAL PRESENTATION 1-24-05

PSD-PALs What level of air pollution control device monitoring is required? In general, air pollution control device monitoring and recordkeeping should be equivalent to CAM requirements Effective air pollution control device monitoring could be essential to flexibility provisions Compliance with unit specific BACT requirements is based on compliance with PAL limits BACT compliance is contingent upon proper operation of air pollution control equipment An effective monitoring system is therefore essential to BACT/PAL compliance FINAL PRESENTATION 1-24-05

PSD-PALs Emission calculation procedures The applicant should develop and propose emission calculation procedures to convert monitoring data to a mass emission basis Calculations should be based on sound scientific/engineering principles and should compute emissions (tons) on a monthly basis Monthly emissions (tons) are summed with the preceding 11 months worth of monthly data to demonstrate PAL compliance on t rolling 12-month basis Calculations should be replicable FINAL PRESENTATION 1-24-05

PSD-PALs A draft PSD-PAL permit is recommended as part of a PSD-PAL application Benefits of a draft permit in the application Starting point for negotiating conditions Clearly articulates source expectations and commitments Compresses regulatory agency review time Draft permit components include: PAL conditions Monitoring requirements Recordkeeping requirements Calculations Flexibility provisions FINAL PRESENTATION 1-24-05

Case Study A – Saturn PSD/PAL Overview of the PSD/PAL Permit for the Saturn Spring Hill, Tennessee Facility The Saturn facility is comprised of three business units: Body Systems - body panels, body fabrication and paint shop Vehicle Systems - vehicle interior systems and final vehicle assembly Powertrain - machining, engine assembly, and final dress Production of Saturn vehicles began in July of 1990 The original PSD permit had 54 separate permitted emissions units and 333 separate permit conditions FINAL PRESENTATION 1-24-05

Case Study A – Saturn PSD/PAL Planned facility changes for 2001 New vehicle assembly lines Modified coating lines/conveyor changes New engine machining/assembly operations New AA stamping press Overall facility production capacity increase from 360,000 to 595,350 vehicles per year FINAL PRESENTATION 1-24-05

Case Study A – Saturn PSD/PAL Critical facility air permitting issues: Initial projects triggered PSD applicability Facility projects are subject to frequent scope/schedule changes NSR Revision status was in a state of flux in 1999 Saturn air permit objectives: Obtain an innovative permit regardless of NSR Revision status Base flexible permit on the PAL concept Obtain allowable emissions adequate for 595,350 vehicles/yr or more Accommodate scope/schedule changes without triggering the need for a new permit Simplify compliance demonstration FINAL PRESENTATION 1-24-05

Case Study A – Saturn PSD/PAL Final air permitting concept: Innovative permit obtained through traditional PSD permitting process PSD permit with BACT levels combined to establish multi-pollutant PALs Streamlined monitoring and compliance determination Expedited treatment of additional new units Authorized changes to existing units provided PALs are not exceeded FINAL PRESENTATION 1-24-05

Case Study A – Saturn PSD/PAL PSD-PAL permit application Common PSD Components (BACT, modeling, etc.) Innovative Components Proposed PALs based on a combination of baseline and potential emissions for criteria pollutants Single emissions unit for all combustion related emissions Documentation of BACT equivalent technology for unaffected emissions units (e.g., clean units) Sample draft permit language incorporating proposed PALs and other innovative provisions Submitted application to TDEC in October 1999 Received final PSD/PAL permit in June 2000 FINAL PRESENTATION 1-24-05

Case Study A – Saturn PSD/PAL Emissions Summary, Tons/yr. a Previous allowable emissions represent conditions from Saturn’s original operating/construction permits and subsequent modifications. b Baseline actual is the average 1995/1996 annual emission rate c Net change represents the difference between baseline emission rates and PAL levels. The project triggered PSD review for VOC, NOx, and PM10. d Saturn utilizes natural gas as the sole fuel on-site. There are no provisions for alternative or back-up fuels. FINAL PRESENTATION 1-24-05

Case Study A – Saturn PSD/PAL Permit Innovations Operational Flexibility Pre-approved new “major” emissions units Registration and BACT requirement Saturn may begin construction when BACT is approved (i.e., 45 days) Pre-approved new “minor” emissions units Registration and mBACT requirement Saturn may begin construction when mBACT is approved (i.e., 30 days) Changes to existing emissions units do not require TDEC approval FINAL PRESENTATION 1-24-05

Case Study A – Saturn PSD/PAL Permit Innovations Clear monitoring and recordkeeping requirements Ability to increase PALs through the PSD permitting process Termination provision with return to “traditional” permit Streamlined compliance requirements FINAL PRESENTATION 1-24-05

Case Study A – Saturn PSD/PAL “Old” PSD Versus New PSD/PAL Conditions FINAL PRESENTATION 1-24-05

Case Study A – Saturn PSD/PAL Summary The PAL permit provides significant operational flexibility to Saturn within current regulatory bounds The permit streamlines compliance determinations for the facility, TDEC, and the public VOC emissions per vehicle produced has declined since PAL issuance The PSD/PAL permit has improved the environmental performance of the facility The original PAL permit limits and flexibility are retained in the Title V operating permit FINAL PRESENTATION 1-24-05

Case Study C – Non-attainment PAL Overview of a proposed PAL for an adhesive coating facility in Pennsylvania The facility includes boilers, reactor vessels, mixing and formulation, multiple adhesive coaters and dryers, and research and development facilities Facility emissions include VOC, PM10, HAPs, and products of combustion (NOx and CO) The facility is well controlled using a vent condenser and two existing regenerative thermal oxidizers to abate VOC and vHAP emissions FINAL PRESENTATION 1-24-05

Case Study C – Non-attainment PAL Critical facility air permitting issues: NSR Revisions became effective in March 2003 for attainment pollutants The facility is located in an area classified as moderately non-attainment for ozone due to its location in the Northeast Ozone Transport Region Permitting timelines and redundant NSR applicability analyses Projects “in the pipeline” that include expedited installation schedules FINAL PRESENTATION 1-24-05

Case Study C – Non-attainment PAL Final air permitting concept: Acquire a VOC PAL through the Pennsylvania minor NSR program Since facility is well controlled, use the 40 ton major NSR modification threshold to establish a VOC PAL Ensure expedited state review and approval of facility modifications by eliminating required non-attainment NSR applicability determinations Allow the facility to decide where and how VOC emissions are controlled within the facility in accordance with Pennsylvania Best Available Technology (BAT) requirements FINAL PRESENTATION 1-24-05

Case Study C – Non-attainment PAL Minor Pennsylvania NSR permit application BAT analysis not required since no emissions units were being modified Emissions inventory Baseline calculation - PA PAL policy requires the use of the most recent two calendar years to develop baseline emission rates or an alternative two year period within the past five year if the most recent two years is not representative PAL calculation - The PAL was established by adding an amount slightly less than the major modification threshold (i.e., 39 tons for VOC) to the baseline minus allowable emission increases since 1991 FINAL PRESENTATION 1-24-05

Case Study C – Non-attainment PAL Non-attainment VOC PAL Calculation Calculation Steps Emissions (tpy) 2002 Calendar Year Actual Emissions (from emissions statement) 25.06 2003 Calendar Year Actual Emissions (from emissions statement) 21.91 Two-year average baseline emissions 23.49 ADD - Moderate Non-attainment major modification threshold (- 0.5 tons) 39.5 SUBTRACT - Allowable increases in VOC since 1991 (0.79) PROPOSED NON-ATTAINMENT VOC PAL 62.6 FINAL PRESENTATION 1-24-05

Case Study C – Non-attainment PAL Innovative Components Proposed site wide VOC PAL set using baseline VOC emissions plus adjusted NSR major modification threshold The facility is well controlled and the VOC PAL provides a considerable growth cushion For this facility, the ability to manage growth internally via a VOC PAL is sufficiently innovative Submitted application in October 2004 A proposed draft permit is currently under review by DEP and the facility FINAL PRESENTATION 1-24-05