1. New Ozone NAAQS Impacts: What Happens Next with a Lower O3 Standard? Nonattainment Designation and Industry’s Opportunity to Participate New Ozone NAAQS Impacts: What Happens Next with a Lower O3 Standard? Nonattainment Designation and Industry’s Opportunity to Participate Presented by: Thomas I Sullivan, P.E. Zephyr Environmental Corporation 512.879.6632 tsullivan@zephyrenv.com Presented to: IEEE-IAS/PCA Cement Industry Technical Conference May 18, 2016

2. Topics Summary of new 2015 O 3 NAAQS Potential consequences of 2015 O 3 NAAQS on cement plants Timeline for designation of new non- attainment areas and SIP changes Evaluation process for the potential designation of individual counties Techniques for developing arguments against nonattainment designation

3. 2015 Ozone NAAQS Previous (2008) O 3 NAAQS: 0.075 ppm (75 ppb) New (2015) Primary and Secondary O 3 NAAQS: 0.070 ppm (70 ppb) – Published in Federal Register on 10/26/2015 – Effective on 12/28/2015 – Codified at 40 CFR 50.19

4. Interpretation of O 3 Standards Ozone Data Conventions – Hourly O 3 concentration data reported in ppm to the 3rd decimal place, with additional digits truncated – Moving 8-hr averages are computed from the hourly data – 8-hr averages are reported in ppm to the 3rd decimal place, with additional digits truncated – A daily maximum 8-hr average is determined for each day Design Value – The design value is the 3-year average of the 4th highest daily maximum 8-hr concentration (same as previous standard) – Design values are reported in ppm to the 3rd decimal place, with additional digits truncated – Because of the truncation, the design value has to be 0.071 ppm (71 ppb) or higher to exceed the NAAQS

7. Potential Consequences of New 2015 O 3 NAAQS Nonattainment Designation and Classification based on monitor data Nonattainment Designation triggers: – Lowest Achievable Emission Rate (LAER) – Emission Offsets (depends on classification) From 1.1:1 up to 1.5:1 Nonattainment Classification determines the scope of additional requirements – SIP requirements may put potential limitations on future growth 2015 Ozone NAAQS Designations and Classification as early as 2017

8. Impacts Before Nonattainment Designation For counties where regulatory monitor data design value is currently above the 2015 standard: – No impact to Minor NSR projects – Ozone analysis potentially required for PSD projects – Additional exposure to Public Comments

9. PSD Ozone Analysis Requirement For air permit applications which trigger PSD for NO x and/or VOC, 40 CFR 52.21(m) requires: – Background ozone monitoring data; and – Air quality analysis as to whether NO x and/or VOC project emissions would cause or contribute to a violation of the ozone NAAQS 40 CFR 52.21(i)(5) provides exemption from ozone analysis for projects with net emissions increase of less than 100 tons/yr of both VOC and NO x – There were no changes by EPA to the 100 ton/yr NO x and VOC exemption level in the 10/26/2015 final rules – The final rule stated that the EPA is currently considering development of a SIL for O 3 through either guidance or a rulemaking process

10. Estimated Timeline for Designation of Nonattainment Areas and SIP Changes October 1, 2015Consent decree deadline for final NAAQS October 1, 2016State designation recommendations due to the EPA June 2017EPA sends letter to states with proposed nonattainment area designations (120 days prior to final) October 2017EPA to sign (finalize) designations and classifications October 2017EPA to finalize implementation rule October 2020-2021State Implementation Plans (SIP) due

11. Evaluation Process for the Potential Designation of Individual Counties In determining the ozone nonattainment designations, a county will be designated nonattainment if it is either: – Violating the 2015 NAAQS based on data from the regulatory ozone monitor in that county; or – Contributing to a violation of the 2015 NAAQS in a nearby county with a monitored violation of the NAAQS. Violation of the 2015 ozone NAAQS is based on ozone monitoring data, which is based on a three-year average of the 4th highest daily peak 8-hr ozone measurements for at least one monitor that exceeds 70 ppb. This value is referred to as the “design value” and will likely be based on the 2016 design value (2014-16). The default geographic boundaries for a nonattainment area designation are typically those counties within the Core Based Statistical Area (CBSA) or Combined Statistical Area (which includes two or more adjacent CBSAs).

12. Evaluation Process for the Potential Designation of Nearby Counties According to 2015 ozone area designation guidance from the EPA, the following factors are considered (using a “weight-of- evidence approach”) in whether to add or remove counties from the default geographic boundaries of the nonattainment areas: –Air Quality Data; –Emissions and Emissions-Related Data –Meteorology; –Geography/topography; and –Jurisdictional boundaries;

13. Evaluation Process for the Potential Designation of Nearby Counties Air Quality Data; –Current and historical measured ozone concentrations and design values; –NOx and VOC emissions and emissions-related data (NOx and VOC are considered “ozone precursors”, as ground level ozone is formed from photochemical reactions involving NOx and VOC emissions); Emissions and Emissions-Related Data; –Level of control of emission sources; –Correct estimations of NOx & VOC (ozone precursor) emissions; –Contributions of emissions by source type (mobile and stationary sources); –Population density and degree of urbanization; –Traffic and commuting patterns, and growth rates and patterns; Meteorology; –Assess potential source-receptor relationships on high ozone days using wind speed and direction (HYSPLIT Model); Geography/topography; –Such as mountain ranges and valleys which affects long-range transport; Jurisdictional boundaries –Counties, air districts, areas of Indian country, metropolitan planning organizations

14. Techniques for Developing Arguments Against County Inclusion Work with strategic partners such as other interested parties and potentially regional councils of government Review historical monitoring data and emissions inventories for trends Review meteorological data during the ozone NAAQS exceedances Document enforceable emission reductions for sources in your county (NSPS, NESHAP, state regs, permit conditions) Review other county designations for similarities

15. Determine if you are in a county that may be affected Look for strategic partners or other groups already working on the issue Determine what your state designation recommendations to the EPA will be (due October 2016) and see if you can participate in the discussion prior to submittal Be ready to potentially respond to EPA proposed nonattainment area designations in June 2017 Summary