Permitting Strategies

Securing air permits can be a costly and time-consuming process. It is important to assess which permit requirements apply, opportunities to legally avoid them, how to go through the permit review quickly, and ideal permit conditions. The permit process is typically the time during which investment decisions for controls and operating conditions are made. Since one objective should be minimizing the need to revise a permit, these are important decisions.

Establishing a "Minor" Source Designation

The EPA has adopted a conservative approach for determining if a source is major. For example, a small backup generator or boiler may never emit more than 19 tpy of NOx, but has a PTE of more than 100 tpy. Figure 16-8 provides a representative example of the impact operating hours on annual NOx emissions. Assuming a 25 tpy target threshold, the parallel lines indicate allowable annual operating hours versus gas- and oil-fired boiler capacity with various levels of NOX control. This graphic highlights the relevance of differentiating between the PTE and actual emissions.

The EPA will lower its estimate of a source's PTE if the source is constrained by a federally enforceable limit on its operation. The equipment owner, for example, could request a permit limit on hours of operation or the amount of fuel used and keep the allowable emissions below the major threshold and avoid many complex requirements. Because of the importance of this legitimate route to limiting a source owner's obligations, the EPA and states are now developing mechanisms to establish what the EPA calls "synthetic minor" enforceable limits.

Netting Out of Federal NSR or MACT

Even if one has a major source and is modifying or expanding it, it is possible to "net out" of the key federal requirements. This is done by matching any increase in emissions with a creditable decrease within the same facility. Since the federal requirements are time consuming and expensive, at the outset of evaluating a project at a facility that is already major, it is important to explore what can be done to net out. Options include:

• Taking enforceable limits on the new or modified unit to limit its potential increase.

• Quantifying and receiving full credit for reductions due to equipment being removed or used less after the change. This may also require that the state sets enforceable limits on old units.

• Identifying voluntary controls for the new units or old units at the same site that can be made part of the overall project so that the project has no significant emissions increase.

As an example, if a large industrial facility, already major for NOX, were to seek a permit for a new boiler with potential emissions of 60 tpy in a Moderate ozone nonattainment area, LAER and offsets would likely be required. However, to ensure that no significant net increase would exist to trigger LAER and offsets, the permit applicant could:

• Switch an existing unit to a low-NOx fuel.

• Retrofit added NOx controls to existing units.

• Retire an existing NOx source at the same site.

• Limit the use of the new unit or an existing unit (hours, fuel use, emissions).

• Voluntarily install advanced controls on the new unit

Obtaining Offsets

If a facility goes through Federal major source nonat-tainment NSR, the permit applicant must provide offsetting emissions reductions. Finding and acquiring offsets can be very difficult. Assuming it is not possible to reduce

Fig. 16-8 Impact of Hours of Operation vs. Capacity on Actual Annual Emissions.

emissions at sources under the same ownership, there are generally three options:

1. Obtain the rights to "banked" reductions. Some states maintain emissions reduction banks where source owners who control or shutdown sources are allowed to preserve emissions reduction credits for future use. If the state has a bank, credits may exist in the bank. The owner has the right to set the price for those credits.

2. Conduct a private transaction. In areas without banks or where banked credits cannot be purchased economically, one must track down local source owners who may be willing to reduce emissions for a fee. The state must be involved in deciding how those reductions will be enforced and determine the amount of offsets that can be generated.

3. Obtain credits from the government. In some areas, to encourage new industry, states create a growth increment of allowable emissions in the state attainment plan. That increment is then available for the state to use to cover offset requirements for attractive new businesses or to maintain existing businesses.

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