EPA shifts PM2.5 PSD permitting policies

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Courtesy of Trinity Consultants

On August 12, 2009, EPA created a significant stir in the regulated community when it issued an order that signals a significant shift in how the agency intends particulate matter with a diameter less than 2.5 micrometers (PM2.5) emissions to be regulated under the Prevention of Significant Deterioration (PSD) program. The order specifically applied to petitions filed by environmental groups requesting that EPA object to PSD/Title V permits issued by the Kentucky Division for Air Quality (KDAQ) to Louisville Gas and Electric Company (LG&E) for construction and operation of a new coal-fired electric generating unit (EGU) at the Trimble County Generating Station located in Bedford (Trimble County), Kentucky.

The order contains responses to 13 distinct items ranging in scope from failure to address greenhouse gases in the permit to the inadequacy of the public participation procedures. Of the issues raised by the petitioners, EPA only granted the petition and objected to the permit on two issues, one of which was the failure of the permit to adequately consider PM2.5. EPA agreed with the petitioners that LG&E did not provide sufficient justification that it could meet its obligations for PM2.5 under the PSD program by using particulate matter with a diameter less than 10 micrometers (PM10) as a surrogate. This determination has far reaching implications for other PSD projects as it is not consistent with the way that EPA’s PM10 surrogate policy has been applied for more than a decade.

History of the PM10 Surrogate Policy
The origin of the PM10 Surrogate Policy is a 1997 memorandum from John Seitz, who at the time served as the Director of the U.S. EPA Office of Air Quality Planning & Standards. In this memo, EPA’s justification for using PM10 as a surrogate for PM2.5 was that permitting authorities were not able to accurately calculate emissions of PM2.5 and related precursors or to predict PM2.5 ambient air quality impacts from projects. In May 2008, EPA issued a Federal Register notice for the final PM2.5 NSR Implementation Rule, in which it declared that the difficulties discussed in the 1997 Surrogate Policy “have been largely resolved.” However, rather than requiring states with SIP-approved PSD programs to immediately begin regulating PM2.5, EPA established a transition period under which states with SIP-approved programs must submit revised PSD programs by May 16, 2011. In the meantime, the NSR Implementation Rule stated that “PSD program requirements [for PM2.5] are currently met by implementing the transitional PSD program for PM2.5 described in the preamble (a.k.a. the PM10 surrogate policy)”.

Prior to issuance of the Trimble Order, EPA defended the use of PM10 as a surrogate for PM2.5 without the additional justification they required in the Trimble Order. Therefore, the Trimble Order is a shift from EPA’s long-defended policy that allowed use of PM10 as a standard surrogate for PM2.5 for the purpose of PSD review without detailed site-specific justification by the applicant.

PM10 as a Surrogate for PM2.5 in BACT Analyses
In the Trimble Order, EPA states that case law on the topic of surrogates suggests that “any person attempting to show that PM10 is a reasonable surrogate for PM2.5 would need to address the differences between PM10 and PM2.5” and identifies an example two-step approach for conducting an evaluation of these differences (the cited case law is, however, based on litigation of regulations that predates the PM2.5 NSR Implementation Rule and that is derived from other sections of the CAA and not the CAA section addressing PSD). Step 1 in EPA’s example approach states that the permittee or permitting authority should establish a strong statistical relationship between PM10 and PM2.5 emissions (both on a controlled and uncontrolled basis) from each subject unit, giving reasonable consideration to the likelihood that the PM2.5 to PM10 ratio may vary over the anticipated range of operating conditions for the process and control equipment. In step 2, the permittee or permitting authority should demonstrate that the control technology selected as BACT for PM10 would offer an equivalent control effectiveness for PM2.5 to the technology that would be selected if a separate PM2.5 BACT analysis were conducted for each subject unit.

After presenting these methods for demonstrating the adequacy of PM10 as a surrogate for PM2.5, EPA states that the two identified steps “are not intended to be the exclusive list of possible demonstrations that a source or permitting authority would make to show that PM10 is a reasonable surrogate for PM2.5,” and goes on to caution permitting authorities to consider the limitations of the PM10 surrogate policy on a case-by-case basis considering the case law and the information available in the permit record.

An even more restrictive approach concerning the surrogate policy was suggested by EPA Region 7 in a July 1, 2009 letter to the Kansas Department of Health and Environment. Commenting on a PSD permit application that was expected to be submitted by Sunflower Electric Power Corporation for its Holcomb Power Plant, EPA Region 7 recommended that part of the BACT analysis in the permit application include an evaluation of PM2.5 emissions instead of relying on PM10 emissions as a surrogate. Even before the Trimble Order was issued, EPA Region 7 had in effect advised Kansas to abandon the surrogate policy altogether.

What About PM2.5 Modeling?
The Trimble Order fails to clarify how the use of PM10 as a surrogate should be addressed with respect to PSD air quality modeling analyses, leaving many questions open about how this demonstration would be completed, or in the alternative, how a PM2.5 modeling analysis would be conducted. At present, EPA has not promulgated final PSD Increments or Significant Impact Levels (SILs) for PM2.5 nor is there consensus about how to address direct versus condensable PM2.5 emissions and secondary atmospheric reactions that lead to PM2.5 formation.

One approach that could be considered for certain projects is to model only direct total PM2.5 emissions (i.e., filterable PM2.5 and condensable PM) from project-related emissions increases and compare the concentrations with the proposed SILs for PM2.5. If the resulting concentrations are less than the proposed SILs, then the applicant could argue that PM2.5 impacts froma project would be insignificant and the surrogate policy is justified with respect to dispersion modeling. If the near-field modeling analysis also shows that PM10 impacts from a project are below the SILs for PM10, the use of PM10 as a surrogate could be further justified because both PM10 and PM2.5 concentrations would be shown to be insignificant for the project. However, the PM2.5 SILs proposed by EPA in a September 21, 2007 Federal Register notice range from 1.2 μg/m3 to 5.0 μg/m3 for the 24-hour average standard and from 0.3 μg/m3 to 1.0 μg/m3 for the annual average standard. Therefore, even if this approach was attempted, it is not clear what concentration should be used to define a project’s ambient impacts as insignificant

Retroactive Application of the Updated Policy
Although the scope of the Trimble Order is limited to a single project in Kentucky, and a Title V Order is not the typical legal avenue for issuing NSR implementation guidance, EPA Region 4 issued guidance to State air agencies on September 1, 2009 encouraging them to review the Order and to ensure that the use of the PM10 surrogate policy is explicitly justified by the applicant or by the permitting authority in the Statement of Basis Report for PSD projects triggering review for PM10/PM2.5. A conference call between EPA and all 50 state agencies was also held on September 8, 2009 during which EPA expressed its opinion that the new procedure outlined in the Trimble Order should be followed.

Even more troubling is the fact that this policy is being applied retroactively to any pending PSD permit action, even if applications had already been submitted prior to the release of the Trimble Order.

Given the current lack of quality PM2.5 emissions data and a final unbiased reference test method for condensable PM, conducting a scientific evaluation of the PM2.5 to PM10 ratio for certain emission units under a range of operating conditions would be very difficult, making the implementation of EPA’s guidance in the Trimble Order unworkable. In these circumstances, facilities may have no choice but to embark on full PSD review of PM2.5 emissions including a BACT analysis and potentially a PM2.5 air quality impact analysis.

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