New permitting requirements for sources in Indian country

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Courtesy of Trinity Consultants

In a June 10, 2011 signed rule (published in the Federal Register (FR) on July 1, 2011) , EPA finalized a Federal Implementation Plan (FIP) for “Review of New Sources and Modifications in Indian Country.” The rules, originally proposed by EPA on August 21, 2006, establish a minor New Source Review (NSR) program (minor preconstruction permits) and a major nonattainment NSR program for sources of air emissions located in Indian country.

Background
Sources located in Indian country have historically not fallen under the jurisdiction of requirements in the State Implementation Plans (SIP) approved by EPA for their states.1 While tribes have the authority to develop a Tribal Implementation Plan (TIP) to regulate air sources, very few have chosen to do so. As a result, most sources in Indian country have only been subject to Federal air quality rules such as New Source Performance Standards (NSPS), Maximum Achievable Control Technology (MACT), Title V, and Prevention of Significant Deterioration (PSD).

For minor sources, this situation often resulted in less stringent emission limits than in neighboring state-regulated lands, and no preconstruction approval process. However, it also led to some unique problems for sources located in Indian country. For example, sources regulated by state minor NSR programs can take synthetic minor permit limits to avoid permitting programs such as Title V and PSD, while a comparable source in Indian country could not. The only permitting processes under which a synthetic minor limit could be issued for a source in Indian country were Title V or PSD, which were usually the very permitting processes that the source was hoping to avoid through systematic minor limits. In 1999, EPA remedied the situation for smaller sources by issuing a policy memo to allow minor sources in Indian country, with actual emissions less than 50 percent of the relevant major source thresholds, to be considered synthetic minor sources without needing to obtain synthetic minor permit limits. The new June 10, 2011 rules rescind the 1999 guidance, and requires sources that have depended on that guidance to apply for synthetic minor permits.

Over the years, EPA has issued several other FIPs, fairly narrow in scope, to fill some of the gaps in regulation on sources in Indian country. One of the most significant is the Federal Air Rule for Reservations (FARR), issued in 2005, which established emission standards and a synthetic minor permitting process for sources in Indian country in Idaho, Oregon, and Washington.

The new regulations, signed June 10, 2011, will apply to sources in Indian country throughout the United States, except for those areas where a TIP is in place. The regulations establish the following programs:

  • Minor NSR program to provide preconstruction review for new and modified minor sources and for minor modifications at major sources. These permits will also provide a route for sources to adopt synthetic minor limits and case-by-case MACT limitations.
  • Major NSR permitting program for nonattainment pollutants

Requirements and Timelines for Different Source Types

There are several categories of sources in Indian country, each with its own requirements and timelines.

  • True minor sources (with potential to emit less than major source thresholds without synthetic minor limits) must register with EPA by March 1, 2013 for existing sources and within 90 days of beginning operation for new sources. The minor NSR preconstruction permitting program will begin applying to changes at true minor sources six months after a general permit is issued for the source type, or September 2, 2014, whichever is earlier.
  • Synthetic minor source requirements depend on how the synthetic minor status was obtained. Sources that are synthetic minors under limits established through the FARR rule in Washington, Oregon, and Idaho do not require any new permitting to maintain synthetic minor status. Synthetic minor sources based on coverage under EPA’s now-rescinded 1999 synthetic minor policy must apply for a synthetic minor permit by September 4, 2012. The minor NSR permit program applies to changes at all synthetic minor sources beginning August 30, 2011.
  • Major sources must address minor NSR permitting requirements beginning 60 days after publication of the rule in the FR.

Minor Source Thresholds
True minor sources in Indian country are subject to registration requirements if the source has potential emissions greater than the minor source thresholds shown in Table 1. As described later in this article, these thresholds are also used for determining whether a change at a source requires a minor NSR permit. Fugitive emissions are only considered in the calculation for comparison to these thresholds at sources in the “list of 28” source categories that must count fugitive emissions for major source determinations under the PSD and Title V programs.

Minor NSR Permits Applicability
Construction projects that are major sources or major modifications under the PSD or nonattainment NSR programs must follow the permitting rules of those programs. Otherwise, applicability of the new minor NSR preconstruction permitting program, and the calculation used to determine the emission increase from the source, will depend on the status of the source prior to the new construction.

  • For a new source, the potential to emit of the source is compared to the minor source threshold for each pollutant. The project requires a minor NSR permit covering those pollutants with potential emissions greater than the minor source threshold.
  • For an existing major source, the baseline actual to projected actual emissions increase (the same methodology used for determining major NSR applicability) is compared to the minor source threshold for each pollutant. If the increase is greater than the minor source thresholds for any pollutants, the project requires a minor NSR permit for those pollutants.
  • For an existing minor source, the increase in allowable emissions of all new, modified, and replaced equipment is compared to the minor source threshold. For this calculation, any reductions in emissions at a unit are not counted. If the resulting increase in emissions is greater than the minor source thresholds for any pollutants, the project requires a minor NSR permit for those pollutants.

The rule provides only a very narrowly-focused list of seven categorical exemptions from permit requirements.

Minor NSR Permit Requirements
Minor NSR permits will focus only on the new or modified processes triggering the permitting event. The permit application review will consist of a control technology review and an air quality impacts analysis. The minor NSR program adopts a particularly ambiguous standard for the control technology review. The assessment is based on the following criteria:

  • Local air quality conditions
  • Typical control technology used by similar sources in surrounding areas
  • Anticipated economic growth in the area
  • Cost-effective emission reduction alternative

The vague criteria of the control technology review may be problematic for sources seeking a permit in Indian country. For example, the typical control technology used by similar sources in surrounding areas may be difficult to assess for sources located near the boundary of states that have significantly different standards in their state minor NSR programs, creating much uncertainty over what level of standard should apply in Indian country.

For the air quality impact requirements under the rule, EPA may require the applicant to submit a dispersion modeling analysis to assess impacts on the National Ambient Air Quality Standards (NAAQS) and PSD Increments. In the preamble to the rule, EPA indicated that it intends to develop guidance on the scope of the air quality analysis, and for determining when a modeling analysis will be required.

The new minor NSR rules also allow for EPA to issue general permits for common types of sources in Indian country. Sources that meet the qualifications for a particular general permit would have the option to sign onto the general permit and meet its generic emission limits and requirements instead of following the standard permitting process. To date, no general permits have been developed yet by EPA.

Minor NSR Permit Processing
The timeline for processing a minor NSR permit application depends on the permittig activity.

  • Minor sources seeking a source-specific permit (i.e., not a general permit) have a 45-day application completeness review and a 30 day public comment period. The regulations call for the permit to be granted or denied within 135 days after the application is deemed complete.
  • Minor sources seeking coverage under a general permit have a 45-day application completeness review, but no public comment period (since the public had opportunity to comment on the general permit when it was developed by EPA). The regulations call for the permit to be granted or denied within 90 days of the request for coverage under a general permit.
  • Minor modifications at major sources have a 60-day application completeness review and a 30 day public comment period. The regulations call for the permit to be granted or denied within one year after the application is deemed complete.
  • Synthetic minor permits have a 60-day application completeness review and a 30-day public comment period. The regulations call for the permit to be granted or denied within one year after the application is deemed complete.

Permits become effective 30 days after notice of the approval decision is provided by EPA.

Sources planning projects in Indian country should note that the maximum permit timelines at major sources and for synthetic minor permits (i.e., one year after the completeness determination) are much longer than the timelines in place for most state minor NSR programs. Additionally, sources will be receiving permits from EPA regional offices, which have limited experience issuing such permits. These factors will require sources seeking minor permits to begin the permitting process early and to engage closely with EPA permit writers to ensure that their applications get timely attention.

Major NSR Program for Nonattainment Area
In addition to the minor NSR program, EPA also finalized the major NSR program for nonattainment areas in Indian country. The nonattainment major NSR program for Indian country does not establish an altogether new permitting process, but instead extends the nonattainment NSR requirements of 40 CFR 51 Appendix S (“Emission Offset Interpretative Ruling”) to nonattainment areas in Indian country. Appendix S has historically applied to nonattainment areas where a state does not have an EPA-approved nonattainment major NSR program, until the time that the state amends its SIP to include a state-specific program. Now, Appendix S will also apply to nonattainment areas in Indian country unless a tribe develops a major NSR program as part of an approved TIP.

The Appendix S major NSR program for nonattainment areas includes the following requirements:

  • Lowest Achievable Emission Rate (LAER) emission control technology
  • Certification that all existing major sources owned or operated by the applicant in the same state as the proposed source are in compliance with applicable provisions of the Clean Air Act
  • Emission offsets and a demonstration that the offsets provide a net air quality benefit in the affected area
  • Analysis of alternative sites, sizes, production processes, and environmental control techniques

Conclusion

The new rules for “Review of New Sources and Modifications in Indian Country” will present a major shift in how sources located in Indian country are regulated. Any source planning smaller permitting projects in Indian country that previously would not have required a preconstruction permit now must evaluate whether a minor NSR permit is needed, and plan for the relatively long permitting timelines that may be involved with obtaining the permit.

True minor sources that have had few, if any, air quality requirements will now be subject to registration requirements. Also, synthetic minor sources that have benefitted from EPA’s 1999 synthetic minor policy guidance must apply for a synthetic minor permit.

The rule also provides some possible benefits to sources in Indian country. Sources will now have a process available to establish synthetic minor limits. Current major sources should review their permitting status to determine whether it would be advantageous to opt out of their Title V permit through a synthetic minor permit. Additionally, sources will now be able to obtain synthetic minor limits for hazardous air pollutants to avoid stringent upcoming MACT requirements such as those associated with the Boiler MACT.

1'Indian country' is a legal term defined in 18 U.S.C. 1151 to mean: '(a) all land within the limits of any Indian reservation under the jurisdiction of the United States Government, notwithstanding the issuance of any patent, and, including rights-of-way running through the reservation, (b) all dependent Indian communities within the borders of the United States whether within the original or subsequently acquired territory thereof, and whether within or without the limits of a state, and (c) all Indian allotments, the Indian titles to which have not been extinguished, including rights-of-way running through the same.'

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