SCS Engineers Technical Bulletin: Understanding EPA’s Proposal to Provide States Greater Flexibility in Minor New Source Review (NSR) Public Participation Requirements
Executive Brief
This bulletin discusses EPA’s proposed changes to the federal minimum public participation requirements for minor NSR permitting programs and, more importantly, what those changes could mean for future project planning, permitting strategy, and plant or facility operations.
Why Should Management Care?
When I first reviewed EPA’s proposed rule, my initial reaction was that it appeared to be a relatively minor procedural change. The proposal does not change emission limits, modify permitting thresholds, or expand the applicability of the minor NSR program.
The more I thought about it, however, the more I realized this proposal is not really about public notice. It is about project planning. One lesson I have learned over the years is that permitting often becomes part of the project’s critical path. Delays in obtaining a permit can affect equipment procurement, construction schedules, startup dates, and ultimately project costs. That is why this proposal caught my attention; recognizing this helps management be in control and reassured about project timelines.
If EPA finalizes the rule, states and local air agencies—not EPA—will decide whether public notice and comment remain part of their minor NSR permitting programs. Some states may choose not to revise their permitting programs if their existing requirements already meet or exceed EPA’s minimum requirements.
The proposal itself does not shorten permitting schedules. Whether permitting becomes more efficient will depend on how individual states respond. For now, management should continue planning projects in accordance with today’s permitting requirements while monitoring future developments.
Questions Management Should Be Asking
Rather than asking whether EPA is changing the rule, I think management should be asking different questions.
Those are the questions and aims that will determine whether this proposal has any practical business value.
Plant Environmental and Compliance Perspective
From the perspective of the plant environmental manager, very little has changed today.
Permit applications currently being prepared should continue following existing state and local permitting requirements. Existing project schedules should not be modified in response to a proposed federal rule. However, environmental managers have an opportunity to begin discussing with plant management how this proposal could affect future projects. For example, if their state ultimately revises its permitting program, eliminating or reducing public notice requirements for certain minor NSR permits could shorten one step in the permitting process. Whether this ultimately saves a few days or several weeks will depend on how each state implements the final rule and how much time public participation currently adds to its permitting process.
One question I would expect from management is: “If EPA finalizes this proposal, could our next project move through permitting more quickly?”
Today, the honest answer is, “We do not know yet.”
That answer will depend on whether your state decides to revise its own permitting program. Environmental managers should continue to monitor the EPA’s rulemaking and future actions by their state or local permitting authority. They should also begin evaluating how any changes could affect their facility’s or plant’s permitting strategy, project schedules, and coordination with the permitting agency. As with many permitting issues, the most effective strategy will vary by state and by project.
Background
Current federal regulations require approved state minor NSR programs to include minimum public participation procedures before certain permitting actions are finalized. EPA is proposing to remove that federal minimum requirement. Importantly, EPA is not proposing to eliminate public participation nationwide. Instead, EPA is proposing to allow each state or local permitting authority to determine whether public notice and comment remain appropriate for its own permitting program.
This distinction is important because the proposal does not automatically change permitting procedures nationwide.
Strategic Considerations
The more interesting question is not whether the EPA finalizes this proposal. The more interesting question is what the states do next. Some states may conclude that their current permitting process works well and decide not to make any changes. Others may view this proposal as an opportunity to streamline routine permitting actions.
As someone who has worked with state permitting agencies for many years, I expect there will be a variety of responses rather than a single nationwide approach. Companies operating in multiple states already know that permitting requirements vary from state to state. If EPA finalizes this proposal, public participation could become another area where those differences exist. That is why facilities should continue to work closely with their permitting professionals and plan projects based on each state’s requirements rather than assuming a common national approach.
The SCS Engineers Perspective
One mistake I occasionally see is companies assuming that a proposed federal rule immediately changes how permits are issued. That is rarely the case. Even if EPA finalizes this proposal, many states would still need to determine whether changes to their own regulations are appropriate. Some may revise their permitting programs, while others may not.
From my perspective, facilities should continue planning projects in accordance with today’s permitting requirements. The proposal is worth watching—not because it changes permitting today—but because it may influence how permitting is administered several years from now. That is where the real business impact may occur.
For more information about EPA’s proposed rule, visit https://www.epa.gov/nsr.
For specific guidance or questions, please get in touch with SCS Engineers for an expert in your state, or the Author, John Tsun. John Tsun is a Project Director and SCS’s National Practice Leader for Industrial Clean Air Act (CAA) Services, with more than 35 years of experience leading complex environmental compliance projects. His background spans a wide range of industrial sectors, including petroleum, pharmaceutical, chemical, power generation, manufacturing, and government agencies.
REPRINT OF USEPA PRESS RELEASE
WASHINGTON (Dec. 3, 2019) — Today, the U.S. Environmental Protection Agency (EPA) is announcing several actions to clarify and improve New Source Review (NSR) permitting requirements. These Clean Air Act actions are part of a suite of measures EPA is taking to modernize and streamline the NSR process, without impeding the Agency’s ongoing efforts to maintain and enhance the nation’s air quality. These actions will improve regulatory certainty and remove unnecessary obstacles to projects aiming to improve the reliability, efficiency, and safety of facilities while maintaining air quality standards.
“NSR reforms are a key component of President Trump’s agenda to revitalize American manufacturing and grow our economy while continuing to protect and improve the environment,” said EPA Administrator Andrew Wheeler. “NSR regularly discouraged companies from investing in and deploying the cleanest and most efficient technologies. Through the Trump Administration’s efforts, EPA is providing clarity to permitting requirements, improving the overall process, and incentivizing investments in the latest energy technologies.”
“For too long, New Source Review permitting requirements stifled job creation, hampered innovation and slowed the ability to modernize critical energy infrastructure. Worse, in previous administrations, the permits were weaponized, so liberal activists could delay key projects,” said U.S. Senator Jim Inhofe (OK). “New Source Review hasn’t been updated in over four decades—making it hard to integrate new technologies into our energy infrastructure. I’ve worked for years to modernize the review process, and applaud today’s action by President Trump and Administrator Wheeler to streamline the NSR permitting process.”
“One of my consistent frustrations with New Source Review is what seems to be a perverse incentive away from innovation. Thank you to Administrator Wheeler and the Trump Administration for recognizing this and finalizing these positive reforms,” said U.S. Senator Kevin Cramer (ND). “The EPA’s actions provide certainty while restoring the proper scope of the Clean Air Act.”
“I applaud the EPA for taking further steps to reform the New Source Review permitting program. NSR’s burdensome process can impede upgrades that would actually increase efficiency and improve air quality. The EPA is moving toward a better NSR program that streamlines the process without sacrificing environmental protections,” said U.S. Representative Morgan Griffith (VA-09).
“I applaud Administrator Wheeler for implementing a strong regulatory reform agenda at the EPA. Today’s actions are a solid first step in the right direction to reform the NSR permitting program. I look forward to continue working with the Trump Administration to further reform NSR and allow America’s industry to make their units more reliable and efficient, while maintaining strong environmental standards,” said U.S. Representative Andy Biggs (AZ-05).
“President Donald Trump continues to deliver on his promise to cut burdensome regulations that strangle American manufacturing and energy development. These improvements to the New Source Review (NSR) permitting requirements will protect our air quality, while incentivizing businesses to grow and expand. I look forward to continuing to work with President Trump and Administrator Wheeler to cut needless regulations and create American jobs,” said U.S. Representative Alex X. Mooney (WV-02).
“This Administration is clearing the path for manufacturers to invest in more energy efficient technologies that conserve energy, reduce emissions, and keep U.S. manufacturers competitive,” said Portland Cement Association President and CEO Mike Ireland. “For energy-intensive industries like cement, strategic investment in energy efficiency and emissions reduction are key components of any long-term climate and sustainability strategy, and EPA’s New Source Review reforms announced today help unlock new opportunities for sustainable operation.”
Final Guidance: Revised Policy on Exclusions from “Ambient Air”
After considering public comments, EPA is issuing final guidance, identifying the sort of measures which EPA may take account of in determining whether a source owner or operator has precluded the general public from having access to its property. Where access is precluded, the portion of the atmosphere above that property is not considered “ambient air” for the purpose of conducting air quality analyses under the Clean Air Act. The guidance updates EPA’s policy to recognize that a variety of measures may be considered effective in keeping the public off a source owner/operator’s property. These measures, which account for advances in surveillance and monitoring, depend on site-specific circumstances and continue to include, but are now not solely limited to, fences or other physical barriers. State, local and tribal permitting authorities have the discretion to apply this guidance on a case-by-case basis. The regulatory definition of “ambient air,” as stated in 40 CFR § 50.1(e) to mean “that portion of the atmosphere, external to buildings, to which the general public has access,” remains unchanged.
Final Guidance: Interpreting “Adjacent” for New Source Review and Title V Source Determinations in All Industries other than Oil and Gas
EPA has also recently issued a final guidance that revises the agency’s interpretation of when multiple air pollution-emitting activities are located on sufficiently “adjacent” properties to one another that they should be considered a single source for the purposes of permitting. To determine what activities comprise a single source under the NSR and Title V air permitting programs, three factors must be satisfied: the activities must be under common control; they must be located on contiguous or adjacent properties; and they must fall under the same major group standard industrial classification (SIC) code. In this guidance, for all industries other than oil and natural gas production and processing for which there is a separate set of rules and to which this guidance does not apply, EPA adopts an interpretation of “adjacent” that is based on physical proximity only. The concept of “functional interrelatedness” would not be considered by EPA when determining whether activities are located on adjacent properties. This interpretation should help clarify and streamline the permitting process.
Additional NSR Proposals
EPA also recently issued a proposal to address minor errors that have accumulated over time in four NSR regulations. While these minor errors, such as outdated cross references and typographical errors, have not materially impeded the effective operation of the NSR program, EPA believes that it is important to remove such errors from the regulations in order to provide regulatory certainty and clarity. The proposed corrections are all considered to be non-substantive and are intended to provide clarity and precision to the NSR regulations without altering any NSR policy or changing the NSR program as a whole.
EPA is also proposing to remove from the NSR regulations various provisions, such as certain “grandfathering” provisions, that, with the passage of time, no longer serve any practical function or purpose. EPA will be taking comment on this proposal, which will be published in the Federal Register.
More information on these actions and other NSR improvements are available at: https://www.epa.gov/nsr
Coming Soon: Revisions to Petition Provisions of Title V Permitting Program
EPA is currently working to take final action on a 2016 proposal for revisions to the title V regulations. This proposal would streamline and clarify processes related to the submittal and review of title V petitions.
The proposed rule would bring more certainty for all stakeholders, including the sources required to obtain and maintain title V permits; more focused petitions; better title V permit records which are expected to result in fewer petitions; and reduced administrative burden in the EPA’s review of petitions in a tight timeframe.
Background
Congress established New Source Review as a preconstruction permitting program in the 1977 Clean Air Act Amendments. The program intended to ensure the maintenance of air quality standards around the country and that state of the art technology is installed at new plants or existing plants undergoing major modifications.
Under the NSR program, before constructing a new stationary emission source or major modification of an existing source, the source operator must determine whether the new source will emit or the project will increase air emissions above certain thresholds. If so, the operator may need to get a permit from a state government or EPA that may require installation of pollution control technology or other measures.
Contract your SCS project manager, or if you have questions about the impact of these recent actions.
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