Streamlining the EPA’s New Source Review Permitting Program

Industrial Smoke Stack
January 17, 2019

Confused on what air quality permits are required for a new construction project? You are not alone.

However, after a nine-year delay, the U.S. Environmental Protection Agency (EPA) has clarified the meaning of “project aggregation” for the New Source Review (NSR) permitting program.

NSR is a preconstruction permitting program that requires certain stationary sources of air pollution to obtain permits prior to beginning construction. It applies to both new construction as well as modifications of existing sources.

Prior to this action, the EPA’a aggregation policy was built on case-by-case after-the-fact inquiries related to potential violations of existing permits.

Now, aggregation will be defined as projects that are technically or economically related.

An Automotive Assembly Facility as an Example

The Agency uses the following example of an automotive assembly facility:

Suppose an automotive facility wants to expand its surface coating operation. It installs a new, larger gas-fired cure oven to handle the increased throughput. There is a substantial relationship between the oven and the coating line activities, so these activities’ emissions should be aggregated.

However, if an operational or physical change is proposed at the facility’s boiler house, this does not mean that it is automatically related to a change at the coating operation as the boiler serves many other operations as well.

Although this ruling is expected to affect all industries, those that will feel the biggest impact include: electric service, petroleum refining, organic and inorganic chemical manufacturing, natural gas liquids, pulp and paper mills, automotive manufacturing, pharmaceuticals, mining, and agriculture.

Speeding Up the Process and Increasing Clarity

The EPA hopes this final action will encourage companies to implement more efficient technology as this step should cut down the time and paperwork required to get a change approved. EPA Acting Administrator Andrew Wheeler says that “Previously, New Source Review regularly discouraged companies from employing the latest energy-efficient equipment”. Wheeler also claims that the updates will remove undue regulatory barriers.

The 2009 NSR Aggregation Action, approved in November 2018, describes the factors that should be considered when evaluating whether changes are substantially related, including technical or economic dependence.

The 2009 action also states that the farther apart projects are timed, the less likely they are to be substantially related, since the activities would likely be part of distinct planning and capital-funding cycles. The 2009 action affirms that timing could be a basis to not aggregate separate projects, and it establishes a policy of applying a rebuttable presumption against aggregating projects that occur three or more years apart.

An EPA spokeswoman said: “We believe that providing the guidance in a single document is a better approach and provides more clarity for sources and permitting agencies. Even with this final action, given the case-specific nature of NSR, we recognize there will continue to be ‘gray areas’ that sources and permitting authorities will have to work through in deciding whether to aggregate individual projects at a facility.”

The Agency expects the increased clarity provided by this action will provide a better understanding of which projects need an NSR permit, which might speed up the permitting decisions.

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Laurie Toupin