PSD Permitting – A Brief Overview and the Implications for your Business

PSD Permitting – A Brief Overview and the Implications for your Business

BACKGROUND – What is PSD Permitting?

Under EPA’s New Source Review (NSR) Permitting program, new major sources and existing major sources applying for a major modification that are located in an attainment area are required to undergo Prevention of Significant Deterioration (PSD) review.  When completed, the source will be required to:

1. Install the “Best Available Control Technology” (BACT);
2. Complete an air quality analysis;
3. Complete an additional impact analysis; and
4. Undergo a public comment period.

The purpose is to protect the public health and welfare and preserve existing air quality and clean air resources by maintaining the National Ambient Air Quality Standards (NAAQS).

APPLICABILITY – When is PSD review required?

When determining if PSD review is applicable and necessary for a project, the steps can become complicated very quickly.  A simplified step-wise summary would include:

1. Determine the facility-wide potential to emit (PTE).
   1. If the PTE for any NSR regulated pollutant is greater than 250 tpy, then the facility is considered a PSD major source.  The 250 tpy threshold might be reduced to 100 tpy if the facility falls into one of the specifically defined source categories seen in 40 CFR 51.166(b)(1)(i).
   1. If a modification to a facility, that is not a PSD major source, meets these thresholds (250 tpy or 100 tpy), then the modification is considered a PSD major modification.
2. Calculate your baseline emissions (otherwise known as the “Actual Emissions.”)
3. Calculate your future emissions (loosely considered “Potential Emissions.”)  The potential emissions can be based on a full production schedule at full capacity or a more realistic emission level, calculated using more realistic schedule or production values (this is called projected actual emissions).  Keep in mind that these values can show up as limits in a future permit.
4. Compare the past actual emissions with the future emissions.
   1. If the increase in each pollutant is less than the significant thresholds identified below, then no PSD review will be required.
   1. If the increase in any one pollutant exceeds the significant thresholds, then the facility or modification may be subject to PSD review.
   1. Note that contemporaneous increases or decreases may have to be considered in this analysis.  Generally, contemporaneous emissions are any that have occurred over the five year period previous to the application.

NSR Significance thresholds:

40 CFR 51.166(b)(23))

Pollutant and Emissions Rate

Carbon monoxide:	100 tons per year (tpy)
Nitrogen oxides:	40 tpy
Sulfur dioxide:	40 tpy
Particulate matter:	25 tpy
PM10:	15 tpy
PM2.5:	10 tpy of direct PM2.5 emissions; 40 tpy of SO2; 40 tpy of NOx unless demonstrated not to be a PM2.5 precursor
Ozone	40 tpy of VOCs or NOx
Lead	0.6 tpy
Fluorides	3 tpy
Sulfuric acid mist	7 tpy
Hydrogen sulfide (H2S)	10 tpy
Total reduced sulfur	10 tpy
Reduced sulfur compounds	10 tpy

Best Available Control Technology (BACT)

BACT is the best proven control equipment or method for reducing the pollutant or pollutants subject to PSD review.  However, a facility may not have to apply a specific control device or method if it can be shown that the device or method is technically or economically infeasible.  EPA and most states use a “top-down” method to determine BACT.  The “top-down” method is as follows:

1. List all available controls from best to worst (most efficient at limiting pollutant to least efficient)
2. Starting at the top, review the control methods, eliminating methods that are technically or economically infeasible
3. The best control method (or combination of methods) that cannot be eliminated must be applied to control the affected pollutant or pollutants

In our experience, finding similar projects or facilities that have applied BACT to their process in your region is a productive way to ensure that the BACT Analysis you submit will be accepted.  EPA maintains a database called the RACT/BACT/LAER Clearinghouse with information on what has been required as BACT in air permits.

Requirements for Air Quality Analysis

The PSD review process requires monitoring data that identifies the air quality in the area prior to the modification.  This can roughly be defined as the “background” concentrations or pre-existing concentrations of the pollutant.  Typically, a State or Local air pollution control agency operates a network of monitors.  The results of these monitors can be used to satisfy this requirement.  If no existing monitoring data is available, a facility could be required to set up and operate its own monitoring station(s).  Before doing so, it’s wise to have a discussion with the air agency having jurisdiction over the facility.   Use of State monitoring data can considerably reduce the cost of the permit application process.

Requirements for a Source Impact Analysis

The owner or operator of the proposed source or modification must demonstrate that the resulting allowable emission increases, in conjunction with all other applicable emissions increases or reductions (including secondary emissions), would not cause or contribute to air pollution in violation of:

• Any NAAQS in any air quality control region; or
• Any applicable maximum allowable increase over the baseline concentration in any area.

This is accomplished with air dispersion modeling.  This type of analysis will require the facility to provide detailed descriptions of the of the pollutants being emitted, location, design capacities, and typical operating schedules of the source or modification.  Both specifications and drawings would be needed for the review showing the source design and plant layout.  The analysis must also consider meteorological and topographical data.

Following construction of the major source or modification, the regulatory authority determines the necessary post-construction ambient monitoring.  The purpose of this additional monitoring is to determine the effect the emissions from the stationary source or modification may have, or are having on air quality in the area.  As with the pre-application air quality analysis, State monitoring data can be used to satisfy the post modification monitoring requirement – if necessary.

Requirements for Public Involvement

PSD applications are usually given a final determination by the regulatory authority within 6 months, but this process can take up to 1 year.  Prior to the final determination, the project is given a preliminary determination that either approves the construction, approves it with conditions, or disapproves the construction.  The public is given an opportunity to review all materials submitted by the applicant, the preliminary determination, and any other materials considered in making the preliminary determination.  Public notice is made (notice varies depending on the jurisdiction where the facility is located) with instructions for how the public can provide written comments or attend a public hearing on the draft permit.  The regulatory agency reviews and considers all comments in making their final determination for the proposed source or modification.

Establishing a facility’s baseline actual emissions, determining projected actual emissions or potential to emit from a source, and identifying the applicability of PSD review can be a lengthy and difficult task.  Stevens EHS Consulting has the expertise and experience to guide facilities that are seeking to avoid PSD review.  Through “project accounting”, which takes into account both increases and decreases associated with a project and through “netting”, which takes into account increases and decreases from other projects that are contemporaneous with the particular change, facilities can avoid PSD.  Changes in policy guidance now allow facilities to exclude increases in emissions from the project any portion of the unit’s emissions following the project that an existing unit could have accommodated during the consecutive 24-month period used to establish the baseline actual emissions.  These topics will be discussed in greater detail in a future article on PSD Avoidance.

Implications of a PSD Permit

• For a PSD major source, every change (big or small) must be assessed for PSD applicability.  Small changes over the previous five years can affect the assessment.
• For those projects that require PSD review, a PSD permit must be obtained prior to starting any construction or equipment installation.  Obtaining a PSD permit can be a lengthy process.  PSD major facilities must include an elongated schedule leading up to a change to make sure there is sufficient time to obtain a permit, if necessary.
• Emissions controls might be required as part of the review process.  A facility may choose to install controls to legally avoid PSD review.  Regardless, these controls will become federally enforceable permit conditions/limits that would apply, for the most part, for the life of the facility.
• Federal EPA would have to review and approve all permits and permitting changes.
• The cost of installing BACT emissions control devices could be very expensive.

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For more information on PSD permitting and related projects, contact our Client Service Engineer, Carter Venable at Carter@StevensEHS.com to get started.