Notice of intended action: The Air Pollution Control Board intends to consider amendment of a regulation on air quality. A regulation is a general rule governing people's rights or conduct that is upheld by a state agency.
Regulation name: Permits for Stationary Sources (9VAC5-80 – Rev. L07)
Purpose of notice: The board is seeking comments through the Department of Environmental Quality on the amendment, including but not limited to 1) the analysis prepared by the Department on the potential practical impact the amended regulation would have on air quality, 2) effects of the regulation on farm forest land preservation, and 3) impacts on small businesses.
Public comment period: February 9, 2009 to March 11, 2009
Subject matter and intent of proposal: On May 1, 2007 (72 FR 24060), EPA promulgated a final rule excluding ethanol production facilities from the definition of “chemical processing plant” in the federal new source review (NSR) permitting program for major sources located in Prevention of Significant Deterioration (PSD) areas and for major sources located in areas not in attainment with the National Ambient Area Quality Standards (NAAQS). The effect of this revision was to raise the applicability threshold level for ethanol production facilities from 100 tons per year (tpy) of a NSR regulated pollutant to 250 tpy of a NSR regulated pollutant in EPA’s major NSR permit programs.
Virginia has an EPA-approved State Implementation Plan (SIP) for the major NSR permit programs set forth in the state’s air pollution control regulations. At the State Air Pollution Control Board (SAPCB) meeting on November 30, 2007 the Department of Environmental Quality (DEQ) presented to the Board a proposal to revise Virginia’s air pollution control regulations to make them consistent with this federal rule change. In particular, the proposed changes would revise 9 VAC 5 Chapter 80, Article 8, pertaining to “Permits for Major Stationary Sources and Major Modifications Locating in Prevention of Significant Deterioration Areas” and 9 VAC 5 Chapter 80, Article 9, pertaining to “Permits for Major Stationary Sources and Major Modifications Locating in Nonattainment Areas or the Ozone Transport Region”.
The substantive amendments proposed are to the definition of “major source” [9 VAC 5-80-60 C, subdivision b (20) of the definition of “major source”]; the definition of “major stationary source” [9 VAC 5-80-1615 C, subdivisions a (1)(w) and c (20) of the definition of “major stationary source”]; the list of exemptions [9 VAC 5-80-1695 A 1 v]; the definition of “major stationary source” [9 VAC 5-80-2010 C, subdivision c (22) of the definition of “major stationary source”]; and the list of exemptions [subdivision 22 of 9 VAC 5-80-2140] would be revised to change the reference to chemical process plants in order to exclude chemical process plants that are ethanol production facilities.
How to comment: DEQ accepts written comments by e-mail, fax and postal mail. All written comments must include the full name, address and telephone number of the person commenting and be received by DEQ by 5 p.m. on the last day of the comment period. All exhibits and documents received are part of the public record.
How a decision is made: After comments have been considered, the board will decide whether to take action on the amendment.
To review regulation documents: The Department analysis and the regulatory text are included in this notice.
Contact for public comments, document requests and additional information:
Karen G. Sabasteanski; Office of Regulatory Affairs, Department of Environmental Quality, PO Box 1105, Richmond, Virginia 23218 (phone 804-698-4423, fax 804-698-4510, email kgsabastea@deq.virginia.gov).
ANALYSIS OF POTENTIAL IMPACT OF VIRGINIA’S ADOPTION OF EPA REVISIONS TO THE APPLICABILITY THRESHOLD FOR ETHANOL PRODUCTION FACILITIES IN THE PREVENTION OF SIGNIFICANT DETERIORATION (PSD) AND NONATTAINMENT NEW SOURCE REVIEW PERMIT PROGRAMS
INTRODUCTION
On May 1, 2007 (72 FR 24060), EPA promulgated a final rule excluding ethanol production facilities from the definition of “chemical processing plant” in the federal new source review (NSR) permitting program for major sources located in Prevention of Significant Deterioration (PSD) areas and for major sources located in areas not in attainment with the National Ambient Area Quality Standards (NAAQS). The effect of this revision was to raise the applicability threshold level for ethanol production facilities from 100 tons per year (tpy) of a NSR regulated pollutant to 250 tpy of a NSR regulated pollutant in EPA’s major NSR permit programs.
Virginia has an EPA-approvedState Implementation Plan (SIP) for the major NSR permit programs set forth in the state’s air pollution control regulations. At the State Air Pollution Control Board (SAPCB) meeting on November 30, 2007 the Department of Environmental Quality (DEQ) presented to the Board a proposal to revise Virginia’s air pollution control regulations to make them consistent with this federal rule change. In particular, the proposed changes would revise 9 VAC 5 Chapter 80, Article 8, pertaining to “Permits for Major Stationary Sources and Major Modifications Locating in Prevention of Significant Deterioration Areas” and 9 VAC 5 Chapter 80, Article 9, pertaining to “Permits for Major Stationary Sources and Major Modifications Locating in Nonattainment Areas or the Ozone Transport Region”.
Historically, the Board has revised Virginia’s air pollution regulations to make them consistent with EPA’s regulations following changes to the federal programs. The primary reason the Board revises its regulations to make them consistent with changing federal requirements is that the federal Clean Air Act requires state NSR programs to be no less stringent than the federal programs. In most instances, revisions EPA makes to the federal NSR programs can be implicitly understood as strengthening air pollution protection, thus leaving states, including Virginia, no alternative but to revise their regulations accordingly. The Clean Air Act, however, gives states the discretion to promulgate permit programs that are more stringent than the federal programs. State NSR programs, therefore, do not have to be identical to federal NSR programs. Moreover, Virginia is under no legal obligation to adopt changes to its program that weaken air pollution protection, even if EPA has weakened the federal program.
At the SAPCB meeting on November 30, 2007, the Board deferred action on DEQ’s proposal to revise Virginia’s major NSR regulations with respect to the applicability threshold for ethanol facilities to make them consistent with the federal NSR programs. Instead, it asked DEQ to prepare an analysis of the potential practical impact the revised regulation would have on the Virginia’s air quality, and to submit that analysis to public review and comment. This analysis document was prepared in response to the Board’s request.
BACKGROUND
There are approximately 158 ethanol plants currently operating in the US and about 51 new facilities are being constructed. The production capacity of these plants ranges from 3 – 130 million gallons per year of denatured ethanol. As of January 2009, there are no operating ethanol facilities in Virginia. However, in September 2008, DEQ issued a minor NSR permit to Osage Bio Energy, LLC for the construction and operation of a 68.2 million gallon per year ethanol plant, the Appomattox Bio Energy Facility (Osage), in the City of Hopewell. Construction had not begun on that facility as of January 2009.
Ethanol can be made from a variety of products such as corn, grain sorghum, wheat, barley, sugar cane or beets, cheese whey, or potatoes. Most new plants are dry-mill facilities that can also produce distiller’s dried grain and solubles (DDGS) and wet cake for animal feed as a by-product of ethanol production. Generally, emissions of air pollutants at ethanol facilities come from the following specific process:
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Equipment/Process
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Pollutants
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Grain receiving, storing, and milling
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PM, PM10, PM2.5
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Fermentation and distillation/thermal oxidizer
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VOC and HAPs
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Ethanol/Denaturant storage and loadout
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VOC and HAPs
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Distillers grain with solubles (DGS) drying
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PM, PM10, PM2.5, SO2, NOx, CO, VOC, and HAPs
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Steam generation
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PM, PM10, PM2.5, SO2, NOx, CO, VOC, and HAPs
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DDGS storage and loadout
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PM, PM10, PM2.5
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Wet distillers grain with solubles (WDGS) storage
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VOC, and HAPs
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Truck traffic fugitives from plant roads
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PM, PM10, PM2.5
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Equipment leaks
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VOC, and HAPs
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Cooling tower
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PM, PM10, PM2.5
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Emergency power generation
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PM, PM10, PM2.5, SO2, NOx, CO, VOC, and HAPs
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IMPACT ANALYSIS OF THE PROPOSED RULE CHANGE
This regulation change would only impact new ethanol facilities in Virginia. In PSD areas of the state, i.e., those areas of the state that are in attainment with the NAAQS, the proposed rule would change the NSR applicability threshold for new ethanol facilities from 100 tpy to 250 tpy potential to emit (PTE) of a NSR regulated pollutant. NSR regulated pollutants include the criteria pollutants defined under the Clean Air Act, such as oxides of nitrogen (NOx), sulfur dioxide (SO2), particulate matter (PM10 and PM2.5), carbon monoxide (CO), volatile organic compounds (VOCs), lead, fluorides, sulfuric acid mist, hydrogen sulfide, and total reduced sulfur.[1] Thus, ethanol facilities that have the potential to emit less than 100 tpy or greater than 250 tpy of a regulated NSR pollutant would not be affected by the proposed rule change. This analysis, therefore, is limited to the impacts of the rule change for new ethanol plants locating in PSD areas with PTE between 100 tpy and 250 tpy of a regulated NSR pollutant. These sources would be subject to Virginia’s minor NSR program found at 9 VAC 5 Chapter 80, Article 6 “Permits for New and Modified Stationary Sources” instead of the major source PSD rule. This sized source would be classified as a “state major” (sources with PTE of greater than or equal to100 tpy and less than 250 tpy).
In nonattainment areas, the impact of the proposed rule would be even less. The thresholds in the current Northern Virginia non-attainment area for ozone would be 50 tpy for VOCs and 100 tpy for NOx. The only change the proposed federal rule would have on nonattainment thresholds is that fugitive emissions would no longer be counted toward permit applicability for ethanol facilities. If ethanol facilities are left in the “chemical processing plant” category, fugitive emissions would be included in any calculation to determine NNSR permit applicability. Although fugitive emissions would not be counted for major NNSR permit applicability, they would be included for any minor NSR or “state major” permit applicability determination.
The Department conducted a survey of states where numerous ethanol plants currently are permitted. The states contacted were Nebraska, South Dakota, Minnesota, Illinois, and Kansas. All of these states, except Kansas, have changed their PSD applicability threshold for ethanol production facilities from 100 tpy to 250 tpy. States where the PSD applicability threshold has been changed reported that most of the new plants being permitted continue to propose equipment or operational limits that will restrict emissions to less than 100 tpy, in order to avoid being subject to the following two requirements of the Clean Air Act: the “Miscellaneous Organic National Emission Standard for Hazardous Air Pollutants”, known as the MON rule;[2] and the requirement for a Federal Operating Permit under Title V of the Clean Air Act, known as a Title V permit.[3]
The impacts of the proposed rule changes in Virginia have been analyzed for the following:
· Air pollution control requirements
· Public participation and site suitability requirements
· Air quality analysis
· Permit processing timeline
Air Pollution Control Requirements:
Virginia requires a Best Available Control Technology (BACT) determination under both the major source PSD program and Virginia’s minor source NSR permit program. Currently, new ethanol plants with a PTE of 100 tpy or more of a NSR regulated pollutant are subject to best available control technology (BACT) requirements defined in 9 VAC 5-80-1615 C of the PSD rule, and those with PTE of less than 100 tpy of a criteria pollutant are subject to BACT requirements defined in 9 VAC 5-50-250 C (minor source BACT). If the proposed rule change is adopted, new ethanol plants with a PTE of between 100 tpy and 250 tpy of a NSR regulated pollutant would be subject to BACT under Virginia’s Article 6 (minor new source review).
The definitions of BACT for PSD and for Virginia’s minor source NSR program are basically identical and are presented in Appendix A. BACT determinations for new sources under both Virginia’s major and minor source programs are case-by-case determinations conducted under a top-down process[4] that take into account technical feasibility, economic feasibility, environmental impacts, and energy impacts. DEQ anticipates that the process for conducting a top-down BACT analysis for ethanol facilities with a PTE between 100 tpy and 250 tpy would be the same under either the PSD or minor source permit programs. Therefore, there would be little difference between BACT determinations made for such facilities under either approach.[5]
To date the Department has issued one NSR permit to an ethanol production facility. That permit was a minor source permit issued in September 2008 to the Osage facility in Hopewell, which had a PTE of less than 100 tpy. Despite the size of the Osage facility, DEQ conducted a top-down, case-by-case BACT evaluation for the project. Based on that top-down BACT analysis, DEQ determined that the following technologies represented BACT for the Osage facility:
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Emission unit/Process
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Pollutant
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Control Measures
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Fermentation and Distillation Process Units
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VOC
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98% control by Process Scrubber and Regenerative Thermal Oxidizer (RTO)
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DDGS Drying Process
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VOC
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Eco Dryer Systems (Integrated Thermal Oxidizer)
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Pre-fermentation units, stillage tanks, syrup tank, centrifuge units, and evaporator
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Fugitive VOC
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No control
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Grain receiving, milling, DDGS handling and loadout
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Particulate Matter
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99% control by baghouse
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RTO and 3 Eco Dryers
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VOC, NOx, CO, Particulate Matter
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Good combustion Practice
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RTO and 3 Eco Dryers
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SO2
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Low sulfur Fuel (natural gas/ethanol mixture)
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Haul Roads
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Fugitive Dust
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Apply asphalt, water, or equivalent; paving and sweeping haul roads; covered material stockpile to be kept adequately moist
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Back up Generator
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SO2
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Low sulfur (0.5%) fuel
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The technology control levels determined in the BACT analysis for the Osage facility and set forth in the above table are consistent with the BACT determinations that have been conducted for ethanol facilities in other states. These technology control levels likely would set the floor for any future BACT determinations made for ethanol facilities in Virginia.[6]
Public Participation and Site Suitability
Both major source PSD and NNSR permit applications and minor source NSR permit applications for proposed facilities with a PTE of great than 100 tpy, sometimes referred to as “state major” sources, are subject to public participation requirements. A table comparing the public participation requirements is located in Appendix B. Although the public participation requirements for PSD and NNSR are slightly different than those for “state major” NSR sources, both programs allow for public comment on the BACT determination as well as on all other parts of the permit evaluation process.
In addition, both major source PSD and NNSR permit applications and minor source NSR permit applications are subject to a DEQ site suitability analysis required under Virginia Code §10.1-1307.E. The statute does not distinguish between major or minor source permits and DEQ uses the same process when conducting site suitability analyses under either permit program.
Air Quality Analysis
Currently, new ethanol plants with a PTE of 100 tpy or more of a regulated NSR pollutant are subject to air quality analysis requirements for a PSD facility. If the proposed rule change is adopted, new ethanol plants with a PTE of 100 to less than 250 tpy of a regulated NSR pollutant would be subject to air quality analysis requirements for a “state major” source under DEQ’s minor source permit requirements. Since every modeling project is somewhat unique, this section provides a general comparison of the air quality modeling and additional impact analysis requirements for a PSD and non-PSD facility. .
PSD Air Quality Analysis: All PSD permits require an air quality analysis of the ambient impacts associated with the project, including an evaluation of criteria pollutant emissions, an additional impact analysis, and an evaluation of any adverse impacts in Class I areas. Additionally, facilities are required to evaluate compliance with the applicable Virginia toxic pollutant emissions standards.
The PSD air dispersion modeling analysis must demonstrate that emissions from the new source or major modification, in conjunction with applicable emissions from other existing sources, will not cause or contribute to a violation of any applicable National Ambient Air Quality Standards (NAAQS) or PSD increment. The PSD modeling analysis involves two distinct phases: a preliminary analysis and a full impact analysis. The preliminary analysis evaluates the potential increase in emissions from the project or the net increase in emissions associated with the modification. The results of the preliminary analysis determine whether or not a full impact analysis is required. In addition to emissions from the project, the full impact analysis also considers any existing emission units at the facility, nearby facilities, and any growth resulting from the new project. For PM-10, SO2, and NO2, the full impact analysis consists of separate modeling analyses for the NAAQS and the PSD increments.
Current modeling guidance provided by the Federal Land Managers (FLMs) recommends that a major source proposed to be located within 300 kilometers (km) of a Class I area perform a modeling analysis to assess the ambient air quality impacts in terms of Class I PSD increments and Air Quality Related Values (AQRVs). Examples of common AQRVs include visibility and acid deposition. The FLMs are provided reviewing authority of Class I areas that may be affected by emissions from a proposed source by the PSD regulations and are specifically charged with protecting the AQRVs within the Class I areas.
An additional impact analysis must also be conducted for all PSD projects. This analysis assesses the impact of the emissions from the project and any associated growth on soils, vegetation, and visibility.
Lastly, facilities that are subject to the toxic pollutant requirements under 9 VAC 5 Chapter 60, Article 5 (Emission Standards for Toxic Pollutants from New and Modified Sources) are required to conduct modeling for each toxic pollutant that exceeds the exemption rates under this rule.
Non-PSD Air Quality Analysis: A non-PSD analysis is similar to PSD in that it would require the facility to demonstrate compliance with the applicable NAAQS and toxic pollutant emissions standards in 9 VAC 5 Chapter 60, Article 5. In contrast to the PSD analysis, the non-PSD facility would not be required to perform the PSD increment, AQRV, or additional impacts analyses.
Permit Processing Timeline
The processing of major source PSD and NNSR permit applications can take up to one year from receipt of a complete application. The processing time for minor NSR permits for sources with a PTE of greater than100 tpy, i.e., “state major” source permits, is often significantly shorter. DEQ generally processes applications for “state major” permits within 180 days of receiving a complete application.
SUMMARY
If the proposed rule excluding ethanol production facilities from the definition of “chemical processing plant” in the federal new source review (NSR) permitting program is adopted, new ethanol plants locating in PSD attainment areas with a PTE of between 100 tpy and 250 tpy of a regulated NSR pollutant would be subject to DEQ’s minor NSR permit rule rather than the major source PSD rule. A permit application for a source of this size would be processed as a “state major” source and would receive a top-down, case-by-case BACT determination and be subject to public participation, site suitability, and air quality analysis requirements. In nonattainment areas the threshold for current Northern Virginia ozone nonattainment area would be 50 tpy for VOCs and 100 tpy for the other regulated NSR pollutants. However, when determining permit applicability, fugitive emissions would not be counted. DEQ, therefore, believes that adoption of the rule would have no effect on air quality, and bring little change to the way public participation, site suitability, or air quality analysis requirements are addressed under the existing rules.
APPENDIX A
BACT Definition for PSD NSR as defined in 9 VAC 5-80-1615 C:
"Best available control technology" means an emissions limitation (including a visible emissions standard) based on the maximum degree of reduction for each regulated NSR pollutant that would be emitted from any proposed major stationary source or major modification that the board, on a case-by-case basis, taking into account energy, environmental, and economic impacts and other costs, determines is achievable for such source or modification through application of production processes or available methods, systems, and techniques, including fuel cleaning or treatment or innovative fuel combustion techniques for control of such pollutant. In no event shall application of best available control technology result in emissions of any pollutant that would exceed the emissions allowed by any applicable standard under 40 CFR Parts 60, 61, and 63. If the board determines that technological or economic limitations on the application of measurement methodology to a particular emissions unit would make the imposition of an emissions standard infeasible, a design, equipment, work practice, operational standard, or combination thereof, may be prescribed instead to satisfy the requirement for the application of best available control technology. Such standard shall, to the degree possible, set forth the emissions reduction achievable by implementation of such design, equipment, work practice or operation, and shall provide for compliance by means that achieve equivalent results.”
BACT Definition for Minor NSR as defined in 9 VAC 5-50-250 C:
"Best available control technology" means a standard of performance (including a visible emission standard) based on the maximum degree of emission reduction for any pollutant which would be emitted from any proposed stationary source which the board, on a case-by-case basis, taking into account energy, environmental and economic impacts and other costs, determines is achievable for such source through the application of production processes or available methods, systems and techniques, including fuel cleaning or treatment or innovative fuel combustion techniques for control of such pollutant. In no event shall application of best available control technology result in emissions of any pollutant which would exceed the emissions allowed by any applicable standard in Article 5 (9 VAC 5-50-400 et seq.) of this part or Article 1 (9 VAC 5-60-60 et seq.) of Part II of 9 VAC 5 Chapter 60. If the board determines that technological or economic limitations on the application of measurement methodology to particular emissions unit would make the imposition of an emission standard infeasible, a design, equipment, work practice, operational standard, or combination of them, may be prescribed instead of requiring the application of best available control technology. Such standard shall, to the degree possible, set forth the emission reduction achievable by implementation of such design, equipment, work practice or operation, and shall provide for compliance by means which achieve equivalent results. In determining best available control technology for stationary sources subject to Article 6 (9 VAC 5-80-1100 et seq.) of Part II of 9 VAC 5 Chapter 80, consideration shall be given to the nature and amount of the new emissions, emission control efficiencies achieved in the industry for the source type, and the cost-effectiveness of the incremental emission reduction achieved.”
[Language is bold is not contained in the PSD program’s definition of BACT.]
APPENDIX B
Comparison of Public Participation Requirements
PSD vs. “State Major”
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PSD Permits
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State Major Permits
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Name / Title:
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Karen G. Sabasteanski
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Address:
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629 East Main Street
P.O. Box 1105
Richmond, 23218
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Email Address:
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kgsabasteanski@deq.virginia.gov
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Telephone:
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(804)698-4426
FAX: (804)698-4510
TDD: ()-
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