AOI finishes comments on DEQ pollution rules

AOI Wraps up Big Package of Air Rules – Sends to DEQ
John Ledger
Associated Oregon Industries

Representing Oregon’s manufacturers, an AOI workgroup has submitted its second and last set of detailed comments to the DEQ on its opposed greenhouse gas and fine particulate permitting rules. The details of the rule will affect thousands of Oregon companies operating, or considering expanding in Oregon.

For details, click here [or see below].

The composite air permitting rulemakings, the largest in at least 20 years, implement the U.S. EPA’s requirement that states adopt new regulations for both greenhouse gas and fine particulate – the most common of pollutants. AOI’s work with the DEQ on these issues, by far the most extensive and detailed, was headed by AOI Air & Energy Co-chair Tom Wood, Stoel Rives LLP, who exhibited what can only be described as a dazzling display of expertise. Tom is owed a debt of gratitude for his work on this project and his support of the Oregon business community.

Both sets of AOI comments can be seen here: November 24, 2010 and January 14, 2011.

The next step is for the DEQ to review the comments and propose a final version to the Environmental Quality Commission within the next few months. As soon as the final proposal becomes available it will be distributed to AOI members on the AOI Environment & Energy emailing list.

The How, Where, and If of Oregon Manufacturing Up In Air with New Proposed Rules
Article by: John Ledger – November 9, 2010

An AOI member workgroup has begun the arduous task of reviewing, assessing, and developing positions on the most important air permitting rulemaking in decades. How the final rules turn out will determine not only where various types of new manufacturers can locate in Oregon, but for existing sources it will determine what types of retrofit might be required and even if they can expand at all.

The genesis of the rulemaking is EPA’s recent determination that each state must now devise complete regulatory regimes for fine particulate and greenhouse gases. While the EPA lays out a general framework, DEQ has considerable latitude in writing the implementation rules. These will be extremely complex and the details will determine not only the permitting and compliance costs at on-going plants (in millions of dollars), but whether or not a facility can be constructed or expanded at all.

The review team, headed by AOI Air & Energy Co Chairs (David Like, Hampton Affiliates, and Tom Wood, Stoel Rives, one of the Northwest’s top air attorneys), illustrates one of AOI’s greatest strengths – the depth of member’s expertise and their willingness to step up and contribute.

Below is a brief and greatly simplified summary. The rulemaking can be seen here.

The DEQ has graciously provided a copy of their slides, which can be seen here.

Fine particulate (PM2.5) – solids or aerosols 2.5 microns or less in diameter;
Greenhouse gases (CO2e) – CO2 and other gases indexed to CO2’s warming potential.

Affected Facilities (industrial facilities, for CO2e also big dairies/feedlots, landfills)
Sources with potential emissions of 100,000 tons/yr of listed greenhouse gases (CO2e) will be subject to Major source construction permitting and Title V operating permits even if other pollutants are at minor source levels.

Major and Minor sources that have or need air permits will have new PM2.5 emission limits added and will be subject to new PM2.5 permitting requirements for new equipment and modifications to existing operations.

Because of the new limits on CO2e, about 20 Minor or non-regulated sources could now become Major Sources for CO2e. Of those, 6-12 may be able to be reclassified “Synthetic Minors” by limiting operations. About 20 facilities already classified as Major Sources will now also be classified as such for CO2e. These numbers will grow rapidly as EPA lowers the 75,000 ton threshold. For PM2.5 hundreds of sources of nearly all types will be subject to new permitting and emission control requirements.

Example Issues & Impacts
Many sources heretofore classified as Minor will now be classified as Major (Title V) Sources due to CO2e. Major Sources can trigger a special permitting requirement called Prevention of Significant Deterioration (PSD) before they construct or increase emissions. This will now be true for CO2e in addition to the other traditional pollutants. A PSD permit is extremely expensive, can take years and add tens of millions of dollars in control costs. Depending on the rules and the ability of a facility to “net out,” a source will be required to install Best Available Control Technology (BACT) and possibly even retrofit sources constructed decades ago.

For PM2.5, a facility with only a nine ton/yr increase in PM2.5 emissions must model all its emission impacts to see if a theoretical decrease in ambient air quality will exceed a very small “increment” set by DEQ rule. If the increment is exceeded, the project cannot go forward, even though the overall air quality is very good. A source may even have to include emissions from surrounding facilities in its modeling, again, depending on the rules.

How their PM2.5 emissions are calculated and assessed, as well as how limits will be proposed, are all elements in the proposed rule. At the present time, sources under 100,000 tons/year CO2e are not regulated for greenhouse gases, but EPA is expected to require states to lower that threshold over the next few years. Sources with CO2e emissions greater than 2,500 metric tons/year still will have to report actual emissions to DEQ.

The AOI workgroup will have a product to bring back to the AOI Air & Energy Committee within just a few weeks. The rulemaking is expected to go final very early next year.

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