ILLINOIS POLLUTION CONTROL BOARD

July 14, 1983

IN THE MATTER OF:

R8l—16

MAJOR SOURCE CONSTRUCTION

)

DOCKET B

AND MODIFICATION

)

PART 203 OF CHAPTER

2:

AIR POLLUTION

OPINION OF THE BOARD (by J.

D, Dumelle):

With the adoption of Public Act 81—1444 on September

9,

1980

the Environmental Protection Act

(Act) was amended to include

Section 9.1(d), which mandates that the Board adopt regulations

establishing permit programs

in accordance with Sections 165 and

173

(42 U.S.C.

7475 and 42 U.S.C.

7503) of the Clean Air Act

(CAA). Section 165 is found in Part C of the CAA, which encom-

passes the programs for “Prevention of Significant Deterioration

of Air Quality” in areas designated attainment;

Section 173 is

found in Part D,

“Plan Requirements for Nonattainment Areas.”

On

May 1, 1981 the Illinois Environmental Protection Agency (Agency)

filed its proposal outlining a permit program for new ani modified

major stationary sources in both attainment and nonattai~ment

areas.

Merit hearings were held on July 20 and 21,

1981 in

Springfield and Chicago, respectively, and again on November

2

and

6,

1981

in the same locales.

Economic hearings were held on

September 20 and

27,

1982 in Chicago and Springfield,

the

Economic Impact Study having been received on August

6,

1982.

Coincidently,

First Notice was published in the Illinois

Register, Vol.

6, Issue

32, on August

6,

1982.

A final hearing

was held on November 16,

1982 in Chicago to consider outstanding

issues, especially those arising from the District of Columbia

Appellate Court’s decision of August

17,

1982 Natural Resource

Defense Council v

Gorsuch,

13 ERC 1225 and 1993.

At the outset of this rulemaking the subject matter was

separated into two dockets.

The rules pertaining to the

Prevention of Significant Deterioration

(PSD) permit program were

assigned to Docket

A, while Docket B was reserved for the

permitting rules

for major sources and modifications in non—

attainment areas.

The latter are commonly referred to as New

Source Review

(NSR).

Not only does Section 9.1 of the Act

contain deadlines for adoption of the NSR rules,

but Sections

TEit

the wish of the Board that the knowledge and concern

contributed to this proceeding by Irvin G. Goodman before his

death,

and his legacy of inspiration be recognized and remembered.

The Board also acknowledges the work of Marili McFawn, hearing

officer and administrative assistant in this matter.

53-45

---

2

110(a)(2)(I),

172(a)(1),

and most specifically Section 172(b)(6)

in accordance with Section 173 of the CAA,

require that these

rules be adopted as properly enforceable provisions of the State

Implementation Plan

(SIP).

If they are not, the United States

Environmental Protection Agency (USEPA)

is authorized under the

CAA to impose growth sanctions.

To avoid such action by the

USEPA,

and in accordance with Illinois

law, adoption of the

NSR

rules

is proposed separately from the PSD rules;

this Opinion and

the accompanying Order concern only Docket

B.

Where air quality is modeled or monitored to be worse than

that required by the National Anibient Air Quality Standards,

in a

nonattainment areas as defined in Section 171(2), the priraary

objective

is obviously to improve the region’s air quality as

soon as possible.

One avenue already established is to require

existing sources to apply reasonably available control tech-

nologies, commonly known as the RACT program ~172(b) of the

CAA.

Another approach is to control the emissions from newly

constructed and modified sources.

Therefore,

the NSR prqgram

consists primarily of preconstruction rules to ensure that as

built or modified, potentially large sources of air pollutants do

not contribute to a region’s air quality problems. Although the

purpose of the NSR is similar to that of the RACT program,

since

it applies to sources not yet constructed or modified, NSR

requirements are more demanding.

These sources may only emit

nonattainment designated pollutants at the Lowest Achiev~tble

Emission Rate (LAER).

This is accomplished by applying the most

stringent control technology known, and if appropriate, limita-

tions on operating parameters.

Furthermore,

in accord with the

need to improve air quality to acceptable healthy levels,

these

sources may also have to provide emission reductions from exist-

ing sources.

Only if it is proven that these emission offsets

are unnecessary for the area’s reasonable further progress

(RFP)

towards attainment, can the new source forego providing them.

Lastly, assuming improvement of air quality through the pre—

construction review rules contained in Subparts

A,

B and C

three

rules are included at Subpart

F to ensure

the desired improvement

continues.

Sources receiving construction permits pursuant to

NSR will be required,

to maintain the LAER operating parameters,

to keep current any necessary emission offsets, and to monitor

emissions to establish the source’s actual effect on the region’s

reasonable further progress.

SUBPART

A:

Definitions and General Provisions

The definitions currently found at Rules

101 and 102 of

Chapter

2 are applicable

to this Part.

Of particular importance

to the NSR rules are the definitions of “emission source” at Rule

101, and “stationary emission source” at Rule 201.

An emission

source is defined as “any equipment or facility of

a type capable

of emitting specified air contaminants to the atmosphere”.

As

such,

it provides

a dual definition of a source.

A source

is

either an entire plant or an individual piece of process equip—

53-46

---

3

mont within a plant.

The importance of the dual definition

within

the

context of the NSR rules is included at the

‘Significant

Net

atission Increases’ discussion.

It should be

noted that Rule 201 contains many definitions which more specif-

ically describe ‘equipment’, e.

g. degreaser,

firebox.

The term

‘emission source’ also provides a building block for ‘stationary

emission source’.

A stationary emission source is defined as

‘an emission source which is not self-propelled.’

Obviously when

the language ‘stationary source’ is used in this Part, whether or

not in the context of major stationary source,

it is referring to

a stationary emission source.

Four of the definitions found in Subpart A were adopted

verbatim in R81—20, Alternative Control Strategies, on

June

2, 1983.

They are: ‘actual emissions’,

‘allowable

emissions’,

‘emission baseline’, and ‘potential to emit’.

All

four are important in the context of NSR, as well as for

Alternative Control Strategies.* Except for ‘emission baseline’,

these definitions parallel the federal versions found at 40 CFR

51.18(j),

and only the definition of ‘allowable emissions’

varies from

that

at 40 CFR 51.18(j)(xi).

Generally,

‘allowable

emissions’

are

calculated based on a source’s maximum rated

capacity

and

the

applicable

emission

limitation

found

in

Chapter

2.

However,

if

the

source’s

maximum

rated

capacity

or

emission

rate

is

specified

as

a

permit

condition,

calculating

that

source’s

‘allowable

emissions’

is

likewise

limited.

aiiission

estimates

for

start—ups,

malfunctions, or

breakdowns

are

also

included in a source’s allowable emissions if Rule 105 has been

complied with.

Since Rule 105 requires

that

these emissions be a

part of the operating permit, it is appropriate that they be

included as part of the source’s allowable emissions.

Lastly, if

a source’s allowable emissions cannot be determined, or

are

not

established by a permit condition, then they shall be the

source’s ‘potential to emit’.

While the federal definition of

‘actual emissions’ provides for this alternative, the federal

definition of ‘allowable emissions’ is silent.

In either case,

if a source’s emissions cannot be determined using the

body

of

the rule, it is logical and certainly no less stringent to allow

potential emissions to be used.

Despite the fact

that

the terms ‘commence’ and ‘construc-

tion’ are already defined in Rule 101, expanded definitions of

the

same

are

proposed

for Part 203.

‘Commence’ now refers to

beginning actual on—site construction, as well as the act of

entering into binding contracts to construct or modify.

The

*Msuming

that

all

four are

pertinent

to

both

Parts 202 and 203,

it may

prove appropriate

to include them in the general

definition section of

Chapter 2.

This can be

done

in the course

of final rulemaking on R79—14, Revisions to Chapter 2, or R81—2,

Codification of Chapter 2.

53-47

---

4

contractual obligation

has

been further qualified to mean that it

cannot

be

broken

without

substantial

loss

to

the

owner

or

oper-

ator.

The

definition

of

‘construction”

has

been

expanded

to

include

not

only

an

on-site

physical

change

such

as

fabrication,

erection

or

installation

of

an

emission

source,

but

also any

change, physical or operational, which causes a change in actual

emissions.

As amended, the definitions for ‘comoence” and

“construction”

are

equivalent to those required by 40 CFR

51.18(j)(1)(xvi)

and

(xvii).

A definition of “Begin Actual

Construction” was proposed.

It is not included in Subpart A, but

is instead incorporated at Section 203.202, Preconstruction

Permit Requirement.

The distincticn is that

“commence’

and

“construction” are used throughout this Part, whereas “Begin

Actual Construction” is not.

Its meaning is limited to deter-

mining when a preconstruction permit is required.

The terms ‘available growth margin”,

“emission offset” and

“reasonable further progress’

are defined in Subpart A; there are

no parallel federal regulations.

All are

concepts

fundamental

to

the entire Part, especially to Subpart C.

“Secondary emissions”

is defined identically to that found in 40 CFR 51.18(j)(l)(viii).

secondary emissions are those contaminants emitted due to the

newly

constructed

or

modified

sources,

but

are

not

emitted

by the

source

itself.

anissions

from

off—site

support

facilities

that

would not have,

but

for the new construction or modification,

increased emissions qualify as such indirect emissions.

However,

increased emissions coming directly from mobile sources,

i.e.

trains

and

ships,

which

service the new major source or modified

stationary source, do not. It should be noted that while second—

ary emissions are not included in determining a source’s poten-

tial to

emit,

those attributed to mob~lesources are included.

Furthermore, the requirement to provide the lowest achievable

emission

rate

is

not

applicable to the secondary enission

sources unless they themselves quali~!yfor NSR

(c.f.

45

FR

59878,

September ii,

.980).

A

number

of terms associated with tWit were included in

the

Agency’s proposal-

They are:

major modification, major

stationary

source,

net

emissions,

and significant.

Definitions

for these words

are

instead included as part of the actual rules,

since they themselves are fundamentally determinative as to

whether NSR applies or emission offsets are necessary.

The term

“complete application,” as proposed,

is not included because

existing Rule 103 provides a more sufficient outline of what and

when a

permit

application is complete.

Lastly, the terms “Lowest

Achievable ~nissionRatec, “temporary” and “non—industrial area”

are not defined, but instead are explained within the appropriate

rule, Sections 203.301(a),

203.304(b) and 203.304(c), respectively.

In addition to the definitions,

Subpart A includes two

general rules.

53-48

---

S

for each pending NSR permit, there

will

be notice of the same and

a period for public comment.

To satisfy

40

CFR 51.1B

(h), public

participation should be initiated when the construction permit

application is made pursuant to Section 203.203.

Should

applications for the preconstruction and construction permits be

simultaneously

made,

then the notice of the pending application

should be given once it has been determined that the project

qualifies for NSR, i.e.

that a preconstruotion permit will be

issued.

SUBPART B:

Major Source Construction or Modification

in Nonattairiment Areas

As stated above?

the NSR rules const~.tutea preconstruction

review program.

Fundamentally there are :~oursituations that

initiate NSR, or more explicitly?

that require a project to

comply with the Lowest Achievable Emission Rate and possibly the

offset requirements set out in Subpart C.

First, the NSR rules

apply if a major stationary emission source

is to be newly con-

structed.

Secondly,

any physical change at a stationary source

which itself qualifies as a major stationary source, regardless

of the source’s size prior to the change, triggers NSR.

Thirdly,

reconstruction of an emission source, if the fixed capital cost

of new components exceeds approximately half of an entirely new

emission source, will be treated as a newly constructed major

stationary source.

Modification of a source which creates a

significant net increase in its emissions is the final situation

subjecting a project to t~~SR.

Permit Program

Given these four scenartos~should a project be likely to

qualify as a new major source or major modificationq application

for a preconstruction permit is required pursuant to Section

203.202.

Based on the information provided therein,

a permit

shall

be issued designating the proposed project as a new major

source or major modification.

The pernittee is thereby alerted

to plan to satisfy the NSR requirements before irreversible

decisions are made.

Subsequently, but before actual work can

begin on the source,

a construction permit must be obtained,

pursuant to Section 203.203,

This permit requirement is not

unlike that already found at Rule 103 of Chapter 2.

However,

a

construction permit is also required prior to any change in the

operation of a source which has been determined to constitute

a

major source or modification.

Furthermore, a construction permit

issued pursuant to this Section must contain those conditions

singular to NSR.

When no separate permit process was proposed for these

projects, the eighteen month limitation on the co~istruction

permit,

Section 203.204, was too short for the larger projects.

53-49

---

6

(Public Comment #18),

This bifurcated permitting process should

provide sufficient flexibility for long—range planning, yet

with the advance knowledge that NSR must be satisfied.

If the

anticipated length of a project,

or individual phases of it

accommodate it, both permits may be simultaneously applied for,

thereby

assuring

acceptances

of the planned project.

If the

anticipated

duration

of the

project

does

not

allow

for

this,

the

permittee is aware that ultimately the project must be designed

to only emit LAER (Section 203.301), and that RFP in the area

must be maintained through the project~scontribution of necessary

emission offsets (Section 203.302),

New Major Source and Major Modification

Pursuant to the combined definitions

in current Rules

101

and 201,

a stationary emission source may be an individual piece

of equipment or entire facility.

In the first situation,

either

the equipment or the facility to be constructed must be “major.”

Pursuant to Section 203.206(a),

a source qualifies as “major” if

it has the potential to emit 100 tons or more per year

(tpy) of

the pollutant for which the area is designated nonattainment.

The

100 tpy limit is premised on the federal definition of major

stationary source at 40 CFR 51.18(j)(l)(iv).

Therefore, pursuant

to Sections 203.201,

203,202 and 203.203, before building anew a

major stationary source

(that is, one which has potential to emit

100 tpy of the nonattainment designated pollutant), the applica-

tion for the proposed project must undergo preconstruction review

prior to a construction permit being issued.

The second project triggering

NSR

is a planned physical

change

which

itself has the potential to emit 100

tpy

of

the

pollutant

for which the area is designated

nonattainxnent.

According to

Section 203~206(b),it is

immaterial

whether

the

facility

where

the change will occur is itself major

(that is,

emits more than 100

tpy).

Therefore,

taking subparagraphs

(a)

and

(b) individually

or together, preconstruction review is

applicable if new equipment or a new facility, either having the

capacity to emit 100 tpy,

is planned.

Finally, in either case,

if the nonattainment designated pollutant is ozone, the source’s

potential to emit will be based on organic material

emissions,

(50 CFR 51.18(j)(l)(v)(b)L

It should be noted that the NSR is

applied only to project~spotential

to emit the non4ttainment

designated pollutant. Potential emissions of pollutants other

than those are limited instead by New Source Perforn)ance

Standards

(NSPS), National Emissions Standards for ~azardous

Air Pollutants

(NESHAPS), Chapter

2 emission limits, and any

desires of the applicant to secure future offsets,

Should reconstruction of a stationary emission source be

undertaken rather than new construction or physical

change, it

too may qualify as a major source, and thus be subject to NSR.

53~5O

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8

argued that this was not federally mandated, and furthermore, was

unacceptable since permit applications do not constitute permit

conditions.

(Public Comments Nos. 11,

14,

15,

16,

18,

19 and 24).

Both assertions are correct.

Since Chapter 2 emission limits

are expressed in mass emission and concentration limitations,

so

qualifying

these exemptions would impose an unforseen “cap” on

these sources,

Accordingly,

it has been deleted.

Significant Net Emission Increase

The

netting

concept

is

used

only

to

determine

whether

a

modification is major,

and therefore subject to NSR.

Whenever

the term

“net”

is used,

it represents a total

figure after any

applicable increases or decreases have been credited to an

original

amount.

Net emission determination are calculated using

actual emissions as defined at Section 203.102.

In this

instance, net emisrions represent the total amount after any valid

contemporaneous increases or decreases of air pollutants emitted

from the equipment have been added and subtracted,

Pursuant to

Section 203.208(a), an increase or decrease

is contemporaneous if

it has occurred due to changes in the equipment’s control or

operation within five years of the application being made for the

NSR permit at issue. However, the change must also have been made

since the area was designated nonattainment by the TJSEPA, or

since April 24,

1979, whichever is more recent.

The 1979 date is

the date the Agency originally adopted its own NSR rules, which

were later voided by the Seventh Circuit Appellate Court in

Citizens for a Better Environment

v.

Illinois Environmental

Protection Agency,

649 F.2d 522

(7th Cir.,

1981).

Since that

time, however,

the Illinois Legislature reinstated these rules

when it amended the Act with Section

9.1(e)

and the reinstated

rules included the April 24, 1979 cutoff date for an increase!

decrease to be contemporaneous.

This date

is included, rather

than the date the rules were legislatively reinstated,

or the

date Subpart B becomes effective, because

it provides the

greatest length of time for increases and decreases to be

considered contemporaneous,

A contemporaneous decrease/increase must also be creditable.

It is only if it has not been used in another permitting process,

and then only to the extent of the difference between old and new

emission levels.

A decrease in actual emissions is only credit-

able if it is enforceable and the Agency does not demonstrate

that the same decrease was already calculated into the SIP’s

demonstration of RFP.

Lastly,

the decrease must represent

reductions in the same pollutant that the modification will

increase, unless the applicant can demonstrate that the decrease

will provide the same or better protection of public health and

welfare

in the area,

Obviously,

should the amount arrived at be

zero or a negative figure,

no net emission increase is attributable

to the modification,

(Note, if a net emission decrease is proven,

that decrease could provide an offset at a later time,)

Should

it be greater than zero, the next step is to determine whether it

53-52

---

9

represents a significant emission increase.

The significant

levels which are found at Section 203.209, are those proposed by

the Agency and listed at 40 CFR Sl.l8(j)(l)(x) for 40 CFR 61.

Four problems pertaining to this determination were raised

by public commentators.

The USEPA cited three discrepancies with

federal requirements. Formerly the definition of “allowable

emissions” included

a provision that the emissions creditable to

the shutdown of a source being replaced by a similar source be

based on allowable emissions.

This was unlike any other

contemporaneously creditable emissions.

The provision allowing

for shutdowns has therefore been relocated to Section 203.208(b)

where clearly any increase or decrease is

to be premised on

actual emissions.

Secondly, citing 40 CFR 51.18(j)(1)(xii)(b)the

USEPA suggested that the term “actual emis~iions”used in this

Section be qualified so that the “rate of annual emissions” be

expressed in “tons per year”. Since the de~initionof “actual

emissions” at Section 203.102

is defined as “annual” emissions,

it naturally follows that when possible,

“actual emissions” will

be expressed in tons per year.

This is especially true

considering that ultimately the net emission figure will be

determined to be or not to be “significant” pursuant to Section

203.209, which expresses significant levels in tons per year.

Finally the USEPA argued that the definition of “allowable

emissions” should be amended to prevent malfunction, start—up or

breakdown emissions from existing sources to be used in the net

emission calculation.

However,

since Section 203.208 only

provides for use of “actual emissions”,

it is not necessary to

so

amend “allowable emissions” to avoid

a discrepancy with federal

requirements.

For the second time commentators argued that a “cap” would

be imposed if emission reductions are not available because that

same decrease was already used to demonstate attainment or RFP.

(Public Comments Nos.

11,

14, and 18).

However, in this instance

this argument fails.

At 40 CFR 51.18(j)(1)(vi)(e)(3) it

is

federally mandated that for decreases to be creditable, they must

be

so qualified.

However, the federal

language does not require

that the Agency prove that it has used the emission reduction,

whereas the proposed language at Section 203.208(c)(4) does.

Thus the burden of proof is shifted to the Agency to demonstrate

that the decrease the permittee wishes to use is not available.

In light of the federal requirement, imposing the burden of proof

on the Agency is all that can be done to satisfy the commentators’

concerns.

Section 203.210, Relaxation of a Source—Specific Limitation,

was vigorously opposed during the public comment period

(Public

Comments Nos.

14,

16,

18,

19,

20,

21 and 24)

It provides that

should a source be granted a relaxed emission limit pursuant to a

statutorily required proceeding or a Chapter 2 mechanism

e.g.

a

Rule 204(g) proceeding,

and the relief itself constitutes a

major new source or modification, then the project implementing

the relaxation is subject to NSR.

The commentators argue that

53-53

---

10

once such relief is awarded, the source should not be subject tO

another review.

They argue that for instance, requiring the

source granted relief provided at Rule 204(g)

(which was adopted

in R80—22:

Sulfur Dioxide Emission Limits) to undergo NSR would

prohibit fruition of the rulemaking’s statutory purpose

of

increasing the use of Illinois coal,

The Board must note that

although

that

was

one

statutory

purpose,

those

rules

were

also

to

be “consistent

with

the

need

to

attain

or

maintain

the

National

Ambient Air Quality Standards”

(Ill. Rev. Stat.

1981,

ch.

111½,

par.

1009.2,

as

amended),

Since

the

purpose

of

NSR

is

also

to

achieve

the

latter,

that

is

provide

RFP,

it

is

appropriate

that

should the relaxed limit create a “significant net increase”,

the

NSR requirements be applied as necessary.

The commentators ask that this Section be deleted.

Arguably

it could be deleted,

but not for the reasons they

importune.

Pursuant to Section 203.301 any construction, modification or

change

in operation which in itself constitutes a new major

source or major modification is subject to NSR, regardless of

the reasons or sanctions it

is associated with.

Although

application of these rules may overlay relief otherwise granted,

it should be remembered that generally air quality impacts are

assessed before source—specific relaxations are granted.

In

fact, under Rule 204(e),

Rule 204(g), and the Alternative Control

Strategy processes air quality impacts must be assessed.

Thus

it will be readily determinable whether the change

is major and

whether offsets will be required.

LAER will rarely be required

since most relaxations will not involve changes to equipment.

SUBPART C:

Requirements For Major Construction or Modification

Once it

has been determined that

construction

of

a

new

major

stationary emission source, reconstruction or major modification

of a facility or emission unit wili.

occur,

the permittee must

provide the

fo1Iawing~

Lowest Achievable Emission Rate

Based on either control equipment or process measures, the

permit application must demonstrate that each source will achieve

the lowest emission rate

possible.

Pursuant

to

Section

171(3)

of

the CAA and the definitions proposed at Section 203,301(a),

this

is one of three things:

1)

the lowest emission limit

in the SIP of any other

state, unless demonstrated not achievable;

then

2)

the emission limit achieved in practice or is

achievable by similar stationary sources; or

3)

the applicable New Source Performance Standard

(Reference Chapter 2:

Part IX)

53-54

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11

Federally, LAER is defined at S171(3)

of the CAA and 40

CFR 51.18(j)(l)(xiii).

Sources subject to NSR are required to

achieve LAER pursuant to S173(2) of the CAA. According to the

federal definition and usage, the source newly constructed or

modified must achieve the more stringent of

(1) an emission limit

contained in any state’s SIP for such category or class of

stationary source, or

(2) that achieved in practice by such class

or category of stationary source, and in no case emit more than

allowable under applicable new source standards of performance.

As proposed herein, the phrase “or

is achievable” is

included at the second part of this three part test.

Thus,

if

it represents the most stringent control sources subject to NSR

are required to implement not only the

mos:. advanced control

technologies or operations already used by like sources, but

also those used by similar sources and whi;h are reasonably

transferrable.

The federal interpretation of LAER includes the

concept of technology transfer

(c.f.

45 FR 59875,

September 11,

1980.)

The phrase “is achievable”

is included to clarify that

technology transfer is to be considered in the LAER deternination.

In practice it is

in keeping with the technology—forcing principle

underlying LAER.

According to Section 203.301,

the burden of proving which of

the three represents LAER for the particular project rests

on the

applicant whether it be a new major stationary source or be major

modifications.

Subparagraphs

(b) and

(c)

require that the

applicant demonstrate how the chosen control equipment or

operational limits will achieve LAER at the emission points of

concern.

However, this demonstration must be supported by the

more encompassing demonstration required by subparagraph

(d).

The applicant must also explain how the particular LAER program

was arrived upon,

or in other words, which of the above three

informational resources is it based on, how expansive was the

search, how successful the application of the program to the

project,

and what are the anticipated emissions.

Lastly, any

alternative emission limits must also be set out, along with any

additional

information the Agency may reasonably require.

Since

Section 39(f)(l)

of the Act authorizes the Agency to determine

what constitutes LAER, it is appropriate that

it be given the

discretion to require additional information as necessary.

Both

the applicant in deciding on, and the Agency in evaluating a LAER

program, must be mindful that as in the case of the RACT guide-

lines,

the LAER control measures must be forward looking

in order

to achieve the goal of cleaning up the area,

However,

even more

than is the case for existing sources, as explained above, new

major changes or modifications must be planned and implemented

using technology—forcing strategies.

53-55

---

12

Reasonable Further Progress

Section 173(l)(A) of the CAA also requires that RFP be

demonstrated in nonattainment areas and any emission reductions

thereby required be enforceable permit conditions,

Section 173

(l)(B) specifically requires that the new or modified sources not

cause or contribute to emission levels which exceed the allowance

permitted for such pollutant under Section 172(b).

Said subsection

(b) requires that the SIP contain an allowance for new or modified

sources.

To

assure

that

this

allowance

is

there,

and then again

that the SIP’S allowance margin is not exhausted, major construc-

tion or modification projects must provide emission offsets,

if

possible.

Pursuant to Section 203,302(a) (3), if the applicant

provides in the immediate vicinity of the project actual emission

offsets at a ratio of 1.25:1 or greater, nc modeling will be

required to assure an air quality improvement.

However, should

these offsets not be readily available,

the applicant may instead

provide a one—to—one offs~talong with acceptable modeling which

demonstrates minimal to no degradation of air quality Section

203.302(a)(1)i.

If the applicant proves by modeling that air

quality will be improved by the new construction or modifj~cation,

no specific offsets are required

Section

203,302(a)(2).

These

options are however only available to projects

involving particu-

late matter,

sulfur dioxide, nitrogen oxide, or carbon monoxide

emissions.

Projects involving organic material must provide actual

emission offsets in excess of the proposed project’s allowable

emissions.

It was suggested that requiring the modeling to prove

improvement at every location pursuant to Section 203.302(a) (2),

is too stringent (Public Comment No.

18),

However,

since such a

demonstration would exempt the project from providing offsets it

cannot be relaxed.

Subparagraph (b)’s requirement that actual

emission offsets be provided for a proposed project’s allowable

volatile organic material omissions was considered inequitable

by the same commentator.

However,

it is intended to insure that

paper offsets are not provided, and that sufficient reductions

are provided to offset maximum operations,

Two changes were made at Section 203.303, Baseline and

Emission Offset Determination.

Subparagraph (b)(1) requires that

the offsets be of a type with approximately the same health

implications.

It has been rhetorically changed from the proposed

version to parallel the language used at Section 203.208(c)

describing those creditable emissions acceptable as 4ecreases.

It should be noted that the substance of SubparagrapI~(b)(1)

also

limits the practice of replacing hydrocarbons with those of less

reactivity in order to obtain emission offsets.

Federally this

practice is limited to only those hydrocarbons listed at Table

1

of the USEPA’s “recommended Policy on Control of Volatile Organic

Compounds” as published on July 8,

1977 at 42 FR 35314

40

CFR

51.18(j)(3)(ii)(d).

According to the Emission Offset

Interpretive Ruling,

this policy is because

“.

.

.

EPA has found

53-56

---

13

that almost all non—methane hydrocarbons are photochemically

reactive and that low reactivity hydrocarbons eventually form as

much ozone as the highly reactive hydrocarbons.~

140 CFR App.

S

IV

(c)(4).

In implementing Section 203.303, USEPA’s 1977

policy determination on the reactivity of hydrocarbons shall

serve as a guide in determining whether or not the replacement

provides emission offsets because it

is of a type with approxi—

rnately the same qualitative

significance

for

public

health

and

welfare.

Should

this

policy change or be scientifically proven

incorrect,

the flexibility of Section 203.303

(b)(1)

shall

likewise allow use of replacement hydrocarbons to gain offsets.

The second change at Section

203.303 :~nvo1vesthe use of a

reductions

achieved

with

the shutdown of a source,

It

is

qualified in

accordance

with 40 CFR Append.x S(IV)(C)(3),

Thus

in

limited situations~

shutdowns

are

allowt~d

as emission offsets,

just

as

they

are permissable as emission

c:edits.

The USEPA

requested

that baselines based on uncontro.led rates pursuant to

Section

203,303(c)

(1)

be

qualified.

As

is

the

case with emission

credits,

the USEPA wanted it

demonstrated

that these uncontrolled

emissions had not been previously used to demonstrate attainment

or more appropriately,

RFP.

(Publ:Lc Comment *22)

Baselines are

premised on uncontrolled emissions only when these are less than

emissions allowed by Chapter 2

limitations,

Thus

the

difference

between uncontrolled and Chapter

2 allowable emissions

is not

available for offsets,

It

is this margin which is used in SIP

demonstrations.

For example,

lime kilns were exempted from the

sulfur

dioxide

limitation

because

their uncontrolled emissions

are

far

less

than

that

allowed

by

Rule

204

(R80—22

Opinion

at

page

16,

February

24,

1983).

Should

a

source,

such

as

a

lime

kiln,

reduce

its

uncontrolled

emissions,

it

is

these

reductions

which are available for off~ets.

If

emission

offsets

are not available at the time of

application,

Rule

203., 304(a)

stays

the

offset

requirement

so

long

as

the

applicant

agrees

to

accept

future

permit

limitations

to

provide

offsets

when

they

become

available.

The

project

will

therefore

initially

consume

part

of

the

growth

margin

built

into

the

SIP

program,

but

eventually

reestablish it.

On the other

hand,

if

the

project

source

is

temporary,

located

in

a

clean—

pocket

of

the

nonattainment

area,

or

in

a

rural

nonattainment

area for particulate matter,

offsets are never required.

These

exceptions are set out in Section 203,304(b),

(c), and

(e).

The clean—pocket exception has

two

specific qualifications.

First,

it must be demonstrated either by the analysis of the

applicant

or

the

Agency

that

emissions

from

the

project

located

within the clean—pocket

will

riot

significantly

impact the area’s

air quality.

The levels

of

significance,

set

out at 203.304(d),

are expressed in the same terms as air

quality

standards.

It

should be noted that these same levels provide the maximum impact

allowed when a project provides either equal

or greater offsets

53-57

---

14

pursuant to Section 203.302(a) and

Ic).)

Secondly, the emission

offset requirement may be lifted for the clean-pocket location if

on the date the air quality analysis is completed, no significant

impact is demonstrated and the clean-pocket

is being federally

reviewed for attainment designation.

The USEPA disagreed with

the offset exemptions provided for both temporary sources and

those located in clean-pockets.

(Public Comment No.

22).

They

will be retained since both exemptions are limited to extent

necessary to protect RFP.

The non—industrial exemption for sources involving TSP,

found at subparagraph

(e),

lists five qualifying criteria.

However, these criteria merely delineate areas which are

non—attainment for the TSP secondary air quality standard due

•to

rural fugitive sources.

Thus, offsets from industrial

TSP sources

are not to be found and even if they were,

they would not~help

to clean up the area.

That the project will comply with the LAER

requirements should suffice to keep the air in these areas as

healthy as possible.

Remaining Requirements

Sections 203.305 and 203.306 contain two additional

requirements of the permit applicant.

For all projects,

the owner

or operator must provide a certificate that all other sources

owned or operated by the same are

(1)

in compliance,

or

(2) on a

compliance program.

This is required under Section 173(3) of the

CAA.

Lastly, if the project involves emissions of organic

material or carbon monoxide, the applicant must demonstrate that

this is the proper location for the new construction or modifi-

cation.

This too is required under Section l72(b)(ll)(A) of the

CAA because Illinois has sought an extension of the 1982 deadline

for attainment involving these pollutants.

SUBPART

F:

OPERATING REQUIREMENTS

As stated at the outset, the purpose of the NSR permitting

program is to improve air quality in nonattainment areas with

each major construction or major modification.

Since the

construction or modification project is required to comply with

the LAER and emission offset requirements, as discussed above,

three rules have been adopted to assure that the same, and there-

fore the air quality improvement, is maintained.

Very simply,

Sections 203.601 and 203.602 require that the LAER provisions and

the emission offsets established at the construction permit stage

must be maintained.

It should be noted that should ~he original

emission offsets become unavailable for some reasons, equivalent

offsets can be substituted.

Furthermore,

after such a project

is operational

the Agency may require that ambient air quality

monitoring that is reasonably necessary to determine the actual

effect on the area (Section 203.603).

Together these three

requirements should assure air quality improvement.

53-58

---

15

CONCLUSION

The NSR regulations adopted herein adequately parallel the

federal requirements to satisfy Part

D of the Clean Air Act,

while also providing a maximum of ease and flexibility for new

source constructions and major modifications to be permitted in

Illinois.

For instance, the permitting process is structured to

allow for the initial determination of whether NSR will apply,

and if necessary,

a sufficient lapse in time for a permittee to

commit to the specifics of actual construction,

All federal

exemptions for activities otherwise considered as possible major

modifications are included, as well as an exemption for seasonal

shutdowns of hydrocarbon control equipment.

The exemption for

increases in operating hours is not eliminated due to permit

representations,

as originally proposed by the Agency.

Therefore

the

associated

cost

included

in

the

Economic

Impact

Study

is

no

longer

a

factor,

Three

alternatives

are

a~7ailable

for

providing

emission offsets,

one of which eliminates the need for offsets if

modeling demonstrates only improvement in air quality,

Another

allows the project the option of providing a set ratio of offsets

to avoid modeling and its associated costs.

Finally,

five

certain exemptions from the emission offset requirements are

included in the regulations.

The first exemption allows the

requirement for offsets to be deferred until such time

as they

are available.

Given the sometime difficulty in securing offsets

in a timely fashion, the rule provides flexibility while still

assuring improved air quality,

The dual definition of source as it pertains to netting out

of NSR is currently required for federal approval of this program,

although it is subject to litigation,

Nevertheless it is the

appropriate concept for Illinois.

The Economic Impact Study

found that the historical and projected impact of netting out of

review to be significant.

It

was estimated that the number of

plants netting out of review may be ten times that greater than

those going through review,

However, the Economic Impact Study

was based on six NSR permits being issued since 1977, and had not

taken into consideration that during only one of the years was

the plantwide definition in effect,

Thus,

the factor of ten

must be an overestimate.

Furthermore,

to allow these new

projects to escape NSR not only may jeopardize air quality,

but

ultimately means that more stringent controls will have to be

applied to existing sources,

at an unspecified cost.

As a whole,

the NSR regulations provide an equitable program to insure and

improve air quality in those regions needing it most,

I,

Christan L.

Moffett, Clerk of the Illinois Pollution

Control Bo~rd,hereby

ertify that the above Opinion was adopted

on the

/t..~1’—

day of

~.

,

1983 by a vote of

‘/‘-~

Illinois Pollut

1 Board

53-59