Rule Number and Title

Adoption of Federal Air Quality Regulations

Amended OARs:

340-216-0060, General Air Contaminant Discharge Permits

340-216, Table 1

340-228-0600, Purpose

340-228-0602, Definitions

340-228-0604, Applicability

340-228-0605, Retired Unit Exemption

340-228-0606, Hg Emission Standards

340-230-0300, Applicability

340-230-0310, Emissions Limitations

340-230-0320, Operating Practices

340-230-0330, Operator Training and Certification

340-230-0340, Monitoring and Testing

340-230-0350, Recordkeeping and Reporting

340-238-0040, Definitions

340-238-0050, General Provisions

340-238-0060, Federal Regulations Adopted by Reference

340-238-0090, Delegation

340-242-0520, General Provisions

340-244-0020, Delegation

340-244-0030, Definitions

340-244-0100, Applicability

340-244-0210, Emissions Limitation for Existing Sources

340-244-0220, Federal Regulations Adopted by Reference

New OARs:

340-228-0609, General Requirements

340-228-0611, Initial Certification and Recertification Procedures

340-228-0613, Out of Control Periods

340-228-0615, Notifications

340-228-0617, Recordkeeping and Reporting

340-228-0619, Petitions

340-228-0621, Additional Requirements to Provide Heat Input Data

340-228-0623, Monitoring Requirements for the Hg Emission Standards

340-230-0335, Standards for Municipal Waste Combustor Fugitive Ash Emissions

340-230-0359, Compliance Schedule

Deleted OARs:

340-228-0608, Computation of Time

340-228-0610, Appeal Procedures

340-228-0612, Authorization and Responsibilities of Hg Designated Representative

340-228-0614, Alternative Hg Designated Representative

340-228-0616, Changing Hg Designated Representative and Alternative Hg Designated Representative; Changes in Owners or Operators

340-228-0618, Certificate of Representation

340-228-0620, Objections Concerning Hg Designated Representative

340-228-0622, General Hg Budget Trading Program Permit Requirements

340-228-0624, Submission of Hg Budget Permit Applications

340-228-0626, Information Requirements of Hg Budget Permit Applications

340-228-0628, Hg Budget Permit Contents and Term

340-228-0630, Hg Budget Permit Revisions

340-228-0632, State Trading Budget

340-228-0634, Timing Requirements for Hg Allowance Allocations

340-228-0636, Hg Allowance Allocations

340-228-0638, Establishment of Accounts

340-228-0640, Responsibilities of Hg Authorized Account Representative

340-228-0642, Recordation of Hg Allowance Allocations

340-228-0644, Compliance with Hg Budget Emissions Limitation

340-228-0646, Banking

340-228-0648, Account Error

340-228-0650, Closing of General Accounts

340-228-0652, Submission of Hg Allowance Transfers

340-228-0654, EPA Recordation

340-228-0656, Notification

340-228-0658, General Requirements

340-228-0660, Initial Certification and Recertification Procedures

340-228-0662, Out of Control Periods

340-228-0664, Notifications

340-228-0666, Recordkeeping and Reporting

340-228-0668, Petitions

340-228-0670, Additional Requirements to Provide

340-228-0673, Monitoring Requirements for the Hg Emission Standards

340-228-0674, Heat Input Determination

340-228-0676, Coal Sampling and Analysis

340-228-0678, Hg Mass Emissions Measurement Prior to Any Control Device(s)

340-228-0671, Emission Standards

340-228-0672, Emission Caps

340-232-0070, Gasoline Dispensing Facilities

340-244-0110, Permit Application Procedures for Early Reductions

340-244-0120, General Provisions for Compliance Extensions

340-244-0130, Determination of Early Reductions Unit

340-244-0140, Demonstration of Early Reduction

340-244-0150, Review of Base Year Emissions

340-244-0160, Early Reduction Demonstration Evaluation

340-244-0170, Approval of Applications

340-244-0180, Rules for Special Situations

Objective of rulemaking

Changes Proposed

The objective of this rulemaking is to keep Oregon’s rules updated and consistent with the federal rules, helping ensure the Department maintains primary delegation authority.

For this rulemaking, DEQ proposes to:

•  Adopt by reference 18 new federal National Emission Standards for Hazardous Air Pollutants (NESHAP) applicable to non-major or area sources including: auto body shops and other surface coating operations; gasoline stations, terminals, bulk plants, and pipeline facilities; paint strippers; hospital sterilizers; glass, clay ceramics, and lead battery manufacturing; metal processing and production; wood preserving; and flexible polyurethane foam fabrication and production.

•  Adopt requirements that go beyond the NESHAP applicable to gasoline stations, including: a requirement that gasoline stations with Stage I vapor control capable tanks use those vapor controls; a requirement that all new tanks be equipped with Stage I vapor controls, and a requirement that stations with high throughput add Stage I vapor controls.

•  Adopt General Air Contaminant Discharge Permits (ACDP) for sources affected by the new federal NESHAPs applicable to non-major or area sources.

•  Adopt by reference 2 new federal New Source Performance Standards (NSPS) applicable to stationary combustion engines and turbines.

•  Adopt by reference new federal residual risk standards for dry cleaning facilities that use perchloroethylene.

•  Update the adoption by reference of existing federal NESHAP and NSPS standards.

•  Remove the adoption by reference of the court vacated federal Boiler and Process Heater NESHAP.

•  Adopt revisions made to the federal Emission Guidelines for Municipal Waste Combustors.

•  Remove the trading portion of Oregon’s Utility Mercury Rule but retain the State cap on mercury emissions. Since the Boardman plant will not have the ability to purchase mercury credits to offset emissions that exceed the State cap, move the mercury cap start date to correspond to the date the Boardman plant is required to reduce its mercury emissions.

Need for this Rulemaking

The Environmental Protection Agency (EPA) has adopted a large number of new NESHAP and NSPS air quality regulations that will affect thousands of small businesses in Oregon in 70 different source categories. This rulemaking adopts those standards by reference. Oregon sources must comply with federal NSPS and NESHAP requirements whether or not state rules are adopted. However, adoption would keep Oregon’s rules updated and consistent with the federal rules which helps ensure that the Department maintains delegation of the NSPS and NESHAP programs, as well as Oregon’s Title V Operating Permit program.

The Clean Air Mercury Rule (CAMR) was recently vacated by the courts. As a result, certain portions of Oregon’s Utility Mercury Rule will need to be removed and/or incorporated into the state rule during this rulemaking.

Relevant History

The Department typically implements federal NESHAPs for non-major or area sources by adopting the NESHAP by reference and through the Department’s permitting programs. The only exception to this is the Dry Cleaner NESHAP which has been implemented by requiring dry cleaners to report compliance information along with their annual report to Land Quality.

Deadlines

The Performance Partnership Agreement with EPA stipulates that DEQ will adopt the NSPS and NESHAP rules and request delegation by April 2009. Air Quality’s goal is to complete this rulemaking by December 2008.

Technical or Environmental Issues

Adopting requirements that go beyond the federal NESHAP for gasoline stations would reduce fuel consumption in Oregon and further reduce benzene emissions.

Retaining the State mercury cap in the Utility Mercury Rule will ensure that mercury emissions in Oregon from coal-fired power plants remain low, but will limit the number of plants that can be built in Oregon.

Cross Media Issues

The new residual risk standards establish additional requirements for dry cleaners using perchloroethylene. As a result, the dry cleaner program which is currently implemented primarily by Land Quality will need to be modified. Air Quality is proposing that dry cleaners using perchloroethylene will obtain an air quality permit. This will give Air Quality the ability to charge fees and provide compliance inspections. Formerly the only funding came through Land Quality Division’s fees and surcharges paid by dry cleaners based on chemical usage. Continued cooperation between the Land Quality and Air Quality Divisions will minimize the cost of the new permitting requirement on dry cleaners.

The Land Quality Division currently has a grant to provide assistance to auto body shops. Implementation of the new auto body shop NESHAP will also require assistance from Air Quality. The Land Quality and Air Quality Divisions are working together to maximize resources and minimize duplication.

The new Gasoline Dispensing NESHAP contains requirements that are the same or similar to those required by Land Quality’s Tanks Program. The Air Quality Division is working with Land Quality’s Tanks Program to identify opportunities to leverage resources and minimize the impact on affected stations.

Policy or Political Issues

DEQ is considering adopting standards for Municipal Waste Combustors (MWC) that are more stringent than federal requirements. Tests have demonstrated that Covanta has consistently lower emissions than the standards contained in the MWC Emission Guidelines.

When Covanta’s permit was up for re-issuance last year the facilities permitted emission levels underwent public scrutiny and became a media and legislative issue.

The public was concerned that the source would be allowed to backslide to the emission levels currently allowed by the MWC Emission Guidelines. One legislator even requested that the Department consider going beyond the federal Emission Guidelines for Municipal Waste Combustors (MWC).

DEQ would like to retain the State mercury emission cap despite the fact that the federal rule which included a state cap has been removed by the courts. The Utility Mercury Rule would continue to restrict the number of new coal-fired power plants in Oregon and will be controversial with PGE and other power companies looking build plants in Oregon.

Compliance & Enf. Issues

The current implementation approach for the Dry Cleaner NESHAP has not assured a high level of compliance and has not provided adequate funding to enable the Department to enforce the NESHAP.

Implementation Issues

There are a great deal of implementation issues associated with this rulemaking that will be addressed through a rulemaking implementation plan. The biggest challenge is figuring out how the Department can regulate such a large number of new sources in a way that will sufficiently meet the new federal standards while not being overly burdensome on small businesses.

Currently non-major NESHAP sources are required to obtain a Simple ACDP unless the Department has established a General ACDP for the source category. The annual fee for a Simple ACDP is $3,840 while the annual fee for a General ACDP currently ranges from $720 to $1,872. The Department is considering creating a new General ACDP category with an annual fee of $360. To implement the new NESHAPs, the Department is proposing to establish new General ACDPs for the new NESHAPs and charge the affected sources an annual fee ranging from $360 to $720 dollars. This would save each affected source between $3,120 and $3,480 while providing the Department at least 7 FTE to implement the program.

The Department is also working on a legislative proposal to give the Department the authority to develop a registration or certification program that will further reduce the impact on affected sources. See the Effects on Small Business, Individuals below for further discussion on the legislative proposal for a registration or certification program.

5 year Review

The five year review may apply to this rulemaking because the Department is considering the adoption of rules that go beyond the federal rules.

Stakeholders

There are approximately 4,000 sources potentially affected by the new NESHAPs applicable to non-major or area sources. The Department will provide notice to these sources and conduct surveys in an effort to determine which are affected by the new standards and to target compliance assistance. The Department will also meet with various stakeholder and industry groups to discuss the Department’s proposed implementation of the new NESHAPs.

There are approximately 240 dry cleaners affected by the new residual risk standards for dry cleaners and the Department’s proposed change to the implementation approach for the Dry Cleaner NESHAP. Outreach will be done in a joint effort between the Air Quality Division’s Small Business Program and Land Quality’s Dry Cleaner Program. The Department has already provided all dry cleaners in Oregon with a leak detector and training as required by the new standards.

PGE will be contacted as the Boardman plant is directly affected by revisions to Oregon’s Utility Mercury Rule.

Covanta will be contacted as they will be directly affected by any changes to the Emission Guidelines for Municipal Waste Combustors.

Effects on Small Business, Individuals

The new federal NESHAPs for non-major or area sources and the new federal residual risk standards affect numerous small businesses. These federal standards apply to these sources regardless to whether the Department also adopts the standards. The Department is not allowed to adopt standards weaker than the federal standards.

The Department is considering implementation options that will minimize costs to small businesses but also provide the Department with resources to sufficiently implement the new federal standards. Currently, sources subject to a non-major or area source NESHAP are required to have a Simple ACDP unless the Department has developed a General ACDP for each source category, which is less costly than a Simple ACDP. This rulemaking includes new General ACDPs for auto body shops and other surface coating operations, paint strippers, gasoline stations, and dry cleaners, to minimize the cost on these businesses.

The Small Business Compliance Advisory Panel has recommended that the Department provide for a registration or certification program in lieu of permitting for those sources that join a program such as ECO-Biz requiring sources to go beyond the new federal standards. The Department is working on a legislative proposal to give the Department the authority to develop a registration or certification program.

The Department is also considering going beyond the new Gasoline Dispensing NESHAP by requiring that gasoline stations with Stage I vapor control capable tanks to use those vapor controls. All new tanks would need to be equipped with Stage I vapor controls, and stations with high throughput would need to add Stage I vapor controls.

Rulemaking Process

Rulemaking Team

Advisory Process

Standing committees that will be utilized during this rulemaking are the Compliance Advisory Panel (CAP) and the Small Business Dry Cleaner Advisory Committee. The purpose of addressing these committees is to present the Department’s implementation strategy for the new NESHAPs and the Dry Cleaner NESHAP and receive the committees’ input and/or recommendations. The Department will also meet with business associations and will convene, at a minimum, a Fiscal Impact Advisory Committee for this rulemaking.

Public Involvement

This rulemaking will involve the public through the required public notice and comment process.

EQC Involvement

There is no plan for EQC involvement for this rulemaking. However, the Director’s dialogue to the Commission in February 2008 included a discussion of the new NESHAPs applicable to non-major or area sources.

Rulemaking Target Dates

Milestone

Target Dates

Advisory Process (e.g., committees; workgroups)

Ongoing

Publication in SOS Bulletin

August 2008

EQC rule adoption

December 2008