Q’s rules allow sources to choose a different baseline year with little to no guidance on when this is proper or how DEQ plans to account for this different baseline period.
NORTHWEST ENVIRONMENTAL DEFENSE CENTER
10015 SW Terwilliger Blvd, Portland, Oregon 97219
Phone: (503) 768-6673 / Fax: (503) 768-6671
January 11, 2025
Jill Inahara, Permit Coordinator
Oregon DEQ, Program Operations,
811 SW 6th Avenue,
Portland, OR, 97204.
(503) 229-5001
E-Mail: AQFeb2011Rules@deq.state.or.us
Re: Proposed rulemaking regarding New Source Review, Particulate Matter and Greenhouse Gas Permitting Requirements and Other Permitting Rule Updates
Northwest Environmental Defense Center (NEDC) submits the following comments concerning the proposal by the Oregon Department of Environmental Quality (DEQ) to issue new regulations concerning the Prevention of Significant Deterioration (PSD) for particulate matter less than 2.5 microns (PM2.5) and greenhouse gases (GHGs).
NEDC is concerned that DEQ’s proposal fails to adequately match the baseline period and baseline concentrations. If individual emissions levels are not set from the same date range as the monitoring data, then DEQ’s rules will not ensure compliance with the national ambient air quality standards (NAAQS) or PSD increment. NEDC is therefore concerned that DE
Q’s rules allow sources to choose a different baseline year with little to no guidance on when this is proper or how DEQ plans to account for this different baseline period.
More fundamentally, NEDC is concerned that DEQ has failed to fully and independently analyze the costs and risks of its proposed regulations and is instead following in the footsteps of its Plant Site Emission Limitation (PSEL) program. The current PSEL program has failed to live up to the standard Oregonians expect: the PSELs are unenforceable as a practical matter, DEQ’s implementation of the PSELs fails to ensure compliance with the NAAQS and PSD increment, and the PSEL program has incentivized industry to keep dirty sources operating instead of replacing them with newer, cleaner sources. DEQ should take the implementation of PSD rules for PM2.5 and GHG as an opportunity to move away from this failed program and take steps to make Oregon’s program consistent with the federal program.
DEQ should instead implement the PSD program for PM2.5 and GHGs in line with the federal program and begin moving all other pollutants to this system. At a minimum, DEQ should take this opportunity to consider how the federal rules work in practice by adopting the federal program for GHGs. If DEQ decides to implement the PM2.5 PSD program through the PSEL program, DEQ should mandate that the baseline emission rate be set for the same period for which DEQ has monitoring data, or at the very least implement stringent guidelines that direct the limited instances when a different baseline period may be chosen.
DEQ Should Not Implement the PM2.5 and GHG PSD Programs Through the PSEL Program.
PSELs Are Unenforceable As a Practical Matter.
NEDC is worried about the unenforceable nature of the PSELs. As applied to PM2.5, the unenforceable nature of these regulations is highlighted by DEQ’s attempt to estimate the level of PM 2.5 at sources in relation to the source’s PM10 levels. In relation to the potential health risks associated with PM2.5, the inability to adequately enforce the permit requirements is troubling. DEQ has stated that “any increase in actual emissions above the PSEL requires the source to apply for, and DEQ to approve, a revision to the PSEL in the state air quality construction permit.” DEQ, FAQ: Relationship to Federal Requirements
New Source Review, Particulate Matter and Greenhouse Gas Permitting Requirements and Other Permitting Rule Updates, pg. 3. (FAQ). However, without adequate monitoring and reporting requirements sources are able to avoid the permitting requirements needed to protect the health of Oregon residents from the specific harms caused by PM2.5.
In Oregon, to qualify as a major modification, a change must result in "an increase in the PSEL" over the significant emission rate over the netting basis. OAR 340- 200-0020(66)(a). The first problem with Oregon's approach is that the PSEL is a permit limit, not a calculation of actual emissions or potential to emit of a new unit. A PSEL is “the total mass of emissions per unit of time of an individual air pollutant specified in a permit source.” OAR 340-200-0020(88). A PSEL is a plant-wide cap on annual emissions in a permit limit that is intended to function as a federally and practically enforceable limit on a source’s potential to emit (PTE). Because the PSEL is a permit limit, the source must apply for an increase in its permit limit to ever qualify as a "major modification" under OAR 340-200-0020(66)(a). However, the focus of the determination must be on whether actual emissions increase, not whether the permit limit changes.
The second problem with Oregon's program is that it requires a "major modification" to result in increase in permitted (not actual) emissions that is equivalent to an increase over the SER on a plant-wide basis. Instead of focusing on the pollution increase from the new emissions unit, Oregon's program determines whether an emissions increase is significant by reference to the entire facility. In this way, Oregon's program features "automatic netting" based on a permit limit from the 1970s, or in the case of one of proposed rules, from the more recent baseline period. Thus, so long as the source had a PSEL in excess of emissions projected from the source after a physical or operational change, and never banked those emissions, no PSD permit is required.
The third problem with Oregon's PSEL approach is that the PSEL is not based on projected or actual emissions during a time-frame that is contemporaneous with the physical or operational change in question, but during the "baseline period." OAR 340-200-0020(3). The rules define baseline period as “any consecutive 12 calendar month period during calendar years 1977 or 1978,” OAR 340-200- 0020(14), or the more recent baseline period. Oregon's definition of "baseline period" also allows DEQ to use an earlier time period “upon a determination that it is more representative of normal source operation.” Id. The baseline emission rate is then adjusted as rules change and future permitting decisions are made. The adjusted baseline is referred to as the “netting basis,” and is defined as follows:
the baseline emission rate MINUS any emission reductions required by rule, orders, or permit conditions required by the SIP or used to avoid SIP requirements, MINUS any unassigned emissions that are reduced from allowable under OAR 340-222-0045, MINUS any emissions credits transferred off site, PLUS any emission increases approved through [NSR] regulations.
OAR 340-200-0020(71).
The resultant "netting basis" in many cases may not reflect actual emissions at any time that is reasonably contemporaneous with the physical or operational change in question. In fact, the "netting basis" reflects a thirty-year "lookback" period, in clear contravention of the federal regulatory floor. Thus, the PSELs are unenforceable on a practical level leading to the next problem.
The PSEL Program Fails to Live Up to Its Goal of Ensuring Compliance With the NAAQS and PSD Increment.
Further, the PSEL program has failed to meet DEQ’s own goals and requirements regarding the NAAQS and PSD increments. DEQ has stated that goals of the PSEL program is to provide the basis for:
1) assuring reasonable further progress towards attainment of ambient standards;
2) assuring compliance with ambient standards and PSD increments (the maximum
concentration increase that is allowed to occur above a baseline concentration for a
specific pollutant);
3) administering the emissions trading program; and
4) tracking PSD increment consumption (the cumulative impact of emissions growth in areas that meet air quality standards). FAQ, pg. 3.
NEDC is concerned that in practice the PSELs fail to adequately meet these lofty goals and comply with the federal program. The PSEL program is only concerned with a specific source’s “allowable” emissions, while both the NAAQS and PSD increments are tied directly to “actual” emissions because they are concerned with “actual” concentrations of pollutants in the air shed. From the start, then, the administration of the PSEL program is disconnected with goals it is intended to achieve.
Regarding goals 1 and 2, above, the PSEL program fails to account for slippage and thus the “maximum concentration increases” for many sources are above what the PSD increment should allow.
In the same light, the PSEL program fails to achieve goal 4 because it fails to properly address the cumulative effects of emission growth. The PSEL program does not adequately consider these cumulative impacts due to the lack of monitoring data and the allowance of slippage in older sources. These inadequacies unfortunately have negative health and environment impacts on the region.
DEQ’s explanation of how the PSEL program is consistent with the federal program is lacking. For instance, DEQ states that:
“PSEL rules are consistent with the requirements of the Clean Air Act as they allow increases in actual emissions only if such increases would not exceed applicable emission limitations, or cause ambient air quality standards, PSD increments or reasonable further progress to be violated.”
DEQ, FAQ: Relationship to Federal Requirements New Source Review, Particulate Matter and Greenhouse Gas Permitting Requirements and Other Permitting Rule Updates, pg. 3. However, as mentioned above, the PSEL program is based on “allowable” not “actual” emissions. Because PSELs are set based on potential emissions, OAR 340-222-0041, and thus create a ceiling for the operation of the source, they do not reach the actual emissions of the source. For instance, a facility that only runs two 8-hour shifts, but has the potential to run three 8-hour shifts, even the source never has and never intends to, could increase actual emissions from their two shifts by 50%, which would be up to their “allowable emissions,” without triggering the PSD program under Oregon’s current rules. Conversely, assuming this increase in actual emissions were over the significant emission rate, the federal program would be triggered and the source would be required to meet the requirements of the PSD program. This highlights how the Oregon PSEL program is inconsistent with the federal program, and leads directly to the next major problem with the PSEL program, namely that it encourages the continued operation of old, dirty sources.
The PSEL Program Encourages the Continued Operation of Old, Dirty Sources When They Would Otherwise be Replaced with New, Cleaner Sources.
The current PSEL program places too much concern on “creep” instead of focusing on the larger problem of “slippage” with old, dirty sources in the region. Slippage allows grandfathered sources to continue polluting the region. Old sources whose retrofits would trigger the federal PSD program, instead simply have their life extended and keep polluting indefinitely.
NEDC is concerned that DEQ has systematically underappreciated the risk of “slippage” when assessing the values of the PSEL program. Slippage is where a source has slowly deteriorated to the point where it can no longer function at what was its original design capacity. The source is then retrofitted with newer equipment or other physical modifications such that it can again run at its previous potential. If the deterioration had occurred more than five years prior to the retrofit, the changes would trigger the federal PSD program and this older source would have to meet all the requirements of the program. Under the Oregon program, because the “allowable” emissions never changed during the deterioration of the source, and assuming the source does not want to increase its PSEL, the Oregon PSEL program would screen this source from the requirements of the PSD program.
Grandfathering of sources was never supposed to let a source escape strict controls forever; it was assumed that these sources would be shut down at the end of their useful life or life extending projects would trigger PSD and the application of stricter emissions controls. This is the grand compromise that Congress made in the Clean Air Act: allow sources that are currently in operation to escape the strictest requirements with the understanding that they would eventually trigger these requirements when they undertook major projects. Instead the PSEL program lets these inefficient sources run forever, so long as their allowable emissions do not increase. By allowing these older, inefficient, and dirty sources to operate, in essence, indefinitely, the PSEL program undermines incentives that the facility has to replace older sources with newer, cleaner, more efficient sources.1
As bad as this problem is currently, allowing the PSEL program to apply to PM2.5 and GHG emissions would allow such sources to further degrade our region’s air quality. Programs related to PM2.5, GHGs, and other harmful pollutants should incentivize their reduction, not their continued existence.
DEQ has indicated that their main concern is not with slippage, but is instead with “creep.” Creep is the process by which a source could systematically increase their potential emissions without triggering the federal PSD program. Under the federal program, only emission increases within ten years are considered.2 A source could then increase emissions, so long as the increase is below the significant emission rate, every ten years without triggering the federal PSD program. DEQ’s concern for creep is however overblown. When a source undertakes a project to increase emissions, they may consider the applicability of the PSD program, but they are unlikely to make this their top priority. The top priority for these sources is the gains they can make through the modifications: the increase in emissions is not, in and of itself, the goal of these projects. DEQ has provided no basis for their concern about creep: other states have been implementing a system like the federal program for years, and yet NEDC is unaware of any massive problems in other states with creep. Furthermore, the potential increases in actual emissions due to creep occur over a long time period and could potentially be addressed through changes to DEQ’s minor source review, while slippage is currently unregulated under Oregon’s program.
The Federal Program is a Workable Program with an Abundance of Guidance on Implementing the Program.
Oregon’s PSEL program, like other DEQ innovative programs, is unique under the Clean Air Act. While this may be a source of pride for DEQ, it makes implementing the program difficult because, when faced by difficult questions about the program and how it operates, DEQ consistently makes ad hoc or irrational decisions without fully anticipating all of the potential consequences. Comparatively, the federal program is implemented by most other states and by EPA and therefore has a wealth of interpretive guidance on the implementation of the program. Implementation of the federal program would therefore save DEQ time and money and would reduce the number of ad hoc decisions DEQ has to make and revise.
Because the PSEL program does not have a federal or state counterpart, understanding how the program works falls squarely on the shoulders of DEQ. This has lead to inconsistent, irrational and ad hoc decisions on what portions of the program mean and how they should be implemented. DEQ does not have any resource for interpreting the program except itself, and so often cavalierly announces new interpretations in permitting decisions, caring little for how they will affect future permitting decisions
For instance, DEQ recently released an interpretation of “netting basis” in regards to PGE’s Boardman plant. This interpretation stated that decreases required by rule would take effect on the netting basis upon adoption by the agency. This interpretation was advanced, no doubt, to correct the problem identified above: namely that the PSEL program relies only on allowable emissions and is disconnected from actual emissions. PGE had announced plans to build an entirely new generating facility at the Boardman site. Without this new DEQ interpretation of netting basis, PGE could have constructed that new facility without ever subjecting it to PSD review because their actual emissions were massively below their allowable emissions; PGE would not have had to increase their PSEL to allow operation of the new facility, and therefore would not trigger PSD review.
Not only does this example point out the immense potential problems with the PSEL program, but it highlights the short sighted nature of DEQ’s decision-making process. The new interpretation of netting basis was only explained, and possibly only considered, in light of the situation at Boardman. DEQ did not examine or explain how this new interpretation would affect other facilities. As commenters pointed out in response to DEQ’s proposed permit for PGE Boardman which advanced this new interpretation, the interpretation would lead to absurd results, potentially subjecting facilities to PSD review for projects that decreased emissions. There is little doubt that if that scenario should come to pass, DEQ would likely reverse its previous interpretation, or twist itself in knots trying to limit the interpretation to the sole case of PGE Boardman.
The above is just one example of DEQ’s repeated ad hoc decision making. This sort of decision making, void of any context or consideration of future application, leads to uncertainty, inconsistent application, and absurd results.
This is therefore an instance where the federal program has a clear advantage over Oregon’s PSEL program. There is an immense wealth of information on the implementation of the federal PSD program. There are court cases, EPA adjudications by administrative law judges and the Environmental Appeals Board, EPA guidance documents, and thousands of actual permitting decisions made by EPA and other states.3 So when confronted with a difficult question in the PSD program, EPA and other states implementing a program like the federal program can simply search through these sources of information to find out a) whether someone has answered the question, or one like it, already, b) how they came up with that answer, c) how that answer has been implemented, and d) whether that answer has been implemented successfully. Because these sources are available to everyone, it helps ensure a consistent regulatory environment with less ad hoc decisions making.
Not only would adopting the federal program save DEQ time in the initial determination of answers, it would save time on the back end as well by reducing the number of these decisions which DEQ will have to reconsider after new circumstances show how short sighted the original decision was. This is good not only for DEQ, but also for businesses and citizens by providing a stable regulatory structure so that everyone knows, or can figure out, the answer beforehand.
Because of the advantages of the federal program and the deficiencies of Oregon’s PSEL program, DEQ should take this opportunity to move away from the PSEL program and begin implementing the PSD program in line with the federal program.
If DEQ Implements PM2.5 Through the PSEL, DEQ Should Mandate That the Baseline Emission Rate be Set Based on Emissions During the Period for Which DEQ Has Monitoring Data Or Limit Discretion to Move Away From This Period.
If DEQ decided to forego NEDC’s suggestion that it adopt the federal program to implement PM2.5, it should at the very least mandate that the baseline emission rate be set based on the emissions during the baseline period, with, at most, limited potential for divergence.
As noted above, the PSEL program is intended to ensure compliance with the NAAQS and PSD increment. Both of these programs are based on actual emissions within the air shed. The only way that the PSEL can actually ensure compliance with these programs is if the baseline emission rates are set based on actual monitoring data from the baseline period. DEQ’s proposed options 1 and 2 do not connect the baseline emissions rate to the baseline period and these proposed would therefore not ensure compliance with the NAAQS or PSD increment.
Compliance with the NAAQS and PSD increment is determined in comparison to the baseline concentration within the air shed. The baseline concentration is determined through the monitoring data that DEQ has for the baseline period. This baseline concentration is the concentration of the pollutant in the air shed, which obviously is based on what was actually emitted into the air shed during the baseline period. It is for this reason that the standard is to tie the specific baseline emission rates for sources to their actual operations during the baseline period.
If the baseline emission rates are not set based on the actual operations during the baseline period, then the PSEL program cannot ensure compliance with the NAAQS or PSD increment. For instance, 4 if the baseline concentration is 0.1 ppm, based on actual emissions during that period of 100 tpy, but DEQ adjusts the baseline emission rates at the behest of industry to 150 tpy, there is no guarantee that this will still correspond to a baseline concentration of 0.1 ppm. This could instead, for instance, correspond to an air shed concentration of 0.15 ppm. When DEQ then analyzes future projects, if it still presumes that it beginning with the actual monitored concentration in the air shed of 0.1 ppm, it will not fully consider the actual emissions in the air shed and this could lead to a violation of the NAAQS or PSD increment.
This problem could potentially be resolved through the use of modeling data to indicate what the baseline concentration would have been had the sources been operating at the baseline emission rate DEQ has assigned them. However, NEDC is concerned that over reliance on modeling to fill in the potential gaps in DEQ’s understanding of air shed concentration turn the PSD program from a program intended to protect human health to a program intended to ensure that the model is not violated.5 While modeling is an essential element of the implementation of the Clean Air Act, reliance upon modeling when actual monitoring data exists is a mistake. There may be little choice to use modeling data, but DEQ should not compound the inaccuracies of modeling by increasing its use beyond what is necessary. Disconnecting baseline emission rates from the baseline concentration compounds this problem.6
Because the use of modeling data to disconnect baseline emission rates from the baseline concentration runs contrary to the intended purpose of the PSD program, DEQ should require that the baseline emission rates for sources be set based on the actual monitoring data that DEQ has. While this is likely not the best case scenario for businesses, DEQ’s goal is to protect human health and the environment, not business profits.
NEDC’s Specific Comments on DEQ’s Proposed Options
Option 1 fails to link PSELs to the baseline concentration in the air shed and therefore will not meet the PSEL program’s goal of ensuring compliance with NAAQS and PSD increment. DEQ provides little guidance on how the “fraction” will be established. There is no indication that DEQ will require further testing of the source to ensure that the fraction remains the same, potentially allowing massive increases in PM2.5 emissions and the result specific health effects.
Option 2 would subject facilities to PSD for any increase over current PSEL and could lead to massive increases in actual pollution. By setting PSELs at PTE for ALL sources constructed after 1978, Option 2 would allow massive increases in actual emissions in the air shed and allow for violation of the NAAQS or PSD increment with impunity. Even more so than Option 1, Option 2 would wholly disconnect the PSEL program from the programs it is supposed to support, making the PSEL nothing more than a bureaucratic and accounting exercise in futility.
Option 3 is better because it ties the baseline period to when DEQ actually has monitoring data, ensuring that the PSEL program actually meets its goal of ensuring compliance with the NAAQS and PSD increment. If adopted, DEQ should outline very specific requirements for when DEQ will diverge from the baseline period for setting baseline emission rates.
Option 4 is best. The PSEL program has failed to live up to what Oregonians expect and DEQ should move away from it. Option 4 is a good first step down that road.
Thank you for your consideration of these comments.
Sincerely,
John Krallman
Air Quality Group, NEDC
Kenny Key
Air Group Project Coordinator, NEDC
The PSEL program also subsidizes current facilities to the detriment of facilities that may want to move into Oregon. Because the PSEL program allows current facilities to operate almost indefinitely without meeting the strictest requirements of the Clean Air Act, these facilities have a competitive advantage over any facilities that wish to be located in Oregon in the same industry that would have to meet these, sometimes costly, requirements. In this light, the PSEL program can be seen, not only as undermining the goals of the Clean Air Act, but also stifling business opportunities in Oregon.
The requirements for Electric Generating Units (EGUs) are slightly different under the federal program and have only a five year look-back period.
For instance, EPA Region VII has an electronic, searchable, database of both permitting decisions and guidance documents. http://www.epa.gov/region7/air/nsr/nsrpg.htm.
These numbers are obviously not correlated to reality, but instead intended to demonstrate the issues associated with disconnecting the baseline emission rate from the baseline period.
Similar to the potential effects of the PSEL program, this could also stifle growth in Oregon because existing sources would magically be able to take part of the PSD increment without going through PSD review, reducing the amount of the increment available to future sources.
DEQ’s own experience with the disconnect between modeling and monitoring data with the Portland air toxics programs should be enough to caution against the overreliance on modeling.