Oregon Department of Environmental Quality

Nov. 5-6, 2014

Oregon Environmental Quality Commission Meeting

Temporary Rulemaking Action Item: # ????

Greenhouse Gas Permitting

DEQ recommends that the Environmental Quality Commission:

Determine that failure to act promptly would result in serious prejudice to the public interest or the interests of the parties concerned as provided under the Justification section of this staff report.

Adopt temporary rule amendments as proposed in Attachment A as part of chapter 340 of the Oregon Administrative Rules to be effective upon filing with the Secretary of State.  

Short summary 

DEQ proposes temporary rule amendments to remove certain parts of Oregon’s greenhouse gas permitting requirements temporarily while DEQ determines how to recommend EQC take into consideration a recent change to federal greenhouse gas permitting rules. The temporary rules would prevent facilities from spending thousands of dollars to comply with Oregon’s current requirements until EQC considers permanent rules in early 2015.

 Background

The federal Clean Air Act regulates stationary sources of air pollution to protect public health and welfare. Under the Act, it is illegal to operate a major industrial source of air pollution without a federal operating permit known as a Title V permit. A major industrial source is any stationary source with the potential to emit 100 tons per year of any air pollutant. In addition, it is illegal to construct or modify a major emitting facility located in an attainment area with ambient air quality standards without obtaining a Prevention of Significant Deterioration permit. A major emitting facility is any stationary pollutant source with the potential to emit 250 tons per year of any air pollutant, and certain types of stationary sources with the potential to emit 100 tons per year. Stationary sources seeking a permit must comply with emissions limits that reflect the best available control technology for each regulated pollutant.

The U.S. Environmental Protection Agency is responsible for administering the Title V permit program and Prevention of Significant Deterioration program. The U.S. Supreme Court’s decision in Massachusetts v. EPA held that the Clean Air Act definition of air pollutant includes greenhouse gases. In response to the Court’s decision, EPA determined that any stationary source with the potential to emit greenhouse gases above the threshold for Prevention of Significant Deterioration and Title V permitting is subject to the PSD and Title V permitting requirements. EPA determined that requiring permits for all of these sources would radically expand the permitting programs and make them difficult to administer.. On May 13, 2010, EPA tailored the Prevention of Significant Deterioration and Title V permitting programs so that sources with the potential to emit less than 100,000 tons of greenhouse gases per year would not become newly subject to PSD or Title V permitting requirements.

On April 21, 2011, EQC adopted rules substantively identical to EPA’s rules. Oregon’s rules require any source with the potential to emit 100,000 tons per year or more of greenhouse gases obtain Title V and Prevention of Significant Deterioration permits.

EPA’s rule was challenged and on June 23, 2014, the U.S. Supreme Court determined that EPA may not treat greenhouse gases as an air pollutant to determine whether a pollution-emitting facility is a major pollutant source required to obtain a PSD or Title V permit. The Court upheld EPA’s rules providing that if a source is a major source due to its emissions of other regulated pollutants then the source’s greenhouse gas emissions are subject to PSD permitting requirements.

On July 20, 2011, EPA deferred for a period of three years the application of PSD and Title V permitting to biogenic CO₂ emissions from bioenergy and other biogenic stationary sources. During this three-year period, biogenic CO₂ emissions did not count toward applicability of the PSD and Title V permitting programs. This rule was challenged and the Court determined it to be invalid, but the Court did not implement its decision. EPA did not extend the rule, and it expired by its own terms July 21, 2014. Due to the Court’s decision invalidating EPA’s permitting requirement for sources that emit more than 100,000 tons of greenhouse gases per year, the number of biogenic CO₂ emissions sources subject to PSD and Title V permitting requirements likely will be significantly reduced.

What need is DEQ trying to address?

DEQ is trying to prevent facilities from paying costs to comply with Oregon’s current greenhouse gas permitting requirements while DEQ considers whether to retain the requirements in a permanent rulemaking. DEQ is in the process of evaluating public comments on permanent rule amendments that DEQ will present to EQC for decision in early 2015.

In 2011, EQC adopted rules substantively identical to the federal greenhouse gas permitting rules to align Oregon’s Clean Air Act State Implementation Plan and Title V permitting program with federal requirements. In 2014, the Supreme Court invalidated EPA’s authority to impose the federal greenhouse gas permitting requirements. It determined that EPA may not treat greenhouse gases as an air pollutant for the purposes of determining whether a pollution-emitting facility is a major source required to obtain a PSD or Title V permit. Consistent with its understanding of the Court’s decision, EPA will not apply or enforce federal rules that require stationary sources to get a PSD or Title V permit solely because the source emits or has the potential to emit greenhouse gases above the major source thresholds.

Although the Supreme Court decision invalidates EPA’s authority to impose the federal greenhouse gas permitting requirements, Oregon’s rules still apply to businesses in Oregon and require Oregon businesses to spend thousands of dollars in late 2014 to comply with the rules.

How would the proposed rule address the need?

The proposed temporary rules would remove Oregon greenhouse gas permitting requirements temporarily while DEQ determines how to recommend EQC consider the U.S. Supreme Court decision in a permanent rulemaking.

Consequences of not taking immediate action  

DEQ determined that failure to amend the proposed rules promptly would result in serious prejudice to the interests of Oregon businesses. Without the proposed temporary rules, Oregon businesses will spend thousands of dollars in late 2014 to comply with greenhouse gas permitting rules that EQC may remove in a permanent rulemaking in early 2015.

Permitting costs. Without the proposed rule amendments, existing rules require affected sources to pay the greenhouse as PSD permit modification fee of $43,200, the annual Title V base fee of $7,657 and the annual Title V emission fee of $57.90 per ton.

Control technology costs. Without the proposed rule amendments, existing rules require affected sources to control their greenhouse gas emissions. A source’s costs to control emissions and comply with Prevention of Significant Deterioration can vary significantly depending on the source and the selected emission reduction option. EPA has developed several studies and guidelines on controlling greenhouse gas emissions from various emission sources. For example, EPA estimates that capital costs for a source to reduce greenhouse gas emissions from boilers between 3 and 8 percent is between $3,000 and $2,300,000.  

Affected parties

The proposed rules would affect sources that emit more than 100,000 tons of greenhouse gases per year and do not currently hold a Title V permit. The proposed rules also affect any pollution-emitting facility source that made modifications to its operations that increased its greenhouse gas emissions above the permitting thresholds over the past three years. DEQ expects affected facilities are primarily in the semiconductor, wood products and landfill industries.

How temporary rule would avoid or mitigate consequences

The proposed rules avoid consequences by removing the greenhouse gas permitting requirements temporarily, preventing facilities from spending thousands of dollars to comply with requirements while DEQ determines how to recommend that the EQC consider permanent rules in light of the U.S. Supreme Court decision.

Lead division            Program or activity

 Operations              Air Program Operations

Chapter 340 action

Statutory authority

ORS 468.020, 468.065, 468A.025, 468A.040, 468A.050 and 468A.310

Other authority

 None

Statute implemented    

ORS 468A.025, 468A.035, 468A.040, 468A.050 and 468A.310    

Documents relied on for rulemaking  ORS 183.335(2)(b)(C)

DEQ determined the proposed rules would have no effect on the development cost of a 6,000-square-foot parcel and construction of a 1,200-square-foot detached, single-family dwelling on that parcel. The proposed rules do not add new requirements; they remove existing requirements temporarily.

This rulemaking does not involve fees.

Advisory committee

DEQ did not convene an advisory committee. The proposed temporary rules do not add new requirements; they remove existing requirements temporarily.

EQC prior involvement

DEQ emailed information about the proposed temporary rule revisions to EQC August 2014.

Public notice

DEQ provided notice of the temporary rule in the following ways:

Posted notice on DEQ’s webpage Aug. 26, 2014: http://www.oregon.gov/deq/RulesandRegulations/Pages/2014/GHGTemp.aspx.

On Aug. 26, 2014, DEQ emailed notice to:

•  U.S. Environmental Protection Agency, Region 10, Seattle.

•  Approximately 6,883 interested parties through GovDelivery, including subscribers of the groups rulemaking, air quality permits and the Title V permit program.

•  406 representatives of permit holders, including Simple and Standard air contaminant discharge permits and Title V operating permits

On Aug. 26, 2014, DEQ mailed notice by the U.S. Postal Service to representatives of permit holders not signed up for email notification, comprised of Simple and Standard air contaminant discharge permits and Title V operating permits.

Public comment

DEQ did not accept public comment on the temporary rule. DEQ accepted public comment during development of the permanent rule amendments, which DEQ plans to bring to the Environmental Quality Commission for decision in early 2015. 

Notification

The proposed rules would become effective upon filing with the Secretary of State, approximately on Nov. 7, 2014. DEQ would notify affected parties by mail and email.

Requirement  ORS 183.405

The state Administrative Procedures Act requires DEQ to review new rules within five years of the date the EQC adopts the proposed rules. Though the review will align with any changes to the law in the intervening years, DEQ based its analysis on current law.

Exemption

The following APA exemption from the five-year rule review applies to all of the proposed rules:

•  Amendments or repeal of a rule. ORS 183.405 (4)  

AGarten, 2014-09-15T13:08:00Z
FYI Reason for change: Aligned with template

AGarten, 2014-09-15T13:08:00Z
Based on Leah’s comments, it sounds like we are considering the US Supreme Court decision, not addressing it. We aren’t required to align our rules to the feds.

AGarten, 2014-09-15T13:08:00Z
Action needed. Please consider word choice throughout this document. I'm confused why this section describes major sources and major emitting facilities, yet later this document refers to sources and major sources. Later, it no longer refers to major emitting facilities. If “major emitting facilities” is not an important term for this rulemaking, either remove it from or reword references to it in the Background section.

AGarten, 2014-09-15T13:08:00Z
Action needed. Consider whether the information is important background information for this rulemaking. If yes, please use simple terms to explain:

•  What is an attainment area?

•  What are ambient air quality standards?

•  What does Prevention of Significant Deterioration mean?

AGarten, 2014-09-15T13:08:00Z
FYI Reason for change: Avoid parentheses and acronyms in public documents

AGarten, 2014-09-15T13:08:00Z
Action needed. Please clarify which pollutants. Perhaps this should say “…of any air pollutant”

AGarten, 2014-09-15T13:08:00Z
Action needed. Please clarify who the document is referring to. The word “facilities” suggests only major emitting facilities. The words “stationary sources” suggest both major sources and major emitting facilities.

AGarten, 2014-09-15T13:08:00Z
Action needed. Please clarify: What does reflect mean?

AGarten, 2014-09-15T13:08:00Z
Action needed. Please clarify using simple words. What does best available control technology mean?

AGarten, 2014-09-15T13:08:00Z
Action needed. Please summarize EPA's role. I made a poor attempt.

AGarten, 2014-09-15T13:08:00Z
Action needed. Please insert date of decision.

AGarten, 2014-09-15T13:08:00Z
Action needed. Please remove acronyms and parentheses. DEQ no longer uses acronyms in public documents with the exception of U.S., EPA, DEQ and EQC. Throughout this document, spell out acronyms or choose other words that represent the acronym.

AGarten, 2014-09-15T13:08:00Z
Action needed. Please use simple words. I don’t understand what radically expand means.

AGarten, 2014-09-15T13:08:00Z
Action needed. Please use simple words. I don’t understand what “render them un-administrable” means.

AGarten, 2014-09-15T13:08:00Z
Suggestion: I suggest using a simpler word. In this context, does tailored mean changed?

AGarten, 2014-09-15T13:08:00Z
Action needed. Throughout document, choose consistent terms to clearly identify who we are referring to. It seems like we have at least six different terms to refer to an entity, including: source; stationary source; major source; major emitting facility; facility; business.

AGarten, 2014-09-15T13:08:00Z
Action needed. Please clarify. I don’t know what newly means in this context. I’m confused because sources with emission below 100,000 tons aren't subject. Perhaps this statement trying to say those sources will not become subject to the requirements if their emissions were to increase over 100,000 tons.

AGarten, 2014-09-15T13:08:00Z
Action needed. Please clarify and correct my edits. I could be wrong, but I thought our rules adopted the requirements period. Adopting requirements in Oregon rule is different from adopting rules that allow us to implement federal rules. Also, it isn't clear in this paragraph if EQC exempted certain sources like EPA's May 13, 2010 action did. From the above paragraph, EPA exempted "sources with the potential to emit less than 100,000 tons of greenhouse gases per year would not become newly subject to PSD or Title V permitting requirements"

AGarten, 2014-09-15T13:08:00Z
Action needed. Please change from passive to active voice. For example, add [Who] challenged EPA's rule…. [Who] can be general or specific.

AGarten, 2014-09-15T13:08:00Z
FYI Reason for change: Abbreviating United States to U.S. is acceptable in DEQ public documents

AGarten, 2014-09-15T13:08:00Z
Action needed. Please consider word choice. Is “may not treat” the right phrase? It might be correct. It raises a red flag for me. Is it more accurate to say "must not treat" or “is not authorized to treat.."?

AGarten, 2014-09-15T13:08:00Z
Action needed. Please verify and correct as needed. Does EPA's determination include only major sources or does it also include major emitting facilities? I notice the paragraph refers to major sources and not major emitting facilities. My comment is related to my earlier comment about using consistent terms and the relevance of "major emitting facilities" to this rulemaking.

AGarten, 2014-09-15T13:08:00Z
Action needed. Please clarify and rephrase in simple words. I don't understand what “application of” means in this context.

AGarten, 2014-09-15T13:08:00Z
Action needed. Please consider word choice. Do the public know what biogenic and bioenergy mean? I don't know what they mean in this context.

bwhite, 2014-09-15T16:36:00Z
Is the word biogenic even needed here? If it is, a short definition or parenthetical explanation should be inserted

AGarten, 2014-09-15T13:08:00Z
Action needed. Change from passive to active voice. For example: [Who] challenged the rule…

AGarten, 2014-09-15T13:08:00Z
Action needed. Please clarify or use simple words. I don’t understand what "did not extend the rule" or "it expired by its own terms" mean.

AGarten, 2014-09-15T13:08:00Z
Action needed. Please reword or add a simple explanation. I don’t understand what this means.

AGarten, 2014-09-15T13:08:00Z
Action needed. Question: Is the information in this paragraph relevant and important background for the proposed rules? If yes, consider adding more information here or later in the document to demonstrate its relevance and importance.

AGarten, 2014-09-15T13:16:00Z
Recommendation: At the end of this section, explain the environmental consequences of taking action.

AGarten, 2014-09-15T13:08:00Z
FYI Reason for change. Begin this section with a statement about what DEQ is trying to do.

AGarten, 2014-09-15T13:08:00Z
Let’s not begin with this paragraph because it does not explain DEQ’s need for the proposed rules

AGarten, 2014-09-15T13:08:00Z
FYI Reason for change: By the time this report is finalized, we will no longer be accepting comments.

R. Feldon, 2014-09-15T13:08:00Z
I’m not sure this is the need. We aren’t required to align our rules to the feds. If we were, we wouldn’t say we are not sure which way we are going with the permanent rules.

AGarten, 2014-09-15T13:08:00Z
Action needed. Consider the accuracy of this text. Based on Leah’s comment, we need to delete this text. Leah says we were not required to align our rules with the federal rules.

AGarten, 2014-09-15T13:08:00Z
Action needed. Is “may” the right word? It might be, but raises a red flag. Is it more correct to say “must” or “is not authorized to treat…”?

AGarten, 2014-09-15T13:08:00Z
Action needed. Please verify. Does this also apply to major emitting facilities?

AGarten, 2014-09-15T13:08:00Z
Action needed. Please verify whether this should include thresholds for major emitting facilities too.

AGarten, 2014-09-15T13:08:00Z
FYI Reason for change: Use consistent terminology

AGarten, 2014-09-15T13:08:00Z
FYI Reason for change: Use “repeal” only if we would literally “repeal” all the rules. To repeal a rule means we completely eliminate rules (versus revising rules).

AGarten, 2014-09-15T13:08:00Z
FYI Deleted because the consequences are not avoided costs. On the contrary, the consequences are costs.

AGarten, 2014-09-15T13:08:00Z
Recommendation: Estimate how many sources will pay these costs.

AGarten, 2014-09-15T13:08:00Z
Reason for change: State the consequence up front.

R. Feldon, 2014-09-15T13:08:00Z
I think this is higher now.

AGarten, 2014-09-15T13:08:00Z
Action needed. Can you provide a range of fees sources would pay? For example, “A source emitting 100,000 tons of greenhouse gases would pay about XX in permitting fees. A source emitting 250,000 tons of greenhouse gases would pay about XX in permitting fees”

R. Feldon, 2014-09-15T13:08:00Z
I think this is higher now.

AGarten, 2014-09-15T13:08:00Z
Action needed. Please verify. EQC adopted new Title V fees in August 2014. Make sure you have the current fee.

AGarten, 2014-09-15T13:08:00Z
Reason for change: Doesn’t seem necessary. I think keeping the information creates confusion.

AGarten, 2014-09-15T13:08:00Z
Action needed. Verify. By “control”, do you mean the technology to control emissions? I made an attempt to clarify.

AGarten, 2014-09-15T13:08:00Z
Recommendation: Estimate how many sources will pay these costs.

AGarten, 2014-09-15T13:08:00Z
Reason for change: State the consequence at the beginning of the paragraph.

AGarten, 2014-09-15T13:08:00Z
Action needed. What does emission reduction scenario mean? Rephrase or explain in simple words.

AGarten, 2014-09-15T13:08:00Z
Reason for change: Percent vs. %. Spell out "percent" in narrations, and always use numerals.(This is one of the exceptions to spelling out numbers one through nine.)Using the percent symbol (%) is acceptable in tables and sections with extensive statistics.

AGarten, 2014-09-15T13:08:00Z
Recommendation: Estimate the number of sources.

AGarten, 2014-09-15T13:08:00Z
FYI Reason for change: ccch
Created By StyleGuard:

< comma (,) >

Use commas to separate elements in a series, but do not put a comma before the conjunction (e.g. and) in a simple series: The flag is red, white and blue.

Replace , and with and

AGarten, 2014-09-15T13:08:00Z
Action needed: Does this include sources that hold Title V permits? If yes, please say clarify this.

AGarten, 2014-09-15T13:08:00Z
Action needed. Clarify. I made an attempt. Is this right?

AGarten, 2014-09-15T13:08:00Z
Action needed. Clarify. What does “over the last three years" mean?

AGarten, 2014-09-15T13:08:00Z
Suggestion: I suggest we explain somewhere in this document what will happen if the rules expire or if EQC does not remove the requirements in the permanent rulemaking.

AGarten, 2014-09-15T13:08:00Z
FYI Reason for change: The statute is in the template and applies to all rulemakings. I added it back.

AGarten, 2014-09-15T13:08:00Z
Action needed: did we use other OARs to prepare this rulemaking? If yes, list them. If no, delete this line.

AGarten, 2014-09-15T13:08:00Z
Action needed: did we use specific statutes to prepare this rulemaking, other than the statutory authority and statutes implemented? If yes, list them. If no, delete this line.

AGarten, 2014-09-15T13:08:00Z
FYI Reason for change. To suspend rules is a special action.

AGarten, 2014-09-15T13:08:00Z
Action needed: Insert date

AGarten, 2014-09-15T13:08:00Z
FYI Reason for change: We didn’t notify legislators

AGarten, 2014-09-15T13:08:00Z
Action needed: Insert number of letters mailed.

AGarten, 2014-09-15T13:08:00Z
FYI Reason for change: “including” can mean this list is a subset of the total. “Comprise” means this list shows everyone.

AGarten, 2014-09-15T13:08:00Z
FYI Reason for change: Aligned with template

AGarten, 2014-09-15T13:08:00Z
Question: Would we mail letters to affected parties not signed up for email?