Title of Proposed Rulemaking

Air Quality Rule Overhaul

Statutory Authority or other Legal Authority

Statutes Implemented

ORS 468.020, 468A.025

468.065, 468A.040, 468A.055, 468A.310

Need for the Rule(s)

Reorganize and Rectify Procedural Permitting Requirements: The proposed rules would move all the procedural requirements from the definitions to the appropriate rule division. They would also rectify requirements for new and modified sources that trigger the most extensive permitting requirements, making them congruent to the potential impact on the environment.

Particulate Matter Permitting Requirements: DEQ is proposing rules to tighten grain loading and opacity standards based on EPA guidance and recently adopted fine particle ambient air quality standards. As a result of the new EPA standards, there are areas in Oregon where the air quality does not meet these human health based standards. Adoption of the rules will reduce emissions statewide and will help prevent future problems, especially in light of EPA’s plan to further reduce the standards.

Permitting Rule Updates: In 2007, DEQ did the second phase of streamlining the Air Quality Program’s permitting process. This rulemaking proposes to further streamline and update the permitting process by clarifying requirements, eliminating duplicative and conflicting standards, keeping rules in line with federal requirements and correcting errors while maintaining equivalent environmental protection and stringency. It also repeals rules for which there are no longer sources in the state (e.g., aluminum plants, ferronickel processing plants, and sulfite pulp mills). This third phase of streamlining would make the permitting process more efficient.

Documents Relied Upon for Rulemaking

Requests for Other Options

Pursuant to ORS 183.335(2)(b)(G), DEQ requests public comment on whether other options should be considered for achieving the rule’s substantive goals while reducing negative economic impact of the rule on business.

Fiscal and Economic Impact, Statement of Cost Compliance

Overview

The proposed rules could have a fiscal and economic impact on approximately 1,256 permitted sources in addition to future applicants:

Business Type

Business Size

Permit Type

Number

City/County Govt

Large

ACDP

42

City/County Govt

Large

Title V

2

State Government

Large

ACDP

22

State Government

Large

Title V

2

Federal Government

Large

ACDP

3

Federal Government

Large

Title V

1

Industrial Business

Large

ACDP

570

Industrial Business

Large

Title V

95

Estimated Number of Large Businesses Potentially Impacted

737

Business Type

Business Size

Permit Type

Number

Industrial Business

Small

ACDP

502

Industrial Business

Small

Title V

17

Estimated Number of Small Businesses Potentially Impacted

519

•  117 facilities in Oregon that are permitted under the Air Quality Division’s Title V Permit Program

•  1139 industrial facilities in Oregon that are permitted under the Air Quality Division’s Air Contaminant Discharge Permit (ACDP) program

Impacts on the General Public

Reorganize and Rectify Procedural Permitting Requirements: DEQ does not anticipate any direct fiscal or economic impacts from the proposed rules on the general public. However, indirect fiscal or economic impacts to the public may occur through increased prices for services or products as a result of costs associated with additional control or process equipment that may be required if a source triggers NSR/PSD. DEQ expects any such price increases to be small and lacks available information upon which it could accurately estimate potential increases.

Particulate Matter Permitting Requirements: DEQ is proposing rules to tighten grain loading and opacity standards based on EPA guidance and recently adopted fine particle ambient air quality standards. As a result of the new EPA standards, there are areas in Oregon where the air quality does not meet these human health based standards. Adoption of the rules will reduce emissions statewide and will help prevent future problems, especially in light of EPA’s plan to further reduce the standards.

Permitting Rule Updates: DEQ anticipates that there will be no fiscal and economic impact on the general public as a result of the proposed rules.

Impacts to Small Business

(50 or fewer employees –ORS183.310(10))

PM_2.5 New Source Review/Prevention of Significant Deterioration and GHG PSD: DEQ anticipates that there will be a negative fiscal and economic impact on 269 small businesses because they will be required to make an initial estimate of PM_2.5 and GHG emissions at time of permit renewal or modification so DEQ can incorporate emission levels into permits. These businesses have the option of assuming that PM_2.5 emissions are the same as PM₁₀ emissions (already included in their permits), eliminating any additional costs for reporting, recordkeeping or other administrative activities. GHG emissions can be estimated using a process similar to their GHG reporting requirements.

DEQ anticipates that there will be a negative fiscal and economic impact on new sources and existing sources if they make a modification to their facility that would trigger New Source Review or Prevention of Significant Deterioration. Additional costs could be incurred if the business had to add control equipment to meet control technology requirements. Sources are also required to perform computer modeling to ensure that the health standards are met and air quality in wilderness areas is not degraded. Most of the costs are the result of federal requirements and do not change as a result of adding PM_2.5 and GHGs to the list of regulated pollutants in Oregon. The application fee for this type of permit is $42,000.

Reorganize and Rectify Procedural Permitting Requirements: DEQ does not anticipate any direct fiscal or economic impacts from the proposed rules on the general public. However, indirect fiscal or economic impacts to the public may occur through increased prices for services or products as a result of costs associated with additional control or process equipment that may be required if a source triggers NSR/PSD. DEQ expects any such price increases to be small and lacks available information upon which it could accurately estimate potential increases.

Particulate Matter Permitting Requirements: DEQ is proposing rules to tighten grain loading and opacity standards based on EPA guidance and recently adopted fine particle ambient air quality standards. As a result of the new EPA standards, there are areas in Oregon where the air quality does not meet these human health based standards. Adoption of the rules will reduce emissions statewide and will help prevent future problems, especially in light of EPA’s plan to further reduce the standards.

Permitting Rule Updates: DEQ anticipates that there will be no fiscal and economic impact as a result of the proposed rules.

Cost of Compliance on Small Business (50 or fewer employees –ORS183.310(10))

a) Estimated number of small businesses subject to the proposed rule

Currently 17 small businesses are required to hold Title V operating permits. Of the 1,139 industrial facilities holding Air Contaminant Discharge Permits, 502 of them are small businesses.

b) Types of businesses and industries with small businesses subject to the proposed rule

There are several types of businesses and industries with small businesses that will be affected by the proposed rules. These may include asphalt manufacturing; ammonia manufacturing; chemical manufacturing; coffee roasting; commercial bakeries; commercial boilers; crematories; educational institutions; electric power generation; furniture manufacturing; food processing; hospitals; iron and steel; natural gas and oil production and processing; petroleum refining; pipe coaters; printers; sand, rock and gravel operations; seed and grain companies; synthetic resin manufacturing; and wood products manufacturing.

c) Projected reporting, recordkeeping and other administrative activities required by small businesses for compliance with the proposed rule, including costs of professional services

Additional costs for reporting, recordkeeping or other administrative activities are expected for approximately 269 small businesses if the amendments are adopted. These small businesses will be required to make an initial estimate of PM_2.5 emissions. Businesses have the option of assuming that PM_2.5 emissions are the same as PM₁₀ emissions (already included in their permits), eliminating any additional costs for reporting, recordkeeping or other administrative activities.

d) The equipment, supplies, labor, and increased administration required by small businesses for compliance with the proposed rule

Additional costs for equipment, supplies, labor or administration are expected if the amendments are adopted and if the small business triggers NSR/PSD through facility modification or new construction. It is unknown how many small businesses would be affected. Most of the costs are the result of federal requirements and do not change as a result of adding PM_2.5 and GHGs to the list of regulated pollutants. The application fee for this type of permit is $42,000.

e) A description of the manner in which DEQ involved small businesses in the development of this rulemaking

Small businesses are being informed by announcements on the DEQ website, through direct mailings and email lists, notices in the Secretary of State Bulletin, and ads in local papers. Comments are being requested during the Public Comment period and at Public Hearings held in November. DEQ staff will participate in the December Northwest Environmental Conference in Portland informing people about the rulemaking. Attendees at this conference include representatives from large and small businesses.

Impacts on Large Business

(all businesses that are not “small businesses” under ORS183.310(10))

Currently 95 large businesses are required to hold federal Title V Operating Permits. There are also 570 large businesses that hold state Air Contaminant Discharge Permits.

PM_2.5 New Source Review/Prevention of Significant Deterioration and GHG PSD: DEQ anticipates that there will be a negative fiscal and economic impact on these sources because they will be required to make an initial estimate of PM_2.5 and GHG emissions at time of permit renewal or modification so DEQ can incorporate emission levels into permits. These businesses also have the option of assuming that PM_2.5 emissions are the same as PM₁₀ emissions (already included in their permits), eliminating any additional costs for reporting, recordkeeping or other administrative activities. GHG emissions can be estimated using a process similar to their GHG reporting requirements.

DEQ anticipates that there will be a negative fiscal and economic impact on new sources and existing sources if they make a modification to their facility that would trigger New Source Review or Prevention of Significant Deterioration. Additional costs could be incurred if the business had to add control equipment to meet control technology requirements. Businesses are also required to perform computer modeling to ensure that the health standards are met and air quality in wilderness areas is not degraded. Most of the costs are the result of federal requirements and do not change as a result of adding PM_2.5 and GHGs to the list of regulated pollutants. The application fee for this type of permit is $42,000.

Small Scale Renewable Energy Sources: DEQ anticipates that there will be a positive economic impact for one or more small scale renewable energy sources because offsets are not available for sources that are located in remote parts of the nonattainment area. Getting offsets elsewhere in the nonattainment area also benefits air quality since the offsets will come from near where the highest ambient concentrations are located.

Permitting Rule Updates: DEQ anticipates that there will be no fiscal and economic impact as a result of the proposed rules.

Impacts on Local Government

PM_2.5 New Source Review/Prevention of Significant Deterioration and GHG PSD: Currently 44 county and local government agencies are subject to air permitting regulations. DEQ anticipates that there will be a negative fiscal and economic impact on these sources because they will be required to make an initial estimate of PM_2.5 and GHG emissions at time of permit renewal or modification so DEQ can incorporate emission levels into permits. These government agencies also have the option of assuming that PM_2.5 emissions are the same as PM₁₀ emissions (already included in their permits), eliminating any additional costs for reporting, recordkeeping or other administrative activities. GHG emissions can be estimated using a process similar to their GHG reporting requirements.

DEQ anticipates that there will be a negative fiscal and economic impact on local government agencies if they build new sources and or modify existing sources that would trigger New Source Review or Prevention of Significant Deterioration. The costs would be similar to large businesses as mentioned above.

Small Scale Renewable Energy Sources: DEQ anticipates that there will be no fiscal and economic impact as a result of the proposed rules.

Permitting Rule Updates: DEQ anticipates that there will be no fiscal and economic impact as a result of the proposed rules.

Impacts on State Agencies other than DEQ

PM_2.5 New Source Review/Prevention of Significant Deterioration and GHG PSD: Currently there are 24 state and 4 federal government agencies subject to air permitting regulations. DEQ anticipates that there will be a negative fiscal and economic impact on these sources because they will be required to make an initial estimate of PM_2.5 and GHG emissions at time of permit renewal or modification so DEQ can incorporate emission levels into permits. State and federal government agencies have the same options available to them as mentioned above for local government agencies.

State and federal government agencies would incur the same fiscal and economic impacts as local government agencies mentioned above.

Impacts on DEQ

PM_2.5 New Source Review/Prevention of Significant Deterioration and GHG PSD: Workload for DEQ will increase as a result of incorporating PM_2.5 and greenhouse gases into permits. If the PM_2.5 and GHG thresholds for the New Source Review/Prevention of Significant Deterioration program are not adopted, there would be a significant workload impact on DEQ. This includes an increase in costs associated with issuing NSR/PSD permits.

Small Scale Renewable Energy Sources: Workload for DEQ will increase as a result of permitting one or more small scale renewable energy sources that may be affected by the proposed rules.

Permitting Rule Updates: Workload for DEQ should not change as a result of the proposed rules.

Assumptions

PM_2.5 New Source Review/Prevention of Significant Deterioration and GHG PSD: If the PM_2.5 and GHG thresholds for the New Source Review/Prevention of Significant Deterioration program are not adopted, an indeterminate number of sources would need to evaluate whether they are required to obtain a permit or a permit modification for PM_2.5 or GHG emissions. Several hundred of these permits may need to be issued or modified creating significant workload issues. The majority of these sources are small businesses, which may not have adequate resources to do additional reporting and monitoring.

Housing Costs

DEQ determined that the proposed rule changes may have a negative impact on the

development of a 6,000 square foot parcel and the construction of a 1,200 square

foot detached single family dwelling on that parcel if the costs for additional control or process equipment are passed through by sources providing products and services for such development and construction. The possible impact appears to be minimal. DEQ cannot quantify the impact at this time because the information available to it does not indicate whether the costs would be passed on to consumers and any such estimate would be speculative.

Administrative Rule Advisory Committee

Stakeholder meetings were held to allow people to provide input on the proposed rules and also comment on the August 19 temporary rules. Stakeholders were identified as all permitted facilities and people who had expressed interest in air quality rulemakings. Announcement of the meetings was sent out in postcards to all permitted facilities, sent out in emails by Oregon’s GovDelivery system, a free e-mail subscription service that provides subscribers with automatic notices of updates to the Oregon DEQ Web page on topics they select, and posted on the DEQ website. Stakeholders were also given two weeks to comment on the fiscal and economic impact statement.

An Advisory Committee was not used because of the technical nature and diversity of the rules proposed for change. DEQ thought it would be a more effective use of people’s time to hold stakeholder meetings and let people choose to attend the meeting that discussed topics of interest to them.