Oregon Department of Environmental Quality

September 13, 2013

Notice of Proposed Rulemaking

 Update Oregon’s air quality rules to address federal regulations

Short summary 

The proposed rules would adopt new and amended federal air quality regulations. This includes adopting:

•  new federal standards for boilers and process heaters, stationary internal combustion engines, nitric acid plants, and crude oil and natural gas production, transmission and distribution

•  newly amended federal standards

•  rules to implement new federal emission guidelines for commercial and industrial solid waste incineration units; and adopting the federal plan for hospital, medical, and infectious waste incinerators

Brief history

The clean air act requires the U.S. Environmental Protection Agency to establish National Emission Standards for Hazardous Air Pollutants for both major and area sources of hazardous air pollutants. EPA finished establishing major source standards in 2004. EPA began establishing area source standards in 2006 and concluded in 2011. EPA may adopt additional NESHAPs in the future for new source categories or source categories it may have missed.

This rulemaking is the final phase for the Oregon Environmental Quality Commission adoption of area source standards. The first four phases concluded in December 2008, December 2009, February 2011, and March 2013.

The Clean Air Act also requires EPA to develop New Source Performance Standards for categories of sources that cause or significantly contribute to air pollution that may endanger public health or welfare. Such regulations apply to each new source within a category without regard to source location or existing air quality. When EPA establishes New Source Performance Standards for a category of sources, it may also establish emission guidelines for existing sources in the same category. States must develop rules and a state plan to implement Emission Guidelines or request delegation of the federal plan. State plans, called Section 111(d) plans, are subject to EPA review and approval.

EPA is required to perform a residual risk analysis for major source NESHAPs and periodic technology reviews for New Source Performance Standards and NESHAPs. These reviews are ongoing and in some cases result in EPA updating the standards.

EPA also revises NESHAPs to address errors, implementation issues, and lawsuits.

Regulated parties

This rulemaking regulates facilities subject to new and modified NESHAPs and New Source Performance Standards identified in the outline section below.

Outline

1.  Adopt by reference:

a.  New federal area source NESHAP for commercial, industrial and institutional boilers, but only for sources required to have a Title V permit or an Air Contaminant Discharge Permit

b.  New federal major and area source NESHAP for stationary internal combustion engines, but only for sources required to have a Title V permit or an Air Contaminant Discharge Permit

c.  New federal major source NESHAP for commercial, industrial and institutional boilers and process heaters

d.  New federal New Source Performance Standards for stationary internal combustion engines, but only for sources required to have a Title V permit or an Air Contaminant Discharge Permit, and excluding the requirements for engine manufacturers

e.  New federal New Source Performance Standards for nitric acid plants

f.  New federal New Source Performance Standards for crude oil and natural gas production, transmission and distribution

g.  Amended federal plan for hospital, medical, and infectious waste incinerators

2.  Adopt rules to implement new federal Emission Guidelines for commercial and industrial solid waste incineration units; and

3.  Update the adoption by reference:

a.  Amended federal area source NESHAP for chemical manufacturing

b.  Amended federal major source NESHAP for electric utility steam generating units

c.  Amended federal major source NESHAP for petroleum refineries

d.  Amended federal major and area source NESHAP for chromium electroplating and anodizing

e.  Amended federal major and area source NESHAP for portland cement manufacturing

f.  Amended federal major and area source NESHAP for oil and natural gas production

g.  Amended federal major source NESHAP for the pulp and paper industry

h.  Amended federal major source NESHAP for natural gas transmission and storage facilities

i.  Amended federal New Source Performance Standards for electric steam generating units

j.  Amended New Source Performance Standards for hospital, medical, and infectious waste incinerators

k.  Amended New Source Performance Standards for nitric acid plants

l.  Amended New Source Performance Standards for commercial and industrial solid waste incineration units

m.  Amended New Source Performance Standards for portland cement plants

n.  Amended New Source Performance Standards for petroleum refineries

o.  Amended New Source Performance Standards for onshore natural gas processing plants

What problem is DEQ trying to solve?

EPA has identified boilers and process heaters and stationary internal combustion engines as emitters of one or more hazardous air pollutants, including polycyclic aromatic hydrocarbon, a toxic of concern in Oregon that can cause red blood cell damage, leading to anemia; suppressed immune system; and developmental and reproductive effects. EPA developed standards to regulate the amount of hazardous air pollutants these activities can produce to better protect public health. The proposal addresses this by adopting the new federal standards into Oregon rules by reference, but only for sources required to have a Title V permit or an Air Contaminant Discharge Permit. For those source not required to have a DEQ permit, EPA would retain responsibility for enforcement, but DEQ would still assist with implementation by providing technical assistance through our small business assistance program.

EPA has also identified stationary internal combustion engines, commercial and industrial solid waste incineration units, nitric acid plants, and crude oil and natural gas production, transmission and distribution as sources which cause or significantly contribute to air pollution which may endanger public health or welfare. EPA developed standards to regulate the amount of emissions these activities can produce to better protect public health. The proposal addresses this by adopting the new federal standards by reference. In adopting the standards for stationary internal combustion engines, DEQ is proposing that EQC: adopt the standards only for sources required to have a Title V permit or an Air Contaminant Discharge Permit; and exclude the requirements for engine manufacturers, which are better implemented by EPA on the federal level. For those source not required to have a DEQ permit, EPA would retain responsibility for enforcement, but DEQ would still assist with implementation by providing technical assistance through our small business assistance program. This would give DEQ the authority to include the new federal requirements into Air Contaminant Discharge Permits.

EPA has adopted amendments to several federal standards that are adopted by reference in Oregon's rules. DEQ cannot enforce the revised versions of the standards because they haven’t been adopted by EQC. In order to maintain federal delegation, EQC must adopt the most recent version of the federal standards. Affected businesses benefit by having DEQ implement federal standards locally. These benefits include technical assistance and quicker approval of requests for applicability determinations and alternative testing, monitoring, recordkeeping and reporting. The proposal addresses this by updating the adoption of existing federal standards by reference (i.e., applicable federal regulations being adopted by reference are those approved as of July 1, 2013). In addition, adopting these standards benefits the public and the environment by allowing DEQ to ensure that required emission reductions are achieved in Oregon.

EPA established emission guidelines for commercial and industrial solid waste incineration units. States are required to develop rules and state plans to implement Emission Guidelines or take delegation of the federal plan in lieu of developing rules and state plans. The proposal addresses this by adopting standards that are equivalent to the federal Emission Guidelines.

In a previous rulemaking, EQC repealed rules that implement the federal emission guidelines for hospital, medical and infectious waste incinerators, because it was thought there were no affected facilities in Oregon. It was recently discovered that a facility in Oregon is required to keep records to avoid being an affected source under the federal emission guidelines. Furthermore, EPA has informed DEQ it must adopt rules and submit a state plan to implement these recordkeeping requirements or take delegation of the federal plan. The proposal addresses this by adopting the federal plan for hospital, medical and infectious waste incinerators by reference.

How would the proposed rule solve the problem?

The proposed rule changes would update DEQ’s rules to reflect new and amended federal standards, adopt standards to implement the federal emission guidelines for commercial and industrial solid waste incineration units, and adopt the federal plan for hospital, medical and infectious waste incinerators. This would further DEQ’s strategic direction to protect Oregonians from toxic pollutants by updating state rules to be consistent with federal rules.

How will DEQ know the problem has been solved?

Upon EQC adoption, DEQ would submit the rules to EPA to update our New Source Performance Standard and NESHAP delegation and request delegation of the federal plan for hospital, medical and infectious waste incinerators. DEQ would also submit a plan to EPA to implement the federal emission guidelines for commercial and industrial solid waste incineration units.

DEQ will know the goals of this rulemaking have been addressed when EPA reviews and approves the delegation request and plan to implement the emission guidelines for commercial and industrial solid waste incineration units.

Request for other options

During the public comment period, DEQ requests public comment on whether to consider other options for achieving the rule's substantive goals while reducing negative economic impact of the rules on business.

Rules affected, authorities, supporting documents

Lead division            Program or activity

 Air Quality            Program Operations section

      Chapter 340 action      

 Recommendation  Division  Rule  Title  

 amend  230  0010  Purpose  

 amend  230  0020  Applicability  

 amend  230  0030  Definitions  

 amend  238  0040  Definitions  

 amend  238  0060  Federal Regulations Adopted by Reference  

 amend  244  0030  Definitions  

 amend  244  0220  Federal Regulations Adopted by Reference

 adopt    230  0415  Adoption of Federal Plan by Reference  

adopt  230  0500  Emission Standards for Commercial and Industrial Solid Waste Incineration Units  

Statutory authority

ORS 468.020, 468A.025, 468A.035, 468A.040, 468A.050 and 468A.310

Other authority

Statute implemented

ORS 468.020, 468A.025, 468A.035, 468A.040, 468A.050 and 468A.310  

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

Also see list of new and amended NESHAPs and NSPSs proposed for EQC adoption, which includes links to the Federal Register

This rule proposal does not involve fees.

Fiscal and Economic Impact

New federal standards typically apply to affected businesses upon their promulgation by EPA. In other words, the fiscal and economic impacts of the new federal standards included in this rulemaking have already occurred. EPA evaluates the impacts of the standards and lists them in the regulation’s preamble.

DEQ anticipates that there would be fiscal and economic impacts as a result of EQC adopting the new federal standards into Oregon law, because adopting them would trigger a requirement that affected businesses obtain a permit. However, in a separate but concurrent rulemaking, DEQ will propose rule changes that would, with the exception of stationary internal combustion engines, maintain the current permitting thresholds for businesses subject to the new federal standards included in this rulemaking. In other words, only owners or operators of larger stationary internal combustion engines would have to obtain a permit and pay permitting fees for the first time as a result of EQC adopting the new federal standards. To mitigate the fiscal and economic impact on affected businesses, some of which may be small businesses, separate but concurrent rulemaking will propose to add stationary internal combustion engines to the list of business categories eligible to obtain a simple or general permit instead of a standard permit. Simple and general permit fees are significantly less than standard permit fees.

Statement of Cost of Compliance  

   Impacts on general public

Indirect impact: The general public could be indirectly impacted by the proposed rule changes as large and small businesses pass along increased or decreased costs resulting from obtaining a permit and paying permit fees in the form of price changes for goods and services.

Direct impact: The general public would not be directly affected by the proposed rule changes.

Impact on other government entities other than DEQ

Direct impact: Any direct fiscal and economic impacts on local governments that operate facilities subject to federal emission standards are expected to be the same as those estimated for small businesses.

Indirect impact: Local governments could be indirectly impacted by the proposed rule changes as large and small businesses pass along increased or decreased costs in the form of price changes for goods and services

All Oregon cities and counties could be indirectly impacted by affected businesses that own or operate a stationary internal combustion engines obtain a permit. This is because businesses throughout the state are required to submit a Land Use Compatibility Statement with their permit application, and local governments process those Land Use Compatibility Statements. Some cities and counties charge a fee to complete the Land Use Compatibility Statement and therefore may have sufficient revenue to cover the added workload. Those cities that don’t charge a fee, or don’t charge sufficient fees to cover their costs, may have new workload without adequate revenue. DEQ does not have adequate information to estimate these fiscal impacts at this time.

Impact on DEQ ORS 183.335

Direct impact: Implementing the federal rules require DEQ to provide technical assistance, amend permits, perform inspections and issue formal enforcement actions against violators. Existing staff funded by revenue from permit fees would implement this work.

Indirect impact: DEQ expects the indirect cost impacts on DEQ to be the same as those estimated for small businesses as discussed below.

Impact on large businesses (all businesses that are not small businesses below)

DEQ expects any fiscal and economic impacts on large businesses to be the same as those estimated for small businesses as discussed below.

Impact on small businesses (those with 50 or fewer employees) ORS 183.336

Indirect impact: Small businesses could be indirectly impacted by the proposed rule changes as other businesses pass along increased or decreased costs in the form of price changes for goods and services.

Direct impact: Small businesses might see increased or decreased costs due to the proposed rule changes and as follows:

1.  Adopt by reference new federal New Source Performance Standards and NESHAPs.

DEQ anticipates that there would be no fiscal and economic impacts from adopting the new federal standards because the fiscal and economic impacts occurred when EPA adopted the rules. EPA has evaluated the fiscal and economic effects of their rules and lists those effects in the preambles to their regulations. See the list of new and amended NESHAPs and NSPSs proposed for EQC adoption, which includes links to the federal rules and their preambles.

2.  Adopt rules to implement new federal emission guidelines for commercial and industrial solid waste incineration units.

DEQ anticipates there would be no fiscal and economic impacts from adopting the standards to adopt the emission guidelines for commercial and industrial solid waste incineration units because DEQ proposes standards that are equivalent to the federal guidelines and the fiscal and economic impacts occurred when EPA adopted the guidelines. EPA has evaluated the fiscal and economic effects of their guidelines and lists those effects in the preambles to their regulations. See the list of new and amended NESHAPs and NSPSs proposed for EQC adoption, which includes links to the federal rules and their preambles.

3.  Adopt by reference the federal plan for hospital, medical and infectious waste incinerators.

DEQ anticipates that there would be no fiscal and economic impacts from adopting the federal plan for hospital, medical and infectious waste incinerators because the fiscal and economic impacts occurred when EPA adopted the plan. EPA has evaluated the fiscal and economic effects of their rules and lists those effects in the preambles to their regulations. See the list of new and amended NESHAPs and NSPSs proposed for EQC adoption, which includes links to the federal rules and their preambles.

4.  Update the adoption by reference of previously adopted NESHAPs and NSPSs.

DEQ anticipates that there would be no fiscal and economic impacts from updating previously adopted federal standards because the fiscal and economic impacts occurred when EPA adopted the rule amendments. EPA has evaluated the fiscal and economic effects of their rules and lists those effects in the preambles to their regulations. See the list of new and amended NESHAPs and NSPSs proposed for EQC adoption, which includes links to the federal rules and their preambles.

In a separate rulemaking, DEQ will propose rule changes that would, with the exception of stationary internal combustion engines, maintain the current permitting thresholds for sources subject to the new federal standards proposed for adoption in this rulemaking. In other words, only owners or operators of stationary internal combustion engines would have to obtain a permit as a result of EQC adopting the new federal standards. Specifically, owners or operators of engines rated between 373 and 500 kW used to generate electricity and engines rated at 373 kW or more used to run pumps and compressors would need to obtain a permit and pay permitting fees for the first time as a result of this rulemaking.

DEQ anticipates that permitting fees would have fiscal and economic impact on affected businesses. To mitigate the fiscal and economic impact on affected businesses, some of which may be small businesses, the separate rulemaking will propose to add stationary internal combustion engines to the list of business categories eligible to obtain a simple or general permit. General ($120 to $1,872 per year) and simple ($1,920 to $3,840 per year) permit fees are significantly less than standard permit fees ($7,680 per year).

Documents relied on for fiscal and economic impact

Advisory committee

DEQ did not appoint an advisory committee for this rulemaking because the rulemaking would primarily adopt federal regulations by reference and rules that are identical to the federal emission guidelines for commercial and industrial solid waste incineration units. However, DEQ did discuss outreach and implementation strategies for the boiler and stationary internal combustion engine requirements with Oregon’s small business compliance advisory panel.

Housing cost

To comply with ORS 183.534, DEQ has determined that triggering the requirement that businesses affected by new federal standards, adopted by EQC into Oregon law, obtain a permit may have a negative impact on the cost of development of a 6,000 square foot parcel and the construction of a 1,200 square foot detached single-family dwelling on that parcel. The negative impact could occur if the permitting fees are passed through by permit holders providing products and services for such development and construction. The possible impact appears to be minimal. DEQ cannot quantify this impact at this time because the available information does not indicate whether the permit fees would be passed on to consumers and any such estimate would be speculative.

"It is the policy of this state that agencies shall seek to retain and promote the unique identity of Oregon by considering local conditions when an agency adopts policies and rules. However, since there are many federal laws and regulations that apply to activities that are also regulated by the state, it is also the policy of this state that agencies attempt to adopt rules that correspond with equivalent federal laws and rules..."

Relationship to federal requirements

The proposed rules adopt the federal New Source Performance Standards and NESHAPs by reference, adopts standards that are equivalent to the federal emission guidelines for commercial and industrial solid waste incineration units, adopts the federal plan for hospital, medical, and infectious waste incinerators.

DEQ proposes that EQC: adopt the federal standards for commercial, industrial and institutional boilers and stationary internal combustion engines by reference, but only for sources required to have a Title V permit or an Air Contaminant Discharge Permit: and not adopt the requirements for stationary internal combustion engine manufacturers. Unpermitted sources and engine manufacturers would still have to comply with the federal requirements; the federal requirements would just not be implemented by DEQ, but would be implemented by EPA on the federal level.

DEQ proposes that EQC not adopt the requirements for engine manufacturers because EPA is in a better position to implement these requirements on the federal level than DEQ.

What alternatives did DEQ consider, if any?

DEQ considered:

•  not taking delegation for some or all federal standards. DEQ accepted this alternative, for sources subject to the federal standards for commercial, industrial and institutional boilers and stationary internal combustion engines not required to have a Title V permit or an Air Contaminant Discharge Permit. This approach was selected because the requirements in the federal rules for these sources are fairly simple (e.g. regular maintenance) so a technical assistance approach implemented by DEQ combined with the back stop of the federal requirement implemented by EPA can achieve a high degree of compliance in a cost effective way. DEQ rejected this alternative for sources required to have a permit because it is important to have all requirements applying to a source in the permit to ensure that the source is in compliance.

•  not adopting standards to implement the federal emission guidelines for commercial and industrial solid waste incineration units. DEQ rejected this alternative because it would reduce DEQ’s ability to ensure compliance and provide assistance to Oregon sources.

•  implementing the federal requirements for manufacturers of stationary internal combustion engines. DEQ rejected this idea because engine manufacturers are located out of state, making it difficult for DEQ to implement the requirements.

•  making state specific changes to some federal standards. DEQ rejected this alternative because the federal rules address Oregon’s immediate concerns and consistency with the federal rules reduces cost and complexity for affected sources.

“It is the Commission's policy to coordinate the Department's programs, rules and actions that affect land use with local acknowledged plans to the fullest degree possible.”  

                              ORS 197.180, OAR 660-030

Land-use considerations

To determine whether the proposed rules involve programs or actions that are considered a land-use action, DEQ considered:

▪  Statewide planning goals for specific references. Section III, subsection 2 of the DEQ State Agency Coordination Program document identifies the following statewide goal relating to DEQ's authority:

 Goal  Title

 5    Open Spaces, Scenic and Historic Areas, and Natural Resources

 6    Air, Water and Land Resources Quality

 11    Public Facilities and Services

 16    Estuarial resources

 19    Ocean Resources

▪  OAR 340-018-0030 for EQC rules on land-use coordination. Division 18 requires DEQ to determine whether proposed rules will significantly affect land use. If yes, how will DEQ:

◦  Comply with statewide land-use goals, and

◦  Ensure compatibility with acknowledged comprehensive plans, which DEQ most commonly achieves by requiring a Land Use Compatibility Statement.

▪  DEQ’s mandate to protect public health and safety and the environment.

▪  Whether DEQ is the primary authority that is responsible for land-use programs or actions in the proposed rules.

▪  Present or future land uses identified in acknowledged comprehensive plans.

Determination

DEQ will implement the proposed standards for major source categories through DEQ’s Title V Operating Permit program and the standards for non-major source categories through DEQ’s Air Contaminant Discharge Program, which are existing programs that are considered land-use programs in the DEQ State Agency Coordination Program.

DEQ’s statewide goal compliance and local plan compatibility procedures adequately cover the proposed rules. DEQ would implement these rules through the Air Contaminant Discharge Program and Title V permitting programs. Currently, pursuant to EQC rules, cities and counties must provide a Land Use Compatibility Statement before DEQ issues these permits or approves a Notice of Construction.

 Advisory committee

DEQ did not appoint an advisory committee for this rulemaking because the rulemaking would primarily adopt federal regulations by reference and rules that are identical to the federal emission guidelines for commercial and industrial solid waste incineration units.

 EQC prior involvement

DEQ shares general rulemaking information with EQC through the annual DEQ Rulemaking Plan review and monthly status report. DEQ did not present additional information specific to this proposed rule revision beyond the annual rulemaking plan and the monthly report.

Public notice

The Oct. 1, 2013 Oregon Bulletin will publish the Notice of Proposed Rulemaking with Hearing for this proposed rulemaking. DEQ also:

•  Will post notice on DEQ’s webpage http://www.deq.state.or.us/regulations/proposedrules.htm on Sep. 13, 2013.

•  E-mail notice to:

•  Interested parties through GovDelivery on Sep. 13, 2013.

•  Parties affected by the new and amended federal air quality regulations.

•  Key legislators required under ORS 183.335 on Sep. 13, 2013, including:

◦  Jules Bailey, Chair, House Energy and Environment Committee

◦  Jackie Dingfelder, Chair, Senate Environment and Natural Resources Committee

•  Mail notice to parties affected by the new and amended federal air quality regulations.

•  Send notice to EPA on Sep. 3, 2013. 

Public hearings

DEQ plans to hold one public hearing in Portland. If unable to attend the hearing in person, you can also participate by conference line at the locations shown in the table below. The table below also includes information about how to participate in the public hearings.

Before taking public comment and according to Oregon Administrative Rule 137-001-0030, the staff presenter will summarize the content of the notice given under Oregon Revised Statute 183.335 and respond to any questions about the rulemaking.

DEQ will add the names, addresses and affiliations of all hearing attendees to the interested parties list for this rule if provided on a registration form or the attendee list. DEQ will consider all oral and written comments received at the hearings listed below before finalizing the proposed rules. All comments will be summarized and DEQ will respond to comments on the Environmental Quality Commission staff report.

Close of public comment period

The comment period will close on Oct. 31, 2013 at 5:00 p.m.