David Brymer and Betsy Peticolas

Texas Commission on Environmental Quality

Office of Air

February 16, 2017

Ozone

Emissions Banking and Trading

Air Permits

1-hr. ozone standard (0.12 ppm) ◦ Measuring attainment since 2013

◦ Redesignation substitute approved in Oct. 2015

1997 8-hr ozone standard (0.08 ppm) ◦ Measuring attainment since 2014

◦ Redesignation substitute approved by EPA Nov. 2016 (effective date Dec. 2016)

2008 8-hr ozone standard (0.075 ppm) ◦ Mot measuring attainment

◦ Bump up from marginal to moderate on Dec. 14, 2016

◦ Attainment demonstration and Reasonable Further Progress SIP revision approved Dec. 15, 2016 and submitted before the end of 2016

2015 8-hr ozone standard (0.070 ppm)

• On October 1, 2015, the EPA lowered the National Ambient Air Quality Standard (NAAQS) for ground-level ozone to 70 parts per billion (ppb).

• Based on preliminary air monitoring data for 2015, the Dallas-Fort Worth, Houston-Galveston-Brazoria, San Antonio, and El Paso areas are measuring levels above the 2015 ozone standard. ◦ State recommendations based on the 2015 Design Value ◦ Final EPA designation expected to be based on the 2016

Design Value

Area

Certified 2015 Ozone

Design Values (parts per

billion)

Preliminary 2016 Ozone

Design Values as of Oct.

31, 2016 (parts per billion)

DFW 83 80

HGB 80 79

San Antonio 78 73

El Paso 71 71

Hood County 73 69

Beaumont-Port

Arthur 68 68

Killeen-Temple-

Fort Hood 69 67

Austin 68 66

Tyler-Longview-

Marshall 68 66

Waco 67 63

Victoria 64 63

Corpus Christi 65 65

Big Bend 64 59

Lower Rio Grande

Valley 59 57

Mission-Edinberg-

Mercedes 56 55

Laredo 59 54

CSA/CBSA County

2016 8Hr

Ozone DV

(ppb)

Dallas—Fort Worth Denton 80

Houston—The Woodlands Harris 79

Houston—The Woodlands Galveston 76

Houston—The Woodlands Brazoria 75

Dallas—Fort Worth Tarrant 75

Dallas—Fort Worth Collin 74

San Antonio—New Braunfels Bexar 73

Dallas—Fort Worth Parker 73

Dallas—Fort Worth Dallas 72

Dallas—Fort Worth Johnson 72

Houston—The Woodlands Montgomery 72

El Paso—Las Cruces El Paso 71

Dallas—Fort Worth Hood 69

Beaumont—Port Arthur Jefferson 68

Killeen-Temple Bell 67

Longview-Marshall Gregg 66

Dallas—Fort Worth Rockwall 66

Austin—Round Rock Travis 66

Amarillo-Borger Randall 65

Tyler-Jacksonville Smith 65

Victoria—Port Lavaca Victoria 65

Corpus Christi—Kingsville—Alice Nueces 64

Beaumont—Port Arthur Orange 64

Dallas—Fort Worth Ellis 63

Waco McLennan 63

Longview-Marshall Harrison 62

Dallas—Fort Worth Kaufman 61

Dallas—Fort Worth Navarro 61

No CSA Polk 61

Dallas—Fort Worth Hunt 60

No CSA Brewster 59

Brownsville-Harlingen-

Raymondville Cameron 57

McAllen-Edinburg Hidalgo 55

Laredo Webb 54 **The Brewster County, Randall County, and Polk County monitors are part of the Clean Air Status and Trends Network (CASTNET) of monitors and report data directly to the EPA.

*2016 design values are calculated as of 12/9/2016 and subject to change

0.070 parts per million (ppm)

Marginal 0.071 up to 0.081 ppm

Moderate 0.081 up to 0.093 ppm

Serious 0.093 up to 0.105 ppm

Severe – 15 0.105 up to 0.111 ppm

Severe – 17 0.111 up to 0.163 ppm

Extreme 0.163 ppm or more

October 2016 State designation recommendations June 2017 EPA publishes public notice of its proposed designations October 2017 EPA to finalize designations and classifications; EPA to finalize implementation rule December 2017 Expected effective date of designations December 2019 Emissions Inventory SIP revisions due for all nonattainment areas December 2020 Attainment deadline for marginal nonattainment areas

Address implementation issues for area and

mobile source emission reduction credit

generation

◦ Surplus

◦ Real

◦ Quantifiable

◦ Permanent

◦ Enforceable

• Proposal:

• Commissioner’s Agenda March 8, 2017

• Copies of the proposed rule available at http://www.tceq.texas.gov/rules/propose_adopt.html

• Public hearings:

• Houston: April 18, 2017

• Arlington: April 19, 2017

• Austin: April 20, 2017

• Comments due by 5:00pm April 24, 2017

• Adoption: August 2017

• Additional Meetings on Rule Implementation

◦ Houston: February 28, 2017, 1:00pm at the Houston-

Galveston Area Council, Conference Room B, 3555 Timmons Ln #120, Houston, TX 77027;

◦ Dallas-Fort Worth: March 1, 2017, 10:00am, at the

North Central Texas Council of Governments, The Fred Keithley Conference Room, 616 Six Flags Drive, Arlington, TX 76011; and

◦ Austin: March 2, 2017, 1:30pm at the TCEQ

Headquarters, Building F, Room 2210, 12100 Park 35 Circle, Austin, TX 78753.

• Non-residential area sources

• Sources with approved/approvable emissions estimation

methods

• Fleet vehicles

• Mobile sources primarily operated in a nonattainment area

• Sources that operated in SIP emissions year

• Sources with >0.1 ton credit after all adjustments

• Sources with real reductions, not activity shifting

• Mobile sources made permanently inoperable or moved

out of North America

Inelastic area source shutdowns will not be credited.

Reduce SIP emissions available for credit by: ◦ 25% for area and non-road mobile source categories

◦ 15% for on-road mobile source category

◦ Draft strategy discussed reductions of:

20% to 30% for area and non-road mobile

5% to 15% for on-road mobile

As area and mobile emissions estimation uncertainties diminish, commission may determine that a greater proportion of SIP emissions could be creditable without risking: ◦ noncompliance with requirement to be surplus to SIP;

and

◦ having a negative impact on the relevant air shed.

Reduce credits for shutdown by 15%. Draft strategy: 20%

Reduce credits based on emissions estimation data.

◦ No adjustment for records required for same facility type at

a point source.

◦ Reduce 15% for alternative methods.

◦ Draft strategy discussed:

Source-specific continuous monitoring: 0% to 10%;

Source-specific non-continuous monitoring: 5% to 15%; and

Alternative methods: 10% to 20%.

Total combined adjustment of no more than 20% Draft strategy: 20% to 30%

Determine historical adjusted emissions from two of five years before reduction. ◦ Can “look back” six to ten years when detailed

operational records are available.

◦ Draft strategy only allowed five year look back.

Mobile SIP and historical adjusted emissions set based on actual emissions in nonattainment area.

Mobile credits set based on remaining useful life, annualized over 25 years. ◦ SIP fleet turnover assumptions

EPA-approved/approvable protocols are required for emissions estimation.

Generator must comply with required conditions. ◦ Monitoring, testing, recordkeeping

◦ Specified in Emissions Banking and Trading Emission Reduction Certification Form (Form EBT-CERT)

EBT-CERT may contain special conditions including, but not limited to: ◦ Vehicle Replacements

Moved out of North America

Proof the vehicle is permanently inoperable and certified or duplicate Texas Nonrepairable Vehicle Title

◦ Vehicle Repower

Proof the engine is permanently inoperable

Moved out of North America

Credit applications must be submitted no more than two

years after the facility's emissions reduction date. ◦ Lack of clarity created by “implementation of the emission

reduction strategy” created implementation issues.

Proposed language is intended to clarify expectations.

For example, at an oil and gas site: ◦ Compressors, dehydrators, and sweeteners, tanks, and fugitives

could have different emission reduction, application, and credit

expiration dates.

◦ Each facility's emissions reduction date would set that facility's

credit application deadline and expiration date.

◦ Well plugging could be completed after the application deadline,

but must be completed prior to credit certification.

Oil and Gas

If: ◦ the application is for a complete shutdown of an oil and

gas production site;

◦ well plugging is completed within one year of final production being reported to the Railroad Commission of Texas (RRC), and

◦ the well is plugged in accordance with RRC requirements,

then: ◦ the application may be submitted no more than two

years after the site's production well is plugged (as opposed to each facility’s emission reduction date); and

◦ credits certified under this exception will be available for 72 months from the date well plugging is completed.

• Exceptions to standard credit application deadline and life for area and mobile sources • For emission reductions that occurred between June 1, 2013

and January 1, 2015

• application deadline December 31, 2017

• For emissions reductions that occurred between January 1, 2015 and January 1, 2017

• application deadline three years after emissions reduction

• Exceptions expire January 1, 2020

• Extend credit life to 72 months for:

• emission reductions eligible for application deadline exceptions; and

• emission reductions occurring before and included on an application submitted, but not acted on, before January 1, 2017.

Air Quality Permitting

New major sources, major modifications of

existing major sources, and minor sources with a

project that is major by itself

Nonattainment classification determines major

source thresholds and pollutant offsets

If two separate classifications apply, the most

stringent is used for air permitting

Nonattainment NSR

Requires LAER ◦ The most stringent emission limitation either

Contained in the SIP or TCEQ rule or

Achieved in practice by such class or source category

Emissions offsets ◦ Actual emission reductions of the pollutant that is

increasing

◦ Air Quality Division, Banking and Trading Programs

teams administers offsets

Public notice and opportunity for contested case

hearing

Nonattainment NSR

Ozone Thresholds

Marginal

100 tpy

40 tpy

Moderate

100 tpy

40 tpy

Serious

50 tpy

25 tpy

Severe

25 tpy

25 tpy

Offset Ratios

Marginal

1.1:1

Moderate

1.15:1

Serious

1.2:1

Severe

1.3:1

Houston Galveston Brazoria

HGB moderate for ozone (2008) standard

New major source =100 tpy of NOx or VOC

Major modification = 40 tpy of NOx or VOC

Offset ratio = 1.15 to 1

Changes to NNSR Permits

If an NNSR application is pending and the source no

longer meets the applicability criteria for NNSR, the

applicant may void that application.

If a site no longer meets the applicability criteria for

NNSR after a redesignation to attainment and the source

has not commenced construction, the applicant can void

the NA permit and be authorized only under a minor

NSR authorization

If the source has commenced construction the source

must continue to comply with its NNSR permit

Air Quality Division (512) 239-1725

Air Permits Division (512) 239-1250

david.brymer@tceq.texas.gov

betsy.peticolas@tceq.texas.gov