governors economic development presentation

8/3/2019 Governors Economic Development Presentation

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Air Permitting & Compliance Issues for Proposed TexasProjects

An In Depth Briefing for the Governor of the State of TexasEconomic Development Staff


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Air Permitting & Compliance Issues for Proposed TexasProjects

Jess McAngus & Leslie Wong

October 30, 2007


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Introduction


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Purpose and Need:

Provide a key Project Evaluation Tool to the Governors Economic

Development Staff

A tool to provide knowledge of air permitting requirements in Texas

A tool to use to identify potential air and other environmental permitting/compliance

pitfalls early in industrial project evaluation

A tool to use to suggest viable location and technology alternatives to initial proposals

Over time in Texas, Air Permitting / Compliance Requirements Have

Become More:

Complex, time consuming and expensive to implement

Regional vs. State in applicability, but National vs. State in authority

Likely to drive location and technology / equipment selection

Subjective and prone to change with little or no notice


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Agenda:

Formal Presentation Air Regulatory Program Structure

Application of Air Regulatory Programs Air Emission Control Standards

Air Permitting Process in Texas

Type of Air Permits Available in Texas

Other Permits to Consider in Development

Hypothetical Projects Apply new skills to sample project

Review process flow for air and other permitting

Question & Answer Session

Materials Provided: Copy of Presentation Slides

Descriptions of Hypothetical Projects

Glossary of Terms


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Air Regulatory Program Structure


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Major Federal Air Programs: 40 CFR 50-97

Base Program (Ambient Air Quality, 40 CFR 50-52):

National Ambient Air Quality Standards (NAAQS) Sets ambient air quality limits on pollutants & methods for determining air quality

States are required to demonstrate compliance with NAAQS via State Implementation Plans

(SIPs)

Types of Pollutants Limited: Criteria pollutants: CO, NOX, VOC, PM, SO2, Lead

Non-Criteria Pollutants: everything else

Hazardous Air Pollutants (HAPs): non criteria on special EPA list


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Implementing Programs (Emission Limits for Stationary Sources):

New Source Performance Standards (NSPS): control of criteria & non-criteria

pollutants by industry and age of plant or latest addition, 40 CFR 60

National Emission Standards for Hazardous Air Pollutants (NESHAPS): control

of HAPs by pollutant, 40 CFR 61-62

NESHAPS Maximum Achievable Control Technology (MACT): control of HAPsby industry, 40 CFR 63

Acid Rain Standards: control of sulfur emissions, 40 CFR 72-78


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Implementing Programs (Emission Limits for Mobile Sources):

Fuel and Fuel Additive Standards, 40 CFR 79-80

Pollution Control Standards for Mobile Sources, 40 CFR 87-94

Not yet delegated to ANY STATE!

Stationary Source standards are delegated to states, and SIPs are based upon

their implementation

Texas is required to maintain minimum ambient air quality standards, but it cannot

control mobile source emissions


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Implementing Programs (Other):

Miscellaneous Ambient Air Quality Programs, 40 CFR 53-59

Federal Air Operating Permit Program, 40 CFR 64-71

Federal Air Quality Regional Planning, 40 CFR 81

Stratospheric Ozone Protection, 40 CFR 82

Mandatory Patent Licenses, 40 CRR 95

Federal Emission Trading Programs, 40 CFR 96-97


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Air Regulatory Program Application


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National Ambient Air Quality Standards:

State Applicability of NAAQs:

State Implementation Plan (SIP)

SIP describes how a State will bring all areas into NAAQS compliance and maintain

compliance status

Compliance called attainment with standards

Standards set for following pollutants Sulfur Dioxide

Particulate Matter (PM, PM10 and PM2.5)

Carbon Monoxide

Ozone (results in limits on NOX and VOC emissions)

Nitrogen Oxides (NOX)

One pollutant may have multiple standards, i.e., 1 hr and 8 hr ozone


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Local Applicability of NAAQS:

Area Definition:

NAAQs designation not determined on state, county or city basis

Areas for NAAQs designation are defined by airshed

Designation areas can cut across political jurisdiction borders

Area Designation:

Attainment Area is an airshed achieving a NAAQs pollutant standard

Nonattainment Area is an airshed not achieving a NAAQs standard

An area may be mixed attainment and nonattainment for different

pollutant standards

Nonattainment areas have different classifications


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Nonattainment Area Structure:

Major and Minor Source Status

An source is Major if it emits more than the threshold amount of nonattainment pollutant

A source is Minor if it emits equal to or less than the threshold amount of the pollutant

Major or Minor source status determines permit & emission trading program applicability

Nonattainment Classifications with Thresholds for Ozone:

Marginal and Moderate Nonattainment 100 tons per year Serious Nonattainment 50 tons per year

Severe Nonattainment 25 tons per year

Extreme Nonattainment 10 tons per year

Transition from Nonattainment to Attainment:

Nonattainment areas must achieve attainment levels in set period of time or state faces penalties

from Federal government, including loss of highway funds

More time allowed to achieve attainment as degree of classification increases


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Ozone 8 Hour Standard Nonattainment Areas In Texas:

Houston Galveston - Brazoria:

Includes Brazoria, Chambers, Fort Bend, Galveston, Harris, Liberty, Montgomery and Waller

Counties

Classification is Moderate, soon to be Severe per formal request by Governor to obtain more time

to reach attainment levels

Dallas Fort Worth:

Includes Collins, Dallas, Denton, Tarrant, Ellis, Johnson, Kaufman, Parker and Rockwall Counties

Classification is Moderate

Beaumont Port Arthur: Includes Hardin, Jefferson and Orange Counties

Classification is Marginal


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Ozone Nonattainment Early Action Compact Areas In Texas:

These areas are voluntarily restricting emissions in hopes of avoiding being

classified as nonattainment areas

San Antonio:

Includes Bexar, Comal and Guadalupe Counties

Classification is Basic Deferred

Austin San Marcos:

Includes Travis, Williamson, Bastrop, Hays and Caldwell Counties

Classification is Attainment

Northeast Texas:

Includes Rusk, Smith, Upshur, Gregg and Harrison Counties

Classification is Attainment


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Other Areas of Concern in Texas:

Near Nonattainment for Ozone (voluntary controls only):

Victoria, including Victoria County only

Corpus Christi, including San Patricio and Nueces Counties

Nonattainment for Other Pollutants:

El Paso, including El Paso County only

El Paso is nonattainment for Carbon Monoxide (CO)

El Paso is nonttainment for Particulate Matter smaller than 10 microns (PM10)

Classification is Moderate for both pollutants

International border transport issues are a factor


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Map of Nonattainment & EAC Areas in Texas


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Air Emissions Control Standards


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Air Pollution Control Standards for Attainment Areas:

Prevention of Significant Deterioration (PSD):

Authority and Purpose:

Federal regulations adopted by Texas, no additional state programs

Permitting standards only, no continuing compliance requirements

Program goal is to keep attainment areas in attainment

Restrictions Imposed:

More complex permit required for new project with 250+ tons per year emissions of a criteria

air pollutant

Owner required to use Best Available Control Technology (BACT) to control emissions of

PSD-level pollutants

BACT allows flexibility in cases of high cost technology

BACT also required for significant emissions of other criteria pollutants

Emissions of adjacent sources may be combined for applicability


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Air Pollution Control Standards for Nonattainment Areas:

Nonattainment New Source Review (NNSR):

Authority and Purpose:

Federal regulations adopted by Texas, plus additional state programs designed to support the Texas SIP

Federal and State permitting standards, plus continuing state compliance requirements

Program goal is to bring nonattainment areas into attainment

Restrictions Imposed:

Very complex permit required for new project emitting more than threshold amount of nonattainment

pollutant

Owner required to use Lowest Available Emissions Reduction (LAER) technology to control emissions of

NNSR-level pollutants

LAER makes no allowances for extreme cost of technology, can stop project

Emissions of adjacent sources may be combined for applicability

Permitting requires that emissions be offset; if no emissions reductions possible, must buy Emissions

Reduction Credits (ERCs) on open market


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Nonattainment New Source Review (NNSR) in Texas:

Texas Permitting and Compliance Regulations:

30 TAC Rule 117 regulations to achieve ozone attainment within Federally designated timeframe

Separate programs for each nonattainment area and for major and minor sources within each

nonattainment area

NNSR minor sources still have special compliance requirements!

NNSR minor source also have special emissions control technology requirements!


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Texas Emissions Trading Programs:

Houston-Galveston Mass Emissions Cap & Trade (MECT)

Applies to all sources with 10+ tons per year NOX emissions

Allowances issued in 2003, with amounts reduced each year for certain industries to force reduction

in NOX emissions

Reissued and accounted for on an annual basis

Annual stream of allowance in perpetuity going for $160,000 per ton

Highly Reactive VOC Emissions Cap & Trade (HRVOC)

Applies to Houston-Galveston only; limited sources, VOCs only

Administered in similar way to MECT program

ERC, Discrete ERC (DERC) and Mobile DERC (MDERC)

ERCs are used for emissions netting within more complex air permitting efforts

Some trading and conversion allowed among programs

This program includes NOX, VOC, SOX, CO, PM10


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Texas Emissions Trading Programs Management:

Banking and Trading by TCEQ:

TCEQ must confirm validity of an allowance or credit before it can be banked for sale, trade or

transfer

Generator of allowance or credit must apply to TCEQ for confirmation, not automatic

TCEQ also confirms transfers of ownership and conversion of one type of credit to another

Banking process allows for revaluation (application of mandatory reductions in value)

Purchase and Trading through Brokers:

Brokers sell from own stock and arrange for transfers among other parties

TCEQ does not engage in credit or allowance marketing!

Pricing is determined by market, not by TCEQ; no price controls in place

Applies to both ERC markets and cap and trade allowance markets


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Air Permitting Programs in Texas


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Federal vs. State Authority Over Air Permits:

Program and Permitting Authority in Texas:

TCEQ has authority for own air pollution control program:

TECQ regulations must be at least as stringent as Federal

TCEQ permitting processes must meet Federal Standard

State Permits to Construct

Permit to Construct for new facility must be obtained before beginning

construction

This permit is issued and governed by TCEQ

Federally Enforceable State Permit to Operate

Permit to Operate under Federal Title V permitting program is issued by

TCEQ upon approval of U.S. EPA Region 6

Application frequently called before new facility constructed


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Basic Air Permit Structure:

Multi Phase Permitting Process for Texas:

Obtain air permit to construct (all projects, preconstruction):

Limits facility operations and predicted air emission types and volumes

Outlines process for proving up (testing) air emissions after startup

Terms of permit may hold in perpetuity, but right to install units may be valid for limited time

without additional permitting

Obtain air permit to operate (major sources only, after PTC):

Only required for Title V Major Sources, no permit for minor sources

Major is 100+ tons per year of any criteria pollutant or listing in regulation

Outlines means by which facility will comply with other permit and regulatory provisions, no

new limitations

This permit must be renewed every five years

Dual authority: State (TCEQ) and Federal EPA (USEPA Region 6)


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Types of Texas Air Permits


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Texas Permits to Construct:

Types of Construction Air Permits Available (multi site):

Permit by Rule:

Pre approved air permit for simple, commonly occurring sources and processes published in TCEQ

regulations with applicability guideline for over 100 types of units and processes

Emissions of CO and NOX must be less than 250 tpy each and emissions of PM10, SO2, VOC and

other pollutants must be less than 25 tons each

Some can be claimed by keeping records on site without notice to TCEQ; others must be registeredwith TCEQ; no public notification or participation required

Standard Permit:

Pre approved air permit with more detail and options than a PBR for moderately complex, but

commonly occurring processes

Pre-prepared by TCEQ but not published in the regulations, therefore easier to update

Requires filing of an application and formal approval, but application is highly specialized and requires

little narrative; no public notification or participation required


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Types of Air Permits Available (site specific):

New Source Review:

For sources that do not qualify for a PBR or standard permits, but also are not in PSD or NNSR

Requires full application with detailed narrative on processes and on regulatory applicability,

which is subject to administrative review and comment by TCEQ.

Requires public notification and public comment period (possibly two) during which a public

hearing may be requested

Permit is issued by TCEQ after completion of public comment and hearings as well as TCEQ

technical review

Time frame to acquire is six months to one year


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PSD:

For sources in attainment areas whose emissions are major for PSD jurisdiction

Application includes same features as NSR, plus additional tasks applied to pollutants emitted

in major or significant amounts

Includes detailed BACT review of emission control technologies

Includes detailed air emission modeling of on and off site impacts to confirm no NAAQs

standards will be exceeded

Requires confirmation that no sensitive areas within range will be impacted

Requires a minimum of two public notice and comment periods

Time frame to acquire is nine months to a year and a half


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NNSR:

For sources in nonattainment areas whose emissions are major for NNSR jurisdiction

Application includes same features as NSR, plus additional tasks applied to pollutants for which site

is major (scope limited to NOX and HRVOC except in El Paso)

Includes detailed LAER review of emission control technologies for major pollutants, which can

result in mandatory technology change

Includes detailed air modeling of emissions on and off site impacts to confirm areas ability to achieve

attainment will not be retarded

Requires major pollutant emissions offset netting: new emissions must be offset with cuts in

existing emissions or purchase of ERCs

For Houston-Galveston, requires prove ability to comply with MECT & HRVOC programs

Requires a minimum of two public notice and comment periods

Time frame to acquire is one to two years


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Permit Type Determination for New Project:

Attainment Area:

Use a Permit by Rule or Standard Permit if one is available

Apply for a NSR Permit otherwise

Apply for a PSD Permit if emissions of a pollutant exceed 250 tons per year (tpy)

Nonattainment Area: Use a Permit by Rule or Standard Permit if one is available, but they are available

only if source emits less than nonattainment threshold

Apply for a NNSR Permit otherwise: NNSR requirements apply to nonattainment

pollutant only

Apply for PSD Permit as well if emissions of a pollutant for which area is in attainment

are 250+ tons per year


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Texas Permits to Operate:

Title V Air Permit to Operate:

Required only for major sources under Title V Program

Major is emissions of 100 tpy of a criteria pollutant or listed in regulations

Title V Permit can be required with Permit by Rule, Standard Permit, NSR Permit, PSD

Permit or NNSR Permit

Permit application can be called by TCEQ anytime from submittal of construction permit

application to one year after startup of operations

Most are site specific, but some General Permits for multiple facility use have been

published by TCEQ

Impose no new limitations, but do impose additional recordkeeping and reporting and can

impose additional monitoring requirements

Permit to Construct is make or break for project, not Permit to Operate


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Other Permits to Consider


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Environmental Permits:

Types of Permits by Media:

Water:

Wastewater Discharge Permit (TPDES)

Stormwater Discharge Permit (General or Site Specific)

Stormwater Discharge Permit for Construction Activity

Research water rights availability for use

Waste:

Solid Waste Permit required for landfills (multiple types) AND all associated activities and

uses

Hazardous Waste Permit required for transportation, storage & disposal

Generators must register each waste with the TCEQ

Check for past waste use, remediation efforts, Brownfields availability


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County and City Permits:

Land Use and Construction Permits:

Land Use Permit

Rezoning no zoning in Houston

Deed Restrictions used in place of zoning

Flood Zone restrictions with required water retention facilities

Construction Permits:

Building Permit

Utility easements and setbacks

Historic Preservation, tree retention, etc.

Public Outreach:

Area Council of Governments

Chambers of Commerce

Community Improvement Organizations


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Hypothetical Project Review / Question & Answer


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For more information:

Jess McAngus & Leslie Wong

Spirit Environmental, L.L.C.www.spiritenvironmental.com

Phone: 713-664-249017350 State Highway 249 (Tomball Parkway), Suite 249

Houston, Texas 77064

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