Smaller Sources and Potential to Emit

With major source limits in the Denver metro area non-attainment area lowering to 25 tons per year of NOx or VOC in early 2022, many sources that have previously considered themselves to be small may be bumping into major source limits and the permitting requirements applicable to major sources.  The 25 tons per year emission level is based on a facility’s Potential to Emit (PTE).  A PTE inventory shows the maximum amount of emissions that COULD come from your facility if it were running at maximum capacity all the time, even if your facility would never run consistently at that level.

Does your facility have a Potential to Emit (PTE) Inventory?  If you have some sources that are controlled, you may or may not be able to count that control in your PTE Inventory, depending on your permits.  Maybe your facility only has a few sources that require a permit and the emissions from those sources added together are less than 25 tpy of NOx or VOC, but did you include your insignificant sources, such as gas-fired heaters, fire pumps, emergency generators, and small fuel tanks, in your PTE?  If you would like to discuss your facility’s PTE inventory, Applewood can help!

Greenhouse Gas Energy Audits for Colorado Manufacturers

The Air Pollution Control Division (APCD) is working on a Greenhouse Gas (GHG) Audit Program that will focus on reducing GHG emissions from manufacturing facilities.  The program has been created in response to Colorado Revised Statute Section 25-7-102(2(g) which set the following goals for GHG reduction in the state:

  • 26% reduction by 2025
  • 50% reduction by 2030
  • 90% reduction by 2050

The audit program will be based on manufacturing facilities’ relative contribution, so large contributors to GHG emissions will be the focus of the program in the beginning.  Manufacturing facilities with direct emissions of equal to or more than 50,000 metric tons of CO2e per year through 2019 will be the affected facilities at first.  It is expected that the applicability will be lowered to smaller contributors in the future.   Facilities that will be excluded will be Oil and Gas, Landfills, Underground Coal Mines, Electric Generating Units and Food Processing Facilities.  Most of those types of sources are covered under separate regulations.

The audit program will require energy and emission control audits addressing GHG emissions from energy-intensive, trade exposed manufacturing facilities (EITEs) as well as non EITE facilities.  For EITEs it will require that the audit be done by a 3rd party every 5 years through 2035. Non EITE facilities will be required to implement management systems for energy and GHG emission reductions over a 5-year period.   APCD wants facilities to help decide what sources should be included in their own audit, with the focus being on the sources that have the most emissions.

The audit will help to establish GHG Best Available Control Technologies (BACT) and Best Available Energy Efficiency Practices (BAEEP). These will likely be set per facility instead of per industry.  The audit report should recommend a compliance process.  If sources do not meet GHG BACT and BAEEP, the commission will consider the regulatory requirements to further mitigate the costs of reducing emissions and provide incentives to reduce emissions.  APCD would also like to utilize existing programs like ISO.

APCD expects to have draft language for the audit program out by mid-February 2021.  In April there will be a request for a rulemaking and a rulemaking hearing in July.   For more information on the upcoming GHG audit program for Colorado manufacturer’s, go to the CDPHE website for the program:

https://cdphe.colorado.gov/greenhouse-gas-emissions-and-energy-efficiency-management-and-audit-program-for-manufacturing-in

Planning for Ozone Non-attainment Downgrade – Again

On December 15, 2020 Governor Polis released a statement about his intentions to push for a downgrade for the Denver Metropolitan/North Front Range Area from serious to severe non-attainment for the area’s ozone levels.  The area has been unable to achieve a ground-level ozone standard of 75 ppb.  The statement said that state agencies and stakeholders should plan for the downgrade in 2022.

Currently, sources that have a potential to emit (PTE) over 50 tons per year of VOC and NOx need to have Title V permits.  However, this will likely soon change again.  The major source level was only recently moved down from 100 tons per year in January of 2020.  Sources that have air permits with VOC or NOx emissions between 25 and 50 tons per year are going to have to either limit their emissions to less than 25 tons per year or apply for a Title V permit within 1 year of the severe designation.

If a source intends to submit a synthetic minor permit, which would limit their emissions to less than 25 tons per year, then the permit needs to be ISSUED by the Air Pollution Control Division within the 12-month period after the change to avoid Title V permit application requirements.  Often permits take several (4-18) months to be issued by the Air Pollution Control Division, so applications for synthetic minor permits need to be submitted in the upcoming months.

If a source intends to submit a Title V permit application, the application will need to be submitted within 12 months of the redesignation date, so likely in 2023.

Sources should now be looking at their PTE accounting and deciding what will work best for them.

To help sources decide which direction to go with their air permit, Applewood has assembled the following table that outlines the benefits and disadvantages of each type of air permit:  Benefits and Drawbacks of Major or Minor Source Permits

Project Emissions Accounting Update

On October 22, 2020 the EPA finalized the latest guidance on Project Emissions Accounting for Prevention of Significant Deterioration (PSD) and Nonattainment New Source Review (NNSR). In short, the new guidance says that sources can consider emissions reductions in the first step of emissions accounting, which allows them to couple emissions reductions with increases that may be necessary for their process. These reductions can help sources avoid a more complicated permitting process.

It is, however, up to some individual states to decide if they want to follow this guidance. States can decide to use the old guidelines which do not allow for subtraction of emissions reductions in the first step of the process.

For more details on this final action on Project Emissions Accounting, the EPA has a fact sheet and a link to the final rule posted here: https://www.epa.gov/nsr/nsr-regulatory-actions

 

Protection from Wildfire Smoke

My son has asthma and the wildfire smoke has been making him cough.  It is a nasty, goopy cough, which has garnered some fun stares in COVID times.  His asthma specialist recommended that we purchase HEPA air purifiers and place them in our home.  This is also the best way to deal with wildfire smoke even if you do not have asthma.  However, if you do not want to go out and buy expensive HEPA filters, check out this great video from the University of Michigan on how to make a HEPA air purifier yourself! https://www.youtube.com/watch?v=kH5APw_SLUU

Colorado Air Quality News

Yesterday was a busy day for air quality in Colorado! Governor Jared Polis signed a Greening the Government Executive Order which sets specific targets for lowering greenhouse gas emissions. See the announcement here: https://www.colorado.gov/governor/news/gov-polis-signs-greening-government-executive-order

The EPA also sent out a press release stating that it is finalizing the reclassification of the Denver Front Range as a “serious” nonattainment area for ozone. The reclassification won’t be final until it is published in the Federal Register, which will likely happen in the next few days. See the update on Denver 7 News here: https://www.thedenverchannel.com/news/state-news/epa-lowers-denver-areas-air-quality-rating-to-serious

New Source Review Permitting “Adjacent” Guidance

Should two adjacent sources be combined for air permitting purposes? On the surface this may seem like a simple question. However, guidance from the EPA on this topic has switched over the years. Originally, in 1980, the EPA focused on combining sources that were adjacent in terms of physical proximity as well as industrial grouping and common control. Over the years the policy has been interpreted differently by using case-specific facts related to shared equipment, shared workforce, ownership and contracts.

On November 26, 2019 the EPA issued a new memorandum providing guidance on this issue. This memo focuses on using a common dictionary definition of contiguous which means that two pieces of land should be in physical contact with one another. The new memo can be found here: https://www.epa.gov/sites/production/files/2019-11/documents/adjacent_guidance.pdf

It is important to note that each scenario is different and often an attorney should review the facts specific to each case. This most recent memo from the EPA provides guidance for permitting authorities. They are encouraged to, but do not have to follow this guidance.

Upcoming Colorado Air Regulation Changes

Industry and citizens in Colorado are holding their breath for major changes that will be happening in our state in the upcoming months. The Denver metro region is a non-attainment area for ozone. This means that our air quality is worse than the National Ambient Air Quality Standards for Ozone. Ozone precursors are VOC and NOx. Currently Sources that emit over 100 tons per year of VOC and NOx need to have Title V permits. However, this will soon change. The change is expected in the second half of 2019 or early 2020. Current sources that have air permits with VOC or NOx emissions between 50 and 100 tons per year are going to have to either limit their emissions to less than 50 tons per year or apply for a Title V permit within 1 year of the serious designation. If a source intends to submit a synthetic minor permit, which would limit their emissions to less than 50 tons per year, then the permit needs to be ISSUED by the Air Pollution Control Division within the 12-month period after the change to avoid Title V permit application requirements. In some cases, the revised permit will need to be issued before July 1, 2020 to avoid additional RACT analysis. Often permits take several months to be issued by the Air Pollution Control Division, so applications for synthetic minor permits need to be submitted in the upcoming months.

Colorado also passed Senate Bill 181 which calls for a reorganization of the Colorado Oil and Gas Conservation Commission and to prioritize their mission on the protection of Public Safety, Health and Welfare, the Environment, while also requiring additional regulation from the Air Quality Control Commission for the oil and gas sector and transmission sector. These changes will likely take years to complete.

Additional legislation was passed including HB 19-1261 which calls for a Climate Action Plan to Reduce Pollution and SB19-96 which aims to Collect Long-Term Climate Change Data. This legislation also establishes sweeping air emissions and environmental rulemakings and changes in the coming years and decades.

At Applewood Environmental, our mission is to stay on top of these regulatory changes and guide our clients through them to remain in compliance and also give their businesses the ability to grow. Call or email us to see how Applewood can help guide your company through these changes: 303-981-0607 or Bethany@applewoodenvironmental.com.