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EMEMFeature

New Source Review is the federal air-permitting program that

regulates the construction of major new pollution sources and major

modifications to existing major sources in the United States. It is a

complex program, which, until recently, was primarily discussed only

by the stakeholders of the program—industry, state and federal

regulators, environmental groups, attorneys, and consultants. Within

the past year, however, the program has been more widely discussed

in the print media, on the evening news, and, yes, even in the

supermarket. This article provides a detailed analysis of EPA’s recently

announced recommendations for NSR reform.

INTRODUCTIONNew Source Review (NSR) has been around since 1975, whenthe first regulation (promulgated in December 1974) went intoeffect. The program experienced changes as a consequence ofthe Clean Air Act (CAA) Amendments of 1977 and 1990, withrule changes occurring in 1978, 1980, and 1992. Due to a num-ber of issues concerning the program, various stakeholders havebeen attempting to negotiate changes and reforms to theprogram since the early 1990s. Despite the publication of aproposed rule in June 1996 and a notice soliciting commentsin August 1998, until recently, nothing has emerged regard-ing reforms to the program. In 1998, the U.S. EnvironmentalProtection Agency’s (EPA) Office of Enforcement and Compli-ance Assurance (OECA) announced an initiative to target specific

NSR Reform—A Light at

the End of the Tunnel?by Gary McCutchen and William Palermo

Editor’s Note: This article discusses the latest developments in one

of the most contentious and controversial of all air pollution control

topics, New Source Review (NSR) reform. The authors wish to

emphasize that they do not represent the U.S. Environmental

Protection Agency (EPA) and that their views do not necessarily

represent those of EPA, A&WMA, or any other agency or entity.

industry sectors for investigation of NSR requirements (see“NSR Enforcement Initiative—A Historical Perspective,” byClara Poffenberger, EM April 2000, p 25). Over the past fewyears, a number of cases have been brought against compa-nies in several industry sectors, including wood products,electric utilities, and petroleum refineries, alleging violationsof NSR requirements.

More recently, as a consequence of energy shortages, pre-dominantly in the West, President George W. Bush createdthe National Energy Policy Development Group (NEPDG),under the stewardship of Vice President Dick Cheney, to ex-plore solutions to ensure a reliable and consistent supply ofenergy for the country. In May 2001, as part of its NationalEnergy Policy Report, the NEPDG recommended that EPA, inconsultation with the U.S. Department of Energy (DOE) andother relevant agencies, review the NSR regulations, includ-ing administrative interpretation and implementation, andreport to the president in 90 days on the impact of the regula-tions on investment in new utility and refinery generationcapacity, energy efficiency, and environmental protection.In June 2001, EPA issued a background paper on the NSRprogram and how it relates to utility and refinery generatingcapacity, energy efficiency, and environmental protection, andheld public hearings during July 2001 to receive comments.The “90-day report” was finally released and submitted to the

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president on June 13, 2002, along with a separate documentsummarizing actions to improve the NSR program.

EPA’s report to the president noted that the NSR programappears to have had little incremental impact on the construc-tion of new electricity generation and refinery facilities, buthas had a more dramatic impact on investment in utility andrefinery generating capacity and energy efficiency at existingutility and refinery plants. With respect to industry as a whole,the report concluded that there was clear evidence of NSR’senvironmental benefits. The report stated that, with respect tothe maintenance and operation of existing utility generationcapacity, uncertainty about the exclusion for routine activitieshas resulted in the delay or cancellation of projects for main-taining and improving the reliability, efficiency, and safety ofexisting energy capacity. The report also noted that energy effi-ciency was to be encouraged where feasible; however, energyimprovement projects that result in significant emission in-creases must be reviewed. Accordingly, EPA concluded that partsof the NSR program can and should be improved and recom-mended a number of changes to the program that address theconcerns raised during the NSR review. EPA’s recommendationsinclude finalizing several of the approaches that were proposedin 1996 and initiating rulemaking on a number of others (seesidebar opposite). This article provides a detailed analysis ofEPA’s intended approach, as announced on June 13, 2002. Toput this analysis into perspective, the article includes a briefoverview of the program and discussion of the history of thereform efforts. For more information on the background to theNSR program and the status of the NSR reform effort in 1998,please refer to the earlier article, “The New Source Review Re-form Proposal: On Target or Near Miss?” by Gary D. McCutchenand William J. Palermo, EM September 1998, p 13.

BACKGROUNDNSR is the federal air-permitting program that regulates the con-struction of major new sources and major modifications of ex-isting major sources. (There are minimum requirements in theCAA for minor NSR programs in both attainment and non-attainment areas, but the focus of EPA’s rules and policy hasbeen major sources and major modifications.) The NSRprogram’s primary purpose is to protect the National AmbientAir Quality Standards (NAAQS) by requiring pre-constructionreview of proposed actions that would either be consideredmajor sources or major modifications to existing major sources.Major source/modification NSR consists of two subprograms:Prevention of Significant Deterioration (PSD), which is appli-cable to areas of the United States in which the NAAQS areattained (i.e., attainment areas), and Nonattainment NSR(NNSR), which is applicable to areas in which the NAAQS arenot attained for one or more pollutants (i.e., nonattainmentareas). While PSD and NNSR both apply to the construction ofmajor sources or major modifications, the definition of theseterms varies in the two programs.

NSR had its beginnings in the CAA Amendments of 1970,although the most controversial part of the program occurredonly as a result of a court case and a series of final rules, begin-ning in 1974. The program was specifically authorized by stat-ute by the CAA Amendments of 1977, which mandated severalchanges to the program and resulted in revisions to the origi-nal (1974) rule in 1978. The 1978 rule was immediately chal-lenged in court and led to the promulgation of the August 7,1980, rule, which established the foundation for the NSR pro-grams that are in effect today. The regulations were amendedin 1992 to add special applicability provisions and pollutioncontrol project exclusion for electric utilities (specifically, elec-tric utility steam-generating units).

Originally, NSR applied to the six criteria pollutants: par-ticulate matter (now regulated as PM10 and PM2.5), sulfur ox-ides (measured as sulfur dioxide), nitrogen dioxide, carbonmonoxide, ozone, and lead. It should be noted that althougha NAAQS has been established for ozone, this pollutant is ac-tually regulated through its precursors. Prior to the 1990 CAAAmendments, the only recognized ozone precursors were vola-tile organic compounds (VOCs). The definition of VOCs in-cludes all organic compounds except those specifically listedby EPA as being negligibly reactive (in forming ozone). The1990 CAA Amendments added NOx as an ozone precursor in non-attainment areas (except unclassifiable nonattainment areas),but did not add NOx as a precursor in areas that were in at-tainment for ozone. The six criteria pollutants were, there-fore, the first pollutants to be regulated under the CAA. Overtime, many more pollutants have become regulated underthe CAA, and the term “regulated under the CAA” has beenthe source of significant controversy, particularly with respectto the PSD program.

NSR REFORM HISTORYThe NSR reform effort can be divided into three phases, withthe most recent phase (Phase 3) being the major focus of thisarticle. To put Phase 3 into perspective, however, we will brieflysummarize each of the two previous phases.

EPA’s Recommended Improvements to NSR

Final rulemaking for:

• Plantwide applicability limits (PALs)• Clean unit exclusion• Pollution control and prevention (PCP) projects• Actual-to-projected future actual (APFA) methodology

Proposed rulemaking for:

• Routine maintenance, repair, and replacement (RMR&R)• Debottlenecking• Aggregation

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Phase 1Beginning in 1992, EPA established a “stakeholders” commit-tee composed of agency, environmental group, industry, andfederal land manager representatives. Over the years, variousstakeholders raised issues concerning the NSR program thatthey hoped would be resolved through the promulgation ofthe NSR reform rulemaking package. A series of meetings anddraft regulations, including a 1994 “staff draft,” provide a recordof the increasingly intense debates that had begun about thedirection to take in revising the NSR rules.

Phase 2On July 23, 1996, a proposal was published in the FederalRegister (61 FR 38250; July 23, 1996), which was the first at-tempt by EPA to bring about a set of comprehensive changesto the NSR rules since August 7, 1980. There had been othermore narrowly structured revisions—such as the “WisconsinElectric Power Company (WEPCO) rule” in 1992, which af-fected only utilities—but the 1996 proposal would affect allsources. The subsequent 1998 Notice of Availability also pub-lished in the Federal Register (63 FR 39857; July 24, 1998)and several “staff recommendations” featured in presenta-tions by EPA personnel indicated that the overall directionof the reform effort had swung toward a “tightening” of theapplicability criteria and requirements. Under any of theseapproaches, there would have been some “industry-friendly”changes, but on the whole, more (rather than fewer) modifi-cations would be subject to major NSR and the requirementswould be more stringent (or more stringent policy would becodified in the regulations). This approach still appeared tobe the one favored by EPA as late as fall 2001, despite a changein administration.

Phase 3In late 2001, an anonymous bullet list of NSR “reforms” wasbeing circulated on the Internet. The list of changes (that al-legedly were being worked on by EPA) was considerably dif-ferent from the approach being advocated in the Phase 2documents and appeared to address nearly all the major con-cerns voiced over the years by the regulated community.Environmental groups would consider the list far too “indus-try-friendly,” but few people knew whether this was simply alist for discussion or whether EPA had actually committed tochanging course and following this approach. By February2002, enough additional information had been gathered thatit appeared that EPA was, indeed, working on at least some ofthe items on the mysterious list. When the new recommenda-tions were announced on June 13, 2002, it quickly becameapparent that the list that had circulated on the Internet wasquite accurate on the direction EPA had taken. Our 1998 EMarticle addressed developments through Phase 2. We will nowdiscuss Phase 3 in detail.

PHASE 3: NEW RECOMMENDATIONSOn June 13, 2002, EPA announced its most recent recommen-dations for NSR reform. Whether or not you agree with theviews presented in this article, it has to be said that this an-nouncement may signal a possible end to the stalemate thathas paralyzed efforts to reform the NSR program for nearly 10years. The information released by EPA (which is currently avail-able on the EPA Web site at www.epa.gov/air/nsr-review) includeda press release and talking points, a report to the president, anda list of recommended improvements. In addition, EPA indi-cated that final rulemaking for improvements previously pro-posed would be coming forth in the next few months and thatthe agency would issue a proposal relating to new improve-ments possibly by the end of 2002. The indicated final andproposed rulemakings are addressed separately below.

INTENDED FINAL RULEMAKINGSPlantwide Applicability Limits (PALs)

Setting PAL Baselines. EPA will conduct final rulemaking al-lowing plantwide applicability limits (PALs) based on actualemissions (i.e., highest consecutive 24-month period withinthe immediately preceding 10 years, taking into account thecurrent emissions factor, which would reflect emissions

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limitation and other reductions since the baseline period, incombination with the utilization level from the 24-month timeperiod selected). This approach creates a baseline somewherebetween actual and potential pre-change emissions. The firstpart is similar to what was proposed in 1996, which allows asource to use its highest utilization level during the past 10years and to take into account much longer business cyclesthan the current approach of using the most recent two yearsof actual emissions data—unless there were problems duringthe two most recent years, such as fires, strikes, or floods.

The second part uses the “current” emissions factor. Thepurpose of doing so (again, per the 1996 proposal) is to pre-vent the source from using emission rates from up to 10 yearsago that could be more lenient than current allowances.Using more lenient past allowable rates to establish a baselinecould result in the source actually emitting more (without be-ing subject to NSR) than it has since the emissions limits weremade more stringent. The only obvious question is whetherthe source uses its current allowable rate or its current actualrate (if the actual rate is lower than the allowable rate). Requir-ing a source to use the current actual rate penalizes a sourcefor doing better than was required (e.g., burning 1% S coalwhen the limit was based on 1.5% S coal). In addition, the“actual” rate will vary from test to test, so it can change con-siderably unless a long-term average is used.

The overall effect, in our opinion, is that this is a balancedoption. It does not provide a true “potential-to-potential” emis-sion increase calculation that industry would prefer, but it doesrecognize that emissions cycles can be longer than two years.Sources have long complained that the immediately preced-ing two-year average often fails to represent market peaks thathave occurred in the past and that will likely occur in thefuture. The proposed approach would reflect contemporane-ous market peaks instead of whatever the market has been

recently. This makes the PAL a more attractive option becausethe PAL would be based on this (higher) baseline of “quasi-actual” emissions. Again, there are some unanswered ques-tions, such as how to deal with sources when the market thatexisted in the past no longer exists (e.g., the market for glasssoda bottles, which is unlikely to ever return). The PAL wouldbe valid for 10 years. During those 10 years, the source couldmake any change without triggering NSR, as long as actualemissions did not exceed the PAL. This approach is similar tothe original 1996 proposal. The main differences are a more“liberal” actual emissions baseline and less-aggressive languageregarding PAL adjustment.

PAL Renewal. Staff recommendations in the late 1990s leanedtoward ratcheting down a PAL (if it was substantially abovecurrent actual emissions) when it was renewed, which wasexpected to be every five years. In effect, sources would bepenalized if business was slow or if they did better than re-quired in terms of emissions rates. The new recommendationsstill anticipate that emissions levels may be reevaluated by thepermitting agency to determine the need for an adjustment.The need can be based on air quality, advances in technology,and control cost-effectiveness considerations.

PAL Increases. A PAL can be increased by a source if certaincriteria are met. These are

• Nonattainment area criteria: Opportunity for public par-ticipation; modeling of increase as appropriate; appli-cation of control technology to the modified existingor new emissions unit; and securing necessary offsets.

• Attainment area criteria: Opportunity for public par-ticipation; modeling the increase; apply controltechnology to the modified existing or new emissionsunit; and undertake any mitigation measures that

might be required.The effect of these criteria is that the

source would have to undergo major NSRpermitting to increase a PAL. What is differ-ent in this new recommendation is that Low-est Achievable Emissions Rate (LAER) andBest Available Control Technology (BACT)would be applied only to the new or modi-fied units; the 1996 proposal asked forcomment on various options, but did notspecify a preference.

PAL Alternatives. EPA also plans to develop analternative that would give a source the op-tion of obtaining a PAL based on allowableemissions. Presumably, there would be addi-tional restrictions that would balance theless-restrictive, allowable-based PAL.

EPA indicated that final rulemaking for

improvements previously proposed

would be coming forth in the next few

months and that the agency would issue

a proposal relating to new improvements

possibly by the end of 2002.

EPA indicated that final rulemaking for

improvements previously proposed

would be coming forth in the next few

months and that the agency would issue

a proposal relating to new improvements

possibly by the end of 2002.

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Clean Unit ExclusionEPA would finalize the 1996 proposal, which was relativelynoncontroversial. A unit would be considered “clean” if it un-derwent a review process that resulted in BACT/LAER or equiva-lent (e.g., state minor NSR BACT) within 10–15 years (it was5–10 years in the 1996 proposal) from the date the controlwas installed or the project implemented. NSR would be trig-gered only if the permitted allowable emissions were increased.Inherently clean or lower emitting processes could also qualify,as well as Maximum Achievable Control Technology (MACT)and Reasonably Available Control Technology (RACT), if theyare judged equivalent to BACT/LAER.

Pollution Control and Prevention (PCP) ProjectsEPA would finalize the 1996 proposal. This would exclude fromNSR the addition, replacement, or use at an existing emissionsunit of any system, process, control, or device whose overallnet impact on the environment is beneficial, subject to cer-tain conditions. These conditions are

• a project cannot result in an emissions increase thatcauses a violation of NAAQS or PSD increment, orresult in an adverse impact on Class I areas; and

• complete replacement or reconstruction of an exist-ing emissions unit will not qualify for exclusion.

EPA will provide a list of environmentally beneficial tech-nologies presumptively eligible for the exclusion, includingthe 1992 “WEPCO rule” list (40 CFR 52.21(b)(32)) and the 1996proposal list. Projects not on the list must be determinedenvironmentally beneficial before they can qualify for theexclusion. Projects can qualify on a case-by-case basis, evenif not on the list. Projects can even be added to the list. Theprocess for adding projects to the list is: (1) source providesprior notice to agency, and (2) source maintains on-siterecords supporting source’s determination. A source can makea self-determination, but could be subject to penalties if theagency disagrees with the determination that the project is aPCP. Alternatively, the source can seek a determination fromthe agency prior to implementing the exclusion and, thereby,avoid the possibility of a penalty, but at the cost of having toobtain that prior approval. This approach would codify thePCP exclusion and provide the list of presumptive PCPprojects, but is not all that different from the 1992 “WEPCOrule” and the 1994 memorandum regarding PCP projects.

Actual-to-Projected Future Actual (APFA) MethodologyThis recommendation is the first momentous reversal ofprior EPA staff recommendations. EPA’s 1996 proposal didindicate that the actual-to-projected future actual (APFA)

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methodology for calculating the emissions increase frommodified emissions units would be considered for all sources(it is currently available only for electric utility steam-generat-ing units per the 1992 “WEPCO rule”), but EPA’s 1998 Noticeof Availability stated instead that EPA was considering with-drawing this methodology completely, including withdraw-ing its use by electric utility steam-generating units. The newrecommendation is to finalize the 1996 rulemaking, whichwould authorize all sources to use the APFA methodology,including ignoring demand growth and other increases un-related to the modification. The APFA methodology wouldapply to all industry sectors and be used for all physical oroperational changes, except for the addition of a new unitand complete replacement of an existing unit. The sourcemust keep (on site) records supporting its determination andrecords of actual emissions for the five years following themodification.

Actual Emissions Baseline. For all sources except electric utilitysteam-generating units, actual emissions would be based onthe highest consecutive 24-month period within the immedi-ately preceding 10 years, calculated using the currentemission factor and the utilization level from the 24-monthtime period selected. This is the same baseline that would beused for a PAL.

Future Actual Emissions Calculation (causation link or “demandgrowth” exclusion). The underlying principle of this approachis that only emissions increases caused by a given change areconsidered in measuring the emissions increase associated withthat change. This means that EPA will apply the causation testin the 1992 “WEPCO rule” and exclude from the calculationthat portion of the post-change emissions that

• could have been accommodated before the changewithin the representative baseline period; and

• is attributable to an increase in projected capacity uti-lization at the unit that is unrelated to the particularchange.

If done correctly, this calculation is probably the most

fair and equitable measure of the impact of a proposed modi-

fication on emissions, although it makes it difficult for agen-

cies to determine whether this methodology is being

properly implemented. The problem agencies tend to have

with the APFA methodology is in determining whether the

source’s future actual emissions estimate is realistic or wish-

ful thinking. Since the determination is done on a case-by-

case basis, it is also disproportionately resource-intensive

(compared to an actual-to-potential calculation). EPA’s ap-

proach for dealing with the plausibility of projected actualemissions (less demand growth) in the 1992 “WEPCO rule”and the 1996 proposal was to require the source to record

its future emissions for at least five years after the modifica-tion; if the actual emissions increase (less demand growth)ended up being significant, the source would be required toundergo major NSR retroactively. That “prove it” safeguardis also part of this new recommendation.

INTENDED PROPOSED RULEMAKINGSRoutine Maintenance, Repair, and

Replacement (RMR&R)Since the definition of routine maintenance, repair, and re-placement (RMR&R) is at the heart of most of the allegedviolations filed against several electric utilities, the recom-mendation to propose cost-based thresholds using “well-es-tablished” precedents from the New Source PerformanceStandard (NSPS) is even more controversial than the APFAmethodology. The current NSR rules do not have any defini-tion of RMR&R. EPA issued a “staff draft” definition in 1994,but did not include it or any other definition of what wasroutine in the 1996 proposal. Under this recommendation(since it was not proposed in 1996, this revision to the NSRrules must be proposed before EPA can take final action onit), projects whose aggregated costs are below the thresholdwould automatically be considered RMR&R. Projects whoseaggregated costs exceed the threshold would remain eligiblefor RMR&R treatment if they otherwise qualify, without anypresumption that they did not qualify by virtue of their be-ing outside the cost-based “safe harbor.”

EPA noted that there are two provisions in the NSPS thatcould be used:

1. The reconstruction provision (a project costing 50%or more of the cost of a new unit is considered recon-struction and the modified unit is treated as a newunit and is subject to any applicable NSPS); and

2. The capital expenditure exclusion (projects below the

“annual asset guideline repair allowance” percentage

thresholds of 1.5 to 15% are excluded from the NSPS

definition of a modification).

These NSPS provisions would be adapted to operate in the

NSR context. For example, annual dollar cost thresholds,

averaged on a rolling basis over a five-year period, might be

appropriate for the two provisions. If the aggregate cost of

maintenance expenses and capital repair and replacement

projects for the relevant unit do not exceed the specified dol-

lar threshold, then the activities would be deemed to be

RMR&R and not subject to NSR. The cost threshold would be

set to cover RMR&R capital and noncapital costs incurred to

facilitate the safety, efficiency, and reliability of the operationof the unit. In the context of NSPS, these would be set byreference to historical invested basis. However, for NSR RMR&R,a more appropriate comparison point might be capital replace-ment cost or another measure that sets a consistent threshold

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for all facilities in a given industry. EPA will take comment onthe most appropriate approach.

Excluded Costs. Any costs incurred for installing and main-taining pollution control technology would be excludedfrom the cost total, and therefore, would not count againsteither total. Also, EPA will consider excluding certain costsassociated with forced outages involving the unanticipatedfailure of one or more major components. It should be notedthat expenses beyond the safe harbor would not be pre-sumed to be nonroutine (but could still otherwise qualifyas RMR&R).

Other Considerations. EPA may decide to identify specific typesof projects that cannot be excluded from review by virtue ofthe thresholds. However, EPA seems to feel that a better ap-proach may be to utilize maximum achievable hourly emis-sions rate as the mechanism for addressing this concern.

Definitional Issues. EPA will propose that the replacementof existing equipment with equipment that serves the samefunction and that does not alter the basic design param-eters of the unit (e.g., maximum heat input and fuel con-sumption specifications for utilities) typically would beconsidered RMR&R. EPA will also consider provisions iden-tifying the types of projects that are undertaken as RMR&Ractivities in particular industrial sectors. Absence of aproject from such a list would not disqualify it from beingconsidered RMR&R, but would simply result in its beingevaluated on a case-by-case basis. For the utility sector,equipment that is maintained, repaired, and replaced canbe categorized along functional lines (e.g., boiler tube as-semblies, air heaters, coal-handling equipment, andpumps). Projects where the consequences of delaying orforegoing the work could lead to lower availability or thefailure of the generating unit and create or add to safetyconcerns would generally be considered routine, perhapsusing RMR&R activities identified as “common practice”by the North American Electric Reliability Council. Simi-larly, EPA could identify RMR&R undertaken by refineriesduring turnarounds.

Energy Efficiency Projects. EPA will affirm that existing NSRrules are not intended to discourage activities that increaseefficiency and will propose that such improvements under-taken through RMR&R activities be considered RMR&R. En-ergy efficiency projects will be considered routine if theimprovements result from the replacement of existing equip-ment with equipment that serves the same function anddoes not alter the original design parameters of the unit.Finally, EPA will take steps to “provide additional certaintyabout RMR&R activities during the pendency of thisrulemaking.”

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DebottleneckingEPA will propose a clarification that, when calculating actualemissions associated with a physical or operational change,sources generally should look only at the unit undergoing thechange. Emissions from units upstream and downstream ofthe unit being modified should be considered only when thepermitted emissions limit of the upstream or downstream unitwould be exceeded or increased as a result of the change.

AggregationEPA would propose clarification of its nonaggregation policyby indicating that a project would be considered separate andindependent from any other project at a major stationarysource unless

• the project is dependent upon another project to beeconomically or technically viable, or

• the project is intentionally split from other projectsto avoid NSR.

EPA generally would defer to the individual states to imple-ment its aggregation rule.

IMPLEMENTATION OF RECOMMENDATIONSIn a presentation entitled “New Source Review: What’s Happen-ing?” given at the 95th A&WMA Annual Conference & Exhibi-tion in Baltimore, MD, June 23–27, 2002, Lynn Hutchinson, ofEPA’s Office of Air Quality, Planning, and Standards, indicatedthat, following EPA’s report to the president, the next step is tosend the rules to the Office of Management and Budget (OMB).At the time of writing this article, EPA had already sent the In-tended Final Rulemaking package to OMB. Although Hutchinsonstated that OMB may take up to 90 days to review the rules,recent speculation has been that the review may actually takeless than 30 days. Once released from OMB, the rules will bepublished in the Federal Register, which generally occurs within30 days. The final rule (but not the proposed portion) takes effectimmediately in delegated states (i.e., the states implementing EPA’sregulations: most of EPA Region 5 and Region 2, including NewYork and New Jersey, and a few others). For State Implementa-tion Plan (SIP)-approved states—approximately three-quarters ofall states—the states will have to revise their NSR regulations andEPA will have to approve these changes into their plans beforethe requirements take effect. Until EPA approves the revisions,the current state NSR regulations will continue to apply. Statesgenerally are reluctant to revise their regulations, NSR or anyother regulations, due to the huge resource effort required. Theonly way to ensure that all states adopt revisions would be forEPA to issue a SIP call. A SIP call indicates that a SIP is deficientand requires the state to correct that deficiency within a certaintime; if the state misses the imposed deadline, EPA can disap-prove that portion of the SIP and incorporate the EPA regula-tions by reference. EPA has in the past only issued SIP calls forless-stringent rules. Since, in this case, the recommendations are

considered by many parties to be less stringent than the currentEPA rules, there is some question as to whether EPA will issue aSIP call with these revisions.

The final bullet in Hutchinson’s presentation may providesome insight into EPA’s intent:

“We believe the final rules establish the minimal elements ofan approval [sic] state program. States will have to submit SIPrevisions to incorporate the provisions, or demonstrate that theirexisting program is equal to or more stringent than these mini-mum program elements.”

The wording is intriguing. Although we are reading be-tween the lines, the language seems to imply that the “mini-mal elements” in the recommendations may be consideredby EPA to be more stringent than the current EPA rules. Theargument would most likely go something like this: Projectswhich improve reliability, energy efficiency, and safety are ben-eficial to the environment, and these minimal elements pre-vent such projects from being delayed or abandoned due toNSR. These minimal elements are environmentally desirableand states with the existing NSR rules would impede suchprojects. Therefore, the minimal elements are more stringentthan the current NSR rule because they benefit the environ-ment. As a result, SIP rules with the existing NSR rules aredeficient and a SIP call is warranted.

WHAT’S NEXT?The recommendations have been on the table for only a shorttime, and already there has been a firestorm of controversy,not only within the professional air pollution managementcommunity, but also in the mainstream media. There arebound to be additional developments. In addition, there are anumber of related issues pertaining to air emission sources,including President Bush’s Clear Skies Initiative. Time will tellwhether we are looking at a light at the end of the tunnel, or atrain. Stay tuned.

About the AuthorsGary D. McCutchen, P.E., QEP, DEE, has been a principal withRTP Environmental Associates Inc. since October 1996, and man-ages RTP’s North Carolina office. McCutchen conducts more than40 training sessions annually for both industry and agencies onair permitting and air management topics (including the one-dayNSR professional development course and NSR workshops of-fered by A&WMA). He is a member of the Association’s Environ-mental Policy and Regulation Committee.

William J. Palermo, P.E., has been a principal with RTP Environ-mental Associates Inc. since November 1999, and manages RTP’sLouisiana office. He is Chair of A&WMA’s Sections & Chapters Coun-cil and a Director of the Louisiana Section. Palermo has developedseveral workshops related to Title V and NSR permitting with theLouisiana Section and the Louisiana Department of EnvironmentalQuality. He is also a member of the Association’s EnvironmentalPolicy and Regulation Committee.