PROPOSAL:

Report on Federal Lowest Achievable Emissions Rate Determination with Reference to AQMD Best Available Control Technology

SYNOPSIS:

BACT, which implements the federal Lowest Achievable Emission Rate (LAER) in California, is required for a permit to construct new, modified, and relocated sources. This report clarifies the applicability of LAER, pursuant to the federal Clean Air Act (CAA), and its impact on the applicability of BACT by the AQMD.

COMMITTEE:

Not Applicable.

RECOMMENDED ACTION:

Receive and File.

Barry R. Wallerstein, D.Env.
Acting Executive Officer

Introduction

A series of articles published by the Los Angeles Times has recently prompted Board member inquiries about the staff’s activities in setting new BACT limits, in relation to federal LAER standards. This status report describes the issues raised and their resolution. It also outlines future work efforts in this area.

Background

The federal CAA defines LAER as an emission standard that has been achieved in practice or is contained in a State Implementation Plan for the source category. There is no cost analysis allowed, and there are no statutory or regulatory definitions of what is meant by "achieved in practice." The CAA requires all new major sources to control air pollution to the LAER standard, stated as an enforceable condition in the permit to construct. Under AQMD rules, BACT may be more stringent than federal LAER.

The AQMD has historically required BACT, which meets or exceeds LAER, in the permit to construct for a new source. In response to progress in science and technology, LAER and BACT standards have evolved over time, and at any time represent the most stringent emission controls for any particular type of source. In most cases, federal LAER matches the AQMD BACT determination. Since BACT/LAER determination are complex, dynamic, and vital to both the environment and the economy. However, limited guidance is provided at the federal, state, and local levels in laws, statutes, regulations or policies.

BACT/LAER Determinations

To date, the U.S. EPA (EPA) does not have an adopted regulatory criteria for LAER determination, but instead relies on policies established by the EPA staff in 1990. Recognizing the need for more formal guidance, the EPA has proposed new regulations for LAER determinations, as part of the New Source Review (NSR) Reform Initiative, which has not yet been finalized. This proposal recommends that six months of operating data would be sufficient to declare an emissions level as LAER, along with other provisions. There is some level of disagreement with the EPA proposal as indicated in several comment letters to the EPA. To aid permit applicants and permitting agencies, the EPA also maintains a clearinghouse at the national level, where information on permits issued by state and local agencies may be obtained. The accuracy, reliability, and completeness of such information and its subsequent utility has been questioned by both industry and air agencies.

The AQMD requirements for BACT are stated in Regulation XIII - New Source Review and Regulation XX - RECLAIM. The actual BACT standards for each type of commonly permitted equipment are listed in AQMD BACT Guidelines, which were last updated in a comprehensive manner in 1988. The AQMD staff is now involved in a major update of this document, in an effort to keep AQMD BACT consistent with technological advances, and consistent with the federal LAER requirements.

In California, Senate Bill 456 (Kelley) was chaptered into state law in 1995. Health & Safety Code 40440.11(c) specifies the criteria and process that must be followed by the AQMD in order to update and change the BACT designation contained in the BACT Guidelines. One of the criteria calls for 12 months of demonstration of the new technology prior to its consideration as a candidate for updating the BACT Guidelines. It also requires that standards be set at a public hearing held by the Board.

Gas Turbine Issue

A recent letter from the EPA stated that a new catalyst technology called SCONOX, developed by Sunlaw Energy Corp./Goaline Environmental Technologies, has achieved an emissions level of 3.5 ppm NOx, based on a 3 hour rolling average, for natural gas fired turbines. Based on three months of data, EPA concluded that the LAER emission standard for this source category was 3.5 ppm NOx. The previous AQMD Achieved In Practice BACT standard of 9 ppm NOx based on a 15-minute average, for gas turbines, as listed in the BACT Guidelines was therefore questioned by several parties, including the EPA. Since SB 456 requires a formal process to update the AQMD BACT Guidelines, the basic question was whether or not SB 456 allowed the AQMD to impose a more stringent LAER emission limit than that contained in the BACT Guidelines.

After consultation with the affected industry, the sponsors of SB 456, the California Air Resources Board (ARB) staff, and the EPA, the AQMD staff has concluded that the process specified in SB 456 to update the BACT Guidelines will be interpreted to apply only if the AQMD proposes to make BACT more stringent than LAER. Thus, the SB 456 requirements for updating the BACT Guidelines do not prohibit the AQMD from applying federal LAER to permits for new projects. As a matter of policy, staff will update the BACT Guidelines with any new LAER determination and bring them to the Board at the earliest opportunity.

Permit Deemed Complete Issue

The AQMD has generally informed permit applicants about BACT requirements at the time the application is deemed complete, so that appropriate control technology can be selected and analyzed for project cost and feasibility. The EPA has stated that the determination of LAER/BACT must be left open until after the close of public comment period. It is EPA’s position that LAER/BACT changes may be required up to the time of final permit issuance. The AQMD staff and members of industry have expressed concern over the ensuing uncertainty that may evolve from EPA’s position. Staff and industry have recently opened a dialogue with the EPA on this issue, which was also discussed at the September 18 meeting of the Board’s Home Rule Advisory Group. Staff will keep the Board apprised of progress and actions taken in this area.

Future Work

Several changes are warranted in the staff’s efforts to update the AQMD BACT Guidelines, in view of the above developments. Since permit-by-permit determination of LAER may overrule BACT Guideline listings, it is imperative for the staff to identify and analyze new LAER determinations that are more stringent than AQMD BACT and present them to the Board for inclusion in the BACT Guidelines at the earliest opportunity. This is a major task, requiring assistance from EPA and ARB, and is expected to affect the permits for a large number of commonly permitted equipment.

The BACT Methodology Report, presented to the Board in September 1995, will be revised and resubmitted to the Board in keeping with the above discussion of LAER.

Staff and industry are jointly seeking concurrence with the ARB and EPA on a process to bring reliability, certainty, and confidence into the setting of new LAER standards on technology advancements.

/ / /