December 2019, Vol. 246, No. 12


EPA Considers Regulatory Relief for Pipeline Facility RICEs

By Stephen Barlas, Contributing Editor

The Interstate Natural Gas Association of America (INGAA) and the American Gas Association (AGA) are pressing the Environmental Protection Agency (EPA) to finalize changes to air emission rules the agency has been considering for over a decade.

At issue is when facilities – inside the natural gas industry and outside – can voluntarily re-designate emission sources as “area sources” after they were originally labeled “major sources.” 

Area sources are more lightly regulated, generally at the state level. A 1995 memorandum that established EPA’s “Once In Always In” (OIAI) policy for National Emission Standards for Hazardous Air Pollutants (NESHAP) source reclassification has made voluntary re-designation very difficult. NESHAPs, of which there are a few hundred, are one of the regulatory programs under the Clean Air Act.

The Bush administration proposed more leeway for re-designation in 2007 but never finalized a new policy. The Obama EPA dropped the effort. Last summer, the Trump administration breathed new life into formally easing re-designation with a proposed rule which followed up a January 2018 memorandum from a top EPA official to the EPA Regional Air Division Directors titled “Reclassification of Major Sources as Area Sources Under Section 112 of the Clean Air Act.”

The proposed rule would essentially formalize that memorandum and allow a major source of HAPs – such as a reciprocating internal combustion engine (RICE) – to become an area source at any time by accepting a “potential to emit” (PTE) limit below the major source thresholds of 10 tons per year (TPY) of a single HAP or 25 TPY, considering all HAPs.

INGAA and AGA have told the EPA the organizations’ members “have been encumbered by the 1995 OIAI policy guidelines that introduced unnecessary complexity and burden to NESHAP compliance.”

There are many NESHAP standards, each with multiple parts, and the dominant one for the natural gas industry is Subpart ZZZZ. It affects emissions for RICEs. Different engines in different parts of a facility, installed at different times, can have different designations, either “area” or “major.” INGAA and AGA complained in comments to the EPA: “This inconsistency leads to unnecessary confusion and complexity for companies implementing compliance measures and when engaged in permitting activities, and reporting and recordkeeping.”    

If the proposed rule is adopted, companies will be incentivized to voluntarily install additional pollution prevention equipment or pursue process changes that reduce HAP emissions because they will not be subject to the major source regulatory administrative burdens, once they have shown they can achieve area source status, according to the two trade groups.

After the EPA official issued his memorandum in January 2018, one INGAA member voluntarily modified its permit to become an area source.  As a result, that site is now subject to enforceable formaldehyde limits and annual testing requirements on four engines, and additional pollution controls were installed on one engine which is now subject to operating and emissions limits.

A basic difference between regulation of major and area sources is the first must reduce emissions based on maximum achievable control technology (MACT) while the second face generally achievable control technology (GACT), which are more permissive given the smaller amount of emissions from a source. The PTE definition, which is used to establish both MACT and GCAT standards, is based on various emissions tests a company must perform.

Environmental groups oppose making reclassification easier. Groups such as Earthjustice, Environmental Defense Fund, Natural Resources Defense Council, and Sierra Club argue the rule, if finalized, would vastly increase emissions of air toxics whose danger to public health and unwind decades of progress toward that statutory goal.

Some state air emission regulatory officials also have concerns. For example, NESHAPs, such as subpart ZZZZ, lead to incidental control of volatile organic chemicals (VOCs) which contribute to ozone formation. That is because many of the nearly 200 HAPs controlled under the Clean Air Act are also VOCs. Gas transmission or distribution companies downshifting to GACT controls for HAPs may inadvertently increase emissions of VOCs.

“Over 50 areas of the country remain in non-attainment of federal ozone standards, including several areas in Wisconsin,” wrote Gail Good Director, Air Management Program Wisconsin Department of Natural Resources. “These areas are relying on EPA to continue to control emissions from sources over which states have little to no regulatory authority.”

The EPA did a "back-of-an-envelope" calculation which guessed nearly half of the 7920 major sources subject to NESHAPs would reclassify as area sources. That was based on an assumption that major sources emitting less than 75% of the major source floor for a single HAP or total HAPs would be candidates for reclassification.

The EPA did not break down the potential 3900 sources who might reclassify based on NESHAPs or sector. However, it did cite one facility previously subject to the major source RICE NESHAP requirements that replaced old engines with new engines equipped with a catalytic oxidizer designed to reduce HAP emissions (formaldehyde by 90%) prior to the reclassification.

Since reclassification as an area source, this facility, which the agency did not identify, continues to be subject to enforceable conditions on the operation of the engines and the catalytic oxidizer to reduce formaldehyde by 90%. So, in that instance the agency doesn’t expect emissions increases from formaldehyde, which is a VOC, resulting from the reclassification of this facility.  P&GJ

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