EPA Final Rule Accepts AGA Comments and Clarifies New Source Review Applicability Assessment
October 21, 2020, EPA issued the final rule codifying previous guidance to clarify New Source Review (NSR) and Prevention of Significant Deterioration (PSD)project accounting. The rule clarifies that both increases and decreases in emissions resulting from a proposed project can be netted in step 1 of the two-step NSR/PSD applicability test to determine whether the proposed project would result in a “significant emissions increase” of a regulated NSR/PSD pollutant.
AGA and INGAA filed comments filed Oct. 8, 2019 strongly supporting EPA’s proposal, now finalized, to clarify the procedure under 40 C.F.R. section 52.21(a)(2) for determining whether a pre-construction “New Source Review” permit will be required for a modification of a “major stationary source” of conventional pollutants such as nitrogen oxides (NOx), volatile organic compounds (VOCs) or fine particulate matter. There are two steps for making this determination. The second step is more onerous and time-consuming, but it is only required if it is determined in the first step that a project would cause a significant net emissions increase. Before the change made in the new final rule, EPA’s regulation describing step 1 allowed for subtracting emission decreases that come from contemporaneous changes – but only if the changes involve existing or new equipment – not both. Under the new final rule, emission decreases can also be counted for “hybrid projects” that achieve emission reductions from both new and existing units. For example, this rule revision could help if a major source compressor station will add a few new compressor turbines (resulting in more emissions from the increased capacity) and will also upgrade several existing compressor engines (resulting in net decreased emissions). The rule change codifies the policy announced in the EPA Administrator’s March 2018 memorandum.
This rule revision is logical, sound policy that will remove a regulatory barrier for moving forward with projects that can help reduce net emissions. This is truly a win-win, benefiting the environment while also expediting natural gas infrastructure projects.