Aggregation Issues

Jesse Lovegren, Ph.D.

Air Permits Division

Texas Commission on Environmental Quality

Advanced Air Permitting Seminar 2015

Presentation Sections

• Overview

• Site Aggregation

• Examples

• Project Aggregation

• Examples

Overview

• Clean Air Act programs applying to "major" sites/sources:

Site Aggregation: “common sense notion of a plant”

Project Aggregation: keeps applicants from improperly avoiding major NSR review

Site AggregationAffected Programs

• Major NSR: Modification to existing major source vs. new source;

• Title V: Applicability of program; and

• NESHAPs for source categories: Major source vs. Area source

Site AggregationSite Criteria

• Same industrial grouping;

• Located in one or more contiguous or adjacent properties; and

• Under common control

Site AggregationSame Industrial Grouping

• Grouping is 2-digit SIC code

• “Support Facility” concept

• Groupings not considered for NESHAP program

Site AggregationContiguous/Adjacent Properties

• Adjoining except for an intervening road, railroad, right-of-way, waterway, etc.;

• Properties located < ¼ mile apart; and

• Interdependent (can be > ¼ mile apart)

Site AggregationContiguous/Adjacent Properties

Oil and Gas Rules

• SB 1134 applies

• Proposed EPA rules:

Proposal 1: Defines “adjacent”; and

Proposal 2: Revises regional consistency regulations

Site Aggregation Contiguous/Adjacent Properties

Oil and Gas Rules

Site AggregationUnder Common Control

• Generally, operations under the same company;

• Evaluated at the highest point of the organization’s structure; and

• More complex business relationships require case-by-case determination

Example 1

Property A:

Crude oil & refined products storage

Property B:

For-hire storage; includes a boiler

Example 1Can They be Aggregated?

Properties A & B:

• Owned by the same company

• On opposite banks of a waterway and < ¼ mile apart at their closest point

< ¼ mile

Example 1Answer

• Common control

• Adjacent properties

• Property A belongs to: Group 5171 Property B belongs to: Group 5169

• Boiler is a support facility

Yes: Sites can be aggregated.

Example 2

Property A:

Soil/groundwater remediation facility

Property B:

Bulk fuels terminal

Example 2Can They be Aggregated?

• On contiguous properties

• Company B owns a share of both

• Shared electricity supply

Partly Owned by Companies A & B

Operated by Company B

Example 2Answer

• Not under common control

• Contiguous properties

• Property A belongs to: Group 4959 Property B belongs to: Group 5171

• Neither is a support facility

No: Sites cannot be aggregated.

Project AggregationApplicability

• Major NSR;

• Major modifications to stationary sources; a physical change with an emissions increase; and

• Projects sufficiently related or treated as a single physical change

Project AggregationOther Applicability

• Applies to evaluation of project increase only

• Source-wide netting comprises all contemporaneous changes at the source, related or not

Project AggregationProject Criteria

• Timing of applications

• Documentation: Funding applications; Consumer demand and projected

production reports; and Statements on plans of operation

• TCEQ analysis

Project AggregationWhen Is Evaluation Required?

• Two or more filed within a short time period; and

• Major NSR requirement avoided by separate treatment of projects

Example 3

Project 1:

PSD application for construction of marine loading dock & storage

Project 2:

PSD application for additional throughput

Example 3Is Further Evaluation Needed?

Project 1 & 2:

• Subject to PSD review for VOC (O3 precursor); and

• Increases for other pollutants insignificant even when projects considered together

Example 3Answer

• Can be considered part of the same physical change

• No major NSR requirements avoided

• Analysis for Project 2 may include emissions from Project 1

No further evaluation is needed.

Example 4

Project 1:

Permit for changes at 3 units at an aluminum reduction plant

Permit

3 Units Controls

Project 2:

Request to split into 3 separate reviews/permits

Permit

1 Unit

Permit

1 Unit

Permit

1 Unit

Example 4Should the Permit Be Split?

Considerations:

• Splitting permit = removal of control device

• Owner: “Projects were separate business decisions and economic justifications.”

Permit

3 Units Controls

Permit

1 Unit

Permit

1 Unit

Permit

1 Unit

Example 4Answer

• Previous owner statements treat the changes as one project

• Owner should not agree to emission reduction measures to avoid PSD review and then apply to discontinue reduction measures

Permit should not be split.

Questions?