This document provides an overview of new source review (NSR) permitting requirements for air pollution sources. It discusses the key triggers for NSR permits, including constructing new major sources or undertaking major modifications. It also summarizes the different types of NSR permits and their requirements. The document outlines strategies for facilities to either obtain the necessary permits or avoid triggering permitting requirements. However, it cautions that exemption criteria and netting calculations can be complex and risky if not done correctly to avoid potential noncompliance issues and penalties. Proper documentation and expertise are important when evaluating NSR applicability for projects.

1. Crash Course in PSD Permitting:
Key Concepts, Pitfalls, and Strategies
Midwest Environmental Compliance Conference
May 13, 2015
Presented by
Piyush Srivastav, President
NAQS-Environmental Experts

2. COMPANY HISTORY
• NAQS was established in 2003 in Lincoln, NE
• First clients were local municipal power plants
• 2005 - First Fortune 500 Client
• Emerged as a leader in air quality
management consultancy services
• By mid-2008, the majority of applications
processed by the Nebraska Department of
Environmental Quality (NDEQ) were
submitted by NAQS
• NAQS is growing to serve our expanding client
base

3. ORGANIZATIONAL POSITION
• Our Vision: The preeminent leader in air quality, water
quality, risk management plans, and climate change.
• Our Purpose: Partner with clients to provide value added
environmental solutions that ensure:
– Regulatory Compliance
– Increased Operational Flexibility
– Successful Project Planning
– Liability Identification, Reduction

4. ORGANIZATIONAL POSITION
• Our Mission: Bridge the gap between industry and
regulators by engaging employees with undisputable
expertise, excellent critical thinking abilities, and strong
communication skills.

5. SERVICES
• Permitting –
– Applications
– Strategies
– Draft Permits
– Permit Reviews
• Compliance Assistance
• Regulatory Analysis
• Emissions Inventories
• Compliance Certifications
• Deviation Reports
• Stack Testing Assistance
• Litigation Support
• Training
• Audits
• Compliance Management
• Executive Training
• Risk Management Planning
• GHG Inventories and
Management
• Strategic Project Planning
• Dispersion Modeling

6. SELECT CLIENTS
Partnering with a spectrum of clients
ranging from small municipalities to
Fortune 500 Companies
Cargill/Polyols
ABENGOA BIOENERGY

7. New Source Review (NSR)
Key Concepts

8. New Source Review (NSR)
• New Source Review (NSR) is a preconstruction
permit program
– requires stationary sources of air pollution to get
permits before construction can start
• There are three types of NSR permitting
1. Prevention of Significant Deterioration (PSD)
Permits
2. Nonattainment NSR (NANSR) Permits
3. Minor Source Permits

9. New Source Review (NSR)
• What triggers NSR permitting?
– Construct a New “Major” stationary source
– Undertake a “Major Modification” at an existing
major stationary source

10. New Source Review (NSR)
• Definitions
–Major stationary source:
• One of 28 “listed” major source categories which emits,
or has the potential to emit, 100 tons per year or more
of any regulated NSR pollutant (including fugitive
emissions)
• Any stationary source (other than the listed 28) which
emits, or has the potential to emit, 250 tons per year or
more of a regulated NSR pollutant (excluding fugitive
emissions)

11. New Source Review (NSR)
• Definitions
–Major modification:
• any physical change in or change in the method
of operation of a major stationary source that
would result in:
– a significant emissions increase of a regulated NSR
pollutant; and
– a significant net emissions increase of that pollutant
from the major stationary source

12. PSD Permits
• Prevention of Significant Deterioration (PSD)
applies to new major sources or major
modifications at existing sources for pollutants
where the area the source is located is in
attainment or unclassifiable with the National
Ambient Air Quality Standards (NAAQS).

13. PSD Permits
• Requirements
– Installation of the Best Available Control
Technology (BACT)
– Air Quality NAAQS Modeling Analysis
– Air Quality Increment Analysis
– Additional Impacts Analysis
– Public Involvement

14. Nonattainment NSR Permits
• For new major sources or major sources making a
major modification in a nonattainment area
• Requirements
– Installation of Lowest Achievable Emission Rate (LAER)
– Emission Offsets (reduce emissions or buy credits)
– Air Quality NAAQS Modeling Analysis
– Air Quality Increment Analysis
– Additional Impacts Analysis
– Opportunity for Public Involvement

15. Minor NSR Permits
• For projects at stationary sources that do not
require PSD or nonattainment NSR permits
• Minor NSR permits often contain permit
conditions to limit the sources emissions to
avoid PSD or nonattainment NSR
– Make sure the facility can live with the permit
conditions

16. NSR Applicability
Physical or Operational
Change?
Proposed Project Emissions
Increase Significant?
Can Project Net Out of
Major NSR?
YES
YES
NO
NO
YES
STEP 1
STEP 2
STEP 3
NO
No Modification
Project Not Major
Project Not Major
SUBJECT TO MAJOR NSR

17. STEP 1
Physical or Operational Change
• No definition in the rule
• Only a few exceptions in the rule
• Most useful and often used exceptions are:
– Routine maintenance, repair and replacement
– Use of alternate fuel or raw material, if capable of
accommodating prior to 1/6/75 or allowed by PSD
permit
– Increasing operating hours or production rate (unless
restricted by permit); cannot be the result of a
physical or operational change

18. Step 2
PSD Pollutant Tons per Year
PM10 15
SO2 40
NOx 40
VOC (Ozone) 40
CO 100
Lead 0.6
PM2.5 10
Attainment
Areas:
Significant
increases in
PSD pollutants
are specified
in the rule
Significant Increase

19. STEP 3
Netting
Can the project net out of NSR/PSD?
• Netting is the sum of all creditable,
contemporaneous increases and decreases at the
source
• If net emissions increase is not significant, the
project is not major
• If net emissions increase is significant, the project
is major

20. Strategies

21. Strategies
• Avoid NSR/PSD Permitting
– Use an exemption
– Rely on netting calculations
– Take a limitation on the project, so that it is not
significant
• Obtain an NSR/PSD Permit

22. Strategies
• Reasons to Avoid NSR/PSD Permitting
– Time Delays
• Modeling analysis
• Application preparation
• Issuance of permit
– Additional Expense
• Application Preparation
• BACT must be installed, if cost effective
– “Cost-effectiveness” is a subjective term

23. Strategies
• Reasons to Avoid NSR/PSD Permitting
– Air Quality Monitoring (preconstruction) if your
current regulatory authority doesn’t allow waiver

24. Strategies
• Reasons to Avoid NSR/PSD Permitting
– Impacts of Modeling Analysis
• Can change the project scope
• Proximity to Class I or Class II areas (Visibility Impacts)
• Can be time consuming

25. Strategies
• If Avoiding Major NSR Permitting, Beware of
Pitfalls

26. Pitfalls

27. Pitfalls
• The NSR Program is extremely complicated
– There are few exemptions
– The rule can be interpreted in new, more
restrictive ways and is sometimes applied
retroactively
– The significant increase thresholds are low and
easy to exceed

28. Exemption Pitfalls

29. Pitfalls
• Using an Exemption to Avoid NSR Permitting
– Does not require performing complicated
calculations, but....
• Determining whether or not the exemption applies can
be tricky
• New interpretations of exemptions can be applied
retroactively

30. Pitfalls
• “Routine maintenance, repair, and
replacement” is one of the most common
exemptions
– What determines if a change is routine?
• The nature, extent, frequency, purpose, cost of work,
etc.
• There is no regulatory definition of “routine”

31. Pitfalls
– Nature – Will the project significantly enhance the
efficiency or capacity of the plant?
– Extent – Are there a number of major components
being repaired/replaced?
– Frequency – Are the components being
repaired/replaced original? How often is this change
made in their lifetimes? How often is the change
made to similar components? Routine for industry?
– Purpose – Will the project extend the life of the plant?
– Cost – Is the fixed capital cost, plus maintenance and
repair, greater than 20% of the replacement value?

32. Pitfalls
• Changes that could be considered a physical
or operational change and not “routine”
– Reducing downtime, changing catalysts, etc.

33. Calculation Pitfalls

34. Pitfalls
• Using Netting Calculations to Avoid PSD
Permitting Must be Done Correctly

35. Pitfalls
• Define the Scope of the Project
– The project includes all activities that are
technically or economically dependent on each
other
– All activities that are part of a single project must
be evaluated together

36. Pitfalls
• Determine Project-Affected Emission Units
– Any new emission unit installed as part of the
project
– Any emission unit modified as part of the project
– Any emission unit that, due to the project,
experiences:
• An increase in production or feed rate, a change in fuel
or raw material, etc.

37. Pitfalls
• When Establishing Baseline Actual Emissions
(BAE)
– Fugitive emissions must be included if the
emission unit is one of the 28 listed source
categories
– For emission units affected by the project that
have existed for less than two years, BAE =
Potential to emit (PTE)

38. Pitfalls
• Establishing Baseline Actual Emissions (BAE)
– For existing units, not realizing
• Look-back period within 5 year period for electric utility
steam generating units (unless another period more
representative of normal operations)
• Look-back period is unknown and a moving target
• The BAE must be decreased because of non-compliant
emissions or regulatory changes
• For a given pollutant, the same baseline period must be
used for all effected emission units
– Different baseline period can be used for different pollutants

39. Pitfalls
• Establishing Projected Actual Emissions (PAE)
– Fugitive emissions must be included if the
emission unit is one of the 28 listed source
categories
– Emissions from startups, shutdowns, and
malfunctions must be included

40. Pitfalls
• Contemporaneous period is a moving target
since it is based on the date actual
construction begins
– Example: You have an emissions decrease that is
four years old at the time the application is
submitted. If it takes more than a year to issue
the permit, that decrease can no longer be used

41. Pitfalls
• Facility must project post change actual annual
emissions for 5 years (10 years post change if
change increases unit’s PTE or capacity)
• Overestimating demand growth emissions
when making use of demand growth exclusion
• Facility must maintain records of actual annual
emissions for 5 or 10 years, and report to
regulatory authority if projection is exceeded

42. Pitfalls and Consequences
NSR Violations
• Administrative penalties
– Up to $37,500 per day per violation up to $320,000
• Civil penalties
– Up to $37,500 per day per violation for up to 5 years, or over $68
million dollars in total
– Injunctive relief: retroactive PSD permit with current BACT
• No statute of limitations
• No “safe harbor”, even with State agency approval
• Criminal penalties
– Usually reserved for the most serious violations, those that are willful,
or knowingly committed
– Individual liability
– A court conviction can result in fines or imprisonment

43. Summary

44. Summary
• NSR/PSD Permitting is Very Complicated, Don’t
Be Afraid to Ask for Help!
• Work with a Firm that is Knowledgeable and Has
Experience – focus on people
• Evaluate the Project
• Develop a Strategy
• Be Aware of Pitfalls
• Obtain or Avoid a Permit
• Maintain Proper Documentation

45. Questions?

46. NAQS-Environmental Experts
Contact Piyush Srivastav at:
402-310-5321 (cell)
Piyush Srivastav
Piyush@naqs.com
402-489-1111 (office)
402-310-5321 (cell)