EPA’s new air rules mean monumental changes for emissions in Indian country

Vol. 43 No. 6

Robert Gruenig is an attorney with Stetson Law Offices, P.C., who specializes in Indian law with an emphasis on tribal environmental issues.

On July 1, 2011, the U.S. Environmental Protection Agency (EPA) issued a Federal Implementation Plan (FIP), titled “Review of New Sources and Modifications in Indian Country.” The FIP includes two New Source Review (NSR) rules to address a regulatory gap concerning the emissions of minor and major sources in Indian country. The first rule (Tribal Minor NSR Rule) applies to new and modified minor stationary sources, and to minor modifications at existing major stationary sources. The second rule (Tribal Nonattainment Major NSR Rule) applies to new and modified major stationary sources in those areas of Indian country that are in nonattainment for the National Ambient Air Quality Standards (NAAQS). The rules mean monumental changes to how facilities in Indian country must operate in the future.

The regulatory framework

The NSR program is a permitting scheme under the Clean Air Act (CAA) designed to ensure that air quality in compliance with federal standards is not significantly degraded to the point of non-compliance and air quality in non-compliance with such standards is not worsened by the addition of new and modified sources. The program requires new or modified facilities that significantly increase the emissions of regulated NSR pollutants to install modern pollution equipment to prevent any further degradation of air quality. The three types of NSR permitting programs are the Prevention of Significant Deterioration (PSD) (applies to a new major source or a source making a major modification in an attainment area), Nonattainment NSR (applies to a new major source or a source making a major modification in a nonattainment area), and Minor NSR (applies to a new minor source and/or a minor modification to a minor or major source in an attainment or nonattainment area).

Only a few tribes, such as the St. Regis Mohawk Tribe and the Gila River Indian Community, have provided for administration of EPA-approved Minor NSR programs as part of tribal implementation plans (TIPs). As a result, the majority of minor sources in Indian country have gone unregulated.

Facilities affected by the two new rules will be required to follow an NSR program process similar to the one in place for non-tribal lands. Initially, EPA will implement the new NSR rules through a FIP. However, a tribe can seek either delegation from EPA to enforce the rules (minus the enforcement or appeal components) or, alternatively, approval of a TIP in order to administer and implement the rules. By implementing its own TIP, a tribe will have the ability to charge permit fees under its own authority, something that EPA is currently unable to do under the CAA.

The new Tribal Minor NSR Rule

The Tribal Minor NSR Rule covers facilities with the potential to emit regulated NSR pollutants (e.g., carbon monoxide, lead, nitrogen oxides, particulate matter, sulfur dioxide, volatile organic compounds) in amounts that are less than major source thresholds (100 or 250 tons per year), but higher than the minor NSR thresholds established for the pollutants. Examples of facilities covered under the Tribal Minor NSR Rule include auto body shops, dry cleaners, gas stations, sand and gravel mining, sawmills, sewage treatment facilities, and solid waste landfills.

Facilities exempted from the Tribal Minor NSR Rule include mobile sources, consumer use of office equipment and products, and internal combustion engines used for landscaping purposes. EPA intends to develop a supplemental rule to determine if additional exempted units/activities should be added to the list. Permit options include:

Site-specific permits that involve case-by-case determinations of the source emissions limits as well as any control technology requirements (e.g., add-on pollution control equipment, design and equipment specifications, or work practice and operational standards). Site-specific permits can be issued for regulated NSR pollutants and toxic air pollutants.

General permits, developed by EPA after public notice and the opportunity for comment, that include a control technology review and associated emissions limits, to cover similar equipment types or facilities to help simplify the permit issuance process for facilities. General permits are only available for true minor sources.

Synthetic minor permits for a source that has the potential to emit pollutants in an amount at or above the major source threshold, but which has voluntarily accepted emissions limits below this threshold to avoid the more stringent major source CAA requirements. Synthetic minor permits can be issued for regulated NSR pollutants and toxic air pollutants.

The Tribal Minor NSR Rule also requires an air quality impact analysis (if there is a concern that the minor source will cause or contribute to a NAAQS or PSD “increment” violation), public participation through notice-and-comment (and administrative and judicial review upon a permit appeal), and registration of the source with the reviewing authority. The source registration requirements mandate that the owner or operator of a new or existing source provide a description of the source’s processes and products, a list of all emission units and activities, production rates information, identification of any existing air pollution control equipment, and existing limitations on source operations. The source owner or operator must conduct monitoring, which may include “continuous,” “predictive,” or “continuous parameter” monitoring systems, equipment inspections, mass balances, periodic performance tests, and/or emissions factors. The owner or operator must also complete annual monitoring reports showing compliance, and recordkeeping must be sufficient to assure compliance.

The Tribal Minor NSR Rule became effective on August 30, 2011, and provides a 36-month phase-in period for minor sources to comply with the following time obligations:

New minor sources need to register within the first 36 months of the rule’s effective date; after this period, or six months after a general permit for a source category is published by EPA, whichever is earlier. In addition to registration, new sources will require a permit if monitoring results demonstrate that their emissions exceed the minor source thresholds.

Existing minor sources need to register within 18 months after the rule’s effective date or 90 days after the source begins operation; after this period, or six months after a general permit for a source category is published by EPA, whichever is earlier. Existing minor sources will also require a permit if emissions after any proposed modification exceed the minor source thresholds.

New synthetic minor sources may apply for permits starting on the rule’s effective date.

Existing synthetic minor sources may need permits depending on the mechanisms they used to obtain their status as a synthetic minor.

Minor modifications at major sources need to apply for permits starting on the rule’s effective date. The effective date was August 30, 2011, so this means that the permit application process for these sources should already be underway.

The permit issuance process will follow different schedules depending on the permit type sought. For minor sources seeking a site-specific permit, there will be a 45-day application completeness review followed by a 30-day public comment period. The permit will issue no later than 135 days after the application is deemed complete. For minor sources seeking general permits, the application completeness review is also 45 days with no public comment period (the general permit would already have been subject to notice and comment when it was initially developed). Further, there is a 30-day period for the reviewing authority and a 15-day period for the owner or operator to review. The permit will issue no later than 90 days after the submission of the request for coverage. Finally, synthetic minor permits (and minor modifications at a major source under a site-specific permit) will have a 60-day application completeness review and a 30-day public comment period. The permit will issue no later than one year after the application is deemed complete.

EPA estimates that several thousand new and modified minor sources will be created in Indian country during the first six years of the Tribal Minor NSR Rule. In the first three years, EPA estimates that approximately 4,326 new or modified facilities are expected to incur $549,402 in monitoring, recordkeeping, and reporting to complete registrations or requests for coverage under general permits. Further, EPA calculates that 32,970 existing true and synthetic minor sources will incur $2.1 million to complete registrations for the former sources and secure new permits for latter sources.

Major NSR Rule for non-attainment lands

EPA has a FIP in place for major sources in parts of Indian country that are in attainment for the NAAQS. Sources in these areas are already being issued permits. The Tribal Nonattainment Major NSR Rule will fill in an important regulatory gap by applying to those areas of Indian country that do not meet the NAAQS. Facility owners and operators will be required to install emissions controls that meet the Lowest Achievable Emission Rate control technology, offset any emissions increases by obtaining emission reductions from other sources in the nonattainment area, and certify that all other owned or operated facilities in the same state as the new or modified source are in compliance with CAA regulations.

Implementation of the rules

On June 13, 2011, EPA held a training session for tribal air professionals on the Tribal Minor NSR Rule and Tribal Nonattainment Major NSR Rule. As part of the session, EPA shared a draft of its Implementation Guidance document (Guidance) to provide tribes with a better understanding of the rules and an opportunity to determine the extent of their participation based on their own goals and priorities (e.g., number of sources on their lands and available resources for implementation). EPA finalized this guidance as an Implementation Manual in May 2012. The Implementation Manual includes a decision matrix that a tribe can use to determine its preferred level of involvement with the rules, possible steps it can take in meeting its desired objectives, and resources to lessen administrative and developmental burdens in pursuit of the tribe’s objectives.

The timeline for sources to register or request coverage under general permits has begun. Practitioners should therefore swiftly consult with their clients to ensure proper compliance with the rules. Learn more about the Tribal Minor NSR Rule and/or the Tribal Nonattainment Major NSR Rule.

Of course, like many EPA rules, this rule is subject to a legal challenge in the D.C. Circuit. In August 2011, the Oklahoma Department of Environmental Quality petitioned the D.C. Circuit to review the EPA FIP. Oklahoma claims that EPA lacks legal authority to issue a nationwide FIP for Indian country. As of this writing, briefing for the D.C. Circuit petition has not begun.

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