New Mexico Poised to Release GHG PSD Permit with PAL

 Permanent link   All Posts

On August 23, 2013, the U.S. Environmental Protection Agency (EPA) proposed to approve New Mexico’s recent revisions to its State Implementation Plan (SIP) under the Clean Air Act (CAA). The comment period closed on September 23, 2013. Part of New Mexico’s proposed revisions to its SIP included approval of the use of Plantwide Applicability Limits (PAL) for greenhouses gases (GHGs) in Title V and Prevention of Significant Deterioration (PSD) permits. GHG PALs would allow operators to receive a one-time GHG limit that allows them to avoid future GHG permitting at that particular source for a 10-year period. EPA had previously approved the use of PALs in GHG permitting when the agency issued its “ Step 3 Rule” back in June 2012.

A PAL is a site-wide permit limit for a regulated pollutant or a cap for that pollutant and is based on a 12-month rolling total, expressed in tons of pollutant per year. Each limit is generally established based on the average baseline emission rate for a 24-month consecutive period during the prior 10 years of that facility’s operation. For any existing electric utility steam generating unit, baseline actual emissions for a PAL means the average rate at which the emissions unit actually emitted the regulated pollutant during any consecutive 24-month period selected by the owner or operator within the 5-year period immediately preceding the date the owner or operator begins actual construction of the project. Compliance with a PAL is determined on a monthly basis and PALs are only valid for a period of 10 years. The use of GHG PALs would allow a site to make additional changes to the facility so that, as long as GHG emissions do not rise above the PAL, the facility avoids triggering PSD permitting.

Back in January 2013, Intel Corporation (Intel) applied to the New Mexico Environment Department (NMED) for a Title V Operating Permit under the CAA for the company’s Rio Rancho facility. The facility is only considered a “Major Source” for GHGs. Intel’s application requested a 10 year GHG PAL and cited the Step 3 Rule as authority for the NMED to approve the GHG PAL requested in the application. Using the PAL calculation procedures found in 40 CFR 52.21(aa)(6), Intel calculated a GHG PAL level of 395,797 tons CO2e. Media sources report that public notice of Intel’s permit should be issued soon.

PALs bring flexibility to the permitting process and GHG PALs do not create the same controversy among environmental groups as PALs for criteria pollutants. The effects of GHG emissions are not localized, and so the potential for GHG hotspots does not exist as it does with other regulated pollutants. However, PALs are not for every facility. Operators need to carefully assess whether committing to a 10-year limit based on past emissions is the best course of action for any future development. Another factor to consider is that the agency could revise the PAL downward at the end of the PAL’s 10-year period. Under the wrong circumstances, a revised PAL could actually restrict a facility’s ability to make changes without triggering additional permitting requirements.

Posted by Matthew Dobbins at 10/2/2013 4:54 PM