Texas Natural Resource Conservation Commission Interoffice Memorandum To: NSR Permit Reviewers Date: August 25, 1999 Through: FNSR Team From: Kurt Kind, Ph.D. Subject: Draft - FNSR Applicability for Flexible Permits The following discussion provides background for how federal applicability may be determined for modifications at facilities covered by flexible permits (within the emission caps). Note that netting may be avoided altogether if the source has established a Plantwide Applicability Limit (PAL). The first section discusses how the endpoints method might be used to simplify netting for flexible permits. The second section, flexible permit project increases, provides direction on how to determine project increases to determine whether netting is required and how those project increases would be shown in subsequent netting exercises. Endpoints Method (suggested if flexible permit was issued in the contemporaneous period) If netting was performed for the flexible permit and/or there were significant emission reductions over the implementation of the permit, this method may limit the calculations necessary to net out of federal review. In this case, the applicant assumes that the project would trigger netting for the pollutants of concern. The two year average actual emissions prior to the first (earliest) modification in the contemporaneous period are subtracted from the proposed allowable for each facility. Facilities in a flexible permit may be lumped together when making this comparison as illustrated below. This method eliminates the need to consider changes in actual emissions at each individual existing facility covered by the flexible permit. It also prevents double counting of emission increases at a facility with more than one modification during the contemporaneous period. For example, A flexible permit was issued in 1997, with 100 existing facilities (some grandfathered, others permitted) and an initial emission cap of 1000 TPY. Federal PSD applicability was evaluated at that time and the past 2 years actual emissions from those facilities were 1010 TPY. All facilities at the site are in this permit and there were no modifications at the site in 1995 or 1996. Modifications were made in 1998 and 1999 which added new facilities that contributed emissions of 100 TPY each to the cap. Another modification is proposed in 2000 which adds facilities that contribute 50 TPY to the cap. The proposed cap is 1000 TPY (there were reductions as BACT was phased in). Emission cap history Cap Year Original 1998 Amd. (+100) 1999 Amd. (+100) 2000 Proposed (+50) 1997 990 - - - 1998 890 990 - - 1999 850 950 1050 - 2000 750 850 950 1000 2001 720 820 920 970 The net change for the contemporaneous period is 1000 - 1010, or -10 TPY and the project is not subject to federal review. This method is limited to major sources that have to net to determine applicability. It becomes more complex if there are other construction permits at the site and will also be complicated by any cap reductions which may have been required by the SIP. Flexible Permit Project Increases The applicant must identify facilities to be physically modified and any resulting upstream and downstream effects (debottlenecking). The facilities covered by a flexible permit fall into one of these 2 categories for any modification: A. Modified, this includes - i. those that are physically modified ii. those not have not been physically modified but require an increase in emission cap contribution B. Not modified. Project increases are determined as follows for each of the categories: A. The increase is the difference between the new cap contribution (total including 9% if applicable) and the past 2 year actual emissions for that facility. The actual emissions may not exceed the contribution to the current cap. If actual emissions exceed the cap contribution, similar facilities (such as tanks) should be grouped to avoid this; if that is not possible method B should be used and the basis for the emission cap evaluated. In all cases, these increases must be at least equal to those increases that would be determined through method B. Note that those facilities with a proposed allowable not based on a physical limitation (such as tanks and loading in most cases) will be subject to an enforceable allowable emission for those facilities. B. The increase in emissions is the potential increase in emissions due to the debottlenecking of the process (incremental increase that could result at the facility, actual emissions do not come into play because the facility is not modified). Note that any creditable decreases must be determined through the method for category A facilities. Only those changes at facilities covered in category A will be shown in future netting. Basis for this approach A flexible permit allows for the maximum operational flexibility under the emission caps (which are generally based on design capacity). Therefore, aside from the emission caps, the facilities have very few operational restrictions. This method correctly accounts for increases to the design capacity of the affected facilities without having to show increases for unaffected emission points in the cap. Example A modification is proposed that will affect the following units; reactor upgrade, new distillation column (DU), increased boiler steam demand, increased tank turnovers at any one of four tanks (greater than the current cap contribution). The project increases are determined as follows for each of the 4 facilities: reactor - physically modified, total new cap contribution - 2 year actual DU - new, cap contribution boiler - not modified, increase based on anticipated increase in steam demand. In this case, the steam demand necessary for the modification is equivalent to an increase in boiler load of 50 MMBtu/hr. Therefore, the project increase at this emission point would be 50 MMBtu times the NOx emissions factor, 0.06 lb/MMBtu in this case. The resulting emission increase is 50 MMBtu/hr(0.06 lb/MMBtu)(4.38 TPYhr/lb) = 13.14 TPY. This is not dependent on the past actual emissions for this facility. tanks - modified, in this case one of the 4 tanks has been operating with emissions above the emission cap contribution and the product could go to any one of 4 tanks. The increase is total new cap contribution for the 4 tanks - 2 year actual for the 4 tanks. A separate emission cap or permit condition will be necessary to make the new allowable for the tanks federally enforceable. Forward any questions regarding this memo or other netting issues to the FNSR team.