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The Clean Air Act -- Major Source or Area Source -- Choose Now

Posted on - 08/29/2007
by JHP

The 1990 Amendments to the Clean Air Act (CAA), including the title V operating permits program, have made source status as a "major source" of considerably greater relevance to facilities that emit regulated pollutants. The 1990 Clean Air Act Amendments significantly lowered the threshold for being classified as a major source. The lower major source thresholds now included in the CAA have made an unprecedented number of sources "major sources." Many of these sources are emitting air pollutants in amounts less than the major thresholds but are major due to their "potential to emit" hazardous air pollutants. Many of these major sources are in fact rather small. Examples include auto body shops, dry cleaners, printers, and surface coaters.

Section 112 of the Clean Air Act defines a "major source" as any stationary source or group of stationary sources located within a contiguous area and under common control that emits or has the potential to emit considering controls, in the aggregate, 10 tons per year or more of any hazardous air pollutant or 25 tons per year or more of any combination of hazardous air pollutants. The term "area source" means any stationary source of hazardous air pollutants that is not a major source. The term "potential to emit" is defined in the section 112 general provisions (40 CFR Part 63.2) as the maximum capacity of a stationary source to emit a pollutant under its physical or operational design, considering controls and limitations that are federally enforceable.

Although maximum achievable control technology (MACT) is required for all major sources of hazardous air pollutants, lesser controls or no controls may be required of area sources in a particular industry. In addition, whether a facility is a major or area source of hazardous air pollutants may affect the applicability of other CAA requirements. For example, the CAA requires all major sources to obtain a Part 70 operating permit. Section 501(2) provides that any source that is major under section 112 will also be major under title V. Therefore, a source that is major for purposes of any MACT standard will be subject to title V as a major source. Most MACT standards explicitly require operating permits for major sources. However, this principle applies regardless of whether it is specified in the particular standard. Therefore, a source required to comply with MACT requirements applicable to major sources will also be required to obtain a Part 70 permit for that MACT requirement.

Under the 1990 Clean Air Act, U.S. EPA must enact regulations establishing emission standards for categories and subcategories of sources as expeditiously as practicable. Pursuant to Section 112(e)(1)(E), emission standards for one half of all categories and subcategories must be in place and enforceable by November 15, 1997, and emission standards for all categories and subcategories must be in place and enforceable by November 15, 2000. Until U.S. EPA promulgates a particular industry's emission standards, a window of opportunity exists for facilities within the industry to modify operations so as not to be regulated as a major source, according to U.S. EPA.

Although certain environmental advocacy groups interpret the statute differently, U.S. EPA believes that it was the intent of Congress not to designate a source as either a major source or an area source until after U.S. EPA's emission standards for any particular industry are finalized. Therefore, if you own or operate a facility which has the potential to emit more than the threshold amount of hazardous air pollutants, your facility may be able to avoid the major source designation and all of the regulatory red tape associated with the designation if you can change your operations so as to eliminate your potential to emit the threshold amount of a hazardous air pollutant before U.S. EPA promulgates a rule affecting your particular industry.

For example, suppose you own a metal finishing business, and like every other person in the metal finishing business, you would like your facility to avoid being classified as a major source. However, your facility has degreasing operations that emit 30 tons per year of volatile organic chemicals (VOCs) which the CAA designates as hazardous air pollutants under Section 112(b)(1). Your facility also emits a maximum of 5 tons per year of VOCs from the coating of miscellaneous metal parts. Since you emit more than 25 tons per year of hazardous air pollutants, your facility will be classified as a major source under the CAA and you will be required to comply with the U.S. EPA's MACT requirements for your industry unless you can find a way to avoid being classified as a major source.

You have decided to implement controls on your degreasing operation that will reduce your emissions from the degreasing operations to 3 tons per year. After your operating changes, the total federally enforceable potential emissions from your facility would now be 8 tons per year which falls below the threshold for being characterized as a major source. Based on your reduced emissions, you can avoid major source designation under the CAA.

This interpretation is found in U.S. EPA's May 16, 1995, Guidance Document titled "Potential to Emit for MACT Standards -- Guidance on Timing Issues." Under U.S. EPA's guidance document, a source that would otherwise be a major source subject to MACT requirements may switch to area source status at any time until the "first compliance date" of the standard. The "first compliance date" is defined as the first date a source must comply with an emission limitation or other substantive regulatory requirement (e.g., leak detection and repair programs, work practice measures, housekeeping measures, etc. . . , but not a notice requirement) in the applicable MACT standard. To avoid being classified as a major source, a facility can avoid MACT requirements by showing that its potential emissions are below major source thresholds. Therefore, the facility in the example above would not be subject to the major source requirements of the miscellaneous metal parts MACT standard provided the plant made its modifications before the enforceability of the MACT standard for the particular industry.

However, if your facility is not under the major source threshold on the date required for compliance with MACT requirements for your industry, according to U.S. EPA, your facility is eternally destined to be a major source. This is true even though you make major modifications to your facility to reduce its potential to emit hazardous air pollutants below the major source threshold. U.S. EPA refers to this as its "once in, always in" policy. U.S. EPA believes that after requiring a source to install controls or take other measures to comply with a MACT standard, the facility should not be able to substitute different controls or measures that happen to bring the facility below major source levels. According to U.S. EPA, a once in, always in policy ensures that reduced emissions from MACT controls are permanent, and that the environmental protection provided by MACT standards is not undermined.

If a source is fortunate enough to avoid being classified as a major source, there is still no guarantee that U.S. EPA will not require some form of control technology in the future. Section 112(f), the residual risk program, allows U.S. EPA discretion within 8 years after promulgation of the MACT standard to evaluate the risk to human health and the environment from any category or subcategory. If U.S. EPA believes there is not an ample margin of safety to protect public health, U.S. EPA will promulgate additional standards for area sources within the category or subcategory to be regulated.

My advice to clients who will be classified as a major source when U.S. EPA establishes MACT for the client's particular industry is to evaluate operations, to change processes, and/or to implement federally enforceable controls on the facility's potential to emit that puts the facility below the major source threshold immediately. Any facility that waits and is categorized as a major source, according to U.S. EPA's guidance documents, will always be a major source subject to MACT requirements, and subject to all of the licensing requirements of section 112 and title V. U.S. EPA has written several guidance documents on how a facility can avoid being categorized as a major source. For more information, consult U.S. EPA's Guidance for State Rules for Optional Federally Enforceable Emissions Limits Based on Volatile Organic Compound Use dated October 15, 1993, Options for Limiting the Potential to EMIT (PTE) of a Stationary Source Under Section 112 and Title V of the Clean Air Act dated January 25, 1995, and Potential to Emit for MACT Standards -- Guidance on Timing Issues dated May 16, 1995.

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