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Back to Air Projects page.Public PetitionBEFORE THE ADMINISTRATOR UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
PETITION FOR OBJECTION TO PERMIT Louisiana Environmental Action Network (LEAN) brings this Petition for Objection to Permit pursuant to Clean Air Act (CAA or "Act") section 505(b) and 40 CFR 70.8(d). LEAN objects to the decision by the Louisiana Department of Environmental Quality (LDEQ) to issue a Part 70 (Title V) Operating Permit modification to Borden Chemicals, Inc. (BCI) for its Formaldehyde Plant in Geismar, Louisiana. The modification removes references to Emission Reduction Credits (ERCs) purchased from Georgia Gulf Corporation and Lowest Achievable Emission Rate (LAER) standards. In this modification, LDEQ is allowing BCI to "net out" the 24.19 tons per year increase in Volatile Organic Compounds (VOCs) associated with the formaldehyde plant with an alleged decrease in VOCs at Borden Chemicals and Plastics Operating Limited Partnership (BCP), pursuant to an "Agreed To Order," during the five year contemporaneous period. LEAN is an incorporated, non-profit organization. LEAN members live, work and recreate in the Geismar area. LEAN members participated in the initial permit proceedings and in the proceedings relating to the modification by submitting comments and speaking at and attending the public hearings. LEAN requests that the United States Environmental Protection Agency (EPA) object to the Borden operating permit modification because the permit is not in compliance with all applicable requirements including the Clean Air Act and federal regulations, Louisiana Air Quality regulations, and substantive and procedural requirements of Louisiana’s Nonattainment New Source Review (NNSR) program. Borden should immediately stop operation of its Formaldehyde plant because it is violating federal and state laws and regulations. To the extent that any of the following objections to the Borden permit modification are deemed to have not been raised with reasonable specificity during the public comment period provided by the permitting agency, it was impracticable to raise such objections within that period or the ground for those objections arose after the public comment period. During the public comment period, Petitioner reasonably relied upon Louisiana’s representations that the banking rules would soon be revised or repealed. See, Joint Motion for Partial Voluntary Remand and Stay of All Proceedings, Louisiana Environmental Action Network, et al. v. U.S. EPA, Case No. 99-60570 (5th Cir.), filed October 6, 2000. 1. These emission reductions are not real, actual, or allowable under federal law and regulations. BCP’s emission reductions at its Acetylene plant are not creditable because they are required by the Clean Air Act. CAA §173(c)(2) states that "[e]mission reductions otherwise required by this chapter shall not be creditable as emissions reductions for purposes of any such offset requirement." BCP was operating in violation of its permit and was required to reduce emissions. The "basic nonattainment [new source review] requirements" provide that a "proposed new major source or major modification be offset by actual emissions decreases of the same pollutant from one or more existing sources." See e.g., EPA Implementation of New or Revised [Standards] (Advanced Notice of Proposed Rulemaking), 61 Fed. Reg. 65764, 65776 (Dec. 13, 1996) (emphasis added). These reductions must be from "actual emissions of the source from which offset credit reduction is obtained." 40 C.F.R. §51.165(a)(3)(i) (emphasis added). This is especially true, when, as here, a state elects to base its rate of progress and attainment demonstrations on actual emissions. Id. For Louisiana’s rate of progress and attainment analyses, the State elected to adjust its baseline to claim progress from Borden’s actual emissions (1,791.2 tpy), which were much greater than Borden’s permit limit (463 tpy). EPA, Approval and Promulgation of Air Quality Implementation Plans (Proposed Rule), 63 Fed. Reg. 44192, 44195 (Aug. 18, 1998). Having made the choice, Louisiana cannot now rely on "paper offsets," from the same permitted limit of 463 tpy that Louisiana declined to rely on for its baseline. EPA, General Preamble for the Implementation of Title I of the Clean Air Act Amendments of 1990, 57 Fed. Reg. 13498, 13552 (April 16, 1992) ("EPA regulations disallow the use of ‘paper’ offsets"). Under these circumstances, therefore, the "actual emissions" requirement of 40 C.F.R. §51.165(a)(3)(i) applies. The proposed Borden modification is a "paper offset" because no plant was ever designed, or constructed that had actual emissions consistent with the permit limit from which the offsets are calculated. The Borden acetylene plant originally received a permit that allowed emissions of 463 tons per year (tpy) of Volatile Organic Compounds (VOCs) in 1990. However, the plant was never designed or controlled to meet that level, and BCP later admitted illegally emitting over 1700 tpy of VOCs in a nonattainment area. As a result of LDEQ’s enforcement action, BCP agreed to reduce its emissions at the acetylene plant by 3.2 tons per day (1168 tpy). Under the Agreed to Order, the acetylene’s plant emissions were capped at 603 tpy. But, again, a plant was never designed or controlled to meet that level and LDEQ never issued a permit to BCP to emit 603 tpy. Instead, following the enforcement action, the plant emits 345 tpy from its towers and decanters. Thus, neither the 463 tpy limit nor the 603 tpy limit qualifies as "actual emissions" under 40 C.F.R. 40 C.F.R. §51.165(a)(3)(i). 2. Nonattainment New Source Review applies to the Borden Formaldehyde plant because BCP emission reductions were not surplus under Louisiana Regulations. The ERCs with which Borden proposes to "net out" its emissions are not valid. Borden must demonstrate that it has valid ERCs to offset the increase in VOC emissions and must use the LAER standard. Contrary to LDEQ’s basis for decision to issue this operating permit modification, BCI cannot net out with BCP emission reductions because they are not surplus. The "Agreed to Order" resulted from BCP’s admission to LDEQ that it had been violating its permitted limit of 463 tons per year (tpy) of VOC emissions and had actual emissions of 1,791.2 tpy, almost 8,000 pounds per day more than permitted at its acetylene plant. EPA, Approval and Promulgation of Air Quality Implementation Plans (Proposed Rule), 63 Fed. Reg. 44192, 44195 (Aug. 18, 1998). Despite this clear violation of a permit condition, LDEQ did not seek penalties from BCP. Instead, BCP agreed to construct two new cooling towers and convert the process related cooling systems from contact to noncontact service. The date of startup under the Agreed To Order was October 1999. Once the change was made under the Agreed to Order, BCP discovered that its potential to emit VOCs from the decanters and towers was 345 tpy, instead of an anticipated 603 tpy. On December 13, 2000, LDEQ granted a permit to BCP for its acetylene unit setting its emission limit at 405.80 tpy VOC. Chapter 6 of LDEQ’s air quality regulations details the procedural and substantive rules for ERC use. In order to be approved for use as ERCs, emission reductions must be "surplus." "Surplus Emission Reductions" are those that are voluntarily created for an emissions unit and have not been required by any state or federal law, regulation, order or requirement and are in excess of reductions used to demonstrate attainment of federal and state ambient air quality standards. Louisiana Administrative Code (LAC) 605. BCP has no surplus emission reductions for use as ERCs. The reduction of VOC emissions from 1,791.2 tpy to 345 tpy resulted from BCPs admission that it was in violation of its permit and needed to make reductions. The reductions were not created voluntarily. The reductions occurred because of a state issued order. Furthermore, the reductions made by BCP are not in excess of reductions used to demonstrate attainment of federal and state ambient air quality standards. LAC 33.III.605. In the proposed rule approving Louisiana’s Attainment Demonstration for the Baton Rouge Ozone Nonattainment Area, EPA proposed to approve a revised 1990 base year emissions inventory that included the increased VOC emissions from Borden’s acetylene plant. 63 FR 44195. To demonstrate attainment, the State used the 1990 base year emissions inventory, which included the excess Borden emissions, in its urban airshed modeling. In addition, LDEQ has ignored the fact that BCP has failed to abide by the procedures outlined in Chapter 6 of the Louisiana Air Quality Regulations and therefore cannot receive credit for these emission reductions. ERCs may only be used in accordance with the regulations in Chapter 6, which states that ERCs can only be used after the issuance of an ERC certificate. LAC 33.III.623(B). LDEQ and BCI have provided no evidence of an ERC certificate to be used as netting under nonattainment new source review for the Formaldehyde plant. Section 607(F) lists the criteria for ERC approval and states that "[e]mission reductions shall be recognized as ERCs only after the approval of the department has been obtained." (emphasis added). According to BCP the emission reductions occurred in October 1999. However, BCP did not apply for an ERC certificate until July 2000 and LDEQ issued its decision approving these emission reductions as ERCs on December 13, 2000. Borden applied to construct and operate the Formaldehyde Plant in March 1999. The netting that LDEQ has now permitted violates §605, which defines netting as "the use of an ERC created at an existing facility to compensate for emission increases associated with a proposed modification at the same facility ." In July 2000, the time of the Borden modification application, there were no ERCs available from BCP for Borden to use to compensate for the emission increases created by the Formaldehyde plant. An emission reduction does not become an ERC until after approval by LDEQ. LAC 33.III.607(F). Furthermore, BCP failed to timely apply to bank its alleged emission reductions. Section 615 clearly states that all applications for "banking emission reductions where the emission reductions occurred after adoption of the final rule shall be submitted by March 1 following the year in which the reductions occurred." The consequence for failing to submit an application timely is confiscation by LDEQ of the VOC emission reductions. §615(C). LDEQ will send a notification of confiscation at the time that a permit modification is submitted using "unbanked" VOC emission reductions as offsets or for netting purposes. §615(C). Had Borden intended to "net out" the increase in emission from the formaldehyde plant, it should have followed the rule in §615(D), which provides for submission of bank balance sheets for banking emission reductions as part of the permit application for the proposed increase. Because BCP did not timely bank any emission reductions pursuant to §615, Borden does not have any ERCs to use for netting. Under Section 504, Nonattainment New Source Review Procedures, the emissions increase from a proposed modification, such as the Formaldehyde Plant, must be compared to the certain trigger values to determine where a calculation of the net emissions increase over the contemporaneous period must be performed. LAC 33.III.504(A)(3). Because the BCI increase was over 5 tons per year, a calculation of the net emissions increase was required. Under Section 504(G), when computing the "net emissions increase," any decrease in actual emissions is creditable only to the extent that it is federally enforceable at the time that actual construction of the particular change begins. Thus, Borden’s calculation of the net emissions increase at its combined facilities in Geismar should not have included any decrease from the emission reductions at the acetylene plant because those reductions were not federally enforceable at the time that actual construction of the Formaldehyde plant began. Finally, there are no surplus emission reductions available for netting or offsetting because under the Baton Rouge State Implementation Plan (SIP), the reductions have been confiscated as part of the contingency measure for failure to attain the ozone standard in 1999. Because Baton Rouge is a nonattainment area, the Act requires that Louisiana’s SIP provide for "the implementation of specific measures to be undertaken if the area fails to make reasonable further progress, or to attain the national primary ambient air quality standard by the attainment date applicable under this part. Such measures shall be included in the plan revision as contingency measures to take effect in any such case without further action by the State or the Administrator." CAA §172(c)(9). The contingency measure, contained in Chapter 6 of the Air Quality Regulations, provides for confiscation of 5.7 tons per day of ERCs from the bank in the event of the failure of Baton Rouge to attain the National Ambient Air Quality Standard for ozone by November 15, 1999. Baton Rouge failed to meet this deadline and the contingency measure goes into effect immediately, resulting in the confiscation of most, if not all, ERCs. CAA §172(c)(9). EPA approved this portion of the SIP on July 2, 1999 and the contingency measure is still in effect. 3. Borden should not be rewarded for violating the Clean Air Act. This modification is contrary to EPA policy and the intent of the Clean Air Act. Borden was violating the terms of its permit limit of 463 tons per year of VOC emissions from at least 1990 until November 1, 1999 by over 1200 tons per year of VOCs. Over the nine year period from 1990 to 1999, when Louisiana was attempting to reach attainment of the ozone standard, Borden was emitting over 11,000 tons of unreported VOCs. Allowing Borden to claim emission reductions due to its failure to accurately report emissions is contrary to the law and policy of the Clean Air Act. Under CAA §502(a), it is unlawful for any person to violate any requirement of a permit or to operate an affected source except in compliance with a permit issued by a permitting authority. For at least nine years, the acetylene plant was operating in violation of its permit by emitting more pollutants than it was permitted to emit. EPA’s policy, as outlined in the New Source Review Workshop Manual at A.41, is that "[a] source cannot receive emission reduction credit for reducing any portion of actual emissions which resulted because the source was operating out of compliance." Clearly, Borden’s acetylene plant was operating out of compliance. When BCP agreed to reduce its VOC emissions by constructing two new cooling towers and converting the process related cooling systems from contact to noncontact service, its actions resulted because it was operating out of compliance for many years. Simply because LDEQ and BCP underestimated the amount of reductions that would result from the construction and conversion does not entitle BCP to take credit for emission reductions. 4. A new facility in the Baton Rouge nonattainment area will not provide for sufficient reductions to achieve the ozone standard. As was stated in the public petition to the original Borden permit, Petition 6-01-1, the issuance of the permit, including the modifications to the permit, will not provide for sufficient reductions to achieve the ozone standard in the nonattainment area. The permit, including the modifications, should be revoked until such time as LDEQ has provided for sufficient reductions to achieve the ozone standard in the nonattainment area. The Clean Air Act §173(a)(1) provides that, in this case, a permit may be issued if LDEQ has determined that by the time Borden begins operation, sufficient offsetting emissions reductions will have been obtained such that total emissions will present reasonable further progress. Reasonable further progress (in this case) means reductions in emissions of VOCs for the purpose of ensuring attainment of the applicable national ambient air quality standard. CAA §171. The requirements for reasonable further progress are included in, but not limited to, Section 173(a)(1)(A). This section is referenced by Sections 172(c)(5) and 182(a)(2)(C). This permitting provision first requires an emissions reduction below the baseline value, and emissions reductions in accordance with Section 182(c)(10) for serious ozone nonattainment areas. In addition to the minimum requirements of 182(c)(10), Section 173(a)(1)(A) requires that emissions reductions represent reasonable further progress as defined in Section 171. Section 171 requires adequate emissions reductions "for the purpose of ensuring attainment of the applicable national ambient air quality standard". The lack of real reductions from BCP, along with the increase in emission from the new formaldehyde plant, ensures that attainment of the ozone standard for Baton Rouge is still a long way off. At the start of 2001, Baton Rouge had four of its eleven monitors in noncompliance for the ozone standard and a design value of 135. This permit cannot be issued until LDEQ has made sufficient emissions reductions to ensure attainment of the standard. The need to go beyond 182(c)(10) becomes even more important now that EPA has recognized that LDEQ was not operating its banking system in accordance with the CAA or EPA policy. The method in which LDEQ was operating the offset program obviously does not provide for progress towards the ozone standard. For the foregoing reasons, LEAN respectfully requests that EPA object to the modification of the Borden Formaldehyde permit and require compliance with Nonattainment New Source Review offsetting requirements and the Lowest Achievable Emission Rate.
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