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EPA adopts new ozone standard - implications for Wisconsin businesses

October 06, 2015

Overview

The United States Environmental Protection Agency (EPA) announced on Oct. 1 that it has adopted a new ozone National Ambient Air Quality Standard (NAAQS) of 70 parts per billion (ppb). This new ozone standard replaces the current ozone standard of 75 ppb and will likely cause new areas of Wisconsin to be designated “nonattainment” for ozone under this standard in the future. Based upon fully quality assured monitoring data for 2012-2014, Department of Natural Resources (DNR) has prepared a “draft” map which highlights the counties which would be designated as marginal or moderate nonattainment under the new ozone standard. See the DNR draft map here.

Any final decision on a nonattainment designation will depend upon the consecutive last three years of qualified monitoring data for the state before the October 2017, designation deadline. Based upon preliminary monitoring data for 2013-2015, the nonattainment map would change. See the DNR draft map here.

This new ozone NAAQS was required as a result of decisions rendered in pending federal court litigation. U.S. District Judge Gonzalez Rogers of the Northern District of California in April, 2014, ordered the EPA to review the ozone NAAQS by Dec. 1, 2014, and issue a final rule by Oct. 1, 2015. The EPA had acknowledged that it had not complied with the review of the 2008 NAAQS for ozone as mandated by the Clean Air Act by March 12, 2013, and that a court-ordered rule schedule for adopting a new standard was appropriate. Under the former 2008 eight-hour ozone standard of 75 ppb, only Sheboygan County and a portion of Kenosha County were considered to be nonattainment for ozone in Wisconsin.

Implementation

Timeline for designations. As mentioned above, areas must be designated as either attainment or nonattainment for this new ozone NAAQS on or before Oct. 1, 2017. This designation will be dependent upon the results of the most recent three years of ozone monitoring in Wisconsin. Based upon the most recent monitoring data available, it is likely that all of these new anticipated Wisconsin county nonattainment areas will be considered to be in a “marginal” nonattainment classification under the new 70 ppb standard.

Requirements for “major” sources in nonattainment areas.
For facilities located in nonattainment areas, the Clean Air Act mandates that a nonattainment new source review (NNSR) be conducted on permit applications. NNSR is more complex and burdensome than normal new source review requirements. A major source that is subject to NNSR is required to satisfy the following requirements to be granted a permit: emission controls, compliance review and emission offsets.

Any new source located in a nonattainment area would not be subject to these requirements unless it had a potential to emit more than 100 tons of volatile organic compounds (VOC’s) or nitrogen oxide (NOx) emissions. For any major modifications to an existing source, the threshold will be a potential to emit 40 tons per year.

However, if these new or modified sources exceed these thresholds for VOC’s and NOx emissions, the Federal Clean Air Act requires that these sources must comply with lowest achievable emission reductions (LAER) for the specific pollutant for which NNSR is being conducted, here VOC’s and NOx.

Under LAER, the source must meet the most stringent of either the lowest emission limitation contained in an approved state implementation plan or the lowest emission limitation achieved in practice by a major source in that same facility category. It is important to note that there is no allowance for economic feasibility in the definition of LAER. Therefore, cost is not considered in determining if the LAER limitation is attainable.

In addition, the Clean Air Act requires that an applicant for a permit in a nonattainment area that exceeds these thresholds must assure that the proposed increased emissions from the project are offset by an equal or greater reduction in emissions from the same or other sources in the area. The amount of reductions or offsets to be provided depend upon the classification of the nonattainment area. Since it is likely that the Wisconsin counties noted above will be classified in the “marginal” category of nonattainment, the offset requirements for such major sources will be 1.10 ton of emission offsets for each ton of proposed increased emissions of VOC’s and NOx.

Synthetic Minor Option. Many sources who will otherwise qualify as “major” sources can avoid nonattainment treatment as a synthetic minor facility under these new ozone standards. This can be accomplished by the otherwise “major” source agreeing to be subject to actual emission limitations contained in the air permit which, if adhered to, will not cause the source to be considered a “major” source category for purposes of the new ozone NAAQS.

Implications for Wisconsin Businesses

The implications for business in Wisconsin by the new, more stringent ozone standard are as follows:

  • Major sources in the new nonattainment areas will incur significant cost to meet additional emission control requirements;
  • It will be costly and difficult to obtain scarce emission offsets that are required prior to construction for these major sources;
  • These major sources can avoid these new ozone nonattainment requirements as a “synthetic minor” source by agreeing to emission restrictions below the applicable major threshold in their air permit. 

Concluding Comment

We are encountering another regulatory era of environmental uncertainty in Wisconsin with the adoption of this new, more stringent ozone standard. During the next two years, major sources should be mindful of these future requirements and begin planning now for this new standard if they are located in the likely nonattainment counties in Wisconsin.  

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If you have a media request or need an attorney with particular knowledge for comment, please contact Susan Steberl, Director of Marketing, at 414.287.9556 or ssteberl@gklaw.com.

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