PERMIT DELAYS UNDER INVESTIGATION

The Office of the Inspector General at the EPA is paying close attention to the backlog of un-issued permits for large air pollution sources. The agency has launched an audit into factors which play a role in permit delays. Six states (not yet disclosed) will be audited. The audit focuses on Title V permits that are facility-wide permits required for large sources under the 1990 Clean Air Act amendments.

Title V is a federal program whose implementation rests at the state and local level. The interaction between three government entities has often been blamed for slowing down the permit issuance process. Other impediments to expeditious permit issuance include: staff turnover, lack of EPA guidance to the states and overruling of state permit decisions at the federal level.

Permit delays affect both the industry and the general public. On the industrial side, a final permit outlines regulatory requirements thus providing certainty to the permit holder. For the public, a final permit contains information as to the source’s compliance status.

The EPA estimates that the investigation will conclude by the end of the year.

SCAQMD RULE 1107 COATING OF METAL PARTS AND PRODUCTS

The SCAQMD is proposing changes to rule 1107 that applies to metal coatings operations other than aerospace assembly, magnet wire, marine craft, motor vehicle, metal container, and coil coating operations. The changes stem from requests by the California Air Resources Board (CARB) to add two new test methods to the rule. Furthermore, industry requested alternative test methods, the use of electrocoatings and exemptions for supercompliant (with a VOC content less than 50 grams/liter) materials.

Under the new proposal, Method D-1613 will be used to determine acid content of pretreatment primers and etching fillers. Method 318 will be used to quantify weight percent of elemental metal in metallic coatings. Furthermore, the proposed amendments will add language to allow alternative VOC Test Methods of Analysis approved by USEPA, CARB and the AQMD.

A limited exemption for electrocoatings is also being considered. The exemption will apply for electrocoatings having a VOC content of 450 grams per liter or less and with usages less than 66 gallons per month. The District reports that the emissions from the application of these materials are very low.

The rest of the limits in the rule remain the same (some examples follow):

ECONOMIC INCENTIVE PROGRAMS-A NEW REGULATORY APPROACH

As emission reductions become increasingly scarce, regulators look to innovative approaches to achieve clean air goals. To this end, the Environmental Protection Agency has issued a guidance on Economic Incentive Programs (EIPs).

What is an EIP?

As the name implies, an EIP is a market-based strategy to encourage emission reductions. The EPA guidance is meant to help states, local air districts and tribes in put together approvable proposals. Through these programs the EPA expects to encourage development of innovative pollution reduction strategies such as:

• Emission trading programs
• Cap-and-trade programs
• Financial mechanisms
• Clean Air Investment funds

Because the EIPs are considered “guidance documents”, policies outlines are non-binding. The EIP guidance does not guarantee final EPA action. The agency evaluates each proposal on a case by case basis.

Mechanisms for approval

The process for EIP approval begins with the state, tribe or local air agency filing a revision to the State Implementation Plan. The EPA will take action by publishing the proposed changes in the Federal Register and soliciting comments. Proposals which conform to the EIP guidance would have a better chance for approval.

According to the guidance, some of the elements to consider are:

• Local public health and safety issues associated with the emission shifts.
• Dependence on public transportation associated with the proposed EIP.
• Accurate quantification of emissions

Stakeholders

Regulated businesses and the public play an important role in EIP development. The EPAs guidance urges regulatory agencies to work with the regulated community and ensure their participation in the process. Feedback from industry will help assess the financial and resource commitment necessary as well as the technical abilities of the affected sources. In fact, the EIP guidance states that “An EIP is much more likely to succeed if the affected parties are involved early in the process.” Other parties who may be involved include the EPA regional offices, local government and environmental organizations.

Pro’s and con’s

Flexibility is the main advantage of EIPs. Because these programs are not traditional command-and-control rules, they offer businesses the opportunity for an innovative approach. On the other hand, it may be difficult meeting all the requirements to obtain EPA approval. For example, monitoring and recordkeeping may be more extensive in order to quantify emission reductions.

COMPOSITE FABRICATORS FACE MORE STRINGENT REGULATIONS

Earlier this year, the South Coast Air Quality Management District (SCAQMD) adopted a new rule (Rule 1132) which impacted the composites industry. The rule calls for a 65% emission reduction for facilities in the South Coast Basin emitting over 20 tons per year of VOC’s. As part of a legal settlement agreement with environmental groups, the District now proposes to amend Rule 1162-Polyester Resin Operations. These requirements would apply to polyester resin operations large and small.

Rule 1162 cuts across various manufacturing operations such as: bathtub, shower and vanity installations, hulls for recreational and commercial watercraft, bodies for recreational vehicles, building panels and appliances, sporting equipment and power tools, automotive, aerospace and aircraft components, and structural components for chemical process equipment and storage tanks.

The new proposal would require:

• The use of non-atomizing and less polluting application technologies for composite spraying operations;
• Lower monomer contents of polyester resin materials such as clear gel coats, pigmented gel coats, general purpose resins, corrosion resistant resins and fire retardant resins;
• Vapor suppression of all applied resin materials;
• The monthly average of the filler content of the applied resin material to be at least 10% by weight.

The following table outlines the proposed monomer percentages:

Dashes indicate that no limit is specified. The General Purpose Resin category is being subdivided into: Marble Resins, Solid Surface Resins, Tub/Shower Resins, Laminating Resins and Others.

The regulated industry has expressed various concerns over the proposal. Specifically, industry representatives would like additional time to develop formulations which can comply with the rule while meeting product performance requirements.

The District has identified 81 companies in the South Coast which will be affected by the changes but admits that there could be hundreds more that they are not aware of.

COURT RULING ON HAZARDOUS WASTE COMBUSTORS

In 1999, the EPA issued standards limiting emissions from three types of hazardous waste combustors: 1) Incinerators that destroy hazardous waste 2) cement kilns that use hazardous waste as fuel 3) lightweight aggregate concrete. For each type of hazardous waste combustor, the EPA set limitations for dioxins, mercury, lead, cadmium and other toxic substances. These hazardous waste combustors burn 80 percent of the hazardous waste combusted each year in the United States. They reportedly emit over 11,000 metric tons of Hazardous Air Pollutants.

The Sierra Club challenged the EPA’s interpretation of the Clean Air Act arguing that EPA standards are required to reflect emissions actually “achieved” by the best performing sources. In a recent court ruling, the court agreed with the environmental group’s claims.

The court disagreed with EPA’s arguments that limits should be set based on technology that every emission source could use to meet the standard and directed EPA to set standards based on the best 12 percent of sources.

Notwithstanding the Sierra Club’s request to keep current limits in place, the court vacated the existing standards. The ruling leaves the door opened for the parties to file a motion with the court to keep the present standards in place while the agency develops new requirements.

AEROSPACE REGULATIONS UPDATE

SCAQMD rule 1124 applies to assembly, component manufacturing, refinishing, repair, maintenance, and service operations of commercial and military airplanes, satellites, space shuttles, rockets, balloons, dirigibles, helicopters and missiles. The District is proposing changes to the regulation to adjust various VOC limits and reflect the state of technology.

The agency identified 237 aerospace related companies that may be affected by the changes. The annual VOC emissions are estimated to be 2.6 tons per day. The proposed changes include:

• Reduce the VOC limit for antichafe coatings from 600 to 420 grams/liter
• Set the VOC limit for mold release coatings at 780 grams/liter
• Reduce the VOC limit for ERE coatings from 800 to 600 grams/liter
• Reinstate the 675 grams/liter limit for fastener sealants
• Reduce the VOC limit for extrudable, rollable or brushable sealants from 600 to 280 grams/liter.
• Reduce the VOC limit for type II chemical maskants to 160 grams/liter to reflect the NESHAP limit.

The District determined that further lowering the limit for adhesion bonding primers is not warranted because of their small usage.

ELECTRICAL TAX GENERATION CREDIT

Assembly Bill 94 would allow electrical generating facilities to get a tax credit for 100% of the price paid for Emission Reduction Credits (ERCs). The bill will utilize the tax system to encourage electrical generating facilities to purchase emission reduction credits, which would allow them to operate for extended hours. The bill would also provide an incentive for these electrical generating facilities to sell the electricity they generate to purchasers within California before selling to out-of-state consumers.

The Energy Commission indicates that a total of ten power plants currently under construction are expected to come online within the next three years: four this year and three each in 2002 and 2003. An additional 15 are currently in the licensing process with an additional 10 expected to begin the process within the coming months. One of ten is government owned. Construction of new power plants typically requires 24 months to complete. Due to California’s current energy challenge, if the number of power plants that come on line doubles beginning in 2003, total credits are estimated to be $50 million annually.

According to sources at the Air Resources Board, new or modified electrical generating facilities have typically incurred costs in the range of $5 million to $10 million for emission reduction credits. Under this bill, the value of ERCs would likely inflate.

LOWER VOC MATERIALS REQUIRED FOR DEGREASING OPERATIONS

The SCAQMD Rule 1122 regulates VOC emissions from degreasing operations. The District adopted amendments to the rule which further reduce VOC and halogenated solvent Hazardous Air Pollutants emissions.

The new rule requires that the VOC content of solvents used in cold cleaning operations be reduced from 50 to 25 grams/liter by January 1, 2003. Vapor degreasers will be required to use solvents with a VOC content of 25 grams per liter or less by January 1, 2006. The use of airless/air-tight cleaning systems remains a compliance option.

The applicability section of the rule now includes halogenated solvents that are subject to the federal National Emission Standards for Hazardous Air Pollutants (NESHAPs). The use of an airless/air-tight cleaning system when performing degreasing with NESHAP halogenated solvents will be required by January 1, 2003. The proposed amendments allow the use of an alternative cleaning systems that achieve equivalent emission reductions to that of the airless/air-tight systems, provided such alternative systems are approved by AQMD, ARB and the USEPA.

The amendments included changes to the rule language pertaining to safety switches and high-vapor cutoff thermostat requirements for certain types of degreasers. A prohibition on the use of HCFC-141B was also added.

District staff reports a decline in the number of vapor degreasers during the last several years. They believe this decrease is due to conversions to aqueous cleaning or other alternative methods. There are still 251 facilities in the basin that use vapor degreasers with high VOC solvents or NESHAP halogenated solvents. These users will be impacted by the District’s newly adopted amendments.