March 22, 2018
Environment Law Alert
Environment Law Alert
Author(s): Dana P. Stanton
EPA announces changes to long-standing practice on how the agency will evaluate NSR significant increase at major sources.
The U.S. Environmental Protection Agency announced that it is changing its long-standing policy about how it evaluates proposed projects that emit air pollutants. In a step towards New Source Review (NSR) reform, on March 13, 2018, EPA Administrator Scott Pruitt issued a memorandum intended to streamline the evaluation process for projects.
The NSR program mandates that an air permit be obtained prior to commencing construction of a new facility or a major modification at an existing facility if the project will result in a significant net emissions increase.
The procedure for evaluating whether a proposed project at an existing facility triggers the requirement to obtain an NSR preconstruction permit is a two-step process. Step 1 requires ascertaining whether the project will, by itself, result in a significant increase in air emissions. If the project will not result in a significant increase, an NSR preconstruction permit is not required. However, if a significant increase is projected to occur, Step 2 is necessary. Step 2 includes determining whether the project, combined with other unrelated, projects at the facility within the “contemporaneous” period, will result in a significant net emissions increase. Step 2 is often a cumbersome, multi-year process.
Previous EPA guidance had suggested that it was not permissible to take into account any decreases in emissions occasioned by the project when conducting the Step 1 analysis. Projects had to move on to Step 2 before any decreases in emissions could be factored in. Pruitt’s memorandum clarifies that emissions decreases as well as increases are to be considered as part of Step 1, provided they are a result of the project.
The Pruitt memorandum acknowledged that the complicated, multi-year Step 2 evaluation has dissuaded companies from undertaking projects at large facilities and thereby prevented environmentally beneficial projects from moving forward.
The new policy will help streamline the permitting process for certain projects. Projects that might benefit from the new policy include switching to cleaner-burning fuels and improving efficiency. The Pruitt guidance recognized that sometimes improving production efficiency can result in reduced emissions, even if production is increased.
The foregoing has been prepared for the general information of clients and friends of the firm. It is not meant to provide legal advice with respect to any specific matter and should not be acted upon without professional counsel. If you have any questions or require any further information regarding these or other related matters, please contact your regular Nixon Peabody LLP representative. This material may be considered advertising under certain rules of professional conduct.