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Introduction

The Clean Air Act (CAA) includes New Source Review (NSR) permit programs that apply to large stationary sources of air pollution, such as factories and electricity-generating units. Under NSR programs, each new large stationary source must apply for a permit before beginning construction. The permitting process is also required when a physical change to an existing large stationary source would result in a significant increase in pollutant emissions. NSR programs allow construction or modification of an emission source only if the operator first shows that emissions will be reduced as much as practicable. In addition, the construction or modification cannot result in significant deterioration of air quality in areas that meet the National Ambient Air Quality Standards (NAAQS)1 or interfere with progress toward attainment in areas where air quality violates the NAAQS.

On December 31, 2002 (67 Fed. Reg. 80186 [2002]), and October 27, 2003 (68 Fed. Reg. 61248 [2003]), the U.S. Environmental Protection Agency (EPA) promulgated changes to the NSR programs were published. The changes have resulted in substantial controversy. EPA and other supporters of the changes say these will provide greater flexibility to industry, increase the energy efficiency of industrial facilities,

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The NAAQS specify the maximum allowable concentrations of criteria pollutants in ambient air that are protective of public health and welfare. The six criteria pollutants are carbon monoxide, lead, nitrogen dioxide, ozone, particulate matter, and sulfur dioxide. Pollutants for which there are NAAQS are known as criteria pollutants because EPA prepares “criteria documents” for these pollutants describing their sources and effects.



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Interim Report of the Committee on Changes in New Source Review Programs for Stationary Sources of Air Pollutants 1 Introduction The Clean Air Act (CAA) includes New Source Review (NSR) permit programs that apply to large stationary sources of air pollution, such as factories and electricity-generating units. Under NSR programs, each new large stationary source must apply for a permit before beginning construction. The permitting process is also required when a physical change to an existing large stationary source would result in a significant increase in pollutant emissions. NSR programs allow construction or modification of an emission source only if the operator first shows that emissions will be reduced as much as practicable. In addition, the construction or modification cannot result in significant deterioration of air quality in areas that meet the National Ambient Air Quality Standards (NAAQS)1 or interfere with progress toward attainment in areas where air quality violates the NAAQS. On December 31, 2002 (67 Fed. Reg. 80186 [2002]), and October 27, 2003 (68 Fed. Reg. 61248 [2003]), the U.S. Environmental Protection Agency (EPA) promulgated changes to the NSR programs were published. The changes have resulted in substantial controversy. EPA and other supporters of the changes say these will provide greater flexibility to industry, increase the energy efficiency of industrial facilities, 1   The NAAQS specify the maximum allowable concentrations of criteria pollutants in ambient air that are protective of public health and welfare. The six criteria pollutants are carbon monoxide, lead, nitrogen dioxide, ozone, particulate matter, and sulfur dioxide. Pollutants for which there are NAAQS are known as criteria pollutants because EPA prepares “criteria documents” for these pollutants describing their sources and effects.

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Interim Report of the Committee on Changes in New Source Review Programs for Stationary Sources of Air Pollutants and contribute to the modernization of American industry—all without damaging the environment. Opponents say the changes will slow progress in cleaning the nation’s air, thus damaging human health, and the changes are not necessary to provide flexibility (GAO 2004). (See Chapter 2 for a description of the NSR changes in the context of the CAA.) CHARGE TO THE COMMITTEE Because of this controversy over the NSR changes, Congress mandated that EPA arrange for a study by the National Research Council (NRC) to assess potential impacts of EPA’s final rules of December 2002 and October 2003. The NRC was asked to assess changes in emissions of pollutants regulated under the NSR programs; impacts on human health; and changes in energy efficiency, pollution prevention, and pollution control at facilities subject to NSR. In response to the request, NRC established the Committee on Changes in New Source Review Programs for Stationary Sources of Air Pollutants (see Appendix A). The committee was asked to estimate and evaluate the amount of uncertainty associated with the effects being considered. It was also asked to identify and recommend additional data collection that would be necessary in future years to assess impacts. Congress asked that an interim report on the committee’s study be provided and that it include all conclusions and recommendations the committee determined to be feasible and appropriate at that stage in its study. The committee is providing this interim report in response. A final report will be provided at the end of 2005. (The congressional mandate for this study is in Appendix B and the committee’s full Statement of Task is in Appendix C.) Congress did not ask the NRC to determine the desirability of the new NSR rules or to recommend whether they be revised or repealed. Such conclusions involve considerations that go beyond science and involve value judgments (for example, how to weigh environmental protection against other societal goals). Congress also did not ask the NRC to appraise the legality of the changes—that is, whether EPA acted within the scope of its authority and, if so, whether EPA’s decision was reasonable. That task falls initially to the United States Court of Appeal for the District of Columbia Circuit, which is currently hearing challenges to the rules (State of New York v. Environmental Protection Agency, D.C. Cir. 02-1387 [challenging the 2002 rules], State of New York v. Environmental Protection Agency, D.C. Cir. 03-1380 [challeng-

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Interim Report of the Committee on Changes in New Source Review Programs for Stationary Sources of Air Pollutants ing the 2003 rules]). In addition, Congress did not ask the NRC to investigate any effects of the NSR changes other than the effects on emissions, human health, and industry actions concerning energy efficiency, pollution control, and pollution prevention. Because the committee has been directed to focus on those specific effects, it did not consider other possible effects of the NSR changes such as effects on nonhuman biota (for example, agricultural crops and forests), atmospheric visibility, and materials (for example, monuments and buildings). Also, because Congress requested an evaluation of changes in emissions of pollutants regulated under the NSR programs, the committee did not include emissions of greenhouse gases, such as carbon dioxide and methane, in its assessment. EPA does not consider those gases to be regulated under the CAA. Congress did not ask for an analysis of the effects of any changes in emissions of hazardous air pollutants (HAPs). Since 1990, a separate program has regulated the construction and modification of sources that emit HAPs (CAA § 112(d)(3), 42 USC § 7412(d)(3)). Emissions of HAPs may be affected by NSR, however, because many of these pollutants are subsets of volatile organic chemicals or particulate matter, both of which are regulated by NSR. COMMITTEE APPROACH As it carries out its charge, the committee is considering relevant scientific and technical documents prepared by EPA, other federal agencies, states, industry, and environmental and other nongovernmental organizations. Although the committee does not present evaluations of those documents in this report, they have been used to inform the committee’s deliberations. The committee expects to provide its perspectives on several of those documents in the final report. The committee will also gather information on how the revised NSR rules may affect emissions, air quality, public health, and industry actions concerning pollution control, pollution prevention, and energy efficiency. It will also gather background information on the types of facilities that may be subject to NSR rules, including the numbers of facilities, age distributions, emission trends, locations relative to NAAQS nonattainment areas, and population sizes downwind of facilities. The committee is also seeking information on how the new rules may affect pollution control, pollution prevention, and energy efficiency within a facility. Because of the various types of industries potentially affected by NSR, the committee can

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Interim Report of the Committee on Changes in New Source Review Programs for Stationary Sources of Air Pollutants not consider the impacts of the rule changes for each type in detail; instead, it is focusing on a few representative industries. Because many of the outcomes that the committee has been asked to consider can be affected by a number of factors outside the realm of the NSR rules, other factors, such as economic conditions and government investment in research and development, will be considered in the committee’s analyses. The committee recognizes that future developments in other pollution laws and regulations can have a substantial influence on the impacts of NSR rule changes. Thus, the committee will strive to consider the plausibility, significance, and interactions of other relevant requirements. This approach will be refined as the study progresses. Because it has not completed the process of information gathering and analyses, the committee has not reached its final conclusions or recommendations in response to its charge from Congress. Those will be presented in the final report. REPORT STRUCTURE This interim report provides a synthesis of background information on relevant health effects, air quality indicators, emissions, and industry activities in a regulatory context. The report also describes the approach that the committee plans to use for assessing the impacts it has been asked to address. To establish a background and context for the committee’s technical and scientific analysis, Chapter 2 provides a regulatory overview of the NSR programs in the context of the CAA. It also describes and discusses the NSR rule changes that are the subject of the committee’s evaluation. Chapter 3 examines contributions that emission sources subject to NSR may make to ambient air quality and relationships between specific air pollutants and health effects. Chapter 4 considers the categories of industrial sources involved in permitting activity under NSR, typical repair and replacement issues for those source categories, and typical technological considerations for those categories. Chapter 5 discusses various methods that have been used or that might be used in the future to assess the effects of the NSR rule changes, and it discusses other information that should be considered in analyses of the probable impacts of NSR rule changes. Chapter 6 provides the committee’s planned general approach for considering the impacts of NSR rule changes as a guide to the analysis undertaken by the committee for its final report.