IN THE MATTER OF AMERICAN REF-FUEL COMPANY OF ESSEX COUNTY

PSD Appeal No. 86-1

ORDER DENYING REVIEW

Decided October 8, 1986

Before the Administrator, U.S. Environmental Protection Agency

Opinion by Lee M. Thomas, Administrator:

In a petition dated January 28, 1986, the Ironbound Committee Against Toxic Waste, through its counsel, Timothy S. Haley, requested review of a Prevention of Significant Deterioration (PSD) permit that the New Jersey Department of Environmental Protection (DEP) has issued to American Ref-Fuel Company of Essex County, pursuant to a delegation of authority from EPA Region II. The permit was issued to the Company on or about December 24, 1985, for construction of a resource recovery facility in Essex County, New Jersey. DEP's action in issuing the permit is subject to the review provisions of 40 CFR § 124.19,1 because the permit is deemed to be an EPA-issued permit under EPA rules. 40 CFR § 124.41; 45 Fed. Reg. 33413 (May 19, 1980).

Petitioner challenges condition G of the permit, which concerns, among other things, emission offsets for emissions of particulate matter (PM).2 Specifically, petitioner challenges that part of condition G which would allow the Company to postpone acquisition of a PM emission offset if none is available when the facility commences operation. If that happens, condition G directs the Company to evaluate the availability of emission offsets annually and to report such efforts to DEP. When offsets acceptable to DEP become available, the Company must then obtain the offsets within a time frame specified by DEP. Petitioner wants this permit condition reviewed by EPA

1 All references to the Code of Federal Regulations (CFR) are to the 1985 edition. 2 Condition G is also concerned with emission offsets for non methane hydrocarbon (HC), but petitioner's appeal does not place that aspect of the condition in issue.

because of the "failure of DEP to require these offsets or to delay their acquisition to a future date. . . ." Petition at 2.

Petitions for review of PSD permits are not usually granted unless the permit determination is clearly erroneous or involves an exercise of discretion or policy that is important and therefore is appropriate for discretionary review, 40 CFR § 124.19(a) (1) and (2). The burden of demonstrating that the permit should be reviewed is therefore on the petitioner. In this case, petitioner has not, in my opinion, shown that DEP's permit determination should be reviewed.

The PSD permit issued by DEP is one of four permits for the Company that were considered by the State in a combined permit proceeding that culminated in a decision by DEP to authorize the proposed facility. Since DEP was acting as a delegatee of EPA in issuing the PSD permit, the governing rules, as noted previously, deem the permit to be an EPA-issued permit. Thus, matters directly related to the permit are subject to my review under 40 CFR § 124.19, provided the petitioner meets the eligibility and other requirements of that regulation.3 Conversely, matters directly related to the other three permits, but not to the PSD permit, are not subject to my review under 40 CFR § 124.19, since DEP is not acting as a delegatee of EPA in issuing those permits. The matter of concern here, i.e., condition G, has only an indirect bearing on the PSD permit,4 where

3 For an issue to be eligible for review, a petitioner must file a petition for review within 30-days after service of notice of the State's permit determination. 40 CFR § 124.19(a). The petition must include a statement of reasons supporting review, including, among other things, a demonstration that any issues being raised were raised during the public comment period. Id. The petitioner here has satisfied these requirements as to the principal issue discussed in this order; however, subsequent to the 30-day period, petitioner raised another issue, in a letter written April 7, 1986, which, in brief, concerns petitioner's claim that fabric filters represent BACT for the control of PM emissions from the Company's proposed resource recovery facility. Petitioner seeks to have this issue included in its original petition. That request is denied. First, the area where the proposed facility will be located is designated as nonattainment for PM. See note 5 infra. Therefore, the applicable requirement is LAER, not BACT, which means that it should be reviewed in an appeal of the nonattainment permit not the PSD permit. Second, petitioner's request is also denied because it is untimely and does not include the required demonstration showing that the issue, as framed by petitioner, had been raised during the public comment period.

4 As noted in the text infra at pages 6-7 [283], the PSD provisions of the Clean Air Act forbid construction of a facility if the owner cannot demonstrate compliance with certain of the Act's requirements for nonattainment areas. Among other things, the owner must demonstrate that the emissions from the facility will not cause, or contribute to, air pollution in excess of any national ambient air quality standard (NAAQS) in any air quality control region. 42 U.S.C.A. §7475(a)(3). Therefore, if,

Continued

as its bearing on one of the other DEP permits (for new sources in nonattainment areas) is clearly direct; therefore, although the petitioner argues otherwise, I am persuaded that this matter is not one that I should review-any such review lies more properly with the state, whose interests are much more immediate, as explained below.

Emission offsets arise under and relate directly to the nonattainment provisions of Part D of the Clean Air Act, sections 171-178, 42 U.S.C.A. §§ 7502-7508, not to the attainment provisions of Part C of the Act-under which PSD determinations are made, sections 160-169A, 42 U.S.C.A. §§ 7470-7491.5 EPA has granted New Jersey unconditional authorization to administer the nonattainment provisions pursuant to its approved Part D state implementation plan (SIP), 46 Fed. Reg. 21996 (April 15, 1981), but EPA has withheld authorization for the attainment provisions, which are the ones having to do with PSD permits, 40 CFR §52.1603. Therefore, with respect to new sources in nonattainment areas, New Jersey is fully authorized to issue permits under its own regulations, and such permits are not subject to administrative review by EPA on appeal as petitioner alleges, failure to obtain required offsets will contribute to an excess of any NAAQS, an argument could be made that the resulting exceedance would prevent compliance with this aspect of the Clean Air Act's nonattainment provisions, which, in turn, would bear as the owner's responsibility under the PSD provisions of the Act, thus establishing an indirect connection between emission offsets and the PSD program.

5 An attainment area is one in which the national ambient air quality standards (NAAQS) for particular pollutants are met or where EPA has not yet determined the attainment status. PSD rules apply to these areas (and to these pollutants) to ensure that good air quality is maintained. The Company's proposed facility will be located in an area that is designated as being in attainment of the NAAQS for SO2 and NOx. 40 CFR §81.331. The issues under appeal do not pertain to these pollutants. Nonattainment areas, in contrast, are areas where NAAQS for particular pollutants are not met. The Company's proposed facility will be located in an area that is designated as nonattainment for PM (total suspended particulates) and ozone. 40 CFR §81.331. Because an area's designation is keyed to particular pollutants, it may be classified attainment for one pollutant and nonattainment for another, in which case separate provisions of the Act govern the control of the pollutants. A new source location in a nonattainment area ordinarily must demonstrate (in addition to meeting certain technological requirements) that the pollution which will result from its operation will be offset by cleaning up or closing down existing pollution sources in the area. The resulting emission offsets must be greater than the pollution to be added by the new plant so that a net improvement in emissions is achieved. New Jersey's EPA-approved state implementation plan (SIP) contains an exemption from the requirement for obtaining an emission offset for certain resource recovery facilities. N.J.A.C. 7:27-18. Condition G in the DEP permit is patterned after the Conditions in the New Jersey SIP. See also 40 CFR Part 51 (Appendix S at Section IV(B)). The validity of the SIP and the conditions in it are not reviewable in this proceeding. See Clean Air Act, § 307(b), 42 U.S.C. § 7607(b).

under 40 CFR § 124.19. That regulation limits its scope (under the Clean Air Act) to EPA-issued PSD permits, 40 CFR §§ 124.1(a) and 19, and therefore does not embrace State-issued permits for new sources in nonattainment areas.

Petitioner nevertheless asserts that emission offsets for nonattainment areas are related to the PSD program for attainment areas and, therefore, EPA should hear its appeal from DEP's PSD permit determination. Without disputing the existence of such a relationship, I do not believe that it is sufficiently strong to warrant federal intrusion into what Congress, upon EPA's approval of New Jersey's SIP for nonattainment areas, clearly intended as a State matter. Congress expressed its intent, in section 101(a)(3) of the Clean Air Act, that "the prevention and control of air pollution at its source is the primary responsibility of states and local governments"; therefore, absent special circumstances, EPA should not risk undermining that intent by second-guessing the State's new source determination under the guise of reviewing a PSD permit. No such circumstances are present here.

The emission offset issue, represented by petitioner's challenge to condition G of the permit, is easily severed from the PSD determination. Also, although petitioner correctly asserts that the PSD provisions of the Act, in particular section 165(a)(3), 42 U.S.C.A. § 7475(a)(3), forbid construction of a facility if, among other things, the owner fails to demonstrate compliance with certain of the Act's requirements for nonattainment areas,6 the Act nevertheless places primary responsibility for making the compliance determination on the State, as part of its approved SIP. In this instance the State has made its determination, and EPA is entitled to rely on it, thus clearing the path for the EPA-issued PSD permit. Therefore, despite the existence of a nexus between the PSD and non-PSD provisions of the Act, EPA can keep the two separate in this instance for purposes of review under 40 CFR § 124.19, while also accommodating the important congressional goal of placing primary responsibility for clean air in the hands of the State.

CONCLUSION

Accordingly, for the reasons stated above, it is my conclusion that review of the DEP's permit determination is not warranted; therefore, the petition for review is denied.

6 See Petitioner's letter of April 7, 1986, pages 6-7.

In accordance with 40 CFR § 124.19(f)(1) and (2), DEP, on behalf of the Regional Administrator, shall issue the final permit decision; and upon notice thereof the Regional Administrator shall publish notice of that decision in the Federal Register. The decision shall be considered final Agency action for purposes of judicial review.

So ordered.