Pruitt issues guidance clarifying NSR evaluations

US Environmental Protection Agency Administrator Scott Pruitt issued a guidance memorandum clarifying the process for evaluating projects under the major New Source Review (NSR) program. EPA said the Mar. 13 memo streamlines permitting without sacrificing environmental protections, and reduces burdens to develop and expand facilities while encouraging companies to reduce pollution.

US Environmental Protection Agency Administrator Scott Pruitt issued a guidance memorandum clarifying the process for evaluating projects under the major New Source Review (NSR) program. EPA said the Mar. 13 memo streamlines permitting without sacrificing environmental protections, and reduces burdens to develop and expand facilities while encouraging companies to reduce pollution. Officials from the American Petroleum Institute and American Fuel & Petrochemical Manufacturers welcomed the move.

“The memo outlines a commonsense interpretation of NSR rules that will remove unnecessary administrative barriers to the construction of cleaner and more efficient facilities,” said Bill Wehrum, EPA Office of Air and Radiation assistant administrator. “This is an important step toward achieving better outcomes based on real-world impacts.”

NSR provisions require covered facilities to obtain a permit prior to the construction of a major stationary source or a major modification to an existing stationary source, EPA said. Determining whether a proposed project triggers the threshold to obtain an NSR permit is a two-step process, which is laid out in the agency’s “applicability procedures” regulatory requirements, it said.

EPA said the first step determines whether a proposed project will, by itself, result in a notable emissions increase. If an increase is projected to occur, the process moves to Step 2 to determine whether the project, combined with other unrelated recent projects, will result in a notable net emissions increase, EPA said.

Given previous inconsistent application and interpretation of the Step 1 evaluation accounting, this process has prevented environmentally beneficial projects from moving forward, the agency continued. The memo clarifies that companies can consider projected decreases in emissions of air pollution, as well as projected emissions increases, during Step 1. EPA said this removes regulatory obstacles, saves time and money, and reduces pollutants.

If the Step 1 evaluation shows that the proposed project will not result in a significant emissions increase, the project then proceeds under a state-issued minor source permit and avoids the complex multiyear evaluation to obtain a major NSR permit, EPA said.

‘A positive step’

“EPA’s practical clarification to the language in the NSR regulations is a positive step that will help reduce uncertainty in the permitting process, while protecting public health,” said Howard J. Feldman, API senior director for regulatory and scientific affairs. “Balanced, effective NSR regulations allow our industry to invest in new facilities and energy infrastructure in ways that improve environmental performance.”

Improving infrastructure permitting could help unleash more than $1 trillion in private sector investments critical to assuring that Americans can continue to benefit from increased production and use of the energy to meet the needs of a dynamic and growing economy, Feldman said.

“Through the development of cleaner transportation fuels and greater use of natural gas, our industry is contributing to a cleaner environment—including helping the US reduce ozone concentrations by 17% since 2000,” Feldman said. “Our commitment to safety and environmental stewardship can help continue these trends as communities across the country benefit from the responsible development and use of America’s oil and gas.”

In a separate statement, AFPM said it has long supported the NSR process as a clearer, more streamlined permitting pathway to expediting the development of critical projects.

“Today’s announcement, along with guidance already disseminated in the past few months, will help assist in providing the necessary regulatory clarity for industry,” it said. “Most importantly, these reforms will allow our industries to be modified and expanded, while continuing to provide strong environmental and health protection for the public.”

Contact Nick Snow at nicks@pennwell.com.

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