EPA Streamlines Industrial Facility Upgrade Process

Published April 25, 2018

U.S. Environmental Protection Agency (EPA) Administrator Scott Pruitt has announced steps to streamline the agency’s New Source Review (NSR) process.

Pruitt issued a guidance memorandum on March 13 to speed up NSR’s permitting process for the construction of new industrial facilities or modifications to existing ones.

In a press statement, Bill Wehrum, assistant administrator of EPA’s Office of Air and Radiation, said the agency’s new application of NSR rules will “remove unnecessary administrative barriers to the construction of cleaner and more efficient facilities.” 

Two-Step Process

NSR requires owners of refineries, chemical plants, and other covered facilities to obtain a preconstruction permit prior to building a new major stationary source of emissions or undertaking a “major modification” of an existing stationary source.

Determining whether a proposed project triggers the threshold to obtain an NSR permit is a two-step process. In Step 1, EPA determines whether the proposed project, by itself, will result in a significant emissions increase. If an increase is projected to occur, the process moves to Step 2 to determine whether the project, in combination with other, unrelated recent projects, will result in a significant net emissions increase.

Preventing Environmental Benefits

EPA says the existing regulatory guidance is confusing and prevents companies from undertaking pollution-reducing projects.

“Given previous inconsistent application and interpretation of the Step 1 evaluation accounting, this process has prevented environmentally beneficial projects from moving forward,” EPA stated in a press release. “The memo clarifies that companies can consider projected decreases in emissions of air pollution, as well as emissions increases, during Step 1.

“This removes regulatory obstacles, saves time and money, and reduces pollutants,” the release stated. “If the Step 1 evaluation shows that the project will not result in a significant emissions increase, the project then proceeds under a state-issued minor-source permit and avoids the complex multi-year evaluation to obtain a major NSR permit.”

NSR vs. Power Supply

Fred Palmer, a senior fellow with The Heartland Institute, which publishes Environment & Climate News, says NSR reform is necessary to keep critical power plants operating.

“The U.S. coal fleet is aging, and without additional regulatory reform it will deteriorate to near death by 2040,” said Palmer. “New Source Review reform is essential to keep this from happening. Otherwise, the retrofitting of existing coal plants will not be possible and their capacity to produce electricity will shrink to zero through entropy.

“In addition to NSR reform, EPA’s carbon-dioxide Endangerment Finding must also be repealed to ensure America’s retrofitted coal fleet will be allowed to run free of injunctions from federal district courts where, in some states. green liberals rule the roost,” Palmer said.  

Bonner R. Cohen, Ph.D. ([email protected]) is a senior fellow at the National Center for Public Policy Research.