PSD and Nonattainment Regulation: Implications of a Settlement Agreement

The EPA recently issued an internal memorandum and a settlement agreement in the case of Chemical Manufacturers Association et al. vs. EPA. The agreement reflects potential changes to the PSD regulations and the Emissions Offset Interpretive Ruling for nonattainment areas. The information presented in this paper is a summary of the significant aspects of the agreement, as it will affect future industrial sources. This paper also discusses other recent changes to the PSD and nonattainment regulations.

The changes to the regulations provide for significant relaxation of some aspects of PSD and the nonattainment regulations. The most significant aspect is the proposed change in the method of tabulating net increases of emissions due to source modifications. The change would allow offset credit for decreases in emissions due to shutdown of equipment based on the potential emission rate rather than the actual.