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Cash Creek and Kentucky Syngas Permit Petitions Granted In Part and Denied in Part by EPA


On June 22, 2012, EPA responded to petitions filed by environmental groups regarding two permits issued by the Kentucky Division for Air Quality (DAQ) in 2010.  The merged PSD/Title V permits were issued to Cash Creek Generation, LLC (Cash Creek) (Petition No. IV-2010-4) for a coal gasification facility and co-located natural gas combined cycle plant in Henderson County and to Kentucky Syngas, LLC (Syngas) (Petition No. IV-2010-9) for a substitute natural gas facility in Muhlenberg County.  EPA granted each petition in part and denied each in part.  EPA noted that DAQ could respond to the objections by improving or justifying certain aspects of the permit or permitting record, as suggested in the order, or by making other appropriate changes in accordance with the state implementation plan (SIP), approved Title V program and applicable federal regulations.

Notably, in each response, EPA addressed Petitioners’ claims that DAQ’s public notice of the permit was deficient.  EPA denied Petitioners’ claim that DAQ was required to specify an “end date” for the public comment period, finding that “end date” is not defined in the Kentucky SIP and DAQ is not obliged to adopt Petitioners’ preferred interpretation of the term.  Both petitions contained claims that key information was unavailable during the public comment period.  In each response, EPA specified that when an objection is sought based on the unavailability of information during the public comment period in violation of public participation requirements, the petitioner must show that the unavailability deprived the public of the opportunity to meaningfully participate during the permitting process.  In Cash Creek, EPA granted Petitioners’ request for objection where it determined that the unavailable information pertained to whether the facility’s emissions were properly estimated and whether the permit included appropriate best available control technology (BACT) requirements.  EPA denied as premature Petitioners’ concerns relating to potential errors based on the unavailable information.  EPA required DAQ to submit the information for public review and respond to any comments received.  However, EPA noted that where a permitting authority provides an explanation for its decision not to make information available during the public comment period, the petitioner bears the burden of demonstrating that the permitting authority’s explanation is unreasonable.

In Syngas, EPA denied claims relating to unavailable information on procedural and substantive grounds where Petitioners did not demonstrate the unavailable material was necessary to impose an applicable requirement or for compliance assurance.  Also, EPA found that numerous requirements related to the unavailable information had been included by DAQ in the permit and Petitioners did not raise any issues with those components during the public comment period.  However, EPA granted Petitioners’ claim that DAQ had failed to provide public notice of its revised proposed permit issued in response to a prior EPA objection regarding the permit’s air quality impact analysis.  This same issue was resolved in DAQ’s favor in Sierra Club, et al. v. EEC, et al., Case No. 11-CI-00428 (Muhlenberg Circuit Court, February 7, 2012), a copy of which was provided with DAQ’s response to EPA.

In both responses, EPA expressed the need for justification and explanation from the permitting agency on several issues.  In Cash Creek, enforceability of source-wide VOC emissions limit; the BACT determination for flare operation during shutdown and malfunction (where BACT is required to apply at all times including shutdown and malfunction); fugitive emission estimates; the appropriateness of the assumed silt loading factor; and, the control efficiency expected from combined measures for enforceable permit conditions for control of fugitive emissions from material handling sources were identified by EPA as not having been sufficiently supported in the permit record.  In Syngas, EPA found DAQ failed to provide sufficient explanation and justification as to enforceability of VOC limits.  Due to questions regarding the enforceability of the methanol limit for Syngas, the petition was also granted with respect to the Clean Air Act Section 112 applicability threshold for combined HAPs.

EPA denied Petitioners’ assertions in Cash Creek that the permit was defective on various other issues including claims that: a flare minimization plan should have been required, BACT limits for the flare were insufficient, single source modeling was required for the ozone impact analysis, the alternative qualitative assessment was inadequate and DAQ’s consultation with EPA Region IV was insufficient.

Likewise, EPA denied various claims asserted in the Syngas petition including claims that: DAQ failed to consider alternatives to the facility, DAQ erred in finding the Thoroughbred Mine and the Syngas facility were separate sources, deficiency of the SO2 BACT analysis (EPA found DAQ provided sufficient explanation of the cost evaluation in the BACT analysis), exclusive use of natural gas was not considered, BACT analysis was inadequate for the flare because the permit did not adequately limit shutdown and emergency emissions (Petitioners failed to raise these points during public comment), and DAQ improperly used PM10 as a surrogate for PM2.5 BACT where DAQ provided sufficient justification and support for its support and Petitioners failed to identify specific deficiencies.  DAQ responded to EPA’s objections on September 24, 2012.

It is noteworthy that on August 31, 2012, EPA denied a petition to object to DAQ’s permit issued to the Tennessee Valley Authority for the Shawnee plant in West Paducah, Kentucky.  DAQ had reopened the Shawnee permit for cause to address specific issues in the permit.  The issues raised by the petition were not related to the parts of the permit that were reopened; therefore, the petition was denied.

To view a complete PDF of the Third Quarter 2012 issue of the Air Quality Letter, click HERE.

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