TCEQ DOCKET NUMBER 2014·0965·AIR

PERMIT REOPENING

EXXONMOBIL CORPORATION BAYTOWN OLEFINS PLANT BAYTOWN, HARRIS COUNTY

§ § §

§ §

BEFORE THE

TEXAS COMMISSION ON

ENVIRONMENTAL QUALITY

ENVIRONMENTAL INTEGRITY PROJECT, AIR ALLIANCE HOUSTON, AND SIERRA CLUB'S REPLY TO RESPONSES TO OUR MOTION TO OVERTURN THE

EXECUTIVE DIRECTOR'S REOPENING OF PERMIT NO. PAL6

Environmental Integrity Project ("EIP"), Air Alliance Houston, and Sierra Club

("Movants") submit this reply to responses to our Motion to Overturn filed by the Executive

Director, ExxonMobil, and the Office of Public Interest Counsel ("OPIC"). As we explain

below, consistent with our Comments, our Motion to Overturn, and the response brief filed by

OPIC, the Executive Director's decision to reopen ExxonMobil's Plant-wide Applicability Limil

("PAL") permit to increase the particulate matter ("PM") limit by nearly 100 tons a year is

contrary to the law, bad policy, and will have the primary effect of allowing ExxonMobil to

circumvent New Source Review ("NSR") requirements that would otherwise be triggered by PM

emissions from its cooling towers and its recently authorized ethylene expansion project. The

reopening undermines the integrity of Commission's air permitting program, puts ExxonMobil's

competitors at an unfair disadvantage, and endangers public health. Accordingly, we

respectfully ask the Commission to overturn the Executive Director's decision to reopen

ExxonMobil's PAL permit.

I. INTRODUCTION

For many years, the Executive Director issued permits to major and minor sources alike

without specifically authorizing or analyzing impacts from cooling tower particulate matter

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emissions. This policy arose because the Executive Director did not know how to properly

monitor or quantify cooling tower PM emissions and he assumed, in the absence of reliable data,

that these emissions were insignificant. However, new methods for quantifying cooling tower

emissions reveal that cooling towers often emit significant quantities of PM. Indeed, according

to ExxonMobil, the cooling towers at issue in this case emitted nearly 100 tons of PM in 2010

and nearly 120 tons of PM in 2011.1

The Executive Director concedes that his failure to analyze and authorize PM emissions

from cooling towers in permits that he issued was a mistake that he must correct. 2 In 2009, the

Executive Director issued a guidance document explaining that cooling tower emissions omitted

from previously issued permits must be evaluated and authorized when those permits come up

for renewal. 3 Where cooling tower PM emissions are significant, sources must obtain a permit

amendment to authorize the emissions. To obtain an amendment, applicants must analyze

impacts from cooling tower PM emissions under worst-case scenarios and propose emission

limitations based on best available control technology ("BACT"). This process is necessary

because significant sources of PM threaten public health and may significantly deteriorate air

quality.

In the present case, the Executive Director insists that he must depart from his own well-

established policy and reopen ExxonMobil's PAL permit shortly before renewal to include

1 ExxanMabil. Request and Application for PAL6 Reopening and Alteration of Permit 3452 (September 24, 2013) ("Reopening Application"), Attachment 4. 40 CER. § 52.21(b)(23) (incorporated by reference into 30 Tex. Admin. Code § 116.160). The regulatory significance level for PM is 25 tons per year. The regulatory significance threshold for PM IO is 15 tons per year. The regulatory significance threshold for PM2.5 is 10 tons per year. The calculation method ExxonMobil used to calculate its cooling tower PM emissions assumes that all PM is also PM lO

and PM,.5' EIP Comments, Attachment A. 2 Executive Director's Response Brief ("ED Response Brief') at 3 ("This reopening action was performed to include emissions that should have been included in the original establishment of the PM PAL, but were omitted due to permitting practices in effect at the time the PAL was established, which can be considered a technical error (as contrasted with a typographical or calculation error.")(emphasis added). 3 [d., Attachment C

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significant PM emissions from ExxonMobil's cooling towers without an amendment. The

Executive Director's decision to disregard his own policy is remarkable, because it does not

actually resolve the problem it purports to address. Even after the PAL permit reopening, the

Executive Director will still need to authorize PM emissions from ExxonMobil's cooling towers

when the permit that contains the PM PAL comes up for renewal next year. The Executive

Director should not depart from his own policy without good reason, especially where the

departure results in a less effective solution to the very problem the policy was established to

address. There is no good reason for the Executive Director to depart from his policy in this

case. Indeed, there are many very good reasons that he should not.

The totality of circumstances discussed below demonstrate that the primary result of the

reopening-if not its direct motivation-is the circumvention of New Source Review permitting

requirements that would otherwise be triggered by PM emissions from ExxonMobil's cooling

towers and a recently authorized ethylene production nnit expansion project. To accomplish this

improper end, the Executive Director does considerable violence to the PAL rules he is required

to enforce. Obviously, the Executive Director should not misapply the Commission's rules to

allow an entity subject to those rules to avoid permitting requirements established to protect

public health. To do so calls into question the integrity of the Commission, puts the public

health at risk, and provides ExxonMobil with an unfair advantage over its competitors who will

be required to reduce their own emissions to offset air quality impacts resulting from

ExxonMobil's emissions. In light of these facts, Movants respectfully urge the Commission to

overturn the Executive Director's decision to reopen ExxonMobil's PAL permit.

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II. ARGUMENT

A. The Executive Director's Argument that a 97 Ton "Upward Adjustment" in the Emission Limit is Not an Increase is Nonsensical.

A PAL, by definition, is a limit expressed in tons per year. 4 Before the Executive

Director reopened ExxonMobil's PAL permit, ExxonMobil's PM PAL was 365.62 tons per

year.5 After the Executive Director reopened ExxonMobil's PAL permit, the PM PAL was

463.55 tons per year.6 The Executive Director reopened ExxonMobil's PAL permit and

increased ExxonMobil's PM PAL by 97.93 tons per year. The numerical limit-the PAL-is

bigger than it was. It has been increased. This is not a matter up for reasonable disagreement.

And yet, amazingly, ExxonMobil and the Executive Director both deny that ExxonMobil's PM

PAL has been increased:

And

[T]he facts of this case clearly indicate that the information submitted to the TCEQ is not for an increase in the PM PAL, but rather is information now required by TCEQ and which was used [to] the [sic] adiust the PM PAL upward.?

The instant action is not to increase the PM PAL6 based on the presence of new or modified emission units that are increasing emissions, but instead, to adjust the PM P AL6 "to reflect a more accurate determination of the emissions used to establish the P AL[ .]"8

An upward adjustment is an increase. Why then do ExxonMobil and the Executive Director

deny that ExxonMobil's PM PAL has been increased?

430 Tex. Admin. Code § 116.12(24) ("Plant-wide applicability limit-An emission limitation expressed, in tons per year, for a pollutant at a major stationary source, that is enforceable and established in a plant-wide applicability limit permit under § 116.186 of this title (relating to General and Special Conditions"). 5 ED Response Brief, Attachment B. 6Id. 7 [d. at 5-6 (emphasis added). 8 ExxonMobil's Response to Environmental Integrity Project, Air Alliance [Houston] and Sierra Club's Motion to Overturn (hEM Response Brief') at 3 (emphasis added).

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B. "Any increase in a plant-wide applicability limit must be made through amendment."

The Executive Director and ExxonMobil must deny the undeniable-that the reopening

increased ExxonMobil's PM PAL-because the Commission's PAL Amendment rule

unambiguously requires that "[alny increase in a plant-wide applicability limit must be made

through amendment.,,9 Thus, unless the Commission's PAL Amendment rule means something

different from what it says, any increase to a PAL must be made through an amendment. Is an

increase to more accurately reflect emissions used to establish a PAL an increase? Of course it

IS. Because this is so, the Commission's PAL Amendment rule requires that the increase be

made through an amendment. For reasons discussed at length below, ExxonMobil would prefer

to have its PM PAL increased without an amendment. That is why the Executive Director and

ExxonMobil must refuse to acknowledge the obvious, undeniable fact that the Executive

Director reopened ExxonMobil's PAL permit to increase the PM PAL. However, the

Commission's rules are clear: Any increase to a PAL must be made through amendment.

Therefore, the Executive Director's reopening to increase ExxonMobil's PM PAL without an

amendment was improper and the Commission should overturn it.

930 Tex. Admin. Code § 116.192(a)(emphasis added). The Executive Director acknowledges that the TCEQ's rule means what it says: "The Executive Director agrees with Movants that an increase in a PAL must be made through an amendment." ED Response Brief at 5-6. While it is true that the Commission's reopening rule at 30 Tex. Admin. Code § 116.192(c)(I)(C) states that the Executive Director may reopen a permit to increase a PAL, that provision requires the permittee to comply with the requirements at 40 C.F.R. § 52.21( •• )(11), which are exactly the same as the Commission's PAL amendment requirements at 30 Tex. Admin. Code § 116.192(a). 116. I 92(a)(1 ) corresponds to requirements in 40 C.F.R. § 52.21(oa)(11)(i)(b). 116.192(0)(2) corresponds to requirements in 52.21(ao)(11)(i)(c). 116.192(0)(3) corresponds to requirements in 52.21(aa)(11)(i)(d). 116.192(0)(4) corresponds to requirements in 52.21(ao)(11)(ii). The public notice requirements listed in 116.192(0), which incorporates 116.194, correspond to requirements listed at 52.21(aa)(11)(iii). Thus, because the requirements for reopening under 116.192(c)(1)(C) are identical to the amendment requirements ot 116.192(0), 0 reopening under 116.192(c)(I)(C) ~ on amendment. See The Office of Public Interest Counsel's Response to Environmental Integrity Project et al Motion to Overturn the Executive Director's Reopening of Permit No. 34521PAL6.

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C. The Executive Director's Reopening of ExxonMobil's PAL Permit Does Not Correct a Typographical or Calculation Error and Does Not Reflect a More Accurate Determination of Emissions Used to Establish tbe PM PAL.

Just as ExxonMobil and the Executive Director must dispute the indisputable-that

ExxonMobil's PM PAL has been increased-and disregard the clear, unambiguous meaning of

the Commission's PAL Amendment rule to avoid the conclusion that ExxonMobil's PM PAL

cannot be increased without an amendment, ExxonMobil and the Executive Director must also

disregard clear and unambiguous language limiting the applicability of the Commission's

mandatory reopening rule at 116.192(c)(1)(A) to make their case that the "upward adjustment" to

ExxonMobil's PM PAL was proper under that rule.

30 Tex. Admin. Code § 116.192(a)(1)(A) states that:

During the PAL effective period, the executive director shall reopen the PAL permit to ... correct typographical or calculation errors made in setting the PAL or reflect a more accurate determination of emissions used to establish the PAL.

Neither ExxonMobil nor the Executive Director claims that ExxonMobil's PM PAL is

based on a typographical or calculation error, and both concede that PM emissions from

ExxonMobil's cooling towers were not "used to establish" ExxonMobil's PM PAL:

And

The Executive Director recognizes that cooling towers have been a source of PM emissions and that the PM PAL established in 2005 for the BOP did not include PM emissions from the cooling towers. The reopening of PAL6 adjusts upward the PM PAL by 93 tons per year to include all sources that emitted PM at the time of the establishment of the PAL. lO

Consistent with TCEQ's policies and practices at the time for all PAL permits, PM contributions from existing cooling towers were not included in the PM PAL6 limitY

10 ED Response Brief at 4 (emphasis added). 11 EM Response Brief at 2 (emphasis added).

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Thus, the Executive Director and ExxonMobil contend that the reopening to include PM

emissions from ExxonMobil's cooling tower reflects a more accurate determination of emissions

used to establish the PM PAL, because emissions tram ExxanMabil's cooling towers were not

used to establish the PM PAL. This argument refutes itself. The reopening to ExxonMobil's

PAL permit to increase the PM PAL has nothing to do with correcting emissions used to

establish the PM PAL. Rather, the reopening adds emissions from new sources to the PM PAL.

The Commission's PAL Amendment rule makes it clear that this kind of change must be made

through an amendment and not a 116.192(c)(1)(A) reopening. The Commission should overturn

the reopening.

D. EPA's Preamble to the Federal PAL Rule Does Not Suggest That the Reopening Was Proper.

Unable to get around the clear unambiguous laoguage in the Commission's PAL rules

requiring any PAL increase to be authorized through an amendment and limiting the

applicability of 116.192(c)(1)(A), ExxonMobil and the Executive Director turn to the federal

register preamble for EPA's New Source Review Reform ("NSRR") aod PAL rule to argue that

the policy behind EPA's PAL rulemaking suggests that the Executive Director should be able to

increase ExxonMobil's PM PAL without an amendment. According to the Executive Director:

EPA clearly intended for states to review PALs and adjust the limits as necessary aod appropriate. The adoption preamble for NSRR states that "[ d]uring the term of the PAL, at PAL renewal or at title V permit renewal, )lour reviewing authoritv may reopen your PAL permit and adiust the PAL level, either upward or downward. as needed by the reviewing authority. 12

This argument fails-not only because ExxonMobii and the Executive Director cannot

read away the clear laoguage of the Commission's rules based on EPA's preamble to a federal

rulemaking that does not directly apply to the Commission-but also because EPA's PAL rule

12 ED Response Brief at 3, citing 67 Fed. Reg. 80186, 80189 (emphasis added). See also, EM Response Brief at 3.

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requires permittees to make the same demonstrations the Commission requires for a PAL

ameudment before the Administrator may reopen a PAL permit to increase a PAL. 13 So, while it

is true that EPA does allow agencies to reopen PAL permits to increase PAL levels, EPA only

allows agencies to do this after permittees make the same demonstrations the Commission

requires for a PAL amendment. Accordingly, the Executive Director's appeal to EPA's PAL

policy does nothing to justify his decision to increase ExxonMobil's PM PAL without an

amendment.

E, The Executive Director May Not Increase ExxonMobil's PAL to Include Unauthorized Cooling Tower PM Emissions and the Increased PM PAL May Not Be Used to Determine that PM emissions from the Cooling Towers Are Insignificant.

Having dispensed with the obvious errors in the arguments advanced by ExxonMobil and

the Executive Director, we must get to the heart of the matter and understand why ExxonMobil is

set on having its PM PAL increased through an administrative reopening rather than an

amendment. The short answer is that this project matters because it allows ExxonMobil to

circumvent permitting requirements that would otherwise be triggered by PM emissions (rom its

cooling towers and its recently permitted ethylene expansion project.

1, PM emissions from ExxonMobil's cooling towers must still be authorized,

ExxonMobil and the Executive Director contend that the Commission's PAL amendment

rule does not mean what it says: That "any increase" in a PAL must be made as an amendment.

Instead, they argue, PAL amendments are only required when a new or modified facility causes

source emissions to exceed a PAL. This is so, ExxonMobil argues, because the Commission's -

PAL Amendment rule at 116.192(a) only requires

13 Compare 40 c.P.R. § 52.21(aa)(11) with 30 Tex. Admin. Code §§ 116.192(a) and (c)(l)(C). See also, note 10.

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And;

an amendment to increase a PAL for a pollutant ... if "new and modified facilities contributing to the increase in emissions ... cause the ... emissions to equal or exceed its PAL. 14

TCEQ's rules at 30 T.A.C. § 116. I 92(c)(l)(C) that require compliance with EPA rules at 40 C.F.R. § 52.2 I (aa)(lI) are premised on "emissions unites) contributing to the increase in emissions so as to cause ... emissions to equal or exceed the PAL[·lI5

Because ExxonMobil's cooling towers were built before ExxonMobil's PAL permit was issued.

ExxonMobii and the Executive Director say that they are not "new sources" and that PM

emissions from the cooling towers cannot trigger PAL amendment requirements. This argument

is not only contrary to the clear unambiguous language of the Commission's PAL Amendment ~

rule, it also leads to absurd results.

Because a PAL's sole purpose is to establish a major NSR significance threshold for

future permitting projects, it makes no sense to allow owners and operators to include emissions

in a PAL before those emissions have been properly authorized. Emissions that are already

included in a PAL will not appear significant when compared to the PAL. To prevent this kind

of abuse, the Commission's PAL rules require baseline actual emissions to be adjusted

downward to exclude "non-compliant" emissions, including emissions from units that have not

been properly authorized.16 As we will see, the Executive Director's PAL permit reopening

disregards this requirement and thereby turns the entire major NSR applicability determination

process upside down. To see that this is so, we must briefly consider the history of

ExxonMobil's Permit No. 3452/PAL6.

14 EM Response Brief at 3, n8. 15Id. at 3, n9. 16 30 Tex. Admin. Code § 116.12(3)(B) and (D).

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ExxonMobil's PAL permit is also a flexible permit.17 Flexible Permit No. 3452 was first

issued in 2002 and established operating requirements and flexible permit emission caps that

apply to emissions units at the Baytown Olefins Plant. In 2005, ExxonMobil amended Flexible

Permit No. 3452 to establish various PALs, including a PM PAL. 18 Though VOC emissions

from ExxonMobil's cooling towers were specifically authorized by ExxonMobil's Flexible

Permit and VOC emissions from the cooling towers were included in ExxonMobil's VOC PAL,

PM emissions from the cooling towers were not specifically authorized by the Flexible Permit

and actual PM emissions from the cooling towers were not included ExxonMobil's PM PAL. 19

Texas flexible permits must include individual emission limits and/or emission caps that

limit emissions of each flexible permit pollutant from all units authorized by a flexible permit.20

These emission caps and individual limits must be set at levels that reflect the application of Best

Available Control Technology and ensure that emissions from the source will not endanger

public health.21 Because the Commission's outdated cooling tower policy is inconsistent with

these and other NSR permitting requirements, the Executive Director must fix each permit issued

under the policy by including PM limits consistent with the Commission's rules that are

protective of public health:

17 A PAL permit is not a special kind of permit. Any NSR pennit that contains a PAL is a "PAL pennit." 30 Tex. Admin. Code § 116.12(27). 18 While Movants maintain that ExxonMobil"s PALs are not federally-approved limits and contend that these limits may not be used as the basis for any major NSR negative applicability determination, the arguments we present in this brief, as well as our Comments and Motion to Overturn presume-for the sake of argument-that ExxonMobil"s PALs are federally-enforceable limits. 19 Or, as the Executive Director puts it: "For the BOP authorization, the cooling towers are authorized by and listed on the MAERT (with emission limits for air contaminants other than PM) for Pennit No. 3452." ED Response Brief at 4. 20 30 Tex. Admin. Code §§ lI6.715(b) ("A pollutant specific emission cap or individual emission limitations shall be established for each air contaminant for all facilities authorized by the flexible permit."), 116.716(c) ("Emissions will be calculated for each facility within an emission capl.],,), (d) ("An individual emission limitation will be established in the same permit for each pollutant not included in an emission cap for facilities authorized by the flexible permit.")( emphasis added). 21 30 Tex. Admin. Code §§ 116.711 and 716(b).

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In the past, at TCEQ's direction, applicants did not include emissions from facilities or emissions units that are recognized as difficult to quantify, including particulate matter from cooling towers. TCEQ recognized that cooling towers were a source of PM emissions but, due to limitations in quantification methodology, these emissions were not included on the Maximum Allowable Emission Rate Table (MAERT) for this and other permits. As TCEQ has subsequently established or adopted better quantification methods in the years since this PAL was issued, PM emissions from the cooling towers are being included in permits. It has been TeED's long-standing practice to treat emissions from such (acilities or emission units as corrections rather than new authorizations. 22

The Executive Director's contention regarding the Commission's practice for including PM

cooling tower emissions is misleading. The document that the Executive Director cites for this

proposition does include general gnidance about how certain errors should be addressed at

renewal,23 but a different guidance document lays out the Commission's long-standing policy for '"

authorizing PM emissions from cooling towers that were improper! y excluded from permits

under the Commission's outdated policy?4

The guidance document that specifically addresses cooling tower PM emissions does not

comport with the Executive Director's claim that the Commission's long-standing policy has

been to include emissions from cooling towers as corrections rather than new authorizations:

For all permit applications received after March 1 [2009], Chemical section will require PM emissions be quantified and authorized from cooling towers that are subject to review (including renewals). This review should be performed as follows:

At renewal

If the cooling tower PM emissions to be added to the permit are not significant (<15 tpy PMlO and <25 tpy PM) add them to the MAERT with the boilerplate

22 ED Response Brief at 3-4 (emphasis added). 23Id. at Attachment D. 24 [d. at Attachment C.

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cooling tower PM monitoring condition per the March 10, 1997 memo from Victoria Hsu . .. entitled "Permit Renewal Requirements [Attachment D]."

If the emissions are significant, a permit amendment will be necessary and should be reviewed as described above. If the emission increase is still significant following the application of BACT, PSD review may apply. The permit holder may do a retrospective PSD applicability analysis to demonstrate that the additional PM emissions from the cooling tower(s) would not have made the original construction project subject to PSD review. Another option would be to treat the authorization of cooling tower PM emissions as a project occurring today. In either case, PSD review would be required unless the net emission increase is not significant. 25

Thus, PM emissions from cooling towers may be included in permits at renewal as

administrative corrections if and only if PM emissions added to a permit are insignificant. Where

PM cooling tower emissions are significant, "a permit amendment is necessary" to "authorize"

the emissions. Indeed, if the emissions are significant after BACT controls have been applied,

the permit amendment to authorize those emissions triggers major NSR requirements.

Thus, when ExxonMobil's Flexible Permit comes up for renewal next year, ExxonMobil

will be required to amend the permit to authorize PM emissions from its cooling towers, unless

emissions from the cooling towers are insignificant. Presuming that PM controls on the cooling

towers satisfy BACT,26 the amendment to authorize cooling tower emissions will trigger major

NSR requirements, because PM emissions from those units are significant (well above the major

NSR significance threshold of 15 tons per year of PM IO and 25 tons per year of PM).

However-and now we get to the heart of the matter-the regulatory significance thresholds will

not apply to ExxonMobil, because ExxonMobil has a PM PAL. Newly permitted emissions at

PAL sources are considered insignificant so long as actual emissions are maintained below the

PAL. Because the Executive Director has already increased ExxonMobil's PM PAL to include

2; Id. (emphasis added). 26 Response to Comments at 5 ("The cooling towers were equipped with drift eliminators which met BACT at the time of installation.").

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the PM emissions from ExxonMobil's cooling towers that must be authorized at renewal, those

emissions will not appear significant. In this way, the current reopening turns the proper

application of ExxonMobil's PAL permit on its head and improperly provides ExxonMobil with

a shield against minor and major NSR requirements-including public participation

requirements and impacts analysis requirements---that would be triggered when ExxonMobil's

cooling towers are finally authorized at renewal.

Because PM emissions from ExxonMobil's cooling towers must still be authorized, the

cooling towers are "new emissions units" within the scope of the Commission's PAL

Amendment rule. The reading of the PAL Amendment rule endorsed by ExxonMobil and the

Executive Director disregards the clear unambiguous language of that rule and leads to the

absurd consequence that ExxonMobil may rely on unauthorized historical PM emissions from its

cooling towers to avoid minor and major NSR permitting requirements when the Executive

Director eventually gets around to authorizing those very same emissions.

2. The circumvention does not end with ExxonMobil's cooling towers.

In the past year, the Commission has issued a new permit authorizing ExxonMobil to

construct a new eight-heater ethylene expansion project at its Baytown Olefins Plant and

amended ExxonMobil's Flexible Permit to authorize construction of new duct burners to provide

steam for the ethylene expansion project.27 The ethylene expansion permit authorizes

ExxonMobii to emit more than 90 tons of PM per year.28 The new duct burners have the

27 An Order Concerning the Application of ExxonMobil for Issuance of Air Quality Permit No. 102982 for the Construction of a New Ethylene Production Unit at ExxonMobil's Baytown Olefins Plant, TCEQ Docket No. 20\3-0657-AIR ("Ethylene Expansion Order"). 2S Texas Air Quality Permit No. 102982 (Total PM emissions listed in permit Maximum Allowable Emission Rate Table).

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potential to emit more than 35 tons of PM per year?9 These new potential emissions account for

34% of ExxonMobil's original PM PAL of365.62 tons per year.

Movants participated in a contested case hearing concerning the Commission's

authorization of the ethylene expansion project. In that hearing, we argued that the project could

not be authorized with a minor NSR permit, because site-wide PM emissions at the Baytown

Olefins Plant already exceeded ExxonMobil's PM PAL. We believed that PM emissions from

the Baytown Olefins Plant already exceeded the PM PAL, because ExxonMobil reported PM

emissions exceeding 365.62 tons per vear to the Commission's emissions inventory in 2007,

20OS, 2009, 2010, and 201l?O The Commissioners disagreed with us. Indeed, the Commission

found that ExxonMobil could maintain PM emissions from its new units and its existing units

below the PM PAL threshold.31 The Commission went further still and found that "there is no

evidence demonstrating that the addition of cooling tower PM emissions. , . based on monitoring

and calculation methods used to determine PM emissions , , . would result in exceeding the PM

PAL in PAL6 [of 365.62 tons per yearj.',32 Thus, the Commission determined that PM emissions

from ExxonMobil's existing units--including the cooling towers-and newly authorized units

could all be maintained below 365.62 tons per year.

29 ExxonMobil Baytown Olefins Plant, Flex Permit Amendment-Train 5 Duct Burner Application (May Z014) at 3-1 ("The proposed annual and hourly PM emission rates for the duct burner are based on 0.0104 Ibs PM per MMBtu (HHV) heat input based on vendor information."). Greenhouse Gas Permit No. PSD-TX-lOZ9S2-GHG at 2 available electronically at http://w-ww.epa.gov/earth1r6/6pd/airfpd-r/ghgiexxonmobil-bayto\vn-olefins­finalpermit.pdf ("The Duct Burners have a combined maximum design heat input rate of 773 MMbtuihr (HHV)"). 773 (MMBtu/hr)* 8760 (hrlyear) * 0.0104 (lbIMMBtu)12000 (Ibs/Ton); 35.21 (tons per year). 30 Executive Director's Response to Protestant's Written Discovery Requests for Permit No. 102982, TCEQ Docket No. 2013-0657-AIR ("Interrogatory No.2: .... [Pllease identify each 12-month period since September 1, 2005 during which the combined PM emissions from all facilities and emission units at the major stationary source identified by TCEQ Regulated Entity Number RN102212925 exceeded 365.62 tons. Response: The Executive Director reiterates the preceding objection. Notwithstanding his objection. according to the available Emissions Inventory (El) data, RN102212925 reported PM emissions greater than 365.62 tons in 2007, 2008, 2009, 2010, and 2011."). 31 Ethylene Expansion Order at Finding of Fact 96. 32 [d. at Finding of Fact 91A.

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While we were skeptical of the Commission's findings, we understood that major NSR

requirements would still be triggered if the Commission was wrong and emissions from the new

units and ExxonMobil's cooling towers--once authorized---exceeded 365.62 tons per year?3

Though ExxonMobil was not required to conduct a thorough impacts analysis (including an

analysis of impacts from secondarily formed PM2.5 emissions or a PSD increment analysis) at the

time its new projects were permitted, the Commission's rules would still require this analysis if

emissions from the Plant exceeded the PM PAL after the expansion was built. If this analysis

showed that impacts from ExxonMobil's expansion project and its new duct burners were

unacceptable, the Commission's rules would still require ExxonMobil to reduce emissions from

other units as necessary to protect public health.

However, the current permitting action lets ExxonMobil off the hook. The Executive

Director's unilateral action in this case will not only allow ExxonMobil to authorize significant

PM emissions from its cooling towers without an amendment, it will likely allow ExxonMobii to ~

avoid major NSR requirements for two significant projects that have yet to be constructed. This,

to put it mildly, is not a proper application of the Commission's reopening rule at

116.192(c)(1)(A).

F. The Executive Director's Determination that Movants Failed to Identify Errors in ExxonMobil's PALs that Must Be Corrected is Unsupported by Evidence.

In our comments, we explained to the Executive Director that "ExxonMobil's PM

Flex/PAL limit reflects an outdated policy for permitting cooling towers at chemical plants," and

that "[t]he Commission's change in policy is best addressed through a permit amendment or

renewal, and not through an administrative reopening.,,34 The Executive Director did not agree

3330 Tex. Admin. Code § 116.192(a)(2). " EIP Comments at 8.

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with us.35 Our comments also included evidence that ExxonMobil's PALs should be adjusted

downward to reflect a more accurate determination of emissions used to establish the P ALs.36

With respect to PALs for NOx and VOC, our comments indicated exactly how the PALs should

be adjusted: the PALs should be adjusted downward to offset an upward adjustment made by

ExxonMobil in its application to reflect emissions that would have occurred but-for unit

downtime during the baseline period. 37 Emissions that did not occur are not "actual" emissions

that may be used to calculate a PAL. The information we provided the Executive Director was

just as reliable-indeed it was more reliable-than the information ExxonMobil provided about

PM emissions from its cooling towers, and the changes we requested-at least with respect to

NOx and VOC-are changes that must be made to reflect a more accurate determination of .,

emissions used to establish the PALs. In response, the Executive Director explained:

Without responding to the merits, if any, of the comments regarding the NOx, VOC, and S02 PALs, the Executive Director notes that these PALs were established more than nine years ago for a permit with a ten year term. PAL6 is scheduled for renewal in June of next year and all PAL permits are subject to the renewal requirements in § 116.196. That rule specifically provides that the proposed PAL levels (for each PAL pollutant) are subject to public review, and "[ dJuring such public review any person may propose a PAL level for the source for consideration by the Executive Director." As based on EPA's NSRR PAL program, § 116.196(e) and (f) include specific limitations on how PALs can be set during the renewal process. The Executive Director believes that a review of the actual emissions during the ten year period preceding the renewal date will provide a more valid result for any PAL than a reexamination of data from 1999-2000 for these other PALs.38

If what the Executive Director says with respect to our comments regarding

ExxonMobil's NOx and VOC PALs is true, it is also true for ExxonMobil's PM PAL. If the

35 Executive Director's Response to Comments Regarding Pennit No. PAL6 ("Response to Comments") at 6. 36 EIP Comments at 8-1l. 37 [d. at 9. 38 ED Response Brief at 7 (emphasis added).

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Executive Director is not obligated to reduce ExxonMobil's NOx and VOC PALs to negate

ExxonMobil's improper upward adjustments to actual emissions represented in its PAL permit

application, why is the Executive Director obligated to reopen ExxonMobil's PAL permit to

increase the PM PAL before renewal? Indeed, the Executive Director's point about the

advantages of evaluating ExxonMobil's PALs in light of the most reliable information available

clearly applies to PM emissions from ExxonMobil's cooling towers. That is so because the

emission factors the Executive Director used to calculate the PM PAL increase are the very

same "unreliable" factors that led to the Commission's policy of excluding PM emissions tram

cooling towers from permits in the first place?9 Though reliable methods for monitoring and

quantifying PM emissions from cooling towers have been developed, the Executive Director

contends that they should not be used in this case:

While the development and use of site-specific factors may provide more accurate emissions estimations, the published factors should provide an estimate that is reasonably conservative and consistent with the approach used for similar facilities. In [the 1 absence of factors developed during the baseline period, the Executive Director's position is that historic determinations should be based on the best information available at that time.4o

But, if the "best information available at that time" is not really that good, why rely on it? The

Executive Director confuses matters further by admitting that "{tlhe TCEQ's current practice is

to update NSR permits to include PM emissions from cooling towers at the time of permit

39 ExxonMobil and the Executive Director explain that they relied on EPA's Refinery Emissions Protocol to calculate baseline actual PM emissions from the cooling tower. EPA's Refinery Emissions Protocol directs owners and operators to use emission factors from AP-42 (U.S. EPA, 1995a; Sections 5.1 and 13.4) to calculate PM emissions from cooling towers. Emission Estimate Protocol for Petroleum Refineries Version 2.1.1, available electronically at httl':!/www.epa.gov/ttnchic1!cfpaciprotocoIJEmission Estimation Protocol for Petroleum Refineri" 052011.pdf at 8-11.

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renewal. ,,41 This whole exerCise of reopening the PAL permit now instead of waiting for

renewal to adjust ExxonMobil's limits based on reliable information does not make any sense ..

. until one looks at the Commission's PAL renewal rules and sees that: "[t]he renewed PAL shall

not exceed the potential to emit for the source and shall not be set at a level higher than the

current PAL. unless the PAL is being amended in accordance with § 116.192(a) of this title . ..

concurrently with the renewal. ,,42 ExxonMobil cannot wait for renewal, because PAL increases

at renewal-like all PAL increases-must be made through an amendment. Again, it seems, the

Executive Director's reopening of ExxonMobil's PAL permit serves no legitimate purpose and

that the project was undertaken to circumvent the Commission's rules.

The Executive Director failed to demonstrate that his decision to increase ExxonMobil's

PM PAL based on unreliable information provided by ExxonMobil, while declining to even -

consider Movants' evidence that ExxonMobil's VOC and NOx PALs must be adjusted

downward, was based on legally relevant factors. The administrative record, including the

Executive Director's Response to Public Comments and the Executive Director's Response

Brief, strongly suggests that his decision was based upon legally irrelevant factors (to put it

charitably). Because this is so, the Commission should overturn the Executive Director's

decision to reopen ExxonMobil' s PAL permit.

G. The Executive Director's Determination that the Increased PM PAL Reflects a More Accurate Determination of Emissions Used to Establish the PAL is Nonsensical.

In its PAL permit application, ExxonMobil used unreliable emission factors to calculate

baseline actual PM emissions for nearly every facility at the Baytown Olefins Plant, including its

41 Response to Comments at 6 (emphasis added). 42 30 Tex. Admin. Code § 116.196(e).

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four boilers, its furnaces, and its gas turbines.43 None of the emissions data that ExxonMobil

used to calculate its PM PAL was based on stack testing or direct PM monitoring. As Movants'

comments point out, the AP-42 emission factor ExxonMobil used to calculate PM emissions

from all or almost a1l44 of its combustion sources has been given an Emission Factor Rate of"D"

or "Below Average" by EP A!S According to EPA, this emission factor is unreliable because it

is based on "test data from a small number of facilities, and there may be data that these facilities

do not represent a random sample of the industry" or "there may be evidence of variability

within the source category population. ,,46

Movants also commented that applicants who rely on emission factors to calculate

baseline actual emissions in a PAL permit application must conduct validation testing within six

months of PAL permit issuance to develop site-specific emission factors. 47 While ExxonMobil

has conducted stack testing for at least some combustion units at the Baytown Olefins Plant,

which it now uses to demonstrate compliance with its PM PAL,48 ExxonMobii has not validated

any of its application data through stack tests and-apparently-has declined to share the results

of the tests it has conducted with the Executive Director. ExxonMobil' s failure to validate its

application data is an ongoing violation of the Commission's PAL rules. As a consequence of

this noncompliance, the Executive Director does not have the information he needs to assess the

accuracy of emissions information used to establish ExxonMobil's PM PAL.

43 EIP Comments, Attachment G. 44 While Attachment G (excerpt from ExxonMobil's initial PAL application) states that boiler emissions were based upon the AP-42 emission factor, other sections of the application indicate that emissions for boilers A and B were based on different emission factors. Boiler A's baseline emissions may have been calculated using an emission factor ofO.00936Ib/MMBtu. Boiler B's emissions during 1999 may have been calculated using an emission factor of .00936 Ib/MMBtu and its emissions during 2000 may have been calculated using an emission factor of .009 Ib/MMbtu. 4' EIP Comments at 5. 46 !d. 47 EIP Comments at 4; 30 Tex. Admin. Code § 116.186(c)(3)(D)(iii). 48 EIP Comments at 5. n9.

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Despite ExxonMobil's failure to comply with the Commission's validation requirement,

the known shortcomings of the AP-42 emission factor used to calculate emissions from nearly

every facility included in ExxonMobil's initial PM PAL calculations, and the questionable basis

of the method ExxonMobil used to calculate actual emissions from its cooling towers, the

Executive Director nonetheless contends that the new PM PAL of 463.55 tons per year reflects a

more accurate determination of emissions used to establish the PAL. This contention is

incredible. It lacks credibility. The Executive Director should not reward ExxonMobil's non­

compliance by arbitrarily increasing its PM PAL. If the Executive Director's primary concern is

ensuring that the PM PAL accurately reflects baseline actual emissions, he should require

ExxonMobil to validate its PM PAL application data and consider the results of that testing

along with data regarding PM emissions from ExxonMobil's cooling towers to determine

whether an "upward adjustment" is necessary. The Executive Director's failure to do so

suggests that his motivation for reopening ExxonMobil's PM PAL-which is the first PAL the

Executive Director has ever reopened49 --only after ExxonMobil filed a request for the increase

and shortly after ExxonMobil obtained minor NSR authorizations for significant sources of PM,

and shortly before the Executive Director will be required to determine whether PM emissions

from ExxonMobil's cooling towers are significant has nothing to do with ensuring that the PM

PAL accurately reflects baseline actual emissions. Whatever the Executive Director's actual

motivation, the reopening was improper and it has the effect of allowing ExxonMobil to

circumvent minor and major NSR permitting requirements.

III. CONCLUSION

As explained above, the Executive Director's reopening of ExxonMobil's PAL permit to

increase ExxonMobil's PM PAL is contrary to the clear unambiguous language of the

49 ED Response Brief at 1 ("This PAL reopening application is the ftrst undertaken by the Executive Director").

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Commission's rules and allows ExxonMobii to circumvent minor and major NSR requirements. ,

In addition, the record evidence does not demonstrate that the increased PM PAL more

accurately reflects emissions used to establish the PAL. Indeed, ExxonMobil's ongoing

noncompliance with the Commission's PAL validation requirements has deprived the Executive

Director of information he needs to make that determination. Lastly, the Executive Director

failed to consider Movants' evidence that ExxonMobil's NOx and VOC PALs should be

adjusted downward. For these and all other reasons explained above and in our comments and

Motion to Overturn, Movants respectfully request that the Commission overturn the Executive

Director's reopening of Permit No. 34521PAL6.

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Respectfully Submitted, ENVIRONMENTAL

By:

Ga riel lark-Leach 1002 West Ave, Suite 305 Austin, Texas 78701 Phone: 512-637-9478 Fax: 512-584-8019

CERTIFICATE OF SERVICE

I certify that I have served true and correct copies of Environmental Integrity Project, Air Alliance Houston, and Sierra Club's Reply to Responses to Our Motion to Overturn the Executive Director's Reopening of Permit No. PAL6 to the person identified belo , on this the 8th day of August, 2014.

FOR THE APPLICANT: Mr. Kevin Brewer (email and regular mail) NSR Team Lead Exxon Mobil Corporation 3525 Decker Dr. Baytown, Texas 77520

Derek Seal (email) Winstead PC 401 Congress, Suite 2100 Austin, Texas 78701

FOR THE EXECUTIVE DIRECTOR: Ms. Janis Hudson (email and regular mail) Texas Commission on Environmental Quality Environmental Law Division, MC-173 P.O. Box 13087 Austin, Texas 78711-3087

FOR THE PUBLIC EDUCATION PROGRAM: Mr. Brian Christian (email and regular mail) Texas Commission on Environmental Quality Small Business and Environmental Assistance Division Public Education Program, MC-108 P.O. Box 13087 Austin, Texas 78711-2087

Rebecca Rentz (email and regular mail) Winstead PC 1100 JPMorgan Chase Tower 600 Travis Street Houston, Texas 77002

Ms. Kristi Mills-Jurach, P.E. (email) Texas Commission on Environmental Quality Office of Air Air Permits Division, MC-163 P.O Box 13087 Austin, Texas 78711-3087

FOR PUBLIC INTEREST COUNSEL: Vic McWherter (email and regular mail) Texas Commission on Environmental Quality Public Interest Counsel, MC-I03 P.O. Box 13087 Austin, Texas 78711-3087

FOR THE CHIEF CLERK: Ms. Bridget Bohac (electronic filing) Texas Commission on Environmental Quality Office of the Chief Clerk, MC-lOS

P.O. Box 13087 Austin, Texas 78711-3087