On Friday, June 10, 2005, the Louisiana Department of Environmental Quality (LDEQ) enacted an Emergency Rule to adopt the 8-hour primary and secondary National Ambient Air Quality Standards for ozone and to revoke the 1-hour standards (both primary and secondary standards). The rule also establishes special Nonattainment New Source Review provisions for the 5-Parish Baton Rouge Nonattainment Area (Ascension, East Baton Rouge, Iberville, Livingston and West Baton Rouge Parishes). The rule becomes effective on June 15, 2005, the same date that the federal 1-hour ozone NAAQS are revoked.

As an Emergency Rule, it will be effective for only 120 days (until October 13, 2005), unless extended by another emergency rule or replaced by a permanent rule prior to that time.

The special provisions for the Baton Rouge Nonattainment Area establish a major source threshold of 50 TPY for volatile organic compounds (“VOCs”) and nitrogen oxides (“NOx”). Because the Baton Rouge Nonattainment Area has been classified as marginal under the 8-hour standard by EPA, without this Emergency Rule, as of June 15, 2005 when the 1-hr standard is revoked, the major source threshold would have increased from the existing 25 TPY level (applicable to areas classified as severe under the 1-hr standard) to 100 TPY level (applicable to areas classified as marginal under the 8-hr standard). Thus, LDEQ chose a middle ground approach by establishing a 50 TPY threshold to trigger nonattainment new source review for construction of a new source.

The Emergency Rule did not change the trigger level for major modifications at major sources, but did change the procedure for evaluation of a major modification. The trigger level for a major modification remains at a level of 25 TPY net emissions increase of either VOCs or NOx. Without the Emergency Rule, this level would have increased to 40 TPY upon the revocation of the 1-hr standard. However, consideration of whether a net emission increase has occurred over the contemporaneous period (involving netting of all creditable increases and decreases over the 5 year period prior to date construction is to commence up to date of new modification becoming operational) is required only when the particular project under review causes an emissions increase in 25 TPY of NOx or VOCs (exclusive of project decreases), except if there are project increases of Highly Reactive VOCs (“HRVOCs”), the threshold for the project is 10 TPY. Thus, the size of a project triggering the netting analysis is increased over the prior 5 TPY project increase for NOx or VOCs that existed under nonattainment new source review for the 1-hour standard under the serious and severe classifications. HRVOCs are defined as acetaldehyde; 1,3 butadiene; butanes (all isomers); ethylene; propylene; toluene; xylene (all isomers); and isoprene.

The special nonattainment New Source Review provisions for the Baton Rouge Area establish an offset ratio of 1.2:1 for new projects triggering the above major new source or major modification thresholds. Without the Emergency Rule, the offset ratios would be the 1.1:1 offset required for marginal areas. However, the required offset ratio is not as great as the ratios required for severe areas under the prior 1-hour classifications, which were 1.3:1 ratio with application of Lowest Achievable Emission Rate (“LAER”) or 1.5:1 internal offset without LAER.

The Emergency Rule is effective for all permits issued on or after June 15, 2005. As noted, this Emergency Rule remains in effect only for 120 days, unless continued by another emergency rule or replaced by a permanent rule. The full text of the Emergency Rule is available at http://www.deq.state.la.us/planning/regs/pdf/AQ253E.pdf.