The document summarizes guidance from the EPA and state regulatory agencies on the process of inter-precursor trading (IPT) for ozone precursors nitrogen oxides (NOx) and volatile organic compounds (VOCs). IPT allows emissions offsets between NOx and VOCs since both contribute to ozone formation. The guidance outlines tiered screening and modeling approaches to determine area-specific or case-specific IPT ratios. A case study demonstrates how different ratios can result from EPA versus state guidance. Key differences that impact projects are highlighted. Planning ahead and understanding facility profiles and credit sources is advised.

1. www.all4inc.com | Philadelphia | Atlanta | Houston | Washington DC
Inter-Precursor Trading (IPT)
Guidance
ALL4 Houston|281.937.7553 |all4inc.com
30th Annual Environmental, Health & Safety Seminar
Galveston, Texas | June 5, 2017
Texas Chemical Council (TCC), Association of Chemical Industry of Texas (ACIT), Louisiana Chemical
Association (LCA), Louisiana Chemical Industry Alliance (LCIA)

2. 2 Your environmental compliance is clearly our business.
Click to edit Master title style
 Background
 IPT Guidance
 Ozone Formation and Tier 1 Approach
 Approach for Area Specific IPT Ratio
 Approach for case-by-case IPT Ratio
 Comparison with TCEQ’s IP/IB Guidance
 Case Study

3. 3 Your environmental compliance is clearly our business.
Click to edit Master title style
“the offset requirement for emissions of ozone
precursors NOX and VOC to be satisfied by offsetting
reduction in emissions of either of those precursors…”
 Federal Regulatory Drivers
• 40 CFR 51, Subpart I, Section 51.165 (a)(11)(i) Permit
Requirements &
• 40 CFR 51, Appendix S, Emission Offset Interpretative Ruling
 State Regulatory Drivers
• Texas – Title 30 Texas Administrative Code (TAC) §101.302(a)
and §101.372(a)
• Louisiana – Title 33 Louisiana Administrative Code (LAC), Part III
§504.F (AQ354)
Background – Why?

4. 4 Your environmental compliance is clearly our business.
Click to edit Master title styleBackground – Ozone Formation
sunlight
VOC + NOX O3 (and other products)
No sunlight  no ozone production
No NOx  no ozone production
No VOC  no ozone production

5. 5 Your environmental compliance is clearly our business.
Click to edit Master title style
 VOC Limited – When hydroxide (OH) radicals
production is less than the rate of production of NOX,
Ozone production is VOC limited.
 NOX Limited – When rate of OH production is greater
than the rate of production of NOX, indicating NOX in
short supply, Ozone production is NOX limited.
 NOX Disbenefits – NOX emissions can lead to not only
formation but sometime destruction of ozone, slows
the ozone formation rate. NOX disbenefits is
phenomenon where NOX emissions reductions can
lead to ozone increases instead of decreases.
Background – Ozone Formation

6. 6 Your environmental compliance is clearly our business.
Click to edit Master title style
 On October 04, 2016, U.S. EPA published draft
guidance document - “Technical Guidance for
Demonstration of Inter-precursor Trading (IPT) for
Ozone in the Nonattainment New Source Review
Program”
 Technical guidance for both air agencies and permit
applicants
 Approach to establish an area specific ozone IPT ratio
• Screening Approach
• Refined Approach
 Approach to establish a case-specific ozone IPT ratio
• Tier 2 Refined Photochemical Modeling Approach
IPT Guidance

7. 7 Your environmental compliance is clearly our business.
Click to edit Master title style
 Screening Approach
• Analysis of existing technically credible data
 Emissions inventory data
 Ambient monitoring data
 Meteorological data for area
• Establish Ozone Formation
 NOX limited area or
 VOC limited area
• If NOX Limited
 Offset ratio of 1:1 for NOX credits
 No VOC credit allowed
IPT Guidance – Area Specific IPT Ratio
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
AnnualNOXConcentration(ppb)
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
AnnualAverageMeasurement(ppb)
Year
Ethylene Emissions
Surface
Pressure
Relative
Humidity
(%)

8. 8 Your environmental compliance is clearly our business.
Click to edit Master title style
 Refined Approach
• Use of new or existing NOX and VOC single-source impacts
on downwind ozone assessment to estimate IPT ratio
 Existing relevant technical information such as air quality
modeling data for hypothetical industrial source can be used
 Depending on the size of the original study, this can be only
developed for a sub-area
 The use of pre-existing credible information for this purpose will
be done by air agencies in consultation with EPA
• Comparability analysis
 Includes average and peak temperatures, humidity, terrain, rural
or urban nature, nearby regional sources, and ambient
concentration profiles
• EPA’s MERP Guidance can be used
IPT Guidance – Area Specific IPT Ratio

9. 9 Your environmental compliance is clearly our business.
Click to edit Master title style
 Permit applicant may choose to NOT rely on the air
agency’s default ozone IPT ratio
 Case Specific IPT ratio allows permit applicant to
develop robust IPT ratio applicable to the project
specific circumstances
 Case Specific Approach
• Consult with agencies and prepare protocol
• Conduct photochemical gird modeling for post-project
emissions increases and credit sources and compare
impacts
• Submit modeling report and modeling files
• Get approval from State air agency and EPA
IPT Guidance – Case Specific IPT Ratio

10. 10 Your environmental compliance is clearly our business.
Click to edit Master title stylePhotochemical Models
Photochemical models are numerical models that
simulate the emission, chemical transformation,
transport, and deposition of gases and aerosols
Gases and
Aerosols
Emissions
Chemical
Transformation
Transport
Deposition

11. 11 Your environmental compliance is clearly our business.
Click to edit Master title stylePhotochemical Models

12. 12 Your environmental compliance is clearly our business.
Click to edit Master title styleCAMx – Photochemical Grid Model
Figure from: CAMx User’s Guide Version 6.0,
Environ, May 2013: Pg. 7.

13. 13 Your environmental compliance is clearly our business.
Click to edit Master title style
 Identify the location of the project source (VOC
increases) and relevant credit source (NOX decreases)
 Model the project source and credit source(s) using
appropriate model (CAMx) to develop modeled
Ozone impacts from precursors
 Compare the modeled results
• All modeled impacts in grid cells within nonattainment
area with elevated ozone prediction
• Use NAAQS relevant averaging period – daily maximum 8-
hr average
• Discard the negative impacts (i.e. project impact > credit)
• Hourly ozone impacts summed over all grid cells in the
area
• Impacts from VOC and NOX compared to daily IPT ratios
IPT Guidance – Case Specific IPT Ratio

14. 14 Your environmental compliance is clearly our business.
Click to edit Master title style
 Calculate IPT Ratio are calculated as the product
of the “relative change in emissions” and the
“relative change in the modeled ambient O3 levels
due to precursors
• NOX emissions increases offset by VOC credits
Ratio of 𝑁𝑁𝑁𝑁𝑁𝑁: 𝑉𝑉𝑉𝑉𝑉𝑉 =
𝑁𝑁𝑁𝑁𝑁𝑁 𝑡𝑡𝑡𝑡𝑡𝑡
𝑉𝑉𝑉𝑉𝑉𝑉 (𝑡𝑡𝑡𝑡𝑡𝑡)
∗
𝑂𝑂𝑂 𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓 𝑁𝑁𝑁𝑁𝑁𝑁 𝑝𝑝𝑝𝑝𝑝𝑝
𝑂𝑂𝑂 𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓 𝑉𝑉𝑉𝑉𝑉𝑉 𝑝𝑝𝑝𝑝𝑝𝑝
• VOC emission increases offset by NOX credits
Ratio of 𝑉𝑉𝑉𝑉𝑉𝑉: 𝑁𝑁𝑁𝑁𝑁𝑁 =
𝑉𝑉𝑉𝑉𝑉𝑉 𝑡𝑡𝑡𝑡𝑡𝑡
𝑁𝑁𝑁𝑁𝑁𝑁 (𝑡𝑡𝑡𝑡𝑡𝑡)
∗
𝑂𝑂𝑂 𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓 𝑉𝑉𝑉𝑉𝑉𝑉 𝑝𝑝𝑝𝑝𝑝𝑝
𝑂𝑂𝑂 𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓 𝑁𝑁𝑁𝑁𝑁𝑁 𝑝𝑝𝑝𝑝𝑝𝑝
IPT Guidance – Case Specific IPT Ratio

15. 15 Your environmental compliance is clearly our business.
Click to edit Master title style
EPA’s IPT Guidance
 IPT guidance is optional and
includes Tier 1 & 2 approaches
 IPT is guidance is case-by-case
and subject to agency approvals
 IPT ratio calculation may require
multiple modeling runs for
different scenarios
 Credit source(s) modeled at
credit source location
 Analysis of the entire basin and
all grid cells in the domain is
required
 Maximum daily day-by-day
impact evaluation is required
IPT vs Inter-pollutant (IP)
TCEQ’s IP Guidance
 IP guidance is mandatory for
permit applicants
 IP guidance provides a detailed
procedure for modeling
 IP ratio calculation is more
straightforward and depends on
the impact
 Credit(s) modeled within 1 km
circle from the project source
location
 Analysis of only grid cells with
high ozone impact is required
 Analysis of ozone monitors
within the nonattainment area is
required

16. 16 Your environmental compliance is clearly our business.
Click to edit Master title style
 Hypothetical Industrial Facility located in the
Houston-Galveston-Brazoria (HGB) area
 Typical industrial facility with petrochemical/refinery
source profile
• Industrial boilers
• Engines
• Catalytic cracking units
• Tank farm
• Polymerization and Alkylation Units etc.
 Project – VOC emissions increase of ~ 145 tpy
 Credit – NOX emissions credits
• Option 1 – Control existing boilers
• Option 2 – Utilize existing ERC
Case Study - Project

17. 17 Your environmental compliance is clearly our business.
Click to edit Master title style
EPA’s IPT Guidance
 Option 1
• IPT Ratio
VOC:NOX = 1:1
 Actual ratio 1:0.55
 Option 2
• IPT Ratio
VOC:NOX = 1:3.47
Case Study - Results
TCEQ’s IP Guidance
 Option 1
• Overall Air Quality
VOC:NOX = 1:1
 Actual ratio 1:0.28
• Design Value Analysis
VOC: NOX = 1:**
 Option 2
• Same as above

18. 18 Your environmental compliance is clearly our business.
Click to edit Master title style
Option 2 – Credit source
at Project Location
Option 1 – Credit source
at Project Location
Case Study - Results
Monitor 3
Monitor 2
O3 Titration
Monitor 1
Project
O3 Formation
Credit
O3 Titration
Monitor 1
Source
O3 Formation
Monitor 2
Monitor 3
Credit

19. 19 Your environmental compliance is clearly our business.
Click to edit Master title style
 IPT Guidance provides technical guidance to establish area
specific as well as case-by-case specific IPT ratio
 Depending on the project situation, the IPT ratio can vary
significantly – different atmospheric conditions can influence
precursor potential of ozone formation
 EPA’s IPT and TCEQ’s IP Guidance document difference in
several aspects
 Differences in the guidance can impact project timeline and
outcome
 Be aware of unique situations like NOX Disbenefits
 If you have an upcoming project
• Plan ahead and understand your facility profile
 Understand the VOC speciation
 Understand the Credit sources
• Complete some fatal flaw analysis
• Engage agency earlier in the process (if possible)
Conclusions

20. Q&A and Discussion
Thank You !!!