Texas Natural Resource Conservation Commission 
                            Interoffice Memorandum

To:  Tammy Villareal, Manager, Chemical Section, New Source Review Permit Division
James Randall, P.E., Manager, Coatings/Combustion Section, New Source Review Permit Division
Date:  June 4, 1998
From:  David Duncan, Senior Attorney, Legal Division
Subject:  Application of 30 TAC 106.352, subsections  (1) and (2)

Question:  Do the site wide emission limits of 30 TAC 106.352(2) apply to facilities authorized
under 30 TAC 106.512 or 106.492 as anticipated by 106.352(1)?

Short Answer:  No.  The general rule under the Texas Clean Air Act ("TCAA") that facilities are
separately authorized, along with the inconsistent application of this language by different New
Source Review Permit ("NSR") sections leads to a conclusion that these facilities are separately
authorized by sections 106.512 or 106.492, not "under" 106.352.

Discussion: 30 TAC 106.352 is a standard exemption which authorizes construction of certain
oil and gas production facilities.  Unlike most exemptions, 106.352 references other exemptions
(for flares and stationary engines and turbines) in its text.  That exemption also limits site wide
emissions to 25 tons per year (tpy) of SO2 or VOC, and 250 tpy of NOx or CO "from all such
facilities constructed at a site under this section."  These two references in the exemption created
the concern that all facilities authorized under 106.512 or 106.492 at a site where facilities were
also authorized by 106.352 might fall under the site-wide limitation in 106.352(2).

The language cross referencing other exemptions has existed since the exemption was number 103
in May of 1981 (103(3) referenced gas-oil separators and combustion units rather than flares and 
engines). From the historic standard exemption lists containing these cross references and site
wide limits, there does not appear to be any contemporaneous explanation of the rationale of the
language linking the exemptions with others for flares and engines.  Standard exemptions were
not promulgated by rule with explicit explanations for each exemption until the early 1990s,
therefore no "reasoned justification" explanation of the change was required to accompany the
original "cross reference" exemption when it was created.

From discussions with permit engineers in the Chemical and Combustion sections of TNRCC's
NSR Division, the two sections have not read these sections consistently.  The Combustion
section believes the engines/turbines (106.512) and flares (106.492) at these sites are separately
authorized by their own exemption sections and are limited only by the site wide emission limits of
106.4 (the same 25/250 limit on site wide emissions unless at least one facility at the site has
been subject to public notice).  The concern regarding the interplay of the various Chapter 106
sections involved in this discussion was raised by staff of the Chemical section.

Rules adopted pursuant to the authority of the TCAA are interpreted according to the Code
Construction Act ("CCA"), Texas Government Code Chapter 311 (Vernon's 1995).  CCA
311.002(4).  The general presumptions of statutory (and rule) construction include:   (1)
compliance with the Texas and U.S. constitutions is intended; (2) the entire statute/rule is
intended to be effective; (3) a just and reasonable result is intended; (4) a result feasible of
execution is intended; and, (5) public interest is favored over private interest.  CCA 311.021. 
When interpreting and applying the language of rules and statutes, the language on the face of the
rule or statute itself is of paramount importance - if it is clear, no "interpretation" is necessary or
allowed.  Id.

The basic premise of the NSR permit system created by the TCAA is that all "facilities" must
either be permitted, exempt, or grandfathered.  382.051, 382.0518.  The section authorizing
commission creation of standard exemptions by rule, 382.057, is also written in terms of
authorization of "facilities."  In light of this general rule, the language of 106.352(2) that
emissions are limited to a certain total "from all such facilities constructed at a site under this
section . . ." should be read to apply only to facilities authorized by that exemption, not those
authorized under other exemptions. 

The language of 106.352(1) may be seen simply as a cross reference to alert operators that they
may not utilize the "Oil and Gas Production Facilities" exemption to authorize flares or
engines/turbines, and that these facilities must meet the requirements of those separate
exemptions.  This reading most fully gives effect to the general language of the TCAA, both in the
permitting sections (382.051-.0518) and the exemption section (382.057) in that separate facilities
are authorized through separate exemptions.  Finally, due to the inconsistent interpretations of the
language of this section, it would be difficult for the agency to enforce a strict reading that the
flares and engines must fit within the site wide emission limits of 106.352.