Michigan Department of Environmental Quality
Air Quality Division
State Registration Number
N5955
RENEWABLE OPERATING PERMIT
STAFF REPORT
ROP Number
MI-ROP-N5955-2014
Lotus Engineering, Inc.
SRN: N5955
Located at
1254 Main Street, Ann Arbor, Washtenaw, Michigan 48104
Permit Number:
MI-ROP-N5955-2014
Staff Report Date:
August 11, 2014
This Staff Report is published in accordance with Sections 5506 and 5511 of Part 55, Air Pollution
Control, of the Natural Resources and Environmental Protection Act, 1994 PA 451, as amended (Act
451). Specifically, Rule 214(1) requires that the Michigan Department of Environmental Quality (MDEQ),
Air Quality Division (AQD), prepare a report that sets forth the factual basis for the terms and conditions
of the Renewable Operating Permit (ROP).
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TABLE OF CONTENTS
AUGUST 11, 2014 STAFF REPORT
3
SEPTEMBER 11, 2014 STAFF REPORT ADDENDUM
9
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Michigan Department of Environmental Quality
Air Quality Division
State Registration Number
N5955
RENEWABLE OPERATING PERMIT
AUGUST 11, 2014 STAFF REPORT
ROP Number
MI-ROP-N5955-2014
Purpose
Major stationary sources of air pollutants, and some non-major sources, are required to obtain and
operate in compliance with a ROP pursuant to Title V of the federal Clean Air Act of 1990 and Michigan’s
Administrative Rules for air pollution control pursuant to Section 5506(1) of Act 451. Sources subject to
the ROP program are defined by criteria in Rule 211(1). The ROP is intended to simplify and clarify a
stationary source’s applicable requirements and compliance with them by consolidating all state and
federal air quality requirements into one document.
This report, as required by Rule 214(1), sets forth the applicable requirements and factual basis for the
draft permit terms and conditions including citations of the underlying applicable requirements, an
explanation of any equivalent requirements included in the draft permit pursuant to Rule 212(5), and any
determination made pursuant to Rule 213(6)(a)(ii) regarding requirements that are not applicable to the
stationary source.
General Information
Stationary Source Mailing Address:
Lotus Engineering, Inc.
1254 Main Street
Ann Arbor, Michigan 48104
N5955
541380
Source Registration Number (SRN):
North American Industry Classification System
(NAICS) Code:
Number of Stationary Source Sections:
Is Application for a Renewal or Initial Issuance?
Application Number:
Responsible Official:
AQD Contact:
Date Permit Application Received:
Date Application Was Administratively Complete:
Is Application Shield In Effect?
Date Public Comment Begins:
Deadline for Public Comment:
1
Renewal
201400075
Tim Holland, Director of Group Resources
734-995-2544
Diane Kavanaugh Vetort, Senior EQA
517-780-7864
May 7, 2014
May 7, 2014
Yes
August 11, 2014
September 10, 2014
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Source Description
Lotus Engineering, Inc., (formerly Michigan Automotive Research Corporation) is located at 1254 North
Main Street, on the north side of the City of Ann Arbor, in a light industrial/commercial zone. Lotus
operates an existing automotive research and testing facility principally involved in non-production
research and development activities testing internal combustion engines and drive trains for the
automotive industry. Lotus’ emission units consist of two (2) permitted diesel engine/transmission
dynamometer testing cells (referred to as TEST SITES). Lotus also operates twenty-three (23) exempt
engine/transmission dynamometer testing sites, and five (5) exempt vehicle chassis dynamometers with
the capacity to operate five vehicle test sites simultaneously. Other exempt emission units include two
(2) compartmented underground storage tanks for fuel storage (compartment sizes: two 15,000 gallon,
one 12,000 gallon, one 10,000 gallon and one 8,000 gallon), thirty-five (35) natural gas-fired space
heaters and two cold cleaners. The engine dynamometer test sites conduct research and development
performance, durability, and emission certification tests on engines, engine components and drive train
components that are supplied by outside manufacturers. The engines tested in the dynamometer sites
have the potential to be fired with gasoline, diesel or similar fuels.
The following table lists stationary source emission information as reported to the Michigan Air Emissions
Reporting System in the 2013 submittal.
TOTAL STATIONARY SOURCE EMISSIONS
Pollutant
Carbon Monoxide (CO)
Lead (Pb)
Nitrogen Oxides (NOx)
Particulate Matter (PM)
Sulfur Dioxide (SO2)
Volatile Organic Compounds (VOCs)
Individual Hazardous Air Pollutants (HAPs) **
Total Hazardous Air Pollutants (HAPs)
**As listed pursuant to Section 112(b) of the federal Clean Air Act.
Tons per Year
160
NA
9
<1
<1
7
-
In addition to the pollutants listed above that have been reported in MAERS, the potential to emit of
Greenhouse Gases in tons per year of CO2e is less than 100,000. CO2e is a calculation of the
combined global warming potentials of six Greenhouse Gases (carbon dioxide, methane, nitrous oxide,
hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride).
See Parts C and D in the draft ROP for summary tables of all processes at the stationary source that are
subject to process-specific emission limits or standards.
Regulatory Analysis
The following is a general description and history of the source. Any determinations of regulatory nonapplicability for this source are explained below in the Non-Applicable Requirement part of the Staff
Report and identified in Part E of the ROP.
The stationary source is located in Washtenaw County, which is currently designated by the U.S.
Environmental Protection Agency (USEPA) as attainment/unclassified for all criteria pollutants.
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The stationary source is subject to Title 40 of the Code of Federal Regulations (CFR), Part 70, because
the potential to emit carbon monoxide and nitrogen dioxide exceeds 100 tons per year.
The stationary source is considered to be a minor source of HAP emissions because the potential to emit
of any single HAP regulated by the federal Clean Air Act, Section 112, is less than 10 tons per year and
the potential to emit of all HAPs combined are less than 25 tons per year.
EUTESTSITE17E and EUTESTSITE17S at the stationary source were subject to review under the
Prevention of Significant Deterioration regulations of Part 18, Prevention of Significant Deterioration of
Air Quality, of ACT 451 because at the time of New Source Review permitting the potential to emit of
carbon monoxide was greater than 250 tons per year.
Although EUTESTSITE1-16, and EUTESTSITE18-24 were installed after August 15, 1967, this
equipment was exempt from New Source Review (NSR) permitting requirements at the time it was
installed. However, future modifications of this equipment may be subject to NSR.
EUTANK A/B and EUTANK C/D/E at the stationary source are subject to the National Emissions
Standards for Hazardous Air Pollutants for Gasoline Dispensing Facilities promulgated in 40 CFR,
Part 63, Subparts A and CCCCCC (GDF Area Source Maximum Achievable Control Technology (MACT)
Standard). The ROP contains special conditions provided by Lotus for applicable requirements from
40 CFR, Part 63, Subparts A and CCCCCC. The AQD is not delegated the regulatory authority for this
area source MACT; therefore, the special conditions for the GDF Area Source MACT contained in
FGGDFMACT were not reviewed by the AQD.
Lotus has organized their Emission Units into the following Flexible groupings:
FGTESTSITES contains the two diesel engine test cell/stand dynamometers EUTESTSITE17E and
EUTESTSITE17S.
FGOTHERTESTSITES contains EUTESTSITE1-16, and EUTESTSITE18-24 engine test cell/stand
dynamometers using gasoline or diesel fuel and exempt from the requirements of Rule 201 pursuant to
Rule 285 (g).
FGCOLDCLEANERS includes the flexible group template for non-halogenated solvent cold cleaners
exempt from Rule 201 pursuant to Rule 278 and Rule 281(h) or Rule 285(r)(iv).
FGGDFMACT in the ROP includes the new federal applicable requirement, GDF MACT or GACT, for
EUTANK A/B and EUTANK C/D/E. GDF means any stationary source which dispenses gasoline into the
fuel tank of a motor vehicle, motor vehicle engine, non-road vehicle, or non-road engine, including a nonroad vehicle or non-road engine use solely for competition. These facilities include, but are not limited to,
facilities that dispense gasoline into on- and off-road, street, or highway motor vehicles, lawn equipment,
boats, test engines, landscaping equipment, generators, pumps, and other gasoline-fueled engines and
equipment.
Lotus’ maximum monthly gasoline throughput at the time of ROP application was less than 10,000
gallons. However Lotus’ Table FGGDFMACT contains both the applicable requirements for a source
dispensing less than 10,000 gallons of gasoline throughput per year, and the applicable requirements for
a source dispensing between 10,000 gallons and 100,000 gallons of gasoline. Lotus proposed this in the
event their GDF applicability changes in the future. GDF could potentially be subject to a different
threshold. Records of monthly throughput are required on the basis of total volume of gasoline that is
loaded into, or dispensed from, all gasoline storage tanks at each GDF during a month. If an affected
source’s throughput ever exceeds an applicable throughput threshold, the affected source will remain
subject to the requirements for sources above the threshold, even if the affected source throughput later
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falls below the applicable throughput threshold (40 CFR 63, 63.11111(i)). Again, the ROP contains
special conditions provided by Lotus for applicable requirements from 40 CF, Part 63, Subparts A and
CCCCCC.
Permit History
In 2008, Lotus submitted a Permit to Install (PTI) application for approval to perform testing of diesel
powered engines with maximum heat inputs greater than 10 MMBtu per hour. The engines therefore
have maximum heat input in excess of the Rule 285(g) 10 MMBtu per hour exemption. The AQD issued
an approved PTI No. 112-08 on April 25, 2008, for the two existing engine dynamometer test sites at the
facility. The PTI contained NOx, and CO emission limits below the major source thresholds and material
usage limits for use of diesel fuel only and gallons per 12-month rolling time period. The diesel engines
were also evaluated pursuant to Rule 702, Rule 224/225 and Rule 901 at the time of NSR permitting.
Lotus conducted performance testing in 2008 and the results indicated the NOx emission factor was
greater than that used as the basis for the initial PTI No. 112-08. Lotus applied for and was issued a
modified PTI No. 112-08A on April 21, 2009, for a reduction in the fuel usage limit.
Lotus was issued an initial ROP in 1996. The previous renewal ROP No. MI-ROP-N5955-2003 was
issued on September 15, 2003, and the renewal ROP No. MI-ROP-N5955-2009 was issued on
November 20, 2009.
In a prior renewal application, Lotus requested to rename the engine dynamometer test cell/stand/site
emission units for clarity and consistency. The nomenclature chosen is test “site” to represent the
individual dynamometer. EUTESTSITE17E, EUTESTSITE17S and FGTESTSITES remain in the current
Renewal ROP. Furthermore, EUTESTSITE17E and EUTESTSITE17S are located in the same room
and were initially permitted to have four exhaust stacks to vent combustion gases from the engines.
During prior Technical review, Lotus provided information that they determined three stacks were
sufficient based on the combined engine capacity of the test sites. Therefore reference to the fourth
stack was removed.
During prior Technical Review, the existing underground fuel storage tanks (USTs) were reviewed for
applicable state and federal requirements. It was determined that the Act 451, Part 55, Administrative
Rules, Part 6 and 7, and the National Emission Standards for Hazardous Air Pollutants, Area Source
MACT, 40 CFR 63, Subpart CCCCCC were not applicable requirements for the USTs. However, since
that time, EPA issued amendments to the standard and a clarification that the GDF MACT does apply to
engine test stands/cells. Lotus’ underground gasoline storage tanks meet the definition of a GDF
(defined above). Lotus’s current renewal application contains EUTANK A/B and EUTANK C/D/E and
they are included in the ROP with GDF MACT applicable requirements.
The USTs were also previously determined to be exempt from NSR pursuant to Rule 284(g) for diesel
fuel storage and (i) for gasoline. The AQD requested that Lotus verify the USTs applicability to the
federal New Source Performance Standard (NSPS), 40 CFR 60, Subpart Kb. Lotus identified two 30,000
gallon compartmented tanks with compartments of the following sizes: two 15,000 gallon, one 12,000
gallon, one 10,000 gallon and one 8,000 gallon. The tanks are not piped or manifold together.
Therefore it was determined that the NSPS, 40 CFR 60, Subpart Kb is not applicable.
The monitoring conditions contained in the ROP are necessary to demonstrate compliance with all
applicable requirements and are consistent with the "Procedure for Evaluating Periodic Monitoring
Submittals."
No emission units are subject to the federal Compliance Assurance Monitoring rule under 40 CFR
Part 64, because all emission units at the stationary source either do not have a control device or those
with a control device do not have potential pre-control emissions over the major source thresholds.
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Please refer to Parts B, C and D in the draft ROP for detailed regulatory citations for the stationary
source. Part A contains regulatory citations for general conditions.
Source-wide Permit to Install (PTI)
Rule 214a requires the issuance of a Source-wide PTI within the ROP for conditions established
pursuant to Rule 201. All terms and conditions that were initially established in a PTI are identified with a
footnote designation in the integrated ROP/PTI document.
The following table lists all individual PTIs that were incorporated into previous ROPs. PTIs issued after
the effective date of ROP No. MI-ROP-N5955-2009 are identified in Appendix 6 of the ROP.
PTI Number
112-08
112-08A
Streamlined/Subsumed Requirements
This permit does not include any streamlined/subsumed requirements pursuant to Rules 213(2) and
213(6).
Non-applicable Requirements
Part E of the draft ROP lists requirements that are not applicable to this source as determined by the
AQD, if any were proposed in the application. These determinations are incorporated into the permit
shield provision set forth in Part A (General Conditions 26 through 29) of the draft ROP pursuant to
Rule 213(6)(a)(ii).
Processes in Application Not Identified in Draft ROP
The following table lists processes that were included in the ROP application as exempt devices under
Rule 212(4). These processes are not subject to any process-specific emission limits or standards in
any applicable requirement.
Exempt
Emission Unit ID
EU00072
EUCHASSIS1
EUCHASSIS2
EUCHASSIS3
Description of
Exempt Emission Unit
Thirty five (35) Natural gas fired
heaters with a rated heat input
capacity of less than 50 MMBTU per
hour per unit.
Vehicle test station with a single
exhaust stack. The vehicles tested
are fueled by gasoline or diesel and
the vehicle may be equipped with a
catalytic converter.
Vehicle test station with a single
exhaust stack. The vehicles tested
are fueled by gasoline or diesel and
the vehicle may be equipped with a
catalytic converter.
Vehicle test station with a single
exhaust stack. The vehicles tested
are fueled by gasoline or diesel and
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Rule 212(4)
Exemption
Rule 212(4)(b)
Rule 201
Exemption
Rule 282(b)(i)
Rule212(4)(d)
Rule 285(g)
Rule 212(4)(d)
Rule 285(g)
Rule 212(4)(d)
Rule 285(g)
Exempt
Emission Unit ID
EUCHASSIS4
EUCHASSIS5
Description of
Exempt Emission Unit
the vehicle may be equipped with a
catalytic converter.
Vehicle test station with a single
exhaust stack. The vehicles tested
are fueled by gasoline or diesel and
the vehicle may be equipped with a
catalytic converter.
Vehicle test station with a single
exhaust stack. The vehicles tested
are fueled by gasoline or diesel and
the vehicle may be equipped with a
catalytic converter.
Rule 212(4)
Exemption
Rule 201
Exemption
Rule 212(4)(d)
Rule 285(g)
Rule 212(4)(d)
Rule 285(g)
Draft ROP Terms/Conditions Not Agreed to by Applicant
This permit does not contain any terms and/or conditions that the AQD and the applicant did not agree
upon pursuant to Rule 214(2).
Compliance Status
The AQD finds that the stationary source is expected to be in compliance with all applicable
requirements as of the effective date of this ROP.
Action taken by the DEQ
The AQD proposes to approve this permit. A final decision on the ROP will not be made until the public
and affected states have had an opportunity to comment on the AQD’s proposed action and draft permit.
In addition, the U.S. Environmental Protection Agency (USEPA) is allowed up to 45 days to review the
draft permit and related material. The AQD is not required to accept recommendations that are not
based on applicable requirements. The delegated decision maker for the AQD is Scott Miller, Jackson
District Supervisor. The final determination for ROP approval/disapproval will be based on the contents
of the permit application, a judgment that the stationary source will be able to comply with applicable
emission limits and other terms and conditions, and resolution of any objections by the USEPA.
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Michigan Department of Environmental Quality
Air Quality Division
State Registration Number
RENEWABLE OPERATING PERMIT
ROP Number
N5955
SEPTEMBER 11, 2014 STAFF REPORT
ADDENDUM
MI-ROP-N5955-2014
Purpose
A Staff Report dated August 11, 2014, was developed in order to set forth the applicable requirements
and factual basis for the draft Renewable Operating Permit (ROP) terms and conditions as required by
R 336.1214(1). The purpose of this Staff Report Addendum is to summarize any significant comments
received on the draft ROP during the 30-day public comment period as described in R 336.1214(3). In
addition, this addendum describes any changes to the draft ROP resulting from these pertinent
comments.
General Information
Responsible Official:
AQD Contact:
Tim Holland, Director of Group Resources
734-995-2544
Diane Kavanaugh Vetort, Senior EQA
517-780-7864
Summary of Pertinent Comments
No pertinent comments were received during the 30-day public comment period.
Changes to the August 11, 2014 Draft ROP
No changes were made to the draft ROP.
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