Environmental News for You(TM) February 2011

The USEPA has begun to apply Clean Air Act (CAA) regulations to greenhouse gases (GHGs), as of Jan. 1, 2011. The USEPA was forced to as the CAA requires the agency to develop and enforce rules for any compound designated a pollutant, and GHGs were so stated. But how does one apply rules designed for a pollutant that has a toxicity and distinct local ambient concentration to those that have little localized effects and is not toxic? Last year, the USEPA published draft rules called The Tailoring Rule to tailor the CAA to GHGs. While there will likely be litigation against the implementation of the rule, no stay has been put on the rule. Here is a summary based on recent USEPA outreach and a document published by the USEPA on Nov. 11, 2010, and available on their website.

The USEPA is applying two established rules, Prevention of Significant Deterioration or PSD (40 CFR Part 52.21) and Title V Operating Permits (40 CFR Part 70), to GHG emissions. PSD is a pre-construction permitting program for major new projects or modifications applicable to emissions of compounds in regions that are already in attainment with their National Ambient Air Quality Standards (NAAQS). Title V is an operating permit required for “major” sources (facilities).

For PSD, the 1st phase of implementation, between Jan. 1 and June 30, 2011, affects active PSD permit applications (PSD permits applied for during that time or those initially applied for earlier, but not yet issued final). PSD applies to GHG emissions of a source only if it is subject to PSD “anyway” because of another PSD-regulated compound and if GHG emissions, measured in CO2 equivalents (CO2e), exceeds 75,000 metric tons/yr (mtpy) and any mass emissions. The USEPA has actually defined an “anyway” facility. After June 30, 2011, “anyway” and other sources that have GHG emissions ≥100,000 mtpy and propose to increase it by ≥75,000 mtpy and new sources with a proposed modification to increase GHG emissions by ≥100,000 mtpy are subject to PSD for GHGs.

Once a proposed project is in the PSD program for GHGs, how would it be regulated? Traditionally, a subject facility must install Best Available Control Technology (BACT) to minimize emissions and perform dispersion modeling to estimate off-site ground level concentrations (impacts). As for the latter, no dispersion modeling or estimate of impacts is necessary for GHGs in general or CO2 in particular. It is understood that even for a facility combusting large amounts of fossil fuels, the concentration of CO2 downwind will not change. However, BACT will still be applicable and a Top-Down approach preferred. Usually a BACT Analysis assesses different control equipment to reduce emissions. Controls for CO2, such as carbon capture & sequestration (CCS), although experimental, needs to be at least listed (although likely would be not technically feasible). Instead, BACT would consider strategies to improve energy efficiency, reducing the quantity of fuels combusted forming CO2. Proposed design and O&M activities are fair game to be reviewed by the USEPA as BACT to determine if they can be improved. The USEPA will allow energy efficiency to be assessed by reduced normalized GHG emissions (say, lbs CO2e / MW) even if the proposed project causes an increase in total emissions. The applicant may follow the PSD strategy of eliminating from BACT a strategy if it causes emissions of other regulated compounds to rise. The USEPA stated that it will not require a facility to operate a brand new boiler or furnace to replace a “poor” one to meet BACT.

As for Title V Permits, the timeline is similar to PSD. During the initial Jan. 1 to June 30, 2011 period, GHGs need to be addressed only for sources getting new or renewed Permits during this period anyway (“anyway” sources) if CO2e emissions ≥100,000 mtpy. No reduction is required. After June 30, 2011, all existing and new Title V Permit sources must address GHG emissions if CO2 equivalent emissions ≥100,000 mtpy. For those affected this would represent a modification of an existing Title V Permit. The modification must pertain to that state’s rules on the matter. For many, the Title V Permit would not need to be modified to include the GHG emission rate until it comes up for its next renewal.

How to Address These New Rules

Here are some potential strategies to prepare for CAA-GHG regulations affecting your facilities:

• Keep up with The Tailoring Rule. The USEPA is beginning outreach to explain its interpretations of the Tailoring Rule, starting with state agencies. Attend a session if open to the public or meet with your local agency if it will enforce it. Keep track of court proceedings.

• Know the status of your Air Permits and expansion plans. Which of your facilities will expand in the future and may be subject to PSD? Which may be modifying or renewing their Title V Permits? Be proactive. As an example, I am working with a facility renewing its Title V Permit. While the process was begun in 2010, the renewal was just issued last week, and as an “anyway” source could be considered subject if CO2e emissions exceed the threshold. To be proactive, I calculated worst case CO2e emissions from all combustion sources, showed that it was below the threshold, and transmitted this to the agency. I did not want this to hold up issuance of the Title V Permit renewal; by doing this, I removed a potential barrier. Now is the time to study impacts of these new rules on your facilities and planned modifications.

• Determine GHG emissions. Take time to determine worst case CO2e emissions of your sources and see whether any may be near an applicability threshold that will affect it in the future. Perhaps there are strategies to consider implementing now to improve energy efficiency to further reduce the risk of exceeding the threshold should there be change or growth later.

Get more useful information in our blog: www.CCESworld.com/blog
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This Environmental News for You is meant to provide background on the Tailoring Rule. Be sure to obtain professional, source-specific technical and legal advice before implementing a strategy. CCES experts have the experience to assist you in the strategic and technical tasks necessary to address the Tailoring Rule.