The USEPA posted on Feb. 24, 2012 minor changes to the Tailoring Rule, tailoring Prevention of Significant Deterioration (PSD) and Title V Operating Permit programs to GHG emissions. The USEPA essentially announced that they would not change many of the parameters in the original draft rule, such as applicability thresholds and gradual scheduling. The USEPA believes that the current approach is working well, and that state permitting authorities are successfully managing PSD and Title V Permit requests. The USEPA did propose steps to streamline the permitting process for facilities covered by the programs, and not to include additional sources in the permitting programs at this time.

The USEPA proposes to follow the same Clean Air Act processes that it has followed for decades. As of Dec. 1, 2011, the USEPA and state permitting authorities have issued 18 PSD permits addressing GHG emissions, covering both new and modified existing facilities. The process addresses six GHGs: carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulfur hexafluoride (SF6). Best Available Control Technology (BACT) has been ruled to be (so far) the implementation of energy efficiency measures to reduce CO2 emissions.

The current PSD approach would be maintained. A new facility with GHG emissions of at least 100,000 tons per year (tpy) expressed as CO2 equivalents (CO2e) or an existing facility emitting at least 100,000 tpy of CO2e and proposing to increase GHG emissions by at least 75,000 tpy CO2e triggers the requirement for a PSD permit. A facility that must obtain a PSD permit because of other regulated pollutants must also address GHG emissions if it proposes to increase emissions by at least 75,000 tpy of CO2e. One change that it is proposing is to develop a “synthetic minor” PSD permit, a relatively simple permit, giving a facility an emission limit above which PSD would be triggered.

The USEPA is keeping the existing Title V Permit thresholds for GHGs. Sources with potential GHG emissions above 100,000 tpy CO2e must obtain a Title V Permit. The agency is proposing one change, allowing a Plantwide Applicability Limit (PAL) for GHGs. This allows facilities to change GHG emissions between sources without having to modify the Title V Permit as long as PAL is met, giving greater operating flexibility.

The proposed changes by the USEPA may be found at:  http://www.epa.gov/NSR/actions.html.  The USEPA will accept comments on this proposal for 45 days after it is published in the Federal Register.

CCES technical experts can help you determine your permitting and PSD needs and help calculate emissions of GHGs and other applicable compounds, and provide cost-effective compliance strategies for you.

April 26, 2011

Earlier this year the World Resources Institute and other organizations issued a report providing ways for the federal government to implement a cap and trade program to reduce greenhouse gas (GHG) emissions independent of Congress, through Section 111 of the Clean Air Act (§111), New Source Performance Standards. This report states that cap and trade regulations are legally-defensible and allow states to implement carbon reductions in a more efficient manner than standard USEPA rules.

While the Clean Air Act generally focuses on geographical areas and maintaining attainment with the National Ambient Air Quality Standards (NAAQS), §111 grants the USEPA the authority to regulate emissions by the type of source, rather than the location or attainment status of pollutants. §111 applies to any compound that has been determined to endanger public health and welfare, but for whom no NAAQS has been issued; a situation that pertains to GHGs. The section provides the states the right to be flexible in how they design these rules, whether they be traditional “command and control” limits or more flexible mechanisms.

Parts of the U.S., of course, are already on the path to cap and trade to reduce GHG emissions, namely RGGI in the Northeast and AB-32 in California. Can these be models to apply §111?

The Tailoring Rule currently tailors PSD and Title V Permitting to GHG emissions. The USEPA may extend this to NSPS by issuing draft performance standards for GHG and other emissions for new and modified power plants and for refineries later this year. At the same time, the USEPA may mandate states develop plans for existing facilities. Final performance standards for these industrial categories under §111 are expected in 2012. With the purported success of RGGI in the Northeast (reduced GHG emissions and revenue for the money-tight affected states), cap and trade may be considered a viable option, although in some areas it may be politically untenable. Many believe that §111 would allow the USEPA to permit states to implement such programs.

Although politics and court challenges are a reality, look at more states to take a more serious evaluation of cap and trade for GHG reductions in the future.
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CCES technical experts can help your facilities prepare for the Tailoring Rule and how they currently impact future facility expansions and your Title V Permit.