By Sharryn Harvey, online editor, Power Engineering magazine
A proposed rule from the U.S. Environmental Protection Agency has some praising the agency for taking the lead on curbing greenhouse gas emissions and others saying the EPA is once again trying to run everything.
On September 30, EPA Administrator Lisa P. Jackson said the agency was going to use its authority under the Clean Air Act to require large stationary facilities, like power plants, that emit more than 25,000 tons of GHG per year to obtain construction and operating permits. These permits must demonstrate the use of best available control technologies and energy efficiency measures to minimize GHG emissions when facilities are constructed or significantly modified. The agency also would require facilities that make modifications that result in an increase of emissions above the significance level to get a permit.
Jackson calls it a "common sense" rule that would cover only large sources that produce 70 percent of non-vehicle emissions.
In the 416-page proposal, the rule would be broken down into two phases. The first phase would establish a temporary Prevention of Significant Deterioration (PSD) and Title V applicability threshold level at 25,000 tons per year (tpy) on a carbon dioxide equivalent basis (CO2e), and a temporary PSD significance level for emissions between 10,000 and 25,000 tpy CO2e for six years. After a review, EPA will establish levels during the second phase by either keeping the thresholds where they are or setting new levels that more accurately reflect the capabilities of permitting authorities.
It came as a surprise to some, however, that Jackson made the announcement only hours after Sens. John Kerry (D-Mass.) and Barbara Boxer (D- Calif.) released their climate legislation draft that has its own emissions rules.
"What we want is legislation," Jackson said during a telephone press conference. "The technical work that we completed is consistent with work that would be done if new legislation was passed. We're not losing time or adding on workload, we're waiting for legislation to pass."
Backup Plan
Graham Noyes, an attorney with Stoel Rives LLC, said the announcement was a significant move. "It is a backup plan to the climate legislation in the Senate," Noyes said. "If Congress takes action they will pre-empt the EPA rule and tell them what to do. If it stalls some more, then the EPA goes on with their policy."
The Senate's climate legislation draft proposes to cut CO2 emissions 20 percent by 2020. The EPA rule uses PSD to expand their emissions list to also include methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs) and sulfur hexafluoride (SF6). The EPA estimates that 400 new sources and modifications would be subject to PSD review each year, and approximately 14,000 large sources would need to obtain operating permits for emissions under the permit.
Current significance thresholds are from 100 to 250 tpy, but EPA's Jackson said the proposed rule would raise that to 25,000 tpy, tailoring it specifically to bigger facilities and not small businesses.
"We know the corner coffee shop is no place to look for meaningful carbon reductions," she said.
Which is why many power generators and manufacturers do not understand why they are being singled out. "If all of this is good and cost beneficial for those who emit 25,000 tpy and above, why not spread the glory to everyone?" said Randy Rawson, president and CEO of the American Boiler Manufacturers Association.
Curious Legal Stance
Jeff Holmstead, a former EPA official who is now with the Bracewell Giuliani law firm said he feels the EPA is trying to fit a square peg in a round hole.
"The Clean Air Act specifically says that any facility that emits more than 250 tons per year of a regulated pollutant is a 'major source' that is covered by various regulatory requirements," Holmstead said in an e-mail. "This doesn't make any sense for CO2, because there are more than a million buildings, including schools, churches, and hospitals, that emit more than 250 tons of CO2 every year.
"EPA is trying to fix this problem simply by changing the 250 ton number to 25,000 tons," he continued. "Normally, it takes an act of Congress to change the words of a statute enacted by Congress, and many of us are very curious to see EPA's legal justification for (the) proposal."
EPA's Jackson said the agency is following the law. "We would not propose a rule that did not make good legal sense," she said.
Carrot and Stick at EPA
Robynn Andracsek, an environmental engineer with Burns & McDonnell and a contributing editor for Power Engineering, said the proposal does allow states to set and enforce their own emissions regulations. However, if the State Implementation Plan does not provide for GHG regulation, then the EPA can revoke authority and take over permitting.
"You see that a lot with the EPA," Andracsek said. "Even just the threat of them taking over can sometimes make states change their rules to comply."
Administrator Jackson disagreed. "We targeted only larger facilities, not smaller businesses," Jackson said. "The rule rests on the argument that, in order to use the Clean Air Act, we need to tailor our best available control technology to larger facilities and not from the smaller businesses up."
Other details about the proposed rule are being left up to the public for comments and suggestions, like a provision that calls for facilities to find the best available control technology (BACT) to cut emissions but does not define what is "best available." Currently, the EPA decides that on a case-by-case basis, but one suggestion is to take common types of equipment and sources and apply them to individual permits with little or no revision or analysis.
Rawson with ABMA said that move could cause widespread problems for power plants.
"Boilers like what we make are not made on an assembly line. They are made to specification," Rawson said. "To say 'best available,' someone in California may have a specific process that someone in Missouri would not have. It could increase costs without any benefits to anyone."
There is also a possible provision that any company that is PSD minor but emits more than 25,000 tpy be considered PSD major and is then subject to review.
Aggressive on Climate Change
Stoel Rives' Noyes said the Obama administration's EPA is taking a much more aggressive stance on climate change than past administrations.
"There is a significant policy shift on the issue of global warming," Noyes said. "In the Bush administration, there was a lot of skepticism and a lot of research and development into the issue. With the Obama administration, he is showing resolve, and the appointments he is making show that he is moving ahead with the plan to curb global warming.
"The Bush administration gave the EPA more authority (but they didn't take it)," Noyes continued.
The EPA's move to regulate greenhouse gases stems from a 2007 Supreme Court ruling in the State of Massachusetts v the Environmental Protection Agency case that the EPA has authority to mandate emissions regulations under the Clean Air Act.
"The Court sent a clear message: no more excuses for delay," Jackson said. "Unfortunately, that watershed moment was met with diversion and inaction."
Added Expenses for Generators
But can this assertion in authority mean trouble for power generators? "It could mean a lot of combustion turbine plants that are currently PSD minor would automatically become PSD major, making it hard to do projects that increase efficiency in the turbines," Burns & McConnell's Andracsek said. "It would also mean new annual fees of $1 million plus."
For example, at $42.75 per ton, Title V fees for 25,000 tons of GHG would be $1,068,750 a year if the rule is passed, Andracsek said. There is currently a cap on fees at 4,000 tons per pollutant but no answer as to whether that would apply to the proposed rule.
It could also mean years of litigation that would potentially hold up the rule, Rawson said.
"Someone's going to ask 'Why aren't they regulating everyone?' and it will be in court for years unless there is an intervention from Congress," he said. "That's not going to happen anytime soon."
Rawson said the proposal appeared to be more of a tactic than regulation. "Let's not kid ourselves, this is still leverage," he said. "The EPA is basically saying to Congress 'This is what is going to happen if you don't approach.'"
The problem, Rawson said, is in using the Clean Air Act to regulate emissions.
"We would rather see greenhouse gas remediation accomplished by statute rather than a twisted, very labored scheme to regulate greenhouse gases through the Clean Air Act."