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How’s that Greenhouse Gas Permit Working for You?

Issue 2 and Volume 116.

By Robynn Andracsek, P.E., Burns & McDonnell and Contributing Editor, and Mary Hauner-Davis, Burns & McDonnell

The Texas Commission on Environmental Quality thought it was doing the good citizens and industries of Texas a favor by refusing to implement EPA’s Greenhouse Gas Tailoring Rule. Did this plan backfire?

When the Tailoring Rule was announced and finalized in June, 2010, TCEQ officials made it very clear in letters to the EPA Administrator, statements to the media and legal challenges to EPA’s greenhouse gas rules that they had no intention of implementing this portion of the federal air permitting program.

TCEQ began by sending a severely worded letter to EPA on Aug. 2, 2010, which said in part and to paraphrase: In order to avoid the absurd results of EPA’s own creation, EPA is demanding a loyalty oath to regulate GHGs in the exact manner and method proscribed by the EPA, which is an affront to the congressionally-establish judicial review process.

The EPA was then left with “no choice” but to assume this portion of the federal program “in order to assure that businesses in Texas are not subject to delays or potential legal challenges and are able to move forward with planned construction and expansion projects that will create jobs and otherwise benefit the state’s and the nation’s economy.”

Although the GHG PSD programs in several other states, such as Arkansas and Florida, are also currently implemented by the EPA, these states are in the process of changing their State Implementation Plans to meet the EPA’s requirements. However, they were not able to accomplish the regulatory revisions quick enough to prevent a temporary takeover of GHG permitting by the EPA. So far, it appears that Texas is the only state overtly challenging EPA’s GHG program.

Both EPA and TCEQ have positioned themselves as if they alone are the advocate for industry and that their actions are necessary, even required, to protect affected companies from the actions of the other party.

So, how has this new system of processing greenhouse gas permits through the EPA but processing other PSD pollutant permits through the TCEQ working? It’s an understatement to say that there have been some issues. At least 12 GHG PSD permits are pending at EPA Region VI for Texas facilities.

We could start by asking the Lower Colorado River Authority (LCRA), which just obtained the first GHG permit issued by EPA Region VI, about its recent PSD permitting experience. The project consisted of two gas-fired combined cycle turbine generators, including a steam turbine generator, to replace an existing steam boiler/turbine generator. LCRA was surely surprised to see that not only did it need to supply a permit application for GHG emissions with the normal Best Available Control Technology (BACT) analysis, but that it also needed to supply a Biological Assessment of Effects on Threatened and Endangered Species report, a Section 106 National Historic Preservation Act analysis and a full Environmental Justice report. These additional studies are more commonly found in National Environmental Policy Act studies and federal environmental assessments, not as part of the PSD process.

The introduction to each of these supplementary reports lays out EPA’s supposed justification for requiring the additional study. In the case of LCRA’s environmental justice report the rationale states: “EPA Offices or their delegates in the states have for several years incorporated environmental justice considerations into their review of applications for PSD permits.” This is, however, disingenuous since finding a PSD permit where environmental justice considerations were even mentioned prior to the Region VI GHG permits is rare, if not nonexistent.

For all the new hoops that applicants must jump through in order to get a PSD permit for GHG, final permits are not requiring any add on control devices or design changes. Since there are no NAAQS or PSD increments for GHGs, ambient modeling is not required for GHG emissions. Additional impacts and Class I area impacts are also not required to be evaluated, per EPA guidance. Regulating GHGs boils down to the question of what is BACT for GHG?

BACT can be no less stringent than the corresponding New Source Performance Standard, but no NSPSs for GHG have yet been issued. Current focus on BACT for GHG is limited to options that reduce GHGs by improving energy efficiency. In other words, the GHG PSD process has so far proven to be a paperwork exercise. BACT determinations to date have consistently ruled out carbon capture and sequestration (CCS) as BACT for either technical and/or economic reasons and determined BACT to be energy efficiency or good combustion practices. This has held true in the permits covering a wide variety of facility types: from boilers to cement to steel.

EPA’s regulation of GHGs has, to date, resulted solely in the production of reports and paperwork appropriately justifying that no controls exist to reduce GHG emissions. What is the point of regulating GHGs, other than perpetrating the EPA bureaucracy?

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