Air Quality Permitting Issues for Alternative Energy Fuels

1. Air Quality Permitting Issues for Alternative Energy Fuels David Matos & Furqan Shaikh Chemicals Permitting Unit Stationary Source Permitting Program December 6, 2006 Environmental Protection Division

2. Agenda • Permitting Process • Governor's Executive Order • Public Participation • Bio-Fuels (Biodiesel and Ethanol) • Permitting Requirements • Applicable Air Rules • Questions Environmental Protection Division

3. Permitting Process SIP Permit Process Receive Application 30 day Public Advisory Technical Review by SSPP Managerial Review Permit Issued Title V Permit Process Receive Application 30 day Public Advisory Technical Review by SSPP 21 day Internal Review Managerial Review 30 day Public Notice Comments Addressed EPA Review Permit Issued Environmental Protection Division

4. Permitting Process (cont.) • SIP Permit Application available - http://www.georgiaair.org/airpermit (Click on Permitting  SIP Application Forms) • Title V Permit Application (may be required) - Application must be submitted electronically • Exemption Forms available - Georgia Rule 391-3-1-.03(6) – list of exempt equipment • Permit timelines - Striving for 90 days on average from complete application - 120-180 days for Title V and PSD Environmental Protection Division

5. Governor's Executive Order • Signed on February 28, 2006 by Sonny Purdue to promote alternative energy fuels (Biodiesel, Ethanol). • Affects permitting for biofuel refineries and bioenergy projects in Georgia. • EPD is required to act on a permit application and issue the permit (if approved) within 90 days from a completed application. Environmental Protection Division

6. Public Participation • Public Hearing is held anytime SSPP gets a request. • Generally, Q&A sessions are held prior to hearings. • Public Hearing and citizen comments usually delay issuance of a permit. • District Involvement • SSPP or Public Outreach will contact the District office Environmental Protection Division

7. Bio-Fuels • Bio-fuels include a variety of fuels that are made from renewable resources, such as - Energy-Dedicated or Agricultural Crops - Trees and Woodwaste - Aquatic Plants - Animal or Municipal Wastes • Currently, Georgia has seen commercial and industrial interest in two major bio-fuel categories - Biodiesel - Fuel Ethanol Environmental Protection Division

8. 1. Biodiesel • Biodiesel is most commonly used to make one of three biodiesel-diesel blends: • B20 (20% biodiesel) • B5 (5% biodiesel) • B2 (2% biodiesel) • B2 and B5 blends are used to slightly alter fuel characteristics; neither blend has a significant affect on vehicle emissions. Environmental Protection Division

9. Biodiesel: Production • Basic Reaction: • Methyl esters are “biodiesel”. • Biodiesels are commonly made from virgin or waste vegetable/seed oils, animal fats, or microalgae oils. Environmental Protection Division

10. Biodiesel: Environmental Impact of Production and Transportation • The process to react biodiesel feed stocks with methanol is a low temperature process and requires little energy • Primary pollutants of interest are VOCs and methanol. Emissions from these facilities are relatively low. • Slight emission increases due to truck and locomotive transport are expected. Environmental Protection Division

11. Biodiesel: Environmental Impact of Biodiesel Use in Motor Vehicles Soy-based B20 vs. No. 2 Diesel • Reductions: CO, PM, Total Fuel Toxics, and Hydrocarbons. • The environmental impact of B20 use is dependent upon the vehicle tested; the NOX emission impact is inconclusive. Environmental Protection Division

12. Factors Affecting Biodiesel Availability and Use • A federal tax credit of $0.50 per gallon of recycled restaurant oil used in biodiesel production • A federal tax credit of $1.00 per gallon of virgin oil used in biodiesel production • B20, B5, B2 blends can be used in standard diesel engines. Environmental Protection Division

13. Biodiesel: Permitting Requirements • Minimum Permitting Threshold: 2 tpy of any HAP, or 20 tpy VOCs in attainment area (5 tpy in non attainment area) • For biodiesel fuel production greater than 7,000 gallons / day (~ 2.55 million gallons / year), the facility should apply for an operating permit. (i.e. submit a SIP Permit Application). • A toxic impact assessment analysis must be submitted with the permit application. • Facility should install scrubber, condenser and vapor recovery system to greatly reduce VOC and methanol emissions. Environmental Protection Division

14. Biodiesel: Permitting Requirements (cont.) • EPD will require the facility to conduct performance tests for VOC and methanol emissions to verify compliance upon startup. • Currently, there are three biodiesel production facilities in Georgia; - US Biofuels (Rome): 9.6 million gal/yr (SIP permit) - Middle Georgia Biofuels (Dublin) 3.5 million gal/yr (No permit required) - Peach State labs (Rome) 0.62 millions gal/yr (No permit required) • For biodiesel fuel production greater than 35,000 gallons / day (~ 12.7 million gallons / year), the facility will also need to apply for a Title V (Part 70) Permit. Title V Permit Application is due within 12 months from actual plant startup. • Currently, there are no Title V Sources for Biodiesel Production in Georgia. Environmental Protection Division

15. Biodiesel: Applicable Air Rules • Georgia Rules 391-3-1-.02(2)[(b), (d), (e) and (vv)] - Rule (b) – Limits visible emissions (40 percent opacity) - Rule (d) – Applicable for fuel burning equipment only - Rule (e) – Limits PM emissions - Rule (vv) – Requires installation of submerged fill pipes (Applicable for sources in non attainment area) • 40 CFR 60 Subpart VV “Standards of Performance for Equipment Leaks of VOC in the Synthetic Organic Chemicals Manufacturing Industry” - Requires a Leak Detection and Repair Plan (LDAR) for all equipment • 40 CFR 60 Subpart Kb “Standards of Performance for Volatile Organic Liquid Storage Vessels” (tank capacity > 19,800 gal) - Requires record keeping Environmental Protection Division

16. 2. Fuel Ethanol • Ethanol is most commonly used to make one of two ethanol-gasoline blends: • E85 (85% EtOH) • E10 (10% EtOH) • Ethanol is generally not used in neat form. • Ethanol-diesel blends have drawbacks. Environmental Protection Division

17. Ethanol: Production • Basic Reaction: • While cellulose is more difficult to convert to ethanol than starch, production of ethanol from cellulosic biomass will greatly expand the materials used for ethanol production. Environmental Protection Division

18. Ethanol: Environmental Impact of Production and Transportation • The creation of new ethanol production facilities can impact air quality, but most facilities will be located in attainment areas and emissions can be minimized. • Slight emission increases may be seen from locomotive transportation. • No emission changes are expected from truck transportation. Environmental Protection Division

19. E85 vs. Gasoline Reductions: VOC, CO, PM, NOX, SOX, Toxins, and Hydrocarbons Increases: Acetaldehyde and Ethanol E10 vs. Gasoline Reductions: VOC and CO No emission changes are seen in most other pollutants Ethanol: Environmental Impact of Ethanol Use in Motor Vehicles Environmental Protection Division

20. Factors Affecting Ethanol Availability and Use • A federal tax credit of $0.51 per gallon of ethanol used as motor fuel • The Energy Policy Act of 2005, which requires the use of 7.5 billion gallons of renewable fuel in gasoline by 2012 • Flex-fuel vehicles are available without increased cost to the consumer. • E10 can be used in existing gasoline-powered motor engines. Environmental Protection Division

21. Ethanol: Permitting Requirements • Major Source Threshold 100 tpy of any criteria pollutant (VOC, NOx, PM, SO2) or 10/25 tpy of HAPs • Facility will be required to install thermal oxidizer, fermentation scrubber, and baghouses to greatly reduce emissions. • EPD will require the facility to conduct performance tests for criteria pollutants and HAPs (acetaldehyde) to verify compliance upon startup. • Continuous Emissions Monitoring (CEMS) may be required. Environmental Protection Division

22. Ethanol: Permitting Requirements (cont.) • Ethanol Production (1 application received in August 2006) First United Ethanol LLC in Camilla, Georgia • Feedstock: corn • Product: 110 million gallons/yr of Ethanol • Ethanol Production (1 permitted facility): Wind Gap Farms in Baconton, Georgia - Feedstock: waste brewers yeast - Product: 0.4 million gallons/yr of Ethanol - TV Permit: 2048-205-0037-V-03-0 (Wood fired Boiler) Environmental Protection Division

23. Ethanol: Applicable Air Rules • Georgia Rules 391-3-1-.02(2)[(b), (d), (e) and (g)] - Rule (b) – Limits visible emissions (40 percent opacity) - Rule (d) – Applicable for fuel burning equipment only - Rule (e) – Limits PM emissions - Rule (g) - Limits sulfur content in any fuel burning equipment • 40 CFR 60 Subpart VV “Standards of Performance for Equipment Leaks of VOC in the Synthetic Organic Chemicals Manufacturing Industry” - Requires a Leak Detection and Repair Plan (LDAR) for all equipment • 40 CFR 60 Subpart Kb “Standards of Performance for Volatile Organic Liquid Storage Vessels” (tank capacity > 19,800 gal) - Requires record keeping Environmental Protection Division

24. Ethanol: Applicable Air Rules (cont.) Potentially Applicable for Fuel Burning Equipment • 40 CFR 60 Subpart Db “Standards of Performance for Industrial-Commercial–Institutional Steam Generating Units” • 40 CFR 60 Subpart Dc “Standards of Performance for Small Industrial-Commercial–Institutional Steam Generating Units” Environmental Protection Division

25. Questions • David Matos, Chemicals Permitting Unit Manager Phone: (404)363-7127 Email: david_matos@dnr.state.ga.us • Furqan Shaikh, Senior Environmental Engineer Phone: (404)362-4849 Email: furqan_shaikh@dnr.state.ga.us Environmental Protection Division