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New EPA Challenges for Coal-Fired Plants SNL Energy June 10, 2010. PRESENTED BY Peter Glaser Troutman Sanders LLP 401 9 th Street, NW Suite 1000 Washington, DC 20004 202.274.2950 www.troutmansanders.com. Hazardous Air Pollutants NAAQS: NO 2 , SO 2 , PM-2.5, Ozone

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new epa challenges for coal fired plants snl energy june 10 2010

New EPA Challenges for Coal-Fired PlantsSNL EnergyJune 10, 2010

PRESENTED BY

Peter Glaser

Troutman Sanders LLP

401 9th Street, NW

Suite 1000

Washington, DC 20004

202.274.2950

www.troutmansanders.com

what s coming
Hazardous Air Pollutants

NAAQS: NO2, SO2, PM-2.5, Ozone

CAIR Replacement Rule

Coal Ash

Carbon

What’s Coming
hazardous air pollutants
Hazardous Air Pollutants
  • EPA to issue proposed MACT for utility HAP emissions by 3/11, finalize by 11/11. Highly aggressive schedule.
  • Not just for mercury! Other air toxics, including acid gases, trace metals, organics, likely more important.
  • Ongoing multi-hundred million dollar information collection effort…but will there be time for EPA to analyze the data?
  • Very stringent standards and only 3 years for existing units to comply.
  • Could have major impacts on existing fleet.
slide4
NO2
  • Feb. 9, 2010 Revision
  • Adds new 1-hour standard of 100 ppb, at upper end of range of 80-100 ppb in proposed rule
  • Supplements existing annual standard of 53 ppb
  • Additional monitoring both around sources and to measure area-wide concentrations
  • Mostly a highway issue but could affect utility diesel generators
so 2 naaqs
SO2 NAAQS
  • Replaces daily and annual standard with hourly standard.
  • Proposed at 50-100 ppb, with comment taken on 150 ppb.
  • Final at 75 ppb.
  • Increased monitoring and modeling around emitting sources, meaning coal-fired EGUs.
  • Concern that even some scrubbed plants could cause exceedance.
ozone naaqs
Ozone NAAQS
  • 2008 standard: 0.075 ppm based on 8-hour average, reduced from prior standard of 0.084 ppm
  • While standard on appeal, new administration pulls it back for reconsideration based on existing record
  • New proposal 1/19/2010: 0.060-0.070 ppm
  • Comments 3/10/10
  • Concern across many industries at large numbers of new nonattainment areas
  • For coal EGUs, concern is NOX
pm 2 5 naaqs
PM-2.5 NAAQS
  • 2006 standards:

- 24-hour - 35 µg/m3, reduced from previous standard of 65 µg/m3.

- Annual: 15 µg/m3.

  • Overturned in court.
  • EPA considering on remand.
  • Proposal expected this year.
  • Affects coal EGU NOX and SO2 emissions.
cair replacement rule
CAIR Replacement Rule
  • CAIR covered NOx and SO2 transport in East. Overturned in court.
  • New proposal expected any day.
  • Will not have same interstate trading as previous rule; likely intrastate trading and perhaps some sub-regional trading.
  • Stricter caps and timetables.
coal ash
EPA 5/4/10 proposes two alternative means of regulation

Neither addresses filling at mines - to be addressed separately

Comment period ends 90 days after publication of the proposals in the Federal Register

Likely a year or more before chosen regulation is implemented

Coal Ash
option 1
Option 1
  • Regulate coal ash as a “special waste” under “Subtitle C” of RCRA, the regulatory section addressing “hazardous” wastes
  • Complex, comprehensive, and costly
  • Would effectively signal the end for surface disposal of wet coal ash
  • Allows “encapsulated” reuse, but this may be more theoretical than factual
option 2
Option 2
  • Coal ash would be subject to existing RCRA standards similar to those for municipal and non-hazardous solid waste.
  • EPA’s role largely advisory; states have enforcement authority.
  • Less costly and onerous requirements.
  • Likely lead to phase out of wet handling and disposal in favor of landfills.
carbon
Endangerment Finding Litigation

Auto Rule

Johnson Memorandum Reconsideration

Tailoring Rule

GHG BACT Guidance

NSPS

Carbon
endangerment finding litigation
Endangerment Finding Litigation
  • Finding issued December 7, 2009
  • Court challenges from Texas, Alabama, Virginia and numerous industry groups
  • 17 states on each side
  • Don’t expect decision in litigation until 2012
auto ghg rule
Auto GHG Rule
  • Published in Fed. Reg. May 7, 2010
  • DOT MPG - EPA gCO2/mi. standard
  • According to EPA, makes six GHGs “regulated air pollutants” under the PSD and Title V programs
  • Will subject most of industrial capacity in U.S. to GHG regulation under these programs, yet EPA refuses to do an economic study
  • Lawsuits 60 days after publication in Fed. Reg. Some already filed.
johnson memo reconsideration
Johnson Memo Reconsideration
  • Reconsideration issued 3/2/10.
  • GHGs will be deemed to be regulated beginning 1/2/11 when auto rule “takes effect.”
  • Will apply to any PSD permit then in process.
  • Phase in per tailoring rule.
  • Numerous lawsuits filed, including by enviro organization that will continue argument that GHGs already regulated.
tailoring rule
Tailoring Rule
  • Published in Fed. Reg. 6/3/10.
  • Phase in of PSD and Title V:

- 1/2/11: Sources subject to PSD “anyway” will be required to do GHG BACT if increase emissions by 75,000 tons per year.

- 7/1/11: New sources above 100,000 tpy and existing sources that increase emissions by 75,000 subject to PSD.

- EPA will do future rulemaking and future study to determine whether lower emitting sources will be regulated and how, but commits that no source below 50,000 tpy will be regulated for six years.

  • Statutory thresholds are 100/250 tpy, so questionable legal validity…but will anyone challenge?
epa ghg bact guidance
EPA GHG BACT Guidance
  • Technical guidance will begin rolling out later this summer.
  • Policy guidance by end of yea.r
  • Stakeholder input, but no commitment to formal notice and comment.
slide18
NSPS
  • EPA has agreed to promulgate NSPS for coal EGUs that will include GHG standards
  • Commence rulemaking probably next year
  • Will apply to new and modified sources and could also apply eventually to existing-unmodified sources
will congress preempt epa ghg regulation
Will Congress Preempt EPA GHG Regulation?
  • Murkowski Resolution to Disapprove Endangerment Finding.
  • Rockefeller bill to delay regulation for 2 years.
  • Casey-Carper to …?
  • Debate on Murkowski today!
slide20

'11

'12

'13

'16

'15

'17

'08

'09

'10

'14

Environmental Regulatory Timeline for Coal Units

Ozone

SO2/NO2

CAIR

Water

Beginning CAIR Phase I Seasonal NOx Cap

SO2 Primary NAAQS

Revised Ozone NAAQS

Reconsidered Ozone NAAQS

Effluent Guidelines

Final rule expected

Effluent Guidelines

Compliance 3-5 yrs

after final rule

Proposed CAIR Replacement Rule Expected

SO2/NO2 Secondary NAAQS

Next Ozone NAAQS Revision

Final CAIR Replacement Rule Expected

CAIR Vacated

316(b) Compliance

3-4 yrs after final rule

Effluent Guidelines

proposed rule

expected

316(b) final rule

expected

CAIR Remanded

NO2 Primary NAAQS

CO2 Regulation

PM-2.5

SIPs due (‘06)

Begin CAIR Phase I Annual SO2 Cap

PM-2.5 SIPs due (‘97)

Next PM-2.5 NAAQS Revision

Beginning CAIR Phase II Annual SO2 & NOx Caps

Begin CAIR Phase I Annual NOx Cap

Final Rule for CCBs Mgmt

New PM-2.5 NAAQS Designations

Beginning CAIR Phase II Seasonal NOx Cap

CAMR & Delisting Rule vacated

HAPS MACT final rule expected

Begin Compliance Requirements under Final CCB Rule (ground water monitoring, double monitors, closure, dry ash conversion)

HAPS MACT Compliance 3 yrs after final rule

Compliance with CAIR Replacement Rule

HAPs MACT proposed rule

Proposed Rule for CCBs Management

Final EPA Nonattainment Designations

316(b) proposed

rule expected

PM2.5

Ash

Hg/HAPS

CO2

20

-- adapted from Wegman (EPA 2003)