GROUP 3 Alyssa Boutang Whitney Gee Rachel LaMedica BJ Pringle

1. Three Year Deferral Period for Bioenergy CO2 EmissionsExemptions to New Source Review (NSR)Prevention of Significant Deterioration (PSD) and Title V Permitting Requirements GROUP 3 Alyssa Boutang Whitney Gee Rachel LaMedica BJ Pringle

2. History • 1970: Clean Air Act (CAA) establishes National Ambient Air Quality Standards (NAAQS) for six “criteria”pollutants • 1977 & 1990: Clean Air Act Amendments establish and modify New Source Review (NSR) • 2007: Supreme Court finds that Greenhouse Gas (GHG) emissions, including carbon monoxide, are air pollutants covered by the CAA. Massachusetts v. EPA, 549 U.S. 497 • 2010: EPA issues “tailoring” rule for GHG emissions and establishes two steps to implement PSD and Title V.

3. Here and Now:EPA issues Deferral for Bioenergy • 2011: January – EPA announces in letters to Members of Congress and the National Alliance of Forest Owners its intent to defer for 3 years the application of PSD and Title V permitting requirements to CO2 emissions from bioenergy and other biogenic stationary sources. • 2011: July 1: EPA releases final rulemaking to defer for three years the application of the PSD and Title V permitting requirements to biogenic CO2 emissions from stationary sources.

4. Importance? Economics vs. Environment Conflicting research and data on carbon cost Environmental Concerns – CO2 emissions, no BACT, global warming Environmental Advantages – improve forest health, prevent catastrophic wildfire Economic Growth – creates jobs, political Social Pitfalls – air quality and public health; grass roots uprising against industry

5. Existing Policy • Clean Air Act • Title V Permits • NSR

6. Tailoring rule under the CAA • The “tailoring rule” determines which polluters will be required to account for their greenhouse gas emissions when the EPA begins to formally regulate • The ruling did not exempt biomass-fueled power producers from GHG permitting requirements

7. Title V Permitting • The Title V permitting program provides the top tier of air quality operating permits for existing facilities and is applicable only to facilities with relatively large emissions of regulated air pollutants. • Typically require a higher level of compliance monitoring and incur higher annual permitting fees. • Title V permitting requirements generally apply only to facilities that have the potential to emit greater than 100 tons per year of a regulated pollutantor 10 tpy for individual and 25 tpyfor all combined hazardous air pollutants. • 100,000 tons per year of CO2e and 100 tons per year of GHG on a mass basis • Permit must be submitted within 12 months of becoming subject to these requirements.

8. NSR Permits • PSD NSR provides air quality construction permits for projects at relatively large facilities with significant increases of air pollutant emissions located in areas that attain national ambient air quality standards. • Also NSR permits for nonattainment areas which must show lowest achievable emission rate, have emission offsets, and have an opportunity for public involvement. • Unlike the Title V permitting requirements for GHG emissions, which can apply to existing facilities not making any changes, the PSD NSR permitting requirements can only be triggered by new facilities, the addition of new emission units to existing facilities, or the modification of existing emission units at existing

9. Example New Plant 150 MMBtu/hr wood-fired boiler, steam turbine • Non GHG emissions are less than 250 tpy. • Project would be subject to PSD NSR requirements for PM10, NOx, and GHGs because CO2e emissions exceed 100,000 tpy and maximum potential emissions of all three pollutants exceed their associated SER • Significant Emission Rates (SERs) Emissions: 30 tpy of PM 10 (15 SER) 180 tpy of NOx (40 SER) 128,000 tpy of CO2e (75000 SER)

10. PSD NSR Requirements • Use of Best Available Control Technology for control of air pollutant emissions. • Dispersion modeling to demonstrate compliance with ambient air quality standards and PSD increments. • Dispersion modeling to demonstrate potential impacts to visibility and deposition within Class I protected areas. • Construction monitoring of ambient air pollutants. • Complying with requirements can cost tens of thousands to millions of dollars

11. Impetus to change regulation and policy

12. Agency to Agency Protocol • Common goals with GHG to each agency • Provide green energy, jobs and clean air to the American people • Ensure enough data can be attained to comply with statue (statistically valid sample) • Wood-to-energy air emissions can be attained thru European technology

13. Political Agenda’s • National Security Issue - Becoming fossil fuel independent from foreign oil • Forest Health Issue - Getting National Forests back to a healthy state from Mountain pine bark beetle, overgrown forests • Economy needs - Create green jobs, green energy • Private entity pressure on politicians to allow the biomass industry to grow and become competitive.

14. United States National Security Issue - Oil Dependency from Foreign Suppliers • In 2010, U.S. consumed 19.1 million barrels per day of petroleum based products. • U.S is currently the largest consumer of petroleum. • A estimated 57% of total oil consumed is imported from countries that do not like the U.S.

15. Wildfires • Unprecedented loss of valuable resources (water, air, wildlife) in wildfires across America at a rate of 8.0+ million forest acres each year.

16. Energy Crisis • In 2007 The Bush Administration set a national goal to reduce U.S. gasoline use by 20% in 10 years by switching to the use of alternative fuels. • Congress passed the Energy Independence and Security Act of 2007, which requires that renewable fuels collectively supply at least 36 billion gallons of U.S. motor fuel by 2022. • These policies called for a unprecedented growth in the biofuels industry, which today produces about 6 billion gallons of ethanol annually.

17. 2008 Farm Bill Renewable Energy Provisions for Biomass Utilization • Farm Bill, 2008 definition of woody biomass wasinclusive of materials removed from federal lands. • Section 9011: Biomass Crop Assistance Program provides support to establish and produce crops for conversion to bioenergy • Section 9012: Forest Biomass for Energy authorizes Forest Service (FS) to conduct comprehensive R&D program to use forest biomass for energy. • Section 9013: Community Wood Energy provides grants to state and local governments to develop community wood energy plans and to acquire or update wood energy systems.

18. Proposed Change in Regulation and Policy

19. Purpose of Proposed Change • To further examine scientific and technical issues associated with emissions • Develop rulemaking • Determine if a Clean Air Act permit is required • Cut pollution responsible for climate change • CO2 emissions are generated from biomass burning and other biogenic sources during combustion and decay. • Develop an approach that both protects the environment and encourages clean energy use

20. 2011 Permit Deferral for Biomass Industries • January 2011- Air permitting requirements began for large industries with GHG emissions and future plans of facility modification. • Must reduce overall GHG emissions • Includes Power Plants and Refineries • Small sources such as restaurants and farms exempt from permit requirement • Three-year deferral by the EPA on GHG (greenhouse gas) permitting requirements for CO2 emissions from biogenic sources beginning JULY 2011 EPA Three-Year Plan: • Seek input from experts and Federal Government • Consider 7,000+ comments from July 2010 Call for Information • National Alliance of Forest Owners: EPA will reconsider the portion of the May 2010 tailoring rule regarding GHG emissions.

21. Environmental Impacts of New Policy Negative Positive Help reduce accumulation of hazardous fuels and restore healthy forest conditions in the west. Improve forest conditions in the east and south, where additional markets for low-quality and small-diameter trees will enable forest managers to improve the quality of hardwood forests and reduce overstocking in coniferous forests. Debris often bound for slash burn piles or forest fires – shifts that into energy production. • Wood fueled biomass power plants emit about 50% more CO2 per MWh than existing coal plants. • Might encourage clear cutting, over-harvesting. • Still debate over carbon neutrality. • Incinerating biomass in power plants creates more PM than coal burning. Linked to health issues.

22. Economic Impacts of New Policy Negative Positive Creates Jobs in Rural Communities hard hit by timber revenue declines. Promotes Energy Independence Biomass in forests seemingly readily available – untapped resource. Carbon Markets • Boom then Bust – over development of industry • Technological advances might be hindered without disincentive inherent in permitting process. • Health: economists all agree that ultimately, clean air = healthier citizens = reduced health care costs.

23. Recommendations • The 3 year deferment period is useful and necessary to allow a renewable industry such as biomass to establish itself. • Simultaneous peer reviewed study by the EPA of the science and technical issues associated with biogenic CO2 emissions will prove necessary in the long term implementation of biogenic fuel as an alternative energy source.