Local Law Blogs

EPA Issues Greenhouse Gas (GHG) Permitting Guidance

by R. Lee Vail

New major and modified existing stationary sources require air permits prior to beginning construction. Where increases of criteria pollutants  such as sulfur dioxide, nitrogen dioxide, carbon monoxide, particulate and volatile organic compounds exceed a 'significance' threshold, the permittee is required to analyze available and technically feasible control technology with the goal of selecting the best available control technology (BACT) for new or modified emissions units. With agency agreement, the selection of BACT becomes an enforceable part of the permit. 

We now have a new 'pollutant,' greenhouse gas ('GHG') equivalents for the six regulated greenhouse gases (carbon dioxide, methane, nitrous oxide, sulfur hexafluoride, perfluorocabons, and hydrofluorocarbons). GHGs are measured as equivalents to carbon dioxide, the most common GHG (CO2e). Starting January 2, 2011, permits issued for facilities that otherwise trigger PSD (as above) and have a new or increased potential to emit (PTE) of CO2e of 75,000 TPY, must address GHG emissions. Following July 1, 2011, a PSD permit may be required for significant increases in GHGs alone (100,000 tpy for a new source or 75,000 tpy for` a modification), even where there is no significant increase of any other regulated criteria pollutant. 

As with other pollutants, once PSD is triggered for GHGs, the permittee must evaluate and propose that which constitutes BACT to control the CO2e. Although the general scheme for selecting BACT is familiar, a top down ranking of available and technical feasible technologies, the available options are not. There are no conventional CO2e scrubbers or waste heat boilers, or filter traps to capture CO2e.  While some technologies are emerging, the process of determining BACT for CO2 control is a new frontier, and lack of guidance can cause permitting delays. To address some of the uncertainties,  EPA issued guidance on November 10, 2010 concerning permitting GHGs explaining the process for determining the required emission control technology - BACT.

Technology options, at present, are rather sparse. As most GHGs are emitted from fuel burning sources, the EPA guidance places a large emphasis on energy efficiency measures as being potential BACT. This would include technologies that maximize the efficiency of the individual emission unit (e.g. greater production of electricity per unit heat input) and for new greenfield facilities, the permittee should evaluate the efficient use of thermal energy and electricity produced (e.g., energy efficient buildings within the facility). Industry has long balanced capital cost against operating cost in developing the most cost efficient design of a facility. Now, in addition to convincing company management that the right balance has been struck, it may be necessary to convince the EPA. 

EPA noted within the November guidance, that 'the CAA includes ‘clean fuels' in the definition of BACT' however that that the initial list of technologies need not include options that would fundamentally redefine the source (i.e., switch from coal to natural gas). Whereas 'EPA continues to believe that permitting authorities can show in most cases that the option of using natural gas as a primary fuel would fundamentally redefine a coal-fired electric generating unit,' it also maintains that a 'permitting authority retains the discretion to conduct a broader BACT analysis and to consider changes in the primary fuel in Step 1 of the analysis.'

EPA considers carbon capture and control (CCS) as being an available technology for some applications. CCS is composed of three elements; capture and compression, transportation and storage. Where one element is infeasible, the control option is infeasible. As above, CCS can be eliminated based on poor economics, however where the carbon dioxide is valuable, such as in oil field flooding for enhanced recovery, this technology  is to be considered.

As CO2e is a collection of the six GHGs, BACT is determined on the overall effect of the collection. Both methane and carbon dioxide are greenhouse gasses; however methane contributes 21x the effect of carbon dioxide with respect to global warming potential. BACT is determined based on the collection or equivalent effect, not the individual effect of each GHG. Further, a reduction in methane at an existing unit may be credited in the two-step process of determining significant emission increases (PSD avoidance and/or netting). Conversion of the heat of combustion can also be considered in the energy efficiency balance of the BACT determination.

As with other pollutants, an option may be eliminated from the BACT top-down analysis where the implementation cost is disproportionately high.   But how high is that? Much will be learned when the first GHG PSD permit is issued. Let's face it, those early in the queue for a CO2e construction permit will have significant heavy lifting to do and must not proceed without diligent consideration.   

It has been a long time since such a critical permitting issue has been so fluid, and so immediate in application as GHG permitting. All must be fully informed and realize that each early permit may set the trend for years to come. The EPA November 2010 Guidance is available at http://www.epa.gov/nsr/ghgdocs/epa-hq-oar-2010-0841-0001.pdf.

Full post as published by Louisiana Law Blog on December 16, 2010 (boomark / email).