Tightening the Screws – Lower NAAQS Mean Higher Costs

ALL4’s Ambient Group continues to track and provide you with updates on the latest developments related to National Ambient Air Quality Standards (NAAQS). The NAAQS are the primary basis for the permitting of new stationary sources and modifications to stationary sources in the United States. A region’s compliance status with the NAAQS dictates how new major stationary sources and modifications to existing major stationary sources are permitted via the New Source Review (NSR) process (i.e., Prevention of Significant Deterioration (PSD) or Nonattainment New Source Review (NNSR)). Lowered NAAQS become increasingly important during the PSD process since the new, extremely stringent NAAQS levels tend to influence the level of control required for a given project and could ultimately doom an otherwise environmentally beneficial and technically sound project. The following reduced NAAQS levels are, or will be, relatively new to the air quality permitting process: 

• PM2.5 (Annual and 24-hour NAAQS evaluated in 2006) 
• NO2 (New 1-hour NAAQS that became effective on April 12, 2010) 
• SO2 (New 1-hour NAAQS scheduled to become effective in June 2010) 

These new and proposed standards will make it increasingly difficult to obtain agency environmental approval for new or existing facility expansion and modernization projects. Now more than ever, the NAAQS and the associated air dispersion modeling requirements will dictate the viability of new projects and the way that new projects are designed, representing a distinct shift from Best Available Control Technology (BACT) influence. The more stringent NAAQS levels in combination with other regulatory initiatives are also expected to dampen the momentum around the development of combustion-related alternative fuel projects (e.g., biomass combustion). At a minimum, the new standards will require inventive approaches to construction permitting that may not have been necessary in the past. Stay tuned for next month’s 4 The Record for a detailed update on the new NAAQS, their impacts on new source permitting, and ALL4’s recommendations on how to address the standards. 

Back to the Future – Proposed Revocation of NSR Aggregation Amendments

In response to a January 30, 2009 petition from the Natural Resources Defense Council (NRDC), U.S. EPA is soliciting comments regarding several aspects of the “New Source Review (NSR) Aggregation Amendments” that were promulgated on January 15, 2009. The NSR Aggregation Amendments were intended to provide clarity regarding when un-related modifications at major sources are evaluated during the NSR applicability determination process. U.S. EPA’s preferred option is to revoke the January 30, 2009 final rule and to restore the past policy for making case-by-case aggregation determinations. As part of the proposal, U.S. EPA is also requesting a six-month extension of the effective date of the NSR Aggregation Amendments until November 18, 2010 to allow a reasonable period of time to complete the reconsideration. 

NSR applicability is determined via a two-step process. How projects are grouped during Step 1 of the process is referred to as aggregation. The issue of aggregation became a concern early in the history of the NSR rules by sources attempting to circumvent NSR rule applicability by splitting projects into smaller pieces that when considered alone (i.e., during Step 1), would not trigger NSR. Through a series of interpretative memoranda, guidance, and precedence over two decades, U.S. EPA developed their case-by-case approach to aggregation. The January 15, 2009 NSR Aggregation Amendments attempted to capture the essence of the case-by-case aggregation policy, requiring sources to combine emissions from projects only when the projects are “substantially related” to determine if a significant emissions increase would occur. However, upon further consideration following the NRDC challenge, U.S. EPA agreed that the “substantially related” interpretation would “exclude meanings that fit within a reasonable understanding of the ordinary meaning of “any physical change,” the interpretation in the NSR Aggregation Amendments would impermissibly narrow the scope of CAA section 111(a)(4).” This position is reflected in U.S. EPA’s preferred option to revoke the 2009 NSR Aggregation Amendments and revert to the previous case-by-case aggregation policy. 

So Your Greenhouse Gas (GHG) Monitoring Plan is Complete… Now What?!?

U.S. EPA’s Greenhouse Gas Mandatory Reporting Rule (GHG MRR) codified at 40 CFR Part 98 required that facilities subject to the rule have a complete written GHG Monitoring Plan by April 1, 2010. At a minimum, the GHG Monitoring Plan must identify (1) methods used to collect GHG emissions information and supporting data, (2) personnel responsible for collecting the data, and (3) quality assurance, maintenance, and repair methods for all measurement devices used to collect data. 

Well, April 1, 2010 has come and gone… so now what? 

First off, we’ll state the obvious – make sure that your GHG Monitoring Plan really is complete and in place. The GHG Monitoring Plan is a working document and is not a plan that sits on the shelf and is dusted off on December 31, 2010. Now is the time to ensure that your facility is implementing the GHG Monitoring Plan. If you wait until year-end, you may find that you cannot collect, or have not collected, the support information identified in your plan. 

In addition to “living your GHG Monitoring Plan,” there are some other steps that you can take now to ensure that you are meeting the requirements of 40 CFR Part 98. 

1. Train your key stakeholders. Provide training to all parties that will play a role in collecting data and calculating parameters/emissions. Like other monitoring programs, the data collection component most likely extends beyond the environmental group. Educate everyone that has a role in executing the GHG Monitoring Plan and distinguish the importance of their respective roles. For example, a facility that operates a multi-fuel boiler may be required to analyze carbon content on a per fuel shipment basis for coal, collect weekly samples from which a monthly composite is analyzed for carbon content for other solid fuels, and analyze the heating value semi-annually for natural gas. 
2. Utilize a monthly GHG calculation tool. Implementing a monthly computation will highlight areas to be resolved on a near term basis as opposed to determining at year end that an issue was present (e.g., missing data, improper analytics, calibration issues, etc.) Monthly calculations will also allow your facility to communicate its GHG emissions footprint (per U.S. EPA 40 CFR Part 98 rule) to internal and external stakeholders and put in place a mechanism for risk mitigation, corporate benchmarking, shareholder/supplier reporting, etc. 
3. Plan for the next wave of GHG rulemaking. While proposed legislation that would regulate GHG emissions has been slower to evolve than anticipated, it is coming soon! The recent activity at U.S. EPA to regulate GHG emissions from automobiles serves as the first step in the process to regulate GHG emissions on the national basis. Expect that GHG pollutants from stationary sources will be regulated and will be required to be considered in future air quality permitting exercises – as soon as the 2011 calendar year. ALL4 believes that any complex air permitting projects that could extend into the 2011 calendar year should address GHG pollutants as part of the application. This will take us into areas previously not considered such as determining what is Best Available Control Technology (BACT) for CO2 emissions from a natural gas-fired boiler.…We environmental professionals have some work to do! 
4. Let folks know the great things that your company is doing. Summarize the positive things that your company has already done to reduce your company’s GHG footprint – give your marketing folks some ammunition to take your contributions public. People might not be able get their arms around the GHG impact of switching from coal to natural gas. They can, however, understand that the switch from coal to natural gas is equivalent to taking 7,000 cars off the road, or saving 29,000 acres of pine trees. Put projects in terms that people can understand and you will maximize the benefits.