Looking Towards 2013 from a Consultant’s Perspective

Here we are again at year’s end, another year older and wiser (hopefully).  We made it through another election, the “fiscal cliff,” Hurricane Sandy, the Mayan end of the world, and the final episode of the Jersey Shore MTV series.  As in past years, we have queried our staff here at ALL4 to gather a few opinions regarding what we have to look forward to in the year ahead in the broad realm of air quality management and compliance.  Based on what we have seen during the last days of 2012, the year ahead looks to be shaping up to be very “active.”  Naturally, most everyone had a slightly different take on what air quality topic was at the top of their list. Note that all of the familiar acronyms (NAAQS, PSD, NSR, MACT, CAIR, GHG, CISWI, CEMs, etc.) make at least one appearance each throughout the article along with a few newer ones (CSAPR, MATS, PAL, CHP, RICE, NHSM, etc.).  So here, in no specific order, are the top air quality issues for 2013, as articulated by ALL4 staff.  Related questions may be posed to the authors – contact information for each is available by clicking on the applicable sub-titles.

Colin McCall – Lower NAAQS Trajectory

One of the few certainties in the air quality permitting and compliance arena is that the National Ambient Air Quality Standards (NAAQS) will continue to be the biggest obstacle to the future growth of facilities across the county (and will continue to make this list for as long as we are writing it).  The latest round of U.S. EPA reviews has further tightened the NAAQS to a level of stringency that will directly impact the design and feasibility of many major projects.  It is only a matter of time before a capital project or new NAAQS implementation process introduces direct NAAQS compliance to more and more facilities.  Here are the key NAAQS to follow looking ahead to 2013:

• 1-Hour Sulfur Dioxide (SO2): We have been keeping you up to date on the 1-hour SO2 NAAQS saga through various blog posts and 4 The Record articles. Our last SO2-specific update pertained to the U.S. EPA stakeholder workgroup meetings that were held to solicit comments on the best way to implement the 1-hour SO2 NAAQS (dispersion modeling, monitoring, or a combination of both?). U.S. EPA heard a range of comments at those meetings and is tasked to release a proposed rulemaking or proposed guidance on the NAAQS implementation process. Given the information that U.S. EPA needs to consider and the logistical considerations around a possible increased ambient monitoring network, we would be surprised to see anything released until mid-2013. Keeping with that trend, U.S. EPA delayed the finalization of 1-hour SO2 designations for areas with ambient monitoring data until June 2013.  Once issued as final, the 1-hour implementation process will impact many facilities that need to mitigate either monitored or modeled SO2 impacts.
• Annual Fine Particulate Matter (PM2.5): As of December 14, 2012, the annual PM2.5 NAAQS has been reduced from 15 micrograms per cubic meter (µg/m3) to 12 µg/m3. It is already very difficult to demonstrate modeled compliance with the annual NAAQS under the Prevention of Significant Deterioration (PSD) modeling process for major permitting projects. A tightened standard makes it even more difficult and could expand the list of PM2.5 nonattainment areas since 12 µg/m3 is already being measured as a background concentration at many of the existing ambient monitors. Similar to the SO2 NAAQS implementation process, expect to be involved in discussions with U.S. EPA and state agencies related to the current coverage of ambient monitors and whether an enhanced monitoring network will be required to adequately assess attainment and nonattainment for the new annual standard.  From a permitting perspective, facilities will continue to need to find internal reductions to offset PM2.5 emissions increases so that major source and modification permitting requirements can be avoided for PM2.5.

On a bigger picture note, legal challenges to the 1-hour SO2 and NO2 NAAQS levels were rejected in 2012, so the NAAQS levels are here to stay for the foreseeable future. These recent court cases show that health-based standards, once established, will be difficult or even impossible to scale back (although there is still hope that the implementation process for those standards can be adjusted). Given the permanence of the NAAQS levels, they will continue to be one of the primary areas that dictate a facility’s ability to operate and expand in the future. Also, don’t lose sight of the ozone (O3) NAAQS. The next reconsideration is scheduled for 2013, so the process of evaluating more stringent ozone standards and the nonattainment area permitting implications of a tightened ozone standard will happen again. We will continue to keep track of the latest developments around the NAAQS levels, so stay tuned for updates as they arise.

John Slade – Electric Utility Sector (or the Usual Suspects)

For the electric utility sector, this past year has been the most challenging in its history of regulation under the Clean Air Act (CAA).  No, nothing has changed in the CAA since 1990, but implementation of those provisions and rules promulgated, or proposed under them have significantly accelerated in frequency and complexity over the past several years.  The utility sector, as with other industrial sources, has been challenged with new NAAQS, Boiler MACT for their non-electric generating units (non-EGUs), and reciprocating internal combustion engine (RICE) regulations.  But the big ticket items for them is the flip-flopping uncertainty of the Clean Air Interstate Rule (CAIR), the Cross State Air Pollution Rule (CSAPR), and a possible new version of rules for nitrogen oxides (NOX)and SO2 emission allowances.  Even more impactful for coal and oil-fired EGUs will be the Mercury and Air Toxics Standards (MATS) rules.  Combine all of this with major shifts in fuel pricing due to unconventional natural gas development, rate-deregulation in some areas, and unprecedented numbers of coal-fired facilities shutting down, we have major uncertainty for an industry that has been one of the backbones for the U.S. economy.  Additionally, with such uncertainty in electricity pricing and reliability, high electrical use industries have begun installing their own electrical generation capability, mostly for captive use and some peak demand response.  All of this adds up to a game changing scenario for which no one quite knows the final rules. Hopefully the mixture of proposals, rules, challenges, remands, and vacaturs will coagulate and we will see a consistent regulatory path emerge from the current chaos.

Dan Dix – Pollutant and Meteorological Monitoring, Yes Really

As was summarized in ALL4’s October 4 The Record article “Musings on Monitoring:  The Who, What, When, Why, and How of Atmospheric Measurements,” it appears as though U.S. EPA has reversed course with their initial air dispersion modeling approach on the 1-hour SO2 NAAQS attainment/non-attainment designations process. U.S. EPA is now heading down a more traditional ambient monitoring path for 1-hour SO2 NAAQS attainment/non-attainment designation process. However, the difference is that U.S. EPA may be placing the burden of operating ambient monitors on industrial facilities and not on state agencies. We are expecting a final rulemaking from U.S. EPA sometime in mid-2013 to outline what the final approach will be. During U.S. EPA stakeholder meetings to discuss potential approaches to the 1-hour SO2 NAAQS attainment/non-attainment designation process, U.S. EPA indicated that monitors will potentially be sited at facilities based on an emissions threshold or population-weighted emissions threshold for a given area. Industrial facilities with high SO2 emissions should consider adding the cost of operating an SO2 ambient monitor to their 2013 budget. In addition, facilities should always co-locate a meteorological monitor with an ambient pollutant monitor in order to understand the meteorological conditions that exist during each hour of data collected. The 1-hour SO2, NO2 and recently lowered 24-hour PM2.5 NAAQS are extremely tight. Any facility going through the Prevention of Significant Deterioration (PSD) permit process may be required to conduct a NAAQS air quality modeling demonstration. The collection of one (1) year of on-site meteorological data for use in a NAAQS air quality modeling demonstration can be designed to collect more measurements (i.e., turbulence data) than National Weather Service (NWS) meteorological data, enabling facilities to utilize U.S. EPA’s AERMOD air dispersion model to produce a more representative prediction of ambient pollutant concentrations.  This is especially beneficial when dealing with 1-hour standards.

John Egan – Air Permitting and Strategic Planning

For over 35 years now, facilities that meet the “major source” criteria have operated under air quality permitting rules that can potentially result in almost any physical change, or change in the way the source is operated, being classified as a “major modification.”  These federal and state major new source review (NSR) regulations include the PSD rules for major sources located in areas that are considered to be in attainment with, or unclassifiable with respect to, the NAAQS.  For areas that are not in attainment with the NAAQS, the applicable major NSR rules are the non-attainment NSR regulations.  A read of the federal PSD and non-attainment NSR rules, or any of the approved state major NSR regulations makes it clear that these are complex regulations; not necessarily easy to understand and even more difficult to interpret and apply.  We’ve had a number of blogs and 4 The Record articles that touch on these air permitting rules and on related agency interpretations and guidance, so we won’t rehash details here.  What we want to point out is that the other new rules and requirements talked about in this article will likely require equipment or fuel changes, or altering operating procedures for existing sources.  If your source is major there are no special exemptions for any of these projects to avoid major NSR (e.g., there is no “pollution prevention project” exemption).  At a minimum, major NSR rule applicability assessments will be needed and the process for completing these assessments is complicated in and of itself by the nuances of the rules.  If you are strategically planning compliance with Boiler MACT or CISWI or other new requirement, and you aren’t taking the major NSR air permitting requirements into consideration in your plan, there could be a flaw in your strategy.  If you are considering major NSR applicability in your strategic planning, don’t overlook the Plantwide Applicability Limitation (PAL) provisions of these rules. Obtaining a PAL permit could be the most strategically advantageous move your facility makes for years to come.

Dan Holland – A Surprise Question for 2013?

What will you do this year if a nearby facility undertakes an air quality modeling study in support of an air permitting project and the results indicate that your facility is causing a violation of the NAAQS?  Will you have investigated the availability of suitable meteorological data to evaluate your facility?  Will you have examined your source stack and emission information to confirm that it is complete and accurate?  Will you have already completed your own diagnostic air quality modeling study to determine your facility’s status with respect to the NAAQS?  Or will you have initiated the process to understand why your facility is not able to be characterized using the current U.S. EPA-approved air dispersion model?  As a goal for 2013, it would be very worthwhile to understand these air quality modeling issues and how they may impact your facility.  Also, it is important to note that U.S. EPA is now devoting time and resources assessing photo-chemical air quality modeling procedures to allow for an assessment of how a single source’s VOC, NOx and SO2 emissions impact ozone and PM2.5 air quality levels on a regional level.  Such analyses will only increase the scrutiny that facilities receive from an air dispersion modeling perspective.  Are you prepared?

ALL4 Staff– Energy Efficiency, CHP, GHG, and NSR

As companies continue to read and react to ever-changing economic and regulatory drivers, management and environmental staff are faced with increasing, and sometimes opposing, challenges to improve infrastructure, reduce operating expenses, and minimize environmental impacts. At the forefront of these challenges are the trio of energy efficiency, energy independence (self-sufficiency), and carbon management [largely in the form of emissions of greenhouse gases (GHGs)]. The implementation of energy efficiency projects, as well as the increasing consideration of combined heat and power (CHP) applications, are examples of industry-proven means to meet such challenges. The concept of energy efficiency projects and CHP systems reduces utility consumption and costs, and often includes the reduction of GHG emissions as an additional benefit. In addition, a movement afoot (whether voluntarily or in response to a regulatory driver) to switch to, or further augment, the use of “inherently cleaner” fuels and process materials has been a large part of the strategic plans for many companies. From a big picture perspective, these approaches and innovations are sure to make a difference for economic, environmental, and social reasons.

However…facilities need to proceed with caution regarding the implementation of energy efficiency, CHP, and GHG-reduction products. With the advent of regulations regarding emissions of GHGs, the regulated community must not lose sight that air permitting requirements in response to such projects are not necessarily less burdensome. Depending on the specific application, the use of cleaner fuels as part of a coal-conversion project, for example, may actually increase the emissions of pollutants like carbon monoxide (CO) and volatile organic compounds (VOC). U.S. EPA’s focus on energy efficiency projects through the Best Available Control Technology (BACT) process as the means to control emissions of GHGs remains intact. U.S. EPA has maintained its position that the BACT process does not need to consider technologies that would “re-define the source,” such as whether a natural gas electric generating facility is a control option for a proposed coal-fired electric generating facility. However, the permitting authority (in most cases, the state agency) retains the discretion to conduct a broader BACT analysis and to consider changes in the primary fuel in the BACT analysis. Furthermore, losing the capability to fire multiple fuels may reduce a facility’s operating and permitting flexibility in the long-term.

In summary, the intentions of implementing projects to reduce utility consumption and associated air emissions are true and worthy of praise. However, one must remember that modifications of existing equipment or the installation of new equipment must still be evaluated for air permitting requirements.

ALL4 Staff – Hydrogen Sulfide

Does your facility emit hydrogen sulfide (H2S)?  It certainly might, since H2S is emitted at a variety of industrial sites including, but not limited to, petroleum refineries, pulp and paper mills, animal feeding operations (AFOs), and wastewater treatment plants.  If your plant emits this compound, how ready are you to report your emissions of H2S in the upcoming Toxic Release Inventory (TRI)?  You heard that right – U.S. EPA is requiring reporting of H2S in the TRI for the first time this year, after having administratively stayed reporting of this pollutant for 19 years, almost immediately after having initially added it to the TRI list of reportable compounds in 1993.  So there has certainly been some controversy around this pollutant that has required lengthy deliberation.  Are you aware of all the various options that currently exist for quantifying this toxic compound?  As an example, the National Council for Air and Stream Improvement, Inc. (NCASI) offers not just emission factors, but a site-specific pond profile method which requires extensive field data collection and pond sampling, and a mechanistic model with predictive capabilities that relies on wastewater treatment plant inlet sampling.   What are the advantages and disadvantages of using the various available options for your facility?  If your facility emits or has the potential to emit H2S, you should be actively planning the basis for meeting your H2S reporting obligations for the 2012 reporting year.

Eric Swisher – Continuous Emission Monitoring Systems Bonanza

Continuous Emission Monitoring Systems (CEMS) will be on everyone’s mind in 2013 and not just the CEMS that everyone has grown up with (i.e., SO2, NOX, etc.).  With the expected promulgation of new rules, implementation of delayed rules, and roll-out of recently promulgated rules, U.S. EPA has given us all the opportunity design, specify, gain approval, install, certify, and continuously operate cool new toys such as monitoring and data acquisition systems for mercury (Hg), hydrogen chloride (HCl), total hydrocarbon (THC), and PM.  Evaluating compliance options and monitoring technologies, designing and procuring monitoring systems, and orchestrating their certification will be on the minds of state air quality regulators, corporate environmental managers, plant environmental managers, consulting engineers, stack testers, hardware vendors, and software developers over the next year and beyond.  Unfortunately, Santa’s elves are not very helpful in developing a monitoring strategy to meet your compliance needs regarding the monitoring requirements of the Portland Cement (PC) MACT, Utility MATS, Boiler MACT, CISWI, and any other regulatory “gifts” from U.S. EPA.

Ron Harding – Glimmer of Hope No Longer: U.S. EPA Secures Extension for Generator Air Rule Deadline (The Regulated Community is Not Surprised)

On Thursday, December 6, 2012, U.S. EPA sent the latest reconsidered revised version of 40 CFR Part 63, Subpart ZZZZ – National Emissions Standards for Hazardous Air Pollutants for Stationary Reciprocating Internal Combustion Engines, the so called RICE MACT, to the White House Office of Management and Budget (OMB).  Almost exactly one (1) short week later, U.S. EPA secured an extension for the reconsidered revised rule deadline despite the fact that the original December 14, 2012 deadline was the result of a court ordered mandate.  U.S. EPA receiving an extension for the mandatory promulgation date of a final rule is not new (Boiler MACT anyone?) and the regulated community affected by the reconsidered revised version of the RICE MACT rule, while potentially disappointed, is likely not surprised at U.S. EPA’s end of the year maneuvering.  Not to worry, the extension is not long.  If you operate RICE affected by the reconsidered portions of the revised rule you’ll only have to wait until January 14, 2013 to see the final version of the RICE MACT.  If you operate RICE unaffected by the reconsidered portions of the revised rule, don’t let U.S. EPA’s receipt of a deadline extension idle your compliance efforts.  With compliance dates looming in 2013, the RICE MACT is no longer coming, it’s here.  Compression Ignition (CI) RICE must comply with the requirements of the RICE MACT by May 3, 2013.  Spark Ignition (SI) RICE must comply with the requirements of the RICE MACT by October 19, 2013.  A year ago the RICE MACT was down the road.  Six (6) months ago it loomed around the corner.  Now it’s knocking at your door.  Are you ready?

Lindsey Kroos – Strategic Planning for the 4 Rules Takes Center Stage

On December 20, 2012, U.S. EPA finalized the so called 4 Rules – the Maximum Achievable Control Technology (MACT) standards for Major and Area Source Boilers (Boiler MACT), Commercial and Industrial Solid Waste Incineration (CISWI), and Nonhazardous Secondary Materials (NHSM) rules.  Seeing as the 4 Rules were finalized just three days shy of a year since they were proposed on December 23, 2011, industry spent nearly all of 2012 waiting for answers to questions such as, “Is the fuel I fire considered a waste?” “When is the compliance date?” and “What happens if the rules are not finalized before the No Action Assurance expires?”  In a word, 2012 was a year of uncertainty when it came to the future of boilers, process heaters, incinerators, and rotary kilns.  With the finalization of the 4 Rules, along with the PC MACT, facilities can start focusing on what they need to do to comply rather than speculating on what they might have needed to do.  At first glance, U.S. EPA appears to have relaxed the rules compared to the March 2011 final versions and the December 2011 proposed versions.  Certain materials were determined to be non-wastes in the NHSM rule, most compliance dates were extended, and certain emission limits were revised.  We also expect that many of the revised rules will be subject to typical court challenges.  Check out a few preliminary takeaways from the final rules here.  2012 was full of uncertainty, but we expect 2013 to be full of strategic planning for compliance with the 4 Rules.