Setting the Stage: The Clean Air Act’s Opportunities and Challenges NACAA, NARUC, NASEO Meeting: Environmental Protection & Clean, Reliable Energy; Governments Working Together July 9, 2012 Bill Becker, NACAA What I Will Cover  Background on Air Quality and Emissions  EPA Air Rules Affecting the Power Industry  Mercury and Air Toxics Standards (MATS)  Cross State Air Pollution Rule (CSAPR)  CO2 Emissions Standards for New Power Plants  GHG Permitting  Regional Haze  National Ambient Air Quality Standards The Clean Air Act is Working The Clean Air Act Has Prevented a Huge Number of Premature Deaths and Other Adverse Health Effects Health Effects Reduction (PM2.5 & Ozone Only) Pollutant (s) Year 2010 Year 2020 PM2.5 Adult Mortality PM 160,000 230,000 PM2.5 Infant Mortality PM 230 280 Ozone Mortality Ozone 4,300 7,100 Chronic Bronchitis PM 54,000 75,000 Acute Bronchitis PM 130,000 180,000 Acute Myocardial Infarction PM 130,000 200,000 Asthma Exacerbation PM 1,700,000 2,400,000 Hospital Admissions PM, Ozone 86,000 135,000 Emergency Room Visits PM, Ozone 86,000 120,000 Restricted Activity Days PM, Ozone 84,000,000 110,000,000 School Loss Days Ozone 3,200,000 5,400,000 Lost Work Days PM 13,000,000 17,000,000 Air Quality is Improving at the Same Time Our Economy Has Expanded However, Millions of People are Still Exposed to Unhealthful Levels of Air Pollution Location of Coal- and Oil-Fired Power Plants MATS covers approximately1,400 coaland oil-fired units > 25 MW at about 600 power plants nationwide Mercury and Air Toxics Standards Fish Advisories for Mercury are Everywhere Mercury and Air Toxics Standards  On December 16, 2011, EPA issued final standards to reduce emissions of mercury and other toxic air pollutants from new and existing coal- and oilfired power plants greater than 25 megawatts   These standards will require facilities to reduce:  Metals, including mercury, arsenic, chromium and nickel  Acid gases, including hydrogen chloride and hydrogen fluoride, and  Particulate matter New sources will have to install state of the art technology, while existing sources must achieve the average of the top 12% performing facilities  Currently, 40% of EGUs do not have advanced pollution control technology Mercury and Air Toxics Standards  These sources will need to install technologies that are generally proven and widely available  Expected measures needed to comply include:  Mercury – Selective Catalytic Reduction, Scrubbers, Activated Carbon Injection  Non-Hg Metals – Fabric Filters (FF), Electrostatic Precipitators (ESP)  Acid Gases – Scrubbers, Dry Sorbent Injection, DSI with FF or ESP  Dioxins and Furans – Work Practice Standards  Sulfur Dioxide – Scrubbers, Dry Sorbent Injection  Retirements – EPA expects retirements to be less than 4.7 GW (out of 1000 GW of total EGU capacity) by 2015 – less than ½ of 1% Compliance Deadlines  The Clean Air Act provides sources three years to comply with the MATS standards  The Act also provides additional flexibilities for sources needing more time  Allows state and local agencies to issue a permit providing one more year, where necessary, for the installation of controls  A source may also be granted an additional (5th) year to comply if it qualifies for an Administrative Order under Section 113 Cross State Air Pollution Rule (CSAPR) Background on CSAPR  EPA issued the Clean Air Interstate Rule (CAIR) on 5/12/05  In 2008, the D.C. Circuit remanded CAIR to EPA, leaving existing programs in place while directing the agency to address certain legal deficiencies  EPA proposed CSAPR on 7/6/10 and finalized the rule on 7/6/11  EPA proposed a supplemental rule on 7/6/11 adding five additional states in the ozone season NOx program; the rule was finalized on 12/15/11  CSAPR was scheduled to replace CAIR on 1/1/2012; however, on 12/30/2011 the D.C. Circuit stayed the CSAPR rule pending judicial review What CSAPR Does  Requires 23 states to reduce annual SO2 and NOx emissions to help downwind areas attain the PM2.5 NAAQS  Requires 25 states to reduce ozone season NOx emissions to help downwind areas attain the 1997 8-hour ozone NAAQS (84 parts per billion)  Emissions reductions were proposed to take effect on 1/1/2012 for SO2 and annual NOx, and 5/1/2012 for ozone season NOx  EPA will need to tighten CSAPR in the future to address 1) the more stringent existing ozone standard (75 ppb), 2) a possible tightening of the ozone standard in 2014 (CASAC recommended 60-70 ppb) and 3) the recently proposed more stringent PM2.5 standard; additionally, the geographic area of CSAPR may need to be expanded accordingly States Covered By CSAPR Anticipated Emissions Reductions 10 9 Million Tons 8 2005 Actual Emissions 7 6 5 2012 Cross-State Air Pollution Rule Emissions 4 3 2014 Cross-State Air Pollution Rule Emissions 2 1 0 SO2 Annual NOX Ozone-Season NOX CO2 Emissions Standards for New Power Plants Background on EPA’s Proposal  Power plants are the largest source of GHGs  In response to a court settlement, EPA proposed New Source Performance Standards (NSPS) on 4/13/2012 pursuant to authority under Section 111 of the CAA that will cover CO2 emissions from Electric Generating Units (EGUs)  Section 111(b) requires EPA to regulate new and modified sources  Section 111(d) requires EPA to regulate existing sources for which standards are promulgated under Section 111(b) What EPA’s NSPS Proposal Does   EPA’s proposal applies to:  Fossil-fuel-fired boilers  Integrated Gasification Combined Cycle (IGCC) units  Natural Gas Combined Cycle (NGCC) units  Simple Cycle turbines The proposal does not apply to:  Existing sources, including “modifications” and “reconstructions”  New units with permits that start construction within 12 months of EPA’s proposal  “Transitional” units – New units with permits that start construction within 12 months of EPA’s proposal and DOE demonstration projects that start construction within 12 months of the proposal What EPA’s Proposal Does (con’t)  New fossil-fueled-fired power plants must meet an output-based standard of 1,000 pounds of CO2 per megawatt-hour  EPA believes that almost all NGCC units built since 1995 will be able to meet the standard without add-on controls  EGUs using coal or petroleum coke that use Carbon Capture and Sequestration have the option of phasing in compliance  For the first 10 years, these sources would be required to meet an annual rate of 1,800 lbs/MWh  For the next 20 years, these sources would need to meet a rate of 600 lbs/MWh A Word About “Existing” Sources  EPA has not proposed standards for existing sources       EPA is required to establish emissions guidelines for existing sources under Section 111(d) of the CAA Guidelines include targets based on demonstrated controls, emission reductions, costs and expected timeframes for installation and compliance Guidelines can be less stringent than the requirements for new sources States use the emission guidelines to develop plans for reducing emissions from existing sources; states can take into account remaining useful life of source EPA has the authority to prescribe a plan for a state in cases where the state fails to submit a satisfactory plan and to enforce the provisions of a plan in cases where the state fails to enforce them Several states are seeking a process by which EPA would deem their GHGreduction programs “equivalent” to the EPA emissions guidelines GHG Permitting  GHG permitting requirements took effect January 2, 2011; apply only to the largest stationary sources of GHG emissions  Most state and local agencies have authority to issue permits covering GHGs; for those that do not, EPA is issuing the GHG portion of permits under temporary federal authority  EPA estimates that as of December 1, 2011, 18 construction permits containing GHG requirements had been issued and an additional 50 applications with GHG elements had been received (all industrial sectors)  Energy efficiency has been the standard control technology thus far  Should be expressed using numerical limits for carbon dioxide equivalent (CO2e)  Other technologies, such as carbon capture and storage (CCS), need to be considered and evaluated, but may be eliminated as infeasible GHG Permitting  On March 8, 2012, EPA issue a proposed rule under Step 3 of the GHG Tailoring Rule; EPA finalize this rule on 6/29  EPA is retaining the current GHG permitting thresholds of 100,000 / 75,000 tons per year CO2e for Step 3, rather than lower it to 50,000 tons; covers only the largest sources of GHG emissions  EPA is also streamlining approaches for GHG permitting  Clean Air Act Advisory Committee GHG Permit Streamlining Workgroup recently set up with representatives from EPA, state and local permitting authorities, tribes, environmental groups, and industry; will identify and evaluate potential streamlining approaches Regional Haze       In 1999, EPA published a regional haze rule establishing a visibility protection program for Class I federal areas – 156 national parks and wilderness areas States required to develop and implement SIPs to reduce pollution that impairs visibility SIPs were to include determinations of Best Available Retrofit Technology (BART) and long-term strategies to ensure reasonable progress toward achieving national regional haze goal  Specific focus on EGUs built between 1962 and 1977  Option of adopting emissions trading program or other alternative, as long as it provides greater reasonable progress than BART SIPs were due to EPA in 2007; many were incomplete or not submitted Now, nearly all have been submitted EPA recently agreed to a schedule, set forth in consent decree, to take action on 45 regional haze SIPs National Ambient Air Quality Standards  Ozone  EPA proposed to strengthen 2008 ozone NAAQS in January 2010; decided last fall not to finalize new standard but to wait for next review (proposal expected late 2013)   States now working to implement 2008 ozone NAAQS (75 ppb)  Designation of areas to be final by May 31, 2012  States must submit SIPs (state strategies) to EPA for approval  Deadlines by which states are required to meet standard range from 2015 to 2032 Sulfur Dioxide  EPA promulgated new standard in 2010; circulated draft implementation guidance in Sept 2011, which was controversial because it relied on modeling to supplement scant monitoring network  EPA recently announced it would allow area designations and infrastructure SIPs to move forward based on monitoring alone and will work with states and other stakeholders on whether there is a reasonable way to use modeling to supplement monitoring for purposes of determining attainment National Ambient Air Quality Standards: Implementation Milestones (as of April 2012) Attainment Demonstration Due Attainment Date Oct 2009 Dec 2012 Dec 2014/2019 Dec 2010/2011 Oct 2011 June 2012/2013 Dec 2015/2016 Jan 2010 Feb 2012 Jan 2013 none none June 2010 TBD June 2013 TBD TBD March 2008 Mid 2012 March 2011 2015 2015-2032 Intended June 2013 2015 June 2016 2018 2020/2025 2019 2019-2036 28 NAAQS Promulgation Designations Effective Oct 2006 Dec 2009 Pb Oct 2008 NO2 Pollutant PM2.5 (2006) (primary) SO2 (primary) Ozone (2008) PM2.5 (current review) 110(a) SIPs Due (3 yrs after NAAQS promulgation) Ozone (current review) 2014 2016material -- do not 2017 Pre-decisional quote or cite 28 For Further Information  Contact:  Bill Becker, Executive Director, NACAA  202-624-7864  [email protected]