1. GHG BACT Analysis Deanna L. Duram, P.E., C.M. August 4, 2011 Air & Waste Management Association Southern Section Meeting trinityconsultants.com

2. Outline  EPA Guidance and 5-Step Process  Differences from traditional BACT approach  Highlight a biomass case study throughout

3. EPA BACT Guidance  Case-by-case determination  Performed by applicant; approved by agency  EPA recommends 5-Step top-down BACT evaluation process  Emission limits achievable considering…  Economic impacts  Environmental and energy impacts  EPA guidance materials  PSD and Title V Permitting Guidance for GHGs  White Papers on GHG Control Measures  On-Demand Video Training Materials, including sample BACT assessments  Enhanced RBLC

4. 5-Step Top-Down BACT Process  Step 0 – Define the Source  Step 1 – Identify available control options  Step 2 – Eliminate technically infeasible options  Step 3 – Rank options by control effectiveness  Step 4 – Evaluate most effective controls and emission limits achievable  Step 5 – Select BACT

5. Step 0 – Define the Source  Applicant defines goals, objectives, purpose, and basic design  Source definition generally provides key design elements that are not under consideration through the BACT process  Define in permit application  Permit issuer must discern which design elements are inherent to that purpose and objectives and which may be changed for pollutant reductions

6. Step 0 Case Study New Combined Heat and Power System at existing pulp and paper mill  620 MMBtu/hr bubbling fluidized bed boiler  40 MW Steam turbine generator  Biomass combustion (bark, mill residuals)  Natural gas for startup burners and some load burning, < 250 MMBtu/hr  Installation allows for shutdown of 1 coal/oil/gas power boiler; removal of coal/oil from a second power boiler, retaining only gas combustion  Objective is to generate renewable energy to replace fossil fuel energy on site and for potential sale to the utility grid

7.  Identify all control technologies available to the source, including:  Inherently lower-emitting processes and designs  Add-on technologies  Control methods applied at similar emissions sources  Feasible combinations of these technologies  Considers facility-level impacts  No off-site impacts considered, technology must represent emissions reduction at facility Step 1: Identify Available Control Options (1/2)

8.  Not required to include options that “fundamentally redefine the nature of the source”  No clear guidance re: which technologies redefine nature of source  Fuel type as BACT? EPA guidance considers:  Cleaner versions of primary fuel  Increased usage of secondary fuel  Alternative fuel for which source is not already configured  EPA guidance leaves door open for stricter interpretations by permitting authority  Use relevant white papers as starting point Step 1: Identify Available Control Options (2/2)

9.  EPA Guidance  Potential carbon neutrality (based on life-cycle of biofuel) not considered  At facility-level, CO 2 emissions from biofuels similar to fossil fuels  Biofuels must represent emissions reduction at facility level to be considered viable GHG BACT option  Biogenic carbon deferral  3/21/2011: EPA proposes deferral of GHG permitting requirements for CO 2 emissions from biogenic sources  EPA issued guidance for determining BACT for bioenergy production  Promulgated 7/20/2011  Effective immediately for delegated states  SIP approved states may incorporate into rules Step 1 Biofuel Considerations

10. Step 1 Energy Efficiency Considerations (1/2)  EPA BACT guidance stresses importance of energy efficiency  Primary Step 1 option(s) for combustion sources  Construction of new facilities  GHG BACT evaluated on facility-wide basis, including energy efficiency  Evaluate emissions from non-emitting, energy consuming equipment  Modification to existing facilities  BACT applies to new or modified emission unit, not necessarily to energy consuming equipment  EPA guidance still encourages permitting agencies to consider energy efficiency

11.  EPA guidance recommends benchmarking evaluation  Collectively assess small energy saving measures by benchmarking efficiency of new unit of similar design  EPA resources to support benchmarking analyses  ENERGY STAR program  Sector-specific tools, Energy Performance Indicators (EPIs), etc. Step 1 Energy Efficiency Considerations (2/2)

12. Step 1 CCS Considerations  Carbon Capture and Storage (CCS)  One of primary distinctions between traditional BACT and GHG BACT  Per EPA, consider CCS in Step 1 for large CO 2 emitters, sources emitting high-purity CO 2 streams  Hydrogen production  Ammonia production  Natural gas processing  Ethanol production  Ethylene oxide production  Cement production  Iron and steel manufacturing  Even if non high-purity CO 2 stream, may need to include as a “possible” control option

13. Step 1 Case Study  CCS  High-purity stream? Not on EPA list  Limited industrial applications  Efficient Boiler Design  Technology selection of BFB boiler over other designs  Redefining source?  Lowest Carbon Fuel  Consideration of back-up fuels as primary (natural gas)  Source redefining concerns – not evaluating any other fuel possibilities  Energy Efficiency Options  Number of options in EPA guidance documents  New boiler – state of the art

14. Step 2: Eliminate Technically Infeasible Options  Is technology available?  Reached licensing and commercial development stage  Compliance with BACT limit demonstrated at similar facility  Is technology applicable based on physical, chemical, and engineering principles?  Per EPA, absence of a commercial guarantee for GHG emissions not sufficient to eliminate option from consideration

15. Step 2 CCS Considerations  Must consider technical feasibility of each step  Capture, transport and storage  If any step infeasible, CCS considered technically infeasible  Low-purity stream?  Space  Right-of-ways  Access to storage reservoir  May suffice to demonstrate difference between CCS considerations at applicant’s facility and demonstrated CCS  Many state agencies prefer to monetize everything (eliminate from Step 4 instead)

16. Step 2 Case Study  CCS  Low-purity stream?  No available storage/pipeline  Boiler design  Addressed supercritical steam design (greater than 3,200 psig operating pressure) as infeasible for this boiler size  Fluidized bed, suspension, stoker, and pile combustion feasible options  Lowest carbon fuel  Use of natural gas feasible  Efficiency options  Feasible

17. Step 3: Rank Remaining Control Options  Ranked by effectiveness of control  Traditionally presented as:  Percent pollutant removal  Controlled emission rate  Reduction in emissions over time  For GHG, EPA advocating efficiency- based control effectiveness  Consider thermal efficiency by using emissions per unit of output (rather than per unit of fuel input)  Must rank logical combinations of the technologies  Can be challenging given variety of iterations on energy efficiencies

18. Step 3 Case Study  Compared boiler efficiencies  In this case, ranked based on energy efficiency – fluidized bed is the clear choice  What if proposing to install a new stoker boiler with a lower energy efficiency?  Is this an area an agency can look at – redefining the source?  Did not do a straight comparison between remaining options  Proceeded to Step 4 with a BFB boiler, and lowest carbon fuel and energy efficiency options to be reviewed

19. Step 4: Evaluate Most Effective Controls (1/3)  Ranked by effectiveness of control  Traditionally presented as:  Percent pollutant removal  Controlled emission rate  Reduction in emissions over time  Top-down – Start with most effective control option  Consider economic, environmental, and energy-related impacts  BACT typically focuses on economic considerations  But EPA guidance suggests other collateral impacts increasingly important for GHG BACT

20. Step 4: Evaluate Most Effective Controls (2/3)  Economic considerations  Evaluated on a per ton CO 2 equivalent basis instead of per ton individual GHG  EPA guidance considers average cost effectiveness and incremental cost of adding compatible control technology  No cost effectiveness threshold ($/ton CO 2 e) in EPA guidance  Work Group’s Interim Phase I Report identifies cost effectiveness range from $3-$150/ton CO 2 e  Additional local economic factors (new for GHGs)  High control cost relative to project cost  Potential movement to overseas production  Local job losses

21. Step 4: Evaluate Most Effective Controls (3/3)  Additional considerations  Direct energy costs (e.g. combustion sources)  Indirect energy usage (e.g. purchased electricity)  For CCS, consider parasitic load  On-site and off-site environmental implications (e.g., life cycle of biofuels)

22. Step 4 Case Study  Environmental benefits of project  Combustion of plant residuals - Identified by EPA as a CH 4 control measure for on-site landfills, so used that logic as a benefit for the project  Significant reduction in coal generated power on-site  Reduction in wastewater through scrubber removal  Off-site benefit – generation of renewable energy, sale of renewable energy to grid, likely displacing fossil-fuel generated electricity  Natural gas is a non-renewable fuel  Higher costs than biomass  Biomass carbon-neutrality? Recent EPA guidance – biomass combustion is BACT  State of the art energy efficiency options for new unit

23. Step 5: Select BACT (1/2)  Select BACT based on most efficient control option or combination of options not eliminated by Step 4  Permitted BACT standards vary  Emission limits (output basis, accounting for energy efficiency)  Averaging time periods  Equipment specifications  Work practices  Associated monitoring, recordkeeping, and reporting  EPA advocates BACT limits with longer averaging periods to address GHG emissions and load variations inherent in combustion equipment

24. Step 5: Select BACT (2/2)  May include work practices such as an Environmental Management System (EMS) focused on energy efficiency  ENERGY STAR provides guidance  BACT limit may include implementation of energy saving measures identified by EMS  EPA’s Sample GHG BACT assessments  Municipal solid waste landfill  Natural gas-fired boiler  Hydrogen plant at petroleum refinery  Coal-fired electricity generating facility  Kiln at a cement plant  Natural gas compressor station  Gas-fired combined cycle power plant

25. Step 5 Case Study  Proposed BACT limit based on vendor provided data  0.45 lb CO 2 e per lb steam on a 12-month rolling average basis  Anticipated CEM for monitoring for CO 2, and subsequent calculations for CH 4 and N 2 O  Since application submittal, EPA released biomass deferral proposal and bioenergy GHG BACT guidance  State agency was considering a range of options, even having mentioned the possibility of “good combustion practices” as BACT  Stay tuned...

26. Questions Deanna L. Duram, P.E., C.M. Trinity Consultants (678) 441-9977 dduram@trinityconsultants.com