1. insert graphic on title master CURRENT ISSUES IN BACT Kevin J. Finto Hunton & Williams June 28, 2006 APPA New Generation Meeting: Anticipating new permitting issues, IGCC, Technology Options, Atmospheric Modeling, and Anticipating the Public’s Reaction Washington, D.C.

2. www.hunton.com Current Issues in BACT Written and Unwritten Definition of BACT and How it is Applied in Practice — Commercial Availability, Achievability, Demonstrated in Practice

3. www.hunton.com Current Issues in BACT What is BACT? (It’s a limit) Best Available Control Technology means an emissions limitation (including a visible emission standard) based on the maximum degree of reduction for each pollutant subject to regulation under Act which would be emitted from any proposed major stationary source or major modification which the Administrator, on a case-by- case basis, taking into account energy, environmental, and economic impacts and other costs, determines is achievable for such source or modification through application of production processes or available methods, systems, and techniques, including clean fuels, fuel cleaning or treatment or innovative fuel combustion techniques for control of such pollutant....

4. www.hunton.com Current Issues in BACT ( No, it’s a work practice) If the Administrator determines that technological or economic limitations on the application of measurement methodology to a particular emissions unit would make the imposition of an emissions standard infeasible, a design, equipment, work practice, operational standard, or combination thereof, may be prescribed instead to satisfy the requirement for application of best available control technology. Such standard shall, to the degree possible, set forth the emissions reduction achievable by implementation of such design, equipment, work practice or operation, and shall provide for compliance by means which achieve equivalent results. 40 C.F.R. § 52.21(b)(12)

5. www.hunton.com Current Issues in BACT Best Available Control Technology BACT is an Emission Limit or Work Practice BACT is a Case-by-Case Analysis What is “Achievable?” What is “Available?” BACT Does Not Redefine the Source BACT is Done on a Pollutant-by-Pollutant Basis BACT Considers Multi-Pollutant Effects BACT Considers Environmental, Energy and Economic Costs The Role of Other “Drivers” ( e.g., visibility concerns) The Role of CAA 165(a)(2)

6. www.hunton.com Current Issues in BACT Defining the Source Case-by-Case Analysis Operational Limits of the “Source” –Tail Wagging the Dog Problem –Common ownership –Contiguous –Same SIC Code Restrictions on Construction ( e.g., Retrofit) Restrictions on Operation ( e.g., Type of Fuel) Type of Combustion

7. www.hunton.com Current Issues in BACT Best Available Control Technology Information That Must Be Considered –Other Permits –RACT/BACT/LAER Clearinghouse –Draft or Proposed Permits –Permit Applications –NSPS Proposal February 9, 2005

8. www.hunton.com Current Issues in BACT Best Available Control Technology Other sources –CEMs Data –Source Tests –Foreign Experience –Vendor Guarantees –Vendor Literature Verify reliability of information and watch for “folklore” ( e.g., compare Sierra Club claims regarding WA Parish plant with Hendrickson email)

9. www.hunton.com Current Issues in BACT What is achievable? BACT is not the lowest level ever recorded Need for a cushion What can be achieved under worst-case, reasonably foreseeable circumstances? Not the best day or the average day Long term achievability See Newmont

10. www.hunton.com Current Issues in BACT IGCC as BACT “Defining the Source” the difference in technologies EPA letter of December 12, 2005 Appeal of letter pending in the D.C. Circuit Greg Foote articles and briefs The CAA 165(a)(2) issue Practical advice

11. www.hunton.com Current Issues in BACT Consideration of CO 2 Emissions in Decision-Making Process — How Far Does the Collateral Environmental Impact Analysis Stretch?

12. www.hunton.com Current Issues in BACT CO 2 in the BACT analysis (Cont.) CO 2 is not directly regulated through a BACT analysis because CO 2 is not an “air pollutant” “[T]he CAA does not authorize EPA to regulate for global climate change purposes, and accordingly that CO2 and other GHGs cannot be considered “air pollutants” subject to the CAA’s regulatory provisions for any contribution they make to global climate change.” 68 Fed. Reg. 52922, 52925 (Sept. 8, 2003)

13. www.hunton.com Current Issues in BACT CO 2 in the BACT analysis (Cont.) However some states have required analysis of CO 2 as a collateral environmental impact in the BACT analysis –Require permittees to consider HAP and CO 2 emissions when considering various control technologies –Analysis regarding HAPs consistent with certain EAB decisions and agency guidance

14. www.hunton.com Current Issues in BACT CO 2 in the BACT analysis (Cont.) EAB Quotes “There is one exception to the general rule that pollutants that are not directly regulated by the PSD program are not subject to PSD review. It is legitimate to consider unregulated pollutants as collateral environmental impacts in the context of the BACT determination.” In re South Shore Power, LLC, PSD Appeal No. 03-02, unpub. op. at 20 n. 11 (EAB June 4, 2003)

15. www.hunton.com Current Issues in BACT CO 2 in the BACT analysis (Cont.) EAB Quotes “If a technology has ‘an incidental effect of increasing or decreasing emissions of unregulated pollutants,’ consideration of that effect may be taken into account in selecting BACT for a facility.” In re Knauf Fiber Glass, GMBH, 8 E.A.D. 121, 163 n.56 (EAB 1999).

16. www.hunton.com Current Issues in BACT CO 2 in the BACT analysis (Cont.) EAB Quotes “[BACT] requires the permitting authority to take into account the control technology’s impact on unregulated pollutants in every permit proceeding. In re Hibbing Taconite Co., 2 E.A.D. 838 (Adm’r 1989).

17. www.hunton.com Current issues in BACT BACT on Appeal: the current climate Challenges are Common Challenges are Common Opponents are Highly Coordinated Opponents are Highly Coordinated Process is Maturing Process is Maturing Properly Supported Permits are being Upheld Properly Supported Permits are being Upheld Think Backwards – “What Will I Need on Appeal?” Think Backwards – “What Will I Need on Appeal?”

18. www.hunton.com BACT on Appeal (Cont.) Know the Process and Standard of Review Know the Process and Standard of Review “Open” or “Closed” Record?“Open” or “Closed” Record? Evidentiary Hearing or Briefs?Evidentiary Hearing or Briefs? De Novo or Deference?De Novo or Deference? Burden of Proof?Burden of Proof? Identify Witnesses Early in Process Identify Witnesses Early in Process Encourage the Agency to Anticipate a Challenge Encourage the Agency to Anticipate a Challenge Current Issues in BACT

19. www.hunton.com Current Issues in BACT BACT on Appeal (Cont.) Build a Solid Record Build a Solid Record Provide a Coherent Basis for Each Permit DeterminationProvide a Coherent Basis for Each Permit Determination Respond in Detail to Every CommentRespond in Detail to Every Comment Supplement the ApplicationSupplement the Application Anticipate Issues and Put Solutions into the Record Anticipate Issues and Put Solutions into the Record C

20. www.hunton.com Current issues in BACT BACT on Appeal (Cont.) Remember Your High School Math Teacher: Remember Your High School Math Teacher: “Show Your Work” “Show Your Work” Coordinate with Agency to Build Record Coordinate with Agency to Build Record Lessons from Recent Cases Lessons from Recent Cases Key Part of Record - The ApplicationKey Part of Record - The Application Using the Draft NSR Workshop ManualUsing the Draft NSR Workshop Manual Rectify Problems PromptlyRectify Problems Promptly

21. www.hunton.com Current issues in BACT Conclusions Through careful analysis and documentation of all the relevant factors in a BACT analysis, and close coordination with the permitting agency, it is possible to develop a reasonable permit that will survive appeal.