1. Indiana Manufacturers Association IDEM Update – September 6, 2012 Thomas W. Easterly, P.E., BCEE, QEP Commissioner, Indiana Department of Environmental Management

2. Why is the Economy Important to the Environment? 2

3. Pilot 2006 Environmental Performance Index Yale Center for Environmental Law & Policy Yale University Center for International Earth Science Information Network (CIESIN) Columbia University http://www.yale.edu/epi/ 3

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5. Wealth matters. The Environmental Health scores, in particular, reveal a significant relationship with GDP per capita. EPI scores more generally also correlate with wealth, although there is a diversity of performance within every level of economic development. Policy Implications of the 2012 EPI 5

6. Why Does Energy Matter? Without energy, life is brutal and short— think back to the cave man. Making energy more expensive is a regressive tax and an economic development inhibiter—the cost of energy influences the viability of every economic endeavor, but especially those that produce wealth. 6

7. Air Quality 2008-2010 Monitoring Attains Does Not Meet the PM Standards Does Not Meet the Ozone standard Does Not Meet the Ozone and PM Location of the State Capitals State Boundaries 7

8. Summary Wealth is a significant driver of improved environmental quality. The cost of energy is a significant driver of wealth production. As we strive to improve the quality of our environment, we must be careful not to unnecessarily increase the cost of energy. 8

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10. 10 IDEM’s Mission We Protect Hoosiers and Our Environment IDEM’s mission is to implement federal and state regulations to protect human health and the environment while allowing the environmentally sound operations of industrial, agricultural, commercial and government activities vital to a prosperous economy.

11. How Does IDEM Protect Hoosiers and Our Environment? Develop regulations and issue permits to restrict discharges to the environment to safe levels. Inspect and monitor permitted facilities to ensure compliance with the permits. 11

12. How Does IDEM Protect Hoosiers and Our Environment? Use compliance assistance and/or enforcement when people exceed their permit levels or violate regulations. Educate people on their environmental responsibilities. 12

13. Performance Metrics July 2012 13 ResultTargetComments Quality of Hoosiers' Environment % of Hoosiers that live in counties that meet air quality standards 99.99%100%80% Lead in a small portion of Muncie % of CSO Communities with approved programs to prevent the release of untreated sewage 97.2%100%90% 96+9 (105) out of 99+9 (108) % of Hoosiers that receive water from facilities in full compliance with safe drinking water standards 99.88%99%95% Permitting Efficiency Total calendar days accumulated in issuing environmental permits, as determined by state statute* Land33,67441,51446,398 Air70,77365,99473,758 Water43,03461,78769,056 * Places emphasis on back logged permits Compliance Total percentage of compliance observations from regulated customers within acceptable compliance standards* Inspections97.54%97%75% Self reporting98.57%99%95% Continuous monitoring (COM)99.77%99.9%99.0% * Tracks observations and not just inspections

14. 14 Performance Metrics June 2005 Quality of Hoosiers' EnvironmentResultTargetComments % of Hoosiers in counties meeting air quality standards 61%100%80% 12 counties & 2,408,571 of 6,195,643 above standard % of CSO Communities with approved programs to prevent the release of untreated sewage 4%100%20%75% by 2007 is goal Permitting Efficiency Total calendar days accumulated in issuing environmental permits, as determined by state statute* Land 100,01366,56586,864 Air 511,000207,000385,000 Water 301,00048,000200,000 * Places emphasis on back logged permits Compliance Total percentage of compliance observations from regulated customers within acceptable compliance standards* Inspections 95.46%97%75% Self reporting 97.11%99%95% Continuous monitoring (COM) 99.19%99.90%98.95% * Tracks observations and not just inspections Organizational Transformation Budgetary agency dollars spent on key outside contracts for core agency functions. Dollars spent on outside services per year $6,179,367$0$3,447,017

15. Permits--Percent of Statutory Days 15

16. Comparison of Region 5 States Permitting Program Status compiled by U.S. EPA Region 5 for July 26, 2012, State Environmental Directors Meeting 16

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18. Status of All Facilities Covered by Current NPDES Permits (as of 7/6/12) 18 Status of All Facilities Covered by Current Permits (as of 7/6/12)

19. IDEM Backlogs Eliminated On January 10, 2005, there were 263 administratively extended NPDES permits and 289 unissued Title V permits. All of those have been issued and IDEM now issues permits using less than 85% of the statutorily allowed days. On January 10, 2005, there were 250 unresolved enforcement cases over 2 years old. Now the oldest referral on our tracking list is June, 2010. 19

20. Water Antidegradation (Water) Antidegradation—Applies to new or increased loadings of regulated pollutants due to deliberate actions. There are exemptions for: –Short term temporary discharges. –De minimis discharges (<10% of available capacity). –Changes in loadings covered by an existing permit. 20

21. Water Antidegradation Three basic tests: –Is the new loading necessary? –Is the proposed treatment (discharge) level appropriate? –Do the social and economic benefits of the activity outweigh the environmental degradation? Additional protection requirements for Outstanding State Resource Waters. 21

22. Fish Tissue Mercury At the end of 2010, U.S.EPA issued new guidance on the proper interpretation of the fish tissue data. U.S.EPA’s guidance indicates that a properly calculated average mercury value is the appropriate interpretation of the limit. IDEM has reevaluated its mercury data using the U.S.EPA guidance. 22

23. Fish Tissue Mercury ( Note: Lake Data Does Not Include Lake Michigan) Year Mercury Impaired Stream Reaches Mercury Impaired Stream Miles Mercury Impaired Lakes Mercury Impaired Lake Acres 2010 2721,6893744,540 2012 424171514,582 Change -84%-75%-60%-67% 23

24. 24 Current Air Quality Status At the end of 2009, all of Indiana met every currently effective NAAQS for the first time since NAAQS were established in the 1970’s. IDEM has succeeded in working with U.S. EPA to have all of the state designated as attainment for those pollutants except: –Central Indiana PM 2.5 –Clark and Floyd counties PM 2.5

25. 25 New Air Quality Standards Since the end of 2009, new air quality standards have resulted in U.S. EPA designating the following new nonattainment areas: –Lake and Porter Counties Ozone (2008 standard) –Lawrenceburg Township (Dearborn County) Ozone –City of Muncie Lead All monitors in Indiana currently meet the 100 ppb short term NO x standard established in 2010. A number of townships in seven counties will likely be designated as nonattainment for the 1-hour 75 ppb SO 2 standard established in 2010.

26. NWI 75 ppb OZONE DESIGNATION September 22, 2011, U.S. EPA announces it is proceeding with ozone nonattainment designations. December 9, 2011, U.S. EPA notifies Governor Daniels that all of Indiana will be designated attainment except Lawrenceburg in Dearborn County. 26

27. NWI 75 ppb OZONE DESIGNATION January 31, 2012, U.S. EPA notifies Governor Daniels that due to data provided by Illinois on December 7, 2011; Lake, Porter and Jasper Counties will be designated as nonattainment for ozone. April 13, 2012, Indiana sends package explaining why Lake, Porter and Jasper Counties should be designated as attainment. 27

28. NWI 75 ppb OZONE DESIGNATION Reasons for Indiana ozone attainment recommendation: –A single monitor out of 22 apparently exceeded the standard by 0.4 ppb (0.0004 ppm) –Illinois caused the violation by discontinuing full implementation of its automotive inspection program in 2008 without making a 110 (l) demonstration, thereby violating its SIP and the Clean Air Act. 28

29. NWI 75 ppb OZONE DESIGNATION –Milwaukee, which is designated as attainment, has a higher contribution to the violating monitor than Lake County or Porter County. On May 31, 2012, Administrator Jackson signed the nonattainment designation for the Chicago Area including Lake and Porter Counties in Indiana—Milwaukee remains designated as an attainment area. 29

30. NWI 75 ppb OZONE DESIGNATION Remedies being implemented: –Petition Court for Reconsideration of nonattainment designations—July 19, 2012. –Petition Court for a Stay of the designations— August 8, 2012. –Petition U.S.EPA to reconsider the May 31, 2012 designations—August 10, 2012 –Ask impacted congressional delegation for help. 30

31. Why is Illinois I & M Key? Beginning in 2007, Illinois went to the OBD inspection system which exempts the 1968 through 1995 vehicles from inspection. Data from Indiana’s system shows that inspection of 1968 through 1995 vehicles accounted for 67% of the HC, 85% of the NOx, and 79% of the CO reductions in 2008. 31

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33. 33 2010 Sulfur Dioxide Standard Nonattainment Designation Recommendations

34. 34 2008 Lead Standard Nonattainment Designations

35. 35 CAIR/Transport Rule/CSAPR IDEM expected to meet the Transport Rule Statewide caps for 2012 without additional controls. CSAPR reduced those caps by 29%-- not currently achievable. IDEM expected that we would need one current project completed and another source controlled to meet the 2014 caps. CSAPR reduced the caps by 20%. CSAPR annual cost estimated to be $2.4 billion.

36. 36 CAIR/Transport Rule/CSAPR Success: On December 30, 2011, the DC Circuit Court of Appeals issued a Stay of CSAPR and a hearing on the merits of the appeals was held in April—CASPR Vacated August 22, 2012. Cost of Success: U.S. EPA placed a hold on the PM 2.5 attainment designation for the Indianapolis Area which had been sent to the Federal Register, but not published.

37. Air Quality Compared to CSAPR Goals 2008 to 2010 Attains Does Not Meet the PM Standards Does Not Meet the Ozone standard Does Not Meet the Ozone and PM Location of the State Capitals State Boundaries 37

38. IDEM 2011-2013 GOALS AND CHALLENGES 38

39. 2011-2013 IDEM Major Goals Complete Antidegradation Rulemaking Process. Done WPCB Final Adoption March 14, 2012. Obtain U.S. EPA approval of attainment designations for PM 2.5 for all of Indiana: Evansville, Cincinnati and Northwest Indiana are final and effective. U.S. EPA is evaluating the August 22, 2012 CSAPR decision to decide if EPA will proceed with attainment designations for the Indianapolis and Louisville areas. 39

40. 2011-2013 IDEM Major Goals Complete CAFO/CFO Rulemaking Process. Done Final Adoption November 9, 2011. Adopt Remediation Closure Guidance and Remediation Program Guidance as NPDs. Done presented to SWMB February 21, 2012. Effective March 22, 2012. Start Rulemaking for Numeric Nutrient WQS. 40

41. 2011--2013 IDEM Challenges Administratively reissue NPDES General Permits and address antidegradation requirements. Develop and implement plan for seamless implementation of water program responsibilities currently assigned to: IDEM, ISDH, IDNR, IDHS, and ISDA. 41

42. Questions? Tom Easterly Commissioner Indiana Department of Environmental Management 317-232-8611 teasterly@idem.in.gov 42