NSR Regulations Update November 14, 2012 Atlanta, GA Katy R. Forney Energy Sector Technical Authority EPA – Region 4 Atlanta, Georgia

Recently Finalized Rules Tailoring Rule – Step 3 Published 7/12/12 Does not lower Subject to Regulation Thresholds in current rules Extends PALs for use on a CO2e-basis PM and Condensables Rule Published 10/25/12 Removes the term particulate matter emissions from the requirement to include condensable PM fraction

Rules in Final Stage PM2.5 NAAQS Implementation Proposed on 6/29/12 Under court order to be finalized by 12/14/12 EPA has proposed 2 provisions: Grandfathering of certain in-process PSD permit applications (draft permits out to public comment before the affective date of revised rule in 2013) Surrogate approach for conducting air quality analysis associated with proposed secondary visibility index

Rules in Proposal Stage Supplemental Tribal Rule Revisions to the Tribal Minor NSR Rule promulgated July 1, 2011 Scheduled for proposal in March planned Revisions: Increase the number of sources/activities for exemption. Currently 7 activities are exempted. Define commence construction which is used in rule applicability

NSR Permitting Guidance Permit Processing Guidance Memo Signed 10/15/2012 Intended for use by Regional and Delegated permitting authorities May be helpful for SIP-Approved permitting programs (optional) Includes among other things… Checklist for Complete PSD Applications Template letters for notifications Encourages permitting authorities to ensure applications are deemed complete appropriately

NSR Permitting in Region 4 Typical year ~ 30 draft PSD permits More than 50% trigger for NO 2 and/or SO 2 Modeling of 1-hour NAAQS still remain the biggest challenge for PSD permit issuance

GHG Regulations Update November 14, 2012 Atlanta, GA Katy R. Forney Energy Sector Technical Authority EPA – Region 4 Atlanta, Georgia

D.C. Circuit – Climate Change Litigation On June 26, 2012, the U.S. Court of Appeals-D.C. Circuit upheld EPA's Endangerment Finding and Greenhouse Gas regulations issued under the Clean Air Act for passenger vehicles (i.e., CAFE standards) and permitting for stationary sources (i.e., Tailoring Rule) 8

Stationary Sources - The Tailoring Rule Final Rule issued May 13, 2010 Establishes thresholds for GHG emissions and defines when permits under the New Source Review Prevention of Significant Deterioration (PSD) and Title V Operating Permit programs are required for new and existing industrial facilities Tailors" the requirements of these CAA permitting programs to limit which facilities will be required to obtain PSD and Title V permits Includes the nation's largest GHG emitters -power plants, refineries, and cement production facilities Emissions from small farms, restaurants, and all but the largest commercial facilities are not covered by these programs at this time IMPORTANT! Florida has not taken delegation of the GHG permitting program. GHG permits for FL industry are currently issued by EPA Region 4 in Atlanta. Contact: Katy Forney IMPORTANT! Florida has not taken delegation of the GHG permitting program. GHG permits for FL industry are currently issued by EPA Region 4 in Atlanta. Contact: Katy Forney

Permitting Timeline Under the Tailoring Rule Study Complete 2016 Step 1: Source already subject to PSD anyway (tpy CO2e) New source: N/A Modification: 75,000 Step 2: All Stationary Sources (tpy CO2e) New source: 100,000 Modification: 75,000 Step 3: Implementation of potential additional phase-in and streamlining options 5-year study: To examine GHG permitting for smaller sources Implementation of rule based on 5-year study July 1, 2011 new thresholds subject to regulation began Step 3 Rule was issued July 3, Proposed no changes to thresholds. The Tailoring Rule One public hearing was held on March 20, 2012, in Arlington, VA.

Biomass GHG Permitting EPA temporary defers certain CO 2 emissions from PSD and Title V permitting July 1, 2011, final rule deferred for 3 years GHG permitting requirements for CO 2 emissions from biomass-fired and other biogenic sources Interim guidance was issued to assist facilities and permitting authorities with permitting decisions until the Proposed Rule was finalized A scientific analysis will be conducted during the 3 year deferral to consider issues that the Agency must resolve in order to account for biogenic CO 2 emissions in ways that are scientifically sound and also manageable in practice Accounting Framework for Biogenic CO 2 Emissions from Stationary Sources (September 2011) 11 Biomass Permitting

GHG New Source Performance Standard On 12/23/10, EPA entered into two proposed settlement agreements to issue rules that will address greenhouse gas emissions from fossil fuel-fired power plants and refineries These two industrial sectors make up nearly 40% of U.S. GHG emissions On April 13, 2012, EPA published its carbon pollution standard for new fossil fuel-fired power plants (comments accepted until June 25) 12 GHG NSPS for Utilities and Refineries Contact: Keith Goff Contact: Keith Goff

GHG NSPS for New Fossil Fuel-Fired Power Plants Only applies to new generating units that will be built in the future Does not apply to existing units already operating or units that will start construction over the next 12 months The proposed rule is flexible and would help minimize carbon pollution through deployment of the same types of modern technologies and steps that power companies are already taking to build the next generation of power plants Even without the proposed rule, the power plants that are currently projected to be built going forward would already comply with the proposed standard; as a result, EPA does not project additional cost for industry to comply with the standard

Output-based standard of 1,000 pounds of CO 2 per MW-hr New natural gas combined cycle (NGCC) power plant units should be able to meet the proposed standard without add-on controls New power plants that are designed to use coal or petroleum coke would be able to incorporate technology to reduce CO 2 emissions to meet the standard, such as carbon capture and storage (CCS) EPA will accept comments on the proposed rule until June 25 EPA held two public hearings on May 24 GHG NSPS for New Fossil Fuel-Fired Power Plants

Purpose is to collect accurate and timely GHG data to inform future policy decisions EPA issued Mandatory Reporting of Greenhouse Gases Rule (74 FR 5620) Requires reporting of GHG emission data from specific entities in the U.S. GHG suppliers Direct emitting source categories Facilities that inject CO 2 underground For 2011 emissions, reports were due to EPA due March 31, GHG Reporting Program 2010 Data now available on EPAs website! Highlights for 2010 Direct Emitters Power plants were the largest stationary sources of direct emissions - 2,324 million metric tons of carbon dioxide equivalent (mmtCO 2 e); petroleum refineries second mmtCO 2 e CO 2 accounted for 95% of emissions; methane second at 4%; NO 2 and fluorinated gases remaining 1% 100 facilities with emissions over 7 mmtCO 2 e (96 power plants, two iron and steel mills, two refineries) Contact: Jason McDonald Contact: Jason McDonald

Questions? Katy R. Forney U.S. EPA – Region 4 Atlanta, GA Katy R. Forney U.S. EPA – Region 4 Atlanta, GA