1. IDEM Leaders Communication Meeting May 31, 2012 Thomas W. Easterly, P.E., BCEE, QEP Commissioner IN Department of Environmental Management 1

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. State Air Quality Status 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

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. 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 July 8, 2010. 10

11. Permits--Percent of Statutory Days 11

12. 25 Years of Progress Water Quality: Combined Sewer Overflows – All 98 State lead CSO Communities and 7 of the 10 Federal lead Communities have entered legal agreements to address their CSO issues. – We are working with U.S. EPA to speed the progress on the remaining 3 Federal lead CSO communities. – At least 27 of the CSO communities have completed their projects to address the release of untreated sewage during rain events. 12

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15. 15 Fish Tissue Mercury Mercury emissions in Indiana have decreased by approximately 20% over the past 14 years. Measured mercury deposition has decreased by 7% during this time. In spite of these reductions, there is no apparent change in mercury fish concentrations in Indiana.

16. Protection of Human Health U.S. EPA’s “acceptable” fish mercury levels are 0.3 mg/kg which is 300 ppb. While the average fish tissue mercury levels in Indiana have not changed, they are less than one half of this level. Indiana has historically called a stream impaired for mercury if a single analytical result (average of 3 fish) exceeded 300 ppb. 16

17. Protection of Human Health 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 will propose revised impairments after reevaluating its mercury data using the new U.S. EPA guidance. 17

18. 18 Mercury Air Toxics Rule (MATS) Final Rule Effective: April 16, 2012 Annual rule cost $9.9 billion. Annual rule HAP benefit $5,000 to $6,000,000 (0.00209 IQ points per exposed person or 510.8 IQ points per year in US out of 31 billion IQ points) Rule cost is between $1,650 and $1,980,000 per $1 of HAP benefit. Estimated annual co-benefits $53 to $140 billion.

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20. Protection of Downwind States In 2005 a number of counties including three in Indiana did not meet all ozone and PM 2.5 air quality standards. U.S. EPA projected that over 100 counties would still not meet standards by 2012. By the end of 2010 air quality in Indiana and the rest of the country had improved to meet the ozone and PM 2.5 air quality standards addressed by CSAPR (except for two areas impacted by local sources). 20

21. Protection of Downwind States OzonePM 2.5 (Annual)PM 2.5 (24-Hour) EPA predicted 2012 Non Attainment counties (based upon 2005 air quality) 1132103 Counties attaining by 2009 92783 Counties still needing improvement at end of 2009 2520 Counties with remaining local source issues 2010 111 21

22. 22 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.

23. 23 CAIR/Transport Rule/CSAPR The State of Indiana has filed three actions to respond to CSAPR: –A petition to reconsider the rule with U.S. EPA. –A petition for judicial review of the rule with the DC Court of Appeals. –A request for a stay of the rule with the DC Court of Appeals. We are also working with LA, OH, TX and WV to advocate reconsideration of the rule.

24. 24 CAIR/Transport Rule/CSAPR U.S. EPA is implementing CSAPR through a Federal Implementation Plan (FIP) before allowing the States to implement the rule. The State has no role in CSAPR unless we modify our State Implementation Plan (SIP). U.S. EPA is moving to approve our requests to redesignate the State of Indiana to attainment for PM 2.5 now that CSAPR is in effect. This rule will also allow U.S. EPA to approve our BART SIP submission.

25. 25 CAIR/Transport Rule/CSAPR Success to Date: On December 30, 2011, the DC Circuit Court of Appeals issued a Stay of CSAPR and held a hearing on the merits of the appeals in April. 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.

26. 26 NAAQS Revisions 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. –New 75 ppb 1 hour SO 2 Air Quality Standard (2010). –New 100 ppb short term NO x Air Quality Standard (2010). –U.S. EPA reconsideration of 0.075 ppm ozone Air Quality Standard. –U.S. EPA review of the 15 microgram/cubic meter annual PM 2.5 Air Quality Standard.

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31. 31 CO 2 (Green House Gasses) The National Academy of Sciences report, “America’s Climate Choices” recommends that actions be taken now to start reducing U.S. greenhouse gas emissions to levels between 50% and 80% below 1990 levels. Achieving an 80% reduction from 1990 levels would require a 81.4% reduction from 2009 levels. If we converted all U.S. fossil fuel use from coal and oil to natural gas, we would achieve a 23.9% reduction from 2009 levels.

32. 32 CO 2 (Green House Gasses) The remaining emissions would need to be reduced by 73.8% to reach the 80% target. Apparent choices are: –Energy conservation. –Increasing non-hydro renewable energy sources from the current 5.5% market share. –Carbon sequestration. –Nuclear electricity. Is it possible to achieve the additional 73.8% reduction?

33. IDEM 2011-2012 GOALS AND CHALLENGES 33

34. 2011-2012 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 and Cincinnati and Northwest Indiana are final and effective. U.S. EPA will discuss the Indianapolis and Louisville areas on May 31. 34

35. 2011-2012 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. 35

36. 2011--2012 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. 36

37. Questions? Tom Easterly Commissioner Indiana Department of Environmental Management 317-232-8611 teasterly@idem.in.gov 37