1. 1 Summary of Climate Change Workgroup Focus on BACT for GHG NACAA Spring Membership Meeting May 16-19, 2010 John Paul, OH William O’Sullivan, NJ Co-Chairs, NACAA NSR Committee

2. 2 Report available at: http://www.epa.gov/air/caaac/climate/2010_02_InterimPhaseIReport.pdf Makeup of Workgroup 19 Industry 19 Industry 5 Environmental 5 Environmental 10 state/local/regional/tribal agencies 10 state/local/regional/tribal agencies

3. 3 State/Local Regional Workgroup Members Stephan Hartsfield – National Tribal Air Association Stephan Hartsfield – National Tribal Air Association Bill Becker – National Assn. of Clean Air Agencies Bill Becker – National Assn. of Clean Air Agencies Dennis McLean – Pudget Sound Dennis McLean – Pudget Sound Jared Snyder – NY Jared Snyder – NY John Paul – Dayton, OH John Paul – Dayton, OH Laurel Kroack – Illinois Laurel Kroack – Illinois Pravene Amar – NESCAUM Pravene Amar – NESCAUM James Goldstein – CARB James Goldstein – CARB Susana Hildebrand – Texas Susana Hildebrand – Texas Bill O’Sullivan – NJ Bill O’Sullivan – NJ

4. 4 EPA Response to Phase 1 Recommendations (GM 4/9/10 letter ) A. Specific EPA commitments 1. New ORD GHG Mitigation Strategies Database 1. New ORD GHG Mitigation Strategies Database 2. RACT/BACT/LAER Clearinghouse enhancements 2. RACT/BACT/LAER Clearinghouse enhancements 3. Sector based GHG control measures white papers 3. Sector based GHG control measures white papers B. Goal - provide timely guidance to pave the way for a smooth transition to permitting of GHG for a smooth transition to permitting of GHG

5. 5 Schedule for Phase 2 4/29 - Kick off call 5/6 - Review background material 5/26 & 27 - CCWG, CAAAC (MEETING) 6/8 - Discuss issues 6/17 - Determine consensus/ non-consensus (MEETING) 6/24 - Review first draft of report 7/1 - Review 2nd draft of report 7/13 - Finalize report (MEETING) 7/16 - Send to CAAAC

6. 6 EPA's 4/9/10 request for Phase 2 to focus on 2 areas 1. Energy efficiency – How can the BACT process be used to encourage the development of energy efficient processes and technologies? 2. Innovative emissions reduction measures How can the development and permitting of innovative emission reduction measures, including the promotion of inherently efficient and lower emitting processes and practices for GHGs, be encouraged? How can the Innovative Control Technology waiver be used or changed to better promote technology development and application?

7. 7 8 White Papers provided to EPA for Consideration for a Phase 2 Workgroup Effort 1. Scope of applicability of PSD and BACT to GHG sources 2. Presumptive BACT 3. Use of Offsets in place of BACT 4. Netting amongst commonly owned or operated facilities, or a larger range of sources 5. ENCOURATING INNOVATIVE CONTROL TECHNOLOGIES 6. EVALUATING ENERGY EFFICIENCY 7. Clean fuels 8. Ben Henneke’s modest suggestions for the next 5 years

8. 8 Draft List of Categories being used as examples for Phase 2 BACT EE Evaluation 1. Industrial gas-fired boilers 2. Gas-fired EGU peakers (simple cycle, combined cycle) 3. Major mod at a Coal-fired EGU 4. Natural gas pipeline compressors 5. Landfills 6. Pulp and paper industry

9. 9 Data and Guidance Needs of State/Local Agencies

10. 10 NACAA GHG BACT Workgroup Lisa Clarke, Colorado Carolina Espejel-Schutt, Minnesota Andrew M. Bodnarik, New Hampshire Arthur S. McDaniel, Knox County Tom Adams, Kentucky Christopher Clinefelter, Dayton Mohsen Nazemi, South Coast Jorge DeGuzman, Sacramento

11. 11 Assumptions Agencies use existing SIP approved PSD review process Agencies use existing SIP approved PSD review process We do not envision a new process for GHG BACT determinations We do not envision a new process for GHG BACT determinations Top-Down-BACT process is preferred Top-Down-BACT process is preferred Some form of the tailoring rule will be adopted by EPA Some form of the tailoring rule will be adopted by EPA

12. 12 Communication Periodic GHG control measures newsletter is recommended Periodic GHG control measures newsletter is recommended Communication among EPA headquarters, the Regions, and State/Local agencies on permit decisions is essential Communication among EPA headquarters, the Regions, and State/Local agencies on permit decisions is essential RACT/BACT/LAER Clearinghouse and ORD GHG Mitigation Database must be readily accessible, timely, complete, and adequately staffed RACT/BACT/LAER Clearinghouse and ORD GHG Mitigation Database must be readily accessible, timely, complete, and adequately staffed

13. 13 Guidance Needs Appropriate methods for calculating costs Appropriate methods for calculating costs Pollution prevention methods Pollution prevention methods Efficiency improvement technologies Efficiency improvement technologies Emissions factors (including fugitives) Emissions factors (including fugitives) Bio-fuel effects Bio-fuel effects Monitoring requirements, test methods, etc. Monitoring requirements, test methods, etc. Acceptable control technologies Acceptable control technologies Ranking of GHGs with regard to impact Ranking of GHGs with regard to impact Netting for GHGs under PSD rules Netting for GHGs under PSD rules Many more needs not listed here Many more needs not listed here

14. 14 Areas of Non-Consensus Appropriateness of New Source Performance Standards (primarily with regard to 111(d) standards for existing sources) Appropriateness of New Source Performance Standards (primarily with regard to 111(d) standards for existing sources) Appropriateness of “Presumptive BACT” standards Appropriateness of “Presumptive BACT” standards –Many state/local agencies have called for such standards, especially for smaller sources –Members are concerned such standards would conflict with the case-by-case mandate

15. 15 Training Essential for all stakeholders Essential for all stakeholders Should be on both the process to be followed and the technical aspects of GHG controls Should be on both the process to be followed and the technical aspects of GHG controls National, Regional, State/Local level and periodic National, Regional, State/Local level and periodic Must be timely and should communicate latest information to all parties Must be timely and should communicate latest information to all parties

16. 16 Subgroup Areas of Phase I Report I. Defining the source/scope of analysis II.Criteria for determining Feasible Control Technologies III. Criteria for Eliminating Technologies IV. Needs of States & Stakeholders V. Other (biomass, future availability of control)

17. 17 I.Scope of BACT Analysis: Defining the Source A. Consensus - New or modified emission units B. Non-Consensus - Other portions of the production process (other than the emission unit) process (other than the emission unit) - Scope of the terms “source” and “facility” “source” and “facility” “project” “project” - Meaning of the terms “fundamental business purpose” “fundamental business purpose” “basic design” “basic design”

18. 18 II. Criteria for Determining Feasibility Control Technologies A. General Criteria Consensus (Partial List) 1. Expand RBLC to include: - Compliance test results - Compliance test results - Operating Conditions - Operating Conditions - Foreign sources - Foreign sources 2. Encourage innovative control technologies 3. Provide guidance on evaluating energy efficiency efficiency 4. Use 1990 Draft NSR Workshop Manual 5. Technology must be available in time frame of permit issuance. permit issuance. 6. Consider a control technology if applied to a similar chemical and physical exhaust gas stream chemical and physical exhaust gas stream

19. 19 B. Demonstrated in Practice Consensus Used in production situation Used in production situation Successful at achieving claimed Performance Successful at achieving claimed Performance Range of reasonably expected operating scenarios Range of reasonably expected operating scenarios Commercial Scale Commercial Scale

20. 20 C.Technology Transfer Consensus Characteristics of the gas stream Characteristics of the gas stream Comparability of production process Comparability of production process Range of operating scenarios Range of operating scenarios

21. 21 D. Innovative Control Consensus EPA’s provisions rarely used EPA’s provisions rarely used Consider other ways to promote new and innovative control measures Consider other ways to promote new and innovative control measures

22. 22 E. Carbon Capture and Sequestration (CCS) Need both capture and sequestration Need both capture and sequestration Site specific feasibility relevant for sequestration Site specific feasibility relevant for sequestration Size relevant Size relevant Piping CO2 to another site can be considered Piping CO2 to another site can be considered

23. 23 F. Energy Efficiency Should be included in BACT analysis Should be included in BACT analysis –To evaluate BACT alternatives –To set emission limits Must achieve desired production output Must achieve desired production output Setting energy efficiency limits may not be feasible for some source categories Setting energy efficiency limits may not be feasible for some source categories BACT might be an equipment specification or operating procedure BACT might be an equipment specification or operating procedure

24. 24 G. Clean Fuels Should be considered (requirement of Act) Should be considered (requirement of Act) No consensus on requiring cleaner fuels No consensus on requiring cleaner fuels

25. 25 III. Criteria for Eliminating Technologies 1. Consider impacts on criteria pollutants (can’t cause/significantly contribute to NAAQS violation) 2. Consider other environmental impact, (i.e., water use) 3. Energy efficiency = multi pollutant reductions 4. Use carbon dioxide equivalents 5. Cost effectiveness values will be smaller per ton of pollutant

26. 26 Next Steps 1. John Paul leading follow-up NACAA/EPA group on state/local GHG BACT needs 2. NACAA participating on phase 2 GHG BACT workgroup (energy efficiency and innovation). 3. NACAA following up with designated EPA staff on wider array of GHG implementation needs. See 3/17/10 follow up items from 2/4/10 NACAA-EPA retreat. (tailoring rule, resource needs, reporting rule, SIP credits for energy efficiency, and needs, reporting rule, SIP credits for energy efficiency, andBACT) 4. EPA Goal - provide timely guidance to pave the way for a smooth transition to permitting of GHG