EPA Issues Permitting Guidance for Greenhouse Gas Emission Sources

On November 10, 2010, EPA issued guidance on permitting of greenhouse gas (GHG) emissions under the Clean Air Act (CAA). Most significantly, the guidance addresses how the Prevention of Significant Deterioration (PSD) program’s “best available control technology” (BACT) standard can be applied to regulate GHGs. In addition to PSD, the guidance also discusses applicability of the Title V operating permits program to sources of GHGs pursuant to EPA’s recently published GHG Tailoring Rule (75 Fed. Reg. 31,514 (June 3, 2010)).

Although currently subject to legal challenges, the Tailoring Rule purports to phase in the requirements of the CAA — namely, the statutory PSD and Title V thresholds — and the permitting of stationary sources emitting GHGs above those thresholds. According to EPA, the Tailoring Rule is necessary because the statutory thresholds (100 and 250 tons per year) would result in triggering tens of thousands of PSD permits and millions of Title V permits. 

GHG BACT Guidance. One of several tools EPA released in response to the recommendations of the Clean Air Act Advisory Committee Climate Change Work Group, the permitting guidance largely reaffirms the five-step approach EPA has applied in making case-by-case BACT determinations for over 20 years under the PSD regulations. The five steps, which are commonly referred to as the “top-down” method, are as follows:

• Step 1:  Identify all available control technologies
• Step 2:  Eliminate technically infeasible options
• Step 3:  Evaluate and rank remaining control technologies
• Step 4:  Evaluate the cost-effectiveness and environmental and energy impacts of potentially applicable control technologies
• Step 5:  Select the BACT and establish enforceable emissions limitations

The guidance does not prescribe any particular BACT standard for certain source categories, but rather provides general guidance on how permitting authorities can apply the existing five-step approach to GHGs.

Drawing upon existing agency guidance and the decisions of EPA’s Environmental Appeals Board, the guidance addresses a number of key concepts critical to development of BACT for GHGs:

• For electric generators and large industrial facilities, BACT for GHGs will often involve consideration of the energy efficiency of available technologies. By burning less fuel per unit of output, such facilities can reduce their GHG emissions.
• While carbon capture and sequestration (CCS) is noted as a promising technology that should be identified as available for large combustion sources, it is unlikely to be selected as BACT because of its cost and ancillary energy and environmental impacts.
• Although the definition of BACT includes “clean fuels,” fuel switching (e.g., coal to natural gas) will not ordinarily be required because it would fundamentally redefine the source, although the permitting authority retains discretion to broaden the analysis and consider clean fuels.

EPA will publish a notice announcing availability of this guidance in the Federal Register and has said it welcomes public feedback over the next few weeks on any aspect that contains technical or calculation errors or where the guidance would benefit from additional clarity. To provide comment, please visit the official docket EPA has opened for the guidance at: http://www.regulations.gov/search/Regs/home.html#docketDetail?R=EPA-HQ-OAR-2010-0841.

Along with this general guidance, EPA also issued seven technical “white papers” focusing on how to conduct GHG BACT analyses in the following common source categories:

• Coal-fired electric generating units
• Large industrial/commercial/institutional boilers
• Pulp and paper manufacturing
• Cement manufacturing
• Iron and steel industry
• Petroleum refineries
• Nitric acid plants

These technical white papers are available at: http://www.epa.gov/nsr/ghgpermitting.html.

Expansion of Control Technology Clearinghouses. EPA also announced enhancements to its web-based Control Technology Clearinghouse (known as the “RACT/BACT/LAER Clearinghouse”) to address GHGs and has established a special “GHG Mitigation Strategies Database” to track cost and availability information for a number of emerging GHG-control technologies. This database, which currently covers the electric generating and cement production sectors, is available at: http://ghg.ie.unc.edu:8080

Bingham’s team of air quality and climate change attorneys has been closely involved in EPA’s development of guidance on GHG BACT, including through their work on the Clean Air Act Advisory Committee’s Climate Change Work Group and in obtaining the first federal PSD permit to include BACT limits for GHGs.

For more information, please contact:

Rick R. Rothman, Partner
rick.rothman@bingham.com, 213.680.6590