Ryan Whaley Coldiron Shandy

Beginning on January 2, 2011, greenhouse gases (“GHG”) will be “subject to regulation” for many facilities – especially power plants, refineries, and cement production facilities.  For background information on the steps the Environmental Protection Agency (“EPA”) has taken to regulate GHGs, please see our summary here: http://www.ryanwhaley.com/epa-proposes-path-for-state-regulations-of-greenhouse-gases.  The result of these EPA actions is that certain facilities will have to address GHG emissions when they seek either a construction permit or an operating permit in 2011. 

On November 17, 2010, the EPA officially made available a guidance document intended to assist both the permit applicants and the permit writers in establishing permit requirements for GHGs.  The document, titled “PSD and Title V Permitting Guidance for Greenhouse Gases,” can be found by clicking on this link: http://www.regulations.gov/search/Regs/home.html#documentDetail?R=0900006480b8662b.  The guidance document discusses both applicability determinations – i.e., whether a permit applicant must address GHGs – and how to establish emissions limitations by determining the “best available control technology” (“BACT”) for GHG emissions.

Here are a few notes from the guidance document:

• EPA is not establishing a new across-the-board BACT determination for GHG emissions; those determinations will continue to be a state- and project-specific analysis using a “traditional” five-step, top-down process.   
• The guidance leans heavily on energy efficiency to reduce GHG emissions. On the other hand, energy efficiency options that might achieve reductions in a facility’s overall demand for energy from the grid but that cannot be tied to specific emissions from the stationary source should not be considered at step 1 of the BACT analysis.  Plant-wide efficiency considerations factor into step 4 of the analysis, regarding energy, economic, and environmental impacts.
• EPA recommends that carbon capture and storage should be considered by all stationary sources at least in step 1 of the BACT analysis as an add-on control – like selective catalytic reduction for NO_x emissions – even though it will likely be eliminated from consideration as cost-ineffective in step 2 of the BACT analysis.
• EPA is unclear on the role that fuel switching will play in the BACT analysis.  EPA generally rejects the idea that sources must consider fuel switching from one category of fuel to another, even beyond what some courts have suggested regarding the required consideration of “clean fuels” as BACT.  On the other hand, the guidance document promotes fuel switching from subcritical to supercritical coal combustion.
• Even though EPA appears to come down hard on fuel-switching as BACT, it admits that “redefining” the source is ultimately a question of degree that is within the discretion of the permitting authority.  It seems to indicate that any fuel-switching battle must be won or lost at the permitting-agency level. 

The EPA will be accepting comments on the guidance document until December 1, 2010.