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REGULATION: EPA struggles to define best carbon-reducing technologies (Friday, October 9, 2009)

Jessica Leber, E&E reporter

With U.S. EPA set to soon regulate greenhouse gas emissions from large industrial sources, the biggest question — what exactly that means — is still far from an answer.

In late September, the agency issued its controversial proposal to include greenhouse gases, for the first time, in Clean Air Act permits for major new stationary pollution sources.

Under the rule, permits for new industrial facilities that release more than 25,000 tons of emissions a year would require what’s termed "best available control technology" (BACT) to limit their greenhouse gas releases. And when existing facilities make major upgrades that trigger permit reviews, they, too, would have to meet BACT requirements.

But with carbon capture and sequestration still years from commercial viability, how BACT will be defined is up in the air. "There’s no add-on, magic technology widget thingy that controls CO2," said David Bookbinder, the Sierra Club’s chief climate counsel.

Absent a widget, EPA’s proposal leaves the BACT question open to discussion. When the rule takes effect, EPA will have to issue guidance to state and regional permitting authorities, which ultimately evaluate each permit on a case-by-case basis.

"We don’t want to have a judgment yet going into this," said Peter Tsirigotis, director of the sector policies and programs division within EPA’s air office. "Now, we’re just throwing a bunch of things out to the wall and seeing what sticks."

He spoke this week to the agency’s Clean Air Act Advisory Committee, a panel of outside experts that is planning to complete its recommendations on the issue over the next six months.

A quick and complicated timetable

By the end of next March, EPA plans to finalize the first greenhouse gas standards for motor vehicles. To do that, the agency will have to officially declare these emissions pollutants under the law — a finding that will force the agency to put rules in place for industrial sources, as well. That means that by as soon as next spring, applicants for new permits might need to consider their greenhouse gas emissions.

States will ultimately bear the responsibility to decide what technologies fit the bill. Bill Becker, executive director of the National Association of Clean Air Agencies, said states will be looking for EPA to issue clear and simple, legally consistent, up-to-date guidelines about what BACT is and what it is not.

"We are plowing new ground here," Becker said. "We will be under intense pressure to make decisions on a timely basis, because time is money for regulated sources."

The process for determining BACT is fraught with complications. For every individual permit, states need to consider the energy and environmental impacts and, most significantly, the cost of requiring pollution controls. Then permitting authorities weigh a spectrum of options — from the Porsches of pollution control technologies to requiring nothing — and determine what doesn’t bust the bank account based on the price per ton of pollution avoided.

For conventional air pollutants, EPA runs a clearinghouse filled with real BACT examples in every region of the country, and for many types of sources, as a basis for comparison. "For carbon dioxide, you’re going to have an empty clearinghouse right now," said Joe Koncelik, an environmental lawyer who represents various industries for Frantz Ward LLP.

Defining the undefined

And, of course, everyone has his own ideas about what makes up the menu of BACT options.

Energy efficiency is one that almost everyone agrees upon. The Bush administration, in its consideration of the issue last year, said that efficiency is one of the few potentially cost-effective carbon controls right now, according to Roger Martella, the agency’s general counsel at the time. But the new administration, he said, may be willing to look at many more possibilities.

For the power sector, that might require power companies to consider co-firing with biomass or co-generating with waste heat, said Bookbinder. It also, he said, could mean that plants might need to consider switching fuels, from coal to natural gas, for example, or consider building new super-efficient, carbon-capture-ready facilities, such as integrated gasification combined cycle (IGCC) plants.

The latter option has already been subject to intense legal debate. At issue is whether EPA or states can make an applicant reconsider its entire plant design. "IGCC is a totally different process than a coal plant. It’s a big chemical plant, in a way," said John Kinsman, a senior director for the environment at the Edison Electric Institute, a utility trade group.

EPA, he said, has never typically required an applicant to build a nuclear plant, for example, instead of a coal plant.

The question is still not settled. In a recent decision, EPA’s Environmental Appeals Board sent the permit for the proposed Desert Rock Energy Facility, an embattled 1,500-megawatt pulverized coal power plant in New Mexico, back for review, in part because the agency did not at least consider an IGCC design. (E&ENews PM, Sept. 25).

BACT to the drawing boards

Determining carbon controls beyond the power sector may prove an even greater challenge. The new Clean Air Act requirements will apply to a whole host of sources, from steel manufacturers to cement kilns.

"Given the time frame, I don’t see how EPA is going to determine what BACT is for whole sets of industry categories," said Koncelik.

Meanwhile, EPA and the advisory committee may also consider entirely new alternatives never discussed before. "The question is: How do we balance the need for a very quick solution with the opportunities that exist to encourage innovation?" said EPA’s Tsirigotis.

That could mean allowing utilities to use energy demand reduction and response programs to meet BACT requirements, said Kinsman.

That could also mean allowing companies to buy carbon offsets instead of reducing their own emissions, an option that was raised for discussion at the advisory committee meetings this week.

Becker was wary of the offset option. For one, there would be major questions about whether offsets would even be legal.

Second, he said, allowing companies to purchase emission reductions in other areas of the country would ignore the air quality improvements that carbon-control technologies could provide. Increasing the efficiency of a boiler, for example, would also reduce other conventional air pollutants that only have regional effects.

The advisory committee this week agreed to look at innovative options, but not at the expense of immediately practical approaches. "What we very much don’t want to have is a pie-in-the-sky, potentially illegal, recommendation that interferes with the committee reaching an agreement," Becker said.

Ultimately, experts agreed, the agency’s first pass will be fought in the courts.

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ClimateWire is written and produced by the staff of E&E Publishing, LLC. It is designed to provide comprehensive, daily coverage of all aspects of climate change issues. From international agreements on carbon emissions to alternative energy technologies to state and federal GHG programs, ClimateWire plugs readers into the information they need to stay abreast of this sprawling, complex issue.

Copyright 2009, E&E Publishing, LLC. Reprinted with permission. www. ClimateWire.com