11

Katy R. ForneyKaty R. Forney

Energy Sector Technical AuthorityEnergy Sector Technical Authority

Air Permits SectionAir Permits Section

EPA Region 4EPA Region 4

PSD and Title V PSD and Title V Greenhouse Gas Tailoring Rule Greenhouse Gas Tailoring Rule

1414thth Annual Power Generation Conference Annual Power Generation ConferenceJuly 29, 2010July 29, 2010

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Overview of PresentationOverview of Presentation

The Final Tailoring RuleThe Final Tailoring Rule

Covered Pollutants Covered Pollutants

Phase-In Steps to Include GHG in PSD/Title V Phase-In Steps to Include GHG in PSD/Title V

State/Local Implementation ConsiderationsState/Local Implementation Considerations

GHG Technical InformationGHG Technical Information

PSD Implementation GuidancePSD Implementation Guidance

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The Final Tailoring RuleThe Final Tailoring Rule

Issued on May 13, 2010. Issued on May 13, 2010.

Published in the Federal Register on June 3, 2010 Published in the Federal Register on June 3, 2010

““Tailors” the existing requirements of PSD and title V Tailors” the existing requirements of PSD and title V permitting programs to focus requirements on the largest permitting programs to focus requirements on the largest emitting facilities emitting facilities

Subjects facilities responsible for nearly 70 percent of Subjects facilities responsible for nearly 70 percent of the national GHG emissions from stationary sources to the national GHG emissions from stationary sources to CAA permitting requirementsCAA permitting requirements This includes the nation’s largest GHG emitters—power plants, This includes the nation’s largest GHG emitters—power plants,

refineries, and cement production facilities refineries, and cement production facilities

Small farms, restaurants, and commercial facilities are likely not Small farms, restaurants, and commercial facilities are likely not subject to this rulesubject to this rule

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Pollutants CoveredPollutants Covered

Sets thresholds for GHG emissions, addressing Sets thresholds for GHG emissions, addressing emissions from six well-mixed GHGs:emissions from six well-mixed GHGs:

Carbon dioxide (COCarbon dioxide (CO22))

Methane (CHMethane (CH44))

Nitrous oxide (NNitrous oxide (N22O)O)

Hydrofluorocarbons (HFCs)Hydrofluorocarbons (HFCs) Perfluorocarbons (PFCs)Perfluorocarbons (PFCs) Sulfur hexafluoride (SFSulfur hexafluoride (SF66))

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Pollutants Covered (cont.)Pollutants Covered (cont.)

The aggregate sum of these six GHGs is the The aggregate sum of these six GHGs is the identified air pollutant in EPA’s Light-Duty identified air pollutant in EPA’s Light-Duty Vehicle Rule, and the associated Vehicle Rule, and the associated Endangerment Finding and Cause or Contribute Endangerment Finding and Cause or Contribute FindingFinding

To determine applicability, a source's GHG To determine applicability, a source's GHG emissions are calculated as the sum of the six emissions are calculated as the sum of the six gases on a COgases on a CO2 2 equivalent (COequivalent (CO22e) basis and e) basis and

compared against the relevant threshold compared against the relevant threshold

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Phase-In Steps: Step 1Phase-In Steps: Step 1

January 2, 2011 to June 30, 2011January 2, 2011 to June 30, 2011

No new permitting actions due solely to GHG No new permitting actions due solely to GHG emissions during this time period; only sources emissions during this time period; only sources undertaking permitting actions “anyway” for undertaking permitting actions “anyway” for other regulated pollutants will need to address other regulated pollutants will need to address GHG emissionsGHG emissions

Covers sources responsible for 65% of total Covers sources responsible for 65% of total national stationary source GHG emissionsnational stationary source GHG emissions

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Phase-In Steps: Step 1 (cont.)Phase-In Steps: Step 1 (cont.)

PSD Permitting Applicability: PSD Permitting Applicability:

““Anyway” sources will be subject to the PSD Anyway” sources will be subject to the PSD requirements only if they increase GHG requirements only if they increase GHG emissions by 75,000 tpy COemissions by 75,000 tpy CO22e or moree or more

Title V Permitting Applicability:Title V Permitting Applicability:

Only those sources currently with title V Only those sources currently with title V permits will address GHGs, and only when permits will address GHGs, and only when applying for, renewing or revising their permitsapplying for, renewing or revising their permits

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Phase-In Steps: Step 2Phase-In Steps: Step 2

July 1, 2011 to June 30, 2013July 1, 2011 to June 30, 2013

Sources subject to GHG permitting Sources subject to GHG permitting requirements under step 1 will continue to be requirements under step 1 will continue to be subject to GHG permitting requirementssubject to GHG permitting requirements

In addition, sources that emit or have the In addition, sources that emit or have the potential to emit GHGs at or above 100,000 tpy potential to emit GHGs at or above 100,000 tpy COCO22e will also be subject to GHG permitting e will also be subject to GHG permitting requirements in title V and possibly in PSD requirements in title V and possibly in PSD programs.programs.

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Phase-In Steps: Step 2Phase-In Steps: Step 2

PSD Permitting Applicability:PSD Permitting Applicability:

Triggered with construction that increases emissions Triggered with construction that increases emissions above certain thresholdsabove certain thresholds

A newly constructed source (which is not major for A newly constructed source (which is not major for another pollutant) will not be subject to PSD unless it another pollutant) will not be subject to PSD unless it emits 100,000 tpy or more on a COemits 100,000 tpy or more on a CO22e basis e basis

A modification project at a major stationary source A modification project at a major stationary source will not be subject to PSD unless it results in a net will not be subject to PSD unless it results in a net GHG emissions increase of 75,000 tpy or more on a GHG emissions increase of 75,000 tpy or more on a COCO22e basise basis

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Phase-In Steps: Step 2 (cont’d.)Phase-In Steps: Step 2 (cont’d.)

Title V Permitting Applicability:Title V Permitting Applicability:

A GHG emission source (which is not already subject A GHG emission source (which is not already subject to title V) will not be subject to title V unless it emits to title V) will not be subject to title V unless it emits 100,000 tpy or more on a CO100,000 tpy or more on a CO22e basis.e basis.

Newly subject sources must apply for a title V permit Newly subject sources must apply for a title V permit on or before July 1, 2012 (which is one year from July on or before July 1, 2012 (which is one year from July 1, 2011), unless the permitting authority sets an 1, 2011), unless the permitting authority sets an earlier deadline.earlier deadline.

Covers sources responsible for nearly 70% of Covers sources responsible for nearly 70% of total national stationary source GHG emissionstotal national stationary source GHG emissions

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Phase-In Steps: Step 3Phase-In Steps: Step 3

The rule establishes an enforceable commitment The rule establishes an enforceable commitment to complete another rulemaking no later than to complete another rulemaking no later than July 1, 2012.July 1, 2012.

We will propose or solicit comment on a possible We will propose or solicit comment on a possible step 3 of the phase-in plan step 3 of the phase-in plan EPA will consider, during the implementation of step EPA will consider, during the implementation of step

2, whether it will be possible to administer GHG 2, whether it will be possible to administer GHG permitting programs for additional sources. permitting programs for additional sources.

EPA will establish that step 3 would take effect on EPA will establish that step 3 would take effect on July 1, 2013, so that permitting authorities and July 1, 2013, so that permitting authorities and sources can prepare for any additional GHG sources can prepare for any additional GHG permitting actions.permitting actions.

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Phase-In Steps: Step 3Phase-In Steps: Step 3

Step 3, if different from step 2, will not require Step 3, if different from step 2, will not require permitting of sources with GHG emissions below permitting of sources with GHG emissions below 50,000 tpy CO50,000 tpy CO22ee

We also commit to explore a wide range of We also commit to explore a wide range of streamlining options on which we plan to take streamlining options on which we plan to take comment in the step 3 proposalcomment in the step 3 proposal

In addition, we plan to solicit comment on a In addition, we plan to solicit comment on a permanent exclusion of certain sources from permanent exclusion of certain sources from PSD, title V or bothPSD, title V or both

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Phase-in Steps: Further ActionPhase-in Steps: Further Action

EPA will not require permits for smaller sources EPA will not require permits for smaller sources until April 30, 2016 or later until April 30, 2016 or later

The rule establishes an enforceable The rule establishes an enforceable commitment for EPA to complete a study within commitment for EPA to complete a study within 5 years projecting the administrative burdens 5 years projecting the administrative burdens that remain for small sources after EPA has that remain for small sources after EPA has had time to develop (and states have had time had time to develop (and states have had time to adopt) streamlining measures to reduce the to adopt) streamlining measures to reduce the permitting burden for such sourcespermitting burden for such sources

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Phase-in Steps: Further ActionPhase-in Steps: Further Action

We will use this study to serve as the basis for We will use this study to serve as the basis for an additional rulemaking that would take an additional rulemaking that would take further action to address small sources, as further action to address small sources, as appropriate. appropriate.

We are making an enforceable commitment to We are making an enforceable commitment to complete this rulemaking by April 30, 2016complete this rulemaking by April 30, 2016

We plan to solicit comment on a permanent We plan to solicit comment on a permanent exclusion of certain sources from PSD, title V exclusion of certain sources from PSD, title V or both.or both.

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Permitting Steps under the Permitting Steps under the Tailoring RuleTailoring Rule

2011 2012 2013 2014 2015

• Step 1: Source already subject to PSD “anyway” (tpy CO2e) New source: N/A Modification: 75,000

• Step 2: All Stationary Sources (tpy CO2e)New source: 100,000Modification: 75,000

• Step 3: Implementation of potential additional phase-in and streamlining options

• 5-year study: To examine GHG permitting for smaller sources

• Implementation of rule based on 5-year study

Study Complete

2016

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Newly-Subject SourcesNewly-Subject Sources

The newly-subject sources in Step 2 are The newly-subject sources in Step 2 are expected to include:expected to include: Large industrial sources from energy-intensive source Large industrial sources from energy-intensive source

categories that have not triggered permitting categories that have not triggered permitting programs for their non-GHG emissionsprograms for their non-GHG emissions

The largest landfillsThe largest landfills The largest coal mines or oil and gas production The largest coal mines or oil and gas production

installationsinstallations

Without the Tailoring Rule, there would have Without the Tailoring Rule, there would have been millions of newly-subject sources and the been millions of newly-subject sources and the costs would have been in the tens of billions of costs would have been in the tens of billions of dollarsdollars

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Newly-Subject Sources (cont.)Newly-Subject Sources (cont.)

Title V does not trigger any new control Title V does not trigger any new control requirementsrequirements

These sources will not trigger PSD unless they These sources will not trigger PSD unless they construct or modify in a way that significantly construct or modify in a way that significantly increases emissionsincreases emissions

If they do trigger PSD, BACT decisions made by If they do trigger PSD, BACT decisions made by permitting authorities (usually state/local permitting authorities (usually state/local agencies) must take costs into accountagencies) must take costs into account

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State ImplementationState Implementation

Definition of “subject to regulation” so that the GHGs Definition of “subject to regulation” so that the GHGs emitted by sources that fall below the tailoring emitted by sources that fall below the tailoring thresholds are not treated as “subject to regulation”. thresholds are not treated as “subject to regulation”.

““Subject to regulation” approach facilitates more Subject to regulation” approach facilitates more rapid adoption and implementation of the tailoring rapid adoption and implementation of the tailoring rule thresholds by states before January 2, 2011rule thresholds by states before January 2, 2011

60 Day Letters:60 Day Letters: EPA requests states to submit EPA requests states to submit information to appropriate EPA Regional information to appropriate EPA Regional Administrator within 60 days after the date of Administrator within 60 days after the date of publication of the Tailoring Rule in Federal Registerpublication of the Tailoring Rule in Federal Register If state must revise its statutes or regulations to If state must revise its statutes or regulations to

implement Tailoring Rule, provide an estimate to time implement Tailoring Rule, provide an estimate to time needed to do so needed to do so

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Other Actions and IssuesOther Actions and Issues

Streamlining options are being pursued as Streamlining options are being pursued as expeditiously as possible, and we encourage expeditiously as possible, and we encourage permitting authorities to do the same.permitting authorities to do the same.

We are not providing exemptions from applicability We are not providing exemptions from applicability determinations (major source and major determinations (major source and major modification) under title V and PSD for certain modification) under title V and PSD for certain GHG emission sources, emission activities, or GHG emission sources, emission activities, or types of emissions at this timetypes of emissions at this time

This rule does not contain any additional This rule does not contain any additional exemptions or grandfathering provisions exemptions or grandfathering provisions addressing the transition to PSD and title V addressing the transition to PSD and title V permitting for GHGspermitting for GHGs

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PSD GHG Technical InformationPSD GHG Technical Information

Late Summer 2010:Late Summer 2010:

Initial technical data and information concerning Initial technical data and information concerning available and emerging GHG control measures available and emerging GHG control measures

GHG Mitigation Strategies DatabaseGHG Mitigation Strategies Database

RACT/BACT/LAER Clearinghouse enhancementsRACT/BACT/LAER Clearinghouse enhancements

GHG technical white papers that will provide GHG technical white papers that will provide information on control techniques and measures for information on control techniques and measures for the largest GHG emitting industrial sectors (e.g., the largest GHG emitting industrial sectors (e.g., power plants, industrial boilers, cement plants, power plants, industrial boilers, cement plants, refineries, iron and steel, pulp and paper and nitric refineries, iron and steel, pulp and paper and nitric acid plants)acid plants)

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GHG Implementation GuidanceGHG Implementation Guidance

Before end of 2010:Before end of 2010:

GHG Implementation Guidance GHG Implementation Guidance

General PSD guidance, including BACTGeneral PSD guidance, including BACT Short ExamplesShort Examples

Training for EPA Regions and Permitting AuthoritiesTraining for EPA Regions and Permitting Authorities

Traditional Classroom WorkshopsTraditional Classroom Workshops WebinarsWebinars Extensive Example-Based TrainingExtensive Example-Based Training

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Additional Questions? Additional Questions?

EPA Region 4 points of contact on the EPA Region 4 points of contact on the Tailoring Rule, its implementation and Tailoring Rule, its implementation and development of GHG guidance development of GHG guidance

Katy Forney,Katy Forney, forney.kathleen@epa.govforney.kathleen@epa.gov

Heather Abrams, Heather Abrams, abrams.heather@epa.govabrams.heather@epa.gov

EPA’s website - www.epa.gov/nsr EPA’s website - www.epa.gov/nsr