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EPA’s GHG Tailoring Rule: Understand How it Will Impact Your Business

The Tailoring Rule – How did we get here? Impact of EPA's Greenhouse Gas Tailoring Rule related to

Title V and PSD permitting What facilities are affected Timeline of EPA's 3-step implementation process Implications for Best Available Control Technology (BACT) Near term affect on PSD and Title V facilities

Application of Tailoring Rule to projects and permitting Case study

Strategies to advancing the permitting process

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Agenda

GHG Advisory Services EPA and State Regulatory Interpretation GHG Inventory – Federal, California, and Voluntary Reporting Life Cycle Analysis

Carbon markets – leading registries, project development protocols, GHG offsetting, offset pricing

Credit generation from projects: Carbon, REC, and ERCsProject Screening → Credit Development → Transaction

Training 3

MotivEarth: Our Offering

Greenhouse gas emissions rates significantly higher than criteria and HAP emissions rates

Clean Air Act thresholds for major sources are currently 100/250 tons per yr

Avoids issuance of thousands of PSD permits Significant pushback from air agencies Manpower and training issues

Proposes a 3-phase implementation regarding permitting under PSD and Title V requirements

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Justification for the Tailoring Rule

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Tailoring Rule - A Problem of Scale

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3-Step Implementation

PSD Permit issued before January 2, 2011 Need not be re-opened due to GHGs Make sure permit is not expired

Sources not subject to PSD Permitting until Step 2 Can begin or continue construction prior to July 1, 2011 Sources that begin construction after July 1 need to

obtain a PSD Permit

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PSD Permitting – Tricky in the Transition

If you are applying for a Title V Permit for the 1st time Submit permit application within 12 months after

becoming subject to Title V If you submit your permit application, but prior to release

of the draft permit, the source is obligated to supplement the permit application

What if I have a Title V permit? If 3 years or more remaining on the permit, the permit

authority is required to re-open the permit and account for GHGs

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Title V Permitting in the Transition

Step 1: Indentify all potentially applicable control technologies

Step 2: Eliminate technically infeasible options Step 3: Rank remaining technologies by control

effectiveness Step 4: Evaluate most effective controls and document

results Step 5: Propose BACT

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“Top Down” BACT Process

1. Energy Efficiency Technology – Cogeneration, turbines, engines, super

critical boilers Thermal efficiency

2. Non-fossil and low carbon fuels Renewable energy Biofuels Natural gas, propane, etc.

3. Carbon capture, transport, and sequestration10

Steps 1 BACT Analysis – 3 considerations

Treatment of biomass facilities First determinations of GHG BACT

“Cost effective” GHG control Establishing the RACT/BACT/LAER Clearinghouse

What happens if States are not ready to implement? Enter the FIP

Legal challenges No grandfathering

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Other Issues

EPA Tailoring Rule Permit StrategiesJames A. Westbrook

September 9, 2010

GHG Tailoring Rule Permit Strategies

• Do anything now? YES!• Strategies:Avoid triggering permit requirementsAccept requirements and minimize issues

• Case Studies:New Cogeneration FacilityPower Plant Upgrade / Expansion

BlueScape, Inc.

• National PSD and Title V permitting experience

• Solve tough air quality problems:Avoid PSD and Title V requirementsPass ambient standards with AERMOD

dispersion modelingNegotiate flexible permit conditionsKeep in compliance, stay out of trouble!Get the permit!

PSD & Title V Permitting Summary • PSD PermittingNew Source Review for constructionMajor Stationary SourcesSignificant emission thresholdsAmbient Air Analysis and BACT requirements

• Title V PermittingOperating Permit Program for applicable rulesNew Title V facilities, application processExisting Title V facility, 5-year renewal

• Potential emissions vs. actual emissions

Strategies for PSD and GHG• Biggest PSD Issues:

Delays, uncertainty, BACT expense, other issues (NO2, SO2 impact modeling)

• Avoidance Strategy Current PSD action - Get below PSD thresholds for criteria

pollutants New facility - Get GHG emissions below 100,000 tons/year Existing facility – Total GHG below 100,000 tons/year,

increases below 75,000 tons/year PSD permit in process, time is running out quick!

• Can’t Avoid PSD PSD process planned, put GHG in, carefully plan equipment

purchases Follow developing agency and BACT requirements closely

Strategies for Title V and GHG• Biggest Title V Issues: GHG pulls in ALL applicable requirements A lot of work, monitoring, deviation reporting

• Avoidance StrategyGet below GHG thresholds for Title V

• Can’t avoid Title VNew facilities – submit within one yearExisting Title V

oMore than three years to renewal – could reopen

oLess than three years to renewal – more time

CASE STUDIES

1) New Cogeneration Plant

2) Existing Power Plant Upgrade

New Cogen Plant• New Source, 8,760 hours/year• 3 x 8 MWe lean burn engines = 24 MWe• BACT for NOx and PM

NOx PM10 GHGEmission Factor

(lb/MWh): 0.15 0.011 1,000

Emissions (TPY): 15.8 1.2 105,120PSD and Title V

Threshold (TPY): 250 250 100,000

Exceed Threshold? No No YES1

1No PSD or Title V trigger for GHG limited to under 8,333 hours/year

Power Plant Upgrade / Expansion

• Major PSD and Title V source currently• Application submittal in Oct 20103 existing gas turbines, 450 MWe totalReplace with 3 x 250 MWe units, phased Increase to 750 MWe total in future8,760 hours/year proposed

• Modification - Emissions increases from 2YR actuals to future potential-to-emit (PTE)

• BACT for criteria pollutants • Application does not currently include GHG

Power Plant Upgrade Emissions

NOx PM2.5 GHG

Current Emission Factor (lb/MWh): 0.2 0.03 1400

Future Emission Factor (lb/MWh): 0.08 0.02 850

2-Yr Baseline Actuals (TPY): 270 41 1,890,000Future PTE (TPY): 263 66 2,792,250

Emissions Increase (TPY): -7 25 902,250PSD Significance Threshold (TPY): 40 10 75,000

Exceed Threshold? no YES YES

Summary• Evaluate against thresholds - Do you know your GHG

PTE?• Develop a permit strategy now to deal with GHG in

permits• PSD permitting: Avoiding PSD may be your best option Current PSD - wrap it up by 1/2/11 Need to do a PSD permit, plan for GHG emissions now

• Title V permitting: Avoid Title V if you can If no way to avoid, understand new requirements,

timing• Stay on top of agency implementation requirements

Next Webinar Tue, October 12

Air Modeling for Non-ModelersWhat’s Up with the New Ambient Standards?

1-hour NO2 1-hour SO2 PM2.5

How to know your PROJECT WILL PASS so you can Get the Permit

https://www2.gotomeeting.com/register/496570147

Contact with QuestionsJames A. Westbrook

BlueScape, Inc.858-695-9200 x201

jwestbrook@bluescapeinc.comwww.bluescapeinc.com

Joseph RitterMotivEarth, LLC858-735-3288

jritter@motivearth.comwww.motivearth.com