The Shaw Group Inc. ®

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EPA’s Proposed Mandatory Greenhouse Gas Reporting Rule

Technical Considerations

EPA’s Proposed Mandatory Greenhouse Gas Reporting Rule

Technical Considerations

Presented to Louisiana Section Air & Waste Management Association

September 24, 2009

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IntroductionIntroduction

• Proposed April 10, 2009• Signed by Lisa Jackson September 22, 2009• Must be published in Federal Register by End of October

(Mid October Likely)• From the Press Release:

– “This is a major step forward in our effort to address the greenhouse gases polluting our skies,” said EPA Administrator Lisa P. Jackson. “For the first time, we begin collecting data from the largest facilities in this country, ones that account for approximately 85 percent of the total U.S. emissions. The American public, and industry itself, will finally gain critically important knowledge and with this information we can determine how best to reduce those emissions.”

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IntroductionIntroduction• Pollutants (Depending on Subpart)

– Carbon Dioxide (CO2)– Methane (CH4)– Nitrous Oxide (N2O)– Sulfur Hexafluoride (SF6)– Hydrofluorocarbons (HFCs)– Perfluorochemicals (PFCs)– Other Fluorinated Gases

• Sources– Listed Sources– Downstream facilities > 25,000 metric tons CO2e per year– Upstream suppliers of fossil fuels and industrial GHGs– Manufacturers of vehicles and engines

• 10,000 Facilities, 85% of GHG Emissions• Data Collection – January 1, 2010; First Report – March 31, 2011

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PurposePurpose

• “One specific action EPA has taken, consistent with the Congressional request contained in the FY2008 Consolidated Appropriations Act, to collect GHG emissions data.”

• Under Authority of CAA, but expected to be useful to inform other policy decisions as well.

– “The mandatory GHG reporting program will provide EPA, other government agencies, and outside stakeholders with economy-wide data on facility-level (and in some cases corporate-level) GHG emissions, which should assist in future policy development.”

• “Emissions from direct emitters should inform decisions about whether and how to use CAA section 111 to establish new source performance standards (NSPS) for various source categories emitting GHGs, including whether there are any additional categories of sources that should be listed under CAA section 111(b).”

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Comments to Proposed RuleComments to Proposed Rule• 16,800 comments received, Over 15,000 from Sierra Club mass mailer, 45

states, 3 tribal groups, ~16 NGOs, 400 trade groups, 150 individuals• Deadline not feasible• Allow use of best available information for some transition period• Adopt a 5% de minimis level to allow facilities to exclude small sources • Not “once in, always in” but allow a facility to drop out of the program if

emissions drop below applicability thresholds or equipment is permanently shut down

• Use other data reported to other government agencies (Department of Energy, Customs and Border Protection) to reduce redundant reporting and protect CBI

• Use typical fugitive emissions definition and estimation methods• Revise certification language• Use facility level reporting, rather than unit level• No third party verification, or • Yes, third party verification to prepare for Cap and Trade• Biennial calculations and reporting• Supplier reporting performed at company level

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EPA’s Frequently Mentioned CommentsEPA’s Frequently Mentioned Comments

Comment Industry States NGOs

Verification

• General Support of EPA Verification• Concerns over CBI• Verification Consultants are a well established industry and support 3rd party

• Some, but not all, support 3rd party• Interest in roles as auditing function either before or after submittal to EPA

Neutral or supportive or EPA verification for transparency purposes

CBIConcern that many data elements are CBI

Support transparency and complete release of reported data

Once in,

Always in

Support for mechanism to stop reporting if below applicability; disincentive to reduce emissions

NASupport for consistent, long-term data set

From EPA’s GHG Mandatory Reporting Rulemaking, Katherine Sibold, US EPA Climate Change Division, September 1, 2009

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Major IssuesMajor Issues• Third Party Verification – No, EPA will verify.

• Best Available Information: January 1, 2010 to March 31, 2010 – extension available for remainder of 2010 – application within 30 days of effective date of the rule.

• Certification Statement: “I certify under penalty of law that I have personally examined, and am familiar with, the statements and information submitted in this document and all its attachments. Based on my inquiry of those individuals with primary responsibility for obtaining the information, I certify that the statements and information are to the best of my knowledge and belief true, accurate, and complete.” Reasonable Inquiry?

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Major Issues (cont.)Major Issues (cont.)

• Less than 25,000 metric tons CO2e for 5 years or less than 15,000 metric tons CO2e for three years, or shut-down of all GHG units can discontinue reporting.

• Accuracy – Meters must be calibrated prior to April 1, 2010 according to the manufacturer’s recommended procedures, an appropriate industry consensus standard, or a method specified in a relevant subpart of this part. All measurement devices shall be calibrated to an accuracy of 5 percent.

• Lawsuit or Stay? Petition for Judicial Review?

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Part 98 SubpartsPart 98 Subparts

C. General Stationary Fuel Combustion Sources

D. Electricity GenerationE. Adipic Acid ProductionF. Aluminum ProductionG. Ammonia ManufacturingH. Cement ProductionI. Electronics ManufacturingJ. Ethanol ProductionK. Ferroalloy ProductionL. Fluorinated GHG ProductionM. Food ProcessingN. Glass ProductionO. HCFC–22 Production and

HFC–23 DestructionP. Hydrogen ProductionQ. Iron and Steel Production

R. Lead ProductionS. Lime ManufacturingT. Magnesium ProductionU. Miscellaneous Uses of

CarbonateV. Nitric Acid ProductionW. Oil and Natural Gas SystemsX. Petrochemical ProductionY. Petroleum RefineriesZ. Phosphoric Acid ProductionAA. Pulp and Paper

ManufacturingBB. Silicon Carbide ProductionCC. Soda Ash ManufacturingDD. Sulfur Hexafluoride (SF6)

from Electrical EquipmentEE. Titanium Dioxide Production

FF. Underground Coal MinesGG. Zinc ProductionHH. Landfills (MSWs Covered)II. Wastewater Treatment JJ. Manure Management KK. Suppliers of Coal LL. Suppliers of Coal-Based

Liquid Fuels MM. Suppliers of Petroleum

Products NN. Suppliers of Natural Gas and

Natural Gas Liquids OO. Suppliers of Industrial GHGs PP. Suppliers of Carbon Dioxide

(CO2)

Note: Colored subparts indicate that they were reserved in the final rule. EPA plans further review before finalizing these subparts.

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Subpart CGeneral Stationary Fuel Combustion

Subpart CGeneral Stationary Fuel Combustion

• Four-tiered Approach - CO2

Tier Covered Units Calculation Methodology

Tier 1Units less than 250 MMBtu/hr provided no specific fuel information available; If you have specific HHV info go to Tier 2

Use fuel-specific default CO2 emission factor, default high heating value, and annual fuel consumption (Nat Gas @ 1027 MMBtu/scf and 53.02 kgCO2/MMBtu).

Tier 2

Units less than 250 MMBtu/hr for fuels listed in Table C-1 or Units greater than 250 MMBtu/hr for pipeline quality natural gas and distillate fuel oil

Use measured high heat values with default CO2 emission factor and annual fuel combusted (HHV sampling frequency specified by fuel).

Tier 3Any unit greater than 250 MMBtu/hr unless it qualifies for Tiers 1 or 2 or Tier 4 is required

Use measured fuel carbon content and quantity combusted.

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Subpart CGeneral Stationary Fuel Combustion

Subpart CGeneral Stationary Fuel Combustion

Tier Covered UnitsCalculation

Methodology

Tier 4

Meets following 6 conditions:•Units greater than 250 MMBtu/hr or Combusts more than 250 tpd MSW; •Combusts solid fossil fuel as primary or secondary fuel;•Operates more than 1000 hours per calendar year;•The unit has a CEMS;•The CEMS has a certified gas monitor of any kind, or a flow rate monitor, or both;•Monitors are required by permit or regulation to undergo QA testing.

Units less than 250 MMBtu/hr or Combusts less than 250 tpd MSW if:

•Unit has both CO2 concentration monitor and flow monitor;•Meets the other requirements above.

Starts January 1, 2011 if existing equipment does not meet requirements. Use Tier 2 or 3 for 2010.

CEMS

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Subpart CGeneral Stationary Fuel Combustion

Subpart CGeneral Stationary Fuel Combustion

Tier 3 Gaseous Fuel Data and Calculation

• Fuel = Annual SCF, measured directly from calibrated meters• CC = Annual average carbon content from sampling• MW = Annual average MW from sampling• There are still some errors and typos in the procedures.

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General Stationary Fuel CombustionGeneral Stationary Fuel Combustion• CH4 and N2O emissions are

required only if you had to calculate CO2 and fuels are listed in Table C-2.

• Basically use same flow and heating value data you used for CO2 but apply CH4 and N2O emission factors from Table C-2.

• Very prescriptive, so map out your plan!

• Includes provisions for controls and biogenic fuels.

• Monitoring, QA/QC, Missing Data procedures are stipulated.

• Reporting includes unit level data such as Unit ID, Type of Unit, Max Heat Input, type of fuel combusted, emissions from each type of fuel combusted as well as CO2e, and method used.

• Significant verification data is required, e.g., monthly heat values for Tier 2.

Very prescriptive, so map out your plan!

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Petroleum RefineriesPetroleum Refineries• Units Covered:

– Catalytic Cracking Units– Fluid and Delayed Coking Units– Catalytic Reforming Units– Coke Calcining Units– Asphalt Blowing Operations– Blowdown Systems– Storage Tanks– Process Equipment Components

(Fugitives)– Loading (Marine, Barge, Truck, and

similar)– Flares– Sulfur Recovery Plants– Non-Merchant Hydrogen Plants

• GHGs to Report:– CO2, CH4, and N2O from stationary

combustion sources and flares;– CO2, CH4, and N2O coke burn-off emissions

from cat crackers, fluid coking units, and catalytic reformers;

– CO2 emissions from sour gas sent to off-site SRUs and CO2 emissions from on-site SRUs;

– CO2, CH4, and N2O from each coke calcining unit;

– CO2 and CH4 emissions from asphalt blowing operations;

– CH4 fugitive emissions from equipment leaks, storage tanks, loading operations, delayed coking units and uncontrolled blowdown systems;

– CO2, CH4, and N2O from any process vent not already named; and

– CO2 and CH4 emissions from non-merchant H2 production.

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GHG Monitoring PlanGHG Monitoring Plan

• Job Titles responsible for collecting emissions data;

• Explanation of the processes and methods used to collect the necessary data for the GHG calculations;

• Description of the procedures and methods that are used for quality assurance, maintenance, and repair of all continuous monitoring systems, flow meters, and other instrumentation used to provide data for the GHGs reported under this part;

• May reference existing procedures and quality assuance programs;

• The results of all required certification and quality assurance tests of continuous monitoring systems, fuel flow meters, and other instrumentation used to provide data for the GHGs reported under this part; and

• Maintenance records for all continuous monitoring systems, flow meters, and other instrumentation used to provide data for the GHGs reported under this part.

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To Do ListTo Do List

• Perform initial assessment or identify differences with current program;

• Identify applicable subparts;

• Identify sources and pollutants;

• Form your team;

• Identify process parameters / monitors that will be used for calculations;

• Outline the gaps;

• Perform a “dry run” collecting data, making calculations, and preparing report;

• Communicate with Management; and

• Train your people!

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References and LinksReferences and Links• EPA’s Webpage

– Rule and Preamble– Response to comments (Coming Soon)– Applicability Tool– Info Sheets for Source Categories– Major Changes since Proposed Rule– EPA Overview Power Point Presentation– http://www.epa.gov/climatechange/emissions/ghgrulemaking.html

• Docket– EPA-HQ-OAR-2008-0508 (www.regulations.gov)

• Inventory of U.S. Greenhouse Gas Emissions and Sinks– http://www.epa.gov/climatechange/emissions/usinventoryreport.html

• IPCC– http://www.ipcc.ch

• NPRA Comments– http://www.npradc.org/cmsRelatedFiles/

ghg_reporting_rule_comments_cover_letter_06_09_09_final1.pdf– http://www.npradc.org/cmsRelatedFiles/

npra_comments_on_greenhouse_gas_reporting_rule_final1.pdf• API Comments

– http://www.eenews.net/public/25/12165/features/documents/2009/08/17/document_gw_01.pdf

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Questions?Questions?

George F. Holder, II, P.E.

Air Permitting and Compliancegeorge.holder@shawgrp.com

225-987-7021