EPA Releases Guidance On Greenhouse Gas Permitting Leaving Many Questions Unanswered

by Megan Spencer

    On November 10, 2010, EPA released guidance for states and permitting authorities to begin including greenhouse gas (“GHG”) emissions in PSD and Title V permitting processes entitled PSD and Title V Permitting Guidance For Greenhouse Gases. (“Guidance”). This Guidance is scheduled to take effect January 2, 2011. EPA gave the public a short window to submit comments on the Guidance, with the comment period ending December 1, 2010. However, this Guidance left much to be interpreted by permitting authorities, leaving industries subject to the new Guidance wondering how it will be applied to them.
    The Guidance applies EPA’s “top down” analysis of best available control technology (“BACT”) to GHG emissions. BACT in Clean Air Act permitting actions for new and modified sources. This BACT analysis involves the following steps: 1) identify all available control technologies; 2) eliminate technically infeasible options; 3) rank remaining options by emissions control effectiveness; 4) evaluate economic, energy, and other environmental impacts; and, 5) select best option as BACT for the source. The Guidance provides a list of available control technologies under step 1 including inherently lower-emitting processes/practices/designs, add-on controls, and combinations of the two. Under step 2, a technology is “technically feasible” if it has been demonstrated in practice or is available and applicable to the source type under review. When ranking options under step 3, ranking should be based on total CO2e. Those available options are then evaluated under step 4. Under step 5, the goal of the BACT selection is to have the highest level of control that the applicant could not adequately justify its elimination based on the factors in step 4.
     The Guidance emphasizes energy efficiency as a means to achieve lower GHG emissions. (Guidance, p. 30). However, the Guidance does not provide definitive answers for how energy efficiency is to be determined. This uncertainty leaves those industries subject to the new guidance wondering whether energy efficiency will be applied to the entire facility, on an individual equipment basis, or across a production unit. With the discretion of how this energy efficiency goal will be interpreted left to the permitting authority, uniformity among states and permitting programs will be lacking. This uncertainty will likely lead to increased costs and delays in permit approvals.
One of the more controversial issues raised by the guidance is whether GHG BACT could force an applicant to redesign its source. Well-settled BACT procedures state that “EPA has recognized that a Step 1 list of options need not necessarily include inherently lower polluting processes that would fundamentally redefine the nature of the source proposed by the permit applicant. BACT should generally not be applied to regulate the applicant’s purpose or objective for the proposed facility.” However, the Guidance then continues with a statement that “permitting agencies must take a ‘hard look’ at the applicant’s proposed design in order to discern which design elements are inherent for the applicant’s purpose and which design elements may be changed to achieve pollutant emissions reductions without disrupting the applicant’s basic business purpose.” At best, this language is likely to lead to widely varying results between different permitting authorities.
     Another unanswered question involves the inclusion of carbon capture and sequestration in the Guidance. The Guidance suggests that carbon capture and sequestration is an available control technology that should be considered under step one of the BACT analysis. Notably, the Guidance recognizes in a footnote that carbon capture and sequestration is not yet ready for large-scale implementation. (Guidance, p. 33, fn. 82). This acknowledgment suggests that facilities should not be required to carry the use of carbon capture and sequestration past steps 1 or 2 when it is not “available” or “feasible” for large-scale implementation.

The full text of the Guidance is available at the following link:www.regulations.gov/search/Regs/home.html#documentDetail

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