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January 2011

Vol. 16, No. 2 Week of January 09, 2011

Regulation of GHG emissions begins

The impact of new EPA regs requiring best available CO2 control technology in new or modified major facilities remains to be seen

Alan Bailey

Petroleum News

Many people viewed the December 2009 finding by the U.S. Environmental Protection Agency that greenhouses gases, and carbon dioxide in particular, pose a threat to public health and welfare as a ratcheting up of the pressure on Congress to enact greenhouse gas cap-and-trade legislation — the Obama administration had already threatened to use regulation through the Clean Air Act as a vehicle to mandate tighter controls on U.S. greenhouse gas emissions, should Congress fail to act.

Now, with energy bills having run aground for the foreseeable future in a Washington, D.C., facing something of a party political stalemate, EPA is steadily moving ahead with its regulatory approach to attacking greenhouse gas emissions.

Having already brought in new rules for the reporting of industrial greenhouse gas discharges, on Jan. 2 EPA implemented another rule limiting greenhouse gas emissions from light vehicles, through new fuel economy standards. And the regulation of greenhouse gas emissions from vehicles triggered a legal requirement for the regulation of emissions from stationary sources such as power stations, oil refineries and other industrial facilities.

But what does this actually mean in terms of impacts on the economics of operating carbon dioxide generating industrial plant? In Alaska, for example, oil fields, gas fields, pipeline systems, oil refineries and electrical power plants all burn fossil fuels and all emit carbon dioxide.

Needs to be practical

Pollution emission permits issued under the Clean Air Act normally apply to facilities that discharge more than 100 or 250 tons of pollutant per year, depending on the type of facility involved. But carbon dioxide is emitted in much greater quantities than traditional pollutants, thus raising the specter of an impossible government task in the emissions regulation of anything from laundries to restaurants.

To avoid this problem, EPA has issued what it calls a “greenhouse gas tailoring rule,” which the agency says will limit greenhouse gas regulation to major facilities such as power plants and refineries that account for nearly 70 percent of total U.S. greenhouse gas emissions.

“Without this tailoring rule, the lower emissions thresholds would take effect automatically for GHGs on Jan. 2, 2011. … State, local and tribal permitting authorities would be overwhelmed and the program’s abilities to manage air quality would be severely impaired,” EPA said in May, when announcing the tailoring rule.

Under the tailoring rule, between Jan. 2 and June 30, air emissions sources already subject to permitting for traditional pollutants will require a greenhouse gas emissions permit for any modifications that trigger an increase in greenhouse gas emissions equivalent to 75,000 tons or more per year of carbon dioxide. Then, from July 1, the greenhouse gas permitting requirements will also apply to any new facility that will emit at least 100,000 tons per year of carbon dioxide equivalents, regardless of whether or not the facility emits other pollutants.

State implementation

EPA is delegating greenhouse gas permitting to state and local agencies that normally administer air quality permitting, provided that those agencies implement the EPA tailoring rule. And, in Alaska, the Alaska Department of Environmental Conservation is implementing the greenhouse gas regulations, to ensure that the state maintains control of its own permitting program, John Kuterbach, air permits program manager with Alaska’s Division of Air Quality, told Petroleum News Jan. 3. The state has adopted the federal rules for the prevention of significant air quality deterioration with respect to greenhouse gases, Kuterbach said.

Obtaining an air quality permit involving greenhouse gases will require a permit applicant to demonstrate that the best available technology for controlling greenhouse gas emissions is being used for the permitted facility modifications or for a new facility, Kuterbach said.

“The important part of best available control technology is that it has to be a proven technology. It has to actually be in use and work in practice. And it has to be cost effective,” Kuterbach said.

A business seeking a permit will submit a proposal for greenhouse gas emissions control technology, and the Division of Air Quality will assess the proposal, determining whether the proposal is acceptable and perhaps proposing alternatives. However, with greenhouse gas emission regulation being new, there is no track record of permitting cases to provide guidance on acceptable technologies. Technologies could include those that result in high energy efficiency, as well as technologies perhaps for capturing and sequestering carbon dioxide, Kuterbach said.

And several Alaska entities considering new facility construction have already approached the division, to discuss the requirements of greenhouse gas best available control technology, Kuterbach said.

Impacts major facilities

Sean Lowther, an environmental engineer with the Division of Air Quality, told Petroleum News Jan. 4 that, given the very large threshold greenhouse gas emissions volumes, the new greenhouse gas emissions regulations would only apply to the larger industrial facilities in Alaska. And the new permitting will only kick in if there is a major modification to an existing plant — triggering a significant increase in greenhouse gas emissions, or if someone builds a new major greenhouse-gas-emitting facility after June 30.

Operators of the large facilities are already familiar with what is going on, Lowther said.

“For the last few months the larger facilities have been submitting their GHG emissions (data) with their (permit) applications, just to get used to the process,” he said.

The new regulations are unlikely to impact small facilities, such as rural power plants, Lowther said.

“From what I’ve been seeing a lot of the small rural electrics … don’t burn enough fuel to trip into it,” he said.






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