The last administration got some good things done on NSR. Thus far, the changes are still in place. The Pruitt Memo on projected actual emissions was one of those. Project emissions accounting guidance became a rule. This allowed netting for shutting down a coal plant and changing to gas. A project aggregation reconsideration was issued. There were also some site-specific decisions that were helpful.
The PAL guidance encouraged states to take a flexible approach to PALs. Also, there were some language cleanups that were done. Biogenic CO2 was not addressed. Beginning actual construction guidance did not go through. States had some objections. A court case was won on routine maintenance, repair, and replacement. Guidance on de-bottlenecking was not forthcoming. Recently, with the new administration, a guidance rule was eliminated. The project emissions accounting rule petition was denied.
The John Deere memo on removing avoidance limits when a source reclassifies asked about such a removal. Some guidance has been issued on ozone and PM2.5 modeling. This is now required when PSD is triggered for NOx or SO2. EPA issued a BACT memo to TCEQ to define a BACT limit on what is achievable. EPA stated that a limit is achievable if it is in a permit. On fugitive emissions, the original rule required inclusion to determine if a modification was a major modification only if the industry was included in a particular listing. This went back and forth a few times. The last time, EPA went back to the original. Environmental groups objected. EPA has made a new proposal that has not issued yet. EPA is looking at “improvements” on the project emissions accounting and the improvements to major MACT. EPA is looking at notice requirements for minor NSR permits. The primary concern is synthetic minor permits. The Pruitt memo may be under review.
Further NSR reform is not a priority for this administration. Those memos that did not get finished will not likely be addressed. EJ is a key priority for the current administration. Different states are taking different approaches. Some recent permit applications have been denied on EJ grounds, even if all regulatory requirements have been met. There will likely be increased use of the Civil Rights Act to object to permit actions. That means interaction with neighbors prior to submittal of a permit application is becoming more important.
EPA is reconsidering the last administration’s decision to retain the ozone NAAQS as is. EPA is expected to propose a lower annual standard for PM2.5. The current standard is 12 ug/m3. Numbers from 8 – 11 have been suggested. Background is 8. Companies should improve the confidence in their emissions inventory. For expansion plans, the time to apply for a permit is now before the standards are lowered. Engage with the community now. Understand geographic impacts, as well as cumulative impacts. Engage with your industry associations (CIBO) to maintain your understanding or the rules and make comments on these proposed rules.
– Amy Marshall, All4
Federal, state, and local agencies are all looking at fence line monitoring. Right now, the federal program looks at benzene monitoring. For PSD issues, there can be requirements to get permits. For post construction, monitoring for PSD could apply to any criteria pollutant at the administrator’s discretion. Section 114 of the CAA has some specific requirements for particular chemicals.
California is looking at refineries in particular, but there are District level rules as well. Underground gas storage has ambient monitoring for methane. Colorado has requirements for ozone precursors, particularly VOC monitoring. Chicago has requirements for fugitive dust and toxic metals, especially in EJ communities. Passive sampling includes Method 325A and Method 325B for VOC concentrations. The samplers are placed along the fence line in a hooded installation to protect against the elements. The sampling period is 14 days. Generally, 12 samplers are required, but more may be needed for large facilities. Equal spacing or special placement, depending upon size and shape, can be used. The device is simple and the sample tube is removed and analyzed in the lab. The disadvantage is that the data only comes back after the lab analysis. Short term detection can be a problem. Time integrated samples can be done with Summa canisters. A flow controller draws the sample over a fixed period of time. A sorbent captures the VOCs of interest. The collected samples are still sent to a lab for analysis. Costs are somewhat higher. However, the time frame could be as low as 1 hour. The detection limits are much lower. The data is still lagged due to lab analysis requirements. Continuous monitoring can also be installed. These provide near real time data. The number of continuous monitors has been increasing significantly. There are federal reference methods. There are near reference monitors at lower cost. Data validity might be an issue.
EPA does not particularly like the use of low-cost sensors and does not really use that data. Data resolution is better. For EPA use, strict performance criteria are set by EPA. A climate-controlled shelter is typically required. The results are verifiable. Line power is required. The low-cost sensors do not meet the EPA requirements. Open path monitoring is required in some states. FTIR analysis uses a laser system. Continuous measurements across the fence line can be obtained. As a general rule, if data is available for 75% of the time, it is considered continuous. Thus, 45 minutes out of any hour or 18 hours out of any day would satisfy the requirement for continuous ambient monitoring. These are the most expensive. Annual calibration is typical. EPA supports community based monitoring. Both mobile and stationary systems can be deployed. EPA has developed an Air Sensor Toolbox. To get good data, there is a need for QA/QC, as opposed to just a number. In many cases, an alarm system is required. An agency must be notified of any alarm condition within a specified timeframe. Data is kept for at least 2 years. The EPA is continuing to focus on fugitive emissions. EJ considerations are taking on higher importance. Local regulations are increasing. Being involved is getting more important. Comments on proposed regulations are helpful.
– Scott Adamson, Trinity Consultants, Inc.-MSI
The EPA Good Neighbor Plan stems from the 2015 Ozone NAAQS rule. The EPA received numerous comments, including many from industry which are seriously being considered. The goal is to get to a final rule so that some controls at existing facilities can be turned on next year with the remainder due by 2026. There was an oil and gas rule proposed in 2021 with an update due shortly. The on shore upstream sources are impacted. They are mostly concerned about methane leaks. For GHG reductions at EGUs, new rules have to be proposed. Both coal and gas fired units will be impacted. A proposed rule could be out by March 2023. For the moment, these are the two main GHG rules under consideration. The PM NAAQS proposal is over at OMB for review. The ozone NAAQS are being reviewed. There are no decisions as yet. The Boiler MACT final rule was issued. For pulp and paper MACT, options are being considered. No decisions have been made and no deadlines have been established. The hazardous organic NESHAP is proposed for March 2023.
– Kevin Culligan, EPA
There is a carbon negative shot that involves the whole DOE to capture CO2 from the atmosphere and store it at gigaton scales. Normal CO2 capture from point sources cannot get carbon negative, with the exception of using biomass and capturing the CO2 emissions. The goal is to capture and store CO2 for $100/ton.
The DOE budget for CDR has increased dramatically. There are a few generation 1 technologies, but there is a lot of interest in generation 2 technologies that are at the very early stages of development. The current estimates are $600/ton. The goal is to get to $100/ton. With appropriate qualifications, the 45Q credit can go to $180/ton. One advantage for DAC would be that the capture system could be collocated with storage without major transportation of the CO2. With potential integration, hopefully the cost can come down. Biomass is very important to CDR technology. Three studies have been initiated to study site specific conditions. Congress has instructed the DOE to go for 4 DAC hubs in the US. These hubs must capture 1 million tons/yr. The largest DAC plant in the world is currently located in Switzerland and captures 4,000 tons/yr. The 4 hubs need to be geographically diversified. The life cycle analysis for these plants is critical.
– Lynn Brickett, DOE
The DOE Office of Carbon Management Technologies has two groups: Point Source Capture and Removal and Utilization. CCUS is critical to address climate challenge. Reaching net zero will be nearly impossible without CCUS. DOE FE is now DOE FECM. Carbon management seeks 50% reduction by 2030 and net zero by 2050. Carbon free electric generation is hoped for by 2035. Carbon management goes beyond fossil energy. There are 7 priority areas. A strategic vision document on carbon management has been issued.
For Direct Air Capture (DAC), $3.5 billion has been allocated to regional DAC hubs. There are also prize competitions totaling $115 million. Storage validation and verification has several billion dollars. Relative to 45Q, the DAC threshold for CO2 capture has been reduced to 1,000 ton/yr. Thresholds were reduced for electric generation and other facilities as well. There is an international mission to catalyze carbon dioxide removal worldwide. The US, Canada, and Saudi Arabia are co-leads. There are a number of international support groups. Reactive capture and conversion can comprise integration of separation and conversion using fewer steps. The idea is to make of the captured CO2 as it is captured, as opposed to releasing and purifying the CO2 and then directing it to a utilization process. There are DAC prizes for pre-commercial air capture processes. These processes are most likely bench scale and total $15 million. There is also a commercial DAC prize for projects that are large scale and total $100 million.
– Amishi Kumar Claros, DOE
The DOE has included some loan guarantee provisions under the new law. Title 17 has been expanded. There is an Advanced Industrial Facilities Deployment Program that has $5.8 billion for assistance for those companies that improve or retrofit their facilities that reduce GHG emissions. There are $63 billion in DOE Industrial GHG Reduction Grants.
The DOE Advanced Manufacturing Office has an industrial emissions reduction technology program. The office will be split into two different offices. One will focus on industrial efficiency and decarbonization. The second will focus on advanced materials and manufacturing technologies.
There is a new Industrial Technology Innovation Advisory Committee that companies can join. There are at least two FOAs for decarbonization technologies totaling nearly $200 million. The DOE has issued an Industrial Decarbonization Roadmap. This roadmap looks at 5 key industries. (iron and steel, chemicals, food and beverage, refining, and cement) There are 4 pillars of decarbonization: energy efficiency, electrification, low carbon fuels/energy resources, and CCS/CCUS.
The EPA received $41.5 billion for 24 new and existing programs. State “green banks” will get $27 billion. Climate pollution reduction at the state and local level are in line for $5 billion. Environmental Justice (EJ) and climate block grants get $3 billion. EPA OAR is in ramp up mode. Transportation and monitoring grants are included, including $5 million for states that adopt California standards for mobile sources. Monitoring activities will increase, including $117.5 million for fence line monitoring. There is $68 million for a low emissions electricity program. There is a corporate reporting program. $50 million will support improved air quality in schools. The bipartisan Infrastructure Law provided EPA with $100 million for emissions reduction in EJ communities.
The Supreme Court decisions in WV v EPA went against EPA. The regulation in question was the Clean Power Plan (CCP). The CPP proposed generation shifting as opposed to Best System of Emission Reduction (BSER). The Court stated that EPA did not follow BSER and therefore exceeded its authority. The Court stated that the statute did not give EPA the authority to shift generation. The decision did not violate Mass v EPA. EPA still has the authority to regulate GHGs. The IRA restates that GHGs are considered to be pollutants under the CAA. Thus, EPA still has the authority to regulate GHGs. It just has to use the proper tools.
- Lisa Jaeger, Bracewell LLP
The recently passed law is unprecedented in terms of the ideas that have been included. A number of federal agencies will have to coordinate to make this successful. Companies must leverage their tax departments to take advantage of the various tax credits that are in the law. There are also some new taxes to pay for the credit provisions. The EU is looking into a minimum 15% tax on international companies. This is not finalized, but it is important to keep these provisions in mind. Many of the credits build on existing credits. It is important to make sure that the current version has not changed the basis for applicability. Guidance on many of these credits is expected. Many regulations have not been finalized.
The investment tax credit for PTC (production tax credit) has been 1.5 cents/Kwhr. The credit applies for 10 years. There is a bonus of 2.6 cents/Kwhr for certain provisions. Job training and apprentice programs are required for the bonus. Project commencement could be within 60 days of the guidance issuance. Private companies cannot use direct pay. Some companies can sell transfer credits to bring in other companies. Domestic content rules can allow additional credits. Steel production and energy communities may qualify.
The ITC (investment tax credit) is an upfront, onetime payment. The credit applies to most renewable energy projects. The existing ITC runs to 2024. A replacement credit is anticipated thereafter. There are apprenticeship requirements as well as domestic content requirements. The level of credit can vary from 6% all the way to 70% if an energy community is involved. The 45Q credit is for CO2 capture and sequestration. The prior guidance took 2 years to issue. The credit starts at $12/ton and now ranges up to $180/ton. Direct Air Capture is now included and can attract a higher level of credit. The amount of CO2 that needs to be captured has increased to qualify. There are prevailing wage and apprenticeship program requirements. Companies can use direct pay for this credit. The 45Q cannot be stacked with other credits. This bill was a reconciliation bill. That means that it will be difficult to fix any mistakes that may appear in the bill. Only the party that has control of the House, the Senate, and the White House can pass a reconciliation bill with only 50 Senate votes. A fix to a mistake would require 60 votes, which is unlikely.
– Jeff McMillen, Akin Gump Law