UPDATE: The South Coast AQMD Moratorium on Permits 06/04/09

UPDATE - The South Coast AQMD Moratoriumon P Permits i James A. Westbrook BlueScape Environmental June 4 2009 4,

Webinar Agenda• Snapshot of moratorium impacts• Recap New Source Review and offsets• Update the permit moratorium situation – State Legislative Action SB696 Action, – Court Appeals – Rule 1315 Tracking System Re-adoption Re adoption – District Workshops and NSR “Reform”• Current ERC pricing• Permit actions• Questions 2

About BlueScape• Air quality permitting & compliance• New Source Review; CA and national• ERC applications and market strategies• AERMOD, ISCST3 and HARP air quality modeling q y g• GHG management, AB32, registries, life-cycle analysis, carbon trading• 20 years experience with i d t i i S th C i ith industries in South Coast t• Regulatory strategies to move business forward See www.bluescapeinc.com/about/index.html for more information. 3

Snapshot – Permit Moratorium Impacts• Facilities cannot get certain permits without offsets, or emission reduction credits (ERCs) – Permits to construct (P/Cs) to build – Permits to operate (P/Os) to operate• Offsets are scarce and very expensive• AQMD estimates 3,150 permits may be impacted• Costs to acquire offsets > $4 billion – $ 150 million for a landfill gas waste-to-energy plant – $ 1.6 million to permit a tortilla fryer and oven• Impacts: – Project delays, lost jobs – Difficulty getting permits for essential services – Diffi lt deploying stimulus f di Difficulty d l i ti l funding, cleaner equipment l i t 4

see www.yesonSB696.com Reference: www.yesonsb696.com 5

Recap: Offsets in Permitting• New Source Review (NSR) - Regulation XIII – Rule 1303 requires offsets for nonattainment pollutants – District policy, emission increases 0.5 lb/day and greater• Rule 1304 exemptions from offsets• Rule 1309.1 offset bank (Priority Reserve) for large essential projects, e.g. power plants• Rule 1309.2 offset budget for other projects• Rule 1315 new source review tracking system• Exemptions and Priority Reserve previously funded by the District Offset Bank• Rule 1309.2 offset budget not active 6

Timeline – Then & Now• Nov. 2008: LA Superior Court Ruling (BS110792) – invalidates Rule 1315 District Bank Tracking• Dec 2008: Court appeals filed• Jan 2009: South Coast AQMD issues moratorium – P Permits need offsets it d ff t – Rule 1304 exemptions no longer available – Could be retroactive to permits issued after Sep. 8, 2006• Feb 2009: amended SB696 by state Senator Wright• Mar 2009: Rule 1315 amendment proposed, CEQA Initial Study, N ti I iti l St d Notice of P f Preparation ti• District NSR Stakeholder workshops, reform 7

State Legislative and Court Activity• State Legislation - SB696 (Wright) – Limited CEQA exemption to offset rules – Allow access to District offsets bank with requirements met – Bill pulled from committee, negotiations (Capital Weekly, May 21) – www yesonsb696 com www.yesonsb696.com• Court Activity – Municipal court appeals, stay on invalidating appeals previous permits – Federal court case pending 8

Rule 1315 & 1309.2 Rule Revision and CEQA Programmatic Study• Purpose of amendments: – Ability to issue permits using District internal offsets – Codify procedures – Specify types of reductions• Rule 1309.1 for large projects will not be amended• Amended Rule 1309.2 must be approved by EPA• Program Environmental Assessment• Scheduled to go to AQMD Board Oct 2, 2009• No Rule 1304 exemptions currently allowed pending re-adoption of Rule 1315 9

District NSR Workshops, Reform• Workshops held on Jan 21, Mar 11, Apr 16, 16 & May 12• Near-term and long-term solutions• Supply-Side and Demand-side• Requires rule revisions• Next workshop on July 16 See: http://aqmd.gov/prdas/nsr/051209/FinalNSR051209.pdf 10

What to do Now?• A lot happening, nothing has changed .. yet• Can you wait, or need to act now? - Permit process length and difficulty - Offset scarcity and market direction - Business opportunity, stimulus funding• Consider costs to purchase market offsets costs, versus other options• Consult a permitting expert – make the right decision, ideas to get your permit 13

Current Open Market ERC Prices Coastal (lb/day) Inland (lb/day) NOx PM10 VOC NOx PM10 VOC$90,000$90 000 – $270,000 $270 000 - $5,000 $5 000 - $55,000 $55 000 - $100,000 $100 000 - $5,000 $5 000 -$150,000 $350,000 $9,500 $80,000 $170,000 $9,000 14

Summary• Relief may come, from different fronts• South Coast AQMD permitting is complicated, develop a permit strategy• BlueScape will help you: – Review your permit situation business goals and situation, other factors – Develop and analyze various options p y p – Execute a permitting strategy• Stay on top of the changing New Source Review landscape 15

Contact with Questions James A. Westbrook BlueScape Environmental 877-486-9257jwestbrook@bluescapeinc.com www.bluescapeinc.com Los Angeles ~ San Diego 16

UPDATE: The South Coast AQMD Moratorium on Permits 06/04/09

by James Westbrook on Jun 02, 2011

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UPDATE: The South Coast AQMD Moratorium on Permits 06/04/09 — Presentation Transcript