Greenhouse Gas Emissions Regulatory Update

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  • 1. Greenhouse Gas Emissions Regulatory Update 2011 Annual Environmental and Energy Conference & Trade Show Lancaster, PA April 13, 2011 John Slade and Neal Lebo All4 Inc.
  • 2. Agenda
    • Terms of Art
    • Greenhouse Gas (GHG) Reporting Rule
      • Overview
      • Amendments
    • GHG Tailoring Rule
      • Applicability and Implementation
  • 3. Terms of Art
    • What gases are considered GHG?
      • Six (6) recognized greenhouse gases (GHG)
        • Carbon dioxide (CO 2 )
        • Methane (CH 4 )
        • Nitrous oxide (N 2 O)
        • Hydrofluorocarbons (HFC)
        • Perfluorocarbons (PFC)
        • Sulfur hexafluoride (SF 6 )
  • 4. Terms of Art
    • Global Warming Potential (GWP)
    • A measure of how much a given mass of GHG is estimated to contribute to global warming. It is a relative scale which compares the gas in question to CO 2 .
    GHG GWP CO 2 1 Methane 21 N 2 O 310 HFC-32 650 PFC-14 6,500 SF 6 23,900
  • 5. Terms of Art
    • Emissions measured in CO 2 equivalency (CO 2 e).
      • Each gas placed on CO 2 e basis by multiplying GWP.
    • For GHG Tailoring Rule emissions are measured in short tons.
    • 1 short ton = 2,000 lbs
    • For GHG Reporting Rule emissions are measured in metric tons.
    • 1 metric ton = 2,204.62 lbs
    • 1 short ton = 0.907186 metric tons
  • 6. GHG Reporting Rule
    • Release Date – September 22, 2009.
    • Publish Date – October 30, 2009.
    • Effective Date – December 29, 2009.
    • Established 40 CFR Part 98 – Mandatory Greenhouse Gas Reporting.
      • Subpart A - General Provisions
      • Subparts C to PP - Specific Source Categories
    • Data monitoring and recordkeeping requirements began January 1, 2010.
    • Annual GHG emissions must be reported by March 31 of each year (except this year).
  • 7. Who Must Report?
    • § 98.2(a)(1) - A facility that contains any source category that is listed in Table A-3 in any calendar year starting in 2010.
    • Example Table A-3 “all-in” source categories:
      • Electricity generation units that report CO 2 emissions through 40 CFR part 75.
      • Cement production.
      • Petroleum refineries.
  • 8. Who Must Report?
    • § 98.2(a)(2) - A facility that contains any source category that is listed in Table A-4 of this subpart and that emits 25,000 metric tons CO 2 e or more per year in combined emissions from stationary fuel combustion units, miscellaneous uses of carbonate, and all applicable source categories that are listed in Table A-3 and Table A-4 of this subpart.
    • Example Table A-4 “25,000 metric ton threshold” source categories:
      • Glass production
      • Lead production
      • Pulp and paper manufacturing
  • 9. Who Must Report?
    • § 98.2(a)(3) - A facility that in any calendar year:
      • (i) Does not meet the requirements of either paragraph (a)(1) or (a)(2).
      • (ii) Has an aggregate maximum rated heat input capacity of stationary fuel combustion units of 30 mmBtu/hr or greater.
      • (iii) Emits 25,000 metric tons CO 2 e or more per year in combined emissions from all stationary fuel combustion sources.
    • For these facilities, the annual GHG report must cover emissions from stationary fuel combustion sources only .
  • 10. Who Must Report?
    • § 98.2(a)(4) – Suppliers of GHG must report all applicable products for which calculation methodologies are provided in the subparts listed in Table A-5.
    • Example Table A-5 supplier categories:
      • Petroleum refineries that distill crude oil.
      • Producers of coal-to-liquid products.
      • Local natural gas distribution companies that deliver 460,000 thousand cubic feet or more per year.
      • CO 2 producers.
      • Importers and exporters of a combination of 25,000 metric tons CO 2 e or more per year.
  • 11. How To Report?
    • U.S. EPA’s Electronic Greenhouse Gas Reporting Tool
      • User registration.
      • Certificate of Representation.
      • Data entry and submittal.
  • 12. How To Report?
    • Exception:
      • Suppliers of Coal-based Liquid Fuels (Subpart LL) and suppliers of Petroleum Products (Subpart MM) use the Office of Transportation and Air Quality Fuels Registration (OTAQREG) system to report CO 2 emissions from products.
      • However, if your facility has other source categories covered by the GHG Reporting Rule (e.g., stationary combustion sources) those GHG emissions must also be reported using e-GRRT.
  • 13.
    • March 18, 2011 – U.S. EPA extended the deadline for reporting 2010 GHG data to September 30, 2011.
      • Allow U.S. EPA to further test the e-GGRT system.
      • Give industry the opportunity to test the tool, provide feedback, and become familiar with it prior to reporting.
    When To Report?
  • 14. When To Report?
    • Exception:
      • Supplier category sources are only required to report 2010 stationary source combustion emissions during 2011 unless specified otherwise in applicable subparts. Supplier category emissions will otherwise be reported for the first time during 2012.
  • 15. Amendments Since Promulgation
    • 7/12/2010 – Added new source categories and amended General Provisions.
      • Magnesium Production – Subpart T.
      • Underground Coal Mines – Subpart FF.
      • Industrial Wastewater Treatment – Subpart II.
      • Industrial Waste Landfills – Subpart TT.
    • 9/22/2010 – Added reporting of corporate parent, NAICS Code, and co-generation information.
    • 10/28/2010 – Made technical corrections, clarifications, and other amendments to various provisions of Part 98.
    • 11/30/2010 – Added new source category and amended General Provisions.
      • Petroleum and Natural Gas Systems – Subpart W
  • 16. Subpart W in Pennsylvania
    • Subpart W has significant application in the Marcellus Shale Region of Pennsylvania.
    • Requires facility level reporting for source categories which include onshore petroleum and natural gas production and natural gas processing, transmission compression, storage and distribution facilities.
    • GHG emissions from equipment venting and blowdown, flares, and leaks from valves, connectors, pumps, flanges, meters, regulators and other equipment leak sources.
  • 17. Subpart W “Facility”
    • For Onshore Production “facility” includes all emission sources on a well pad or associated with a well pad that are under common ownership or control in a single hydrocarbon basin as defined by the American Association of Petroleum Geologists (AAPG).
    • For Natural Gas Distribution “facility” includes the collection of all pipelines, metering stations and regulating stations that are operated by a single Local Distribution Company.
    • For all other categories “facility” includes all source categories listed in the GHG Reporting Rule under common ownership or control that are located on contiguous or adjacent properties in physical contact or separated solely by a public roadway or right-of-way (definition from Subpart A - General Provisions).
  • 18. Amendments Since Promulgation
    • 12/1/2010 – Added new source categories and amended General Provisions.
      • Electronics Manufacturing - Subpart I.
      • Fluorinated Gas Production - Subpart L.
      • Electrical Transmission and Distribution Equipment Use - Subpart DD.
      • Importers and Exporters of Fluorinated Greenhouse Gases Contained in Pre-Charged Equipment and Closed-Cell Foams - Subpart QQ.
      • Geologic Sequestration of Carbon Dioxide – Subpart RR.
      • Electrical Transmission and Distribution Equipment Manufacture or Refurbishment - Subpart SS.
      • Injection of Carbon Dioxide – Subpart UU.
  • 19. Amendments Since Promulgation
    • 12/17/2010 – Revisions to various provisions of Part 98.
    • 12/27/2010 – Deferral of the reporting date for certain data elements.
    • 3/18/2011 – Extension of reporting deadline for year 2010 data.
  • 20. No Time to Rest
    • Calculate 2010 GHG emissions and have them ready to upload to e-GGRT.
    • Evaluate any problems experienced and lessons learned that may require revisions to your GHG Monitoring Plan.
    • Review all revisions and update GHG Monitoring Plans accordingly.
    • Prepare GHG Monitoring Plans for new source categories.
    • Monitoring, quality assurance, recordkeeping efforts for 2011 and beyond.
  • 21. GHG Tailoring Rule
    • Prevention of Significant Deterioration (PSD) and Title V Greenhouse Gas (GHG) Tailoring Rule.
      • Amends 40 CFR Parts 51, 52, 70 and 71.
      • Effective Date – August 2, 2010.
      • Sets timing and thresholds for addressing GHG emissions from stationary sources under Clean Air Act (CAA) permitting programs.
  • 22. GHG Tailoring Rule
    • 2007 Supreme Court Decision in Massachusetts vs. EPA.
    • The Light Duty Vehicle Rule (April 2010) established GHG emission standards.
    • GHGs become “subject to regulation” under the CAA on January 2, 2011.
    • U.S. EPA concludes that regulating GHG tailpipe emissions triggers regulating GHG under major source permitting programs (PSD and Title V).
  • 23. GHG Tailoring Rule
    • Major source permitting program emission thresholds are 100 and 250 tons per year (tpy).
    • Without the GHG Tailoring Rule:
      • Tens of thousands of new PSD permits.
      • Millions of new Title V permits.
    • GHG Tailoring Rule “tailors” these requirements to limit facilities required to get permits for GHG emissions.
  • 24. GHG Tailoring Rule
    • GHG Tailoring Rule is implemented for the largest sources of GHG emissions in two (2) steps.
      • Step 1 – January 2, 2011 to June 30, 2011.
      • Step 2 – July 1, 2011 to June 30, 2013.
    • U.S. EPA will begin rulemaking in 2011 to establish requirements for smaller sources. Any new requirements will be effective July 1, 2013.
    • In general, sources with GHG emissions below 50,000 tpy of carbon dioxide equivalent (CO 2 e) will not be regulated for at least six (6) years.
  • 25. GHG Tailoring Rule
    • PSD Applicability for GHG emission sources
      • Projects adding new or modifying emission units.
    • Step 1 – January 2, 2011 to June 30, 2011
      • No sources become major for PSD based solely on GHG emissions.
      • Sources major for any PSD pollutant other than GHG will also be major for GHG if the project increases GHG emissions by 75,000 tpy CO 2 e or more.
    • Step 2 – July 1, 2011 to June 30, 2016
      • Regardless of other PSD pollutants, the following must meet PSD permitting requirements:
        • New sources that emit GHGs at or above 100,000 tpy CO 2 e.
        • Modifications that increase GHG emissions by at least 75,000 tpy CO 2 e.
  • 26. GHG Tailoring Rule
    • What are PSD requirements for GHG emissions?
      • Must demonstrate Best Available Control Technology (BACT).
    • What is BACT for GHG Emissions?
      • U.S. EPA PSD and Title V Permitting Guidance for Greenhouse Gases – updated March 2011.
        • Use the same case-by-case, 5-step, top-down approach used for other PSD pollutants.
        • Reasoning and analysis for each step must be clearly demonstrated.
        • White papers, resources and case studies provided.
  • 27. GHG Tailoring Rule
    • Title V Applicability for GHG emission sources
      • Applications for new permits, renewals or revisions.
    • Step 1 – January 2, 2011 to June 30, 2011
      • No sources become major requiring a Title V permit based solely on GHG emissions.
      • Sources currently subject to Title V program for pollutants other than GHG must apply applicable Title V requirements to their GHG emissions.
    • Step 2 – July 1, 2011 to June 30, 2016
      • Facilities with GHG emissions of 100,000 tpy CO 2 e or more must obtain a Title V Operating Permit if they do not already have one.
  • 28. GHG Tailoring Rule
    • What are Title V requirements for GHG emissions?
      • GHG currently “subject to regulation” but not a “regulated pollutant” (i.e., regulated under Section 111 of the CAA).
      • No current Title V requirements to control GHG.
      • No other current CAA requirements (e.g., NESHAP, NSPS) applicable to GHG.
      • State rules may have requirements (e.g., monitoring, recordkeeping and reporting).
      • Federal GHG Reporting Rule is not a Title V requirement.
  • 29. GHG Tailoring Rule
    • Impact on permit application process.
      • Emission inventories for PSD applicability must include GHG pollutants for comparison to thresholds.
      • Permit applications pending may have to be reopened or amended to address GHG pollutants.
      • Even minor applications will need to demonstrate that thresholds are not exceeded.
      • Title V renewal or modification applications should explain GHG applicable requirements.
  • 30. Future Rulemaking Impacts
    • U.S. EPA plans to issue NSPS for Fossil Fuel-Fired Electric Generating Units (EGU) with GHG as a pollutant in May 2012.
    • GHG will become a “regulated pollutant” for Title V purposes.
    • Title V applications will need to be updated with GHG information including:
      • GHG emission information for existing emission units.
      • Add new emission units that emit only GHG.
      • Reclassify insignificant units as significant due to GHG emissions.
  • 31. Future Legislative & Legal Impacts
    • Proposed legislation in both U.S. House of Representatives and U.S. Senate to postpone or pre-empt U.S. EPA regulation of GHG emissions under the CAA.
    • U.S. EPA authority to regulate GHG under the CAA could be traded for energy legislation.
    • Numerous legal challenges to U.S. EPA GHG Regulations are proceeding through the courts.
  • 32. Questions? John and Neal All4 Inc. 2393 Kimberton Road P.O. Box 299 Kimberton, PA 19442 610.933.5246 x14 and x20 www.all4inc.com [email_address] [email_address]