Life after CAIR and CAMR was the Hot Topic on November 20, 2008

More than 60 people, many of them experts in their fields, participated in a good discussion of the status of PM_2.5 and mercury regulations. Bob McIlvaine and Debbie Fox made presentations. Dave Foerter added insights and answered questions as well. Debbie is an environmental attorney and analyst at the McIlvaine Company. Dave is executive director of the Institute of Clean Air Companies.

Debbie traced the development of CAIR and CAMR and summarized the CAIR litigation status

• September 24, 2008: EPA filed petition for rehearing, asking court to
  • Remand CAIR to EPA for revisions
  • Allow CAIR to remain in place in the interim
  • EPA concedes compliance dates are inconsistent
• October 21, 2008: Court asked parties for briefs regarding –
  • Whether any party is seeking vacatur
  • Whether the court should restore the CAIR rule in the interim
• Implications –
  • New rulemaking likely to have aggressive compliance dates
  • CAIR may be reinstated by the court, either Phase I or in entirety

There are a variety of fates for CAIR and CAMR

• Courts:

o   CAIR rehearing or amended court decision?

o   CAIR appeal to Supreme Court?

o   Status of CAIR in the interim?

• CAMR Rulemaking:
  • Revisit delisting EGUs from air toxics?
  • New mercury MACT rulemaking?
• CAIR Rulemaking:
  • Revised compliance dates?
  • Cap and trade or source specific standards?
  • Retirement of acid rain allowances?
  • Coordinated with revised Ozone and PM _2.5 standards?
• Legislation:
  • More strict than CAIR and CAMR?
  • “Four pollutant” bill to add CO₂?

Participants seemed to agree that the greenhouse gas issue would impact the decisions on air pollutants. McIlvaine has been analyzing the eco-efficiency efforts of many companies and in particular the methods they use to determine eco-efficiency. The challenge is to quantify disparate categories such as air emissions, water pollution, resource consumption, global warming, etc. McIlvaine has made an attempt to quantify the combination of air pollution and global warming. The measurement is in tons of equivalent CO₂.

CO₂ EQUIVALENCY

*tons of CO₂ per ton of each chemical compound

The basic method was to use the relative toxicity of each compound. EPA developed the Lesser Quantity Emission Rate (LQER). In turn this is derived from the Clean Air Act (CAA) listing of 10 tons as the threshold for the most benign air toxic e.g., hydrochloric acid. The LQER lists Vanadium at one ton and lead at 0.01 tons. Since the criteria pollutant threshold is 100 tons for NO_x and SO_x these were added to the list. Since NO_x allowances are $2000/ton and CO₂ allowances may be $20/ton, CO₂ was added with an equivalent 100 x higher than NO_x. It can be argued that CO₂ should be $3/ton or $50/ton. So there is no absolute right or wrong equivalent. But it is unlikely that allowances will be higher than $20/ton for power plants in the foreseeable future. Based on the CO₂ equivalents the pollution from all the coal plants has been determined.

U.S. COAL POWER CO₂ EQUIVALENT EMISSIONS

Actual CO₂ emissions are two billion tons/yr. Equivalent CO₂ emissions from just the criteria pollutants are 2.3 billion tons equivalent. Toxic pollutants add more than one billion additional tons. (Only some of the toxics emitted by coal-fired power plants are included in the chart.) The conclusion is that there is more potential eco-efficiency in reducing air pollutants than in reducing CO₂. The fact that it is also cheaper to reduce one ton of SO₂ than 100 tons of CO₂ is the other dimension in eco-efficiency.

These statistics cut both ways. A gas turbine compares better to a coal-fired power plant using the CO₂ equivalents. But at gas prices above $6/MMBtu it would be better to spend the money cleaning up the existing coal-fired power plants than replacing them with gas-fired generators. Also a new coal-fired power plant with very low air pollution emissions, high efficiency and co-firing biomass could compare favorably to gas-fired power plants. For example, the lignite-fired Spiritwood power plant with 66 percent equivalent thermal efficiency due to the use of waste heat at the adjacent ethanol plant would have possibly even lower equivalent CO₂ emissions than a gas-fired power plant.

The biggest revelation of this approach is that you cannot just simply compare coal to gas. A peaking single cycle gas turbine power plant might have only 30 percent thermal efficiency. A coal-fired power plant with BACT for all the air emissions could have a fraction of the CO₂ equivalent ton release of a coal-fired power plant with no scrubber or SCR. But the CO₂ equivalent emissions approach is a way to compare all these combinations.

We ended the session with more questions than answers. Here they are.

• Are CAMR and CAIR fixes a temporary bridge? If so, for how long?
• Can states regulate without Federal intervention to reduce interstate transfer?
• How important are greenhouse gas emissions in impacting mercury and PM_2.5 decisions?
  • Delaying and negotiating a new CAA amendment which includes greenhouse gas emissions and other pollutants
  • Eco-efficiency trade-offs
• With the combination of regulations on HAPS, PM_2.5, and NSR, will every power plant eventually have to meet BACT?
• Is there any logical reason that new and existing sources will not eventually, e.g., in 40 years, have the same limits?
• Will the U.S. be pressured to keep up with developed and even developing countries on regulatory stringency? (If China requires scrubbers on all plants, will the U.S. be forced to do likewise?)
• Why not make coal-fired power plants green by co-firing sewage sludge and biomass or gasifying and reburning medical and municipal waste along with enough plastics to oxidize the mercury?
• Shouldn’t coal-fired power plants consider green by-products such as waste heat for ethanol plants and hydrochloric acid manufacture?
• Isn’t there a middle ground between requiring CO₂ capture and removal of virtually all pollutants vs. minimal regulations that don’t even require BACT at all plants?