Clean Air Updates

1. Clean Air Updates Anna Marie Wood Director Air Quality Policy Division Office of Air Quality Planning and Standards U.S. EPA WESTAR Spring Business Meeting April 17, 2012

2. Outline of Presentation • Regional Haze SIPs • Exceptional Events guidance and fire policy • Update/Replacement for the Interim Wildland Fire Policy • GHG permitting • Multi-pollutant and sector-based program integration • Questions/feedback?

3. Regional Haze SIP/FIP Status(as of April 16, 2012) EPA has proposed action on the full SIP and/or a FIP (includes AK) 29 Four Corners FIP proposed by EPA San Juan GS Final EPA FIP D.C. (Final approved SIP) States with final SIPs submitted to EPA but not yet acted on by EPA Final Regional Haze SIP has been acted on by EPA (full approval of program, except NV; Arkansas is partial disapproval, West Virginia is limited disapproval.) 7 9 States that have not submitted final SIPs to EPA (includes HI and VI) Final SIP or FIP has been approved by EPA – BART only 3 4

4. RH Actions and Next Steps for WESTAR States • Alaska - Action was proposed on February 24, 2012 and was for full approval • Next Steps - Final action is due June 15, 2012 • Arizona - Proposed action due May 15, 2012 • Next Steps - Final action due November 15, 2012 • California - Action was final on June 14, 2011 to fully approve the SIP • Next Steps - 5 year progress report due from CA March 17, 2014 • Colorado - Action was proposed on March 26, 2012 and was for full approval • Next Steps - Final action is due September 6, 2012 • Hawaii - Proposed action is due May 14, 2012; Region 9 is doing a FIP • Next Steps - Final action is due September 14, 2012 • Idaho - Action was final on June 21, 2011 and was for BART only. EPA approved the BART determinations for Idaho • Next Steps - Proposal for the remaining SIP elements (primarily Reasonable Progress and the Long Term Strategies) is due May 15, 2012 with final action due November 15, 2012

5. RH Actions and Next Steps for WESTAR States (cont.) • Montana - EPA Region 8 signed the proposed FIP on March 20, 2012 • Next Steps - Final FIP is due August 15, 2012 • Nevada - Action was final on March 26, 2012 and was approval of the entire SIP except for BART for Reid Gardner; a re-proposal of a partial FIP for BART for Reid Gardner to require SNCR was signed on April 2, 2012 • Next Steps - Final action for BART for Reid Gardner is due July 13, 2012 • New Mexico - FIP for BART for NOx at San Juan Generating Station (SJGS) was final on August 22, 2011; proposal for the remaining SIP elements (primarily elements for SO2 under Section 309, Reasonable Progress, and the Long Term Strategies) was signed on April 16, 2012 as well as proposed action on the state's revised SIP for SJGS • Next Steps - Final action for the remaining SIP elements is due August 15, 2012 • North Dakota - Final action signed on March 2, 2012 and was for partial approval and partial disapproval of BART for NOx for Coal Creek Units 1 and 2 and Reasonable Progress for NOx for Antelope Valley Station Units 1 and 2. EPA promulgated a FIP for those disapprovals, requiring SNCR at Coal Creek and combustion controls at Antelope Valley. EPA did not finalize the proposal to require SCR at the Milton R. Young and Leland Olds power plants. • Next Steps - 5 year progress report due from ND on March 17, 2015

6. RH Actions and Next Steps for WESTAR States (cont.) • Oregon - Action was final on June 21, 2011 and was for BART only. EPA approved the BART determinations for Oregon • Next Steps - Proposal for the remaining SIP elements (primarily Reasonable Progress and the Long Term Strategies) is due May 15, 2012 with final action due November 15, 2012 • South Dakota - Final action signed on March 29, 2012 and was for full approval of the SIP • Next Steps - 5 year progress report due from SD on February 2, 2016 • Utah - Proposed action due on April 30, 2012 • Next Steps - Final action due October 31, 2012 • Washington - Proposed action due on May 15 2012 • Next Steps - Final action due on November 15, 2012 • Wyoming - Proposed action due May 15, 2012 • Next Steps - Final action due on October 15, 2012

7. Other EPA Actions on Regional Haze SIPs • CA, DC, DE, KS, ME, NJ, and SD have fully-approved RH SIPs. • Multiple environmental groups (NPCA) filed a complaint for EPA’s: • Failure to take action on submitted SIPs for states that did not receive a “finding of failure to submit” notice in January 2009, and • Failure to promulgate FIPs for states that did receive a 'findings' notice. • Consent Decrees • Action schedules for 10 states are already governed by four separate Consent Decrees (e.g., Wild Earth Guardians). • A consent decree with NPCA established a schedule for the remaining states, DC, and the U.S. Virgin Islands. • Transport Rule Better-Than-BART determination • Proposal was published in the Federal Register on December 30, 2011. • Comment period was extended to February 28, 2012. • Final rule is expected in May 2012. • FIPs: • Three FIPs have been finalized: 1 power plant in NM, 3 power plants in OK, and 2 power plants in ND. • Two proposed FIPs: NV and MT • There will also be FIPs for many states to substitute CSAPR for CAIR as the alternative to source-specific BART for EGUs.

8. Regional Haze SIPs – Periodic Review and 2018 Revision • Periodic report describing progress toward reasonable progress goals [§51.308(g)] • Report is due 5 years from submittal of the initial SIP • Must be in the form of a SIP • Evaluate adequacy of existing plan and act accordingly [§51.308(h)] • Regional offices are working with the states to clarify expectations • 2018 SIP revision must fully satisfy RH rule requirements [§51.308(f)] • Comprehensive SIP revision due July 31, 2018, with revised reasonable progress goals, if necessary • EPA intends to hold future meeting with RPOs to discuss the requirements and develop a strategy to meet the requirements

9. Exceptional Events Implementation Guidance • EPA is developing guidance and other tools to improve implementation of the Exceptional Events Rule. • EPA released draft guidance documents to state, local, and tribal stakeholders in 2011 and is almost done revising the draft guidance documents. • EPA intends to publish a Notice of Availability in the Federal Register announcing the availability of the revised draft guidance documents and a detailed Response to Comments document for a 30-day public comment period.

10. Policy to Address Air Quality Impacts from Wildfires and Prescribed Burns • Draft policy to address managing air quality impacts from wildfires and prescribed burns was submitted for OMB review in February 2010 • Because of concerns identified by other federal agencies, we withdrew it to address their issues • An intent of the policy is to address agriculture burning • Have been working internally with EPA Regions on appropriate issues to address in the guidance • Also have had several meetings with federal agencies to understand their specific concerns and still have issues to work with and resolve with them • After we finish with the Federal agencies, we will work with NACAA to schedule meeting with interested states and local agencies and Federal agencies to discuss the results of our discussions and get their input. • EPA will then draft revised policy and put it out for comment in late 2012

11. GHG Permitting: Steps under the Tailoring Rule • Step 1: Sources already subject to PSD “anyway” and GHG emissions = or > than (tpy CO2e): New source: NA PSD Modification: 75,000 • Step 2: Step 1 plus sources with GHG emissions = or > than (tpy CO2e) : New source: 100,000PSD Modification: 75,000 • Step 3: Implementation of potential additional phase-in and streamlining options • 5-year study: To examine GHG permitting for smaller sources • Implementation of rule based on 5-year study 2011 2012 2013 2014 2015 2016 Study Complete

12. GHG Permit Status • As of April 13, 2012, we are aware of 31 companies/plants that have been issued GHG permits (since January 2, 2011) • EPA has issued 5 of these permits (Palmdale Hybrid Energy Center, CA; Eni Holy Cross Drilling Project, OCS Eastern GOM; Lower Colorado River Authority, TX; and Port Dolphin Energy LNG Port, OCS Eastern GOM ; Pioneer Valley Energy Center, MA ) • SIP-approved state/local permitting authorities issued the other 26 • EPA has provided comments on 13 draft GHG permits to be issued by state agencies • EPA is currently reviewing approximately 27 GHG permit applications for which EPA will issue the permits • In addition to these issued and pending permits, EPA is tracking roughly 70 additional PSD permit applications that likely include a GHG component have been submitted and include source categories such as: • Biofuel Production • Cement Plants • Electric Generating Units • Lime Production Facilities • Outer Continental Shelf Exploration • Pulp and Paper Mills • Refineries

13. EPA Comments on GHG Permits • Include adequate support and explanation for form of GHG BACT emissions limit • Numerical emissions limit, or design standard or some other requirement if numerical limit deemed infeasible. • Must specify averaging time for limits. • Consider setting output based limits for GHG (lb/MWh). • Limits can be on CO2e basis or individual gas basis. • Ensure practical enforceability, adequate compliance monitoring to measure emissions or efficiency over time. • Consideration of a source’s non-CO2 constituents– e.g., CH4 and N2O at combustion sources. • CEMS or other CO2 measurement- preferably direct measurement for EGUs and other large sources.

14. EPA Comments on GHG Permits (Cont.) • Provide adequate explanation for rejecting control options (e.g., CCS) based on feasibility or cost. • BACT analysis should explain if most efficient turbine or boiler was not selected. • Permit record should clearly show where CCS was eliminated as a potential BACT control technology. • Affirm that the CO2e emissions during start-up and shut-down are included in the compliance calculation for the CO2e BACT limits. • Bottom line: documentation of GHG control considerations and BACT limits is important for a robust permit record

15. Biomass and GHG Permitting • Biomass Deferral • In Jan 2011, EPA announced an expedited rulemaking to defer completely the application of pre-construction permitting requirements to biomass-fired CO2and other biogenic CO2 emissions for a period of three years. • Final Rule, Fact Sheet, and Response to Comments at: http://www.epa.gov/nsr/actions.html; • Deferral applies to CO2 emissions only. • EPA sent a biomass study to SAB for review in September 2011 • Next steps: • SAB to issue letter on biomass study (anticipated Spring 2012) • EPA to address SAB comments as appropriate • If necessary, EPA would propose rule on how to treat biomass in permitting

16. Other GHG Permitting Activities • Ongoing GHG permitting implementation • Tailoring Rule Steps 1 & 2 • Q&A website • Tailoring Rule Step 3 rulemaking underway • Proposal comment period ends April 20, 2012 • Final rule to be completed this summer • 2016 - 5-year GHG NSR study and Step 4 final rule

17. Multi-pollutant and sector-based program integration • In 2010, the Clean Air Act Advisory Committee (CAAAC) assembled a work group to provide the EPA with information, advice, and recommendations regarding the development and implementation of an air pollution stationary source multi-pollutant approach • WG conducted two 1-day roundtable discussions to explore the attributes and investigate the opportunities and challenges of moving towards a multi-pollutant system of air pollution regulation at stationary sources • The CAAAC recommendations (issued Nov 2011)included that EPA • Establish a clear and transparent process for considering and advancing multi-pollutant clean air approaches within sectors • Expand engagement with community residents, grassroots and EJ organizations, and develop approaches to reduce facility-specific and cumulative risks and impacts • Identify and quantify air pollution co-benefits and trade-offs associated with multi-pollutant regulatory approaches • Disseminate information about tools and resources available to improve implementation of clean air regulatory programs (permitting innovation, timely rule implementation guidance, etc.) • EPA is currently considering the WG’s conclusions and recommendations

18. Questions or comments?