Indiana’s First Proposed PSD Permit for GHGs – Indiana Gasification, LLC
By Larry Kane, Partner, Bingham Greenebaum Doll LLP
In December 2011, the Indiana Department of Environmental Management (IDEM) released for public notice and comment its first Prevention of Significant Deterioration (PSD) permit addressing Best Available Control Technology (BACT) requirements for greenhouse gases (GHGs) with respect to a proposed project for construction of a coal gasification facility in southwestern Indiana known as Indiana Gasification, LLC (IG). The IG facility is described as designed to produce up to 48 billion standard cubic feet of pipeline quality syngas annually from the gasification of Illinois Basin coal and petroleum coke. A byproduct of the gasification process would be the production of approximately 6.4 million tons annually of liquefied carbon dioxide (CO2) that would be sold to third parties for use in enhanced oil recovery (EOR) in Gulf Coast oil fields. Another byproduct of the facility would be the generation of 300 MW of electricity from heat recovery steam generators, primarily for use at the facility.
According to the Technical Support Document (TSD) for the draft permit, the principal source of CO2 emissions from the IG project would be the Acid Gas Recovery (AGR) Units, which separate acid gases, such as CO2 and hydrogen sulfide (H2S), from the syngas stream. The AGR units are said to be capable of capturing 90 percent of CO2 contained in the produced syngas, which can be liquefied and sold for use in EOR. The remainder of the CO2 in the waste gas from the AGR units would be vented to the atmosphere after being routed through regenerative thermal oxidizers intended to oxidize small amounts of carbon monoxide (CO), carbonyl sulfide (COS), methane and volatile organic compounds (VOCs) (methanol) in the waste gas.
Proposed BACT for GHGs
IDEM’s approach to a BACT determination for GHGs is illustrated by brief examination of three aspects of IG’s gasification facility operations: (i) GHG emissions from the AGR vents; (ii) GHG emissions from the wet sulfuric acid (WSA) plants; and (iii) all other, smaller GHG emission units.
An initial observation is that the BACT analysis for GHG emissions from this source focuses on CO2, which is used as a surrogate for other GHGs. This is justified in the TSD on the basis that, while other GHGs will be present in trace quantities, there are no known control technologies that would reduce or control these pollutants any differently than CO2.
AGR Vent Emissions
As mentioned, the AGR is the predominant source of CO2 generated at the IG facility and is projected to generate 6.43 million tons per year of CO2. BACT for CO2 emissions from the AGR vent is proposed to comprise a series of phased-in limits: (i) 4,690,000 tons of CO2 emissions for the first 12 months of operation; (ii) 6,430,000 tons of CO2 emissions for the second 12 months of operation; and (iii) 1,290,000 tons of CO2 for the third year of operation and for each consecutive 12-month period thereafter, determined on a rolling 12-month basis.
These BACT limits are explained on the basis of IG’s plans to sell the captured CO2 to EOR users on the Gulf Coast after transport through a pipeline to be constructed and operated by third parties. Once the pipeline is operational, IG expects to sell and transport all captured CO2. However, no pipeline currently exists and will need to be constructed by others. Recognizing the time frame for regulatory approval and construction of this pipeline, the proposed BACT limits are based on the expectation that the pipeline will not be available for the first two years of the IG facility’s operation. Thus, the proposed CO2 limits for these first two operational years are based on emission of all captured CO2 from the AGR vents. It is expected that the pipeline will be available by the third year of the gasification facility’s operation, so the BACT limits reflect the transport to sequestration sites represented by EOR operations of the captured fraction (90 percent or greater) of CO2 while the remainder of CO2 that is not susceptible to effective separation from other waste acid gases will be emitted from the AGR vents or the subsequent WSA plants without controls.
Local Sequestration Not Technically Feasible
While EPA’s guidance on development of BACT limits for GHG emissions specifies that capture and sequestration is to be considered “available,” IDEM’s BACT analysis concludes that sequestration (geologic) is, nonetheless, technically infeasible because it is not applicable to IG’s project. The inapplicability of sequestration as a control technique appears primarily based on two points: one, IG “has neither access to, nor can develop, a suitable sequestion site for the volume of CO2 that may be vented from the AGR vents” (TSD at 151); and, two, even if a regional sequestration site were available, “the logistical challenges of constructing a second pipeline as a ‘backup’ to the EOR pipeline makes this option infeasible.” (TSD at 153).
Wet Sulfuric Acid Plant Emissions
The BACT analysis further concludes that no controls are technically feasible for CO2 emissions from the WSA plants. This conclusion is based on the following points. One, the CO2 emissions from the WSA plants represent the small residual amounts of CO2 remaining in the waste gases after efficient capture in the AGR process. CO2 is removed from the syngas stream using a solvent in which CO2, H2S, and COS are preferentially soluble and then applying a second process akin to fractional distillation in which the relative solubilities of these acid gases are used to selectively evaporate and recover CO2, which is the least soluble of the three. However, as the CO2 concentration significantly decreases, it becomes more difficult and, correspondingly, less efficient to separate CO2 from the other two gases. To apply a secondary and different selective solvent removal of CO2 from the WSA gas stream would be considered technically infeasible, according to IDEM, under the Environmental Protection Agency’s (EPA’s) BACT guidance for GHGs since the WSA waste gas stream could be realistically analogized to those post-combustion waste gases from which CO2 capture is considered inefficient due to low pressure and low concentrations and quantities of CO2 in the gas stream.
Other Small CO2 Emission Units
A further conclusion of the BACT analysis is that the only feasible means of reducing CO2 emissions from small combustion sources such as the auxiliary boiler, gasifier preheater burners, emergency generators and the like, is through the use of low carbon fuels and energy-efficient design of the combustion equipment. Post-combustion capture of CO2 was particularly found to be technically infeasible because these are not large CO2-emitting facilities nor do the emissions consist of high purity CO2 streams. Thus, these emission units fall outside the scope of EPA’s GHG guidance concerning the availability of post-combustion CO2 capture. (TSD at 160-161.)
The proposed IDEM permit for IG involves interpretations of EPA’s BACT guidance for GHGs that will make it of interest for future permit applicants with significant CO2 emissions.
To view a complete PDF of the Fourth Quarter 2011 / First Quarter 2012 issue of the Air Quality Letter, click HERE.