Uncertainties Plague Early BACT Determinations for GHG Emissions
By Larry Kane, Attorney, Bingham Greenebaum Doll LLP
A handful of proposed PSD permits for new or modified industrial sources with significant GHG emissions are providing a glimpse into how state air permitting agencies are approaching BACT determinations for GHGs and how U.S. EPA is responding to the state determinations. Unsurprisingly, the two examples highlighted below illustrate the uncertainties and interagency disagreements that characterize these early applications of BACT to GHG emissions.
PacifiCorp Energy’s Natural Gas-Fired Power Plant in Utah
The most recent example is provided by the proposed permit for a project by PacifiCorp Energy to add two natural gas-fired combustion turbines (CTs) with heat recovery steam generators (HRSGs) and ancillary equipment to its existing power plant in Utah. The project is projected to increase the plant’s GHG emissions by over 1,825,500 tons/year CO2e, rendering it subject to BACT under U.S. EPA’s GHG Tailoring Rule. The Utah air agency’s draft PSD permit for the project included a BACT analysis for GHGs that found that requirements for combined cycle efficiency and auxiliary boiler efficiency based on equipment design specifications were BACT. Based on its review of the permit, U.S. EPA (Region 8) commented in early March 2011 that the “proposal of an undefined design standard as BACT, rather than a numerical emission limit, does not satisfy the definition of BACT . . . and is not consistent with the [U.S. EPA’s] Permitting Guidance for GHGs.” Apparently at the request of the source, the Utah air permitting agency agreed to revise the draft permit to include an emission limit for CO2e stated in terms of allowable mass of CO2e per gross MWhr as a 12-month rolling average, determined on the basis of the potential emissions of GHGs at full generation output. U.S. EPA has not yet indicated whether it considers this emission limit to be acceptable as BACT.
Nucor Steel’s Direct Reduced Iron Facility in Louisiana
An earlier controversial example involves a proposed Nucor Steel direct reduced iron (DRI) plant in Louisiana. The draft PSD permit for this facility, which was placed on public notice in late November 2010, identified “good combustion practices” as BACT for controlling CO2e emissions from a package boiler and one of the DRI-related stacks. The draft permit also set a limit on natural gas consumption per ton of DRI production as BACT for the DRI process. January 2011 comments by U.S. EPA (Region 6) criticized the Louisiana state agency for failing to justify in the administrative record “why establishing a numerical BACT emissions limit [for CO2e] is infeasible.” Also, since the DRI process proposed by Nucor will employ an acid gas adsorption system that will process relatively pure CO2e as a byproduct, U.S. EPA further criticized the Louisiana agency for not considering carbon capture and storage as an available control technology in its BACT analysis. In addition, the U.S. EPA comments identified enforceability issues with the manner in which the natural gas consumption constraint was specified. Meanwhile, Sierra Club and a Louisiana environmental activist group filed a petition with the U.S. EPA Administrator in early May 2011 asking for an objection by U.S. EPA to the Title V permits implementing the Nucor project. The petitioners contend, among other things, that a limit on natural gas consumption does not constitute BACT for GHGs and, even if it did, the natural gas limit is not sufficiently stringent to be BACT when compared with literature values and natural gas consumption rates for other DRI facilities.
Both examples illustrate uncertainties and disagreements between state permitting agencies and U.S. EPA whether numeric limits on GHG emissions are essential to satisfy BACT requirements and, if not, what is the appropriate basis and form for other, indirect limits on GHG emissions.