By Sara G Smith
President, Smith Management Group
Limitations on carbon dioxide and other
greenhouse gas emissions (GHG – includes carbon dioxide and related gases) are
no longer a distant threat. With the
December 7th declaration by U.S. EPA that GHG are a danger to human
health and the environment, we have begun a wild ride – one which does not have
a clear outcome. The question as to
whether Congress or EPA would act first has been answered with EPA’s
announcement. We will be especially
vulnerable in Kentucky
to the changes coming. Many of our
industries will be subject to the rule, as a general stationary fuel source or
due to their particular industry – or both.
At a minimum, many industries
will be required to work through some complex calculations to determine if they
are in or out.
Because of the “endangerment finding”,
EPA now MUST regulate GHG under the Clean Air Act. Currently, that means any facility emitting
over 250-tons per year of GHG would be regulated. CO2 emissions are common and come from both
natural and man-made sources. Each of us
individually emits between ½ and one ton of CO2 annually. A 250-ton per year limit could mean that a
large elementary school may require a permit.
To counteract that departure from common sense, EPA is developing a
“tailoring rule” to raise the permitting limit to 25,000 tons per year. Whether EPA actually has the power to change
the regulation in this way remains to be seen.
You are now required to monitor and report
GHG emissions over 25,000 tons per year.
Compliance with this regulation, effective December 29, 2009, will
increase costs for affected manufacturers substantially. The regulation (Docket ID No.
EPA-HQ-OAR-2009-0171), consisting of over 1200 pages, could
be the subject of an article by itself.
Critical dates are coming up quickly – and some are already past. Monitoring and measuring your emissions
begins January 1, 2010, and the first report is due in April 2011. If you won’t be able to install required
monitoring equipment and procedures by April 1, 2010, you may have some pretty
big trouble. Extension requests had to be substantively supported and submitted by
January 28, 2009!
Now is the time to learn about this
rule and whether it applies to your facility.
SMG is presenting a seminar on
the Mandatory Reporting of Greenhouse Gases Rule on February 23, 2010 at 3:00pm. We will review the rule in
general and go through a case study to learn how to work through the specific
Next we can expect the addition of GHG
to the air permitting process, with requirements of “Best Available Control
Technology” (BACT), although EPA notes that they don’t know what BACT is
All of this is happening without
Congress moving on cap and trade legislation.
In fact, EPA’s actions can be characterized as part of a game of chicken
the administration is playing with Congress.
stands in the center of the controversy due to our heavy dependence on coal for
electricity (greater than 92%) and our currently low electric rates which have
attracted industries that use large amounts of electricity, like aluminum
has few alternatives to replace coal as our primary source of electricity. Alternative energy from solar and wind will
provide very little to our energy mix, purely as a function of our
geography. Biomass can be developed to
provide some fuel for power generation but may not provide more than a small
change. Nuclear generation takes over
twenty years to permit and develop, and currently cannot be legally sited in Kentucky.
There is significant debate and
discussion about the impact of these restrictions on electric generating
industries, but little attention has been paid to the impact on general
industry and manufacturers – whether through substantially increased energy
prices or direct regulatory control of greenhouse gas emissions.
Litigation is a certainty. EPA’s actions will likely be attacked by the
environmental community questioning whether EPA has the power to alter the PSD
threshold from 250-tons per year to 25,000 tons per year. Impacted industry and energy producers will
likely question EPA’s authority to add GHG to the list of regulated pollutants,
as carbon dioxide is both a valuable commodity and essential to life. GHG are vastly different from the types of
pollutants currently regulated under the Clean Air Act.
Wait and see is not a viable response
to this issue. The impact of the
proposed actions is too significant to allow others to make decisions that can
significantly impact our economy.
G. Smith is President of Smith Management Group, an environmental and energy
development consulting firm in Lexington and Louisville, Kentucky. SMG provides permitting and compliance
assistance to manufacturing clients and has been involved in energy policy
development, siting and permitting of energy facilities.