Transcript EPA’s PROPOSED OZONE AND CLEAN POWER PLAN RULE: …

EPA’S PROPOSED OZONE AND
CLEAN POWER PLAN RULE:
WHAT SHOULD TEXAS DO?
Cyrus Reed
Lone Star Chapter of Sierra Club
October 15, 2014
OUTLINE
 Current rules
 What are the proposed rules
 Timeline
 Who does it impact
 State response
 Ozone – Can we get there
 Clean Power Plan – How to Comply
 Role of TERP in both
 Simple steps legislature can take this session to comply with both
CURRENT RULES
 Ozone standard
 Carbon Dioxide Regulation
 Clean Air Act – 1990 amendments
 GHG reporting requirements
 1997 ozone level set at 0.08 PPM
 GHG limits on cars
 2008 Ozone level lowered to
 GHG permits required for new
0.075 PPM, though only recently
implemented
 Houston and Dallas don’t meet
2008 standard
facilities emitting 100,000 tons or
more per year (tailoring rule)
 Texas adopts GHG permitting
regime in 2013
PROPOSED RULES
 Ozone Standard
 EPA has been in a three year
process reassessing the 75 PPB
standard
 Just published their Final Policy
Assessment and Final Risk and
Exposure Assessments
 In December, expected to publish
 Clean Power Plan Rule
 Proposed in June of 2014 to cut
carbon dioxide from fossil fuels
plants by an average of 30% from
2005 levels to 2030. Each state has
different requirements.
 Public Comment Period extended
until December of 2014
draft rule with a 60 to 70 PPB
standard. possible
 Final rule expected in June of 2015
 Most environmental groups calling
 Implementation plans due in 2016,
for 60 or 65 standard
 Most industry groups opposed
 Lawsuits expected
but actual compliance begins in
2020
 Lawsuits expected
WHO DOES IT IMPACT? OZONE RULE
 Potentially everyone
 Multiple Cities – from 3 to 7 cities
 Power Plants
 New businesses wanting to open in urban areas
 Transportation
 Oil and gas development, if connection to ozone contribution
 Refineries
 Smaller area sources
 TCEQ and Legislature
 TXDOT
AIR QUALITY CHALLENGES ARE REAL
6
HOW ARE WE DOING WITH CURRENT
OZONE STANDARD? (SOME CONCERNS –SAN ANTONIO,
AUSTIN, WACO, AND CORPUS CHRISTI)
120
100
80
60
40
20
0
2011
2012
2013
2014
2012-2014 Average
FRIDAY, JULY 17, 2015
7
STATE RESPONSE
TCEQ has consistently opposed a new ozone
standard
Argues will be impossible to meet a lower standard
because of background levels and undermine
current voluntary efforts
Argues that science does not support lowering
standard
TCEQ and local COGs will be subject to final rule
and need to develop SIPs
EPA’S CLEAN POWER PLAN: WHO DOES
IT IMPACT
 Existing Fossil Fuel Power Generation
 From 1250 to 791 Lbs/Mwh by 2030 from our electricity sector
 Transmission Planning
 Renewable Energy Development
 Energy Efficiency Programs
 Building Codes
 Energy Storage
 DSM – Demand Response and Onsite Solar
 CHP – Combined Heat and Power
 Maybe landfill generators, maybe two biomass facilities
 ERCOT, PUC, RRC, SECO and TCEQ
THERE ARE TWO PATHS UNDER EPA’S
PROPOSED RULE
Mass-Based Approach
 Based on total carbon dioxide emissions and required reductions for
2020-2029 and for 2030
 While reductions can begin in 2020,– first real mid-point check is in
2025;
 Will require approximately a 40% reduction in CO2 tons emitted
from fossil-fuel plants
 EPA -- Technical Document on Mass-Based Approach in December
 Need to track any electricity generation to make sure that as carbon
is reduced from existing plants, what replaces it
 TCEQ would be main implementer of mass-based approach
 Clean Air Interstate Rule – implemented in 2005 and 2007.
10
RATE-BASED APPROACH
 Texas Rate: 2012 average rate from 1261 lbs per MWh –includes renewables
853 lbs per MWh Average between 2020-2029
791 lbs per MWh by 2030
GAS EMISSIONS + COAL EMISSIONS/
<NUKE + RENEWABLES +GAS + COAL MWHs – NEGAWATTS from EFFICIENCY >
 Lower Carbon Rate by:
 Making coal plants more efficient (or retiring)
 Combined Heat and Power
 Dispatching efficient existing NG plants
 Renewables – growing to 20% by 2030
 Efficiency – growing to 1.0% of sales by 2020 and 1.5% by 2025 or 2030
 Demand Response, Distributed Generation, Energy Efficient Building Energy Codes, as well as
programs like Energy Star and LEEDs Could HELP
11
Texas: We’re No 1 or “With Great Power, Comes Great Responsibility
Texas Emission = Florida +
Pennsylvania Emissions
Texas: Also No 1 in SO2 + Nox Emissions
CO2 Emissions from the Electric Power Sector in
Texas (2013). 62% Coal versus 38% Gas
The majority of Texas’ power plant
carbon emissions come from coal plants.
Ten (10) old and most polluting plants emit 39.8 % of the state’s power plant
carbon emissions.
15
CO2 EMISSIONS STEADY IN ERCOT– SLIGHT DECLINE
ON LBS/MWH BASIS BECAUSE OF WIND – WE MUST
DO BETTER
500,000,000
Natural Gas
Wind
Total
450,000,000
400,000,000
350,000,000
Coal
Hydro
CO2 Tons
Nuclear
Other
Total Pow
300,000,000
Total
250,000,000
200,000,000
150,000,000
100,000,000
50,000,000
0
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
16
TEXAS WILL REACH 20%
RENEWABLES BY 2020 –
FORGET 2030
62 TWhs by 2018
17
COMPLYING WITH CLEAN POWER PLAN
 Whichever path chosen, Sierra Club believes Texas can reach proposed
rate without resource adequacy or major cost issues
 efficiency, demand response, renewables, and energy storage can play key roles to get
there cost-effectively, grow our economy and lower pollution
 The rule does not require that any particular coal plant retire, only that
carbon emissions overall decrease. We do believe that retirements will
happen, which will make it easier to meet the goals for whichever path
is chosen
STATE RESPONSE
 TCEQ, PUC and RRC have jointly expressed concern about impact on
Texas
 TCEQ has said it is uncertain it could comply with EPA building block
approach
 ERCOT has said it believes it can make system work
 Legislature has held one hearing but not officially opined
 Some individuals legislators are publicly saying refused to implement
 Many utilities concerned about scale and timing
WHAT WE COULD DO ON OZONE
 Begin cleaning up emissions from oil and gas patch
 Fund TERP -- $1 billion sitting in a coffer
 Fund sufficient monitoring
 Consider further requirements on larger coal units
ARE OIL AND GAS EMISSIONS
CONTRIBUTING TO HIGH OZONE DAYS
IN DALLAS OR SAN ANTONIO?
 UNT Study showed greater rate of increase of ozone formation in
fracking area than non-fracking area in ozone formation post-2008
 David Allen study found – preliminarily – that TCEQ was
underreporting VOCs from methane emissions, largely due to leakage
from pneumotic devices in DFW areas
 TCEQ’s own emissions data suggest compressor engines and drilling
rigs are top sources of Nox, while condensate tanks and pnuematic
pumps and devices are cause of VOCs
 Studies by ACOG in San Antonio suggest that amount of emissions will
likely rise through 2018, and suggest that these emissions are now
contributing to higher ozone levels
21

800
700
Statewide Gas Production and Flare/Vent
Percentages
1.60%
Percentage of Total Gas Vented/Flared
Statewide Gas Production (BCF per Month)
VENTING AND FLARING UP – 35 BILLION
CUBIC FEET OF GAS IN 2013
1.40%
600
1.20%
500
1.00%
400
0.80%
300
0.60%
200
0.40%
100
0.20%
0
0.00%
Total Statewide Gas (on left axis)
22
SOLUTIONS ON CLEAN AIR IN THE OIL
PATCH
 Green Completions,
 Leak Detection
 Compressor Station Maintenance
 No-bleed pneumatic controllers
 TERP funding
 Venting and Flaring standards
 Specific TCEQ authority over drilling completion requirements
 Better inspection
 Regulatory vs. Incentives
23
STATUS OF LIRAP AND TERP: LOTS SPENT BUT LOTS MORE
AVAILABLE
Category
Fy 2011
Exp 2012
Exp 2013
FY 2014
FY 2015
Balance
$385
$413
$556
$615
$716
Revenues
$162
$167
$167
$187
$187
Spending
$134
$25
$109
$77.7
$77.6
TERP
Ending
Fund
$413
$556
$772
$882
$992
LIRAP
Revenue
$41
$40
$39
$40
Spending
$7.3
$7.3
$7.7
$7.7
Balance
$33
$66
$98
$130
FRIDAY, JULY 17, 2015
24
COMPLYING WITH CLEAN CARBON RULE
 Don’t fight – begin developing plan that takes advantage of the work we are






already doing on building codes, energy efficiency and renewables
Authorize SECO to begin tracking carbon dioxide reductions – TERP can
fund studies and reports
Authorize PUC to adjust rules to increase energy efficiency
Continue REC program but consider converting to carbon dioxide
reduction trading program through ERCOT
Authorize TCEQ to consider mass-based trading approach for fossil fuel
plant carbon dioxide emissions
Continue to implement advanced energy codes in our building stock and
get credit for it
Fighting the rule will only lead to a similar situation like the GHG permits –
feds step in, Texas loses
EE/RE PROGRAMS IN TEXAS PREVENTED SOME 10
MILLION TONS OF CARBON DIOXIDE IN 2012 –
WE COULD GET 3X THIS AMOUNT
26
CONCLUSIONS
 Texas will need to develop a state response to comply with EPA ozone and
carbon dioxide standards
 Fighting through lawsuits not likely to win given our history
 Making sure we track and get credit for what we are doing very important
on efficiency, TERP, renewable energy, energy storage and other solutions
being developed in Texas
 Legislature can take steps in 2015 to help get us there:
 Authorize TCEQ to take action
 Fund TERP for a variety of programs
 Make sure we are tracking our efficiency and renewable programs
 Don’t do anything to undermine the progress we have made
 Take some regulatory and incentive action on the oil and gas patch