Transcript Title Goes Here

Year in Review: Climate
Change
EPA Heats Things Up
Presented by:
Tom Wood
Stoel Rives LLP
October 8, 2010
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Air Permitting and GHGs
• Issue:
– PSD triggered for source with ≥100 tpy emissions of
regulated air pollutant if one of designated source categories
• e.g., fossil fuel fired steam electric plants of more than 250
MMBtu/hr heat input
– PSD triggered at ≥250 tpy of regulated air pollutant for other
source categories
– EPA has declared that GHGs are regulated air pollutant
• Creates unworkable program burdens
– EPA wanted to “tailor” PSD applicability requirements
2
EPA Tailoring Rule
• Published June 3, 2010:
– Relies on the
• “Absurd Results” doctrine
• “Administrative Necessity” doctrine, and the
• “One Step at a Time” doctrine
– GHGs subject to PSD starting January 2, 2011
– EPA imposed tiered GHG permitting scheme
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EPA Tailoring Rule
• Phase 1 (January 2, 2011)
– PSD only triggered for GHGs if both
• The source triggers PSD for another pollutant, and
• The project increases GHGs by 75,000+ tons/yr CO2e
• Phase 2 (July 1, 2011)
– PSD will apply to GHGs if both
• The source has GHG PTE ≥100,000 tons/yr CO2e, and
• There is a net emission increase for GHGs ≥75,000 tons/yr
CO2e
4
So What Does This Mean?
• Oregon has a SIP approved PSD program
– Oregon rules do not change to match EPA shifts
– Oregon does not include GHGs as a regulated air pollutant
• EPA will declare Oregon SIP inadequate
– Starts SIP call process
– EPA must give Oregon reasonable time to cure
• 1 year v. ~21 days
– FIP simultaneously proposed
• EPA cannot implement until DEQ blows deadline
– FIP starting January 1, 2011
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So What Does This Mean?
• DEQ normally issues PSD permits without Region 10
involvement
• Starting January 2, 2011, EPA will need to issue any
PSD permit for GHGs
– Can result in considerable delay if the project triggers PSD
• Creates powerful incentive to avoid PSD
• DEQ to seek FIP delegation authority
• DEQ also seeking to take revised Oregon GHG PSD
program
– Won’t happen until February 2011 at earliest
6
So What Does This Mean?
• Permitting in interim?
– Confused
– Could result in significant delays
7
Greenhouse Gas & Biomass
• EPA implemented GHG reporting rule earlier this
year
– Applies to more pollutants than Tailoring Rule
– Applies to portions of facilities
– Biomass derived emissions do not trigger reporting by
themselves
• Different approach under Tailoring Rule & PSD
– EPA not treating biomass emissions as carbon neutral for
permitting purposes at this time
– Oregonian Editorial October 6, 2010
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Greenhouse Gas & Biomass
• Big debate as to whether biomass combustion is
carbon neutral
– Debate heavily influenced by attitude towards forest
management
– Many of the criticized biomass sources are not relevant to
NW biomass projects
• e.g., whole log chipping for hog fuel, closed loop biomass fuel
crops
• In NW, biomass is typically either diseased logs (salvage
timber), forest thinning/slash or residuals from timber
processing
9
Greenhouse Gas Neutrality
• Carbon release takes places as either:
– Uncontrolled combustion (slash burning or forest fire)
– Landfilling
– Other decomposition
• Set amount of carbon in wood residual
• Slash burning releases same amount of CO2 as
controlled combustion, but dramatically more of
conventional air pollutants
• Decomposition releases CH4 (methane) which has
global warming potential of 21
10
Greenhouse Gas Neutrality
• Excellent study of benefits of biomass combustion:
– Pacific Institute (May 2008)
• “Atmospheric greenhouse-gas levels in 2006 were lower by 70
million tons of CO2 equiv. of fossil greenhouse gases and by
62.5 million tons of CO2 equiv. of biogenic greenhouse gases
as a result of solid-fuel biomass power production in California
during 1980-2006.”
• Opposing point of view:
– Manomet study (June 2010)
• “For biomass replacement of coal-fired power plants, the net
cumulative emissions in 2050 are approximately equal to what
they would have been burning coal; and for replacement of
natural gas cumulative total emissions are substantially higher
with biomass electricity generation.”
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Greenhouse Gas Neutrality
• So who is right?
– Manomet issued statement after study released clarifying
conclusions
• Noted it was very Massachusetts-centric
• On NY Times blog, Manomet President stated: “over time using
wood for energy can lead to lower atmospheric greenhouse gas
levels.”
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Greenhouse Gas Neutrality
– Groups such as AF&PA criticize Manomet study
• Manomet assumed half of the annual timber harvest was
diverted from lumber production to hog fuel
• Manomet only considered carbon from the moment that timber
is harvested so ignored the sequestration leading to harvest
• Manomet focused on single stands so ignored the
sequestration continously occurring among managed stands
• Manomet did not recognize slash burning as the alternative to
use of the fuel in a biomass plant
– Study: http://www.manomet.org/node/322
– Blog: http://green.blogs.nytimes.com/2010/06/22/q-and-awoody-biomass-pros-and-cons/
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