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PA Chamber of Business and Industry DEP Quarterly Meeting September 22, 2011

Topics Covered. Implementation of National Ambient Air Quality Standards (1-hour sulfur dioxide, nitrogen dioxide and ozone standards)Implementation of the Transport RuleEPA's Nonhazardous Secondary Materials RuleEPA's Proposed Utility Maximum Achievable Control Technology (MACT) RuleBoiler MAC

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PA Chamber of Business and Industry DEP Quarterly Meeting September 22, 2011

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    1. PA Chamber of Business and Industry DEP Quarterly Meeting September 22, 2011 Joyce E. Epps Director, Bureau of Air Quality PA Department of Environmental Protection 400 Market Street Harrisburg, PA 17105-8468 717-787-9702 jeepps@pa.gov

    2. Topics Covered Implementation of National Ambient Air Quality Standards (1-hour sulfur dioxide, nitrogen dioxide and ozone standards) Implementation of the Transport Rule EPA’s Nonhazardous Secondary Materials Rule EPA’s Proposed Utility Maximum Achievable Control Technology (MACT) Rule Boiler MACT and Commercial, Industrial, Solid Waste (CISWI) Rules Department Litigation Update 

    3. Implementation of the 1-Hour Nitrogen Dioxide National Ambient Air Quality Standard On January 22, 2010, U.S. Environmental Protection Agency (EPA) promulgated a new primary 1-hour nitrogen dioxide (NO2) national ambient air quality standard of (NAAQS) of 100 parts per billion. All NO2 samplers in Pennsylvania are monitoring attainment of the new standard; EPA is expected to designate all areas in the Commonwealth as “unclassifiable/attainment” by October 31, 2011. Installation of NO2 “near-road” monitors within 50 meters of major roadways is required by January 1, 2013, in the following metropolitan areas: Allentown, Harrisburg, Lancaster, Philadelphia, Pittsburgh and Scranton. Prevention of Significant Deterioration (PSD) permitting requirements are being implemented consistent with EPA guidance issued June 29, 2010 and March 1, 2011; the recommended significance impact level is 4 parts per billion.

    4. Implementation of the 1-Hour Sulfur Dioxide National Ambient Air Quality Standard On June 22, 2010, EPA promulgated a 1-hour sulfur dioxide (SO2) NAAQS of 75 parts per billion; the standard became effective on August 23, 2010. On June 23, 2011, DEP recommended that EPA designate Allegheny, Beaver, Indiana and Warren counties as nonattainment areas based on 2008-2010 monitoring data; “unclassifiable” designations were recommended for the remaining counties. EPA will provide its response to the Pennsylvania designation recommendations in February 2012. Pending receipt of EPA’s “120-day letter,” DEP intends to conduct dispersion modeling for approximately 20 sources using EPA’s preferred model, AERMOD to determine if the designation recommendations should be refined.

    5. Implementation of the 1-Hour Sulfur Dioxide National Ambient Air Quality Standard EPA is expected to provide additional SO2 modeling guidance for public review and comment this fall; this guidance will supplement the NSR and PSD guidance issued in August 2010. Final designations will be issued by EPA in June 2012. State Implementation Plan revisions would be submitted to EPA according to the timelines set forth below. June 2013 – SIP revisions due to EPA for attainment/unclassifiable areas June 2014 – SIP revisions due to EPA for nonattainment areas EPA’s final rule requires the use of a hybrid monitoring/modeling approach to demonstrate attainment of 1-hour SO2 NAAQS. EPA has indicated that SIP revisions must demonstrate, using refined modeling, that sources contributing to monitored and modeled violations must be controlled to ensure attainment by the 2017 attainment date.

    6. Implementation of the 1-Hour Sulfur Dioxide National Ambient Air Quality Standard Petitions for reconsideration of the 1-hour SO2 NAAQS were denied by EPA on January 26, 2011. The U. S. Court of Appeals for the DC Circuit denied a stay of the implementation of the standard on April 7, 2011; challenges to the 2010 SO2 standard have been consolidated (Montana Sulphur & Chemical Company v. EPA). Petitioners including Texas, North Dakota, Louisiana and the Utility Air Regulatory Group submitted opening briefs on September 13, 2011. The petitioners claim that the 1-hour SO2 NAAQS is invalid because it violated the Clean Air Act's notice-and-comment rulemaking requirements; EPA’s brief is due on November 14, 2011.

    7. Eight-Hour Ozone National Ambient Air Quality Standards On September 2, 2011, President Obama announced his decision to “halt” reconsideration of the 2008 8-hour ozone standard (0.075 parts per million or 75 parts per billion). The President stated that he “did not support asking state and local governments to begin implementing a new standard that will soon be reconsidered.” The Office of Management and Budget returned the draft final rule, “Reconsideration of the 2008 Primary and Secondary National Ambient Air Quality Standards,” to the EPA Administrator for further consideration. OMB indicated that “…finalizing a new standard now is not mandatory under the Clean Air Act and could produce needless uncertainty.” On September 12, 2011, EPA filed a revised “Motion to Govern Further Proceeding” in Mississippi v. EPA; EPA has requested that the court reinstate the briefing schedule.

    8. Eight-Hour Ozone National Ambient Air Quality Standards In March 2009, DEP recommended that EPA designate 29 counties as nonattainment areas for the 2008 ozone standard based on 2006-2008 monitoring data; EPA stayed the implementation of the standard. Based on 2008-2010 data, the following nine counties are currently violating the 2008 ozone NAAQS: Armstrong and Allegheny counties in the Pittsburgh-Beaver Valley area; Lehigh County in the Lehigh-Northampton area; Berks County in the Reading area; Lancaster County; and Bucks, Chester, Montgomery and Philadelphia counties in the 5-county Philadelphia area. EPA has not yet provided any guidance regarding the implementation of the 2008 standard. As required by the Clean Air Act, statutorily prescribed review of the 2008 standard is ongoing; EPA intends to issue a proposed rule in 2013 and a final rule in 2014.

    9. Transport Rule Implementation On July 6, 2011, EPA signed the final Transport Rule (Cross-State Air Pollution Rule) establishing emission budgets for electric generating units (EGU) in 27 states for SO2, annual NOx and ozone season NOx emissions. The rule also provides one-year variability limits for SO2 and NOx and makes allocations to individual affected EGUs. (76 FR 48208, August 8, 2011). EPA promulgated Federal Implementation Plans (FIPs) for all states with EGUs covered by the rule; States may adopt regulations and submit State Implementation Plans (SIPs) to EPA for approval. The rule, which becomes effective on October 7, 2011, will replace the Clean Air Interstate Rule (CAIR) and CAIR allocations.

    10. Transport Rule Implementation In order to issue state-determined allocations for 2013 and subsequent years, abbreviated or full SIP revisions must be submitted and approved by EPA according to the following schedule: A SIP revision is due by April 1, 2012, to govern 2013 allocations; A SIP revision is due by December 1, 2012, to govern 2014 and 2015 allocations; A SIP revision is due by December 1, 2013, to govern 2016 and 2017 allocations; and A SIP revision is due by December 1, 2014, to govern 2018 and 2019 allocations, and by December 1, 2015, for the subsequent year.

    11. Transport Rule Emission Budgets Applies to 67 Facilities (172 units) in Pennsylvania

    12. Identification of Non-Hazardous Secondary Materials that are Solid Wastes On March 21, 2011, EPA published the final “Identification of Non-Hazardous Secondary Materials that are Solid Wastes” (NHSM) rule in the Federal Register (76 FR 15456). The final NHSM rule identifies which non-hazardous secondary materials, when used as fuels or ingredients in combustion units, are ‘‘solid wastes’’ under the Resource Conservation and Recovery Act (RCRA). Approximately 28 lawsuits and 11 requests for a stay have been filed. Issues generally include the following: Interpretation of discarded material Universe of traditional fuels Meeting legitimacy criteria for contaminants comparable to or less than traditional fuels particularly for biomass materials.

    13. Identification of Non-Hazardous Secondary Materials that are Solid Wastes Combustion units that burn SOLID WASTE would be subject to the Commercial/Industrial Solid Waste Incinerator Rule requirements promulgated under Section 129 of the Clean Air Act. Combustion units that burn materials that are NOT A SOLID WASTE would be subject to the requirements promulgated under Section 112 of the CAA. The NHSM rule specifies which secondary materials are solid wastes when burned in combustion units. Examples include the following: Scrap tires, used oil, wood, coal refuse, and construction & demolition debris.

    14. NHSM Rule – Scrap Tires Scrap tires NOT considered to be solid wastes that can be combusted in units meeting CAA 112 standards: Whole tires used as fuel in a combustion unit where the tires are removed from vehicles and managed and collected under the oversight of an established tire collection program and have not been discarded. Tire-Derived Fuel managed under established collection programs. Whole tires retrieved from waste tire piles that are “processed” in accordance with the rule. Scrap tires considered to be solid waste that must be combusted in units meeting CAA 129 standards: Whole tires retrieved from waste tire piles. Tire-derived fuel not managed under “established collection programs” and not processed according to the rule.

    15. EPA’s Proposed Utility MACT Rule On May 3, 2011, EPA published the proposed “National Emission Standards for Hazardous Air Pollutants From Coal and Oil-Fired Electric Utility Steam Generating Units and Standards of Performance for Fossil-Fuel-Fired Electric Utility, Industrial-Commercial-Institutional, and Small Industrial-Commercial-Institutional Steam Generating Units; Proposed Rule,” (Utility MACT) (76 Fed. Reg. 24976). The Utility MACT Rule will apply to new and existing fossil fuel fired electric generating units (EGUs) of more than 25 megawatts of electricity for sale. The rule will establish emission standards for the following contaminants: Metals, including mercury (Hg), arsenic, chromium, and nickel Acid gases, including hydrogen chloride (HCl) and hydrogen fluoride (HF) Particulate matter EPA has been ordered by the Court to finalize the rule by November 16, 2011.

    16. EPA’s Proposed Utility MACT Rule On August 4, 2011, DEP submitted comments to the EPA Docket on the proposed Utility MACT Rule. Issues of particular concern include the overly stringent hydrogen chloride (HCl) limits which would adversely affect the operation of coal refuse plants in Pennsylvania and the burdensome performance testing and sampling frequencies. DEP urged EPA to build in some “real time flexibilities” in the final rule with respect to timing of the requirements due to grid reliability concerns.

    17. Boiler MACT & CISWI Rules On March 21, 2011, EPA published in the Federal Register “National Emission Standards for Hazardous Air Pollutants for Major Sources: Industrial, Commercial, and Institutional Boilers and Process Heaters’’ (Boiler MACT) and ‘‘Standards of Performance for New Sources and Emission Guidelines for Existing Sources: Commercial and Industrial Solid Waste Incineration Units’’ (CISWI) (76 Fed. Reg. 15608 and 76 Fed. Reg. 15704 ) The final rule covers boilers located at area source facilities that burn coal, oil, or biomass, or non-waste materials, but not boilers that burn only gaseous fuels or any solid waste. On May 18 2011, EPA announced it would stay the effective date of these standards (76 Fed. Reg. 28662). EPA did not stay the effective date of the standards for boilers located at area sources of air toxic emissions. EPA intends to issue a reconsidered proposal in October 2011; the reconsidered final standards would be issued by April 2012.

    18. The EPA Regulatory Relief Act (HR 2250) was approved by a vote of 36-14. This bill would block the Boiler MACT rules adopted by EPA in March 2011. The Cement Sector Relief Act (HR 2681) was approved by vote of 33-12. It would block the ‘‘National Emission Standards for Hazardous Air Pollutants from the Portland Cement Manufacturing Industry and Standards of Performance for Portland Cement Plants’’, published at 75 Fed. Reg. 54970 (September 9, 2010). Under both bills, EPA would be required to propose and finalize new MACT standards within 15 months following the enactment of the legislation. If enacted, the both bills would allow at least five years to comply with the rules. EPA would be required to consider factors including compliance costs, time needed to procure, install and test control equipment; time needed to obtain permit approvals; availability of equipment, suppliers and labor as well as the potential net employment impacts. The full House is expected to vote on the bills during the week of October 3, 2011. House Energy and Commerce Committee Passes Regulatory Relief Bills on September 21, 2011

    19. Department Litigation Update On August 5, 2011, the Department withdrew from the following cases: New York et al v. EPA (relating to the Ozone NAAQS) Coalition for Responsible Regulation v. EPA, D.C. Cir. 10-1092 and consolidated cases (GHG vehicle emission standards) Coalition for Responsible Regulation v. EPA, D.C. Cir. No. 09-1322 and consolidated cases. (Challenging EPA’s GHG Endangerment Finding) On July 14, 2011, the Department filed a motion to withdraw from Chamber of Commerce and NADA v. EPA, D.C. Cir. No. 09-1237. (Challenging EPA waiver of CA GHG vehicle emission standards) On August 5, 2011, the Department filed a motion to withdraw from American Chemistry Council v. EPA , D.C. Cir. No. 09-1325 (GHG Reporting Rule)

    20. Thank you! On behalf of the Honorable Michael L. Krancer Secretary PA Department of Environmental Protection

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