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Strategic Air Planning: Where Do We Grow From Here?

Strategic Air Planning: Where Do We Grow From Here?. Presented to the Manufacture Alabama Environmental Conference by All4 Inc. Colin McCall | cmccall@all4inc.com | (706) 221-7688, x14 November 7, 2012. Air Pressure. NAAQS Boiler MACT/CISWI/NHSM MACT Regulations/Residual Risk

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Strategic Air Planning: Where Do We Grow From Here?

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  1. Strategic Air Planning: Where Do We Grow From Here? Presented to the Manufacture Alabama Environmental Conference by All4 Inc. Colin McCall | cmccall@all4inc.com | (706) 221-7688, x14 November 7, 2012

  2. Air Pressure • NAAQS • Boiler MACT/CISWI/NHSM • MACT Regulations/Residual Risk • GHG Regulation • Visibility/Regional Haze • Utility MACT/NSPS • Multi-pollutant Rules • More…

  3. Agenda • Focus on these areas that create liability and are obstacles to growth • Construction Permitting (New Source Review) • National Ambient Air Quality Standards (NAAQS)

  4. New Source Review Permitting • Reform Rules: “Actual-to-Projected-Actual” • Baseline Actual Emissions: 10 year lookback • Projected Actual Emissions • Should be based on business projections • Exclude emissions “that could have been accommodated” • Tracked for 5 or 10 years

  5. New Source Review Permitting • Source Reporting and Tracking Obligations • Are business or accounting projections available? • Project Aggregation Considerations • Technical and Economic Dependence • Individual projects are “easier” to permit but multiple projects can cause confusion

  6. New Source Review Permitting • Recommendations • Know your 5 year capital plan • Consider relationships between projects • Think like an auditor • Be careful about internal documentation • Consider flexible permitting options

  7. NAAQS Summary • The “newer” NAAQS levels are extremely stringent • NAAQS are health based and are unlikely to be reversed (e.g., recent court cases) • Single biggest air regulatory obstacle to industrial growth for the foreseeable future • Very few projects can increase emissions without an offsetting emissions decrease

  8. Important NAAQS Levels • 1-Hour Sulfur Dioxide (SO2) • 196 micrograms per cubic meter (mg/m3) • 99th %tile of Daily Maximum 1-Hour Concentration • 1-Hour Nitrogen Dioxide (NO2) • 188 mg/m3 • 98th %tile of Daily Maximum 1-Hour Concentration • 24-Hour and Annual PM2.5 • 35 mg/m3 (24-Hour) – 98th Percentile • 15 mg/m3 (Annual)

  9. NAAQS Big Picture • NAAQS Implementation: designating areas as attainment or nonattainment and establishing SIP regulations • Typically evaluated using ambient monitors to measure real pollutant concentrations • Process implemented by ADEM • PSD Permitting: evaluating the NAAQS levels for specific projects and facilities • Evaluated using dispersion models and EPA guidance • Process performed by individual facilities

  10. NAAQS Modeling • Dispersion models can be conservative, particularly for short-term concentrations • Modeling is based on potential-to-emit, not actual emission rates • Results can be very sensitive to inputs such as meteorological data • Ambient background concentrations are summed with modeled concentrations • Generally difficult to model compliance

  11. When is Modeling Required? • PSD permitting projects for major facilities • NAAQS Implementation Process (specifically for the 1-Hour SO2 NAAQS) • Modeling at the discretion of State agencies for minor construction permitting • Modeling triggered when a nearby facility performs PSD permitting • Modeling performed by environmental groups

  12. NAAQS Implications • Common theme: For most facilities, future emissions will decrease from historic actual levels as a result of new and developing air regulations and standards and other influences, regardless of growth in productivity.

  13. NAAQS Current Events • 1-Hour SO2 update: • Process that was originally based on dispersion modeling awaits EPA rulemaking • An enhanced ambient monitoring network is likely, possibly paid for and operated by facilities • PM2.5 annual NAAQS levels is proposed to be tightened (11 to 13 mg/m3 )

  14. NAAQS Takeaways • Understand your dispersion modeling status relative to the NAAQS • Use that knowledge early in the planning process for new capital projects • Follow the 1-Hour SO2 NAAQS implementation process to understand how it impacts you • Consider the implications and benefits of ambient pollutant and meteorological monitoring • Don’t make any changes (e.g., Boiler MACT) without considering the NAAQS

  15. Facility Needs • Ability to change operations/equipment quickly and as needed • Long range targets for planning: • Internal - production/energy/economics • External - rule driven costs to comply • Clarity in regulatory requirements particularly for permitting

  16. PAL Option • “Plantwide Applicability Limitation” (PAL) is an available regulatory option that can potentially ease air permitting PSD cycle • Federal PSD rule provides for PALs based on historic actual emissions • PALs are pollutant specific and could be a critical part of a strategic plan • PALs are another permitting option that shouldn’t be immediately dismissed

  17. PAL Advantages • For a facility with a PAL permit that maintains emissions below PAL, physical changes and changes in method of operation are not major modifications and do not require approval under PSD • Possibilities of a competitive advantage

  18. PAL Considerations • PALs historically worked for relatively simple industries with limited sources and where technology was driving emissions lower per unit of production • New air quality world we are in is forcing facilities to realization that future emissions will be lower per unit of production driven by rules, standards, permitting, technology…

  19. Establishing a PAL • Same baseline actual emissions used in PSD applicability assessment: • Adjust for current applicable requirements • Add PSD significance threshold • Justify PAL and provide method of compliance

  20. PAL Concerns • PAL established for 10 year period • Increased emissions tracking, testing, and monitoring obligations • PAL can be adjusted down to account for new applicable requirements • Getting out of a PAL can have serious ramifications • ADEM approval of projects is still required • PAL can be ratcheted down at the end of the permit term based on actual emissions

  21. PAL Approach • Develop historic facility-wide baseline emission rates and potential PAL levels • Address potential NAAQS issues • Consider new rules, facility operations plans, potential energy efficiency improvements, new technologies, low hanging fruit for emissions reductions • Weigh value of PAL for each pollutant

  22. Final Thoughts • Know your projects and how they relate to one another • Understand how your facility relates to the NAAQS levels (and discuss meteorological monitoring) • Talk about air requirements early and often in the planning process for projects • Understand where emission reductions are available within your fenceline • Consider all permitting options (including PALs)

  23. Questions/Comments Colin McCall| cmccall@all4inc.com | (706) 221-7688, x14

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