Air Toxics Regulatory Update

1. Air Toxics Regulatory Update National Tribal Forum June 14, 2011

2. Overview • Regulatory Updates • Mercury and Air Toxics Standards • Boiler MACT/CISWI Reconsideration • Oil and Gas Sector Rulemakings • Stationary Engines NESHAP Reconsideration and NSPS Amendments • Petroleum Refinery Sector Rulemakings • Chemical Sector Rulemakings • Other Notable Regulatory Efforts • Upcoming Regulations • Pulp & Paper RTR Proposal Update

3. REGULATORY UPDATES

4. Timeline for the Mercury and Air Toxics Standards

5. Boiler MACT and CISWI Reconsideration • Issues identified by EPA • Full load stack test requirement for carbon monoxide coupled with continuous oxygen monitoring • Dioxin emission limit and testing requirements • Data considered in setting emission limits may not fully reflect comments received • Setting PM standards under GACT for existing oil-fired boilers • Issues identified by Industry • Dioxin and CO limits • New source limits and HAP testing • PM limits for some biomass boilers • EPA issued a stay on May 18, 2011 • We are moving forward expeditiously on the reconsideration

6. Oil and Gas Sector Rulemakings • Oil and GAS NESHAP and NSPS • Proposal: July 28, 2011 • Final: February 28, 2012 • Nationwide emissions • HAP emissions of 130,000 tons • VOC emissions of 3 million tons • Methane emissions of 15.7 million tons (300 MMT CO2e) • 40% of all U.S. methane emissions • NESHAP revisions being considered • NSPS improvements being considered for several emission points 5

7. Stationary Engine NESHAP Reconsideration and NSPS Amendments Existing Engines • March 9, 2011 direct final/parallel proposal to address NESHAP monitoring requirements for engines complying with the 2004 NESHAP • Reconsideration of 2010 NESHAP amendments in Summer/Fall 2011 • Monitoring requirements • Emission limits • GACT analysis for area source engines New Engines • Final NSPS amendments in June 2011 Existing and New Engines • Propose requirements for engines used for back-up power (address peak shaving and emergency demand response)

8. Petroleum Refinery Sector Rulemakings • Petroleum Refinery Sector NESHAP and NSPS • Proposal: December 10, 2011 • Final: November 10, 2012 • Taking an integrated approach across the refinery sector to coordinate MACT and NSPS requirements that currently exist in many separate rules • Key issues • Accurate emission data • Scope of the rulemakings • Options to address GHGs • Addressing environmental justice concerns and children’s health • Approach for addressing malfunctions

9. Chemical Sector Rulemakings • Taking an integrated approach across the chemical sector to coordinate MACT and NSPS requirements that currently exist in many separate rules • Propose consolidated set of regulations for HAP and VOC from chemical plants • Rules will reference new uniform standards • Perform risk and technology review (RTR) for six MACT (three are under consent decree, three have statutory deadlines) • Also perform technology review for the Hazardous Organic Chemicals NESHAP (HON), the largest chemical industry MACT • Currently under court orders that require proposal for portions of this sector as early as Nov. 2011

10. Other Notable Regulatory Efforts • EGU GHG NSPS • Iron and Steel Sector NESHAP • Startup, Shutdown, and Malfunction Rule • PVC and Copolymer Production NESHAP • Cement Reconsideration

11. Upcoming Regulations

12. Upcoming Regulations (continued)

13. PULP & PAPER RTR PROPOSAL UPDATE

14. MACT 1 NSPS MACT 2 Power Boiler MACT 3 Bark (bleached product) Wash Water Steam Brown Pulp Storage Boiler MACT Oil Coal Chipper & Screens Debarking Drum Bleach Plant Chips Logs (unbleached product) Lime: CaO Wash Water Digester Bleached Pulp Storage Pulp & Black Liquor White Liquor: Na2S, NaOH Pulp Washers Lime Kiln Caustic Plant Weak Black Liquor Screens & Cleaners Refiners Green Liquor: Na2S, Na2CO3 Lime Mud: CaCO3 Strong Black Liquor Additives Evaporators KRAFT PROCESS Paper Making Slurry Screens Recovery Boiler Paper Waste Water Treatment ASB Water From Process Primary Clarifier Secondary Clarifier To River Paper Machine To Converting Sludge Sludge Sludge

15. Pulp & Paper MACT Chemical Combustion MACT Boiler MACT NSPS Pulp & Paper Air Emissions Gaseous Organic HAP VOC HAP metals PM HCl SO2 Chlorine NOx HF CO CO2 Gaseous Organic HAP VOC TRS Gaseous Organic HAP VOC TRS Wood Chips Pulp to the paper mill Digester Blow Tank & Accumulator Washers & Screens Combination Fuel Boiler Gaseous Organic HAP VOC Gaseous Organic HAP VOC HAP metals PM HCl SO2 TRS NOx CO CO2 Gaseous Organic HAP VOC TRS Gaseous Organic HAP VOC TRS Gaseous Organic HAP VOC TRS Wastewater Treatment Lime Kiln Turpentine Recovery Multiple Effect Evaporators Gaseous Organic HAP VOC HAP metals PM HCl SO2 TRS NOx CO CO2 Gaseous Organic HAP VOC TRS PM Gaseous Organic HAP VOC TRS HCl Chlorine Chloroform Slaker Dissolving Tank Recovery Boiler Bleach Plant

16. Pulp & Paper Sector in Perspective • About 350 Pulp & Paper Mills • 200 major sources subject to MACT, typically Integrated Pulp & Paper • 150 area sources, paper only • $115 billion in sales; 400K direct jobs • 79 million tons paper produced 2008, 18% decrease from 1999 peak • China eclipsed U.S. as largest paper producer in 2008; U.S. still largest in pulp production • Energy subsidies for biomass energy (burning ‘black liquor’) have become an important factor in net income/profit * Boiler MACT Rule (co-benefit) projected to reduce SO2 by over 100,000 TPY with scrubber controls.

17. Pulping Sources in Category Main Pulping Sources: Digesters, Evaporators, (Some Facilities) Turpentine Recovery, Steam Strippers Low volume high concentration (LVHC) emission sources MACT controls – combustion device Secondary Pulping: Washers, Screens, Liquor Storage High volume low concentration (HVLC) emission sources MACT controls – combustion device, clean condensate alternative or waste water treatment Mechanical Pulping Sources: No MACT limits Bleaching MACT controls – scrubber, total chlorine free (TCF) Evaporator: Concentrates Black Liquor

18. Example Pulp & Paper Processing Equipment Turpentine Recovery Digester Blow Tank Causticizing Equipment

19. Papermaking Sources in Category Paper Machines No MACT limits An alternative compliance tool for HVLC control under clean condensate alternative Waste Water Treatment No MACT limits An alternative compliance tool for HVLC control using biological treatment (activated sludge) Paper Machines

20. What is Involved in the Technology Review? • The CAA requires that we review MACT standards, considering advances in practices, processes, and control technologies. • This allows us to tighten existing MACT standards with cost-effective controls. • For the Technology Review, we also assess MACT to: • address significant unregulated emission points • require consistent monitoring and electronic compliance reporting • fix administrative requirements that are duplicative or inconsistent

21. What is Involved in the Risk Review? • Decision process for residual risk • If maximum individual cancer risk (MIR) is less than 1 in 1 million and there are no other health impacts, then no further assessment is needed • If MIR is greater than 100 in 1 million or other significant health impacts are identified, risks are “unacceptable” and must be reduced (this is not a bright line; uncertainties and other health factors need to be considered in this decision) • If MIR is between 1 and 100 in 1 million, we tighten the standards if cost-effective controls are available to provide an “ample margin of safety” • Also consider cost-effective controls to address other endpoints, including noncancer effects, population risks, and environmental impacts • Consider facility-wide risks and demographic analyses to: • make acceptability and ample margin of safety determinations • identify other source categories for priority review and regulatory action, as appropriate

22. For More Information • Amy Vasu • 919-541-0107 • Vasu.amy@epa.gov • OAR Policy & Guidance Information • www.epa.gov/ttn/oarpg 22