GREENHOUSE GAS MONITORING & REPORTING RULES EPA 40 CFR Part 98

2. GREENHOUSE GAS MONITORING & REPORTING RULES EPA 40 CFR Part 98 SMITHFIELD FOODS, INC. ENVIRONMENTAL CONFERENCE San Antonio, TX August, 2011 Eric Lassalle

4. Applicable Sections Subpart A: General Provisions Subpart C: General Stationary Fuel Combustion Sources Subpart JJ: Manure Management Subpart II: Industrial Wastewater Treatment

5. Subpart A • Applicability Requirements • Schedule • Reporting and recordkeeping requirements common to all reporters • Definitions • Report submission procedures • OTHER (e.g. Monitoring Plans, Calibration procedures, etc.)

6. Subparts C, II, & JJ • Source category definitions • GHG’s to report • Calculation methods • Monitoring and QA/QC • Missing data procedures • Reporting and recordkeeping elements unique to each subpart

7. Devices that combust solid, liquid, or gaseous fuel for Producing electricity, steam, useful heat or energy for industrial, commercial or institutional use, or Reducing the volume of waste by removing combustible matter Ex: Boilers, Stationary Internal Combustion Engines, Process heaters, Combustion Turbines, Incinerators & Control devices. Exempt Portable equipment Emergency generators and emergency equipment Agricultural irrigation devices Flares (unless otherwise specified) Electricity Generating Units subject to subpart D Hazardous waste combustion Pilot lights Subpart C: Stationary Fuel Combustion Sources

8. Schedule for Monitoring & Reporting CY10 • January 1, 2010 Start collecting data using required methods as specified by subparts A, C, & JJ. • July 1, 2011 Submit certificate of representative • September 30, 2011 Submit GHG report for reporting year 2010? • Ongoing – Submit corrected report 45 days after each discovery. • Ongoing – Submit annual reports on 3/31 each following year?

9. Schedule for Monitoring & Reporting CY11 • January 1, 2011 Start collecting data using required methods as specified by Subpart II. (Industrial Wastewater) • September 30, 2011 Submit GHG report for reporting year 2010? • January 31, 2012 Submit certificate of representative • March 31, 2012 Submit GHG report for reporting year 2011 • Ongoing – Submit corrected report 45 days after each discovery. • Ongoing – Submit annual reports on 3/31 each following year.

10. Monitoring Plan • Identifies responsibilities for data collection • Explains processes and methods used for data collection • Describes QA/QC procedures for monitors • May incorporate external references to existing corporate documents (e.g. EMCS, QA/QC plans, SOP’s, & O&M plans) • Monitoring plans for Subparts C & JJ completed by April 1, 2010 • Monitoring plans for subparts II complete by January 1, 2011.

11. General Monitor Calibration Requirements • Calibrate flow meters by April 1, 2010 • Calibrate using manufacturer’s specifications, industry consensus standard or method in rule subpart. Describe in monitoring plan. • Recalibrate at frequency specified in subpart. If not specified, use manufacturer’s recommendations or industry consensus practice.

12. General Monitor Calibration Requirements • Flow meters measuring liquid or gaseous fuel feed rates, process stream flow rates, or feedstock flow rates must meet no more than 5% calibration error unless otherwise specified. • Calibration and accuracy requirements do not apply to: • Company records • Best available information • Fuel billing meters (unless we own the meter) e.g. City gate gas meters • Flow meters used exclusively for unit start-up

13. When Can I Stop Annual Reporting • Notify EPA by March 31 of the year you meet one of the following; • If annual report demonstrates CO2e <25,000 metric tons/yr for 5 consecutive years • If annual report demonstrates CO2e <15,000 metric tons/yr for 3 consecutive years • If all process/units/supply operations covered by the rule are shut down Reporting must resume in future year if conditions are no longer met.

14. Electronic Reporting System • Facilities will need to report using EPA’s e-GGRT system Issues – this program currently rounds CH4 & N2O prior to multiplying by the GWP. • Farms will need to mail data (certified or receipt). To EPA Climate Change Director.

15. CO2 Emissions CalculationsSubpart C (Stationary Combustion) • Tier 1 • Annual Fuel use • EPA HHV factors provided • Tier 2 • Annual Fuel Use • HHV Excel Workbook developed & available at Smithfield environmental website www.sfienvironmental.com

16. CO2 Emission CalculationsSubpart JJ (Manure Management) • Subpart JJ provided factors • Workbook Developed for farms located in Google docs

17. CO2 Emission CalculationsSubpart II (Industrial Wastewater) • Covered Anaerobic lagoons • Open Anaerobic lagoons

18. OK, Now What • All facilities should document their GHG total for Calendar years to verify if reporting is required or not. www.sfienvironmental.com

19. EPA July 19, 2011 Amendments

20. SUBPART A (GENERAL PROVISIONS) • Proposed amendments include: •  Setting a threshold for underground coal mines to include only those that have ventilation emissions of 36,500,000 actual cubic feet (acf) of CH4 or more per year (approximately equivalent to 100,000 acf of CH4 or more per day). •  Adding a provision to defer any deadline under the GHG Reporting Program that occurs on a weekend or a holiday to the next business day. •  Providing a one-time extension of the 2012 reporting deadline for facilities and suppliers subject to source categories for which data collection began in 2011. •  Amending the reporting requirements on use of Best Available Monitoring Methods (BAMM).

21. SUBPART A (GENERAL PROVISIONS) •  Clarifying in Table A-3 that facilities are only required to report for electrical transmission and distribution equipment use under subpart DD if the total nameplate capacity of SF6 and PFC-containing equipment located within that facility exceeds 17,820 pounds, as elaborated in §98.301. •  Clarifying the definition of “supplier” to specifically refer to those source categories listed in Table A-5 to subpart A of part 98. •  Clarifying the method of submission of specific reports and other communications to the Administrator through either the electronic greenhouse gas reporting tool (e-GGRT) or through the mail to the Director of the Climate Change Division.

22. SUBPART II (INDUSTRIAL WASTEWATER TREATMENT) Proposed amendments include: •  Clarifying terms in Equations II-4 (e.g., how to apply multiple measurements to develop an average). •  Correcting a mathematical error in Equation II-6.

23. SUBPART II (INDUSTRIAL WASTEWATER TREATMENT) •  Clarifying the monitoring requirements for anaerobic sludge digesters, anaerobic reactors, or anaerobic lagoons from which some biogas is recovered. •  Clarifying terminology throughout this subpart (e.g,. replacing the term “anaerobic digester” with “anaerobic sludge digester” and replacing “gas” with “biogas”).

24. Questions?