December 7, 2004 Janet McCabe IDEM/OAQ

1. Air Regulatory Update: Mercury and PM2.5Presentation to the 18th Annual Surface Mined Land and Reclamation Technology Transfer Seminar December 7, 2004 Janet McCabe IDEM/OAQ

2. Mercury and Health Effects • Mercury in Indiana’s environment is a public health and environmental concern. Mercury—especially in its organic form, methylmercury—can affect the central nervous system of adults and children. • The primary route of human exposure to methylmercury is dietary, and unborn children are as much as 10 times more susceptible than adults to methylmercury’s detrimental effects. • Mercury has been detected in nearly all fish-tissue samples collected in Indiana since 1983, often prompting health officials to issue advisories that warn about human consumption of these fish.

3. Mercury and Air Emissions • Precipitation (wet deposition) is the primary mechanism for transporting airborne gaseous or particulate mercury from the atmosphere to surface water and land. • Mercury in the atmosphere can be from manmade sources (coal-fired power plants, municipal incinerators, industrial boilers) or from natural sources (forest fires, geologic formations, volcanoes). • Manmade sources of mercury emissions to the atmosphere have been implicated for causing the increased concentrations of methylmercury found in fish.

4. Global Context • Much of the mercury circulating through today's environment is mercury that was released years ago, when mercury was commonly used in many industrial, commercial, and residential products and processes. • Mercury is naturally occurring as well as human-caused • Land and water surfaces can repeatedly re-emit mercury into the atmosphere after its initial release into the environment. • Anthropogenic emissions are roughly split between these re-emitted emissions from previous human activity, and direct emissions from current human activity.

5. Worldwide Distribution of Emissions Recent estimates, which are highly uncertain, of annual total global mercury emissions from all sources, natural and anthropogenic, are about 4,400 to 7,500 metric tons emitted per year. Source: USEPA

6. The U.S. in the Global Context • U.S. anthropogenic mercury emissions are estimated to be roughly 3% of the global total; emissions from the U.S. power sector are estimated to account for about 1% of total global emissions. • EPA has estimated that about 1/3 of U.S. emissions are deposited within the contiguous U.S. and the remainder enters the global cycle. • Current estimates are that about 1/2 of all mercury deposition within the U.S. comes from U.S. sources. However there are regional differences in these numbers. For example, U.S. sources represent a greater fraction of the total deposition in the Northeast because of the direction of the prevailing winds.

7. Mercury Emissions in Indiana • 2002 emissions: 10,565 lbs (5.25 tpy) • Breakdown by source category • Coal utilities 4903 lbs • Other sources 5662 lbs Note: Other sources include electric arc furnaces, industrial boilers, foundries, cement kilns, mobile and area sources

8. EPA’s Proposed Mercury Rule • Clean Air Act requires EPA to consider regulating hazardous air pollutants, including mercury, from power plants. • After extensive study, EPA proposed a rule for public comment on January 30, 2004. • Comment period ended June 29, and generated 540,000 comments, including 4000 unique comments • EPA must issue a final rule by March 15, 2005, per court order.

9. EPA’s Proposed Rule The proposed rule applies to plants > 25 MW and has two options Option 1: • Applies technology-based emission limits applicable to all affected plants • Would reduce emissions nationally by 14 tons (29%) by 2007, from 48 to 34 tpy • No cap on emissions • Higher emission limits for subbituminous than for bituminous coal

10. EPA’s Proposed Rule Option 2 • Market-based cap and trade program • Caps applied in two phases: • 2010 - amount of cap to be decided • 2018 - 15 tpy cap (70% reduction) • States would allocate allowances from a state “budget” to plants on a lbs/year basis • Plants may install controls or purchase allowances • Adjusts credit allocation based on coal rank

11. Indiana’s Comments • Indiana submitted comments on EPA’s proposed rule June 29, 2004 • Indiana supports federal rules to control mercury emissions from power plants • Federal rule should be fuel-neutral • Emission targets and timing appear to fall short of what is technologically feasible • EPA should conduct more investigation of local impacts of a cap and trade approach

12. Hoosier Environmental Council Petition • Presented to the Air Pollution Control Board June 2, 2004 • Petitions the board to adopt rules to control mercury emissions from coal-fired power plants • Proposes a reduction of 90% by July 1, 2008 • Requests public hearings to receive citizen input

13. Public Hearing and Workgroup Process • Air Board held a public hearing on October 6, 2004, in Indianapolis to consider the rulemaking petition • Air Board directed IDEM to establish a workgroup, open to the public, to gather and consider information relevant to a state mercury rule • Workgroup meetings have been held monthly; next meeting December 8 in Vincennes

14. Mercury Workgroup Schedule • September 29: mercury contamination in IN, programs to reduce, how utilities produce mercury • October 27: US EPA’s proposed rule • November: other states’ efforts; technology options; control options • December: control options; mercury deposition issues • January 2005: report to Air Board • Other developments: EPA issued NODA 12/1

15. EPA’s Proposed Fine Particle Designations in Indiana June 29, 2004

16. Fine Particle Monitor Values • PM 2.5 standard : • 15.0 ug/m3 Annual • 65.0 ug/m3 Daily • No Indiana counties violate daily standard. • 6 Indiana counties violate annual standard.

17. Fine Particle Designation Process • Governor’s recommendation made on Feb 15, 2004. • 6 nonattainment counties: Lake, Elkhart, Marion, Clark, Vanderburgh and Dubois • Governor’s letter raising concerns about designation process, June 23, 2004 • EPA proposed designations on June 29, 2004 (18 counties and 1 township) • The Clean Air Act provides 120 day consultation period • IDEM responded on September 1; discussions ongoing • EPA’s draft implementation rule expected Winter 2004 • EPA’s final designations expected by December 31, 2004, effective 60 days later • EPA to publish final implementation rule early 2005 • State attainment plans (SIPs) due early 2008 • Areas must attain the standard by early 2010

18. Likely Implementation Milestones for Fine Particles

19. Emission Credit Registry • Sources can voluntarily register their reductions as emission credits if they are permanent, quantifiable, enforceable and surplus. • The registry provides a public database in a central location for sources to view available emission credits. • This could be a useful tool for sources in nonattainment counties that wish to construct or modify and are unable to limit or control emissions below the nonattainment NSR thresholds. • The new Emission Credit Registry became available on June 15, 2004 and is accessible at: www.emissionscredit.in.gov

20. What Measures Will Improve Air Quality? • Measures in Place to be Implemented Prior to 2007 • NOx SIP Call (Indiana’s NOx Reduction Rule) • Tier II motor vehicle engine standards • Low Sulfur Gasoline Standards • Heavy Duty Diesel Engine Standards • Ultra Low Sulfur Diesel Fuel Standards • Non-road Diesel Engine and Low Sulfur Fuel Rule • NOTE: These measures are predicted to bring all areas of Indiana into attainment of the 8-hour ozone standard, with the exception Central and Northwest Indiana. Impact of theses measures on the reduction of PM 2.5 is yet to be quantified. • Federal Measures Currently Under Consideration • Multi-pollutant legislation / Clean Air Interstate Rule (CAIR)

21. Additional Clean Air Measures • Diesel reductions (retrofits, idle reduction programs, electrification) • Energy Efficiency Projects (credit available under Indiana’s NOx Rule) • Local Open Burning Programs • Mobile source programs

22. Outreach Efforts Underway • IDEM and IDOC will meet with local officials, businesses and other stakeholders in all affected counties once designations are final • Stakeholder groups established and meeting in Central Indiana, Southwest Indiana and Northwest Indiana to consider local clean air measures; will be established in other areas as needed • IDEM can provide informational sessions on Emissions Credit Registry on request

23. Key Websites • IDEM Mercury Workgroup: www.in.gov/idem/air/workgroups/mercury/ • IDEM PM2.5 Information: www.in.gov/idem/air/pm25standard/ • IDEM Emission Credit Registry: www.emissioncredit.in.gov

24. How Do I Find Out More? IDEM Website: www.in.gov/idem/air