Tailoring Rules May Send GHG Controls BACT to the Drawing Board

An interesting Alert published by K&L Gates this week explores the question, “What types of ‘Best Available Control Technologies’ could be utilized to control GHG emissions?”

Engraving scanned by Lars Aronsson.

Earlier this year, the EPA published the Final GHG Tailoring Rule, which, when it becomes effective next January, will require certain new and existing GHG-emitting facilities to obtain a New Source Review Prevention of Significant Deterioration (PSD) permit prior to construction or major modification. (The “tailoring” refers to the GHG emissions threshold – facilities with fewer emissions will be exempt from the program.)

PSD permits are currently issued to new major stationary sources of certain air pollutants under the Clean Air Act (CAA). While the EPA believes that GHG emissions would be best regulated by new legislation, the death of the federal cap and trade bill has left them with little choice but to “shoehorn” GHG emission control into the existing CAA framework. Under the PSD program, facilities must indicate how they intend to meet emissions requirements by implementing “Best Available Control Technology” (BACT). BACT is determined on a case-by-case basis, taking into account the cost and effectiveness of the control.

In October of 2009, the EPA established the “Climate Change Work Group,” whose duty was to “discuss and identify the major issues and potential barriers to implementing the PSD program […] for greenhouse gases.” The focus of the work group was to recommend information and guidance on the BACT requirement. Recommendations from the work group were presented to the Clean Air Act Advisory Committee in February, subsequently passed on to the EPA, and seemingly incorporated into BACT guidance released by the EPA last month.

And what, exactly, are the best technological options available for controlling GHG emissions? The EPA guidance offered the following two main suggestions: 1) increased emission source efficiencies (as K&L Gates puts it, “less fuel use = less CO2 emissions”), and 2) the use of cleaner alternative fuels, such as natural gas or biomass. The guidance also mentions the less-well established – but increasingly popular – carbon sequestration, but notes that it is unlikely that it will be “a technically feasible BACT option.” According to K&L Gates, “instead of identifying other, more concrete BACT options, [EPA] has essentially passed that future responsibility onto the state air permitting agencies through a series of general, well-known BACT review recommendations.”

K&L Gates summarizes the state of affairs nicely:

“If the Tailoring Rule survives the various legal challenges against it […] this case-by-case BACT analysis will – in the near term – likely result in a state-by-state patchwork of BACT analyses and accompanying regulatory uncertainty.  This uncertainty may also result in increased BACT legal challenges by environmental and industry groups that perceive individual BACT determinations as being either too weak or too stringent from a GHG reduction standpoint.”

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Tip for knowledgemosaic users: there are plenty of other law firms’ analyses on this topic. Enter the text BACT and Greenhouse on our Law Firm Memo search page to learn more.

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