ALASKA CALIFORNIA FLORIDA MID-PACIFIC NORTHEAST NORTHERN ROCKIES

NORTHWEST ROCKY MOUNTAIN WASHINGTON, DC INTERNATIONAL

705 SECOND AVENUE, SUITE 203 SEATTLE, WA 98104-1711

T: 206.343.7340 F: 206.343.1526 E: eajuswa@earthjustice.org W: www.earthjustice.org February 15, 2013

Comments Via Electronic Mail

Email: R10-Public_Comments@epa.gov and Body.Steve@epamail.epa.gov Mr. Steve Body EPA Region 10 Office of Air, Waste and Toxics

Suite 900

1200 Sixth Avenue Seattle, WA 98101

Re: Docket No. EPA-R10-OAR-2010-1071 Proposed Washington Regional Haze Rule

Comments of the National Pa rks Conservation Association

Dear Mr. Body:

On behalf of the National Parks Conserva tion Association (“NPCA”), we submit these comments on EPA’s proposed partial approval a nd partial disapproval of elements of the Washington regional haze plan as well as EPA’ s proposed federal implementation plan. 77 Fed. Reg. 76,174 (Dec. 26, 2012). The proposed rule is legally deficient and will not require all reasonable measures to protect the air quality of Washington’s national parks and wilderness

areas. This comment letter addr esses the deficiencies with the best available retrofit technology (“BART”) determinations for the Alcoa Intalc o Works aluminum smelter (“Intalco”) and the Tesoro Refinery in Anacortes (“Tesoro”), the improper exemption of the Alcoa Wentachee Works (“Wenatchee”) from BART, and will address the lack of reasonable progress to address haze pollution in Washington.

INTRODUCTION

Washington is home to three national park s, Mount Rainier, Olympic, and North Cascades National Parks, and five wilderness area s, Alpine Lakes, Glacier Peak, Goat Rocks, Mount Adams, and Pasayten Wilderness Areas. Wa shington is also home to the Mt. St. Helens National Monument and the Columbia River Gorg e National Scenic Area. Our national parks and wilderness areas are iconic, treasured landscapes and Washingt on is rich in national parks and natural areas. Congress set as ide these areas to protect our na tural heritage for generations. These natural areas also generate millions of dollars in tourism revenue, provide habitat for a range of species, and provide year-round recreational opportunities for residents. 1 These special

1 NPCA, Economic Significance Report, available at http://www.npca.org/assets/pdf/NPC A_Economic_Significance_Report.pdf ; see also HeadwatersMr. Steve Body February 15, 2013 Page 2

places are designated “Class I areas” under the Cl ean Air Act (“CAA”) and as such, their air quality is entitled to the highest level of protection. Unfortunate ly that requirement and promise

is unfulfilled because the air in most Class I ar eas, including in Washington’s most treasured natural areas, remains polluted by industrial sources.

To improve air quality in our most treasu red landscapes, Congress passed the visibility protection provisions of the Clean Air Act in 1977, establishing “as a national goal the prevention of any future, and the remedying of any existing, impairment of visibility in the mandatory class I Federal areas which impairme nt results from manmad e air pollution.” 42 U.S.C. § 7491(a)(1). Manmade air pollution is defi ned as “air pollution which results directly or indirectly from human activities.” Id. § 7491(g)(3). In order to prot ect Class I areas’ “intrinsic beauty and historical and archeological treasures,” the regional haze program establishes a national regulatory floor and re quires states to design and implement programs to curb hazecausing emissions within their jurisdictions. 2 Each state must submit for EPA review a state implementation plan (“SIP”) designed to make reasonable progress toward achieving natural visibility conditions. Id. § 7491(b)(2).

A regional haze SIP must provide “emissions limits, schedules of compliance and other measures as may be necessary to make reasonab le progress towards meeti ng the national goal.” 42 U.S.C. § 7491(b)(2). Two of the most critic al features of a regional haze SIP are the requirements for installation of Best Ava ilable Retrofit Technology (“BART”) limits on pollutant emissions and a long-term strategy for making reasonable progress toward the national visibility goal. Id. § 7491(b)(2)(A); 40 C.F.R. § 51.308(d)(1 )(i)(B). Under EPA regulations, regional haze SIPs should achieve natural visibi lity conditions in Class I areas by 2064, unless a state can demonstrate that meeting that deadline is not reason able. 40 C.F.R. § 51.308(d)(1)(i)(B).

BART controls must be installed on certai n major stationary sources that were in existence on August 7, 1977 and that began ope rating after August 7, 1962 , and that emit air pollutants that are reasonably anticipated to cause or contribute to visibility impairment at national parks, wilderness areas, wildlife ref uges and other “Class I areas.” 42 U.S.C. § 7491(b)(2)(A)

. In general, states have determined th at a source is subject to BART if it is responsible for an impact on visibility in a Class I area of 0.5 deciview or more. See generally 40 C.F.R. Pt. 51, App. Y § III(1). BART must be installed and operated no later than five years after SIP approval. 40 C.F.R. § 51.302(c)(4)(iv). BART is an essential component of the regional haze program as it compels emissions reductions from older, disproportionately polluting sources that often have escaped c ontrol under other Clean Air Act programs. Additionally, pollution controls n ecessary to make reasonable pr ogress toward attaining natural

Economics, National Park Service Units: Economi c Impacts of Visitation and Expenditures,

available at http://headwaterseconomics .org/apps-public/nps-impacts/ (Olympic National Park

received almost 3 million visits in 2010 and generated 1,673 local jobs).

2 See H.R. Rep. No. 95-294, at 203-03 (1977).Mr. Steve Body February 15, 2013 Page 3

visibility can be imposed as reasonable progre ss controls on both BART sources and sources not subject to BART. 42 U.S.C. § 7491(g)(1). The haze requirements in the Clean Air Act present an unparalleled opportunity to protect and rest ore regional air quality by curbing visibilityimpairing emissions from some of the natio n’s oldest and most polluting facilities.

Implementing the regional haze requirements promises benefits beyond simply improving views. Pollutants that cause visibil ity impairment also harm public health. For example, oxides of nitrogen (“NOx”) are a precurs or to ground-level ozone which is associated with respiratory disease and asthma attacks. NOx also reacts with ammonia, moisture and other compounds to form particulates that can cause and/or worsen respirat ory diseases, aggravate heart disease, and lead to premature death. 3 Similarly, sulfur dioxide (“SO2”) increases asthma symptoms, leads to increased hospital vi sits, and can also form particulates. 4 NOx and SO2 emissions also harm terrestrial and aquatic plan ts and animals through acid rain as well as through deposition of nitrates (which in turn cause ecosystem changes including eutrophication of mountain lakes). 5

Unfortunately, instead of acting on Congre ss’s direction, the states and EPA have repeatedly dragged their feet in implementing th e visibility protection provisions. Now, EPA proposes a plan that will still not meet the basi c requirements of the Clean Air Act, leaving the air in Washington’s parks and wild ernesses dirty for years to come.

I. THE PROPOSED BART DETERMINATI ON FOR THE INTALCO ALUMINUM

SMELTER IS UNLAWFUL.

The Alcoa Intalco Works is a BART-eligible aluminum smelter located at Cherry Point near Ferndale, Washington. Intalco emits NOx, SO 2, and particulate polluta nts that significantly and adversely affect the air quali ty in Olympic National Park, as well as five other Washington Class I areas. 77 Fed. Reg. at 76,814, 76,191. Intalc o’s visibility impact on Washington’s Class I areas stems primarily from sulfur dioxide emissions from the potlines.

After finding that the state of Washington overest imated the cost of pollutant controls for Intalco’s potlines, EPA conducted its own BART analysis and conc luded that limestone slurry forced oxidation (“LSFO”) would reduce Intalc o’s SO2 pollutant emissions by 95%, improving visibility by more than 1 decivi ew at Olympic National Park and more than .5 deciviews at each

3 EPA, Particulate Matter, available at http://www.epa.gov/air/part iclepollution/ health.html

.

4 EPA, Sulfur Dioxide, available at http://www.eap.gov/air/sulfurdioxide/health.html.

5 See, e.g. , National Park Service, http://www.nature.nps.gov/air/Pubs/pdf /reviews/pnw/PNWfinalreport1.pdf ; http://www.nature.nps.gov/air/Pe rmits/aris/olym/impacts.cfm http://www.epa.gov/acidrain /effects/index.html.Mr. Steve Body February 15, 2013 Page 4

of 5 other Class I areas. 77 Fed. Reg. at 76,191. EPA found LSFO to be reasonable and within the cost-effectiveness range of other BART determinations. Id . After considering the five statutory factors for determining BART, EPA finds LSFO is BART, but then relieves Intalco of having to comply with the statute and install BA RT controls for SO2 because Intalco claims it cannot afford the controls “and remain a viable entity.” Id . Instead of proposing controls that would reduce emissions by 95%, EPA proposes a mere 20% reduction in SO2 emissions, achieved in part by limiting the sulfur content of fuel at Intalco. Id . at 76,192-93.

A. EPA’s Proposed BART Decision for Intalc o Fails to Comply With the Public Notice Requirements of the Clean Air Act.

Absent the affordability claim, EPA states th at “LSFO would be BART.” 77 Fed. Reg. at 76,191. EPA proposes less stringent controls because of an affordability analysis based in large part on information and underlying analysis and reasoning that EPA has refused to disclose. In general, EPA does not “show its work” with resp ect to its affordability conclusion. It is impossible for the public to understand and comm ent on EPA’s affordability analysis because

critical information is not available.

As for information underlying EPA’s conclusion , there are only a handful of documents in the record that purport to be relevant to EPA’s conclusions regarding the affordability of pollution controls at Intalco. One document is a June 2012 economic analysis provided by Alcoa; Attachment 2 is claimed as confidentia l business information and withheld from the docket for this rulemaking. Letter from Robert Wilt, Alcoa to Dennis McLerran, EPA Region 10 (June 22, 2012), Attachment 2, EPA Docket ID No. EPA-R10-OAR-2010-1071-0045. The second document is a consultant’s report. RTI International, Intalco BART SO2 Affordability Assessment: Final Report (Nov. 2012) EPA Docket ID No. EPA-R10-OAR-2010-1071-0054.

It appears that Alcoa first clai med that it could not afford BART controls in June of 2012 and that EPA’s analysis was conducted in re sponse to Alcoa’s request and based on the information Alcoa provided in its letter to EPA. The critical information in Alcoa’s June 2012 letter—specifically, Attachment 2—has been red acted from the public docket. The RTI Report primarily limits its analysis to the energy price se nsitivity issue and, as discussed below, fails to

disclose certain facts that the report itself deems of importance in determin ing the profitability of the Intalco facility. EPA’s failure to disclose critical information re garding its proposal to

excuse Intalco from BART means that we are un able to provide meaningful comment on Alcoa’s claims that the company cannot afford LSFO controls and EPA’s decision to accept that

contention. This is a violation of a number of basic tenets of the Clean Air Act and federal

administrative law.

The Clean Air Act forbids EPA from promulgating a rule that relies in whole or in part on information that has not been placed in the public docket. 42 U.S.C. § 7607(d)(6)(C). Furthermore, Congress intended that the public have a meaningful opportunity to comment on a proposed rule. Id . § 7607(d)(5), (h). Courts have also consistently rejected agency attempts to shield foundational documents from public scruti ny, finding that such actions violate the law byMr. Steve Body February 15, 2013 Page 5

depriving the public of an opportunity fo r meaningful review and comment. See e.g. Ober v.

EPA , 84 F.3d 304, 314 (9th Cir. 1996) (EPA improperly failed to afford public comment on document submitted by the state that was plai nly relevant to EPA’s SIP decision); Idaho Farm

Bureau Fed’n v. Babbitt , 58 F.3d 1392, 1402-03 (9th Cir. 1995) (cri ticizing the failure to afford review and comment on a map and re port that the agency relied on and that was critical to the agency’s decision.); Air Transport Ass’n v. FAA , 169 F.3d 1, 7 (D.C. Cir. 1999) (“[E]ven in the informal rulemaking context, we have cautioned that the most critical factual material that is used to support the agency ’s position on review must have been made public in the proceeding and exposed to refutation.”) (emphasis added); see also Gerber v. Norton , 294 F.3d 173, 179-81 (D.C. Cir. 2002).

EPA has failed to identify any support in the Clean Air Act that permits EPA to ignore the requirements in the Clean Air Act for public review and comment on all aspects of EPA’s

SIP decisions and on documents that EPA relies on for those decisions. To the extent that EPA purports to rely on guidance to withhold documen ts critical to EPA’s decision, that guidance 6
must give way in the face of the plain statutory requirements of the Clean Air Act and case law. Further, to the extent that Intalco seeks special treatment and exemption from the “best” emission controls as determined by EPA as required under the Clean Air Act’s visibility protection program, Intalco and EPA must disclo se the information underl ying Intalco’s request, and EPA’s determination, to the public and EPA must substantiate its decision. By withholding

a critical document that dire ctly relates to the dispositive factor supporting EPA’s proposed decision, EPA has deprived the public of a mean ingful opportunity to comment on the proposed

decision.

B. The Proposed Reliance on an Affordability Analysis to Excuse Intalco from BART Is Inconsistent with the Law and Arbitrary and Capricious.

In support of its proposed decision, EPA relie s on a provision in the BART guidelines

that in “ unusual circumstances ,” EPA may take “into considera tion the conditions of the plant and the economic effects of requiring the use of a given control technol ogy.” 40 C.F.R. pt. 51 App. Y § IV(E)(3) (emphasis added); see also 77 Fed. Reg. at 76,191-93 (relying on the affordability provision to reject LSFO as BART in favor of less stringent controls). EPA’s guidance further provides that only wh ere the effects are judged to have a severe impact on plant operations, may they be considered in the te chnology selection. 40 C.F.R. pt. 51 App. Y § IV(E)(3). The guidance does not define what circ umstances are “unusual” or “severe” and it is

not clear how this assessment differs from the cost-effectiveness analysis. The statutory BART factors provide that costs of compliance are a co nsideration in determining BART as well as the remaining useful life of the pollutant source. 42 U.S.C. § 7491(g)(2). T hose factors are part of EPA’s cost-effectiveness analysis and EPA ha s acknowledged that the Clean Air Act does not include a requirement to consider “afford ability.” 77 Fed. Reg. 72,512, 72, 539 (Dec. 5, 2012).

6 The affordability provision in the BART guidelines state that an affordability review “must preserve the confidentiality of sensitive busin ess information.” 40 C.F.R. pt. 51, App. Y § (IV) (E)(3).Mr. Steve Body February 15, 2013 Page 6

By overlaying an additional ill-defined “affordab ility” factor on top of the cost-effectiveness analysis, EPA appears to be creating a potentially broad BART exemption that runs counter to the statutory obligation to restore visibility to natural conditions in Class I areas on a reasonable

timeline. Id. § 7491(b)(2)(A).

Even if the affordability provision in the BART guidelines is consistent with the Clean Air Act, EPA’s reliance on the affordability provis ion here is inconsistent with EPA’s approach to BART determinations around the country. Gi ven this inconsistency, the unprecedented use of the affordability provision to reject controls th at would otherwise qualify as BART is arbitrary and capricious.

Over the last several years, EPA has reviewed scores of BART determinations, including for electric generating units (“EGUs”). In many cases, EPA has proposed and/or finalized

BART determinations that have contributed to power plants shutting down because the EGU was no longer profitable enough after accounting for th e costs of pollution controls. For example, EPA proposed a federal implementation plan containing a BART determination for the Danskammer Generating Station in New York, 77 Fed. Reg. 24,794, 24,812-15 (April 25, 2012) (proposing to disapprove the sulfur dioxide BART determination and proposing a federal implementation plan). In December 2012, the company that owns Danskammer then announced that, as a result of several factors, th e plant would be retired and demolished. 7 Similarly, EPA issued a federal implementation plan for units 3 a nd 4 of the Northeastern Station power plant in Oklahoma requiring an SO2 limit of .06 lbs/MMBtu. 76 Fed. Reg. 81,727, 81,729 (Dec. 28, 2011). The Public Service Company of Oklahoma , which owns Northeastern Station, announced

it will retire unit 4 in 201 6 and will retire unit 3 in 2026. 8

Moreover, EPA has incorporated enforceable shut-down commitments for some EGU units as part of a regional haze rule. For exam ple, EPA proposed BART determinations for five

units at the Four Corners Power Plant. 75 Fed. Reg. 64,221 (Oct. 19, 2010). The owner of units

1-3 then announced intentions to retire the units, resulting in EPA issuing a final BART rule requiring Four Corners to either m eet stringent emissions limits at al l five units or retire units 1-3

and meet emissions limits at the remaini ng units. 76 Fed. Reg. 10,530 (Feb. 25, 2011); 76 Fed. Reg. 51,620 (Aug. 24, 2012). Similarly, the approved BART determination for the TransAlta Centralia Generation plant here in Washington requires TransAlta to retire or end use of coal at

7 Dynegy, Press Release (Dec. 2010), available at http://www.dynegy.com/news/newsrelease?newsurl=http%3A%2F%2Fphx.corporateir.net%2Fphoenix.zhtml%3Fc%3D147906%26a mp%3Bp%3DRssLanding%26amp%3Bcat%3D news%26amp%3Bid%3D1765883.

8 Public Service Company of Okla homa, Press Release (Sept. 26, 2012), available at https://www.psoklahoma.com/info/news/viewRelease.aspx?releaseID= 1309; Public Service Company of Oklahoma, Pre ss Release (Apr. 24, 2012), available at https://www.psoklahoma.com/info/news/ViewRelease.aspx?releaseID=1241.Mr. Steve Body February 15, 2013 Page 7

its two units in 2020 and 2025 respectively. 77 Fed. Reg. 72,742 (Dec. 6, 2012). And the Oregon SIP includes retirement requirements for the Boardman facility. In each of these instances, the EGU determined that shut-dow n was more economical than compliance with BART. EPA has not explained how the situation with Intalco is different.

In these and other BART determinations, EPA ha s confronted factual s ituations similar to the scenario that is allegedly pr esent here: EPA applie s the proper statutory five-factor analysis to determine BART and compliance with BART might then make an already uneconomic or marginally-economic facility even less competitive, in turn causing the facili ty to retire. We are not aware of any other BART determination in which EPA has relied on the ill-defined “affordability” provision to rej ect the controls that would ot herwise qualify as BART. EPA conducted an affordability analysis for a sugar b eet processing facility in Idaho, but concluded that the facility could in f act afford BART controls. See 76 Fed. Reg. 36,329, 36,334-36 (June 22, 2011). EPA has rejected claims by other fac ilities that they cannot afford controls. See, e.g.

, 77 Fed. Reg. at 72,539-42 (concluding that there is no evidence th at the Apache power plant in Arizona cannot afford BART controls). EPA ha s reviewed BART determinations for units in several industries, acro ss the country, and Intalco is the only BART determination where a company is being excused from complying with the law on the grounds that the company cannot

“afford” to follow the law.

EPA has acknowledged that the “BART guidelines specifically allow, but do not require, affordability to be considered when de termining BART.” 76 Fed. Reg. at 36,334; see also 77 Fed. Reg. 72,512, 72,539 (Dec. 5, 2012) (“[N]either th e CAA nor the RHR requires states or EPA to consider the affordability of controls . . .” ). Given that EPA is not required to consider affordability, EPA must exercise its discretion rationally and explain why it makes different decisions when faced with what appear to be si milar facts. Absent any such explanation, the decision to rely on the affordability provision he re is arbitrary and, if finalized, would be

unlawful.

C. EPA’s Affordability Analysis Should be Redone in Light of Facts Absent from the RTI Report and Intalco’s New Long-Term Power Agreement.

As noted above, it is difficult to impossi ble for the public to review and understand EPA’s “affordability” analysis and conclusion ex cusing Intalco from LSFO BART requirements because critical information upon which EPA reli ed is missing from the public record. And, even in the RTI Report, key facts fo r RTI Report’s analysis are absent. 9

9 As to the information that is supplied, RTI notes th at Alcoa has adequate cash-on-hand (which has increased from 2010 to 2011) to pay for the LSFO outright, although it would use 7.8% of

Alcoa’s cash on hand. Should Alcoa choose to bo rrow to fund LSFO controls, RTI’s use of a 7% rate appears based on EPA’s Control Cost Manual. The Control Co st Manual suggests this rate for publicly-funded, not privat ely-funded projects. For projects such as that at Intalco, the Manual makes plain it is more approp riate to assess the actual site-s pecific rate that would apply. It is unclear from the RTI report what that is—given current interest rates it could beMr. Steve Body February 15, 2013 Page 8

First, the RTI report uses a co st/sales ratio as part of its assessment of how affordable something is to a company. It gives a range of 6% to 20% for Intalco and LSFO noting that lower numbers are better. However, entirely missi ng from the report is what ratio is “affordable” and what is not and what the underlying frame of reference is—is the ratio a global benchmark, or a national, or a regional one? There is no in formation anywhere in the RTI report about what these percentages actually mean or what is even desirable (other than “lower” and arguably the entire range is “lower”) , nor is this information provided anywhere in EPA’s decision that complying with the law is not “affordable” for Intalco. This part of the RTI report therefore provides no support in that it onl y provides an opaque conclusion, not reviewable by the public.

Second, the RTI report makes clear that a l ong-term power contract with the Bonneville Power Administration at the IP rate for power would make a difference in the affordability analysis. The RTI report notes th at at the time the report was done , no such contract existed and its prospect was uncertain and maybe even un likely for the amount of power necessary for Intalco to run all three potlines (the most econo mical option for the facility.) However, again there is a piece of information missing. The RTI report never discloses, no r again is it disclosed anywhere in EPA’s final decision, what amount of power at the IP rate is actually necessary for

Intalco to run all three lines nor does the RT I report bother to analyze whether LSFO is

affordable if Intalco is able to obtain long-term power for at least two of the lines and other power for the third. The RTI report repeatedly st ops short of offering the detailed information necessary to actually support its sweeping conclusions in the intr oduction. This is particularly important in light of developments immedi ately after the issuan ce of RTI’s report.

The apparently determinative fact upon wh ich the RTI report bases its conclusions—the existence of a long-term power supply contract—substantially changed 20 days before EPA published its proposed decisi on for Intalco BART and less than a month after RTI issued its report. RTI’s report makes clear that a long-term commitment to a supply of power at the IP rate is key to Intalco’s profitabilit y. The report appears to conclude that with that kind of power supply and the improving market for aluminum, 10 the plant can be profitable, even with LSFO. RTI’s conclusion in this regard is, like so much of its report, not entirely clear as it appears to hedge the precise impact of a long-term contract probably because it stated there was no such commitment in place at the time of the report and RTI seemed to think (oddly in light of events) that such a contract may not be li kely. It is plain that the RTI report concludes that whether there is a long-term power supply contract affects a ffordability. Then, on December 7, 2012, less than a month later, Intalco signed a 10 year electr ic supply agreement with Bonneville Power for 300 megawatts of power (a huge amount of power—re ported as about one-quarter the power supply for all of Seattle City Light) at a low rate. A ccording to Alcoa’s own pr ess release and various

substantially lower than 7% which in turn make s a significant difference in the cost of the controls. The affordability conclusion s of RTI are not adequately explained.

10 Alcoa’s 2011 10-K filing with the Securities and Exchange Commission, the most recent available, confirms the improving market for al uminum and resulting si gnificant improvements

in Alcoa’s financial situ ation in 2011 as a result.Mr. Steve Body February 15, 2013 Page 9

press accounts, this meant that the Intalco faci lity could stay open and fully operational. See attached Alcoa press release and copies of press stories from The Bellingham Herald, and Azom.com (an industry news site.) Further, the agreement included a commitment by Alcoa to invest $35 million in capital improvements to the In talco facility during the next seven years. Id. It appears from the information that EPA has put in the public record, that a primary foundation

for its conclusion that LSFO at Intalco is not af fordable was factually incorrect at the time EPA issued its proposed decision.

EPA should not finalize its deci sion to relieve Intalco of th e obligation to comply with

LSFO as BART and should instead revise its decision regarding affordability and require LSFO

controls on SO2 emissions from Intalco. Overal l, based on the only information that EPA makes available to support its decision th at Intalco cannot “afford” to comply with the Clean Air Act, EPA’s conclusion does not comply with EPA’s re gulation, is not adequately supported, and is arbitrary and capricious.

II. THE PROPOSED TESORO BART ALTER NATIVE DOES NOT COMPLY WITH STATUTORY AND REGULATORY REQUIREMENTS.

Pollution from the Tesoro Refinery near Anacortes, Washington significantly impairs visibility in Olympic National Pa rk and five additional wilderness areas in Washington. NPCA’s

concerns center on five BART-s ubject units at Tesoro where EPA has allowed Tesoro to avoid BART for NOx through a recent proposal from Te soro. The five units in question are boiler number two, unit F-304, and the four heat ers, F-6650, 6651, 6652, and 6653. 77 Fed. Reg. at 76,196. Tesoro’s 2008 BART analysis origin ally recommended unit-specific BART

determinations for these five units. See Letter from Don J. Sorens en, Tesoro to Phyllis Baas, Washington Department of Ecology (Feb. 8, 2008) . The Washington Department of Ecology rejected these controls as not cost-effective because it wrongly assumed the refinery’s next

turnaround would come after the first BART implementation period. 77 Fed. Reg. at 76,196. EPA has rectified this error and proposes to di sapprove Washington’s BART determinations for these units. We support this disapproval.

However, very late in the process and ju st before EPA took ac tion, Tesoro proposed a

BART “alternative” to EPA that excused Tesoro from complying with BART requirements for

these units. See Letter from Mike Johnson, Tesoro to Dennis McLerran, EP A Region 10 at 1 (Nov. 5, 2012), EPA Docket ID No. EPA- R10-OAR-2010-1071-0029. EPA has proposed approving Tesoro’s late proposal.

A. EPA Has Not Demonstrated That the Alternative Will Improve Visibility More Than Source-Specific BART Determinations.

The fundamental legal requirement for an altern ative to BART is a de monstration that the alternative will make greater reasonable progress than BART. 40 C.F.R. § 51.308(e)(2)(i). This must be demonstrated by the clear weight of evidence. Id. § 51.308(e)(2)(i)(E). EPA has

recommended that a BART alternative shoul d be judged by comparing the visibilityMr. Steve Body February 15, 2013 Page 10

improvement from BART to the visibility im provement from the BART alternative. EPA cautioned against relying on comparisons of em issions reductions only because many factors influence the visibility effects of emissions.

In order for an alternative to BART program to be adequate, it must demonstrate, among other things, that it provides “greater reasonable progress” than would BART. 40 CFR 51.308(e)(3). This demonstration can be offered in two ways. In the first case, the “distribution of emissions” must be substantially similar unde r BART and the alternative program; in addition, the alternative measure must provide “greater emissions reductions.” In line with BART determinations that are pollutant specific, cl early this requirement contemplates emissions reductions of the same pollutant, e.g., NOx emissi ons for NOx emissions. Indeed, if this were not the case, the result would be ludicrous —opening the door for trad ing non-equivalent pollutants. A reduction of one t on of NOx does not necessarily have the same visibility impact as one ton of SO2, PM, or other pollutants, a nd moreover this relations hip varies depending on site-specific circumstances.

The regulations provide only one other path to demonstrati ng greater reasonable progress, which is to perform modeling to demonstrate that visibility does not decline in any Class I area and there is an overall improvement in visibility. Here, contrary to its own advice and guidance, EPA did not model the visibility improvement fr om the proposed BART alternative and compare that to the visibility improvement from s ource-specific NOx BART. Instead, EPA simply compared emissions reductions, noting that the claimed BART “alternativ e” had reduced sulfur dioxide emissions by 1068 tons per year, which exceeded the 466 tons per year expected from source-specific NOx BART limits. 77 Fed. Reg. at 76,197. EPA has not performed the appropriate modeling. Instead, it asserts that monitoring data is sufficient to determine the relative impacts of NOx and SO2 from Tesoro. EP A’s argument consists of just one sentence: “In Washington Class I areas, sulfat es contribute significantly more than nitrates to visibility impairment (see SIP Submittal chapter 5) and it is likely that more SO2 converts to sulfate than NOx does to nitrate.” 77 Fed. Reg. 76,196.

EPA has not justified its assertion that th e SO2 reductions would “result in greater reasonable progress than woul d requiring BART for NOx” on the relevant sources. EPA provides no support for its statement that more sulfur dioxide from these units converts to sulfate than nitrogen oxide converts to nitrates; moreover it is directly contrary to what EPA has been told by the National Park Service about the rela tive impact of SO2 and NOx on wintertime haze in cooler, damper climates like that in Olympic National Park. See National Park Service comments, February 15, 2013, p. 8 of attachment. It is precisely such complexities that led EPA to recommend modeling visibility improvement rather than relying on emissions reductions alone when comparing BART to an alternative.

Without additional analysis, the presence of more sulfates than nitrates does not necessarily indicate that one ton of SO2 has more or less of an im pact than one ton of NOx. The chemistry involved is very complex and can cause non-linear outcomes. For instance, reductions in one visibility-causing pollutant can, at times, increase the visibility impairment associatedMr. Steve Body February 15, 2013 Page 11

with another pollutant, or have little impact at all. 11 Modeling can capture many of these complex interactions under different scenarios, whereas monitoring data only reflects the end result. Moreover, monitoring data doesn’t indica te the relative contribution of pollutants from the facility in question; it reflects a multitude of sources.

EPA also fails to consider the facility -specific modeling that Tesoro performed. Geomatrix, BART Determination Modeling Anal ysis Tesoro Anacortes Refinery (2008). 12
Although the 2008 modeling does not explore the ci rcumstances or impacts of the proposed BART alternative, it does illustrate further that a facility-specific analysis is needed even if NOx and SO2 can be legally traded. Tesoro’s 2008 mo deling illustrates the imp acts of two scenarios: baseline conditions, and BART as Tesoro originally proposed it. In each of these scenarios, the results indicate that per ton, NOx contributes more to visibility impairment than SO2 (see Table 1 below).

Emission Rates (Max 24-Hour

Emission Rates in lb/hr) % Contribution (Mean Value for 98 th
Percentile Days) % Contribution

Per Ton

SO2 NOx SO2 NOx SO2 NOx

BASELINE 871.4 457.1 58.4 40.7 134.0 178.1 2008 Proposed

BART 863.4 240.0 73.3 26.0 169.8 216.7

Table 1. Modeling results from Tesoro’s 2008 BART determination. 13

This modeling cannot be applied directly to the proposed BART alternative scenario (for one thing, it only includes BART-e ligible units). But it does indicate that for Tesoro’s emissions, NOx may be having a greater per ton im pact on visibility; EPA cannot simply assume

otherwise.

Tesoro’s report highlights another issue with EPA’s blanket assertion that SO2 emissions are more important than NOx emissions: seasonalit y. As the report notes, “the highest changes to extinction are predicted” under ni trate-dominated wintertime conditions. 14 Thus reductions to

11 For example, reductions in SO2 can lead to in creases in available am monium, and, if the area is ammonia-limited, potentially increases in the formation of a mmonium nitrate. See, e.g.

, Stationary Source NOx and PM Emissions in the WRAP Region: An Initial Assessment of Emissions, Controls, and Air Quality Impacts. Final Report of the WRAP Market Trading Forum at IV-11 (Oct. 1, 2003).

12 Tesoro’s original modeling report does not app ear to be in the docket. This modeling report

should be included in the r ecord for this decision.

13 See Tables 2-1, 2-2, 4-4, and 4-5.

14 Id. at 10.Mr. Steve Body February 15, 2013 Page 12

SO2 may not result in reducing the greatest predicted visibility impacts. Modeling would provide a more definite answer.

Evidence indicates that the issue is more complicated than EPA’s unsubstantiated

assertion would indicate. Sim ilarly, Tesoro’s letter proposing th e BART alternative contains nothing to demonstrate that the proffered SO2 emi ssions will in fact lead to greater reasonable progress than BART, instead focusing squarely on the tons of reductions of dissimilar pollutants. The regulations require comparisons of tons of the same pollutant and do not appear to contemplate trading different polluta nts. Even if such a trade were legally permissi ble in theory, EPA has not demonstrated on this record that the pa st reductions in sulfur dioxide emissions will improve visibility more than nitrogen oxide BART controls would.

In short, EPA has not actually examined Tesoro’s proffered “alternative,” has not conducted visibility modeling for the BART alte rnative and source-specific BART, and has not supported its assertion that sulf ur dioxide from these units c onverts to sulfates more than nitrogen oxide converts to nitrate. The relevant material in the record from the National Park Service and EPA undermines EPA’s assumption that a comparison of sulfur dioxide and nitrogen oxide emissions reductions accurately indicates th e relative visibility improvement from those reductions. EPA must prove by the clear weight of evidence that the BART alternative will make more reasonable progress toward natural visi bility conditions than would BART. EPA has not made that demonstration on this record, and therefore should not finalize this BART

alternative.

B. EPA’s Proposal Is Inconsistent With EPA Guidance Given To Wisconsin Regarding The Requirements For BART Alternatives.

EPA proposes to approve a BART alternative that would use past emissions reductions, carried out to comply with requirements sepa rate from the haze requirements, at seven nonBART units in lieu of requiring source-specific BART for five BART units. 77 Fed. Reg. at 76,196. Under 40 C.F.R. § 51.308(e)(2)(iv), a state th at seeks to use an alternative program in lieu of BART must demonstrate not only that the alternative achieves grea ter reasonable progress toward reaching natural visibility conditions at Class I ar eas but also that “the emission reductions resulting from the emissions trading program or other alternative measure will be surplus to those reductions re sulting from measures adopted to meet requirements of the CAA as

of the baseline date of the SIP.” Our understa nding is that EPA’s proposal here would allow Tesoro to substitute earlier reductions in sulfur dioxide emissions, undertaken to ensure compliance with the NAAQS through PSD requirements, for nitrogen oxide BART limits at five

BART units. 15 This proposal is inconsistent with prior EPA comments suggesting that

15 The improvements that Tesoro previously undert ook to reduce sulfur in its refinery fuel gas produced a de facto reduction in SO2 emissions from any unit that bur ned it, regardless of

whether the limit was extended to that unit or no t. The only true change here—as reflected in EPA’s summary BART chart—is eliminating the opti on to use fuel oil in the subject units which can use it (only five of the seven). However, no information is provided to evaluate the impactMr. Steve Body February 15, 2013 Page 13

reductions at non-BART units that were undertak en in order to ensure compliance with the NAAQS cannot be traded for reductions at BART units.

In 2011 comments on the draft Wisconsin regi onal haze plan, EPA noted that because the BART guidelines do not address trades between BART sources and non-BART sources, such trades should be addressed in accordance with EPA’s economic incentive program (“EIP”) policy. Letter from Cheryl L. Newton, EPA Re gion 5 to Bill Baumann, Wisconsin Department of Natural Resources (Sept. 16, 2011), a ttached Comments at 3 [hereinafter EPA Comments on

Wisconsin RH SIP ]; see also 77 Fed. Reg. 11,928, 11,934 (Feb. 28, 2012). The EIP defines surplus emissions reductions to mean reductions th at are not otherwise reli ed on in any of several programs, including reductions made to en sure compliance with the NAAQS, as well as

reductions included in the releva nt SIP. EPA, Improving Air Quality with Economic Incentive Programs at 35 (2001), available at http://www.epa.gov/ttn/oarpg/t1/memoranda/eipfin.pdf . In Wisconsin, EPA objected to trading between BART and non-BART units at the same facility based upon EPA’s EIP policy.

To determine whether past emissions reductions of one pollutant ar e considered surplus for the purposes of satisfying BART requirement s for another pollutant, EPA relies on the EIP guidance. To the extent that the past sulf ur dioxide emissions requirements have been incorporated into the Washington SIP and relied upon in order to meet applicable requirements, those reductions are not “surpl us” under the EIP. Therefore, Tesoro’s past SO2 emissions reductions are not surplus for purposes of the BART requirements. The past SO2 emissions

reductions at the seven non-BART units cannot be used to satisfy the NOx BART requirements for the five units in question.

Furthermore, the Washington SIP indicates th at the SO2 reductions have already been considered part of BART: “Other recent emi ssion reduction projects at the plant are being recognized as part of BART. The primary project s [include]...improvements to the efficiency of the refinery fuel gas system to re move sulfur from the fuel gas.” 16 These reductions cannot be an alternative to BART if they are already considered part of BART by the state.

C. NOx and SO2 Emissions Reductions Should be Imposed at Tesoro as Reasonable Progress Controls.

Regardless of whether EPA can approve pr ior SO2 reductions unde r another Clean Air Act requirement as an “altern ative” to BART, EPA should st ill require unit-specific NOx

controls on the five units as reas onable progress controls . As part of their regional haze plans, each state must establish reasonable progress goals fo r the best and worst visi bility days at each

Class I area within its borders. 40 C.F.R. § 51.308(d)(1)(i)(A). The regional haze rule establishes a presumptive goal of attain ing natural visibility conditions by 2064, id. §

of this change.

16 Washington SIP Submittal, p. 11-15.Mr. Steve Body February 15, 2013 Page 14

51.308(d)(1)(i)(B), and states that proposed to m eet the statutory goal at a later date must demonstrate that attaining natural vi sibility by 2064 is not reasonable. Id. § 51.308(d)(1)(ii). The CAA requires consideration of four factors when determining reasonable progress: the cost of compliance, the time necessary for complia nce, energy and non-air quality environmental impacts of compliance, and the remaining useful li fe of the source. 42 U.S.C. § 7491(g)(1). If pollution controls will reduce visibility impairment at a Class I area (or areas ) and meet all of the four statutory factors, EPA has approved such controls as reasonable progress controls. See, e.g.

, 77 Fed. Reg. 20,894, 20,897 (Apr. 6, 2012) (setting r easonable progress controls for the Antelope Valley Stati on in North Dakota).

None of Washington’s Class I areas are on tr ack to meet EPA’s presumptive goal of attaining natural visibility in 2064. While Wa shington’s SIP submittal might come close to achieving the uniform rate of progress for a fe w Class I areas, most not ably Goat Rocks and Mount Adams Wilderness Areas, other Class I ar eas will be hundreds of years behind the uniform rate of progress. For example, th e State estimates that it will be nearly 700 years before the Pasayten Wilderness attains natural visibilit y, more than 300 years before Olympic National

Park returns to natural visibil ity conditions, and over 200 years before North Cascades National

Park and Glacier Peak Wilderness achieve the stat utory goal of natural visibility conditions. Washington SIP submittal, Table 9-4 at p. 9-38. EPA proposes to approve a plan that will improve visibility at a far slower rate than EPA’s presumptive uniform rate of progress. 77 Fed. Reg. at 76,204.

Given that the Class I areas affected by Teso ro’s NOx emissions are not on track to meet the uniform rate of progress, a nd after considering the four stat utory factors, EPA should approve low NOx burners plus SNCR at boiler 304, lo w NOx burners at units F-6650 and 6651, and

ultralow NOx burners at units F-6652 and 6653 as reasonable progress controls. The record

indicates that all four of the statutory factors favor imposing th ese technologies as reasonable progress controls. The technologies are cost-effective; a reasonab le compliance deadline can be established; there are no significant energy and n on-air quality environmental impacts from these technologies that would preclude th eir selection; and the remaining useful life of th ese units does not weigh against imposing these controls. See Letter from Don J. Sorensen, Tesoro to Phyllis Baas, Washington Department of Ecology (Fe b. 8, 2008). Thus, at a minimum, EPA should approve these NOx emission reduction requirements as necessary reasonable progress controls.

Furthermore, to the extent that they are not already required, the SO 2 reductions that are being offered in trade for the BART-related NOx reductions should clearly be considered reasonable progress. They require basically no cha nges on the part of the f acility. As appropriate reasonable progress measures, they are not avai lable to substitute for the required BART

reductions.

D. EPA Fails to Evaluate BART for Tesoro’s Flare.

EPA notes that Tesoro’s flare, unit X-819, is subject to BART, but fa ils to evaluate any

BART measures to reduce emissi ons from it. Tesoro’s underlyi ng BART analysis appears toMr. Steve Body February 15, 2013 Page 15

consider some measures, but doe s not discussing implementing a flare minimization plan, such as have provided significant reductions from flares in the Bay Area Air Quality Management

District in California. 17 We ask that EPA evaluate BART fo r this unit, including consideration

of flare minimization efforts to reduce emissions from this unit.

III. NPCA ADOPTS THE COMMENTS OF TH E FOREST SERVICE THAT ALCOA

WENATCHEE WORKS MUST BE SUBJECT TO BART.

Alcoa also maintains a facility in Mala ga, Washington, the Alcoa Wenatchee Works. SO2 pollutant emissions from We natchee’s potlines were demons trated to adversely affect visibility in the Alpine Lakes Wilderness. Wh ile initial modeling demonstrated that Wenatchee was subject to BART, Ecology decided to redo the modeling analysis with a fine grid model, ultimately using the results of the fine-grid mode l to exempt Wenatchee from BART. The Forest Service and EPA repeatedly informed Ecology that use of the fine-grid model, which tends to underestimate or mask effects from haze polluta nt sources, was unacceptable and that it could not be used to exempt Wenatchee from the Clean Air Act BART requirements. EPA’s own modeling expert, Herman Wong, repeatedly objecte d to the use of the fine-grid model pointing out that use of the model is not supported by EP A’s own guidance and that use of the model is inconsistent with modeling for determination of BART-subject sources throughout the U.S. That lack of consistency is particular ly troubling. Inexplicably and en tirely contrary to the record here, EPA’s proposed decision fail s to include a BART analysis and requirement for Wenatchee.

NPCA adopts the most recent comments of th e U.S. Forest Service, dated February 13, 2013 and the National Park Service comments, da ted February 15, 2013, on this matter and notes that all memos, emails and other documents refe renced in the Forest Service and National Park Service comments, including all earlier communi cations to Ecology on this matter, must be

included in the record for EPA’s decision here. NPCA urges EPA to reject the unacceptable fine-grid model and to perform a full BART analysis and impose BART pollutant controls on

SO2 emissions at Wenatchee.

CONCLUSION

NPCA urges EPA not to finalize the Washingt on haze SIP in its current form. EPA has inappropriately excused Intalc o from meeting BART requireme nts without substantiation and without allowing public review of critical information, desp ite clear notice and comment requirements in the Clean Air Act. EPA is propos ing to allow Tesoro to escape its NOx BART obligations on thin assumptions regarding the imp act of Tesoro’s pollutant emissions on haze in Olympic National Park and other areas. EP A has allowed Wenatchee to escape BART requirement through the use of an inappropriate model that does not accurately reflect Wenatchee’s impact on the Alpine Lakes Wild erness. EPA’s proposed decisions for these

17 See, e.g., the BAAQMD’s information on flare minimization: http://www.baaqmd.gov/Divisions/Complia nce-and-Enforcement/Refinery-FlareMonitoring.aspx

.