Comments re SPI Anderson Division ; Revised Draft PSD Permit (No. SAC 12-01) Kevin Bundy to: R9AirPermits 01/10/2014 11:57 AM

From: Kevin Bundy <kbundy@biologicaldiversity.org>

To: R9AirPermits@EPA,

Ms. Kelly,

Attached please find comments from the Center for Biological Diversity regarding the above-referenced draft PSD permit. A hard copy of the comments will follow in today's U.S. Mail. Due to the file size of some of the exhibits referenced in the comments, I am not submitting them by email, but rather will include all exhibits as PDF files on a CD accompanying the hard copy of the comments. Please include both the comments and the exhibits in the administrative record.

I would greatly appreciate confirmation by reply email of your receipt of the comments (and, when they arrive, the exhibits).

Thank you very much for your consideration. Please do not hesitate to contact me with any questions or concerns.

Best, Kevin Bundy

Kevin P. Bundy Senior Attorney Center for Biological Diversity 351 California Street, Suite 600 San Francisco, CA 94104 Phone: (415) 436-9682 x 313 Fax: (415) 436-9683 http://www.biologicaldiversity.org

Please consider the impact on the environment before printing this
e-mail.

14 01 10 CBD SPI Anderson Revised PSD comments.pd f Anderson Revised comments.pdAlaska • Arizona • California • Florida • Minnesota • Nevada • New Mexico • New York • Oregon • Vermont • Washington, DC

Kevin P. Bundy • Senior Attorney • 351 California St., Suite 600 • San Francisco, CA 94104
Phone: 415-436-9682 x313 • Fax: 415-436-9683 • kbundy@biologicaldiversity.org January 10, 2014

Via email: R9airpermits@epa.gov Hard copy and CD of exhibits to follow by U.S. Mail

Shaheerah Kelly U.S. Environmental Protection Agency, Region 9 (AIR-3)
75 Hawthorne Street San Francisco, CA 94105-3901

Re: Sierra Pacific Industries Anderson Division
Revised Draft Prevention of Si gnificant Deterioration Permit (Application No. SAC 12-01)

Dear Ms. Kelly:

The Center for Biological Diversity (“Ce nter”) submits the following comments on the revised draft Prevention of Signifi cant Deterioration permit (“Revised Draft Permit”) and the accompanying Statement of Basis and Ambient Air Quality Impact Report (“AAQIR”) for the proposed Sierra Pa cific Industries (“SPI”) Anderson biomass power plant (the “facility”). 1 The Center is a non-prof it environmental organization dedicated to the protection of imperiled sp ecies, their habitats, and the environment through science, policy, and environmental law. The Center has more than 625,000 members and online activists throughout the Un ited States. The goal of the Center’s Climate Law Institute is to reduce U.S. gr eenhouse gas emissions and other air pollution to protect biological diversit y, the environment, and public health. Specific objectives include securing protections for species th reatened by the impacts of global warming, ensuring compliance with applicable law in order to reduce greenhouse gas emissions and other air pollution, and educating and mob ilizing the public on global warming and air quality issues.

The Center is pleased that EPA is undert aking a best available control technology (“BACT”) analysis for carbon dioxid e emissions, including “biogenic” CO 2 emissions, from the proposed facility. Although SPI has characterized this an alysis as voluntary, it is in fact required by the plain terms of the Clean Air Act. EPA’s July 2010 rule exempting biogenic CO 2 from regulation under the PSD and Title V programs has been adjudged unlawful and vacated by the U.S. Cour t of Appeal for the District of Columbia
Circuit. Center for Biological Diversity v. EPA , 722 F.3d 401 (D.C. Cir. 2013).

1 The Center submitted comments on the original draft PSD permit for this facility on October 17, 2012. To the extent those commen ts address greenhouse gas emissions from the facility, they remain relevant a nd are hereby incorporated by reference. CENTER for BIOLOGICAL DIVERSITYMs. Shaheerah Kelly Re: Revised Draft PSD Permit; SPI Ande rson Biomass Facility (No. SAC 12-01) January 10, 2014

2 Although the Court of Appeal has stay ed issuance of the mandate pending resolution of related cases currently before the United States Supreme Court, the decision is in all other respects final. EPA must a pply the law as it exists at the time of permit
issuance. See, e.g.

, Ziffrin v. United States, 318 U.S. 73, 78 (1943); State of Alabama v

. EPA , 557 F.2d 1101, 1110 (5th Cir. 1977); In re Dominion Energy Bravton Point, LLC, 12 E.A.D. 490, 614- 616 (EAB 2006); In re Phelps Dodge Corp., 10 E.A.D. 460,478 n. 10 (EAB 2002). The law, following the Court of Appeal’s decision, is that EPA must require emissions limitations based on BACT for all pollutants “s ubject to regulation”
under the Clean Air Act. 42 U.S.C. § 7475(a)(1), (4). Biogenic CO 2 , like any other form
of CO 2 , is currently such a pollutant wh en emitted in sufficient amounts. See 40 C.F.R. § 52.21(b)(49)(iii), (j)(2); Prev ention of Significant Deterior ation and Title V Greenhouse Gas Tailoring Rule, 75 Fed. Reg. 31,514, 31,590- 91 (June 3, 2010) (“Tailoring Rule”).

As set forth below, the Revised Draft Pe rmit and AAQIR are inconsistent with the BACT analysis requirements set forth in the Clean Air Act, EPA guidance and regulations, and the decisions of the Envir onmental Appeals Board (“EAB”). EPA must either further revise the permit and AAQIR to comply with these standards or deny the application.

I. The Greenhouse Gas BACT Determinatio n for the Facility Is Inconsistent with Clean Air Act Requirements

The Clean Air Act defines BACT as

an emission limitation based on the maximum degree of reduction of each pollutant subject to regulation under this chapter emitted from or which results from any major emitting facility, which the permitting authority, on a case-by-case basis, taking into account energy, environmental, and economic impacts and other costs, de termines is achievable for such facility through applic ation of production processes and available methods, systems, and techniques, incl uding fuel cleaning, clean fuels, or treatment or innovative fuel combustion techniques for control of each such pollutant.

42 U.S.C. § 7479(3). The level of detail in a BACT determination should reflect the fivestep, “top-down” process described in EPA’s Draft New Source Review Workshop
Manual. 2 “[I]n evaluating the rationality and de fensibility of BACT determinations by permitting authorities, the [EAB] has required an analysis that reflects a level of detail in the BACT analysis comparable to the methodology in the NSR Manual.” In re General Motors, Inc. , 10 E.A.D. 360, 366 (EAB 2002).

While the permit applicant “is responsibl e for proposing an emissions limit that
constitutes BACT for each re gulated pollutant and for providing information on the

2 U.S. EPA, Draft New Source Review Wo rkshop Manual: Prevention of Significant
Deterioration and Nonattainment Area Perm itting (Oct. 1990) (hereaf ter “NSR Manual”).Ms. Shaheerah Kelly Re: Revised Draft PSD Permit; SPI Ande rson Biomass Facility (No. SAC 12-01) January 10, 2014

3 control alternatives that can be used to achieve it,” the permitting authority—here EPA— is responsible for “the ultimate BACT decision.” In the Matter of Genesee Power Station Ltd. P’ship , 4 E.A.D. 832, 835 (EAB 1993). BACT de terminations “are one of the most critical elements in the PSD permitting pro cess and thus ‘should be well documented in the record, and any decision to eliminate a co ntrol option should be adequately explained and justified.’” In re Russell City Energy Ctr. , 15 E.A.D. __, PSD Appeal Nos. 10-01 to 10-05, slip op. at 58 (EAB Nov. 18, 2010) (“ Russell City II ”); see also In re IndeckElwood LLC , 13 E.A.D. 126, 134 (EAB 2006); In re Knauf Fiber Glass, GmbH , 8 E.A.D. 121, 131 (EAB 1999) (“ Knauf I ”); In re Newmont Nev. Energy Inv., LLC , 12 E.A.D. 429, 442 (EAB 2005)). A BACT determination thus must reflect “considered judgment on the part of the permitting authority, as documented in the record.” Russell City II , slip op. at 58 (internal quotations omitted). The E nvironmental Appeals Board has remanded permits “where the permit issuer’s BACT anal yses were incomplete or the rationale was
unclear.” Id. at 58 n.47.

A. The AAQIR Fails to Explain or Support its Identification of Biomass
Combustion as an Emissions “C ontrol Measure” at Step 1

The AAQIR does not supply any basis fo r its identification of biomass combustion, alone or in combination with other measures, as an emissions “control measure” at Step 1 of the BACT analysis . AAQIR at 19, 21. Biomass is simply the primary proposed fuel source for the fac ility. AAQIR at 1; Draft Permit Condition X.G.1. The purpose of Step 1 is not merely to describe what the applicant proposes to do anyway, but rather to identify control measures such as “inherently lower-emitting processes/practices,” add-on controls, and comb inations thereof. NS R Manual at B.10.

The AAQIR does not explain how biomass co mbustion, as a control measure, can be considered “inherently lower-emitting” than combustion of that same biomass as a primary fuel source. 3 Identifying combustion of a prim ary fuel as a “control measure” for emissions caused by combustion of that same fuel is fundamentally illogical. It is difficult to imagine that EPA would consid er, for example, combustion of pipelinequality natural gas to be a “control measure” for emissions from a power plant that proposed to burn that exact same fuel. There is no basis in science, law, or logic for

3 Biomass combustion is quite carbon-intensi ve in any event; measured at the stack, biomass combustion typically results in more CO 2 emissions per unit of energy produced than either coal or natural gas: Gas combined cycle 883 lb CO 2 /MWh Gas steam turbine 1,218 lb CO 2 /MWh Coal steam turbine 2,086 lb/CO 2 /MWh Biomass steam turbine 3,029 lb CO 2 /MWh
Sources : EIA, Electric Power Annual, 2009: Carbon Dioxide Uncontrolled Emission Factors. Efficiency values used to calcu late emissions from fossil fuel facilities calculated using EIA heat rate data. ( http://www.eia.gov/cneaf/electricity/epa/ epat5p4.html ); biopower efficiency value is 24%, a standard industry value.Ms. Shaheerah Kelly Re: Revised Draft PSD Permit; SPI Ande rson Biomass Facility (No. SAC 12-01) January 10, 2014

4 concluding that combustion of biomass is “i nherently lower-emitting” than combustion of biomass. Absent some rational explanation and evidentiary basis in the record—both of
which are absent here—biomass combustion ca nnot be considered BACT for itself.

If anything, the record here confirms that biomass combustion does nothing to “control” the facility’s emi ssions. The BACT emissions limit proposed in the Revised Draft Permit (.36 lbs CO 2 e/lb steam produced, or 433,620 tons/year CO 2 e 4 ) is actually higher than the uncontrolled emissions estimate (433,000 tons/year CO 2 e) provided in SPI’s GHG BACT analysis. 5 In ranking the effectiveness of identified control measures at Step 3 of the BACT analysis, moreover, the AAQIR identifies biomass combustion (in
combination with other measures such as good boiler design and efficient combustion practices) as “the baseline from which all ot her alternatives will be evaluated.” AAQIR at 26. These purported “control measures” are thus simply a descri ption of the proposed facility design, meaning that their imp lementation as BACT will result in zero actual
emissions reductions.

The AAQIR fails to explain why biomass combustion has been identified as a control measure. The document similarly fails to explain and justify its apparent conclusion that emissions limits supposed ly based on BACT—again, defined as the “maximum degree of reduction of each pollutant subject to regulation . . . achievable for [this] facility,” 42 U.S.C. § 7479(3)— in fact represent no emissions reductions at all. Absent such explanation and justification, EP A’s identification of biomass combustion as a component of BACT for the facility is unsupported and clearly erroneous. 6

B. The AAQIR Fails to Evaluate Whether Alternative Biomass Fuel Mixes May Be Considered “Clean Fuels” for Greenhouse Gas BACT Purposes

Although neither the AAQIR nor the GHG BACT Analysis proposes to do so, one conceiveable basis for identifying at least some forms of biomass as control measures at Step 1 of the BACT analysis would be to ev aluate whether those forms of biomass could
be considered “clean fuels” in rela tion to other biomass feedstocks. See In Re Interpower of New York , 5 E.A.D. 130, 145 (EAB 1992) (“[A] proper BACT analysis must include

4 The Revised Draft Permit limits steam pr oduction to 275,000 lbs/hour. Revised Draft
Permit Condition X.C.3. Conversion to mass annual CO 2 e emissions at permit limits is as follows: 275,000 lbs steam/hr * 8,760 hr s/yr = 2,409,000,000 lbs steam/yr * .36 lbs
CO 2 e/lb steam = 867,240,000 lbs CO 2 e/yr = 433,620 tons CO 2 e/yr.

5 Environ Int’l Corp., Biomass-Fired Cogene ration Project: Best Available Control Technology Analysis for Greenhouse Gases (Aug. 15, 2013) (“GHG BACT Analysis”) at 11 (Table 2-1).

6 The AAQIR does not mention, and therefor e can find no support in, EPA’s March 2011 Guidance for Determining Best Available Control Technology for Reducing Carbon
Dioxide Emissions from Bioe nergy Production (“Bioenergy BA CT Guidance”). In any event, reliance on the Bioenergy BACT Guidance would be unlawful, as explained in the
comments attached as Exhibit 1. Those comm ents are hereby incor porated by reference.Ms. Shaheerah Kelly Re: Revised Draft PSD Permit; SPI Ande rson Biomass Facility (No. SAC 12-01) January 10, 2014

5 consideration of cleaner forms of the fuel proposed by the sour ce”). Failure to consider such options constitutes reversible error. Id. at 144 (finding remand appropriate where permitting authority failed to identify all mo re stringent “available” control options), 145 (Clean Air Act “expressly requ ire[s] consideration of clean fuels in selecting BACT”).

In order to evaluate whether certain fo rms of biomass might be identified as “clean fuels,” EPA must answer three questi ons: (1) whether the Clean Air Act permits EPA to identify “inherently lower-emitting” forms of biomass fuels based on life cycle rather than stack emissions (BACT Step 1); (2) whether lower-emitting fuels are “available” and “applicable” to the facility (BACT Step 2); and (3) whether use of those fuels would be the most effective control op tion in light of the energy, environmental, and economic impacts of control (BACT Step 4).

1. Consideration of Biomass Life Cycle Emissions

At the outset, EPA must evaluate whether there is a statutory basis for considering
certain forms of biomass to be “clean fuels” based on life cycle greenhouse gas
emissions. 7 Typically, a determination that one form of a fuel (for example, low-sulfur coal) is cleaner than another would turn on comparative stack emissions. See, e.g.

, InterPower , 5 E.A.D. at 145-50 (discussing different stack emission limits based on sulfur content of available coal). In the bioma ss context, however, combustion of different forms of biomass will produce r oughly the same amount of CO 2 at the stack; stack
emissions therefore offer little or no basis for identifying whether particular forms of biomass are “inherently lower-emitting.”

Biomass fuels may differ, however, in their life cycle greenhouse gas emissions— or, more accurately, in the relative peri od of time during which biomass combustion results in increased atmospheric CO 2 concentrations (the so-ca lled “carbon debt” period). As numerous recent studies have shown, the carbon debts associated with different biomass fuels vary depending on the nature of the feedstock and what would happen to it if it were not burned for energy. 8 Combustion of whole trees, for example, results in both

7 In contrast, biomass cannot be consid ered a “clean fuel” relative to many non-biomass fuels due to the comparatively higher em issions of criteria pollutants—including particulate matter, carbon monoxide, and ni trogen oxides—associated with biomass
combustion. See Partnership for Policy Integrity, Air Pollution from Biomass Energy (April 2011), available at http://pfpi.net/air-pollution-2 (attached as Ex. 2) (concluding based on comparative air permit data that emission rates for many criteria pollutants at biomass facilities are higher than those from natural gas or coal-fired facilities).

8 A Science Advisory Board panel convened by EPA for purposes of reviewing biomass carbon accounting proposals under the Clean Ai r Act concluded that accurate assessment
of biomass-related CO 2 emissions requires a comparison between combustion for energy and an alternative “baseline” predicated on what otherwise would have happened to the
material in the absence of bioenergy production. See Science Advisory Board Review of EPA’s Accounting Framework for Biogenic CO 2 Emissions from Stationary Sources 5-6 (Sept. 28, 2012) (“SAB Panel Re port”) (attached as Ex. 3).Ms. Shaheerah Kelly Re: Revised Draft PSD Permit; SPI Ande rson Biomass Facility (No. SAC 12-01) January 10, 2014

6 conversion of standing carbon stocks to atmospheric CO 2 and lost future sequestration; because it typically takes a very long time for th e trees to grow back and resequester that lost carbon, biomass fuels derived from w hole trees incur carbon debt periods ranging from decades to centuries (and that in some cases may be permanent). 9 Studies have found long carbon debts and carbon stock losses even where trees are purportedly
removed for forest fire threat reduction purposes. 10 Combustion of logging “residues” (typically branches, tops, and small trees) may incur somewhat shorter carbon debt periods depending on the size of the materi al and how long it would have taken to decompose if not burned; that said, combus tion of even small residues may result in carbon debts spanning years or decades. 11 Different timber harvesting operations also have considerably different effects on l ogging-related greenhouse gas emissions from
forest soils. 12

The carbon debts associated with combustion of othe r “waste” materials—for example, mill waste—similarly depend on the likely alternative fate of that material. If,

9 See, e.g. , Bjart Holtsmark, The outcome is in the assump tions: analyzing the effects on atmospheric CO 2 levels of increased use of bioenergy from forest biomass , Global Change Biology Bioenergy (2012), doi: 10.1111/ gcbb.12015 (attached as Ex. 4); Stephen R. Mitchell, et al., Carbon debt and carbon sequestrati on parity in forest bioenergy production , Global Change Biology Bioe nergy (2012), doi: 10.1111/j.1757- 1707.2012.01173.x (attached as Ex. 5); Er nst-Detlef Schulze, et al., Large-scale bioenergy from additional harvest of forest biomass is neither sustainable nor greenhouse gas neutral , Global Change Biology Bioe nergy (2012), doi: 10.1111/j.1757- 1707.2012.01169.x (attached as Ex. 6); J on McKechnie, et al., Forest bioenergy or forest carbon? Assessing trade-offs in greenhouse gas mitigation with wood-based fuels , 45 Environ. Sci. Technol. 789 (2011) (attached as Ex. 7); Manomet Center for Conservation Sciences, Massachusetts Biomass Sustainabil ity and Carbon Policy Study: Report to the Commonwealth of Massachusetts Depart ment of Energy Resources (2010), available at https://www.manomet.org/publications-t ools/sustainable-economies/biomasssustainability-and-carbon -policy-study-full-report

. 10 See John L. Campbell, et al., Can fuel-reduction treatments really increase forest carbon storage in the western US by reducing future fire emissions? Front. Ecol. Env’t (2011), doi:10.1890/110057 (attached as Ex. 8); Tara Hudiburg, et al., Regional carbon dioxide implications of forest bioenergy production , Nature Climate Change (2011), doi: 10.1038/NCLIMATE1264 (attached as Ex. 9).

11 See, e.g. , Kim Pingoud, et al., Global warming potential factors and warming payback time as climate indicators of forest biomass use , Mitig. Adapt. Strateg. Glob. Change (2011), DOI 10.1007/s11027-011-9331-9 (attache d as Ex. 10); Anna Repo, et al., Indirect Carbon Dioxide Emissions from Producing Bi oenergy from Forest Harvest Residues

, Global Change Biology Bioene rgy (2010), doi: 10.1111/j.1757-1707.2010.01065.x (attached as Ex. 11).

12 Thomas Buchholz, et al., Mineral soil carbon flu xes in forests and implications for
carbon balance assessments , Global Change Biology Bioenergy (2013), doi: 10.1111/gcbb.12044 (attached as Ex. 12).Ms. Shaheerah Kelly Re: Revised Draft PSD Permit; SPI Ande rson Biomass Facility (No. SAC 12-01) January 10, 2014

7 for example, the mill waste otherwise would be stored or disposed of in a manner likely to generate equivalent or greater short-term greenhouse gas emissions (including, for example, substantial emissions of methane) , the carbon debt associated with combustion arguably might be relatively short; on the othe r hand, if that material would otherwise be crafted into durable wood products, the carbon debt associated with production could be longer.

In the BACT context, each of these c onsiderations must be evaluated on a “caseby-case” basis, NSR Manual at B.1-B.2, with reference to the fuels available at a particular facility and the likely alternative fa te of the biomass material if not used for
fuel. Such an evaluation would not nece ssarily be unduly complex given adequate information and accurate assumptions about growth rates and alternative fates of
materials. 13 Again, however, EPA must determine at the outset whether the text and structure of the Clean Air Act’s PSD provisi ons allow considerati on of relative carbon debt periods over time in determining wh ether certain fuels are “inherently loweremitting” for BACT purposes. If EPA determines such an analysis is permissible under the statute, it must undertak e such an analysis here.

2. “Available” and “Applicable” Alternative Fuels

SPI’s BACT analysis and the AAQIR assu me a biomass fuel mix consisting of 75% mill waste and 25% “other” material (inc luding forest-sourced material). AAQIR at 26. The fuel supply conditions in the Revise d Draft Permit, however, do not require use of this or any other fuel mix; rather, al most any legally harvested wood or wood waste
could be used as fuel. Revised Draft Perm it Condition X.G.1. In particular, materials
harvested for fire threat reduction and “fores t stand improvement” (a broad category that could be read as encompassing virtually a ll forms of timber management) could consist of larger, whole trees with long carbon debt periods.

To the extent EPA determines it may do so under the Clean Air Act, the agency
must assess whether there are other available and applicable fuel mixes that would result in shorter carbon debt periods (i.e., that woul d be inherently lower-emitting than either the assumed fuel mix or other fuel mixes) . For example, the Environmental Impact Report prepared by Shasta County for the faci lity indicates that SPI could power the facility using only mill waste from the Anderson and Shasta Lake facilities:

Based on information supplied by the project applicant, there were different estimates of the project’s biomass fuel blend by fuel type. One

13 For example, the State of Massachusetts ha s created simple-to-use, spreadsheet-based
models that differentiate be tween the life cycle greenhouse gas emissions associated with combustion of whole trees and residues for purposes of implementing the state’s renewable energy standard regulations. See Exec. Office of Energy & Envtl. Affairs,
Renewable Portfolio Standard — Bi omass Policy Regulatory Process, at http://www.mass.gov/eea/energy-utilities-c lean-tech/renewable -energy/biomass/ renewable-portfolio-sta ndard-biomass-policy.html

.Ms. Shaheerah Kelly Re: Revised Draft PSD Permit; SPI Ande rson Biomass Facility (No. SAC 12-01) January 10, 2014

8 estimate assumed that the entire project (100%) could be fueled by mill
residuals from the SPI Anderson and the SPI Shasta Lake sawmill operations. It is reported that the SPI Anderson Sawmill facility has the capability to provide sixty-five percent (65%) of the fuel requirements of the proposed biomass facility by using 100% of the SPI Anderson mill residuals. The remaining 35% of the annual biomass needed can be mill residuals from the SPI Shasta Lake Sawmill facility, located eighteen (18) miles north of the SPI Anderson facility. 14

Requiring the facility to use only mill waste rather than forest-sourced material (whole trees and logging resi dues) could conceivably reduc e the carbon debt associated with biomass combustion at the facility in comparison to the “assumed” and permitted fuel mixes, depending on what would happen to the mill waste if it were not used as biomass fuel. Such a requirement, moreove r, would not “redefine the source” given
SPI’s statement that “use of the biomass fuel generated by the existing facility is part of the original motivation for the project.” GHG BACT Analysis at 15. In light of the evidence that use of mill waste alone may be an available and applicable control option, EPA must evaluate this po ssibility, along with other fuel mixes and fuel supply conditions that could potentially redu ce net greenhouse gas emissions over time.

Finally, even if EPA determines that it cannot consider life cycle or relative carbon debt implications of di fferent fuels in the BACT process, EPA nonetheless should evaluate a mill waste only alternative under Cl ean Air Act section 165(a)(2) to determine
whether that alternative could reduce air quality and other environmental impacts as compared to the proposed project. See 42 U.S.C. § 7475(a)(2); In re Prairie State Generating Co. , 13 E.A.D. 1, 30-31 (EAB 2006), aff’d sub nom. Sierra Club v. U.S. EPA

, 499 F.3d 653, 654-55 (7th Cir. 2007).

3. Evaluation of Most Effective Controls

At Step 4 of the BACT analysis, EPA must determine, among other things, whether a particular control measure is cost-effective. See generally NSR Manual at
B.31-B.46.

As a threshold matter, SPI’s cost-effec tiveness threshold for greenhouse gases of $7/ton, GHG BACT Analysis at 9- 10, is both unsubstantiated and too low. SPI does not explain why a comparison of CO and CO 2 emissions factors for “external natural gas combustion” is an appropriate way of “scaling” the cost-effectiveness of CO 2 controls at

a biomass facility. See GHG BACT Analysis at 9. 15 Carbon monoxide emissions from
biomass combustion tend to be considerab ly higher than those from natural gas

14 Second Recirculated Draft EIR for the Sier ra Pacific Cogeneration Power Project 2.0- 30 (February 2012) (excerpt attached as Ex. 13).

15 The AAQIR does not appear to address SPI’s proposed cost-effectiveness metric at all; as a result, it provides no a dditional support for using $7/ton as a benchmark for assessing control options.Ms. Shaheerah Kelly Re: Revised Draft PSD Permit; SPI Ande rson Biomass Facility (No. SAC 12-01) January 10, 2014

9 combustion; accordingly, use of an appropriate CO emissions factor for biomass combustion could result in a much higher numerat or in SPI’s “scaling” ratio, and a higher
cost-effectiveness threshold ove rall. Moreover, SPI has provided no explanation as to why CO was selected as the criteria pollutant comparator, rather than NOx or particulate matter or anything else. Give n this lack of explanation and supporting evidence, SPI’s proposed $7/ton figure appears arbitrary and unr elated to the project under consideration.

The $7/ton threshold is also too low. The most relevant regulatory comparison point would be the cost of a greenhouse gas allowance under California’s AB 32 cap-andtrade system. Under that system, the Nove mber 2013 auction settlement price for 2013 vintage allowances was $11.48, and the settlem ent price for 2016 vintage allowances was $11.10. 16 Prices for the same allowances on the secondary market are currently slightly higher than the settlement prices at direct auction. 17 As a further point of comparison,
EPA has estimated the social cost of carbon in 2015 as ranging from $12-$116/ton, figures EPA acknowledges may underestimate the cost of climate damage. 18 SPI’s proposed $7/ton cost-effectiveness threshold no t only falls well below relevant regulatory thresholds, but also fails to internalize even a fraction of the potentia l social cost of the facility’s emissions.

EPA must therefore identify (or requir e SPI to identify) a well-substantiated,
realistic cost-effectiveness threshold. It mu st then evaluate the cost-effectiveness of
alternative biomass fuels with lower life cycle emissions (i.e., shorter carbon debt periods) against this threshol d, and constrain the facility’s fuel supply to the lowestemitting cost-effective mix.

II. The GHG BACT Analysis and AAQI R Improperly Rejected Carbon Capture and Sequestration as a Control Measure.

SPI’s GHG BACT Analysis and the AAQIR rejected carbon capture and sequestration as a control measure due to excessive cost. 19 The cost estimate was based in part on the assumption that the only way to dispose of captured CO 2 was to build a pipeline all the way to an oil field in Bren twood, California, many mile s to the south, for use in enhanced oil recovery operations. See AAQIR at 28 (“SPI estimated that the oil
field nearest to the Anderson facility is located in Bren twood, California, approximately 25 miles west of Stockton, California.”).

16 See http://www.arb.ca.gov/cc/capan dtrade/auction/auction.htm

. 17 Envtl. Defense Fund, California Carbon Mark et Watch A Comprehe nsive Analysis of the Golden State’s Cap-a nd-Trade Program 13-15 (2014), available at http://www.edf.org/california-cap-and-trade-updates

. 18 See http://www.epa.gov/climatechange/E PAactivities/ec onomics/scc.html

. 19 The Center takes no position on whether ca rbon capture and sequestration would be effective as a technical matter given local geologic conditions; for present purposes, the Center simply objects to SPI’s and EPA’s fa ilure to evaluate the technical and economic effectiveness of local disposal options.Ms. Shaheerah Kelly Re: Revised Draft PSD Permit; SPI Ande rson Biomass Facility (No. SAC 12-01) January 10, 2014

10 However, enhanced oil recovery is no t the only possible way to sequester CO 2

. Carbon dioxide also may be injected into local geological formations under proper conditions. California Department of Conservation maps show that the facility is located atop a sedimentary basin with hi storic and active gas fields. 20 Sedimentary basins of this nature are worthy of investigation as pot ential injection zones for captured CO2. 21 A search performed on the NATCARB GIS viewer for the sedimentary basin within a 10- mile radius of Anderson, California show s saline formation sequestration capacity estimates ranging from 370 million metric tonne s to nearly 5,100 million metric tonnes. 22 SPI must provide, and EPA must evaluate, information pertaining to the technological
and economic feasib ility of local CO 2 storage.

SPI also improperly rejected (and EPA fa iled to evaluate) the availability and cost-effectiveness of pre-combustion CO 2 removal technology in combination with a biomass gasification system. SPI evaluated only a post-combustion system based on the
unsubstantiated assertion that gasification “would amount to redefining the source.” GHG BACT Analysis at 19-20. SPI fails to provide informati on demonstrating that this is the case. A gasification unit would presum ably use the same biomass fuels, which SPI has identified as a primary purpose of the f acility. GHG BACT Analysis at 15. SPI has provided no evidence that biomass gasification could not meet SPI’s operational criteria. Given that the proposed boiler for the facility is already designed to run on natural gas during startup and shutdown, SPI and EPA must assess whet her it also could run on syngas. In short, EPA ca nnot reject pre-combustion CO 2 removal options without first demonstrating that gasification woul d improperly redefine the source.

III. Conclusion

For the foregoing reasons, EPA should not issue the Revised Draft Permit as written. Rather, EPA must either gather fu rther information and perform the analysis required under the Clean Air Act or deny the application.

Sincerely,

Kevin P. Bundy Senior Attorney

Encl. (see attached list of exhibits)

20 Cal. Dept. of Conservation, Oil, Gas & Geothermal Fields in California (2001),
available at http://energyalmanac.ca.gov/petroleum/documents/ MAP_OIL_GAS_GEOTHERMAL.PDF (attached as Ex. 14).

21 See, e.g. , North American Carbon Atlas Partne rship, North American Carbon Storage Atlas 2, 5-6, 10, 12-13 (2012), available at www.nacsap.org (attached as Ex. 15).

22 http://www.natcarbviewer.com/

.Ms. Shaheerah Kelly Re: Revised Draft PSD Permit; SPI Ande rson Biomass Facility (No. SAC 12-01) January 10, 2014

11 List of Attached Exhibits (Submitted as PDF Files on enclosed CD)

Exhibit Title 1 Center for Biological Diversity, Co mments Regarding the Environmental Protection Agency’s Guidance for De termining Best Available Control Technology for Reducing Carbon Dioxi de Emissions from Bioenergy Production (March 2011). 2 Partnership for Policy Integrity, Ai r Pollution from Biomass Energy (April 2011). 3 Science Advisory Board Review of EPA’s Accounting Framework for Biogenic CO 2 Emissions from Stationary Sources (Sept. 28, 2012). 4 Bjart Holtsmark, The outcome is in the assump tions: analyzing the effects on atmospheric CO 2 levels of increased use of bioenergy from forest biomass

, Global Change Biology Bioe nergy (2012), doi: 10.1111/gcbb.12015. 5 Stephen R. Mitchell, et al., Carbon debt and carbon sequestration parity in forest bioenergy production , Global Change Biology Bioenergy (2012), doi: 10.1111/j.1757-1707.2012.01173.x. 6 Ernst-Detlef Schulze, et al., Large-scale bioenergy fr om additional harvest of forest biomass is neither sustai nable nor greenhouse gas neutral , Global Change Biology Bioenergy (2012), doi: 10.1111/j.1757-1707.2012.01169.x. 7 Jon McKechnie, et al., Forest Bioenergy or Forest Carbon? Assessing TradeOffs in Greenhouse Gas Mitigat ion with Wood-Based Fuels , 45 Environ. Sci. Technol. 789 (2011).
8 John L. Campbell, et al., Can fuel-reduction treatments really increase forest carbon storage in the western US by reducing future fire emissions? Front.
Ecol. Env’t (2011), doi:10.1890/110057. 9 Tara Hudiburg, et al., Regional carbon dioxide implicat ions of forest bioenergy production , Nature Climate Change (2011), doi: 10.1038/NCLIMATE1264. 10 Kim Pingoud, et al., Global warming potential factors and warming payback time as climate indicators of forest biomass use , Mitig. Adapt. Strateg. Glob. Change (2011), DOI 10.1007/s11027-011-9331-9. 11 Anna Repo, et al., Indirect Carbon Dioxide Emissions from Producing Bioenergy from Forest Harvest Residues , Global Change Biology Bioenergy (2010), doi: 10.1111/j.1757-1707.2010.01065.x. 12 Thomas Buchholz, et al., Mineral soil carbon fluxes in forests and implications for carbon balance assessments , Global Change Biol ogy Bioenergy (2013), doi: 10.1111/gcbb.12044.
13 Second Recirculated Draft EIR for th e Sierra Pacific Cogeneration Power Project (February 2012) (excerpt). 14 Cal. Dept. of Conservation, Oil, Gas & Geothermal Fields in California (2001).
15 North American Carbon Atlas Partne rship, North American Carbon Storage Atlas 2, 5-6, 10, 12-13 (2012).