Clean Air Act AdvisoryCommitteeICT Waiver DiscussionMay 26, 2010AgendaEPA RequestStatutory BasisExisting Regulatory Provision1990s Stakeholder and RulemakingProceedingsQuestions for Discussion2EPA Request – Second Question•Question Has 2 Parts:–(1) How can development and permitting ofinnovative emissions reduction measures,including the promotion of inherently efficientand lower emitting processes and practicesfor GHGs, be encouraged?–(2) How can Innovative Control Technologywaiver be used or changed to better promotetechnology development and application?Part 2 Is Our Focus In These Slides3Statutory Basis – Section 111(j)•“Innovative Technological Systems ofContinuous Emission Reduction:”Based onauthority in NSPS §111(j) (Not §165 or §169).•What:Waiver from otherwise applicable § 111requirement , with EPA determination/approvaland consent of relevant State Governor.•Who:Requested by owner/operator.•Why:Encourage use of innovativetechnological system(s) of continuous emissionreduction, that can provide greater reductionsthan ‘demonstrated technologies.’4Statutory Basis (cont’d)•Criteria for Granting: Administrator (with consent ofState Governor) determines after notice and publichearing that the proposed system(s) –•(i) Has/Have not been adequately demonstrated;•(ii) Will operate effectivelyandhas “substantial likelihood”(considering any previous failures to operate effectively or tomeet NSPS) of achieving:•Greater reduction than would otherwise be required; OR•Equivalent reduction at lower costin terms of energy,economic, or non-air quality environmental impact;•O/O demonstrates will not cause/contribute to unreasonable riskto health, welfare, safety in operation, function, or malfunction(considering effects on otherpollutants and methods forreducing risk to public health); AND•Waiver is consistent with §111(j)(1)C); with respect to how manysuch waivers can be granted (next slide).5How Many Waivers for an “Innovative”Technology? Authority in § 111(j)(1)(C)•The number of ICT waivers that can be granted fora proposed system of continuous emissionreduction:–“shall not exceed such number as the Administratorfinds necessary to ascertain whether or not suchsystem will achieve ...”•effective operation,•without unreasonable risk to public health, welfareor safety.6AUTHORIZES THE ADMINISTRATOR TO FIND/DETERMINENUMBER OF TIMES WAIVER CAN BE GRANTED, FOR EACH ICT.Statutory Basis -- Summary•PSD Authority:Not in the statute, but was derived from§111(j) and has been in the PSD rules since 1980.•Special Terms:Include terms to assure source won’tprevent attainment/maintenance of a NAAQS orotherwise cause or contribute to ‘unreasonable risk topublic health welfare or safety’.•How Many:Can be for as many waivers as EPA findsnecessary to ascertain whether the ICT operateseffectively and achieves the reductions without imposingunreasonable risk (see previous slide).•How Long:Sooner of success or determination of finalfailure but no longer than 7 years from waiver grant, OR4 years from start of operation plus an availableextension for “such minimum period as necessary tocomply with the [NSPS]” of up to 3 years.•Extension, if needed, to include: schedules forcompliance with “otherwise applicable standard” andinclude measures to minimize emissions.7PSD Waiver--History•Longstanding, included in theoriginal 1980 PSD rules.•Elements–"Innovative control technology" means any system of airpollution control that•has not been adequately demonstrated in practice, but•would have a substantial likelihoodof achieving greater continuousemissions reduction than any control system in current practice or•of achieving at least comparable reductions at lower cost in terms ofenergy, economics, or nonair quality environmental impacts.–Limited to attainment areas/PSD.•1990 Workshop Manual–As a practical matter, if a waiver has been granted to a similarsource for the same technology, granting of additional waivers tosimilar sources is highly unlikely since the subsequent applicantsare no longer "innovative."•KamineApplicability Determination – “No multiplewaivers” standard – for a particular system of NOxcontrol.81990s Stakeholder/Rulemakings•Qs about ICT waivers were part of NSRReform Discussions in the 1990s.•CAAAC Subcommittee DevelopedRecommendations to EPA in Light of theHistorical Lack of Use of the WaiverProvision.•Proposed Changes Issued AfterReviewing Recommendations on July 23,1996.9Changes Proposed in 1996•New Name:Undemonstrated Technology orApplication (UT/A) Waiver•Expanded Scope:UT/A definition includesundemonstrated pollution prevention techniques.•Criteria:–Any system, process, material, or treatmenttechnology that shows substantial likelihood tooperate effectively and to achieve•Greater continuous reductions ofair pollutant emissions thanany demonstrated system; OR•Comparable emission reductions–at lower cost, lower energy input, with lesser non-airenvironmental impacts, or–with other advantages that aredefined and mutually agreed oncase-specific basis to justify the use of UT/A provisions.10Rule Changes Proposed in 1996•Special Terms:Must contain reference emission controlperformance objective of the UT/A and the otherwise applicableBACT or LAER standard.•How Long:2 years from startup or 5 years from permit issuance(CAAAC recommended 4 and 7 years, respectively).•Consequences of Failure:Distinguishes based on degree offailure. Permit must defineand include emission limits for twomodes:–Marginal Failure Emission Limit and Gross Failure Emission Limit –Gross limit enforceable.–Gross failure requires either replace or retrofit, on an expeditiousschedule, such that the source achieves BACT or LAER within 18months.–Permit would include: (1) ID potential failure modes, (2) projections ofcorresponding emissions increasesexpected, (3) correspondingemission increases as marginal or gross failures, and (4) ID of potentialcontingency measures, short- and long-term, to reduce or mitigateincreases in event of worse-than-expected emissions during the term ofthe UT/A waiver.This Proposal Was Not Finalized With the 2002Reforms11EPA Solicited Comment on Incentives•Recognizing that a very limited number of PSD ICTwaivers have been requested or approved since 1980,CAAAC offered 3 options:–Allow a source to use, bank,or trade the portion of emissionoffsets of a nonattainment pollutant that becomes surplus whenthe UT/A achieves greater emission reductions than originallyanticipated;–Allow the permitting authority, on a case-by-case basis, inconjunction with the source andsubject to public review, toagree on values of either massemission reduction credits oremission impact reductions inPSD areas in the UT/A permit;–Limit the benefit accruing to theUT/A source to protection fromenforcement of the initial, presumably more stringent, UT/Aemission limit during the life of the UT/A waiver.12Questions for EPA•Can we pull the public comments on thisproposal?•What has the experience with the UT/A waiverbeen since 1996?•Does EPA agree there is flexibility in existingstatutory authority that is not reflected in the1990 Workshop Manual or the applicabilitydetermination issued in the early 1990sregarding number of waivers and other issues?•Does that additional flexibility, if exercised, needto be limited to GHG ICTs?–If so, why? And, how would it be structured?13Questions for CAAAC Discussion•What would it take to encourage companies to use the ICT provision,recognizing that the provision isvoluntary for the owner/operator?–Are there other methods to “sharethe risk” between O/O, states, and EPA?•What qualifies a control technology as “innovative”?–Definition indicateseitherbetter performanceon pollutant of concernorcomparable performance (not necessarily equivalent)withlower costs– economic, environmental, energy ...–Stepwise improvement with application?–Other?•What is the right length of time for waivers? Full 7 years? What is thefeeling about the 1996 proposal?–Would it help encourage risk taking?–Does it provide appropriate sharing of the risk?•What are the options for proceeding?–Finalize 1996 Proposal?–Issue GHG technology-specific guidance under the existing regulatorylanguage?•To ensure transparency, does guidance require notice and comment? And, ifso, what benefits would guidance offer over a rulemaking?–Other?14