ReducingPollutionPlantsReducingToxicPollutionfromPowerEPA’sProposedMercuryandAirToxicsStandardsMarch22,2011OverviewoftheRegulatoryAction•OnMarch16,EPAproposedMercuryandAirToxicsStandards,thefirstnationalstandardstoreduceemissionsoftoxicairpollutantsfromnewandexistingcoal‐andoil‐firedpowerplants–oftenbiggestcontributorspollutionthebiggestcontributorstoairpollution•Standardswouldreduceemissionsof:•Metals,includingmercury(Hg),arsenic,chromium,andnickel•Acidgasesincludinghydrogenchloride(HCl)andhydrogenfluoride(HF),includinghydrogenchloridehydrogenfluoride•Particulatematter•Thesepollutantsarelinkedtocancer,IQloss,heartdisease,lungdiseaseandprematuredeathS ddilib dl•tanardscreateuniformemissons‐controrequrementsaseonproven,currentyin‐usetechnologiesandprocesses•CompliancetimelinesetbyCleanAirAct:upto4years(3yearsplusanadditionalyearifgrantedbythepermittingauthority)permittingauthority)•EPAisalsoproposinganewsourceperformancestandard(NSPS)forparticulate,sulfurdioxide(SO2),andnitrogenoxide(NOX)emissionsfromnewsources2ToxicEmissionsfromPowerPlantsAreaSeriousPublicConcernHealthConcern•Powerplantsreleasemercury,arsenic,othermetals,acidgases,andparticlesthatallharmpeople’shealth.•Uncontrolledreleasesofmercuryfrompowerplantsdamagechildren’sdevelopingbrains,reducingtheirIQandtheirabilitytolearn•Mercuryandmanyoftheothertoxicpollutantsalsopolluteournation’slakes,streams,andfish•Othermetalssuchasarsenic,chromium,andnickelcancausecancer•Acidgasescauselungdamageandcontributetoasthma,bronchitisandotherchronicrespiratorydisease,especiallyinchildrenandtheelderly•Particlescauseprematuredeathandawiderangeoflungandheartdiseases•Peoplewhoeatlargeamountsoffishfrommercury‐contaminatedfreshwaterlakesandriversintheU.S.areatthegreatestriskofexposure•ThisincludesNativeAmerican,Laotian,Vietnamese,African‐American,Hispanic,andCaucasiansubsistencefishersandtheirfamilies•ThestandardswouldalsoresultinadditionalreductionsofSO2,preventingthousandsofdeathsandhundredsofthousandsofillnesseseachyear3PowerSector:AMajorShareofUSAirEmissionsNitrogenOxides(NOx),200915.3MillionTons2.0MillionTons2 6BillionTonsSulfurDioxide(SO2),20099.5MillionTonsCarbonDioxide(CO2),20086.5BillionTonsjOtherSectorsOtherSectors13.3MillionTons87%13%ElectricPower2.6BillionTons40%3.8MillionTons40%ElectricPowerOtherSectorsElectricOtheremissionsinclude:Tracemetals(nickelarsenicParticulateMatter (PM10),2008Mercury(Hg),2005105TElectric5.7MillionTons60%3.9BillionTons60%PowerTracemetals(nickel,arsenic,seleniumandothers)HCl,HFDioxin/furansTraceorganicsOthers(e.g.,cyanide)14.8MillionTons105TonsElectricPowerElectricElectricPower53Tons50%0.5MillionTons4%RadionuclidesEmissionshavesubstantialpublichealth,environment,andotherwelfareimplications.PowerOtherSectors14.3MillionTons96%OtherSectors52Tons50%Sources:NEITrendsData(2009)andCAMDData&Maps(2010)(SO2,NOX)NEITrendsData(2009)(PM10)2005NATAInventoryModifiedfortheUtilityMACT2005BaseYear(2010)(Hg)InventoryofU.S.GreenhouseGasEmissionsandSinks:1990‐2008(2010)(CO2)“Other”sourcesincludetransportation,othermobilesources,andindustrialsources4IntheU.S.,PowerPlantsEmit:20%ofthechromium13%oftheNOx30%ofthenickel60%oftheSO2x50%ofthemercuryover50%ofmanyacidgases60%ofthearsenicorganics,dioxins/furans,andothersSources: NEI Trends Data (2009) andIPM (2010) (SO2, NOX); Proposed toxicsrule modeling platform, based oni t d f 2005 NATA (H )5inventory usedfor2005NATA(Hg);Inventory used for 2005 NATA (othertoxics)HistoryofCleanAirActPowerPlantControlsforMercury/AirToxics•1990CleanAirActAmendmentscreatedAcidRainprovisionsandrevisedprovisionstorequirecontrolstoreduceemissionsoftoxicairpollutantsfromindustrialsources•EPAwasrequiredtodoastudywithin3yearsandthenlistpowerplantsforregulationunderthe,airtoxicsprovisionsiftheAdministratorfoundthatitwasappropriateandnecessary•1998:EPAreleasedUtilityToxicsStudyReporttoCongress•2000:EPAlistedpowerplantsforregulationundertheCleanAirActairtoxicsprovisions•Oncelisted,EPAhad2yearstoissueanairtoxicsstandard•Mercurycitedaspollutantofgreatestconcernbutothertoxicsincludearsenic,chromium,cadmium,nickel,hdrochloricacid,dioxin/furany•2005:BushAdministrationEPAreversed2000finding,de‐listedpowerplantsfromregulationunderairtoxicsprovisions,andfinalizedCleanAirMercuryRule(CAMR)– allowingtrading•2008:DCCircuitfoundthede‐listingtobeillegalandvacatedCAMR•EPAmustproposeutilityMACTstandardsbyMarch16,2011,andissuefinalstandardsbyNovember16,2011,pursuanttoaconsentdecree•EPA’sproposedrulerequirespowerplantcontrolsfortoxics,includingmercury,tobeissuedin6p pqppgy2011andrequirecompliancebyexistingsources3‐4yearslater•Aquarterofacenturywillhavepassedsincethe1990CleanAirActbecamelawPowerPlantsAretheLargestRemainingSourceMercuryEmissionsofMercuryEmissionsintheU.S.•In1990threeindustrycategoriesmade1990 2005 %gapproximatelytwo‐thirdsoftotalU.S.mercuryemissions–TwoofthethreearenowbjiiIndustrialCategoryEmissionstons peryear (tpy)Emissions(tpy)Reductionsubjecttoairtoxicsstandards–SoaremanyotherindustriessuchascementplantsandsteelPowerPlants59 53 10%MunicipalW t57296%pmanufacturers•Today,20yearsafterthe1990CAAAmendmentsdFd lli ifWasteCombustors57296%MedicalWaste 51 <1 >98%passed,noFederallimitfortoxicemissions– includingmercury– existsforcoal‐oroil‐firedpowerplantsIncinerators%Source: EPA’s 2005 NATA Inventory Modified for the Toxics Rule 2005 BaseYear (2010)7AffectedFacilities:1,350CoalandOil‐FiredatPowerPlantsUnits525• Approximately 1,200 coal-fired units• 45%percent of nationwide electricitygenerationyg•Bituminous coal ~ 50% of coal generation•Subbituminous ~45% of coal generation•Lignite ~ 5% of coal generation• Includes units that burncoal, coal refuse, or asynthetic gas derived from coal or solid oil (e.g.petroleum coke) either exclusively, in anycombination together or in any combination withcombinationtogether,orinanycombinationwithother supplemental fuels (e.g., tire-derived fuels)• Approximately 150 oil-fired units• 1% of nationwide electricity generation• Natural gas power plants are not affected by this rule• EPA expects most facilitieswould install technologies tocomply with this rule8LocationofCoal‐andOil‐FiredPowerPlants9Source:National Electric Energy Data System (NEEDS 4.10) (EPA, December 2010)WhattheToxicsRuleProposes•Coal‐andoil‐firedpowerplantsarecoveredbythisrule•AllhazardousairpollutantsmusthavestandardsEPAtiddtiitht•mussetemissonstanarsforexisngsourcesnecategorythaareatleastasstringentastheemissionreductionsachievedbytheaverageofthetop12%bestcontrolledsourcesforsourcecategorieswith30ormoresourcessources•RequirementsforCoal‐FiredUnits–Mercury:numericemissionlimitwouldprevent91%ofmercuryincoalfromb idtthiengreleaseoear–AcidGases:HClnumericemissionlimitasasurrogate,withanalternatesurrogateofSO2Nonmercurymetallicpollutants(e garsenicchromium):numericemission–‐mercurymetallicpollutants..,arsenic,chromium):numericemissionlimitfortotalPMasasurrogate,withanalternatesurrogateoftotalmetalairtoxics–Organicairtoxics(includingdioxinfurans):workracticestandards,insteadg/ )pofnumericemissionlimits,duetolow‐detectedemissionlevelsintheICRdata.Wouldensureoptimalcombustionpreventingdioxin/furanemissions10WhattheToxicsRuleProposes(cont.)•RequirementsOilFiredUnitsRequirementsfor‐–AcidGases:HClandHFnumericalemissionlimits–MetalAirToxics:numericalemissionlimitsfortotalmetalairtoxics(includingmercury)individualnumericallimitsasanalternatemercury)withindividualmetalairtoxicnumericalalternate–Organicairtoxics(includingdioxin/furans):workpracticestandards,insteadofnumericemissionlimits,duetolow‐detectedemissionlevelsintheICRdata.Wouldensureoptimalcombustionreventingdioxinfuranemissionsp g/•Emissionsaveragingwithinacontiguousfacilityisallowed•MonitoringRequirements–HgCEMSorsorbenttrapsformercury–HCl CEMSorSO2CEMSforacidgases–PMCEMSformetals–Emissionstesting,parametermonitoring,andfuelanalysesallowedformetalsandacidgases–Thirtydayaveragingperiodformonitoringaccommodatesprocessvariabilityddilit tan,couplewithCEMS,facilitatescompliance–Recordsofworkpracticestandards(annualtuneups)areproposedfororganicHAPemissions11EmissionsfromCoveredSources5 87SO2Emissions52.960HgEmissions5.83.83.73.51.71.71.723456

M illion Tons52.929.129.429.620304050

TonsThbi ldthT tR lddll1.71.70122009 2015 2020 2030

M6.46.56.6010202005 2015 2020 2030►ThebasecaseincludestheTransportRuleasproposedandallotherexistingfederalandstatecontrolsandenforceableagreements.►EmissiontotalspresentedherereflectallcoveredcoalsteamandIGCCelectricgeneratingunits>25MW.ThliidHCli i351.6250300350400

o nsHClEmissions►ThepolicycaseimposesmercuryandHClemissionratelimitationsontheseunits,andrequiresfabricfiltersonasubsetofthoseunits.►ThemercurycontentofthecoalconsumedinthebasecasebyEGUs>25MWis75tonsin2015;emissionsfromthoseunitsundertheToxicsRulerepresentmorethana90%reductionin74.470.864.86.66.97.2050100150200250

Thousand T oNote:HistoricHClemissionsbasedonsingleemissionfactor;projectedemissionsbasedonfuel‐specificClassumptionsandremovalefficiencies.undertheToxicsRulerepresentmorethana90%reductioninthatmercury.1202005 2015 2020 2030SourcesCanAchieveTheseStandards• Proven control technologies to reduce these emissions such as scrubbers, fabric filters,and activated carbon injection are widely available• Many units already use one ormore of these technologies• As a result of this standard, some powerplants will upgrade existingcontrols (especiallyparticulate matter controls like electrostatic precipitators)• Power plants may also install new controls (suchas fabric filters, dry sorbent injection, oractivated carbon injection)activatedcarboninjection)243250300350

G W)BaseProposedToxicsRuleRetrofit pollution control installationson coal-fired capacity (bytechnology) with the base case andwith the proposed Toxics Rule, 201517414153771755465146146100150200250

2 015 Capacity ( G(measured in GW capacity). Source:Integrated Planning Model run byEPA, 2011FGD: flu gas desulfurization(scrubber)299050WetFGD DryFGD DSI SCR ACI FF

2( )DSI: dry sorbent injectionSCR: selective catalytic reductionACI: activated carbon injectionFF: fabric filterFGD96% SOl 99% HCl lDSI70% SOl 90% HCl l13FGD–96%SO2removal;99%HClremovalDSI–70%SO2removal;90%HClremovalSCR – 80% NOx removal ACI – 90% Hg removalFF – PM controlCostandRetirementProjections►Privatecompliancecoststoutilitiesaredistinctfromtheoverallsocialcostofthepolicy.ThecompliancecostsdepictedareincreasedcostsofoperatingtheelectricgenerationsystemthroughouttheUS$15IncrementalComplianceCostforthePowerSectorelectricgenerationsystemthroughouttheUS.►Incrementalretiredcoalcapacityin2015isabout10GW.Also,itisimportanttorecognize:►EPAidentifiedabout11GWoffirmretirements$10.9$10.1$10.0$5$10$15

B illions $2007►EPAidentifiedabout11GWoffirmretirementsannouncedfor2010‐2015thatwereremovedfrommodeling►EPAmodelingsuggestsforecastednaturalgaspricesalonecloseabout4GWofcoal‐fired$02015 2020 2030

Bcapacityin2015inthebasecase,andTransportRulemaycloseanadditional1GW.►ToxicsRuleandTransportRule(asproposed)togetherclose11GWofcoalin2015.Cldi ib dh hhUS9.871015

W )IncrementalRetiredCapacityin20152015Capacity(beforeretirements)►ClosuresaredistributedthroughouttheUS.‐0.18‐0.46‐0.7705

Capacity (G WTotal:1,028GWCoalSteam&IGCC:314GW14‐5CoalSteamCCCTNuclearAverageConsumerElectricityPriceProjections150

hAverageNationalRetailElectricityPriceBaseProposedToxicsRule1401602015RetailElectricityPriceBaseProposedToxicsRule9089102939210450100

0 7

‐ year mills/kW h406080100120140

2007 mills/KWhNationalaverageincreaseof3.7%in2015that02015 2020 2030

20 0020declinesovertime100120140160

K Wh2020RetailElectricityPriceBaseProposedToxicsRule020406080100

2007 mills/ K15GenerationandCapacityProjections0.290.290 250 250.29 0.290.330.3345GenerationMixOtherOil0 0910IncrementalNewCapacityNaturalGasCCWindBiomass2.001.962.021.982.062.010.830.830.830.840.810.820.690.730.830.871.161.210.29 0.290.290.290.250.251234

Million GWhNon‐HydroRenewablesHydroNaturalGasN l7.400 020.680.080.09468

C apacity (GW)NaturalGasCCWindBiomass1.961.9801Base ToxR Base ToxR Base ToxRNuclearCoal2015 2020 20302.770.020.02022015 2020 2030

C►Coal‐firedgenerationisslightlyreducedasaresultoftheproposedrule.►Increaseindemandismetlargelywithadditionalnaturalgas‐firedgeneration►IPMresultssuggestthatthesectorwillbeabletocomplwiththeToxicsRulewhileyrelyingprimarilyonexistinggeneratingassets►Overcapacityatexistingcombinedcycleunitsrespondstodisplacedgenerationin2015►Anadditional8GWofnewcapacityisprojectedby2030relativetothebasecase,mostofwhichisnaturalgascombinedcycle.16ImpactsonCoalConsumptionandNaturalGas•CoalusefrommajorregionsdecreasesslightlyfromtheproposedToxicsRule.Thereisaslightincreaseinuseofinteriorcoalsinsomeyears.Thiiibit il1831681741651541533030373738388001,0001,200

sPowerSectorCoalUseImportsWasteCoalAppalachiaInteriorWest•Thereissomeincreaseinbituminouscoaluseanddeclineinothercoaltypesused.942551543557553599567227233239228240252200400600800

Million TonC lUbR k0Base ToxR Base ToxR Base ToxR•Naturalgasconsumptionisexpectedtoincrease3‐6percentbythepowersectorfrom2015‐2030.•Overthistime“delivered”naturalgaspricestothe7,7627,6687,9847,8858,599 8,0739046091,05965171865715,00020,00025,000

BtuCoalUsebyRankLigniteSubbituminousBituminous•Overthistime,deliverednaturalgaspricestothepowersectorandatHenryHub(wellhead)willhaveanaverageincreaselessthan10centspermillionBtus,about1.3percent.•Overthistimeresidentialconsumerswouldsee11,45011,62811,29711,54711,44011,70305,00010,000

Trillion•Overthistime,residentialconsumerswouldseeanaveragepriceincreaseoflessthan1percent.1702015Base2015ToxR2020Base2020ToxR2030Base2030ToxRProposedToxicRuleHealthBenefits•Thevalueoftheimprovementstohealthalonetotal$59billionto$140billioneachyear•Thisthateverydollarspentthispollution$13meansfortoreducepollution,wewouldget$5‐inhealthbenefits•Eachyear,theproposedrulewouldpreventserioushealtheffectsincluding:–6 80017 000premature,‐,prematuredeaths–11,000heartattacks–120,000asthmaattacks850 000i dk“ i k”d–850,000mssewororscays•Avoiding“sickdays”savescompaniesandfamiliesmoney.ItisparticularlyimportantforthemillionsofAmericanswhosejobsdonotprovidepaidsickleaveandwhorisklosingtheirmissoftenjobsiftheyworktoo–Theproposedrulewouldalsoprevent12,200hospitaladmissionsandemergencyroomvisits;4,500casesofchronicbronchitis;and5,100,000dayswhenpeoplemustrestricttheiractivitieseachyear18Source: EPA Regulatory Impact AnalysisTheToxicsRule:Implementation•Whenwecomparetheinvestmentsthatwillberequiredtocomplywiththesestandardswithinvestmentsthatthissameindustryhasmadeinthepasttheydonotlookoutofline.–Ineachof2007through2010,over20GWsofadvancedpollutioncontrolequipmentwasinstalled.Thisincludesapeakofover35GWsofscrubbersandSCRsin2009.•Theactcontainskeyflexibilitiessuchasprovidingpermittingagenciesthediscretiontoprovideone‐yearextensions(beyondthegeneralthreeyeartime‐frameforcompliancerequiredbytheAct)thatwillbekeytoaddressinganyfacility‐specificconcerns.•Whileweprojectsomeretirementsofold/inefficientandlessfrequentlyusedcoal‐firedgeneration,amountsextrageneratingcapacitycurrentlygeneration,thelargeamountsofgeneratingcapacitythatcurrentlyexistwillbekeytobeingabletoensurereliableelectricity(NERCdefaultreservemarginsare15%,absenttherule,averagecapacitymarginsareabout25%).19PublicHearingsandComment•ThepublicisencouragedtoprovideEPAwithcommentsonthisproposedToxicsRule•TheAgencywillseekcommentsfor60daysfollowingpublicationintheFederalRegisterandtheproposedruleiscurrentlyavailableonEPA’swebsite.•PublicHearings•Locations•PhiladelphiaHeadquarters)Philadelphia,PA(EPARegion3Headquarters)•Atlanta,GA(EPARegion4Headquarters)•Chicago,IL(EPARegion5Headquarters)•Formoreinformationonhowtoattendthesepublichearingsleasevisit:,phttp://www.epa.gov/airquality/powerplanttoxics•TechnicalContact:•BillMaxwell5415430maxwell bill@epa gov)Maxwell(919‐‐,maxwell.bill@epa.gov)20Summary–Bottom‐Line•Thisproposedrulewillresultintremendouspublicbenefitsworthmanyproposedtremendoushealthbenefits,timesthecost.•Therulewillrequirethepowersectortoinvestincommerciallyavailable,costrequirecommerciallyavailable,effective,proventechnology.ThatinvestmentwillprovidejobsfortensofthousandsofAmericansduringaperiodofhighunemployment,createdemandforproductslikecement,thatareexperiencinglowdemand,andcreateadimoerncleanAmercanpowersector.•Thisrulehasbeenlongdelayed.Itisimportantforpublichealth,thattheruleweissueconformtothedictatestheCleanActinterpretedconformdictatesofAirasinterpretedbythecourtssothatitwillwithstandajudicialchallenge.21Thank you!