### Summary of Interagency Working Comments on Draft Language under

EO12866/13563 Interagency Review. Subject to Further Policy Review.
**1) Pages 38** 

**- 40, 43** 

**- 44, 143, 147** 

**- 48, and 185:**  **Treatment of Modifications and Reconstruction.**  We previously expressed concern that the preamble contained very broad statements to the effect that EPA anticipates no modifications or reconstructions in the utility sector, which could undercut other Clean Air Act (CAA) New Source Performance Standards (NSPS) and New Source Review (NSR) cases against utilities involving modifications or reconstructions. EPA has made some helpful changes; however, further revi sions are needed to accurately characterize the extent to which the power plant sector has undertaken modifications or reconstruction to date. Please see pages 38

- 40, 43

- 44, 143, 147

- 48, and 185 of the attached redline. (Recommended changes are in redlin e/strikeout and capital letters. Pagination is as saved and printed.) For example, rather than stating that there has been a “small number of” or “very few” modifications or reconstructions to date, the preamble should state that the numbers of modificati ons or reconstructions have been “limited.” (In the last few years alone, we’ve received dozens of NSPS referrals from EPA in cases involving modifications; this number alone is not “very few” or a “small number.”) A few of the edits are also designed to limit the discussion to NSPS and greenhouse gases (GHGs) only, the relevant context. These edits are important because any broad suggestion that modifications, in particular, are rare is inaccurate and will make it more difficult to litigate cases conc erning them. We think the new text still supports EPA’s goal not to establish an NSPS for modifications or reconstructions. **2) Page 151:**  **Limitation of Discussion of Equities for Transitional Sources.** It is possible that in future litigation, sources may seek to bolster equitable defenses to violations of requirements of the CAA on the basis of the equities discussion related to transitional sources in this rule. To help counter this, EPA should add the following footnote at page 151: “Nothing in this d iscussion of the unique circumstances of transitional sources facing new GHG requirements should be interpreted as providing a defense to any violation of the CAA by sources that, for example, fail to obtain PSD permits or comply with NSPS before construction.” **3) Pages 30** 

**- 31, 93** 

**- 94, and 164:**  **Use of the Terms “Baseload Power Plant,”“Baseload Plant,” or Related Concepts.**  On these pages, EPA uses the term “baseload power plant,” “baseload plant,” or related concepts. Because the meaning of these terms is a key issue in NSR enforcement against the utility industry, we have suggested edits on the attached redline to refer instead to plants that provide baseload or intermediate generation, for example. This will simply avoid any possible unintended impact fro m this proposal on litigati on. **4)** The EJ section of the preamble describes benefits from this rule that are not described in the EJ section of the RIA. We suggest EPA make conforming changes to the text of the preamble to resolve the inconsistency.

### Summary of Interagency Working Comments on Draft Language under

EO12866/13563 Interagency Review. Subject to Further Policy Review.
**5)** There a ppear to be two seemingly contradictory statements about near term effects on climate from GHG emissions. On page 132 of the preamble, there is a statement that because CO2 is long

- lived in the atmosphere, the 30

-year averaging period is “not expected to have a different impact on climate than meeting the standard of performance.” However, a few pages later, on page 140, the preamble notes that “climate change impacts result from the cumulative amount of emissions so reduced near term emissions provide additional benefits.” We recommend that EPA reconcile these two statements. **6)** The current text includes inaccurate statements, particularly regarding federal financial support for demonstrating carbon capture and storage technology. Interagency commenters are not seeking further analysis to be completed prior to a timely release of the proposed rule, but rather clarifying edits to the language. During the development of a final rule, interagency commenters would like to continue to engage EPA in dialo gue about the feasibility of carbon capture and storage as an option for achieving a GHG NSPS for electric generating units. Interagency commenters also suggest adding acknowledgment about uncertainty regarding future natural gas prices. **7)** Please provide clear language in the NSPS summary that federal funding for future CCS demonstrations has not been available for several years and no funds have been requested in the current budget request. From page ES

- 4: [EPA] estimates that Federal financial assistan ce will support development and demonstration. This language in the proposed NSPS regarding forward

- looking funding for CCS demonstrations is inaccurate and misleading. It should not be assumed that Federal funding for new CCS technology demonstrations will continue, or that the next generation of CCS technology would be demonstrated in the timeframe associated with this rule. Federal budget requests for CCS demonstrations have been zero for the last several years, and actual budgets have also been zero . CCS R&D funding profiles continue to be reduced. The availability of federal funds to continue large

scale demonstrations is not guaranteed, and should not be portrayed as such. Even if funding was available, the next generation of CCS technologies now being developed would not be demonstrated within this rule s stated 2020 timeframe. A similar sentiment is appears to be restated on page 135 of the Preamble: This is because, again, CCS is feasible and can be expected to be sufficiently available in light of continued subsidies and l ower future costs in light of the limited demand. **8)** CCS is not currently a cost

- effective technology, and should not be described as such in the proposed rule.

 Preamble, page 13: Furthermore, design and technology choic es exist that can be readily and cost

- effectively used to reduce GHG emissions from new fossil fuel

- fired power plants.

 Please note that several aspects of carbon capture technologies have not been demonstrated yet at full

- scale, fossil power plants. The overall CCS

### Summary of Interagency Working Comments on Draft Language under

EO12866/13563 Interagency Review. Subject to Further Policy Review.

technology is also not presently considered cost effective for fossil plant applications, as acknowledged in the Preamble in several places. Therefor e, a statement that CCS can be readily and cost effectively used to reduce GHG from fossil sou rces is highly questionable, and CCS should be clearly excepted from such statements about technology choices.

 Preamble, page 35: Thus, the 30

-year averaging compliance option, along with the current opportunities for funding to implement CCS immediately, helps to alleviate any concerns that today s action could restrict new coal

fired construction.

 However, the proposed GHG NSPS for EGUs does acknowledge the uncertainty about the availability of federal funding for demonstrating CCS. In the Preamble, fo otnote 22 (page 34):

 A number of the sources that EPA has identified as transitional sources have received some form of Federal financial assistance to demonstrate CCS. In addition, several additional projects have received funding but have not yet received air permits. Beyond these projects, prospects for additional federal f unding are not currently known. **9)** The proposed GHG NSPS for EGUs should be consistent with EPA s position included in the GHG BACT guidance, which was published in March 2011. This guidance document contains the following statement on CCS technical feasibility: While CCS is a promising te chnology, EPA does not believe that at this time CCS will be a technically feasible BACT option in certain cases. As noted above, to establish that an option is technically infeasible, the permitting record should show that an available control option has neither been demonstrated in practice nor is available and applicable to the source type under review. EPA recognizes the significant logistical hurdles that the installation and operation of a CCS system presents and that sets it apart from other add

- on controls that are typically used to reduce emissions of other regulated pollutants and already have an existing reasonably accessible infrastructure in place to address waste disposal and other offsite needs. BACT guidance, p. 36. **10)** Uncertainty regardi ng future market conditions, particularly with regard to natural gas prices, should be acknowledged. In the proposed GHG NSPS for EGUs, the preamble includes statements in multiple places asserting an expectation that natural gas prices will remain low in the future, making natural gas plants more competitive than new coal power plants. However, natural gas prices have been volatile over the last decade, and much remains uncertain surrounding factors that could affect future prices for natural gas. It wo uld be useful to acknowledge this in the proposed rulemaking. In preparation of a final rule, interagency commenters would be willing to work with EPA to explore useful to analytic results from a side case that has an outlook for higher natural gas prices

.