Draft Appendix C of the TSD for the rule titled " Regional Haze: Revisions to Provisions Governing Alternatives to Source -Specific Best Available Retrofit Technology (BART) Determinations, Limited SIP Disapprovals , and Federal Implementation Plans" RIN 2060-AR05 Phil Lorang to: Kymn, Christine J. 11/14/2011 11:47 AM

Cc: Brian Timin, Lea Anderson, Martha Keating, Paula VanLare, Rhea

Jones

From: Phil Lorang/RTP/USEPA/US

To: "Kymn, Christine J." <Christine

_ J.

_ Kymn@omb.eop.gov>

Cc: Brian Timin/RTP/USEPA/US@EPA, Lea Anderson/DC/USEPA/US@EPA, Martha Keating/RTP/USEPA/US@EPA, Paula VanLare/DC/USEPA/US@EPA, Rhea Jones/RTP/USEPA/US@EPA

Phil Lorang, Senior Policy Advisor Air Quality Policy Division, OAQPS, EPA
919-541-54631 

## APPENDIX C

Sensitivity Analysis Accounting for Proposed Increase s in Transport Rule

Allowances

The Better than BART modeling analysis for this proposed rule was completed using the emissions totals from the final Transport Rule, and also assuming that the July 11, 2011 proposal regarding ozone

- season NOx emissions in five states will be finalized. 1 Recently, EPA proposed 2 to make adjustments to the EGU SO2 and NOx allowances in several states. In all cases, the allowances are proposed to be increased. Table C

- 1 summarizes the proposed

allowance increases.

Table C

- 1 Proposed increases in Transport Rule 2014 SO2 and NOx allowances

State 2014 SO2 Budget Increase (tons) 2014 N O x Budget Increase (tons)

Louisiana N/A 4231
Mississippi N/A 2136

Michigan N/A 5228

Nebraska N/A 3559
New Jersey N/A 112

New York 3527 3485

Texas 70067 1375

Wisconsin 7757 2473

Total Increase 81351 22599

The proposed SO2 and NOx allowance increases are relatively modest compared to the total modeled reductions from the Transport Rule. The modeled SO2 reductions from the Transport Rule are ~3.8 million tons per year and NOx reductions are ~125,000 tons per year. The only

increas e in emissions that is large enough to potentially affect the Better than BART analysis is the SO2 allowance increase in Texas. This is due to the relatively large increase in Texas SO2 compared to other states, and the fact that SO2 emissions account for the majority of the PM2.5 and visibility impacts from the Transport Rule. Therefore, we completed a more detailed sensitivity analysis of the potential impact from the Texas SO2 allowance increase.

1 The air quality modeling conducted for this analysis included in the CSAPR scenario the states addressed in the July 11 proposal. These states are Iowa, Kansas, Michigan, Nebraska, Minnesota, and

Oklahoma.

2 Revisions to the Federal Implementation Plans to Reduce Interstate Transport of Fine Particulate Matter and Ozone, 76 FR 63860 (October 14, 2011)2 Table C

- 2 shows the Texas SO2 emissions as modeled in the Better than BART analysis and the emissions that would occur if the allowances are increased as proposed.

Table C

- 2 Texas 2014 SO2 emissions and decreases compared to the 2014 modeled base

case

2014 Base Case

SO2 Emissions 2014 TR+

BART

elsewhere S O2

Emissions (estimate from IPM, used in air quality modeling) 2014 Proposed
Allowance

Increase SO2 Emissions

Decrease from TR (as modeled) SO2 Emissions

Decrease from
TR with "extra"

allowances 453,332 266,627 70,067

- 186,705

- 116,638

Table C

- 2 shows that the modeled SO2 reduction in Texas is ~186,000 tons per year. After accounting for the proposed increase in SO2 allowances in Texas, the SO2 emissions reduction is still ~116,000 tons per year. This would reduce the total SO2 reduction from the Transport Rule from ~3.8 million tons per year to ~3.7 million tons per year.

It can be seen from Table C

- 2 that even with the increase in SO2 allowances in Texas, there is still a large SO2 reduction in Texas, compared to the 2014 base case. And, the impact on the total net SO2 reduction from the Transport Rule is minimal (< 2% decrease in SO2 reductions).

Given this information, we would still expect major visibility improvements at Class I areas in and around Texas from the Transport Rule. Howe ver, in order to better inform the process, we performed a very conservative sensitivity analysis to provide a limiting upper estimate of the worst case impact of increases in Texas SO2 allowances.

Sens itivity Analysis of Better than BART with Increased Texas SO2 Allowances

We identified the most likely “affected” Class I areas for Texas and then assumed that these areas would get zero benefit from the Transport Rule. Table C

- 3 shows the 9 Class I areas in an d

near Texas that were identified as the affected areas 3 . We identified these areas by looking at the regional haze analysis conducted by the CENRAP regional planning organization in support of the development of regional haze SIPs in Texas and surroundin g states.

3 Affected Class I areas were identified by examining consultation letters from states surrounding Texas which were included in the Texas regional haze SIP su bmissions. The letters are included in Appendix 4

- 3 available here: http://www.tceq.texas.gov/airquality/sip/bart/haze_appendices.html . We included 6 areas which had a > 2 Mm - 1
impact from Texas. These areas had much higher visibility impacts from Texas compared to other analyzed Class I areas. We also included the 3 Class I areas that are in Texas or are represented by an IMPROVE monitor that is

located in Texas.3 Table C

- 3 Class I areas most affected by Texas emissions and the modeled visibility improvement from the Transport Rule + BART

- elsewhere case

Class I Area Name State TR+BART

elsewhere 20% Best days TR+BART

elsewhere 20% Worst days
Big Bend NP TX

- 0.2

- 1.1
Caney Creek Wilderness AR

- 0.4

- 3.2

Carlsbad Caverns NP TX

- 0.1

- 0.9
Guadalupe Mountains NP TX

- 0.1

- 0.9

Hercules

- Glades Wilderness MO

- 0.6

- 2.5

Salt Creek NM

- 0.1

- 0.7
Upper Buffalo Wilderness AR

- 0.5

- 2.5

White Mountain Wilderness NM

- 0.1

- 0.6

Wichita Mountains OK

- 0.2

- 1.6

For this analysis, we assumed that the visibility benefits shown in Table C

- 3 would become zero as a result of the allowance adjustment for SO2 in Texas . This is a very conservative assumption because there would still be 116,000 tons per year of SO2 reductions in Texas and this also assumes that there would be no visibility benefits in these 9 Class I areas from the ~3.6 million

tons of SO2 reductions f rom the other Transport Rule states. This is not a realistic assumption,

but one that we use here in order to be conservative.

Sensitivity Analysis Results

We recalculated the average visibility changes at the 60 Eastern and 140 nationwide Class I area s in the Better than BART analysis, assuming that the visibility change at the 9 Class I areas in

Table C

- 3 would be zero. The first prong of the Better than BART test would still be passed because there will be no degradation in visibility at any Class I areas on either the 20% best or 20% worst days. Table C

- 4 below shows the average visibility results and the re

- calculated average visibility results for the Texas sensitivity case.

Table C

- 4 Average visibility improvement on the 20% best and 20% wo rst days in the Better than BART analysis and the Texas sensitivity analysis “Transport Rule +

BART

elsewhere” “Transport Rule +

BART

- elsewhere” Texas Sensitivity Case “Nationwide BART”

60 Class I Areas in the Eastern Transport Rule Modeling

Domain

20 percent Worst Days 1. 6 1.3 1.0

20 percent Best Days 0. 3 0. 3 0. 2

140 Class I Areas in the Western and Eastern Transport Rule Modeling Domains4 20 percent Worst Days 0. 7 0. 6 0. 5

20 percent Best Days 0. 1 0.1 0.1

Table C

- 4 shows that the even with very conservative assumptions in this analysis, the Transport

Rule+ BART

- elsewhere case is still, on average, better than (or equal to) nationwide BART on both the 20% best and 20% worst days at the 60 Eastern Class I areas and a t the 140 nationwide

Class I areas.