# Mercury and Air Toxics Standards:

Overview of Final Rule
Briefing for OMB November 15, 2011

# Overview
► 

# Comments on Proposal ► 

# NESHAP: Key Issues and Final Decisions ► 

# Impacts of Final MATS ► 

# NSPS for Criteria Pollutants: Key Issues and Final Decisions

**Deliberative –**  **Do Not Cite or Quote 2** 

# Overview of Comments
► 

# More than 900,000 comments received on proposal ► 

## Over 700,000 on NESHAP and over 207,000 on NSPS ► 

## More than 22,000 unique comments ► 

## Hundreds of significant comments on NESHAP, including 10,000 pages of comments and attachments

**Deliberative –**  **Do Not Cite or Quote 3** 

# Key**C omments**  **from Stakeholders –**  **Environmental Community and**  **Tribes** ► 

# Environmental community had rule and structure comments ► 

## Limits should be more stringent ► 

## C oal should not be subcategorized ► 

## Reliability of grid not impacted and compliance can be achieved in 3 years ► 

# Tribal comments were mixed ► 

## Most Tribes support changes such as more stringent limits and less subcategorization ► 

## Some Tribes are against the regulation as it pertains to their specific situation ► 

## The impact of MATS on Tribal water rights in the Southwest (e.g., Navajo Generating Station) is a particular issue

**4 Deliberative**  **– Do Not Cite or Quote** 

# Key**C omments**  **from Stakeholders –**  **States**
► 

# State support is mixed ► 

## Northeastern states more supportive ► 

## Believe limits should be more stringent
– CT, NJ, NY ► 

## Outside Northeast, less supportive ► 

## Proposed limits appear unachievable and should not regulate PM under section 112
– NM ► 

## Against pollutant- by- pollutant approach
– NM Withdraw

rule and better coordinate costs of all agency actions
– AZ, ► 

## Withdraw ule and better coordinate costs of all agency actions FL, IA, IN, KS, KY, OH, OK, UT, VA, WY ► 

## Rule is unlaw

ful
– NE ► 

## Many concerned about compliance time, implementation burden, and impact on States’ economies ► 

## Testing requirements burdensome
– CT, PA, SC ► 

## November 16 deadline should be extended
– NM, FL, VA ► 

## Delegate to states and provide flexibility
– CO, OK, PA, SC, WI ► 

## Extend compliance period
– AL, AR, DE, FL, IN, MI, VA, WI, WV
**5 Deliberative**  **– Do Not Cite or Quote** 

# Key**C omments**  **from Stakeholders –**  **Electric Utility** **Industry**
► 

## Electric utility industry not united in their position on MATS ► 

### Some support and some do not ► 

### However, absence of comment on an issue should not be misinterpreted ► Industry appears to have partitioned out pieces of their comments ► 

## Majority of coal -fired electric utility industry not supportive ► 

### Limits should be less stringent ► 

### Subcategories should be added ► 

### Compliance time should be extended to avert grid reliability issues ► 

### Filterable particulate matter (PM) should be used rather than total PM ► 

### Limited - use subcategories for coal and oil should be added ► 

## Minority of EGU industry (e.g., Clean Energy Group (CEG), Exelon) generally supportive of MATS ► 

### 3 -year compliance time generally appropriate ► 

### Proposed subcategories appropriate ► 

## Some of EGU industry agrees with majority on some issues but minority on others
– no uniform consistency **Deliberative –**  **Do Not Cite or Quote 6** 

# Key**C omments**  **from Stakeholders –**  **Unions and General Industry** 
► 

### Unions for Jobs and the Environment (UJAE) (consortium of unions, including boilermakers, teamsters, mine workers) ► Extend compliance time ► Delay promulgation date ► Jobs impacts incorrect ► Retirement projections low ► Basis for new- source MACT ► Against pollutant- by- pollutant approach ► 

### Council of Industrial Boiler Owners (CIBO) ► MATS will adversely affect the cost- effective operation of industrial energy operations ► Multiplicity of agency rules will drive up compliance costs and impact ability to comply with the deadlines ► Filterable PM should be the surrogate ► 

### U.S. Chamber of Commerce ► MATS does not comply with Executive Order 13563, Executive Order 12866, the Regulatory Flexibility Act, the Unfunded Mandates Reform Act, or the Information Quality Act ► 

### Institute of Clean Air Companies (ICAC) ► Existing - source limits achievable ► New- source limits questionable ► Concerns about continuous emission monitoring system (CEMS) requirements for new sources **Deliberative –**  **Do Not Cite or Quote 7** 

# NESHAP: **Key I**  **ssues**
► 

## Many issues resolved without significant change to proposed rule ► 

### Some proposed emission limits adjusted ► 

### Adj ustments to monitoring provisions for clarity and consistency ► 

## Comments received suggesting changes
– some on issues for which we solicited comment and others based on logical outgrowth ► 

### Coal - Fired Units ► New- source limit ► Subcategorization ► Compliance schedule ► Surrogate for non - mercury metal HAP ► 

### Oil - Fired Units ► Surrogate for acid gas HAP ► Surrogate for total HAP metals ► Subcategorization of distillate and residual oil ► 

### General ► Monitoring ► Area sources ► Startup/shutdown ► Limited - use subcategory **Deliberative –**  **Do Not Cite or Quote 8** 

# NESHAP: **New Coal -**  **Fired Sources**  ► 

# Comments received ► 

## Some industry and union stakeholders expressed concern that there were no sources that could meet all of the required standards simultaneously ► 

### Believe that new source limits should be based on sources that model what a new source would look like to comply with MATS, NSPS, and other air regulations ► 

## Opposed to pollutant- by- pollutant approach Argue that pollutant controls can increase pollutants
– most concern ► 

## wi th PM because injecting sorbents to reduce other pollutants increases PM ► 

## No significant comments from other stakeholders ► 

# Final rule: Revised standards that can be met by an existing source ► 

## Used same general approach as proposal but reassessed data ► 

## Logan Generating Station Unit 1, located in NJ, meets all three new- source emission limits and has full suite of controls **Deliberative –**  **Do Not Cite or Quote 9** 

# NESHAP: **Subcategorization of Coal**  **- Fired Units**  ► 

# Comments received ► 

## Environmental community against any subcategorization beyond coal/oil ► 

## Promotes use of “junk” coal and is illegal ► 

## Most of industry supports additional subcategorization (e.g., <100 MWe , fluidized bed combustion (FBC)) beyond what proposed ► 

## Commented that our premise for the proposed “coal <8,300 Btu/lb with a height/depth ratio >3.82” subcategory is not supported

– Limits should be higher and height/depth ratio does not work for FBC units 

### ► 

# Final rule: Keep same general subcategories as in proposal ► 

## Revise definition to be use of low Btu, virgin coal rather than relying on other design characteristics (e.g., height to depth ratio)

– Makes clear that FBC units that fire low Btu, virgin coal are included ► 

## No other subcategories supported by data **Deliberative –**  **Do Not Cite or Quote 10** 

# NESHAP: **Compliance Schedule**  ► 

# Comments received ► 

## Environmental community and some industry commenters believe 3 years is sufficient ► 

## Most industry commenters believe that additional years are necessary to address reliability issues and reasonable permitting/construction time ► 

# Final rule: Expanded discussion of what qualifies for 1 year compliance extension and discussion of compliance options beyond 4 years ► 

## Explained permitting authorities should consider larger group of activities for compliance extension: emission controls, on - site generation and in cases that impact reliability: off - site generation, transmission upgrades, units needed to cover for units off - line to install controls ► 

## Constrained by statute to 3 -year compliance + 1 year potential additional by permitting authority ► 

### Explain that EPA is developing enforcement guidance to address reliability related issues beyond 4 years **Deliberative –**  **Do Not Cite or Quote 11** 

# NESHAP: **Surrogate for Non**  **- mercury** **M etal HAP**  **for Coal -**  **Fired Units** ► 

# Comments received ► 

## Environmental community opposes surrogates ► 

## Industry commenters support surrogates but believe filterable PM should be used instead of total PM as the surrogate for non mercury metallic HAP ► 

## Note that the primary non - mercury metallic HAP in condensable PM is selenium; selenium can be addressed through acid gas standards ► 

# Final rule: Establish filterable PM as surrogate for non mercury metallic HAP and require PM CPMS (not CEMS); condensable HAP would be addressed by acid gas HAP limits

**Deliberative –**  **Do Not Cite or Quote 12** 

# NESHAP: **Surrogate for Acid Gas HAP for Oil**  **- Fired Units**  ► 

# Comments received ► 

## Most industry commenters want oil moisture content used as the surrogate for HCl/HF rather than testing for each ► 

## Provided limited information suggesting chloride/fluoride in oil results from sea -water ballast contamination from single - hull tankers ► 

## No flue gas desulfurization (FGD) systems on oil -fired units so HCl/HF control unclear ► 

## Environmental community did not comment on oil -fired issues Environmental community did not comment fired issues specifically ► 

# Final rule: Establish 1.0% oil moisture content as alternate compliance option, with HCl/HF limits as alternatives

**13 Deliberative**  **– Do Not Cite or Quote** 

# NESHAP: **Surrogate for Non**  **- Mercury**  **Metal HAP for Oil -**  **Fired Units** ► 

# Comments received ► 

## Most industry commenters want PM to serve as a surrogate for total HAP metals rather than testing for either total metals or individual metals ► 

## Believe that there is a correlation ► 

## No comments from environmental community on oil -fired issues specifically ► 

# Final rule: Establish filterable PM as a surrogate for total HAP metals with total HAP metal limits as alternative

**14 Deliberative**  **– Do Not Cite or Quote** 

# NESHAP: **Subcategorization of**  **Oil -**  **Fired Units** ► 

# Comments received ► 

## Most industry commenters recommend subcategories of distillate/residual oil and non - continental/continental sources ► 

# Final rule: Establish continental/non - continental subcategory and maintain common distillate/residual category

**15 Deliberative**  **– Do Not Cite or Quote** 

# NESHAP: **Limited -**  **use Subcategory**  ► 

# Comments received ► 

## Most industry stakeholders favor limited - use subcategory for both coal and oil ► 

## Situations, such as periods of natural gas curtailment or periods of high demand, when oil must be used to maintain grid load or stability ► 

# Final rule: Limited - use subcategory for oil -fired EGUs <5% capacity factor on oil with work practice standard of annual tune - up

**Deliberative –**  **Do Not Cite or Quote 16** 

# NESHAP: **Area Sources**
► 

# Comments received ► 

## Industry favors area source designation ► 

## Claim that EPA is legally bound to establish GACT limits for area sources ► 

## Claim that small entities (e.g., cities) would be aided by area source determination ► 

## Environmental community opposed Numerous large EGUs (i.e., hundreds of MW) claim to be area ► 

## sources ► 

# Final rule: No change from proposal (i.e., no area source designation)

**17 Deliberative**  **– Do Not Cite or Quote** 

# NESHAP: **Startup/Shutdown** ► 

# Comments received ► 

## Many industry stakeholders commented that EPA failed to propose work practice standards during periods of startup/shutdown as was done in Industrial Boiler NESHAP ► 

## Environmental stakeholders point to Texas permits that contain limits for startup/shutdown periods and other data that indicate high emissions during these periods ► 

# Final rule: Establish work practice standards in final rule; commit to reviewing data to see if changes would be warranted in future 8 -year review

**18 Deliberative**  **– Do Not Cite or Quote** 5.8
3.3 1.9

0 1 2 3 4 5 6 7**M i** **l l** **i o** **n T** **o n** **s** 

### 2015 SO2 **fro m**  **Co al**  **> 25**  **MW** Bas e MA

TS 53

27 8 0 10 20 30 40 50 60**T o** **n s**  

### 2015 Hg **fro m**  **Coal >**  **25 MW**  Bas e MA

TS 

# Emissions from Covered **Sources**

0 2009 MA TSR IA 0 2005 MA TSR IA

351.6

45.3 5.5 0 50 100 150 200 250 300 350 400

2005 MA TSR IA**T h** **o u** **s a** **n d** **T o** **n s**  

### 2015 HC **l f ro**  **m Coal**  **> 25**  **MW** Bas e MA

TS

**Note: Historic HCl emissions**  **based on single emission factor; projected**  **emissions based on fuel -** **specific Cl assumptions and removal efficiencies.**  ► The base case includes the final Cross - State Air Pollution Rule and other existing Federal and state controls and enforceable agreements. † ► Emission totals presented here reflect all covered coal steam and IGCC electric generating units > 25 MW
. ► The policy case models the effect of the MATS mercury and HCl emission rates on these units, and it applies ESP upgrades or fabric filter retrofits to units to reflect the MATS PM standard.
**† EPA’s**  **MATS baseline excludes non -** **federal mercury regulation to remain**  **consistent with the rule’s risk assessment modeling approach. Deliberative**  **– Do Not Cite or Quote**  **19**

### 180

29 9 7 91
0 174

51 53 146 140 197

52 50 100 150 200 250**T o** **t a** **l C** **a p** **a c** **i t** **y (** **G W** **)** 

### Base MA

TSR IA 

# Pollution Controls **on Coal -**  **Fired Capacity**

9 7 0 0 Wet FG D Dry FG D DS I SC R AC I FF ES P Upg rad e

► FGD = Flue Gas Desulfurization (92 - 96 % SO 2 removal and 99% HCl removal ) ► SCR = Selective Catalytic Reduction (90 % NO x removal) ► DSI = Dry Sorbent Injection (70% SO 2 removal and 90% HCl removal) ► DSI is able to meet the analyzed HCl emissions standard with use of multiple coal types less than 2 lb/MMBtu SO 2 ► ACI = Activated Carbon Injection (90% mercury removal) ► FF = Fabric Filter, also called a baghouse (PM control ) ► ESP = Electrostatic Precipitator (PM control) **Deliberative –**  **Do Not Cite or Quote 20** 10.9 9.2

0 2 4 6 8 10 12**B i** **l l** **i o** **n $** **2 0** **0 7**  

### 2015 **In cr**  **em en** **tal Co**  **mp lia**  **nc e**  **Costs**

**fo r**  **the P** **ow er**  **Sect or** 

- 0.2 9.9

- 0.5 - 0.8

- 0.1 5.5
0.1

- 0.4 0 2 4 6 8 10 12

CC Co al Ste am CT Nuc lear**C a** **p a** **c i** **t y** **( G** **W )**  

### In **cr em**  **en tal**  **Ret ir**  **ed Ca**  **pac ity** **i n**  **2015** Pr opose d MA TSR IA 2015 Capac ity (post
- re ti re me nts) To tal: 1, 020 GW CoalSte am : 304 GW 

# Evolution of Results from Proposal **to Final**

0 Pr opose d MA TSR IA CC Co al Ste am CT Nuc lear

**Deliberative –**  **Do Not Cite or Quote 21**  

##  Key changes from modeling of the proposal include:  Not all chlorine in subbituminous and lignite coal is emitted as HCl . The alkalinity of ash from those coals reacts with the acid gas to capture a portion of its emissions even without control equipment. Post- proposal modeling assumes 75% HCl capture from subbituminous and lignite coal ash, based on analysis of data reported under the 2010 ICR.  Whereas at proposal a fabric filter was assumed necessary for PM control, this updated modeling includes ESP upgrades as a more cost- effective alternative for certain EGUs

# Sensitivity**to Limit DSI Installations by 2**  **015**

 

# EPA has modeled a MATS sensitivity scenario limiting DSI retrofitting to 35 GW  

## Addresses concerns that DSI may not be as widely applicable as represented in core policy modeling  

## Annual compliance costs rise by about $1.2 billion, reaching $10.3 billion in 2015  

## About 1 GW of additional capacity withdraws from service  

## SO 2 

## emissions are reduced by a further 55,000 tons, as many units previously projected to install DSI switch to dry FGD instead

**Deliberative –**  **Do Not Cite or Quote 22** 

# NSPS for Criteria Pollutants: **Overall Recommendation** ► 

## Key comments ► 

## Environmental community ► 

### More stringent standards based on projected IGCC emission rates ► 

### Establish separate condensable and filterable PM standards

– Criteria pollutant proposal included a combined standard (based on EGU NESHAP standard) ► 

## Electric utility industry groups ► 

### Standards are unachievable and should be less stringent ► 

### Insufficient data to establish a condensable PM standard or identify the best demonstrated technology ► 

### Best demonstrated technology for control of SO 2 

### not clearly identified ► 

## Industry and Environmental groups: how will the GHG NSPS impact the criteria NSPS? ► 

### CCS is expected to increase some criteria pollutant emission rates and decrease others ► 

## Final rule: ► 

## Finalize NO X 

## and SO 2 

## standards as proposed ► 

## Finalize filterable PM standard to be consistent with EGU NESHAP **23 Deliberative**  **– Do Not Cite or Quote** 

# Benefits and **Costs of the Penultimate MATS**  **IPM Run (Billions of 2007$)**  **3 %**  **Discount Rate**  **7% D**  **iscount Rate**  **To tal**  **Mo netized**  **Benefits $37**  **to $91 $33**  **to $82** Hg - related benefits $0.004 to $0.006 $0.0005 to $0.001 PM 2.5- related co - benefits $37 to $90 $33 to $81 Climate - related co - benefits $0.35 $0.35 **To tal**  **Costs $9.2**  **$9.2 Net Benefits**  **$28 to $81**  **$24 to $72** 
Non - monetized Benefits Visibility in Class I areas Other neurological effects of Hg exposure Health effects from exposure to non - Hg HAP Health effects of ozone and direct exposure to SO 2 and NO 2 Ecosystem effects Health effects from commercial and non -freshwater fish consumption Health risks from exposure to non - mercury HAP Notes:
• All estimates are for 2016 and are rounded to two significant figures.
• Climate - related co - benefits are calculated using the Social Cost of Carbon at a 3% discount rate.
• Mercury benefits were calculated using the baseline from proposal. The difference in emission reductions between proposal and final would not substantially affect mercury benefits.
• Total social costs are approximated by compliance costs. This total does not include monitoring or reporting costs. **24 Deliberative**  **– Do Not Cite or Quote** 

# Appendix

**Deliberative –**  **Do Not Cite or Quote 25** 

# Coal **- fired Units: Draft Final Existing**  **Source NESHAP Limits** 

**Subcategory Filterable** 

**particulate matter**  **(PM) Hy** **drogen**

**chloride (HCl)**  **Mercury**

**(Hg) SO**  **2**

**(alternate) To** **tal HA** **P**

**metals (alternate**  **)***** Existing non - low Btu, virgin coal EGU 0.030 lb/MMBtu

(0.030 lb/MMBtu)* 0.0020 lb/MMBtu

(0.0020 lb/MMBtu) 1.2 lb/T Btu (1.2 lb/TBtu) 0.20 lb/MMBtu

(0.20 lb/MMBtu) 0.000050

lb/MMBtu (0.000040 lb/MMBtu) Existing low Btu, virgin coal EGU 0.030 lb/MMBtu

(0.030 lb/MMBtu)* 0.0020 lb/MMBtu

(0.0020 lb/MMBtu) 3.3 lb/TBtu**

(4.0 lb/TBtu)** 0.20 lb/MMBtu

(0.20 lb/TBtu) 0.000050

lb/MMBtu (0.000040 lb/MMBtu) Existing
– IGCC 0.040 lb/MMBtu

(0.050 lb/MMBtu) * 0.00050 lb/MMBtu

(0.00050 lb/MMBtu) 2.2 lb/TBtu (3.0 lb/TBtu) NA 0.000050 lb/MMBtu (0.000050 lb/MMBtu) * T otal PM ** Beyond -the -floor limit that is being finalized. *** Individual HAP metal limits are also being finalized as alternate limitations Numbers in (blue) are the proposed limits Draft final limits do not yet account for rounding **Deliberative –**  **Do Not Cite or Quote 26** 

# Coal **- fired Units: Draft Final New**  **Source NESHAP Limits** 
**Subcategory Filterable** 

**particulate matter**  **(PM) Hy** **drogen**

**chloride (HCl)**  **Mercury (Hg)**  **SO 2** 

**(alternate) To** **tal HA** **P**

**metals (alternate**  **)  New non - low Btu, virgin coal EGU 0.0050 lb/MW h (NA) 0.40 lb/GW h

(0.30 lb/GW h) 0.00020 lb/GW h

(0.00020 lb/GW h) 0.40 lb/MW h

(0.40 lb/MW h) 0.060 lb/GW h

(0.040 lb/GW h) New low Btu, 0.0050 lb/MW h 0.40 lb/GW h 0.040 lb/GW h 0.40 lb/MW h 0.060 lb/GW h New low Btu, virgin coal EGU 0.0050 lb/MW h (NA) 0.40 lb/GW h

(0.30 lb/GW h) 0.040 lb/GW h

(0.040 lb/GW h) 0.40 lb/MW h

(0.40 lb/MW h) 0.060 lb/GW h

(0.040 lb/GW h)

New
– IGCC 0.070 lb/MW h** **

0.090 lb/MW h***** (NA) 0.0030 lb/MW h

(0.30 lb/GW h) 0.0030 lb/GW h***

(0.000010 lb/GW h) 0.40 lb/MW h (NA) 0.30 lb/GW h

(0.040 lb/GW h) * Beyond -the -floor limit that is being finalized ** Individual HAP metal limits are also being finalized as alternate limitations *** Based on permit limits received in public comments   Duct burners on syngas ** *** Duct burners on natural gas Numbers in (blue) are the proposed limits Draft final limits do not yet account for rounding **Deliberative –**  **Do Not Cite or Quote 27** 

# Oil **- fired Units: Draft Final New and Existing**  **Source NESHAP Limits**  **Subcategory Filterable**  **PM** ***** **Hy drogen chloride**  **(HCl )** ** **Hy drogen fluoride** 

**(HF )** ** **Mercury**

**(Hg)** Existing
– Liquid oil
– continental 0.030 lb/MMBtu (NA) 0.0020 lb/MMBtu

( 0.00030 lb/MMBtu) 0.00040 lb/MMBtu (0.00020 lb/MMBtu) NA Existing
– Liquid oil
– non - continental 0.030 lb/MMBtu (NA) 0.00020 lb/MMBtu (NA) 0.000060 lb/MMBtu (NA) NA New
– Liquid oil
– continental 0.070 lb/MW h (NA) 0.00020 lb/MW h

(0.00050 lb/MW h) 0.00020 lb/MW h (0.00050 lb/MW h) NA New
– Liquid oil
– non - continental 0.20 lb/MW h (NA) 0.0020 lb/MW h (NA) 0.00050 lb/MW h (NA) NA non - continental (NA) (NA) (NA) **Subcategory Filterable**  **PM Hy** **drogen chloride**  **(HCl )**  **Mercury**

**(Hg) SO**  **2**

**(alternate) To** **tal HA** **P**

**metals (alternate**  **)*** Existing
– Solid oil - derived 0.0080 lb/MMBtu

(NA) 0.0050 lb/MMBtu

(0.0050 lb/MMBtu) 0.20 lb/TBtu

(0.20 lb/TBtu) 0.30 lb/MMBtu

(0.40 lb/MMBtu ) 0.000040

lb/MMBtu (0.000050 lb/MMBtu) New
– Solid oil derived 0.020 lb/MW h

(NA) 0.00030 lb/MW h

(0.00030 lb/MW h) 0.0020 lb/GW h

(0.0020 lb/GW h) 0.40 lb/MW h

(0.40 lb/MW h) 0.60 lb/GW h

(0.20 lb/GW h) * Individual and total HAP metal limits are also being finalized as alternate limitations; includes Hg ** Alternate to percent moisture limitation in the oil Numbers in (blue) are the proposed limits Draft final limits do not yet account for rounding **Deliberative –**  **Do Not Cite or Quote 28**