CLIMATE:

With start of July, more facilities need CO2 permits

Six months after U.S. EPA's first round of climate change regulations kicked in, the rules requiring new power plants and factories to get permits for their greenhouse gas emissions are being expanded to more facilities today.

The program has now entered "Phase 2," meaning that any new or modified facility will need an air pollution permit if it would release more than 75,000 or 100,000 tons of carbon dioxide. Up until today, the CO2 limits only applied to facilities that would have needed a permit anyway because they would release large amounts of "criteria" pollutants that lead to soot and smog.

Bill Becker, executive director of the National Association of Clean Air Agencies, said states have a better grasp of what to do in Phase 2 because they have had six months of experience with the program.

When it came out with the "tailoring rule," which set the July 1 start date, EPA said that about 550 more facilities will now need Title V operating permits and about 900 more per year will need preconstruction permits.

"While there still remain daunting challenges for some agencies, especially those that are strapped in their resources, by and large it is working well throughout most of the states," Becker said today. "We're not hearing many complaints."

Most of the new permits are expected to go to landfills, which allow greenhouse gases such as methane to escape into the air as trash decomposes, or manufacturing plants. Factories could trigger the new requirements if they use natural gas-fired boilers, which release carbon dioxide but release very little soot or smog-forming gases, Becker said.

The transition to Phase 2 was quiet; it came without fanfare from EPA and was largely unheralded by either supporters or critics of the agency's plan to cut down on gases that are linked to climate change.

Jeff Holmstead, an industry attorney at Bracewell & Giuliani LLP who was EPA's air chief during the George W. Bush administration, said there have not been many permit applications, in part because of the bad economy but also because companies are waiting on the sidelines to see what the rules will look like.

"There's no doubt that there's a lot of construction that's not happening," Holmstead said.

State and local agencies, which write most of the air permits, have shied away from doing too much with the program. They are the ones who decide whether plants are using the best available control technology (BACT) for their carbon emissions, and so far, they have taken that to mean using the most energy-efficient equipment available.

EPA has largely stood to the side other than to offer a few technical suggestions, despite claims by industry lobbyists that the agency would use the program to crack down heavily on fossil fuels in the absence of a climate change program from Congress.

That situation has not materialized. Earlier this week, the Michigan Department of Environmental Quality finalized the first permit for a new coal-fired power plant, in line with an earlier draft permit that drew kind words from EPA (E&ENews PM, June 29).

The state decided that carbon capture technology was not available but required the plant to burn a mixture of 95 percent coal and 5 percent biomass, which state officials decided would ease the total amount of carbon dioxide in the atmosphere.

Vince Hellwig, the air quality chief at the Michigan Department of Environmental Quality, said that writing CO2 limits into the permit was a learning experience. But the draft permit came out just a few months after the new rules took effect, showing it was not the kind of disruptive change that some critics feared.

"It was a little bit different, but in many ways the same," Hellwig said in an interview. "You go through the same steps, the same process, for any BACT analysis."