Thursday, December 18, 2008

Regulating CO2 Emissions - a cautionary tale

Last month, November 13, 2008, to be exact, the Environmental Appeals Board of the EPA, handed down an important decision [the complete text of the decision can be read here]. The decision concerned a permit granted Deseret Power Electric Cooperative, which would have allowed construction of a new waste-coal-fired electric generating unit at Deseret’s existing Bonanza Power Plant, located near Bonanza, Utah.

In 2007, the Sierra Club presented a challenge to this permit, and sought to have it reviewed on the grounds that a) EPA's Region 8's office that granted the permit " failed to adequately consider “alternatives to the proposed facility;" and b)Region 8 failed to "apply “BACT,” or best available control technology, to limit
carbon dioxide (“CO2”) emissions from the facility." The first issue (a) was set aside and not considered by the Environmental Appeals Board. It was on the second issue that the ground breaking decision was made.

The Environmental Appeals Board determined that EPA Region 8 had inappropriately dismissed the application of a BACT (best available control technology) standard out of hand. Region 8 argued that had not imposed "a CO2 BACT limit in the Permit" because "it lacked the authority to do so."

The Environmental Appeals Board essentially said that the EPA (and EPA Region 8) DID have the authority to impose a CO2 BACT limit, and therefore must consider such a limit. The Appeal decision does not require a BACT limit to be imposed in this case, only that the reasons given (lack of authority) could not justify the lack of a BACT limit. The Appeals Board decision stated:

"Accordingly, we remand the Permit for the Region to reconsider whether or not to impose a CO2 BACT limit in light of the Agency’s discretion to interpret...what constitutes a “pollutant subject to regulation under this Act.” In remanding this Permit to the Region for reconsideration of its conclusions regarding application of BACT to limit CO2 emissions, we recognize that this is an issue of national scope that has implications far beyond this individual permitting proceeding. The Region should consider whether interested persons, as well as the Agency, would be better served by the Agency addressing the interpretation of the phrase “subject to regulation under this Act” in the context of an action of nationwide scope, rather than through this specific permitting proceeding."

This ruling recommends that the EPA to develop "best available control technology" (BACT) limits for CO2 emissions that would apply across the nation to all new construction or additions to coal fired electrical generation facilities.

But what is the "best available control technology" when it comes to limiting CO2 emissions? Although "clean coal" has been bandied about by the coal and electricity industry for several years, the actual technologies this term applies to are still for the most part on the drawing board, or deployed in small scale research settings only. Short of carbon capture, some existing technologies that reduce CO2 emissions include co-generation (of heat and electricity) or recycling, and co-firing with biomass. Simply determining the minimum possible CO2 emissions of existing highest efficiency conventional coal-fired technology is a challenge that will have to be met.

Many environmental organization and blogs hailed this decision as a triumph that would put a complete stop to permits for new coal-fired electricity generation. But the decision falls far short of that. EPA Region 8 can decide against imposing BACT limits on CO2, it just cannot use the same set of reasons (lack of jurisdiction or authority to set such limits).The Appeals board only recommends (nor requires) that Region 8 consider its decisions as part of a larger national policy. While the ruling makes the development of CO2 BACT limits more likely, the imposition of such limits on any particular new construction or expansion of an existing plant must also include considerations of economic impacts.

It could take months, or even years to establish meaningful BACT limits for CO2 emissions. Environmental Appeals Board decision does not require that all new permits for coal-fired generation wait until those limits have been established, although it certainly can be seen as recommending this action. Much will depend upon how the new Obama administration decides to respond to the Appeals Board ruling.

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