Volume 14, Issue #3

On September 22, 2009, the U.S. Environmental Protection Agency (EPA) issued a final rule for mandatory reporting of greenhouse gases (GHG). A week later, EPA proposed a follow-up rule that would require sources covered by the reporting rule to get permits and meet GHG control and energy efficiency requirements when significantly modifying existing or building new sources. The immediate question for many facilities is whether they are large enough emitters of GHGs to be covered by the new reporting rule. If so, they will need to begin collecting, analyzing and reporting data on GHG emissions by January 1, 2010. EPA estimates that approximately 10,000 facilities, representing 85% of all GHG emissions in the U.S., are covered by the reporting rule.

The list of specifically affected sources includes energy intensive industries, such as:

• power plants


• pulp and paper mills


• aluminum production facilities


• iron and steel mills


• petroleum refineries


• cement kilns

However, the rule also applies to miscellaneous stationary combustion sources having actual GHG emissions of 25,000 metric tons or more. This will result in some moderate GHG sources (large hospitals, universities and office complexes, etc.) being required to collect data on stationary fuel combustion, and to follow specified procedures for quality assurance, missing data, recordkeeping and GHG reporting. As a general guide, you should evaluate rule applicability if your facility has combustion sources with combined heat inputs of 30 million Btu’s per hour (MMBtu/hr) or greater.

This national reporting requirement is intended to provide a better understanding of where GHGs are coming from, and will guide development of the best possible policies to reduce emissions and mitigate their impact on climate change. Reported data will be publicly available, and will allow facilities to track their own emissions, compare them to similar facilities, and aid in identifying cost effective opportunities to reduce GHG emissions in the future.

EPA’s proposed rule of September 30, 2009 signaled that identifying large GHG sources via the new reporting rule was just an initial step, aimed at identifying large GHG sources for additional regulatory requirements. The proposed rule would require facilities to obtain construction and operating permits if they have at least 25,000 tons of GHG emissions a year. Such facilities would also be required to demonstrate the use of best available control technologies and energy efficiency measures to minimize GHG emissions when their facilities are constructed or significantly modified. If adopted, this permitting approach would be somewhat comparable to EPA’s existing permit program for major sources of traditional (criteria) pollutants such as sulfur dioxide (SO2) and oxides of nitrogen (NOx).

For now, the immediate concern for large GHG sources is the final reporting rule. It requires reporting of annual emissions of carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), sulfur hexafluoride (SF6), and several other fluorinated greenhouse gases, as applicable to the reporting facility. A number of industrial sources recommended delaying the start of the program until 2011, but EPA ultimately decided to keep the originally proposed reporting schedule. The final rule requires annual reporting for calendar year 2010 emissions, with the first reports due from affected facilities by March 31, 2011. However, because some facilities will need to install sophisticated continuous emission monitoring systems, EPA added a provision to allow use of best available monitoring methods in lieu of required monitoring methods for the initial monitoring period (January - March 2010). Extensions beyond March 2010 will be considered by EPA, but will not be granted after 2010. EPA also added monitoring provisions that allow engineering calculation estimates to replace the need for new monitors in certain circumstances.

Some industrial sectors (e.g., food processing, electronics manufacturing, wastewater treatment, industrial landfills, ethanol production, etc.) may benefit from EPA’s decision that more time is necessary for EPA to conduct additional data review and consider alternative reporting methods. The final rule lists subparts for these industrial sectors as “reserved”, and there is no timeline for finalizing their rule requirements.
Facilities that determine they are covered by the rule, may want to carefully examine their emissions estimates, especially if their initial calculations reveal that they are near the reporting threshold of 25,000 metric tons. If rule coverage is unavoidable, a facility may benefit from considering strategies for exiting the reporting program. They would be able to exit the reporting program if they reduce facility-wide GHG emissions, in any of the following ways:

• 5 consecutive years of emissions below 25,000 metric tons GHG/year, or


• 3 consecutive years of emissions below 15,000 metric tons GHG/year, or


• Shut down of GHG-emitting processes or operations.

The new rule creates several regulatory questions. These include the role the States will play in implementing the rule, the effects the new rule may have on existing regional GHG regulatory programs, and excessive or duplicative reporting burdens created by the existence of other GHG reporting programs. EPA has offered the following clarifications:

• EPA will not delegate rule implementation to any State;


• The rule does not pre-empt States from regulating or requiring reporting of GHGs; and,


• EPA will work with State and Regional climate programs to provide timely access to verified emissions data, and to harmonize data and reporting systems.

Contact Roux
Roux Associates’ air quality compliance and climate change professionals (including DOMANI, a wholly owned subsidiary of Roux Associates, Inc.) have extensive experience with emissions estimation, measurement, reporting, and GHG reduction and strategy development. Our previous engagements have been with a wide range of clients, including the following representative GHG/Climate change client list:

Allstate
Cisco
Dean Foods
Del Monte
Estee Lauder
Exxon Mobil
Gerdau Ammeristeel
Hunter Douglas
IEPA
Invensys
McGraw-Hill
National Geographic Society
Pepco Holdings
Pfizer
Schering Plough
State of Illinois
State of New Mexico
The Coca-Cola Company
United Airlines
William Wrigley Jr. Co.

Should you have any immediate questions regarding this memorandum, or if you would like to explore how we can help you evaluate rule applicability, or comply with rule requirements, please feel free to contact Paul Eisen, CCM, Principal Scientist at Roux Associates, at peisen@rouxinc.com or (631) 232-2600.

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Notice: ENVIRONMENTAL REVIEW is published by Roux Associates Inc., Islandia, New York. The information contained herein is provided for educational and informational purposes only and should not be taken as technical consulting advice for specific situations, which depends on an evaluation of site-specific factual information. Please direct questions or comments to the Roux Associates professional named in a specific article. Copyright Roux Associates, Inc., 2009.