What U.S. Environmental Protection Agency Greenhouse Gas Regulation Changes Mean to You

Transcription

1 What U.S. Environmental Protection Agency Greenhouse Gas Regulation Changes Mean to You C a t a l y t i c P r o d u c t s I n t e r n a t i o n a l K e n t S m i t h E n g i n e e r i n g M a n a g e r J a n u a r y 2011 A Catalytic Products International White Paper There is an upside for forward-thinking manufacturers regarding EPA blueprint for the way state and local regulatory agencies use the Clean Air Act permitting process to regulate greenhouse gas emissions in the United States. Jan 2011 EPA GHG Regulation Changes: A Catalytic Products International White Paper Page 1 of 15

2 Introduction New concepts affect the permitting process and future project design Table of Contents Introduction 3 Background 4 Timing and Tailoring 5 Strategy 6 Consequences 10 The Upside 11 Conclusion and resources 12 Table addendum 14 Background Including state and local regulators in technology decisions, with an eye toward maximizing the energy efficiency of each project Timing and Tailoring Phasing in GHG permitting in a two-step process in 2011 Strategy Allowing state and local regulators to increase emissions of traditional air pollutants in order to decrease emissions of GHG in certain cases Consequences The requirement to consider GHGs in construction permits may cause system overload The Upside Optimizing energy use can reduce operational costs in the long run Conclusion and Resources As EPA gears up to begin regulation of GHG, Catalytic Products is ready to help you navigate through the new rules Table addendum Regulated greenhouse gases Jan 2011 EPA GHG Regulation Changes: A Catalytic Products International White Paper Page 2 of 15

3 Introduction U.S. Environmental Protection Agency blueprint for the way state and local regulatory agencies use the Clean Air Act permit process to regulate greenhouse gas emissions in the United States is defined in their November 17 document: PSD and Title V Permitting Guidance for Greenhouse Gases. The greenhouse gases that will be regulated include carbon dioxide, methane, nitrous oxide, sulfur hexafluoride and a number of refrigerants. The Agency believes that these compounds are responsible for changing the planet s climate and is thus taking steps to reduce emissions of the gases throughout the nation. In taking this action, EPA is breaking new ground, by not only defining a broad new class of air pollutants, but by changing the way that the Agency regulates emissions of those pollutants. Traditionally, EPA has set definitive, measurable goals when seeking to reduce air pollutant emissions, both in terms of how much a compound a facility is allowed to emit and in terms of the maximum amount of the pollutant that can be in the air we breathe. The Agency will not take the same approach when it comes to greenhouse gases. Instead, they will be asking facilities to reduce emissions to the greatest extent possible and economically feasible. And, yes, there is upside for forward-thinking manufacturers. Jan 2011 EPA GHG Regulation Changes: A Catalytic Products International White Paper Page 3 of 15

4 Background The Permit System EPA said Greenhouse Gasses (GHG) are subject to regulation though an endangerment finding in which the agency declared these gases present a danger to human health and the environment. Under the Clean Air Act (CAA), EPA is obligated to regulate emissions and develop control strategies for air pollutants. In the case of traditional criteria pollutants 1, the CAA directs EPA to develop ambient air standards for each criteria pollutant (i.e. how much of the pollutant is safe to be in the air we breathe) and then to have state and local regulatory agencies [for simplicity, we ll refer to state and local regulatory agencies as state agencies from here on] develop strategies to reach these target levels. The permit system is then used to ensure that individual industrial sources that emit significant amounts of air pollutants meet the standards that the state has put in place in order to reach the ambient air target. Because EPA is not proposing an ambient air standard for GHG, these new pollutants will not be treated as criteria pollutants, but they will be regulated nonetheless. The biggest industrial sources of air pollutants are called major sources. In general, if you re building a new industrial source that emits 250 tons per year or more of any of a regulated criteria pollutant, you have to obtain a construction permit under the Prevention of Significant Deterioration (PSD) program. 2 In addition, major sources must also obtain operating permits for continued operation. Major sources under the Title V operating permit program are sources that emit 100 tons per year or more of a regulated pollutant. 3 1 The traditional criteria pollutants are nitrogen oxides, particulate matter, sulfur dioxide, ozone, carbon monoxide and lead. Volatile organic compounds contribute to ozone formation, thus those emissions are also regulated. 3 Certain sources that emit lesser amounts of Hazardous Air Pollutants also fall under the Title V program, even if their criteria pollutant emissions are less than 100 tons per year. 2 For certain sources the PSD threshold is 100 tons per year. Additionally sources must obtain PSD permits if they make major modifications to a major source. There is a complex methodology for evaluating whether a modification is major or not. That will not be further discussed here, but when large manufacturing concerns or power plants make changes, add power generation capability, etc., such projects are very often major modification and thus PSD kicks in. 1 Jan 2011 EPA GHG Regulation Changes: A Catalytic Products International White Paper Page 4 of 15

5 EPA Strategy to Regulate GHG Timing and Tailoring EPA has decided to rely upon the existing PSD and Title V provisions of the Clean Air Act to regulate GHG, at least in the short term. EPA will begin GHG regulation on January 2, They will use a two-phased approach. 1 In phase one, which will run from January 2, 2011 through June 30, 2011, facilities that would trigger PSD or Title V requirements based on their emissions of other (non GHG) criteria pollutants must address GHG emissions in the permitting process. (The term that EPA uses for these sources in anyway sources, meaning that they would have been subject to PSD or Title V permitting anyway. ) 2 In phase two, beginning on July 1, 2011, any source that is a major source of GHG must address those emissions when going through the PSD or Title V permitting processes. To make GHG regulation feasible, EPA had to figure out a workaround to avoid the 250 ton per year PSD threshold and the 100 ton per year Title V threshold. A relatively small commercial establishment, a church or even a large home could emit 100 tons per year of GHG. Accordingly, if EPA stuck to the permitting thresholds specified in the Clean Air Act, the universe of regulated sources would be impossibly large. According to EPA, sticking to the Clean Air Act in the case of GHG would inflate the number of Title V sources from several thousand to more than one million. The regulatory structure could not possibly manage that many permits. In order to avoid the problem, EPA has creatively interpreted the Clean Air Act through the so-called Tailoring Rule. Through the Tailoring Rule, EPA declared it can alter the permitting threshold in the case of GHG. Well, sort of. Clearly anticipating a legal challenge, EPA retained the 250 and 100 ton per year thresholds when it comes to GHG emissions, but they ve added another test as part of the formula: the amount of carbon dioxide equivalent emissions. Carbon dioxide equivalent, commonly shorthanded CO 2 e, refers to the global warming potential of air pollutants, expressed in terms of carbon dioxide s global warming potential. Multipliers are used to determine the warming potential of GHG. Thus, one ton of methane emissions (with a multiplier of 21) is calculated as 21 tons of CO 2 e. The multiplier for nitrous oxide is 310 and the multipliers to get to CO 2 e for certain refrigerants are in the thousands. Using CO 2 e as an additional test, EPA has narrowed the universe of regulated GHG sources by setting the CO 2 e threshold very high. A complete listing of all GHG s and their global warming potentials is presented in Table 1 at the back of this White Paper. This is the tailoring the Agency is using to avoid the problems that naturally fall out of trying to regulate GHG under the Clean Air Act. In the case of PSD, the CO 2 e threshold is 75,000 tons per year and in the case of Title V it s 100,000 tons per year. Jan 2011 EPA GHG Regulation Changes: A Catalytic Products International White Paper Page 5 of 15

6 EPA Strategy to Regulate GHG Best Available Control Technology Whenever someone builds a new plant that triggers PSD or makes major modifications to an existing plant that is subject to the program, they are required to demonstrate that they are using Best Available Control Technology ( BACT ) to control emissions of air pollutants. Defining BACT requires a detailed analysis of available control technologies, the costs associated with available technologies and potential unintended consequences of using the technologies. 4 In their guidance document, EPA goes to great lengths in instructing state agencies how to determine what BACT is when it comes to GHG control. The Agency recognizes the carbon capture and sequestration (collecting and injecting carbon dioxide deep underground) will not be a feasible or affordable option for most facilities. As an alternative, EPA is urging state agencies to focus on energy efficiency when evaluating GHG BACT. In order to determine that a facility is operating at optimum energy efficiency, EPA goes on to tell state agencies that they must look at the design and operational details of proposed projects. Fluid Heating Heat Exchanger Fluid heating systems represent very efficient recovery methods For example, a facility could install a new heat exchanger to capture additional energy from a hot exhaust stream. For every million BTU of energy recovered, GHG emissions would be reduced by over 700 tons, due to a reduction in natural gas use. The EPA expects that facilities will consider energy saving opportunities like this when evaluating GHG BACT and that the facility will quantify the GHG reductions it expects to realize. 4 A five step top down BACT analysis is required when evaluating control technologies. While the top down methodology is not specified in either law or regulation, it is recommended in EPA guidance. As a practical matter, the top down method is the only one used by permitting authorities. Jan 2011 EPA GHG Regulation Changes: A Catalytic Products International White Paper Page 6 of 15

7 EPA Strategy to Regulate GHG Trade Offs On page 43 of the guidance document EPA says this: Relatively small collateral increases in another pollutant need not be of concern, unless even that small increase would be significant, such as a situation where an area is close to exceeding a NAAQS (National Ambient Air Quality Standard) or PSD increment and the additional increase could push the area into nonattainment. What this means is EPA will accept higher emissions of traditional criteria pollutants if the trade off involves reductions in greenhouse gas emissions. This statement represents a new direction for the Agency. Traditionally these kinds of trade offs were not allowed in a permitting scenario. Allowing them to occur can, in the case of some projects, create opportunities to optimize the project s design even if the plan involves a small increase in a traditional criteria pollutant. Jan 2011 EPA GHG Regulation Changes: A Catalytic Products International White Paper Page 7 of 15

8 EPA Strategy to Regulate GHG A Different Approach Rules When the PSD program kicks in (because a project will increase GHG emissions by 75,000 tons per year of CO 2 e or more) sources applying for a permit are usually required to do computer modeling in order to determine what kind of effect the emissions will have on ambient air. This is a complex procedure requiring specialized, sophisticated software and trained technicians. The model predicts the worst-case impact in ambient air and that value is compared to National Ambient Air Quality Standards (NAAQS) and Significant Impact Levels (SIL). An example will illustrate the methodology. The NAAQS for nitrogen dioxide in the air we breathe is 100 micrograms per cubic meter of air. The SIL is one microgram per cubic meter of air. Under PSD a project cannot result in any impacts that would result in concentrations of nitrogen dioxide greater than the 100 micrograms per cubic meter. Additionally, if concentrations anywhere at ground level exceed the SIL, then additional modeling bringing in other sources in the area has to be conducted. The idea is to use modeling as a tool to ensure that a project cannot turn a place with clean air into a place with dirty air. Thus, if the background level of nitrogen dioxide in a particular county is measured to be 80 micrograms per cubic meter, EPA would not allow someone to build a facility that would result in an additional 30 micrograms per cubic meter being added to the mix anywhere in the county. While this logical approach works for traditional air pollutants, it presents a challenge when it comes to GHGs. Carbon dioxide disperses throughout the atmosphere, so modeling would be an exercise in futility. There are no NAAQS or SIL to compare to for carbon dioxide and EPA does not appear to have any intention of developing them. Thus EPA proposed method of regulating GHG will differ from the Agency s traditional approach. Some parts of the PSD program will apply, while others will not. Jan 2011 EPA GHG Regulation Changes: A Catalytic Products International White Paper Page 8 of 15

9 EPA Strategy to Regulate GHG Fees The Title V permit program authorizes state agencies to collect annual fees from sources that have Title V operating permits. In general, those fees are based on the amount of emissions that a permit holder emits or is allowed to emit. Because EPA is directing state agencies to include GHG in Title V permits, state agencies will be able to collect additional fees based on GHG emissions. From page 56 of the guidance document: Shell and tube heat exchangers used to provide heat recovery solutions and lower energy demand in a multitude of process applications the statutory and regulatory requirements to collect fees sufficient to cover all reasonable (direct and indirect) costs required to develop and administer Title V programs still applies. Permitting authorities need to review resource needs for GHG-emitting sources and determine if their existing fee structure is adequate. If not, permitting authorities would need to raise fees to cover direct and indirect costs of the program or develop alternate approaches. Jan 2011 EPA GHG Regulation Changes: A Catalytic Products International White Paper Page 9 of 15

10 Consequences Permit Delays? In many states, construction permit programs are already pressed to the breaking point due to budget pressures that have reduced manpower and increased workload. The requirement to consider GHGs in construction permits may cause system overload in many cases as state agencies find their workload vastly increased. This could further delay industrial development and add even more uncertainty to the process when developers are considering new projects. It should also be noted that both the PSD and Title V permit processes are subject to public comment and review in every case. Environmental groups like the Sierra Club have used these provisions to hold up projects sometimes for years and to frustrate developers into cancelling others. In the context of the nebulous concept of regulating GHG, environmental groups will have new opportunities to shut down or harass projects that use fossil fuels. In order to get a permit application involving GHG through the system as quickly as possible while avoiding environmental group opposition, it is important to design projects that maximize energy efficiency. As important, the energy efficiency advantages of the project must be clearly presented so that both the permit writer and environmental groups who are unlikely to understand complex technical detail can readily grasp the advantages and agree that the design is in accordance with EPA guidance. Plate and frame heat exchangers represent high efficiency in a compact space Jan 2011 EPA GHG Regulation Changes: A Catalytic Products International White Paper Page 10 of 15

11 The Upside CPI Greenhouse Gas Estimator Do you want to estimate CO2-e from methane or propane gas savings? Follow the link below to find out how much co2-e can be saved by even miniscule savings in natural gas or propane: /store/calculator.asp The methodology used to calculate the GHG savings follows USEPA guidelines, as established in USEPA's "Mandatory Greenhouse Gas Reporting Rule" (40 CFR, Part 98) While EPA GHG guidance creates many new challenges, it can also open the door to new opportunities. Optimizing energy use can reduce operational costs in the long run. There are number of strategies that can help meet EPA requirements while improving a production facility s bottom line. For example: Recovering waste heat, even at relatively low temperatures, using high-efficiency heat exchangers and using the energy recovered in another part of the process, or for comfort heating. Using waste heat from a process to preheat incoming air entering an oven or furnace, thus reducing natural gas use. For facilities that emit methane, capturing and controlling those emissions using an oxidizer, thus reducing CO 2 e emissions by a factor of twenty for each pound of methane combusted. Creating off-site CO 2 e reductions that can be used to offset GHG increases associated with a project using fossil fuels. Collecting and controlling methane generated by animal waste, other agricultural wastes and landfills are but a few examples of opportunities to create CO 2 e reductions. These reductions can then be used during the PSD permitting process to offset the CO 2 e increases that result from burning more of a fuel like natural gas. One way or another, when a facility triggers PSD for GHG, it must show the EPA that it has reduced GHG emissions somewhere. If it is not possible to reduce GHG emissions from the process itself, than the facility operator should look for creative solutions involving other processes or facilities. Jan 2011 EPA GHG Regulation Changes: A Catalytic Products International White Paper Page 11 of 15

12 Conclusion and Resources In addition to including GHG emissions in permits and creating BACT standards for GHG emissions for new major sources and major modifications, EPA recently announced that it will go even farther in regulating GHG emissions. As part of court settlements with environmental groups and several states, the Agency has promised to develop New Source Performance Standards (NSPS) for GHG emissions for power plants and oil refineries. EPA intends to have these regulations in place by the end of NSPS establish finite emissions limits for particular classes of sources. Although the acronym contains the world new, NSPS actually apply to both newly constructed and existing sources. By establishing NSPS for GHG emissions, facilities will be limited in amount of carbon dioxide, methane and other GHG s that each will be allowed to emit. Although NSPS for GHG emissions are limited to the power and petrochemical industries at this time, more NSPS applying to other industries are sure to come. As EPA gears up to begin regulation of GHG, Catalytic Products International is ready to help you navigate through the new rules as quickly, painless and profitably as possible. Catalytic Products International has been helping industries optimize energy use since Our engineers have the skills and experience to design systems that squeeze every last drop of energy out a wide variety of processes. Our custom-designed, durable, highefficiency heat-exchangers set the standard for heat recovery. And, our broad, flexible line of thermal and catalytic oxidizers ensures that the right control solution can be found, when control is needed. Catalytic Products International will continue to stay abreast of these sweeping changes and we ll continue to keep you informed. Very large processes can provide substantial CO 2 e reductions Jan 2011 EPA GHG Regulation Changes: A Catalytic Products International White Paper Page 12 of 15

13 Conclusion and Resources This is a heat recovery system on an RTO that delivers heat back to the process Here are a few examples of the ways CPI is working to help industry reduce GHG emissions: 1. Develop a methane-specific oxidation catalyst. 2. Develop a nitrous oxide-specific oxidation catalyst. 3. Offer systems that efficiently remove refrigerants from air streams. 4. Replace recuperative thermal oxidizers with regenerative thermal oxidizers that are much more energy efficient. 5. Provide low pressure oxidation systems, variable speed drives, and high efficiency motors that are designed to reduce energy use and operating costs. 6. Provide custom heat recovery solutions for air, water, and oil recovery needs. 7. Retrofit existing RTOs with higher thermal efficiency media or catalyst to provide immediate cost reductions. 8. Provide combustion system retrofits that optimize fuel delivery and temperature management to conserve fuel sources. Catalytic Products International is a worldwide leader in the design and manufacture of custom air pollution control systems. Further assistance may be found by consulting Catalytic Products International, Inc., please contact us at: Catalytic Products International 980 Ensell Road Lake Zurich, Illinois tel: fax: info@cpilink.com Jan 2011 EPA GHG Regulation Changes: A Catalytic Products International White Paper Page 13 of 15

14 Table 1 Regulated Greenhouse Gases Common Name CAS No. Chemical Formula Global Warming Potential Carbon Dioxide CO 2 1 Methane CH 4 21 Nitrous Oxide N 2 O 310 HFC CHF 3 11,700 HFC CH 2 F HFC CH 3 F 150 HFC C 2 HF 5 2,800 HFC C 2 H 2 F 4 1,000 HFC-134a CH 2 FCF 3 1,300 HFC C 2 H 3 F HFC-143a C 2 H 3 F 3 3,800 HFC CH 2 FCH 2 F 53 HFC-152a CH 3 CHF HFC CH 3 CH 2 F 12 HFC-227ea C 3 HF 7 2,900 HFC-236cb CH 2 FCF 2 CF 3 1,340 HFC-236ea CH 2 CHFCF 3 1,370 HFC-236fa C 3 H 2 F 6 6,300 HFC-245ca C 3 H 3 F HFC-245fa CHF 2 CH 2 CF 3 1,030 HFC-365mfc CH 3 CF 2 CH 2 CF HFC-43-10mee CF 3 CFHCFHCF 2 CF 3 1,300 Sulfur Hexafluoride SF 6 23,900 Trifluoromethyl Sulphur Pentafluoride SF 3 CF 3 17,700 Nitrogen Trifluoride NF 3 17,200 PFC CF 4 6,500 PFC C 2 F 6 9,200 PFC C 3 F 8 7,000 Perflourocyclopropane c-c 3 F 6 17,340 PFC C 4 F 10 7,000 Perflourocyclobutane c-c 4 F 8 8,700 PFC C 5 F 12 7,500 PFC C 6 F 14 7,400 PFC C 10 F 18 7,500 HCFE-235da CHF 2 OCHCICF HFE-43-pccc NA CHF 2 OCF 2 OC 2 F4OCHF 2 1,870 HFE CHF 2 OCF 3 14,900 HFE CHF 2 OCHF 2 6,320 HFE-143a CH 3 OCF HFE-227ea CF 3 CHFOCF 3 1,540 HFE-236ca12 NA CHF 2 OCF 2 OCHF 2 2,800 HFE-236ea CHF 2 OCHFCF Jan 2011 EPA GHG Regulation Changes: A Catalytic Products International White Paper Page 14 of 15

15 Table 1 Regulated Greenhouse Gases (continued) Common Name CAS No. Chemical Formula Global Warming Potential HFE-236fa CF 3 CH 2 OCF HFE-245cb CH 3 OCF 2 CF HFE-245fa1 NA CHF 2 CH 2 OCF HFE-245fa CHF 2 OCH 2 CF HFE-254cb CH 3 OCF 2 CHF HFE-263fb CF 3 CH 2 OCH 3 11 HFE-329mcc CF 3 CF 2 OCF 2 CHF HFE-338mcf CF 3 CF 2 OCH 2 CF HFE-338pcc13 NA CHF 2 OCF 2 CH 2 OCHF 2 1,500 HFE-347mcc CH 3 OCF 2 CF 2 CF HFE-347mcf2 NA CF 3 CF 2 OCH 2 CHF HFE-347pcf CHF 2 CF 2 OCH 2 CF HFE-356mec CH 3 OCF 2 CHFCF HFE-356pcc3 NA CH 3 OCF 2 CF 2 CHF HFE-356pcf2 NA CHF 2 CH 2 OCF 2 CHF HFE-356pcf CHF 2 OCH 2 CF 2 CHF HFE-365mcf3 NA CF 3 CF 2 CH 2 OCH 3 11 HFE-374pc CH 3 CH 2 OCF 2 CHF HFE-449sl Chemical Blend C 4 F 9 OCH (CF 3 ) 2 CFCF 2 OCH 3 HFE-569sf2 Chemical Blend C 4 H 9 OC 2 H (CF 3 ) 2 CFCF 2 OC 2 H 5 Sevoflurane CH 2 FOCH(CF 3 ) NA (CF 3 ) 2 CHOCH 3 27 NA CHF2OCH(CF3)2 380 NA NA -(CF 2 ) 4 CH(OH)- 73 NA NA CH 3 OCF(CF 3 ) NA NA (CF 3 ) 2 CHOH 195 NA NA CF 3 CF 2 CH 2 OH 42 PFPMIE NA CF 3 OCF(CF 3 )CF 2 OCF 2 OCF 3 10,300 Jan 2011 EPA GHG Regulation Changes: A Catalytic Products International White Paper Page 15 of 15