Why We Are Interested In Coal-fired Generation

Transcription

1 Allison D. Wood of Hunter & Williams LLP 13-1 New Energy Supplies From an Old Source New Coal Plant Permitting Allison D. Wood Hunton & Williams Energy in the Southwest Santa Fe, New Mexico July 14, 2005 Why We Are Interested In Coal-fired Generation Percentage Electrical Generation by Fuel Type* Gas/Oil 18.8 % Nuclear 19.7 % Renewables 10.7 % Coal 50.8 % * Statistics from EEI.org Trends in Fossil Fuel Costs** Gas $/mmbtu Oil $/barrel Coal $/ton (Illinois basin) ** Current as of 2/14/05

2 Allison D. Wood of Hunter & Williams LLP 13-2 Coal Use Grows While Emissions Decline Coal used for electricity has tripled since 1970 while emissions have been significantly improved. 200% 150% +177% Electricity from Coal Percent Increase Since % 50% 0% -50% PM10-100% -87% E Source: EPA National Air Pollutant Emission Trends, EIA Annual Energy Review 2002 (October 2003). No x0% SO 2-35% The Path to Zero Emissions from Coal-Fueled Generating Plants Emissions from Coal-Fueled Generating Plants Sulfur Dioxide Pounds Per Million Btu Nitrogen Oxide Near-Zero 0 U.S. Average U.S. Average Clean Air Clean Air Existing IGCC Prairie State IGCC Projection FutureGen Interstate Rule 2010 Interstate Rule 2015 (Permit Level) (Permit Level) Goals Source: EPA s Clean Air Markets database; Energy Information Administration 2004 Annual Energy Outlook; GE Energy; SFA Pacific.

3 Allison D. Wood of Hunter & Williams LLP 13-3 Public Policy Issues Local: National: Land use and siting issues CAA and other environmental permitting and regulatory issues International: Carbon regulation National security Sierra Club Legal Defense Fund (9/16/04): In general, our long-term objective is to make sure that coal-fired plants get closed. Eventually, with enough attacks against coalfired plants, there will be action to shut them down. Complex Permitting Process In most states, there is no centralized permitting authority that coordinates all of the required permits for a new power plant. In many areas Federal, state, and local permits of various types are required. The permits range from major permits for air and water to local zoning and sewer interconnection. Some are very specific to the individual project. Varying lengths of time for the permitting process for each agency. Duration of permit validity also varies. Regulatory challenge procedures also vary by permitting agency. Project scheduling is very important to ensure all permits are in hand and valid when you finally make it to financing.

4 Allison D. Wood of Hunter & Williams LLP 13-4 Air Permitting Generally the longest lead time permit and most difficult to obtain. New plant additions at existing facilities best to bubble to avoid PSD for most pollutants. Restricts appeals only to PSD pollutants usually only particulate and sulfuric acid mist. New plants have a more difficult process: BACT analysis under pressure for determination that IGCC is BACT. Appeals filed by environmental groups on over 20 power plant permits. New issues raised with respect to FLAG and impacts to endangered species. Recent permitted emission levels for some pollutants nearing detection limits, problems with test methods (ex 202), and CEMS reliability for PM and mercury. Air Permit Appeals Sierra Club leading the effort in most states NRDC, Clean Air Task Force also involved Entities well funded About 20 challenges in process, many different states Longview multi-million dollar settlement, up to 4:1 emission credits for Class I Significant funds set aside to finance the challenges Delay is part of the tactic Major themes IGCC should be BACT Impacts to threatened and endangered species, NEPA regardless of federal action 8 hour ozone and PM 2.5 Others more specific to individual permits Possible expiration of PSD permit before appeal process completed

5 Allison D. Wood of Hunter & Williams LLP 13-5 Class I Areas Concerns for New Plant Construction Class I Areas Class I areas are located throughout the United States and the FLM takes a liberal view of what might affect them.

6 Allison D. Wood of Hunter & Williams LLP 13-6 The Problem To obtain an permit, must show compliance with increment and protection of air quality related values in Class I areas. Class I areas are National Parks, Wilderness Areas, Monuments and Wildlife Refuge described in 40 C.F.R (e) and listed in FLAG. Air quality related values include visibility, soils and vegetation, and endangered species. The Problem (continued) Federal Land Manager has primary responsibility for protection of Class I areas. FLM is the Secretary of Interior (Deputy Secretary for Fish and Wildlife and Parks) and Secretary of Agriculture. States and EPA have to coordinate with FLM but have final decision making role on Class I Areas. FLM on one hand and States/EPA on the other use different criteria and have different perspectives. Result is confusion, inefficiency, and delay.

7 Allison D. Wood of Hunter & Williams LLP 13-7 Background Information Applicant must show emissions will not cause or contribute to Class I increment using modeling and objective criteria. Modeling: ISC3C if Class I area is within 50 km and CALPUFF if Class I area is > 50 km distant. See 40 C.F.R. Part 51, App. W. Visibility impairment modeled as light extinction. What the Regulations Say: 40 C.F.R (p) State/EPA must send application to FLM if project emissions may affect a Class I area. FLM may comment on project, including providing a visibility analysis. State/EPA has to consider FLM comments; if State/EPA disagrees, have to explain why in public notice on draft.

8 Allison D. Wood of Hunter & Williams LLP 13-8 What the Regulations Say: 40 C.F.R (p) State/EPA has to send draft permit to FLM who gets to comment with the public; FLM can make a finding of adverse impact. If modeling shows the project will not cause or contribute to a violation of Class I increment, burden is on FLM to demonstrate adverse impact to AQRVs, including visibility. What the Regulations Say: 40 C.F.R (p) If State/EPA concurs with FLM, it shall not issue the permit. State/EPA may issue the permit over FLM adverse finding if State/EPA determines that project emissions will not result in an adverse impact to AQRV s including visibility. FLM can appeal such a determination as any other citizen. No special status.

9 Allison D. Wood of Hunter & Williams LLP 13-9 What the Regulations Say: 40 C.F.R (b)(29) Adverse Impact to Visibility Visibility impairment which interferes with the management, protection, preservation or enjoyment of the visitor s visual experience of the Federal Class I area What the Regulations Say: 40 C.F.R (b)(29) This determination must be made on a case-by-case basis, taking into account the geographic extent, intensity, duration, frequency and time of visibility impairment, and how these factors correlate with: (1) times of visitor use of the Federal Class I area; and (2) the frequency and timing of natural conditions that reduce visibility.

10 Allison D. Wood of Hunter & Williams LLP What the Regulations Say In a nutshell, the determination: Is Case-by-case; Considers frequency, extent, and intensity of visibility impairment; Considers geographic extent of vista; Considers timing of impairment relative to visitation; and Considers natural factors that impair visibility (e.g., weather). What Is FLAG? FLAG = Federal Land Managers Air Quality Related Values Workgroup Implementing Agencies are U.S Forest Service, U.S Fish and Wildlife Service, and National Park Service. Secretary of Interior (Deputy Secretary for Fish, Wildlife and Parks) and Secretary of Agriculture Agencies developed guidance to promote consistency and manage expectations.

11 Allison D. Wood of Hunter & Williams LLP What FLAG Says FLAG provides guidance on: Visibility modeling Acid deposition Ozone modeling Best Available Control Technology What FLAG Says About Visibility See flow chart on page vi of FLAG If single source will contribute to impairment > 10% extinction, FLM is likely to object. If source contributes > 0.4% to cumulative impact > 10% extinction, FLM likely to object. If single source contributes 5% extinction, FLM is not likely to object.

12 Allison D. Wood of Hunter & Williams LLP What FLAG Says About Visibility If single source contributes < 0.4% to cumulative impact > 10% extinction, FLM is not likely to object. FLAG recommends very conservative assumptions in CALPUFF modeling. FLAG uses a very pristine definition of natural background. Differences Between FLAG and Regulations Rigid application of FLAG is not caseby-case (and is unlawful also because it uses guidance as a rule). Site specific refinements in modeling make the predictions more accurate: Meteorological data Ammonia Relative humidity Background visibility

13 Allison D. Wood of Hunter & Williams LLP Differences Between FLAG and Regulations Regulations allow consideration of weather events that are reflected in modeling parameters (fog, rain). Regulations allow for comparison of time of visibility extinction to visitation times (e.g., modeling may show low visibility at night due to high relative humidity, but park is closed then anyway). Although light extinction may be based on 100 km vistas, park may not have vista more than a few kilometers. Differences Between FLAG and Regulations Science is still developing on what level of light extinction is detectable. FLAG threshold of 5% is conservative. More recent science suggests 20% might be more reasonable. There is no special role for FLMs in BACT analysis. Difficulty with deposition analysis, ozone modeling, and endangered species (a whole other symposium).

14 Allison D. Wood of Hunter & Williams LLP Fixes Executive oversight Agency rulemaking Congressional oversight/legislation (Clear Skies) Judicial decisions