What is the Transport Rule?

Transcription

1 What is the Transport Rule? The Transport Rule will limit pollution from power plants that are located in 31 eastern, southern, and midwestern states and DC The CAA requires each state to be a good neighbor and do its fair share to avoid sending air pollution to other states This proposal reduces emissions contributing to fine particle (PM2.5) and ozone nonattainment that travel across state lines: Sulfur dioxide (SO 2) and nitrogen oxides (NOx) contribute to PM 2.5 transport NOx contributes to ozone transport The Transport Rule will reduce millions of Americans exposure to fine particles and ozone 3

2 What is the Transport Rule? These requirements are long overdue EPA attempted to improve air quality with a regulation called the Clean Air Interstate Rule (CAIR) in 2005 The court found that some things we did were not authorized by the law The court left CAIR in place but said we had to replace it This Transport Rule is intended to replace CAIR 4

3 Why is the Transport Rule Needed? Air pollution can travel hundreds of miles and cause multiple health and environmental problems The ozone and PM 2.5 air quality in a particular location even close to a source like a power plant is due to a combination of local emissions and emissions from hundreds of miles away Many places are still violating the 1997 ozone and the 1997 and 2006 PM 2.5 healthbased air quality standards (NAAQS) Attaining those NAAQS will require some combination of emission reductions from: Sources located in or near nonattainment area (i.e. local pollution) Sources located further from the nonattainment area (i.e. transported pollution) Local pollution Transported pollution + = Air Quality 5

4 Air Quality in Any One Place is Affected by Sources in Many States Each arrow represents a state that is significantly affecting air quality in a downwind nonattainment or maintenance area in 2012 In the box above, Wisconsin is both affected by some states and contributes significant pollution to some states Key to Arrows Linkage of Upwind to Downwind for Ozone Linkage of Upwind to Downwind for Annual PM 2.5 Linkage of Upwind to Downwind for 24 hour PM 2.5 6

5 Transport Rule is One Big Step Local pollution Transported pollution Air Quality + = Other regulations affect local sources of pollution THIS REGULATION affects SO 2 and NOx that form fine particles and ozone and are transported to downwind states 7

6 Ozone: More Needs to Be Done to Reduce Transport EPA moved quickly to get this Transport Rule out to ensure the earliest public health protection and respond to the court as soon as possible This proposal reduces seasonal ozone levels Additional emission reductions will be needed for everyone to attain the existing (1997) ozone standard and the upcoming 2010 ozone standards. EPA has already started the required analyses for a second transport rule affecting ozone transport We anticipate proposing that second transport rule in 2011 and finalizing it in 2012 This schedule is designed to help downwind states attain the reconsidered ozone standards on time 9

7 Key Aspect: States that Significantly Contribute The Transport Rule affects 31 eastern, southern, and midwestern states and DC This proposal defines state obligations to reduce pollution that significantly contributes to another state s nonattainment and maintenance areas (i.e. transported pollution ) based on: the size of a state s contribution the cost of controlling pollution from various types of sources (e.g. power plants, refineries, etc) the air quality impacts of reductions This definition is key to determining what amount of emission reduction the rule will achieve 10

8 States Covered Reduces both fine particle (SO 2 and annual NOx) and ozone-season NOx emissions in 2012 Requires further SO 2 reductions in 2014 in some states States controlled for both fine particles (annual SO 2 and NOx) and ozone (ozone season NOx) (21 states +DC) States controlled for fine particles only (annual SO 2 and NOx) (6 states) States controlled for ozone only (ozone season NOx) (4 states) States not covered by the Transport Rule 11

9 States in the SO 2 Program Are In One of Two Groups Proposal includes additional requirements for annual SO 2 reductions in some states in 2014 Two Control Groups Group cap lowers in 2014 Group cap only SO 2 Group 1 states (15 states) SO 2 group 2 states (12 states + DC) 12 States in both groups are covered for annual NOx

10 Key Aspect: Timing The first Transport Rule emission control requirements take place in 2012 for SO 2 and NOx Additional SO 2 requirements take effect in 2014 To assure emissions reductions happen quickly, EPA is proposing federal implementation plans, or FIPs, for each of the states covered by this rule. A state may choose to develop a state plan to achieve the required reductions, replacing its federal plan, and may choose which types of sources to control. This process can take several years. EPA continues to assess what further emission reductions may be needed to meet CAA requirements for transported pollution for: 1997 ozone standard 2006 PM 2.5 standard 13

11 Key Aspect: Use of Limited Trading EPA is proposing a preferred approach, or method, for getting these emission reductions. Requires each state to limit its emissions Allows air pollution emissions trading within a state and limited between state trading among power plants Results in a total of 4 trading programs - one for seasonal NOx, one for annual NOx, and two for SO 2 EPA is also proposing two alternative approaches 1st Alternative: Requires each state to limit its emissions Allows only within-state trading 2nd Alternative: Requires each state to limit its emissions Limits the emission rate of each source (often called direct control ) Allows limited emissions averaging within each state 14

12 Why a Limited Trading Program Is Our Preferred Approach Most source-specific control requirements limit emissions rates, not total emissions If sources can t adjust their power output somewhat, electricity reliability is likely to suffer None of EPA s alternatives within this proposal can ensure there will be no emission increases at any facility Under the direct control alternative, the emissions rate for each facility is reduced but each facility could emit more by increasing its power output Under the within-state trading option, state emissions are limited but individual facilities within each state could increase their emissions as long as another facility in the state had decreased theirs Determining a separate cap for each source would be time-consuming and would likely lead to less-stringent control requirements Limited trading helps keep control costs and electricity prices - low 15

13 Key Aspect: Proposal Supports Local Emission Reductions Unlike other trading programs, the Transport Rule limits total emissions from covered sources in each state Sources CANNOT use existing Clean Air Act allowances to comply, which means sources cannot draw on the existing bank instead of reducing emissions Strict penalties If a source fails to turn in enough allowances to cover its emissions, it must surrender additional allowances (beyond the number needed to cover its emissions) and is violating the CAA and must pay a maximum discretionary penalty of $37,500 per ton/day (inflation adjusted) A source must also turn in additional allowances if it emits more than its share when the state limit is exceeded. If it fails to do that, it is subject to CAA penalties States have additional tools (e.g. SIP requirements) that provide an additional backstop EPA is also working on other efforts (e.g. tighter NAAQS; implementation of air toxics standards; etc) to protect every neighborhood from air pollution 16

14 Annual SO 2 Power Plant Emissions Scale: Largest bar equals 2.2 million tons of SO2 emissions in Ohio, 1990 Source: EPA, 2010 * Emissions shown include only Acid Rain Program sources -- for 97% of annual Transport Rule SO 2 emissions and 88% of Transport Rule units in SO2 Emissions (million tons) Total U.S. Emissions Year 18

15 Annual NO X Power Plant Emissions Scale: Largest bar equals 534 thousand tons of NOx emissions in Ohio, 1990 Source: EPA, 2010 * Emissions shown include only Acid Rain Program sources for 96% of annual Transport Rule NO X emissions and 88% of Transport Rule units in NOX Emissions (million tons) Total U.S. Emissions Year 19

16 Ozone Season NO X Power Plant Emissions Scale: Largest bar equals 216 thousand tons of ozone season NOx emissions in Ohio, 1997 Source: EPA, 2010 * Emissions shown include only Acid Rain Program sources for 96% of ozone season Transport Rule NO X emissions and 88% of Transport Rule units in Ozone Season NOX (million tons) Total U.S. Emissions Year 20

17 Air Quality Improvements Are Widespread Before Transport Rule After Transport Rule 21

18 Health Benefits for Millions of Americans Estimated Number of Adverse Health Effects Avoided Due to Implementing the Proposed Transport Rule* Health Effect Number of Cases Avoided Premature mortality 14,000 to 36,000 Non-fatal heart attacks 23,000 Hospital and emergency department visits 26,000 Acute bronchitis 21,000 Upper and lower respiratory symptoms 440,000 Aggravated asthma 240,000 Days when people miss work or school Days when people must restrict their activities 1.9 million 11 million * Impacts avoided due to improvements in PM 2.5 and ozone air quality in

19 Billions of Dollars of Health Benefits in 2014 Ranges of Benefits Maine, New Hampshire, Vermont, Rhode Island, North and South Dakota receive benefits and are not in the Transport Rule region. Transport Rule RIA, Table A-4 and A-5; mortality impacts estimated using Laden et al. (2006), Levy et al. (2005), Pope et al. (2002) and Bell et al. (2004); monetized benefits discounted at 3% 23

20 Are There People Who Don t Benefit? Yes, there are a few disbenefits outside the area affected by the Transport Rule Modeling shows 15 excess premature deaths, mostly in a few counties in Colorado This is compared to the 14,000 excess premature deaths prevented in the area covered by the Transport Rule These modeled increases are NOT the result of trading within the Transport Rule They are due to a combination of: area being outside the Transport Rule region (because sources there do not contribute significantly to downwind state nonattainment or interfere with maintenance) national nature of both coal markets and the Acid Rain Program allowance market Future rules, such as Utility MACT and the second Transport Rule, as well as new state actions, will either prevent these increases from actually occurring or eliminate them shortly thereafter 24

21 Impact on Utility Bills EPA s goal is to provide environmental and health benefits while minimizing any increases in electricity costs Electricity prices can affect Price people pay to heat and cool their homes Price people pay for goods that require large amounts of energy to manufacture Increases in electricity prices can be offset by using less of it, i.e. increasing the energy efficiency of homes, businesses, and manufacturing facilities The proposed Transport Rule will increase utility prices very little In 2014, the proposed Transport Rule is estimated to increase national average retail electricity prices roughly 1.5 percent For example, if you spend $ per month on your electric bill in 2014, your bill is estimated to increase to $ as a result of the Transport Rule 25

22 Schedule for This Rulemaking Publication of proposal August 2, 2010 (75 CFR 45209) 3 public hearings were held August 19, 2010 Chicago, IL August 26, 2010 Philadelphia, PA September 1, 2010 Atlanta, GA Webinars for environmental justice; state and local stakeholders held August/September Comment period is open until October 1, 2010 Final Transport Rule is expected in spring/summer

23 To learn more about the Transport Rule Main rule website The EJ Section of the Transport Rule, which summarizes the primary aspects of the rule, can be found on pages of the August 2 Federal Register notice, which is available at The Office of Air and Radiation s environmental justice website can be found at EPA s environmental justice website can be found at 29