january 24, 2012 environment group/washington food industry environmental council environmental...

January 24, 2012

Environment Group/Washington

Food Industry Environmental CouncilEnvironmental Issues Presentation

Patrick TraylorAdam KushnerAdam Siegel

www.hoganlovells.com 2

Overview

• General overview of energy/environmental policy (Kushner)• Boiler Air Toxics Rules Update (Traylor & Kushner)• Cross-state Air Pollution Rule (Traylor & Kushner)• Mercury and Air Toxics Standards (Traylor & Kushner)• Clean Air Act Climate Change Program (Traylor & Kushner)• CAFOs (Siegel)• EPA Chemical Safety and Management Initiatives, Dioxin

(Kushner)


Overview—Energy and the Environment

• Direct impacts to food industry– GHG PSD rules– Boiler air toxics rules– CAFO rules– Categorical standards (e.g., grain elevator NSPS)– Chemical safety and management initiatives– Dioxin regulation


Overview—Energy and the Environment

• Indirect impacts to food industry– EPA’s power plant rules (CSAPR, MATS, GHG NSPS)– Land-based natural gas (and now oil) energy extraction– Renewable fuel standards (RFS) and alternative fuels– Increased domestic refining

• Planned expansions to “crack” sour crude• Air toxic impacts

– Domestic energy development– And, of course, climate issues . . . .


Boiler Air Toxics Rules• Rule package

– Emissions standards for area source industrial, commercial, and institutional boilers

– Emissions standards for major source industrial, commercial, and institutional boilers

– Emissions standards for commercial/industrial solid waste incinerators– Identification of non-hazardous materials that are solid waste

• Procedural posture– Original MACT/CISWI rules vacated by D.C. Circuit– Finalized replacement rules on March 21, 2011, but stayed by EPA pending

reconsideration– Proposed reconsidered rules on December 23, 2011– D.C. District Court vacated EPA’s stay on January 9, 2012– EPA informed Senator Ron Wyden on January 18, 2012, that EPA will issue

“no action assurance letters” to affected sources pending finalization of December proposal


Boiler Air Toxics Rules• Modifications from 2011 rule

– The non-hazardous solid waste proposal modifies somewhat the definition of biomass so as to allow more materials traditionally used as a fuel to be classified as a non-hazardous solid waste (and therefore exempting combustion of these materials from the CISWI rule)

– The major source boiler rule sets new emission limits for particulate matter that are different for each solid fuel subcategory, and sets new, more variable carbon monoxide limits

– The major source boiler rule replaces dioxin limits with work practice standards

– The amendments continue to allow major source gas-fired boilers to qualify for work practice standards, and continue to exempt area source gas-fired boilers from the rule

– For affected area sources, initial compliance tune-ups are due within two years instead of one year

– Seasonal affected area source boilers have an extended tune-up compliance schedule


Boiler Air Toxics Rules

Discussion


Cross-state Air Pollution Rule• Procedural posture

– Original Clean Air Interstate Rule vacated/remanded by D.C. Circuit– Finalized replacement rules on July 6, 2011, with an effective date of

January 1, 2012– Finalized supplemental rule on December 15, 2011, adding five states– D.C. Circuit stayed final rule on December 30, 2011– Expedited briefing schedule in litigation that consolidated some 45 challenges

to the rule, with final briefs due March 16, 2012

• Brief overview of the rule– Address transport issues in “eastern” U.S.– Protect downwind states from upwind state impacts– 28 states required to reduce annual NOx (54%) and SO2 (73%) and seasonal

ozone emissions to assist in attaining the 1997 ozone and 2006 fine particle ambient air quality standards

– Establishes a NOx and SO2 budget for each state, which the states allocate to their power plant sources


Cross-state Air Pollution Rule

Discussion


Mercury Air Toxics Standards

• Nationwide scope: All coal- and oil fired utilities > 25 MW (burning coal for average of 10% of last three years);

• Objective: Reduce mercury, metals, arsenic, nickel, hydrochloric acid and hydrogen fluoride.

• Typical controls: Hg (SCRs, activated carbon injection, non-Hg metals (electrostatic precipitators), Acid gases and SO2 (scrubbers).

• Deadlines: 3 years from effective date, plus 1 additional year (by statute) (still not published in the Federal Register)

• Reliability Issue: – EPA enforcement office policy memo to address “reliability critical”

units and secure a possible 5th year– Congressional Research Service concluded on January 9, 2012:

MATS not expected to harm reliability; cost increases “within the normal range of historical price fluctuations”


Mercury Air Toxics Standards

Discussion


GHG PSD Permitting

• Endangerment Finding (2009)– Summarizes scientific evidence to date in support of anthropogenic

climate change– Describes human health and welfare effects of climate change

• Light-duty Vehicle GHG Emission Standards (2010)– Essentially a fuel efficiency standard, which will increase from 30.1 to

35.5 MPG in 2012-2016– Expected to reduce CO2 emissions by 950 million metric tons over the

lifetime of the MY2012-2016 vehicles and save 1.8 billion barrels of oil– Cost of $60 billion (or $1,100 per vehicle), with benefits of $250 billion

(including $130-160 per year fuel savings per vehicle)


GHG PSD Permitting

• Subject-to-regulation Rule (2010)• Tailoring Rule (2010)

– “Absurd results” and “administrative necessity”• Would increase Title V sources from 15,000 to six million• Would increase PSD permits from 300 per year to 40,000 per year

– Lower regulatory threshold levels in phases:• Phase I (January 2011-June 2011): 75,000 tpy CO2e and otherwise

subject to PSD• Phase II (July 2011-June 30, 2013): Phase I sources plus 100,000 tpy

CO2e new sources or 75,000 tpy CO2 net emission increase sources

• Phase III (July 1, 2012): Consider permanent exclusion of small sources• Phase IV (April 30, 2016): Final implementation rule

• Oral argument in D.C. Circuit on all rules February 28 & 29, 2012


Greenhouse Gas Emissions—New Source Performance Standards for Power Plants and Refineries

• Originally, EPA agreed to proposed and final standards as follows:– Power plants by July 2011 and May 2012, respectively;– Refineries by December 2011 and November 2012, respectively.

• Just recently sent to OMB;• Pertains to new and existing sources;• Lots of unknowns:

– May require:• Switch to natural gas• Carbon sequestration implemented over a significantly long time

horizon• Energy efficiency improvements.


Climate Change Regulation

Discussion


Chesapeake Bay CAFO Proceedings

NDPES CAFO Reporting

CERCLA/EPCRA Reporting from CAFOs


Dioxin• Concern: Ubiquitous, bio-accumulative compounds. • Dioxin Exposure Initiative

– Initiated in 1994– 2003 draft assessment – most people at or near exposure levels had

sharply increased risk cancer and other adverse health effects• Would classify most forms of dioxin as carcinogen

– 2006 National Academy of Sciences report, which concludes:• EPA overstated risk• Uncertainties insufficiently quantified and assumptions not justified• EPA should better communicate estimates and methods

– 2010 EPA draft report


Dioxin (cont’d)• Dioxin Exposure Initiative (cont’d)

– May 2010 EPA draft report• Reassesses issues raised by NAS• Proposes to set a “safe” daily dose for tetrachlorodibenzo-p-dioxin

(TCDD)—the most toxic form of dioxin– August 2011—Science Advisory Board issues results of its review of

EPA’s May 2010 draft:• Criticized EPA’s choice of cancer endpoints and its failure to bound

uncertainty associated with cancer risk models.– January 2012

• EPA is scheduled to release non-cancer part of its re-analysis;• No date set for cancer portion re-analysis.

– January 10, 2012—Rep. Markey urges EPA to move forward with finalizing assessment citing increased emissions (10%) and landfill disposal (18%).


Dioxin

Discussion

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january 24, 2012 environment group/washington food industry environmental council environmental...

Documents

major source boiler

final rule

supplemental rule

dioxin kushner slide

replacement rules

reconsidered rules

work practice standards

rule address transport