Federal Register: January 8, 2014 (Volume 79, Number 5)
DOCID: FR Doc 2013-28668
ENVIRONMENTAL PROTECTION AGENCY
ENVIRONMENTAL PROTECTION AGENCY
CFR Citation: 40 CFR Parts 60, 70, 71, et al.
RIN ID: RIN 2060-AQ91
FR ID: [FR Doc No: 2013-28668]
EPA ID: [EPA-HQ-OAR-2013-0495; FRL-9839-4]
NOTICE: PROPOSED RULES
ACTION: Standards of Performance for Greenhouse Gas Emissions from New Stationary Sources:
DOCUMENT ACTION: Proposed rule.
Standards of Performance for Greenhouse Gas Emissions from New Stationary Sources:
DATES: Comments. Comments must be received on or before March 10, 2014. Under the Paperwork Reduction Act (PRA), since the Office of Management and Budget (OMB) is required to make a decision concerning the information collection request between 30 and 60 days after January 8, 2014, a comment to the OMB is best assured of having its full effect if the OMB receives it by February 7, 2014.
Public Hearing. A public hearing will be held on January 28, 2014, at the William Jefferson Clinton Building East, Room 1153 (Map Room), 1201 Constitution Avenue NW., Washington DC 20004. The hearing will convene at 9:00 a.m. (Eastern Standard Time) and end at 8:00 p.m. (Eastern Standard Time). Please contact Pamela Garrett at (919) (541 7966) or at email@example.com to register to speak at the hearing. The last day to preregister in advance to speak at the hearing will be 2 business days in advance of the public hearing. Additionally, requests to speak will be taken the day of the hearing at the hearing registration desk, although preferences on speaking times may not be able to be fulfilled. If you require the service of a translator or special accommodations such as audio description, please let us know at the time of registration.
The hearing will provide interested parties the opportunity to present data, views or arguments concerning the proposed action. The EPA will make every effort to accommodate all speakers who arrive and register. Because this hearing is being held at U.S. government facilities, individuals planning to attend the hearing should be prepared to show valid picture identification to the security staff in order to gain access to the meeting room. In addition, you will need to obtain a property pass for any personal belongings you bring with you. Upon leaving the building, you will be required to return this property pass to the security desk. No large signs will be allowed in the building, cameras may only be used outside of the building and demonstrations will not be allowed on federal property for security reasons.
The EPA may ask clarifying questions during the oral presentations but will not respond to the presentations at that time. Written statements and supporting information submitted during the comment period will be considered with the same weight as oral comments and supporting information presented at the public hearing. Commenters should notify Ms. Garrett if they will need specific equipment, or if there are other special needs related to providing comments at the hearing. The EPA will provide equipment for commenters to show overhead slides or make computerized slide presentations if we receive special requests in advance. Oral testimony will be limited to 5 minutes for each commenter. The EPA encourages commenters to provide the EPA with a copy of their oral testimony electronically (via email or CD) or in hard copy form. Verbatim transcripts of the hearings and written statements will be included in the docket for the rulemaking. The EPA will make every effort to follow the schedule as closely as possible on the day of the hearing; however, please plan for the hearing to run either ahead of schedule or behind schedule. Information regarding the hearing (including information as to whether or not one will be held) will be available at: http://www2.epa.gov/carbonpollutionstandards/.
On April 13, 2012, the EPA proposed a new source performance standard for emissions of carbon dioxide for new affected fossil fuel fired electric utility generating units. The EPA received more than 2.5 million comments on the proposed rule. After consideration of information provided in those comments, as well as consideration of continuing changes in the electricity sector, the EPA determined that revisions in its proposed approach are warranted. Thus, in a separate action, the EPA is withdrawing the April 13, 2012, proposal, and, in this action, the EPA is proposing new standards of performance for new affected fossil fuelfired electric utility steam generating units and stationary combustion turbines. This action proposes a separate standard of performance for fossil fuelfired electric utility steam generating units and integrated gasification combined cycle units that burn coal, petroleum coke and other fossil fuels that is based on partial implementation of carbon capture and storage as the best system of emission reduction. This action also proposes standards for natural gasfired stationary combustion turbines based on modern, efficient natural gas combined cycle technology as the best system of emission reduction. This action also includes related proposals concerning permitting fees under Clean Air Act Title V, the Greenhouse Gas Reporting Program, and the definition of the pollutant covered under the prevention of significant deterioration program.
Electric Utility Generating Units
Comments on the April 13, 2012 proposal. The EPA considered comments submitted in response to the original April 13, 2012, proposal in developing this new proposal. However, we are withdrawing the original proposal. If you would like comments submitted on the April 13, 2012 rulemaking to be considered in connection with this new proposal, you should submit new comments or resubmit your previous comments. Commenters who submitted comments concerning any aspect of the original proposal will need to consider the applicability of those comments to this current proposal and submit them again, if applicable, even if the comments are exactly or substantively the same as those previously submitted, to ensure consideration in the development of the final rulemaking.
Acronyms. A number of acronyms and chemical symbols are used in
this preamble. While this may not be an exhaustive list, to ease the
reading of this preamble and for reference purposes, the following terms and acronyms are defined as follows:
AB Assembly Bill
AEP American Electric Power
AEO Annual Energy Outlook
ANSI American National Standards Institute
ASME American Society of Mechanical Engineers
ASTM American Society for Testing of Materials
BACT Best Available Control Technology
BDT Best Demonstrated Technology
BSER Best System of Emission Reduction
Btu/kWh British Thermal Units per Kilowatthour
Btu/lb British Thermal Units per Pound
CAA Clean Air Act
CAIR Clean Air Interstate Rule
CBI Confidential Business Information
CCS Carbon Capture and Storage (or Sequestration)
CDX Central Data Exchange
CEDRI Compliance and Emissions Data Reporting Interface
CEMS Continuous Emissions Monitoring System
CFB Circulating Fluidized Bed
CHP Combined Heat and Power
CSAPR CrossState Air Pollution Rule
DOE Department of Energy
DOT Department of Transportation
ECMPS Emissions Collection and Monitoring Plan System
EERS Energy Efficiency Resource Standards
EGU Electric Generating Unit
EIA Energy Information Administration
EO Executive Order
EOR Enhanced Oil Recovery
EPA Environmental Protection Agency
FB Fluidized Bed
FGD Flue Gas Desulfurization
FR Federal Register
GHG Greenhouse Gas
HAP Hazardous Air Pollutant
HRSG Heat Recovery Steam Generator
IGCC Integrated Gasification Combined Cycle
IPCC Intergovernmental Panel on Climate Change
IPM Integrated Planning Model
IRPs Integrated Resource Plans
kg/MWh Kilogram per Megawatthour
kJ/kg Kilojoules per Kilogram
lb/lbmole Pounds per PoundMole
LCOE Levelized Cost of Electricity
MATS Mercury and Air Toxic Standards
MMBtu/hr Million British Thermal Units per Hour
MWe Megawatt Electrical
NAAQS National Ambient Air Quality Standards
NAICS North American Industry Classification System
NAS National Academy of Sciences
NETL National Energy Technology Laboratory
NGCC Natural Gas Combined Cycle
NRC National Research Council
NSPS New Source Performance Standards
NSR New Source Review
NTTAA National Technology Transfer and Advancement Act
OMB Office of Management and Budget
PC Pulverized Coal
PM Particulate Matter
PRA Paperwork Reduction Act
PSD Prevention of Significant Deterioration
PUC Public Utilities Commission
RCRA Resource Conservation and Recovery Act
RFA Regulatory Flexibility Act
RGGI Regional Greenhouse Gas Initiative
RIA Regulatory Impact Analysis
RPS Renewable Portfolio Standard
RTC Response to Comments
RTP Response to Petitions
SBA Small Business Administration
SCC Social Cost of Carbon
SCR Selective Catalytic Reduction
SIP State Implementation Plan
SNCR Selective NonCatalytic Reduction
SSM Startup, Shutdown, and Malfunction
Tg Teragram (one trillion (10\12\) grams)
Tpy Tons per Year
TSD Technical Support Document
TTN Technology Transfer Network
UIC Underground Injection Control
UMRA Unfunded Mandates Reform Act of 1995
U.S. United States
USGCRP U.S. Global Change Research Program
VCS Voluntary Consensus Standard
WGS Water Gas Shift
WWW Worldwide Web
Organization of This Document. The information presented in this preamble is organized as follows:
I. General Information
A. Executive Summary
C. Does this action apply to me?
A. Climate Change Impacts from GHG Emissions
B. GHG Emissions from Fossil Fuelfired EGUs
C. The Utility Power Sector and How its Structure is Changing
D. Statutory Background
E. Regulatory and Litigation Background
F. Coordination with Other Rulemakings
G. Stakeholder Input
III. Proposed Requirements for New Sources
A. Applicability Requirements
B. Emission Standards
C. Startup, Shutdown, and Malfunction Requirements
D. Continuous Monitoring Requirements
E. Emissions Performance Testing Requirements
F. Continuous Compliance Requirements
G. Notification, Recordkeeping, and Reporting Requirements
IV. Rationale for Reliance on Rational Basis To Regulate GHGs from Fossilfired EGUs
B. Climate Change Impacts From GHG Emissions; Amounts of GHGs From Fossil FuelFired EGUs
C. CAA Section 111 Requirements
D. Interpretation of CAA Section 111 Requirements
E. Rational Basis To Promulgate Standards for GHGs From Fossil Fired EGUs
F. Alternative Findings of Endangerment and Significant Contribution
G. Comments on the State of the Science of Climate Change V. Rationale for Applicability Requirements
A. Applicability RequirementsOriginal Proposal and Comments
B. Applicability RequirementsToday's Proposal
C. Certain Projects Under Development
VI. Legal Requirements for Establishing Emission Standards
B. CAA Requirements and Court Interpretation
C. Technical Feasibility
D. Factors To Consider in Determining the ``Best System''
E. Nationwide Component of Factors in Determining the ``Best System''
F. Chevron Framework
G. Agency Discretion
H. Lack of Requirement That Standard Be Able To Be Met by All Sources
VII. Rationale for Emission Standards for New Fossil FuelFired Boilers and IGCCs
B. Identification of the Best System of Emission Reduction
C. Determination of the Level of the Standard
D. Extent of Reductions in CO
E. Technical Feasibility
G. Promotion of Technology
H. Nationwide, LongerTerm Perspective
J. CCS and BSER in Locations Where Costs Are Too High To Implement CCS
K. Compliance Period
L. Geologic Sequestration
VIII. Rationale for Emission Standards for Natural GasFired Stationary Combustion Turbines
A. Best System of Emission Reduction
B. Determination of the Standards of Performance IX. Implications for PSD and Title V Programs
B. Applicability of Tailoring Rule Thresholds Under the PSD Program
C. Implications for BACT Determinations Under PSD
D. Implications for Title V Program
E. Implications for Title V Fee Requirements for GHGs X. Impacts of the Proposed Action
A. What are the air impacts?
B. What are the energy impacts?
C. What are the compliance costs?
D. How will this proposal contribute to climate change protection?
E. What are the economic and employment impacts?
F. What are the benefits of the proposed standards? XI. Request for Comments
XII. Statutory and Executive Order Reviews
A. Executive Order 12866, Regulatory Planning and Review, and Executive Order 13563, Improving Regulation and Regulatory Review
B. Paperwork Reduction Act
C. Regulatory Flexibility Act
D. Unfunded Mandates Reform Act
E. Executive Order 13132, Federalism
F. Executive Order 13175, Consultation and Coordination With Indian Tribal Governments
G. Executive Order 13045, Protection of Children From Environmental Health Risks and Safety Risks
H. Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use
I. National Technology Transfer and Advancement Act
J. Executive Order 12898, Federal Actions To Address
Environmental Justice in Minority Populations and LowIncome Populations
XIII. Statutory Authority
I. General Information
A. Executive Summary
1. Purpose of the Regulatory Action
On April 13, 2012, under the authority of Clean Air Act (CAA)
section 111, the EPA proposed a new source performance standard (NSPS)
to limit emissions of carbon dioxide (CO
fired units. In addition, the applicability requirements proposed today differ from the applicability requirements in the original proposal. In light of these and other differences, the EPA is issuing a document (published separately in today's Federal Register) that withdraws the original proposal, as well as issuing this new proposal.
2. Summary of the Major Provisions
This action proposes a standard of performance for utility boilers
and IGCC units based on partial implementation of carbon capture and
storage (CCS) as the BSER. The proposed emission limit for those
sources is 1,100 lb CO
\1\ In this rulemaking, all references to lb CO
As explained in the Regulatory Impact Analysis (RIA) for this
proposed rule, available dataincluding utility announcements and EIA
modelingindicate that, even in the absence of this rule, (i) existing
and anticipated economic conditions mean that few, if any, solid fossil
fuelfired EGUs will be built in the foreseeable future; and (ii)
electricity generators are expected to choose new generation
technologies (primarily natural gas combined cycle) that would meet the
proposed standards. Therefore, based on the analysis presented in
Chapter 5 of the RIA, the EPA projects that this proposed rule will
result in negligible CO
\2\ Conditions in the analysis year of 2022 are represented by a model year of 2020.
1. Why is the EPA issuing this proposed rule?
Greenhouse gas (GHG) pollution \3\ threatens the American public's
health and welfare by contributing to longlasting changes in our
climate that can have a range of negative effects on human health and
the environment. The impacts could include: longer, more intense and
more frequent heat waves; more intense precipitation events and storm
surges; less precipitation and more prolonged drought in the West and
Southwest; more fires and insect pest outbreaks in American forests,
especially in the West; and increased ground level ozone pollution,
otherwise known as smog, which has been linked to asthma and premature
death. Health risks from climate change are especially serious for
children, the elderly and those with heart and respiratory problems.
\3\ Greenhouse gas pollution is the aggregate group of the
following gases: CO
The U.S. Supreme Court ruled that GHGs meet the definition of ``air
pollutant'' in the CAA, and this decision clarified that the CAA's
authorities and requirements apply to GHG emissions. Unlike most other
air pollutants, GHGs may persist in the atmosphere from decades to
millennia, depending on the specific greenhouse gas. This special
characteristic makes it crucial to take initial steps now to limit GHG
emissions from fossil fuelfired power plants, specifically emissions
On April 13, 2012, the EPA issued a proposed rule to limit GHG
emissions from fossil fuelfired power plants by establishing a single
standard applicable to all new fossil fuelfired EGUs serving
intermediate and base load power demand. After consideration of the
information provided in more than 2.5 million comments on the proposal,
as well as consideration of continuing changes in the electricity
sector,\4\ the EPA is issuing a new proposal to establish separate
standards for fossil fuelfired electric steam generating units
(utility boilers and IGCC units) and for natural gasfired stationary
combustion turbines. These proposed standards reflect separate
determinations of the BSER adequately demonstrated for utility boilers
and IGCC units and for natural gasfired stationary combustion
turbines. Because, in contrast, the April 2012 proposal relied on a
single standard for all new fossil fuelfired units, the EPA is
issuing, as a final action, a document (published separately in today's
Federal Register) that withdraws the original proposal, as well as issuing this new proposal.
\4\ For example, since April 2012, there has been significant progress on two CCS projects (Kemper County and Boundary Dam), and they are now both over 75 percent complete. Two other projects have continued to make progress toward construction (Texas Clean Energy Project and Hydrogen Energy California Project).
2. What authority is the EPA relying on to address power plant CO
Congress established requirements under section 111 of the 1970 CAA
to control air pollution from new stationary sources through NSPS.
Specifically, section 111 requires the EPA to set technologybased
standards for new stationary sources to minimize emissions of air
pollution to the environment. For more than four decades, the EPA has
used its authority under section 111 to set costeffective emission
standards that ensure newly constructed sources use the best performing
technologies to limit emissions of harmful air pollutants. In this
proposal, the EPA is following the same wellestablished, customary
interpretation and application of the law under section 111 to address GHG emissions from new fossil fuelfired power plants.
3. What sources should the EPA include as it develops proposed standards for GHGs for power plants?
Before determining the appropriate technologies and levels of control that represent BSER for GHG emissions, the EPA must first identify the appropriate sources to control.
The starting point is to consider whether, given current trends
concerning coalfired and natural gasfired power plants and the nature
of GHGs, the EPA should regulate CO
For sources covered under subpart Da, the original proposal relied on analyses,
primarily undertaken by EIA, indicating that, while substantial reliance on coalfired electricity generation would continue in the future, few, if any, new coalfired power plants were likely to be built by 2025. Based in part on these results, the EPA concluded that it was appropriate to propose in April 2012 a single fuelneutral standard covering all intermediate and base load units based on the performance of recently constructed NGCC units. In light of developments in the electricity sector since the April 2012 proposal, and in response to numerous comments on the proposal itself, the EPA is changing the approach in today's document and proposing to set separate standards for new sources covered by subpart Da.\5\
\5\ While the emphasis of EPA's BSER determination is on coal and petcokefired units, the subpart covers all fossil fuelfired EGU boilers and IGCC units, including those burning oil and gas.
The EPA notes that, since the original April 2012 proposal, a few
coalfired units have reached the advanced stages of construction and
development, which suggests that proposing a separate standard for
coalfired units is appropriate. Since the original proposal, progress
on Southern Company's Kemper County Energy Facility, an IGCC facility
that will implement partial CCS, has continued, and the project is now
over 75 percent complete. Similarly, SaskPower's Boundary Dam CCS
Project in Estevan, Saskatchewan, a project that will fully integrate
the rebuilt 110 MW coalfired Unit
Additionally, two other IGCC projects, Summit Power's Texas Clean
Energy Project (TCEP) and the Hydrogen Energy California Project
(HECA)both of which are IGCC units with CCScontinue to move
forward. Further, NRG Energy is developing a commercialscale post
combustion carbon capture project at the company's W.A. Parish
generating station southwest of Houston, Texas. The facility is
expected to be operational in 2015. Continued progress on these
projects is consistent with the EIA modeling which projects that few,
if any, new coalfired EGUs would be built in this decade and that
those that are built would include CCS.\6\ The existence and apparent
ongoing viability of these projects which include CCS justify a
separate BSER determination for new fossil fuelfired utility boilers and IGCC power plants.
\6\ Even in its sensitivity analysis, the EIA does not project any additional coal projects beyond its reference case until 2023, in a case where power companies assume no emission limitations for GHGs, and until 2024 in any sensitivity analysis in which there are emission limitations for GHGs.
In addition to these projects, a number of commenters (on the April
2012 proposal) noted that, if natural gas prices increase, there could
be greater interest in the construction of additional coalfired
generation capacity. This, too, is consistent with the EIA analysis,
which also suggests that, in a limited number of potential scenarios
generally associated with both significantly higher than anticipated
electric demand and significantly higher than expected natural gas
prices, some additional new coalfired generation capacity may be built
beyond 2020. It is also consistent with publicly available electric utility Integrated Resource Plans (IRPs).\7\
\7\ IRPs are planning documents that many Public Utility Commissions require utilities to file outlining their plans to meet future demand. Many of the IRPs that the EPA has reviewed included planning horizons of ten years or more.
Many of those IRPs indicated the utilities' interest in developing some amount of generating capacity using other intermediateload and base load technologies, in addition to new NGCC capacity, to meet future demand (albeit, almost always at a higher cost than NGCC technology). Only a few utilities' IRPs indicated that new coalfired generation without CCS was a technology option that was being considered to meet future demand. Finally, a number of commenters suggested that it was important to set standards that preserve options for fuel diversity, particularly if natural gas prices exceed projected levels. Given this information, the EPA believes that it is appropriate to set a separate standard for solid fossil fuelfired EGUs, both to address the small number of coal plants that evidence suggests might get built and to set a standard that is robust across a full range of possible futures in the energy and electricity sectors.
Utility announcements about the status of coal projects, IRPs, and EIA projections suggest that, by far, the largest sources of new fossil fuelfired electricity generation are likely to be NGCC units. The EPA believes, therefore, that it is also appropriate to set a standard for stationary combustion turbines used as EGUs. These units are currently covered under subpart KKKK (stationary combustion turbines).
The EPA also proposes to maintain the definition of EGUs under the NSPS that differentiates between EGUs (sources used primarily for generating electricity for sale to the grid) and nonEGUs (turbines primarily used to generate steam and/or electricity for onsite use). That definition defines EGUs as units that sell more than onethird of their potential electric output to the grid. Under this definition, most simple cycle ``peaking'' stationary combustion turbines, which typically sell significantly less than onethird of their potential electric output to the grid, would not be affected by today's proposal.
Finally, the EPA is not proposing standards today for one
conventional coalfired EGU project which, based on current
information, appears to be the only such project under development that
has an active air permit and that has not already commenced
construction for NSPS purposes. If the EPA observes that the project is
truly proceeding, it may propose a new source performance standard
specifically for that source at the time the EPA finalizes today's proposed rule.
4. What is the EPA's general approach to setting standards for new sources under Section 111(b)?
Section 111(b) requires the EPA to identify the ``best system of emission reduction [hellip] adequately demonstrated'' (BSER) available to limit pollution. The CAA and subsequent court decisions (detailed later in this notice) identify the factors for the EPA to consider in a BSER determination. For this rulemaking, the following factors are key: feasibility, costs, size of emission reductions and technology.
Feasibility: The EPA considers whether the system of emission reduction is technically feasible.
Costs: The EPA considers whether the costs of the system are reasonable.
Size of emission reductions: The EPA considers the amount of emissions reductions that the system would generate.
Technology: The EPA considers whether the system promotes the implementation and further development of technology.
After considering these four factors, we propose that efficient
generation technology implementing partial CCS is the BSER for new
affected fossil fuelfired boilers and IGCC units (subpart Da sources)
and modern, efficient NGCC technology is the BSER for new affected
combustion turbines (subpart KKKK sources). The foundations for these determinations are described in Sections VII and VIII.
5. What is BSER for new fossil fuelfired utility boilers and IGCC units?
Power generated from the combustion or gasification of coal emits
means, such as solar or wind. If any new coalfired unit is built, its CO
The three alternatives the EPA considered in the BSER analysis for new fossil fuelfired utility boilers and IGCC units are: (1) highly efficient new generation that does not include CCS technology, (2) highly efficient new generation with ``full capture'' CCS and (3) highly efficient new generation with ``partial capture'' CCS.
Generation technologies representing enhancements in operational
efficiency (e.g., supercritical or ultrasupercritical coalfired
boilers or IGCC units) are clearly technically feasible and present
little or no incremental cost compared to the types of technologies
that some companies are considering for new coalfired generation
capacity. However, they do not provide meaningful reductions in
An assessment of the technical feasibility and availability of CCS
indicates that nearly all of the coalfired power plants that are
currently under development are designed to use some type of CCS. In
most cases, the projects will sell or use the captured CO
Southern Company's Kemper County Energy Facility, a 582 MW IGCC
power plant that is currently under construction in Kemper County,
Mississippi. The plant will include a CCS system designed to capture approximately 65 percent of the produced CO
SaskPower's Boundary Dam CCS Project, in Estevan, Saskatchewan,
Canada, is a commercialscale CCS project that will fully integrate the
rebuilt 110 MW coalfired Unit
Texas Clean Energy Project (TCEP), an IGCC plant near Odessa,
Texas, that is under development by the Summit Power Group, Inc.
(Summit). TCEP is a 400 MW IGCC plant that expects to capture approximately 90 percent of the produced CO
Hydrogen Energy California, LLC (HECA), is proposing to build a
plant similar to TCEP in western Kern County, California. The HECA
plant is an IGCC plant fueled by coal and petroleum coke that will
produce 300 MW of power and will capture CO
The above examples suggest that project developers who are incorporating CCS generally considered two variants: either a partial CCS system or a full CCS system (i.e., usually 90 percent capture or greater). Therefore, the EPA considered both options.
In assessing whether the cost of a certain option is reasonable, the EPA first considered the appropriate frame of reference. Power companies often choose the lowest cost form of generation when determining what type of new generation to build. Based on both the EIA modeling and utility IRPs, there appears to be a general acceptance that the lowest cost form of new power generation is NGCC.
Many states find value in coal investments and have policies and
incentives to encourage coal energy generation. Utility IRPs (as well
as comments on the April 2012 proposal) suggest that many companies
also find value in other factors, such as fuel diversity, and are often
willing to pay a premium for it. Utility IRPs suggest that a range of
technologies can meet the preference for fuel diversity from a
dispatchable form of generation that can provide intermediate or base
load power, including coal without CCS, coal with CCS and nuclear.
Biomassfired power generation \8\ and geothermal power generation are
other technologies that are dispatchable and that could potentially
meet this objective. These technologies all cost significantly more
than natural gasfired generation, which ranges from a levelized cost
of electricity (LCOE) \9\ of $59/MWh to $86/MWh, depending upon
assumptions about natural gas prices. In assessing whether the cost of
coal with CCS would have an unreasonable impact on the cost of power
generation, the EPA believes it is appropriate to compare coal with CCS
to this range of nonnatural gasfired electricity generation options.
Based on data from the EIA and the DOE National Energy and Technology
Laboratory (NETL), the EPA believes that the levelized cost of
technologies other than coal with CCS and NGCC range from $80/MWh to
$130/MWh. These include nuclear, from $103/MWh to $114/MWh; biomass,
from $97/MWh to $130/MWh; and geothermal, from $80/MWh to $99/MWh.
\8\ The proposed CO
\9\ The levelized cost of electricity is an economic assessment of the cost of electricity from a new generating unit or plant, including all the costs over its lifetime: initial investment, operations and maintenance, cost of fuel, and cost of capital. The LCOE value presented here are in $2007.
The EPA believes the cost of ``full capture'' CCS without EOR is
outside the range of costs that companies are considering for
comparable generation and therefore should not be considered BSER for
\10\ The cost assumptions and technology configurations for these cost estimates are provided in the DOE/NETL ``Cost and Performance Baseline'' reports. For these cost estimates, we used costs for new SCPC and IGCC units utilizing bituminous coal from the reports ``Cost and Performance Baseline for Fossil Energy Plants Volume 1: Bituminous Coal and Natural Gas to Electricity'', Revision 2, Report DOE/NETL2010/1397 (November 2010) and ``Cost and Performance of PC and IGCC Plants for a Range of Carbon Dioxide Capture'', DOE/NETL2011/1498, May 27, 2011. Additional cost and performance information can be found in additional volumes that are available at http://www.netl.doe.gov/energyanalyses/baseline_studies.html.
Finally, the EPA considered whether implementation of ``partial capture'' CCS should be proposed to be BSER for new fossil fuelfired utility boilers and IGCC units.
Partial capture CCS has been implemented successfully in a number of facilities over many years. The Great
Plains Synfuels Facility \11\ is a coal gasification facility that has captured at least 50 percent of its produced CO
\11\ While this facility is not an EGU, it has significant similarities to a coal gasification combined cycle EGU, and the implementation of the partial CCS technology would be similar enough for comparison.
\12\ The Global CCS Institute, http://www.globalccsinstitute.com/projects/browse.
The EPA analysis shows that the costs of partial CCS are comparable
to costs of other nonNGCC generation. The EPA projects LCOE generation
ranging from $92/MWh to $110/MWh, depending upon assumptions about
technology choices and the amount, if any, of revenue from sale of
The projects in development for new coalfired generation are few
in number, and most would already meet an emission limit based on
implementation of CCS.\13\ As a result, a standard based on partial CCS
would not have a significant impact on nationwide energy prices.
Moreover, the fact that IGCC developers could meet the requirements of
the standard through the use of a conventional turbine (i.e., a syngas
turbine, rather than a more advanced hydrogen turbine) reinforces both
the technical feasibility and cost basis of today's proposal to determine that CCS with partial capture is the BSER.
\13\ For example, the Hydrogen Energy California facility plans to capture approximately 90 percent of the CO
Partial CCS designed to meet an emission standard of 1,100 lb
After conducting a BSER analysis of the three options described
above, the EPA proposes that new fossil fuelfired utility boilers and
IGCC units implementing partial CCS best meets the requirements for
BSER. It ensures that any new fossil fuelfired utility boiler or IGCC
unit will achieve meaningful emission reductions in CO
6. What is BSER for natural gasfired stationary combustion turbines?
We considered two alternatives in evaluating the BSER for new fossil fuelfired stationary combustion turbines: (1) modern, efficient NGCC units and (2) modern, efficient NGCC units with CCS.
NGCC units are the most common type of new fossil fuelfired units
being planned and built today. The technology is in wide use. Nearly
all new fossil fuelfired EGUs being constructed today are using this
advanced, efficient system for generating intermediate and base load
power. Importantly, NGCC is an inherently lower CO
By contrast, NGCC with CCS is not a configuration that is being
built today. The EPA considered whether NGCC with CCS could be
identified as the BSER adequately demonstrated for new stationary
combustion turbines, and we decided that it could not. At this time,
CCS has not been implemented for NGCC units, and we believe there is
insufficient information to make a determination regarding the
technical feasibility of implementing CCS at these types of units. The
EPA is aware of only one NGCC unit that has implemented CCS on a
portion of its exhaust stream. This contrasts with coal units where, in
addition to demonstration projects, there are several fullscale
projects under construction and a coal gasification plant which has
been demonstrating much of the technology needed for an IGCC to capture
\14\ ``Operating Flexibility of Power Plants with CCS'', International Energy Agency (IEAGHG) report 2012/6, June 2012.
After considering both technology options, the EPA is proposing to
find modern, efficient NGCC technology to be the BSER for stationary
combustion turbines, and we are basing the proposed standards on the
performance of recently constructed NGCC units. The EPA is proposing
that larger units be required to meet a standard of 1,000 lb
7. How is EPA proposing to codify the requirements?
The EPA is considering two options for codifying the requirements.
Under the first option EPA is proposing to codify the standards of
performance for the respective sources within existing 40 CFR Part 60 subparts. Applicable
GHG standards for electric utility steam generating units would be included in subpart Da and applicable GHG standards for stationary combustion turbines would be included in subpart KKKK. In the second option, the EPA is coproposing to create a new subpart TTTT (as in the original proposal for this rulemaking) and to include all GHG standards of performance for covered sources in that newly created subpart. Unlike the original proposal, the subpart would contain two different categories, one for utility boilers and IGCC units and one for natural gasfired stationary combustion turbines.
8. What is the organization and approach for the proposal?
This action presents the EPA's proposed approach for setting standards of performance for new affected fossil fuelfired electric utility steam generating units (utility boilers) and stationary combustion turbines. The rationale for regulating GHG emissions from the utility power sector, including related regulatory and litigation background and relationship to other rulemakings, is presented below in Section II. The specific proposed requirements for new sources are described in detail in Section III. The rationale for reliance on a rational basis to regulate GHG emissions from fossil fuelfired EGUs is presented in Section IV, followed by the rationale for applicability requirements in Section V. The legal requirements for establishing emission standards are discussed in detail in Section VI. Sections VII and VIII describe the rationale for each of the proposed emission standards, including an explanation of the determination of BSER for new fossil fuelfired utility boilers and IGCC units and for natural gasfired stationary combustion turbines, respectively. Implications for Prevention of Significant Deterioration (PSD) and title V programs are described in Section IX, and impacts of the proposed action are described in Section X. In Section XI, the agency specifically requests comments on the proposal. A discussion of statutory and executive order reviews is provided in Section XII, and the statutory authority for this action is provided in Section XIII. Also published today in the Federal Register is the document withdrawing the original April 13, 2012 proposal.
Today's proposal outlines an approach for setting standards of performance for emissions of carbon dioxide for new affected fossil fuelfired electric utility steam generating units (utility boilers) and stationary combustion turbines.
C. Does this action apply to me?
The entities potentially affected by the proposed standards are shown in Table 1 below.
Table 1Potentially Affected Entities \a\
Examples of Potentially Category NAICS Code Affected Entities Industry......................... 221112 Fossil fuel electric power generating units. Federal Government............... \b\ 221112 Fossil fuel electric power generating units owned by the federal government. State/Local Government........... \b\ 221112 Fossil fuel electric power generating units owned by
municipalities. Tribal Government................ 921150 Fossil fuel electric power generating units in Indian Country. a Includes NAICS categories for source categories that own and operate electric power generating units (including boilers and stationary combined cycle combustion turbines).
b Federal, state, or local governmentowned and operated establishments are classified according to the activity in which they are engaged.
This table is not intended to be exhaustive, but rather to provide a guide for readers regarding entities likely to be affected by this proposed action. To determine whether your facility, company, business, organization, etc., would be regulated by this proposed action, you should examine the applicability criteria in 40 CFR 60.1. If you have any questions regarding the applicability of this action to a particular entity, consult either the air permitting authority for the entity or your EPA regional representative as listed in 40 CFR 60.4 or 40 CFR 63.13 (General Provisions).
In this section we discuss climate change impacts from GHG emissions, both on public health and public welfare, and the science behind the agency's conclusions. We present information about GHG emissions from fossilfuel fired EGUs, and we describe the utility power sector and its changing structure. We then provide the statutory, regulatory, and litigation background for this proposed rule. We close this section by discussing how this proposed rule coordinates with other rulemakings and describing actions to obtain stakeholder input on this topic and the original proposed rule.
A. Climate Change Impacts From GHG Emissions
In 2009, the EPA Administrator issued the document we refer to as
the Endangerment Finding under CAA section 202(a)(1).\15\ In the
Endangerment Finding, which focused on public health and public welfare
impacts within the United States, the Administrator found that elevated
concentrations of GHGs in the atmosphere may reasonably be anticipated
to endanger public health and welfare of current and future
generations. We summarize these adverse effects on public health and welfare briefly here and in more detail in the RIA.
\15\ ``Endangerment and Cause or Contribute Findings for Greenhouse Gases Under Section 202(a) of the Clean Air Act,'' 74 FR 66496 (Dec. 15, 2009) (``Endangerment Finding'').
1. Public Health Impacts Detailed in the 2009 Endangerment Finding
Anthropogenic emissions of GHGs and consequent climate change
threaten public health in multiple aspects. By raising average
temperatures, climate change increases the likelihood of heat waves,
which are associated with increased deaths and illnesses. While climate
change also leads to reductions in coldrelated mortality, evidence
indicates that the increases in heat mortality will be larger than the
decreases in cold mortality. Climate change is expected to increase
ozone pollution over broad areas of the country, including large
population areas with already unhealthy surface ozone levels, and
thereby increase morbidity and mortality. Other public health threats
also stem from increases in intensity or frequency of extreme weather
associated with climate change, such as increased hurricane intensity,
increased frequency of intense storms and heavy precipitation.
Increased coastal storms and storm surges due to rising sea levels are expected to cause increased drownings and other health
impacts. Children, the elderly, and the poor are among the most vulnerable to these climaterelated health effects.
2. Public Welfare Impacts Detailed in the 2009 Endangerment Finding
Anthropogenic emissions of GHGs and consequent climate change also
threaten public welfare in multiple aspects. Climate changes are
expected to place large areas of the country at serious risk of reduced
water supplies, increased water pollution, and increased occurrence of
extreme events such as floods and droughts. Coastal areas are expected
to face increased risks from storm and flooding damage to property, as
well as adverse impacts from rising sea level, such as land loss due to
inundation, erosion, wetland submergence and habitat loss. Climate
change is expected to result in an increase in peak electricity demand, and extreme weather from climate change threatens energy,
transportation, and water resource infrastructure. Climate change may exacerbate ongoing environmental pressures in certain settlements, particularly in Alaskan indigenous communities. Climate change also is very likely to fundamentally rearrange U.S. ecosystems over the 21st century. Though some benefits may balance adverse effects on agriculture and forestry in the next few decades, the body of evidence points towards increasing risks of net adverse impacts on U.S. food production, agriculture and forest productivity as temperature continues to rise. These impacts are global and may exacerbate problems outside the U.S. that raise humanitarian, trade, and national security issues for the U.S.
3. The Science Upon Which the Agency Relies
The EPA received comments in response to the April 2012 proposed
NSPS rule (77 FR 22392) that addressed the scientific underpinnings of
the EPA's 2009 Endangerment Finding and hence the proposed rule. The
EPA carefully reviewed all of those comments. It is important to place
these comments in the context of the history and associated voluminous
record on this subject that has been compiled over the last few years,
including: (1) the process by which the Administrator reached the
Endangerment Finding in 2009; (2) the EPA's response in 2010 to ten
administrative petitions for reconsideration of the Endangerment
Finding (the Reconsideration Denial) \16\; and (3) the decision by the
United States Court of Appeals for the District of Columbia Circuit
(the D.C. Circuit or the Court) in 2012 to uphold the Endangerment Finding and the Reconsideration Denial.17 18
\16\ ``EPA's Denial of the Petitions to Reconsider the Endangerment and Cause or Contribute Findings for Greenhouse Gases Under Section 202(a) of the Clean Air Act,'' 75 FR 49557 (Aug. 13, 2010) (``Reconsideration Denial'').
\17\ Coalition for Responsible Regulation, Inc. v. Environmental Protection Agency (CRR), 684 F.3d at 102 (D.C. Cir.), reh'g en banc denied, 2012 U.S. App. LEXIS 25997, 26313 (D.C. Cir. 2012), petitions for cert. filed, No. 121253 (U.S. Apr. 2013).
\18\ We discuss litigation history involving this rulemaking in more detail later in this section.
As outlined in Section VIII.A. of the 2009 Endangerment Finding, the EPA's approach to providing the technical and scientific information to inform the Administrator's judgment regarding the question of whether GHGs endanger public health and welfare was to rely primarily upon the recent, major assessments by the U.S. Global Change Research Program (USGCRP), the Intergovernmental Panel on Climate Change (IPCC), and the National Research Council (NRC) of the National Academies. These assessments addressed the scientific issues that the EPA was required to examine, were comprehensive in their coverage of the GHG and climate change issues, and underwent rigorous and exacting peer review by the expert community, as well as rigorous levels of U.S. government review. The EPA received thousands of comments on the proposed Endangerment Finding and responded to them in depth in an 11 volume Response to Comments (RTC) document.\19\ While the EPA gave careful consideration to all of the scientific and technical information received, the agency placed less weight on the much smaller number of individual studies that were not considered or reflected in the major assessments; often these studies were published after the submission deadline for those larger assessments. Primary reliance on the major scientific assessments provided the EPA greater assurance that it was basing its judgment on the best available, wellvetted science that reflected the consensus of the climate science community. The EPA reviewed individual studies not incorporated in the assessment literature largely to see if they would lead the EPA to change its interpretation of, or place less weight on, the major findings reflected in the assessment reports. From its review of individual studies submitted by commenters, the EPA concluded that these studies did not change the various conclusions and judgments the EPA drew from the more comprehensive assessment reports. The major findings of the USGCRP, IPCC, and NRC assessments supported the EPA's determination that GHGs threaten the public health and welfare of current and future generations. The EPA presented this scientific support at length in the Endangerment Finding, in its Technical Support Document (which summarized the findings of USGCRP, IPCC and NRC) \20\ and in the RTC. \19\ ``Endangerment and Cause or Contribute Findings for Greenhouse Gases under Section 202(a) of the Clean Air Act: EPA's Response to Public Comments,'' http://www.epa.gov/climatechange/endangerment/#comments (``Response to Comments'' or ``RTC''). \20\ ``Technical Support Document for Endangerment and Cause or Contribute Findings for Greenhouse Gases under Section 202(s) of the Clean Air Act (Dec. 7, 2009), http://www.epa.gov/climatechange/Downloads/endangerment/Endangerment_TSD.pdf (TSD).
The EPA then reviewed ten administrative petitions for
reconsideration of the Endangerment Finding in 2010. In the
Reconsideration Denial, the Administrator denied those petitions on the
basis that the Petitioners failed to provide substantial support for
the argument that the EPA should revise the Endangerment Finding and
therefore their objections were not of ``central relevance'' to the
Finding. The EPA prepared an accompanying threevolume Response to
Petitions (RTP) document to provide additional information, often more
technical in nature, in response to the arguments, claims, and
assertions by the petitioners to reconsider the Endangerment Finding.\21\
The 2009 Endangerment Finding and the 2010 Reconsideration Denial
were challenged in a lawsuit before the D.C. Circuit. On June 26, 2012,
the Court upheld the Endangerment Finding and the Reconsideration
Denial, ruling that the Finding (including the Reconsideration Denial)
was not arbitrary or capricious, was consistent with the U.S. Supreme
Court's decision in Massachusetts v. EPA, which granted to the EPA the
authority to regulate GHGs,\22\ and was adequately supported by the
administrative record.\23\ The Court found that the EPA had based its
decision on ``substantial scientific evidence'' and noted that the
EPA's reliance on assessments was consistent with the methods decision
makers often use to make a sciencebased judgment.\24\ The Court also
agreed with the EPA that the Petitioners had ``not provided substantial support for their argument
that the Endangerment Finding should be revised.'' \25\ Moreover, the Court supported the EPA's reliance on the major scientific assessment reports conducted by USGCRP, IPCC, and NRC and found that:
\22\ 549 U.S. 497 (2007).
\23\ CRR, 684 F.3d at 11727.
\24\ Id. at 121.
\25\ Id. at 125.
The EPA evaluated the processes used to develop the various
assessment reports, reviewed their contents, and considered the
depth of the scientific consensus the reports represented. Based on
these evaluations, the EPA determined the assessments represented
the best source material to use in deciding whether GHG emissions
may be reasonably anticipated to endanger public health or welfare.\26\
\26\ Id. at 120.
As the Court stated
It makes no difference that much of the scientific evidence in large part consisted of `syntheses' of individual studies and research. Even individual studies and research papers often synthesize past work in an area and then build upon it. This is how science works. The EPA is not required to reprove the existence of the atom every time it approaches a scientific question.\27\ \27\ Id. at 120.
In the context of this extensive record and the recent affirmation of the Endangerment Finding by the Court, the EPA considered all of the submitted comments and reports for the April 2012 proposed NSPS rule. As it did in the Endangerment Finding, the EPA gave careful consideration to all of the scientific and technical comments and information in the record. The major peerreviewed scientific assessments, however, continue to be the primary scientific and technical basis for the Administrator's judgment regarding the threats to public health and welfare posed by GHGs.
Commenters submitted two major peerreviewed scientific assessments released after the administrative record concerning the Endangerment Finding closed following the EPA's 2010 Reconsideration Denial: the IPCC's 2012 ``Special Report on Managing the Risks of Extreme Events and Disasters to Advance Climate Change Adaptation'' (SREX) and the NRC's 2011 ``Report on Climate Stabilization Targets: Emissions, Concentrations, and Impacts over Decades to Millennia'' (Climate Stabilization Targets).
According to the IPCC in the SREX, ``A changing climate leads to changes in the frequency, intensity, spatial extent, duration, and timing of extreme weather and climate events, and can result in unprecedented extreme weather and climate events.\28\'' The SREX documents observational evidence of changes in some weather and climate extremes that have occurred globally since 1950. The assessment also provides evidence regarding the cause of some of these changes to elevated concentrations of GHGs, including warming of extreme daily temperatures, intensified extreme precipitation events, and increases in extreme coastal high water levels due to rising sea level. The SREX projects further increases in some extreme weather and climate events during the 21st century. Combined with increasing vulnerability and exposure of populations and assets, changes in extreme weather and climate events have consequences for disaster risk, with particular impacts on the water, agriculture and food security and health sectors. \28\ SREX, p. 7.
In the Climate Stabilization Targets assessment, the NRC states:
Emissions of carbon dioxide from the burning of fossil fuels have ushered in a new epoch where human activities will largely determine the evolution of Earth's climate. Because carbon dioxide in the atmosphere is long lived, it can effectively lock Earth and future generations into a range of impacts, some of which could become very severe.\29\
\29\ Climate Stabilization Targets, p. 3.
The assessment concludes that carbon dioxide emissions will alter the atmosphere's composition and therefore the climate for thousands of years; and attempts to quantify the results of stabilizing GHG concentrations at different levels. The report also projects the occurrence of several specific climate change impacts, finding warming could lead to increases in heavy rainfall and decreases in crop yields and Arctic sea ice extent, along with other significant changes in precipitation and stream flow. For an increase in global average temperature of 1 to 2 [deg]C above preindustrial levels, the assessment found that the area burnt by wildfires in western North America will likely more than double and coral bleaching and erosion will increase due both to warming and ocean acidification. An increase of 3 [deg]C will lead to a sea level rise of 0.5 to 1 meter by 2100. With an increase of 4 [deg]C, the average summer in the United States would be as warm as the warmest summers of the past century. The assessment notes that although many important aspects of climate change are difficult to quantify, the risk of adverse impacts is likely to increase with increasing temperature, and the risk of surprises can be expected to increase with the duration and magnitude of the warming.
Several other National Academy assessments regarding climate have
also been released recently. The EPA has reviewed these assessments and
finds that in general, the improved understanding of the climate system
they and the two assessments described above present strengthens the
case that GHGs are endangering public health and welfare. Three of the
new NRC assessments provide estimates of projected global sea level
rise that are larger than, and in some cases more than twice as large
as, the rise estimated in a 2007 IPCC assessment of between 0.18 and
0.59 meters by the end of the century, relative to 1990. (It should be
noted that in 2007, the IPCC stated that including poorly understood
ice sheet processes could lead to an increase in the projections.) \30\
While these three NRC assessments continue to recognize and
characterize the uncertainty inherent in accounting for ice sheet
processes, these revised estimates strongly support and strengthen the
existing finding that GHGs are reasonably anticipated to endanger
public health and welfare. Other key findings of the recent assessments are described briefly below:
\30\ Climate Stabilization Targets; ``National Security Implications for U.S. Naval Forces'' (2011) (National Security Implications); ``Sea Level Rise for the Coasts of California, Oregon, and Washington: Past, Present, and Future'' (2012) (Sea Level Rise).
One of these assessments projects a global sea level rise of 0.5 to
1.4 meters by 2100, which is sufficient to lead to rising relative sea
level even in the northern states.\31\ Another assessment considers
potential impacts of sea level rise and suggests that ``the Department
of the Navy should expect roughly 0.4 to 2 meters global average sea
level rise by 2100.\32\ This assessment also recommends preparing for
increased needs for humanitarian aid; responding to the effects of
climate change in geopolitical hotspots, including possible mass
migrations; and addressing changing security needs in the Arctic as sea
ice retreats. A third NRC assessment found that it would be ``prudent
for security analysts to expect climate surprises in the coming decade
. . . and for them to become progressively more serious and more frequent thereafter[.]'' \33\
\31\ Sea Level Rise, p. 4.
\32\ National Security Implications, p. 9.
\33\ ``Climate and Social Stress: Implications for Security Analysis'' (2012), p.3.
Another NRC assessment finds that ``the magnitude and rate of the
present greenhouse gas increase place the climate system in what could
be one of the most severe increases in radiative forcing of the global climate system in
Earth history.'' \34\ This assessment finds that CO
\34\ ``Understanding Earth's Deep Past: Lessons for Our Climate Future'' (2011), p.138.
\35\ Ibid, p. 1.
Similarly, another NRC assessment finds that ``[t]he chemistry of the ocean is changing at an unprecedented rate and magnitude due to anthropogenic carbon dioxide emissions; the rate of change exceeds any known to have occurred for at least the
FOR FURTHER INFORMATION CONTACT
Dr. Nick Hutson, Energy Strategies Group, Sector Policies and Programs Division (D24301), U.S. EPA, Research Triangle Park, NC 27711; telephone number (919) 5412968, facsimile number (919) 5415450; email address: firstname.lastname@example.org or Mr. Christian Fellner, Energy Strategies Group, Sector Policies and Programs Division (D24301), U.S. EPA, Research Triangle Park, NC 27711; telephone number (919) 5414003, facsimile number (919) 541 5450; email address: email@example.com.