Category Archives: greenhouse gas

Republicans failed to stop EPA

The Republicans in the U.S. Senate failed to “defund” EPA in order to keep it from proceeding with its greenhouse gas regulations.

This was considered a victory for the Administration which received the go ahead from the Supreme Court awhile back to start regulating CO2 as a greenhouse gas.

More on Greenhouse Gas Emission

EPA will be proposing greenhouse gas emission standards for power plants in July 2011 and for refineries in December 2011 and will issue final standards in May 2012 and November 2012, respectively.

In the absence of any possible legislative action by Congress in the upcoming term, EPA is now exercising its authority under the Clean Air Act to regulate greenhouse gases as air pollutants.

In California, the Air Resources Board is going ahead with its Cap and Trade program for GHG. It is a program that does not have immediate impact on industry in the sense that affected industry is provided with GHG allowances in the first year to meet their caps. The trading of GHG allowances does not start until 2012 and will accelerate in 2015. State law mandates that GHG be reduced to 1990 level by 2020.

EPA’s Tailoring Rule on Greenhouse Gas

EPA issued its final rule on greenhouse gas (GHG) emissions on June 3, 2010. Under this rule, GHG will be regulated in two phases under the Clean Air Act.

Phase 1 will go from January 2, 2011 to June 30, 2011. If you are currently under a PSD permit (Prevention of Significant deterioration) and you emit more than 75,000 tpy of GHG, you will need to use Best Available Control Technology (BACT) to control you GHG emission.

Phase 2 goes into effect July 1, 2011 and ends on June 30, 2013. PSD permits will apply to new construction projects that emit more than 100,000 tpy of GHG. Modifications at existing facilities  that exceed 75,000 tpy of GHG will be subject to PSD requirements. Also if you emit more than 100,000 tpy of GHG, you will need to get a Title V permit!

Of course – this is America. So expect lawsuits to be filed against EPA on this final rule.

GHG is defined to include CO2, CH4, HFCs, PFCs, and SF6. For a complete set of the Tailoring Rule, click here. There is also a pretty interesting article in Pollution Engineering Magazine on this topic written by my fellow contributing editor Lynn Bergeson.

We have 2-day environmental regulations seminars scheduled in Florida (Fort Myers and Orlando), California (Santa Ana and San Francisco), Nevada (Las Vegas), Georgia (Atlanta), Texas (Houston), New Jersey (Newark) and Virginia (Virginia Beach). For our latest 2010/2011 environmental seminar schedule, click here.

EPA’s new directions on greenhouse gas emissions

In a recent letter to several senators, EPA Administrator made the following comments about the agency’s directions on greenhouse gas:

No facility will be required to address greenhouse gas emissions in Clean Air Act permitting of new construction or modifications before 2011.

For the first half of 2011, only facilities that already must apply for Clean Air Act permits as a result of their non-greenhouse gas emissions will need to address their greenhouse gas emissions in their permit applications.

EPA is also considering a modification to the rule announced in September requiring large facilities emitting more than 25,000 tons of greenhouse gases a year to obtain permits demonstrating they are using the best practices and technologies to minimize GHG emissions. EPA is considering raising that threshold substantially to reflect input provided during the public comment process.

EPA does not intend to subject smaller facilities to Clean Air Act permitting for greenhouse gas emissions any sooner than 2016.

EPA’s New Greenhouse Gas Reporting Rule

The final rule was signed by the Administrator on September 22, 2009. On October 30, 2009, the  final rule was published in the Federal Register ( under Docket ID No. EPA-HQ-OAR-2008-0508-2278.  The rule went into effect December 29, 2009.

Under this new rule,  suppliers of fossil fuels or industrial greenhouse gases, manufacturers of vehicles and engines, and facilities that emit 25,000 metric tons or more per year of GHG emissions are required to submit annual reports to EPA. The gases covered by the proposed rule are carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFC), perfluorocarbons (PFC), sulfur hexafluoride (SF6), and other fluorinated gases including nitrogen trifluoride (NF3) and hydrofluorinated ethers (HFE).

Facilities need to start collect data on January 1, 2010 and the first emission report is due March 31, 2011. There are special provisions in 40 CFR 98 for some companies in 2010.

The complete regulation (all 261 pages of it) can be downloaded here. A much shorter version (press release) is here.

New development on the air front

emergency vehicleToday EPA granted California’s waiver from federal air emission standards for cars and trucks. This waiver means that California can enforce its own tailpipe greenhouse gas emission standards BEFORE the federal emission standards become effective 2012. The same waiver had been denied by the Bush EPA earlier.

This is another example that California and other states can have more stringent environmental standards than the federal standards.

Another development today is the Minnesota Supreme Court’s ruling that Al Franken had won the Senate race. Norm Coleman conceded soon after the ruling came out. What that means is that there will now be 60 Democratic senators and that makes it easier for the Democrats to pass its cap-and-trade law in the Senate.

The House passed its cap-and-trade law (American Clean Energy Security Act) last week.

Cap-and-trade 101

What are greenhouse gases?

 Three forms of naturally occurring greenhouse gases are being affected by industrial activities. These are carbon dioxide, methane and nitrogen oxide. Of these three, carbon dioxide is by far the most prevalent – coming primarily from man-made incineration of fossil fuels. 

 changes in CO2The accompanying chart from EPA shows the changes in greenhouse gas emission since 1990 in absolute terms. The unit MMTCE refers to million of metric tons of carbon equivalent.  

 The idea of regulating carbon dioxide was given a push by the Supreme Court in its 2007 decision (Massachusetts v. EPA) where it affirmed (once again) that EPA has the authority under the Clean Air Act to regulate any pollutant that is found by the agency to be harmful to human health.

 So just what exactly is cap-and-trade?

 First of all, cap-and-trade is not a new concept. It was used in the 80s to control the emission of sulfur dioxide as part of the legislation to reduce acid rain. Cap-and-trade is also being used in California by the South Coast Air Quality Management District to reduce the emission of nitrogen oxides and sulfur dioxide from industries under its Regional Clean Air Incentives Market (RECLAIM) program.

Here is how cap-and-trade works. The regulatory agency places a maximum amount of emission that a facility can emit for a particular pollutant – say carbon dioxide. That’s the cap part. Once this cap is in place, the agency provides an emission allowance to industries that can be applied against the cap. The allowance may be as large as the cap during the first few years of the program. It then decreases gradually over time. This decrease in allowance has the effect of reducing the amount of carbon dioxide that can be emitted each year.

The whole idea of cap-and-trade is to provide a disincentive to industry to continue to emit harmful pollutants such as greenhouse gas (primarily carbon dioxide from coal power plant).

Faced with this decreasing allowance – which is in effect a more restrictive limit on emission over time – the regulated industry has two options to comply with the cap. It can install pollution control equipment to reduce its emission to make up for the decreasing allowance in order to meet the cap. Or it can purchase credit in an open market to make up for any short fall. That’s the trading part of cap-and-trade. Conversely, if a facility comes in below the cap as a result of installing pollution control devices, it may have “surplus allowance” that it can sell in the open market and make money.

That’s the whole idea of cap-and-trade. If you cannot meet the emission limit, you have to go to the open market and purchase emission credits. For those companies that choose to install pollution control equipment, they would not have to pay millions to purchase emission credits. They may even have unused allowances that they can sell in an open market. The underlying intent of the bill is to control emission by creating an incentive to the development and installation of pollution control technology.

There have been a lot of complaints from opponents of the proposed bill that cap-and-trade is a “tax” on industries.

Cap-and-trade is a pollution “tax” in much the same way that regulations that control the disposal of toxic wastes constitute a “tax” because they impose additional costs on industry. Companies that generate hazardous wastes will have to pay more to have them disposed of properly. The incentive there is to either change the manufacturing process to reduce the amount of toxic wastes generated or pay to have the wastes disposed of properly.

Another example of pollution tax is tailpipe emission control from automobiles. The cost of the catalytic converter increases the manufacturing cost of a car and is passed on to the consumers. So are the costs of seat belts and air bags. 

Why should carbon emission control be treated any differently?