BACT to the Drawing Board

By Eric Triplett | November 15, 2010
Now that the U.S. EPA has finalized its Greenhouse Gas Tailoring Rule, attention has shifted to implementation and what will constitute best achievable control technology (BACT) for sources subject to the Prevention of Significant Deterioration Program. On Jan. 2, the greenhouse gas (GHG) PSD program applies to "anyway" sources (sources already subject to demonstrating BACT). Significant questions remain regarding how a BACT analysis and emission measures will look. This process is certain to be difficult and will likely result in litigation and potentially delayed construction of new or modified sources.
Unlike the analysis/determination process for many regulated pollutants, it will not be possible to streamline a BACT analysis by referring to the RACT/BACT/LAER Clearinghouse—no BACT guidance yet exists for GHGs, and there are no widely available GHG controls. The lack of precedent has resulted in a wide range of views regarding what may constitute BACT for GHGs, which is a recipe for litigation.

Recent rulings in lawsuits by environmental groups seeking BACT for GHGs at power plants indicate EPA may require BACT analyses to consider fuel switching, integrated gasification combined cycle, and/or carbon capture and sequestration (CCS). Despite these rulings, EPA recently denied that fuel switching or facility redesign would likely be required to meet BACT, but signaled it could include demand reduction and energy efficiency measures. Other possibilities include co-generation with waste heat, carbon offsets, coal drying and high-efficiency boilers. Energy efficiency is most likely given its lower cost relative to control technologies and BACT's legal parameters.

The Climate Change Work Group's interim Phase I report done in February highlights the difficulties in establishing BACT for GHG sources and the legal challenges that may arise. For example, the work group could not agree on whether:

>BACT analyses may consider units/processes beyond those undergoing a modification;
>Production process changes would be permissible considerations;
>Commercial guarantees are sufficient evidence of technical feasibility;
>A more stringent emissions limit could be included in a permit under the assumption that a control technology would be available in the future;
>A source could be required to relocate to an area more favorable to CCS;
>How widespread CCS must be before it is "demonstrated" or "available;" and
>What cost-effectiveness threshold, if any, should be used (proposals ranged from $3 to $150 per ton CO2 equivalent).

One possible solution to the question of what constitutes best practices in a world without mature GHG control technologies is the use of the PSD program's (ICT) waiver. Although rarely used, this provision provides a source that implements an innovative control technology (technology that may achieve greater emissions reductions than a demonstrated technology or similar reductions at lower cost or impact) with a longer time period to meet BACT emissions limits than would be applied to a demonstrated technology. As noted by the work group, it may also be possible to use the existing BACT process to issue permits with a range of permissible emission limits while a technology is optimized. In its August Phase II report, the work group recommended that EPA encourage innovative control technologies through expanded use of the ICT waiver.

No one knows how sources will perform a satisfactory BACT analysis; how permitting authorities will make BACT determinations; the usefulness of EPA's BACT guidance released Nov. 10; or the possible spectrum of GHG BACT that will result from early determinations. Given the numerous, subjective factors that go into a BACT analysis/determination, and the variation in political opinion and expertise within permitting authorities across the country, initial determinations are likely to encompass varied controls/measures, from energy efficiency to CCS. It is also fair to conclude that the initial sources have their work cut out for them and that litigation will result from some of the initial determinations. Perhaps these difficulties will convince Congress to take action, either by terminating the tailoring rule or passing a comprehensive national GHG program.

Author: Eric Triplett
Attorney, Faegre & Benson
(303) 607-3612