EPA partially approves Tenn. SIP, Eastman eyes coal-to-gas switch

The U.S. Environmental Protection Agency said in an April 24 Federal Register notice that it has finalized a limited approval and a limited disapproval of an April 2008 revision to the Tennessee State Implementation Plan (SIP) for regional haze.

EPA said it is taking final action on the entire SIP revision except for the Best Available Retrofit Technology (BART) determination for Eastman Chemical (NYSE: EMN). Eastman Chemical is a global chemical company which manufactures and sells a broad portfolio of chemicals, plastics and fibers. The company’s headquarters and largest manufacturing site are located in Kingsport, Tenn.

Tennessee’s April 2008 SIP revision addresses regional haze for the first implementation period. The regional haze rules require states to prevent any future and remedy any existing anthropogenic impairment of visibility in mandatory Class I areas (national parks and wilderness areas) caused by emissions of air pollutants from numerous sources located over a wide geographic area. States are required to assure reasonable progress toward the national goal of achieving natural visibility conditions in Class I areas.

The limited SIP disapproval is because the affected part of the SIP depended on the federal Clean Air Interstate Rule, which the U.S. Court of Appeals for the District of Columbia Circuit struck down.

EPA said it received six sets of comments on the June 2011 rulemaking proposing a limited approval and limited disapproval of Tennessee’s regional haze SIP revision. The comments were received from the American Coalition for Clean Coal Electricity, Eastman, the state of Tennessee, the National Park Service and the Tennessee Valley Authority.

Commenter One – One commenter urged EPA to move expeditiously to assess, through modeling, whether the emissions reductions that will be achieved under the Transport Rule, also known as the Cross-State Air Pollution Rule (CSAPR), will be sufficient to satisfy BART requirements for electric generating units (EGUs) under the regional haze program.

EPA said it has performed modeling analyses to determine the visibility improvement expected from the implementation of the Transport Rule and compared the results to the improvements expected from BART. On Dec. 30, 2011, EPA proposed its determination that the Transport Rule achieves greater reasonable progress toward the national goal of achieving natural visibility conditions in Class I areas (including Tennessee’s two areas) than source-specific BART (i.e., that the Transport Rule is “better than BART”). Based on this proposed action, EPA believes that the Transport Rule will satisfy BART requirements for SO2 and NOX for EGUs in Tennessee. Incidentally, the Transport Rule/CSAPR is currently on hold due to a federal appeals court order while the court sorts through appeals of the rule from a number of industry parties.

Commenter Two – Another commenter requested that EPA delay final action on the June 2011 proposed rulemaking related to Tennessee’s regional SIP revision so that the BART requirements are harmonized with other pending federal air quality regulatory actions that affect Eastman’s Tennessee facility (e.g., 1-hour SO2 National Ambient Air Quality Standard (NAAQS), the maximum achievable control technology (MACT) rule for industrial boilers (Industrial Boiler MACT), and the Transport Rule). The commenter said this delay will provide Eastman with an opportunity to meet all of the requirements of these programs at one time and will allow the company to comply with all pending requirements in an efficient and cost-effective manner.

Under the Clean Air Act, EPA said it is required to act within specified timeframes to approve or disapprove SIP revisions. Tennessee submitted its regional haze SIP revision for EPA review in April 2008, and because EPA did not approve or disapprove the SIP within the prescribed 12 months, the National Parks Conservation Association and other interested parties sued EPA to take action. As a result of that lawsuit, EPA is now operating under a consent decree to finalize approval or disapproval of Tennessee’s regional haze SIP.

EPA noted that after publication of the proposed limited approval and limited disapproval action on Tennessee’s SIP, the state and Eastman entered into discussions with the lawsuit plaintiffs regarding the BART determination for Eastman. The Eastman facility is considering a conversion to natural gas in one or two of its powerhouses in lieu of continuing to use coal and retrofitting its facility pursuant to the facility’s BART determination to reduce its SO2 emissions. Based on these discussions and a March 14 agreement between Tennessee and Eastman regarding possible control options to satisfy BART, the plaintiffs agreed to extend the date in the consent decree for EPA to take final action on the BART determination for Eastman. Accordingly, EPA is taking no action on this BART determination at this time since EPA expects Tennessee to submit a revised BART determination for Eastman in the near future. EPA will take action on Eastman BART in a separate rulemaking.

Commenter Three – A third commenter indicated that it is fundamentally inequitable to set the BART compliance deadline earlier for non-EGUs (in reference to the Eastman facility) than for EGUs and to require non-EGUs to make necessary investments earlier than EGUs. The commenter also said this step is not required to ensure reasonable progress in visibility improvement in Class I areas.

EPA said it is not clear what compliance dates the commenter is referring to. The latest BART compliance date under the Tennessee regional haze SIP for the state’s subject-to- BART sources (excluding Eastman) is in 2017, five years after final action on this rulemaking. Under the aforementioned March 14 agreement between Tennessee and Eastman, the BART compliance date for Eastman is the same compliance date that Eastman would have received had EPA taken final action on the Eastman BART determination on March 15, if Eastman does not convert its BART subject unit to natural gas. Additionally, states may opt to implement an alternative measure to source-specific BART that must achieve greater reasonable progress than would be achieved by implementation of BART.

Commenter Four – The fourth commenter questioned EPA’s authority to issue a limited approval of Tennessee’s SIP revision and said that EPA should reach full resolution of the issue of what constitutes BART and reasonable progress for EGUs before approving any portion of Tennessee’s regional haze SIP.

EPA said it has the authority to issue a limited approval and believes that it is appropriate and necessary to promulgate a limited approval and limited disapproval of Tennessee’s regional haze SIP at this time. It is not necessary to reach full resolution on whether the Transport Rule is better than BART for EPA to issue a limited approval, the agency said. Granting full approval at a later date would only delay realization of the SIP’s visibility benefits whereas the SIP is strengthened now by acting through the limited approval, it added.

Commenter Five – A fifth commenter asserted that the 1-hour SO2 NAAQS is very restrictive and may result in fuel switching from coal to natural gas. In addition, the commenter mentioned that sources upgrading their facilities may be faced with possible greenhouse gas best available control technology determinations that would drive repowering from coal to natural gas. The commenter also mentioned that sources must also consider what controls may be required by the Transport Rule and the Industrial Boiler MACT. The commenter concluded with a request that EPA time the final approval of the Tennessee regional haze SIP to allow BART sources to have a reasonable amount of time to plan for the implementation of various regulatory programs, and mentioned that the burden of meshing all of the planning and construction of equipment to meet these programs is too much to ask of industries that are trying to stay competitive and to keep citizens employed.

EPA simply referred that commenter to its answer to the second commenter, which had to do with its statutory and consent decree-imposed need to act.

Commenter Six – The sixth commenter stated that EPA should have considered updated information in evaluating the BART determination for Alcoa Tennessee’s primary aluminum smelter. The commenter also stated that Alcoa also appears to have overestimated costs for limestone slurry forced oxidation scrubbing. The commenter asserts that wet scrubbing of potline emissions is BART at Alcoa.

In December 2007, this commenter submitted comments to Tennessee on the state’s regional haze SIP and raised no substantive issues regarding Tennessee’s BART determination for Alcoa, EPA noted. EPA said it does not believe that the commenter’s expressed concerns regarding Alcoa’s BART analysis (in response to the June 2011 proposed rulemaking) justify reconsideration of Tennessee’s BART determination.

Commenter Seven – The seventh commenter recommended that EPA grant full, not limited, approval of the Tennessee SIP for regional haze, and mentioned that such full approval should not be delayed pending EPA’s analysis to confirm that the Transport Rule would provide sufficient reductions to satisfy BART requirements. This commenter said EPA must grant full approval but reserve the option of having the SIP reopened in the unlikely event that its analysis indicates that emissions reductions beyond the Transport Rule are necessary in Tennessee to meet the national visibility goals.

EPA said to look at its response to comment four that said it has authority to grant a limited SIP approval.

Commenter Eight – The eighth commenter asserted that EPA should give full, not limited, approval to Tennessee’s regional haze SIP because CAIR and another federal rule remain in effect. Further, the commenter stated that EPA could not have a basis to propose or promulgate disapproval or limited disapproval of a regional haze SIP due to its reliance on CAIR and that federal rule unless EPA had first determined, based on a thorough and defensible analysis, that, among other things, the emissions reductions and associated visibility-improvement benefits that are likely to result from the final Transport Rule will not be at least comparable to those achieved under CAIR.

EPA said to look at its response to commenter four about its authority to issue this approval.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.