The State Implementation Plan & New EPA

Standards and Rules that Impact Texas:

Moving Forward

Cyrus Reed

Lone Star Chapter, Sierra Club

September 26, 2012

Environmental Regulation

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Overview

� Why do we care?

� How are we doing with current ozone standard

� Current and Upcoming Clean Air Standards (Ozone, PM 2.5 and SO2)

� Current EPA rules and TCEQ – Some Disputes Resolved, Others Messy

� Upcoming Rules that Impact Areas and Industry

� A Path forward – begin with TERP and LIRAP funding

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Why we care

� Rules and Standards Are There to Protect Public Health

� Air Pollution impacts economics – lost work days, attracting business -- health and leads to early deaths, particularly for children and the elderly

� Attracting new business and development is helped by clean air and hurt by dirty air

� Texas can and has taken steps to prepare for future rules and standards, avoid expensive regulations and helped spur economic development – TERP, Grandfathered Plants, SB 7

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How Are We Doing With Current Ozone

Standard? (Some Concerns)

0102030405060708090

100

4th Highest 8-Hour Ozone Value, 2010-2012

2010 2011 2012

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New Ozone Standards Likely to Come

Under Present Administration

� New Ozone NAAQS will be proposed in December 2013, with final rule out by September 2014;

� We don’t know the number but most likely scenario is 70 PPB

� At that level, we can expect not only Houston, Port Arthur and Dallas, but Tyler, Waco, San Antonio, Austin and Perhaps Corpus;

� Actual Non-Attainment Designations would not be for several years, but the more we do in coming years the better off state will be…

� Oil and gas sources near urban areas, as well as large stationary stations like coal plants outside the urban areas will require additional controls

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What do the new ozone standards mean in Texas?

Areas of non-attainment could go from 3 to 8 at 70 PPB

Ozone Standards

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Other NAAQS Affecting Texas

� PM 2.5 – EPA is proposing to lower annual PM 2.5 Fine Particle Standard

from 15 ug/m3 to a range between 12 and 13 ug/m3.

� Harris County would be county most impacted

� SO-2 – New One-Hour Standard of 75 PPB (New 2010 Standard)

� Jefferson County violates the standard today

� Unclear in counties without monitors where there are major SO2 Sources Like

Coal Plants – Will EPA require actual monitors or rely on modeling?

� This Committee could hold hearings on SO2 and Ask TCEQ to Look at Emissions

Reductions at Large Industrial Sources of SO2 That Will Avoid SIP-Style

Regulations

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8

Areas near concentrated diesel Areas near concentrated diesel Areas near concentrated diesel Areas near concentrated diesel

emissions such as ports, emissions such as ports, emissions such as ports, emissions such as ports, rail rail rail rail

yardsyardsyardsyards, warehouses, , warehouses, , warehouses, , warehouses, truck truck truck truck stops stops stops stops

and and and and busy busy busy busy roadways roadways roadways roadways have have have have the the the the

highest exposure highest exposure highest exposure highest exposure to to to to diesel diesel diesel diesel

exhaustexhaustexhaustexhaust. . . .

Those communities Those communities Those communities Those communities

have have have have the highest risk of the highest risk of the highest risk of the highest risk of

becoming becoming becoming becoming nonnonnonnon----attainment.attainment.attainment.attainment.

Houston

Metropolitan

Area and the

Port of Houston

Dallas-Ft

Worth

Metropolitan

Area and IH-

20 Corridor

San Antonio to

Austin IH-35

Corridor

El Paso/Mexico/New

Mexico

MEX-45/IH-10

Corridor

Port of Corpus Christi

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• Monitors that show problems are next to ports

• Quick action on port emissions and new standards

could help avoid designation

• Other ports like Los Angeles, Oakland, Portland and

Seattle have taken action

• Coordination with infrastructure and transportation in

port areas will be key

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Particle Port Pollution Could Push Houston into

Non-Attainment for Federal Air Quality Standards

Current EPA rules and TCEQ – Many

Disputes getting resolved quietly

� Flexible Permits – Only represented less than 10% of permits and virtually all of these have moved back into the standard permitting program at TCEQ by “deflexing.” No direct enforcement needed and some permits actually expanding their facilities (ExxonMobil Baytown and Motiva), despite big court case

� Title V – dispute over “incorporation by reference” ended by incorporating preconstruction permits into the Title V Permits

� New Source Review Reform – Latest July 25, 2012 are likely to resolve long-standing EPA Concerns with issues like plant-wide applicability limits and references to federal rules

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Other disputes messier …Greenhouse gases

and SSM (startup, shutdown, maintenance)

� The only program that EPA has taken over is GHG permitting for new

facilities following a 2011 DC Circuit Court of Appeals reaffirming the right to

regulate GHG

� Sierra Club would prefer that TCEQ be like all 49 other states and be

permitting GHG for major new facilities, but if not, EPA will run the program

and we could risk more EPA involvement, not less, in Title V and other

programs

� Courts sided with EPA on SSM emissions events – these events can and

should be enforced – TCEQ must adopt new policy to enforce SMM

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Non-NAAQS UPCOMING EPA REGULATIONS

Moving Forward

� BACT for GHGs for EGUs

� NSPS & MACT for Oil and Gas Facilities

� Mercury and Air Toxics Standard for EGUs

Unclear

� CSPAR – Legally in Limbo

� Coal Ash Waste Regulation

� Section 316(b) Water Intake Standards

� OSM Regulation of Ash Minefillls

� PM2.5 NAAQS Reconsideration

� Haze FIP (Comments received but CSPAR Stay Complicates This Rule)

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Important Issues

� TCEQ must incorporate NSPS and MACT for oil and gas into present PBR or come up with new rules – must apply them statewide not just in Barnett

� Relationship between CAIR, CSPAR, SO2 Standards and Haze Rule and Their Impact on Coal Plants is murky –

� TCEQ could avoid all that by simply imposing new emission rules on large stationary sources without basic pollution control and probably meet any upcoming EPA regulations

� New MACT standards will require significant TCEQ resources

� Single-most important act of the Legislature in 2013 to meet Ozone rules and clean up the air will be funding of TERP and LIRAP

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Present LAR 2014-2015 Fails to Ask for

TERP & LIRAP MoneyCategory Fy 2011 Exp 2012 Exp 2013 LAR 2014 LAR 2015

Balance $385 $413 $556 $615 $716

Revenues $162 $167 $167 $168 $168

Spending $134 $25 $109 $67 $67

TERP Ending

Fund

$413 $556 $716 $716 $817

LIRAP

Revenue

$41 $40 $39 $40

Spending $7.3 $7.3 $7.3 $7.3

Balance $33 $66 $98 $130

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Other issues that will help clean air

� Energy Efficiency Programs

� Building Energy Code Standards – Adoption of 2012 IECC

� Demand Response Programs

� Energy Storage

� Renewables

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