In the nearly two years since the Supreme Court ruled in Massachusetts v. EPA that carbon dioxide was a “pollutant” within the meaning of the Clean Air Act (CAA), many commentators have posited a cascade of potential regulatory developments flowing from the decision.  In a series of posts, ClimateIntel evaluates one such possible regulatory development—the regulation of CO₂ under the New Source Review (NSR) program.

In this first post, we describe the key elements of NSR regulations and outline the permitting issues that would arise. In the next installment, we discuss some of the recent permitting decisions from the Environmental Protection Agency (EPA) concerning new coal-fired power plants and the current regulatory status. In the third post, we will discuss the likely pollution controls on coal-fired power plants if required to implement Best Available Control Technology (BACT).  The fourth post will discuss technical and policy issues associated with BACT for CO₂ emissions and the five key steps to BACT analyses.  The final installment will discuss whether and to what extent decreases in CO₂ emissions should be required at the expense of increases in emissions of conventional air pollutants and the economic value of avoided CO₂ emissions from a proposed stationary source in the United States.

Massachusetts v. EPA arose from a rulemaking petition seeking to require EPA to regulate greenhouse gases emitted by automobiles.  The Supreme Court held that the plain meaning of the statute was unambiguous and that EPA could not rely on subsequent federal legislation addressing climate change (largely through research efforts) to alter its duties under the CAA.  The Court ruled that EPA “can avoid taking further action only if it determines that greenhouse gases do not contribute to climate change or if it provides some reasonable explanation as to why it cannot or will not exercise its discretion to determine whether they do.”

The CAA also establishes a pre-construction permitting program, known as New Source Review, which is aimed at preventing not only violation of the National Ambient Air Quality Standards, but also deterioration of air quality in areas that meet those standards.  The NSR program requires pre-construction review and the issuance of a permit for the construction of any new “major emitting facility,” or for the “modification” of an existing facility.  To obtain a pre-construction permit, the facility must show, inter alia, that the project would not result in either a violation of an ambient air quality standard or an exceedance of the allowable increment in air quality in local or downwind areas.

The regulation of CO₂ under the NSR program is likely to make facilities not previously subject to NSR suddenly covered by the program.  The CAA and the rules specify applicability thresholds, in terms of pollutant emission quantities, such as 100 to 250 tons per year for new facilities of various types.  These thresholds were developed based on conventional pollutant emissions.  Combustion sources, such as coal-fired boilers and natural gas-fired water heaters, generally emit CO₂ at a rate that is 3 to 4 orders of magnitude (1,000 to 10,000 times) higher than conventional pollutants.  Commercial and institutional facilities that would never be subject to the current NSR program will be subject, if greenhouse gasses are pulled into the NSR program.

A critical part of the permitting process is the analysis and determination of the pollution controls required to be installed before the new or modified source may operate.  The NSR program requires the permittee to conduct an analysis of the BACT for the applicable pollutants.  BACT represents an emissions limitation based on the “maximum degree of reduction” of regulated pollutants that is achievable for a facility, taking into account facility-specific “energy, environmental, and economic impacts and other costs.”  With respect to coal-fired power plants, for example, BACT for sulfur dioxide emissions typically is some form of flue gas desulfurization device or “scrubber.”  Similarly, BACT for nitrogen dioxide emissions can be a range of control or combustion devices, such as selective catalytic reduction or low-NO_X burners.

Until Massachusetts v. EPA, efforts to have any stationary sources, let alone coal-fired power plants, undergo new source review for emissions of greenhouse gasses were not seriously considered.  Since then, however, EPA regions and state permitting authorities have had to address the issue for nearly every permitting decision.  In the next installment, ClimateIntel reviews the uneven regulatory path the issue has traveled.

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