1 Air Quality Information Session Indiana Department of Environmental Management August 18, 2010

2 National Ambient Air Quality Standards (NAAQS)

3 Revised NAAQS Former Standard Current Standard Proposed Standard Designations Effective Nitrogen Dioxide NO 2 (ppb) 53 (annual basis) 100 (hourly basis)N/AFeb 2012 Sulfur Dioxide SO 2 (ppb) 140 (daily) 30 (annual) 75 (hourly basis)N/AJul 2012 Ozone O 3 (ppm) 0.08 (8 hr avg) (8 hr avg) (8 hr avg)Aug 2011 Fine Particles PM 2.5 (ug/m 3 ) 65 (daily) 15 (annual) 35 (daily) 15 (annual) (daily) (annual)Dec 2013 Carbon Monoxide CO (ppm) N/A 9 (8 hour) 35 (1 hour) 3-6 (8 hour) 5-15 (1 hour)June 2011 Lead Pb (ug/m 3 ) 1.5 (calendar quarterly) 0.15 (rolling 3 mo avg)N/ANov 2010

4 Anticipated NAAQS Implementation Milestones NAAQS Promulgation Date Designations Effective (approx. date) 110(a) SIPs Due (3 yrs after promulgation) Attainment Demonstration Due Attainment Date Fine Particles PM 2.5 (2006) Sep 2006Dec 2009Sep 2009Nov 2012 Nov 2014/2019 Lead (Pb) Oct /2011Oct /2013 Nov 2015/2016 Nitrogen Dioxide (NO 2) (primary) Jan 2010Feb 2012Jan 2013Aug 2013Feb 2017 Sulfur Dioxide (SO 2 ) (primary) Jun 2010Jul 2012Jun 2013Jan 2014Jul 2017 Ozone (O 3 ) Aug 2010Aug 2011Aug 2013Dec 2013Dec 2017 Carbon Monoxide (CO) May 2011Jun 2013May 2014Dec 2014May 2018 Fine Particles PM 2.5 (2010) Nov 2010Dec 2013Oct 2014Dec 2016 Dec 2018/2023 Nitrogen Dioxide (NO 2 ) and Sulfur Dioxide (SO 2 ) (secondary) Mar 2012Apr 2014Mar 2015Oct 2015N/A

5 Lead Trends

6 October 15, 2008: U.S. EPA announced a new lead standard set at 0.15 µg/m 3 as a three month rolling average. Indiana’s Proposed Nonattainment Area for Lead Based on Monitoring Data

7 New Lead Monitoring Requirements New source-oriented lead monitors at sources ≥ 1.0 tons per year actual emissions. –Four monitors in Indiana were added in Delaware, Lake (2) and Porter counties. Second round of designation recommendations based on these new monitors are due to U.S. EPA in December 2010.

8 8-Hour CO Trends

9 1-Hour CO Trends

10 U.S. EPA scheduled to announced a revised CO standard in October 2010 likely within a range of 3-6 ppm. CO Design Values Based on Monitoring Data Current 8-hour Standard at 9 ppm Mapped By: B. Callahan, Office of Air Quality Note: Washington Park monitor began monitoring on 1/10/2010

11 PM Hour Trends Annual monitoring for PM 2.5 did not begin until 1999.

12 PM 2.5 Annual Trends Annual monitoring for PM 2.5 did not begin until 1999 Note: The Hammond-Purdue monitor had an exceedance of the standard in 2009 but the three-year design value is still well below the standard.

13 March 15, 2010: U.S. EPA announced a potential revised annual PM 2.5 standard with a range of µg/m 3. PM 2.5 Design Values Based on Monitoring Data Current Standard at 15 µg/m 3

14 March 15, 2010: U.S. EPA announced a potential revised annual PM 2.5 standard with a range of µg/m 3. PM 2.5 Design Values Based on Monitoring Data Potential Standard (Upper End) at 14 µg/m 3

15 March 15, 2010: U.S. EPA announced a potential revised annual PM 2.5 standard with a range of µg/m 3. PM 2.5 Design Values Based on Monitoring Data Potential Standard (Lower End) at 11 µg/m 3

16 Annual NO 2 Trends

17 1-Hour NO 2 Trends Note: The new 1-hour NO 2 standard set at ppm was not established until 2010 and is not shown on this graph

18 Franklin Rd, Chicago NO 2 Monitor Data Only monitor in the country that is over the 1-hour NO 2 standard.

19 January 22, 2010: U.S. EPA announced a new NO 2 standard set at 100 ppb and retained the annual NO 2 standard set at 53 ppb. NO 2 Design Values Based on Monitoring Data

20 New NO 2 Monitoring Requirements Near-Road Monitors –Within 50 meters from edge of selected major roads (based on annual average daily traffic). –Potential issues: road grades, noise barriers, air flow, access to monitor. –Start operating January 1, 2013.

21 Indiana Counties Required to have U.S. EPA NO 2 Roadside Monitors

22 8-Hour Ozone Trends

23 March 12, 2008: U.S. EPA announced a new 8-hour ozone standard set at ppm. Ozone Design Values Based on Monitoring Data Current Standard at ppm

24 January 6, 2010: U.S. EPA announced reconsideration of the hour ozone NAAQS (Proposed range of ppm). Ozone Design Values Based on Monitoring Data Proposed Standard at ppm

25 Ozone Design Values Based on Monitoring Data Proposed Standard at ppm January 6, 2010: U.S. EPA announced reconsideration of the hour ozone NAAQS (Proposed range of ppm).

26 Ozone Design Values Based on Monitoring Data Proposed Standard at ppm January 6, 2010: U.S. EPA announced reconsideration of the hour ozone NAAQS (Proposed range of ppm).

27 Proposed Accelerated Implementation Timeline for Ozone DeadlineMilestone August 31, 2010Signature - Final Rule January 2011State designation recommendations due to U.S. EPA August 2011Final Designations will be effective no later than August 2011 December 2013Attainment Demonstration SIPs due to U.S. EPA Attainment Dates (depends on severity of problem) U.S. EPA is planning to propose an implementation rule in Summer 2010 and issue a final rule as quickly as possible after the final ozone NAAQS is established.

28 Ozone Designation Classifications U.S. EPA has stated that all nonattainment areas for the 2010 ozone standard will be designated under Subpart 2. Moderate and above areas would require additional control measures such as RACT, I/M, ROP, etc.) Classification Option #1 “Percent-Above-Standard” method. At 70 ppb Indiana could have18 marginal areas. At 60 or 65 ppb Indiana could have 21 marginal areas and 6 moderate areas. Classification Option #2 “Ratio of Thresholds” method. At 70 ppb Indiana could have 15 marginal areas and 4 moderate areas. At 60 or 65 ppb Indiana could have 12 marginal areas and 15 moderate areas.

29 SO 2 Annual Trends Note: The new 1-hour SO 2 standard set at ppm was not established until 2010 and is not shown on this graph.

30 June 6, 2010: U.S. EPA announced a new 1-hour SO 2 standard set at 75 ppb. SO 2 Design Values Based on Monitoring Data Standard at 75 ppb

31 SO 2 Implementation Timeline DeadlineMilestone June 2010U.S. EPA sets new primary SO 2 standard June 2011States submit designation recommendations, based on available monitoring data and any modeling in advance of submitting their state implementation plans June 2012U.S. EPA issue initial designations January 2013 New monitoring network operational June 2013State maintenance or infrastructure plans due to U.S. EPA February 2014 State plans for basic requirements to implement the revised standards (including appropriate state regulations to carry out monitoring) due to U.S. EPA August 2017Attainment and unclassifiable area state implementation plans modeling attainment of the new standard due to U.S. EPA August 2017All areas attain the standard

32 SO 2 Designations U.S. EPA anticipates initially designating areas based on monitoring data. DesignationCriteria NonattainmentMonitoring data or modeling results shows a violation of the standard AttainmentBoth monitoring data and modeling results showing no violation of the standard UnclassifiableAll other areas

33 SO 2 SIP Development Process IDEM prefers a single SIP development process to meet all obligations since both maintenance SIP and attainment SIP require modeling and rulemaking. –Addresses all obligations. –Conserve resources. –Ensure timely SIP submittals. –Eliminate confusion associated with rulemaking for emission limitations or controls. –Reduce the burden of additional monitoring.

34 SO 2 Modeling Protocol Model Fountain and Warrick counties. These two counties currently monitor nonattainment, but should monitor attainment following the installation of Flue-Gas Desulfurization scrubbers (FGDs) at sources in those counties. Model those areas that currently show attainment through monitoring data (Lake, Porter, LaPorte, Jasper, Hendricks and Vanderburgh counties). Model those areas (Marion and Gibson counties) which show a downward trend in SO 2 emissions, still monitor violations, but may reach attainment in the near future. Based on results from the above modeling, Indiana will prioritize the remaining sources greater than 100 tons per year and model starting with the largest source or cluster of sources. Areas that measure air quality above the standard and are not expected to attain in the near future will not be modeled until Indiana is ready to draft attainment SIPs.

35 Transport Rule

36 Proposed Clean Air Transport Rule Clean Air Interstate Rule (CAIR) remains in place until the proposed transport rule is finalized. Affects power plants because their emission reductions are most cost- effective. Twenty-one states (including Indiana) will be controlled for precursors of both fine particles and ozone. –Eight states will be controlled for fine particles only and 4 states will be controlled for ozone only. Separate requirements for annual SO 2 reductions, NO x reductions, ozone-season NO x reductions, and also sets emissions budgets for each state. To meet the proposed rule, U.S. EPA anticipates power plants will operate already installed control equipment more frequently, use lower sulfur coal, or install pollution control equipment.

37 Proposed Clean Air Transport Rule By 2014 the benefits include 71% reduction from 2005 levels in SO 2 and 52% reduction from 2005 levels in NO x emissions from power plants. –6.3 million tons of SO 2 per year. –1.4 million tons of NO x per year. 300,000 tons of NO x during ozone season. SO 2 emissions would be limited to 2.6 million tons per year (tpy). NO x emissions would be limited to 1.3 million tpy. –Ozone season NO x emissions will be limited to 600,000 tpy. U.S. EPA estimates the annual benefits from the proposed rule range between $120-$290 billion in U.S. EPA estimates annual compliance costs to the power sector at $2.8 billion in 2014.

38 Proposed Clean Air Transport Rule U.S. EPA is proposing one approach and taking comment on two alternatives. All three approaches would cover the same states, set budgets for each state, and obtain the reductions from power plants. –U.S. EPA’s preferred approach: allows interstate trading and limited interstate trading among power plants but assures that each state will meet its pollution control obligations. –First alternative: trading is allowed only among power plants within a state. –Second alternative: U.S. EPA specifies the allowable emission limit for each power plant and allows some averaging of emission rates.

39 Proposed Clean Air Transport Rule Proposal includes four separate control regions: –NOx reductions (2012). –Ozone-season NO x reductions (2012). –Annual SO 2 reductions. Phase I (2012) and Phase II (2014). Two control groups. –Group 1: 2012 cap lowers in –Group 2: 2012 cap only. Indiana is in Group 1. –NO x annual and ozone season. –SO 2 annual.

40 CAIR Phase 1CAIR Phase 2CATR and Later **2014 and Later** NO x Ozone Season45,95239,77349,987 NO x Annual108,93590,779115,687 SO 2 Annual254,599*178,219*400,378201,412 Clean Air Interstate Rule (CAIR) Compared to Clean Air Transport Rule (CATR) (Units in Tons) SO 2 budget is approximate. Budgets were to be 50% reduction of the Acid Rain budget for Phase 1 and 65% for Phase 2. Excludes interstate trading and eliminates bank of credits.

41 Proposed Clean Air Transport Rule Variability Limits on SO 2 Annual Emissions for 2014 and Later for EGUs (tons) ProposedAlternative StateSO 2 Annual Emissions Budget1-Year Limit3-Year Average Limit1-Year Limit3-Year Average Limit Indiana201,41220,14111,62920,14111,629 Variability Limits on NO X Annual Emissions for 2014 and Later for EGUs (tons) ProposedAlternative StateNO X Annual Emissions Budget1-Year Limit3-Year Average Limit1-Year Limit3-Year Average Limit Indiana115,68711,5696,67911,5696,679 Variability Limits on NO X Ozone Emissions for 2014 and Later for EGUs (tons) ProposedAlternative StateNO X Ozone Season Emissions Budget1-Year Limit3-Year Average Limit1-Year Limit3-Year Average Limit Indiana49,9874,9992,8864,9992,886

42 Note: Additional control equipment assumed for Clifty Creek and Rockport units Only. Rockport and Wabash would be required to control units to meet the proposed 1-year and 3-year average caps for 2014.

43 Note: No new control equipment assumed for 2012 or 2014 (other than those within unsigned decrees). All units predicted to meet the year cap, but Rockport may have difficulty with the proposed 3-year average cap.

44

45 LADCO* (Round 5) 8-Hour Ozone Modeling Results for Indiana MonitorCountySite Average Design Value Relative Reduction Factor Future Year Design Value (ppm) Relative Reduction Factor Future Year Design Value (ppm) Relative Reduction Factor Future Year Design Value (ppm) Ogden DunesPorter Granger St Joseph Fort WayneAllen FloraCarroll Fort HarrisonMarion SandcutVigo CharlestownClark Inglefield Vander burgh Lake Michigan Air Directors ConsortiumHighlighted Values are ≥ ppm

46 LADCO (Round 5) PM 2.5 Annual Modeling Results for Indiana MonitorCountySite Average Design Value 2009 Future Year Design Value (ug/m3) 2012 Future Year Design Value (ug/m3) 2018 Future Year Design Value (ug/m3) Hammond-PurdueLake Elkhart Fort WayneAllen LafayetteTippecanoe W 18 th StreetMarion Terre HauteVigo JeffersonvilleClark JasperDubois Highlighted Values are ≥ 12.5 ug/m3

47 PM 2.5 Redesignations Uncertainty associated with the implementation of CAIR has prevented approval of Indiana’s redesignation requests. –Lack of support for demonstration for continuation of maintenance. –Areas pending include Central Indiana, Northwest Indiana and Southwest Indiana. –Southeast Indiana and Lawrenceburg Township will be submitted in Fall U.S. EPA intends to propose approval of the pending PM 2.5 redesignations based on the proposed transport rule. Final approval would be issued following finalization of the transport rule in Spring 2011.

48 Schedule for Final Transport Rule Proposal signed on July 6, Public comment period ends 60 days after publication in the Federal Register. Three public hearings will be held. U.S. EPA will continue to work with states to address comments and to implement the rule when final. Final rule expected in late spring 2011.

49 Transport Rule II Transport Rule II will address new 2010 ozone standard and likely include ICI boilers. Transport Rule II will be the anchor to Indiana’s control programs for the new 2010 ozone standard.

50 Upcoming Regulations ActionSchedule SO 2 NAAQSFinal June 2010 Transport RuleProposed July 6, 2010, Final July 2011 Ozone NAAQS ReconsiderationFinal August 2010 Utility Boiler NSPS and MACTProposed March 2011, Final November 2011 Transport Rule II (NO x )Propose Summer 2011, Final Summer 2012 PM 2.5 NAAQSPropose Feb 2011, Final October 2011

51 Greenhouse Gases

52 Endangerment Finding Supreme Court – Greenhouse gases (GHGs) are air pollutants covered by the Clean Air Act. U.S. EPA must determine if GHGs emitted from new motor vehicles cause or contribute to air pollution or if science is too uncertain to make a reasoned decision. U.S. EPA issued two findings: –Endangerment Finding. –Cause or Contribute Finding. Findings do not impose requirements, but provide a trigger for other regulatory actions.

53 Final rule published October 30, 2009 (74 FR 56260). Requires reporting of annual GHG emissions directly to U.S. EPA. Does not require control of GHG emissions. Third party verification of emissions data not required. U.S. EPA estimates around 10,000 facilities are affected: –25 source categories. –5 types of suppliers of fuel and industrial GHGs. –Motor vehicle and engine manufacturers (except light duty sector). Emission reporting thresholds of 25,000 metric tons or more of carbon dioxide equivalent (CO 2 e) per year for most sources. Facilities and suppliers to begin collecting data on January 1, First emissions report due on March 1, GHG Mandatory Reporting Rule

54 Requires motor vehicle and engine manufacturers to begin reporting carbon dioxide for model year 2011 and other GHGs in subsequent model years. Facilities subject to the Acid Rain Program required to continue submitting quarterly reports, in addition to providing annual GHG reports. Federal rule does not preempt states from regulating or requiring reporting of GHGs. No state delegation. IDEM can access verified emissions data from U.S. EPA. Sources no longer required to report if they fall below specific emission thresholds. GHG Mandatory Reporting Rule (continued)

55 Final rule published on June 3, 2010 (75 FR 31514). Sets thresholds for GHG emissions under PSD and Title V for new and existing industrial facilities. –“Tailors” the PSD and Title V requirements to limit number of facilities required to obtain PSD and Title V permits for GHGs. Close to 70% of GHG emissions from stationary sources nationally will be subject to this rule (e.g. power plants, refineries, cement production). –Establishes tiered schedule: Largest sources with the most CAA permitting experience first. Adds large sources of GHGs not previously covered for other pollutants. –Emissions from small farms, restaurants, and all but very large commercial facilities not covered at this time. Prevention of Significant Deterioration (PSD) and Title V GHG Tailoring Rule

56 Existing CAA permitting program emissions thresholds of 100 and 250 tons per year (tpy) not feasible for GHGs as they are emitted in much higher volumes. Existing thresholds would take effect automatically for GHGs on January 2, 2011 without the tailoring rule resulting in a dramatic increase in number of required PSD and Title V permits. Prevention of Significant Deterioration (PSD) and Title V GHG Tailoring Rule (continued)

57 Covered Pollutants: –Carbon Dioxide –Methane –Nitrous Oxide –Hydrofluorocarbons –Perfluorocarbons –Sulfur Hexafluroride Carbon dioxide equivalents (CO 2 e) used to address differences in global warming potentials for each GHG. Prevention of Significant Deterioration (PSD) and Title V GHG Tailoring Rule (continued)

58 Implementation: –January 2, 2011 – June 30, 2011: Only applies to new construction or modification projects currently subject to the PSD or Title V permitting programs. Increase of net GHG emissions by at least 75,000 tpy CO 2 e, requires BACT for GHG emissions. No sources become subject solely due to GHG emissions. Prevention of Significant Deterioration (PSD) and Title V GHG Tailoring Rule (continued)

59 Implementation: –July 1, 2011 – June 30, 2013 Applies to new construction projects that emit GHG emissions of at least 100,000 tpy CO 2 e even if not subject to PSD for another pollutant. Modifications at existing facilities that increase GHG emissions by at least 75,000 tpy CO 2 e even if no other pollutant significantly increases. Sources emitting at least 100,000 tpy CO 2 e subject to Title V. Nationally, about 550 new Title V sources due to GHGs (mostly large solid waste landfills, coal mines, oil and gas production, and large industrial sources) and about 900 additional PSD permit actions from increases in GHG emissions. Prevention of Significant Deterioration (PSD) and Title V GHG Tailoring Rule (continued)

60 Implementation: –January 2011 – July 1, 2012 U.S. EPA plans to initiate another rulemaking on additional steps for phasing in GHG permitting and streamlining future GHG permitting. No permits for sources with less than 50,000 tpy CO 2 e emissions until at least April 30, U.S. EPA will complete study on remaining GHG permitting burdens if applied to small sources by April 30, U.S. EPA working on additional information and guidance in Prevention of Significant Deterioration (PSD) and Title V GHG Tailoring Rule (continued)

61 U.S. EPA is delaying final action on issuing limited approvals for SIP- approved PSD and Title V programs until it better understands how states plan to implement tailoring rule. U.S. EPA requested states submit information by August 2, 2010, to address the following: –Will State apply the meaning of term “subject to regulation” for both PSD and Title V? –If yes, will State use regulatory or legislative process? –If revising statutes or rules, what is estimated schedule? Indiana submitted information on July 23, –Intend to implement GHG tailoring approach through interpretation of the meaning of “subject to regulation.” State Implementation Plan Considerations

62 Indiana’s PSD and Title V rules must be revised for consistency with GHG applicability thresholds and definitions in final federal rule. –Current permitting thresholds are 100 and 250 tons. –Any GHG emissions increase is significant under current rules and subject to more stringent permitting requirements Expedited rulemaking to address federal tailoring approach. –Section 8 Notice published – mid-August –30-day comment period end date – mid-September –Final rule adopted – November –Rule effective date – March –Emergency rule as interim measure may be considered. Tailoring Indiana’s Rules

63 Conducting detailed analysis of permitting rules to determine if additional revisions and clarifications are necessary. –Emissions Reporting requirements in 326 IAC 2-6. –Permitting Fees for GHGs. –Permit Applicability issues. Rulemaking to address outcomes from a refined evaluation will be initiated in early Tailoring Indiana’s Rules (continued)

64 Office of Air Quality Contact Information Scott Deloney Branch Chief (317) Christine Pedersen Section Chief (317) Sarah Raymond Senior Environmental Manager (317)