WESTAR Fall 2008 Business Meeting Status of Air Toxics Program

2 KEY TOPICS  Area Source MACT  Mercury  Residual Risk and Technology Review

Area Source Rules – Status, Requirements, and Implementation

4 Current Status  A total of 70 area source categories have been listed  Standards have been promulgated for 50 categories  20 categories remain to be addressed under March 2006 Court Order 10 source categories by December 16, source categories by June 15, 2009

5 Area Source Program Implementation Priorities  States and Regions have expressed concerns regarding delegation and implementation of area source standards  We recently distributed a guidance document to assist Regions in prioritizing standards for implementation and outreach  We identified three groups of area source standards that would require different levels of implementation and compliance assistance. This is our vision for implementation.

6 Group One and Two Rules  Group one: opportunity for substantial emission reductions (tpy) from individual sources” Electric Arc Furnaces, 100 facilities, (865 PM; 52 HAP) Iron and Steel Foundries, 427 facilities, (380 PM; 14 HAP) Glass Manufacturing, 21 facilities (415 PM; 28 HAP)  Group Two: Sources that may impact attainment areas due to co-benefits of reducing criteria pollutant emissions. Autobody, misc. coatings and paint strippers, facilities  (20,900 VOC; 2900 PM; 11.4 HAP) RICE (new engines) 773,000 engines affected by 2015  ( NOx; CO; VOC; HAP) Gas Distribution, facilities ( VOC; 4900 HAP) Oil & Gas Production, 2200 facilities (16,000 VOC; 7920 HAP)

7 Group Three Rules  Codify existing, effective HAP emission reduction control approaches and prevent backsliding: Primary nonferrous prod.Primary copper smelting Secondary copper smeltingPVC and Copolymers Carbon Black productionAMF production Wood PreservingChromium compounds Flexible Foam Prod. and Fabr. Lead Acid Battery Prod. Clay Ceramics MfgSecondary Nonferrous Metals Hospital SterilizersPlating and Polishing Nine Metal Fabr. Categories

8 Remaining Categories: Bins 5 and 6  Bin 5 Final Rules December 2008: Ferroalloys Production (10 facilities) Chemical Manufacturing (450 facilities) covers processes such as vents, cooling towers, wastewater, equipment leaks, and tanks, (9 categories in one rule)  Bin 6 Final Rules June 2009: Copper, Aluminum and Other nonferrous Foundries, (3 categories in one rule) Chemical Preparation Prepared Feeds Paint and Allied Products Asphalt Roofing  Three categories extend into 2010 for promulgation: Commercial Boilers Industrial Boilers Sewage Sludge Incineration

9 Guidance/Implementation  13 brochures and 7 notification examples have been developed – can be found at:  Webcast for the Autobody rule will be held the last week of July  Collision Repair Campaign in full swing by Regions/OAQPS Website has comprehensive information on resources at: Best practices DVD with Jeff Gordon (NASCAR) as speaker will be distributed in early August  Plain language fact sheets in English and Spanish, will be developed for several rules where a good majority of workers may not understand a brochure or regulatory text.  Implementation tools are being provided by OAQPS and the Small Business Assistance Program. Responsibilities for implementation rests with the delegated authority or the Regional air toxics office.

10 Title V  The majority of area source rules do not require Title V. Proof of compliance is through monitoring, recordkeeping and reporting. It is expected that states will adopt these compliance requirements via whatever mechanism they choose.

11 Delegations  States have been utilizing various options on delegation: Straight delegation on rules where they already have programs in place; Leaving responsibility for the rule with the Region, but assisting with compliance tool development and notifications; Not taking any role at all.

Clean Air Mercury Rule (CAMR)

13 Clean Air Mercury Rule (CAMR)  On Feb. 8, D.C. Circuit Court of Appeals vacated the Section 112(n) revision rule, which removed utilities from the Section 112(c) list of source categories  Court also vacated CAMR, but did not reach the merits of challenges to CAMR  On March 14, the Court issued its mandate making the vacatur effective  On May 20, D.C. Circuit denied our petition for rehearing and also denied the industry’s petition for panel rehearing  On September 17, Utility Air Regulatory Group filed a cert petition  Department of Justice has until October 17, 2008 to file a certiorari petition before the U.S. Supreme Court if the Agency were to request a filing

14 Applicability of 112(g)  The effect of the vacatur is to restore the status quo ante.  Prior to the 112(n) revision rule, and as of December 15, 2000, coal- and oil-fired EGUs were a listed source category under section 112 and section 112(g) applied.  As a result, coal- and oil-fired EGUs must obtain a 112(g) determination before beginning actual construction or reconstruction. The phrase "begin actual construction or reconstruction" has the same meaning as the phrase "begin actual construction" in 40 CFR 51 and 52 (the NSR and PSD programs), i.e. initiation of physical on- site construction activities as set forth in those programs. (See 61 FR 68634, (Dec. 27, 1996).  Under section 112(g), no person may begin actual construction or reconstruction of a major source of HAP unless the permitting authority determines on a case-by-case basis that new source MACT requirements will be met.

Residual Risk and Technology Review

16 Current Schedule for all RTR Projects  RTR Phase 2 Group 1 Final rule scheduled for Nov 1, 2008, no additional standards  RTR Phase 2 Group 2 Published the Group 2 ANPRM on March 29, 2007 Group 2A - plan to propose 5 MACT in Sept 2008, final rule by Nov 1, 2008, no additional standards Group 2B – plan to propose 3 MACT in March 2009, final rule by Sept 2009 Group 2C - plan to propose 3 MACT in Fall 2009, final rule by Spring 2010  RTR Phase 2 Group 3 Plan to publish the Group 3 ANPRM addressing 17 MACT in Feb 2009  Petroleum Refineries Published the NPRM for Petroleum Refineries on September 4, 2007, court ordered deadline for final rule extended from Aug 2008 to Oct 2008

17 Current Schedule for all RTR Projects (continued)  Halogenated Solvents Reconsideration proposal signature date is October 2, 2008, by agreement between EPA and petitioners, monitored by DC Circuit Court EPA scheduled to report to DC Circuit Court on Nov 3, Final rule date anticipated Summer  Dry Cleaning Published final amendments (addressed technical corrections not related to the litigation) in July In the process of preparing court briefs but don't expect a court hearing before April 2009, outcome uncertain. Court decision will dictate next steps. If action required, a proposal and final action could be anticipated in 2010/2011 timeframe.

18 RTR Phase 2 Groups 1 and 2 MACT Group 1  Polymers and Resins I (4 source categories)  Polymers and Resins II (2 source categories)  Hydrogen Fluoride  Acetal Resins Group 2A  Group I Polymers and Resins (5 source categories)  Pharmaceuticals Production  Marine Tank Vessel Loading Operations  Mineral Wool Production  Printing and Publishing Industry Group 2B  Aerospace Manufacturing and Rework Facilities  Natural Gas Transmission and Storage  Oil and Natural Gas Production Group 2C  Primary Aluminum Reduction Plants  Group IV Polymers and Resins ( 7 source categories)  Shipbuilding Coatings

19 RTR Phase 2 Group 3 MACT (Groupings based on preliminary MIR and subject to change) Group 3A  Flexible Polyurethane Foam  Polycarbonates  Off-Site Waste Treatment  Phosphate Fertilizer/Phosphoric Acid  Wood Furniture  Steel Pickling Group 3B  Acrylic Modacrylic Fibers  Publicly Owned Treatment Works  Primary Lead  Secondary Lead  Chrome Electroplating (3 source categories) Group 3C  Ferroalloys  Secondary Aluminum  Pulp and Paper MACT I and III  Pulp and Paper MACT II  Wool Fiberglass  Polyether Polyols

20 Phase 3 RTR MACT  Portland Cement  Pesticide Active Ingredients  Polymers and Resins III (Amino Resins and Phenolic Resins)  Extraction for Vegetable Oil  Nutritional Yeast  Boat Manufacturing  Primary Magnesium Refining  Hazardous Waste Incinerators  Leather Finishing  Wet Formed Fiberglass  Petroleum Refineries MACT II  Metal Coil  Cellulose  Primary Copper  Tire Manufacturing  Polyvinyl Chloride and Copolymers  GMACT I, II, III and IV (Carbon Black, Cyanide, Ethylene, and Spandex)  Large Appliances  Friction Products Manufacturing  Paper and Other Web Coating

21  Program Challenges Based on data in NEI which is voluntary, state driven and available only every 3 years, ANPRM to solicit additional review and comment Lack of agreement on cancer potency values (slow IRIS process) Acute non-cancer benchmarks uncertain More analyses required due to ongoing litigation issues (i.e., HON, SSM) Litigation/remand of MACT causes delay of RTR (i.e., P&R IV, Portland Cement) Litigation of residual risk rules requires resources (i.e., HON, Dry Cleaning) New issues and policies to consider, resulting in extensive comment and review Multiple packages under development and review concurrently  Priorities More closely meet our statutory schedule Focus more on higher risk source categories RTR Challenges and Priorities