1. Indiana Chamber of Commerce August 5, 2009 Thomas W. Easterly, P.E., DEE, QEP Commissioner, Indiana Department of Environmental Management 1

2. IDEM 2009 Legislative Changes SB 221—Good Character and public notification requirements for Confined Feeding Operations (CFO/CAFO). HB 1162 – Water TMDL transparency improvements – Water Antidegradation guidance on EUW’s, OSRW projects and social and economic factors 2

3. IDEM 2009 Legislative Changes HB 1162 Continued – IDEM RISC Cleanups must properly consider: Environmental Restrictive Ordinances (ERO) Proposals to eliminate pathways (i.e. paving, fences) – How do we determine the long term viability of a proposed institutional control? – Do we need Financial Assurance to ensure controls are maintained? – How can we effectively use conditions subsequent? 3

4. IDEM 2009 Legislative Changes HB 1162 Continued – Revises IDEM’s role in Environmental Restrictive Covenants. – Extends prospective purchaser protections to petroleum contamination. – Requires EQSC study of an Institutional Control Registry, Environmental Trust Fund, and including institutional controls into the One Call System. 4

5. IDEM 2009 Legislative Changes HB 1589—Electronic Waste Manufacturers are responsible for overseeing the collection and recycling of sixty percent (by weight) of electronics that they sell to Indiana households. – (Requirements start January 1, 2010) IDEM is currently implementing the program and working with the IRC, ICC and other key stakeholders to maximize the effectiveness of the program while minimizing the burden to stakeholders, including manufacturers. 5

6. EQSC Wish List—Petroleum Study redesigning our program for petroleum cleanup funding as a dedicated tax supported activity, not as an insurance fund. The primary funding for the Excess Liability Trust Fund is through a 1 cent per gallon tax on diesel and gasoline sales. The Petroleum Trust Fund is funded through tank registration fees and penalties. 6

7. EQSC Wish List—Petroleum – Combine the Petroleum Trust Fund and the Excess Liability Trust Fund. – Fund all petroleum clean ups. – Address unpaid tank fees and improper reporting through increased deductibles, rather than disallowing reimbursement. – Pay off the over $16,000,000 liability to Speedway, a company that exceeds the annual statutory limit of $3,000,000 a year in cleanups. 7

8. Potential Regulatory Issues Increased EPA emphasis on enforcement to improve environmental quality. EPA reevaluation of permitting decisions made during the past eight years. IDEM Outdoor Hydronic Heater Rule restart. Increased scrutiny of all coal related activities. Transparency. 8

9. Potential Regulatory Issues--Air New short term NO x Air Quality Standard. EPA reconsideration of 0.075 ozone standard and 35 microgram/cubic meter PM 2.5 Air Quality Standards. CAIR replacement rule. CAMR and ICI boiler rules. EPA inaction on redesignation requests. 9

10. Potential Regulatory Issues--Water Antidegradation Regulations. Algae issues and nutrient regulations. – Great Lakes, Gulf of Mexico, Ohio River, Indiana lakes, rivers and reservoirs. Pharmaceuticals and other trace pollutants. IDEM action on the final six extended permits. More attention to the Great Lakes. 10

11. Potential Regulatory Issues--Land RISC Guidance and Regulations implementing HB1162. Coal combustion waste regulations. EPA to speed up review of pollutant risk evaluations. 11

12. Climate Change Science The unbiased temperature record does not indicate any increase in temperature. – Local heat sources near US measurement stations would be expected to increase the average network temperature by 1.9 o C, yet the “observed temperature increase” is 0.7 o C. – Satellite measurements since 1978 show cycling temperatures but no sustained increase. 12

13. Climate Change Science Geologists believe that the earth was warmer than current temperatures approximately 700 years ago (medieval warming period). Geologists have produced evidence of significant warming 12,000 years ago, 130,000 years ago and 225,000 years ago. Reported 20 th century temperatures are no higher than historical values. 13

14. Climate Change Science Local temperatures may be increased by pavement, air conditioning exhaust, changes in land use and increased atmospheric water vapor from irrigation, etc. CO 2 is a greenhouse gas. However, geological studies, including the recent Vostok ice core work indicate that CO 2 changes lag, rather than lead temperature changes. 14

15. Climate Change Science Current CO 2 levels are about 35% higher than those associated with peak temperatures from about 130,000 years ago as measured in the Vostok ice cores; however the Earth’s temperature is currently lower than those estimated for this historical event. 15

16. CO 2 Cap and Trade Concerns CO 2 is different from SO 2 and NO x. – We know how to change gaseous SO 2 to a solid sulfate (SO 4 ) compound such as gypsum which can be sold as a product or landfilled. – We know how to react NO x with NH 4 (ammonia) to form N 2 (nitrogen gas) and H 2 O (water) which can be released to the environment. – We do not have a treatment process for CO 2. 16

17. CO 2 Cap and Trade Concerns CO 2 is different from SO 2 and NO x. – SO 2 emissions from coal combustion can be reduced by 80% through coal switching and by over 99% through switching to natural gas. – CO 2 emissions from coal combustion can be reduced by 33% by switching to oil and by 50% through switching to natural gas. 17

18. CO 2 Cap and Trade Concerns CO 2 is different from SO 2 and NO x. – When the acid rain provisions passed, US SO 2 emissions totaled 23 million tons per year and almost 70% were from utilities and 24% from industries. – Current US CO 2 emissions are 7,760 million tons per year (337 times historical SO 2 emissions) with 33% from utilities and 19% from industries. 18