1. IDEM UPDATE Indiana Steel Environmental Group June 27, 2012 Thomas W. Easterly, P.E., BCEE, QEP Commissioner IN Department of Environmental Management 1

2. Why is the Economy Important to the Environment? 2

3. Pilot 2006 Environmental Performance Index Yale Center for Environmental Law & Policy Yale University Center for International Earth Science Information Network (CIESIN) Columbia University http://www.yale.edu/epi/ 3

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5. Wealth matters. The Environmental Health scores, in particular, reveal a significant relationship with GDP per capita. EPI scores more generally also correlate with wealth, although there is a diversity of performance within every level of economic development. Policy Implications of the 2012 EPI 5

6. Why Does Energy Matter? Without energy, life is brutal and short— think back to the cave man. Making energy more expensive is a regressive tax and an economic development inhibiter—the cost of energy influences the viability of every economic endeavor, but especially those that produce wealth. 6

7. State of the Air Status 2008 to 2010 Attains Does Not Meet the PM Standards Does Not Meet the Ozone standard Does Not Meet the Ozone and PM Location of the State Capitals State Boundaries

8. Air Quality Compared to CSAPR Goals 2008 to 2010 Attains Does Not Meet the PM Standards Does Not Meet the Ozone standard Does Not Meet the Ozone and PM Location of the State Capitals State Boundaries

9. Summary Wealth is a significant driver of improved environmental quality. The cost of energy is a significant driver of wealth production. As we strive to improve the quality of our environment, we must be careful not to unnecessarily increase the cost of energy. 9

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11. Backlogs Eliminated On January 10, 2005 there were 263 administratively extended NPDES permits and 289 unissued Title V permits. All of those have been issued and IDEM now issues permits using less than 85% of the statutorily allowed days. On January 10, 2005 there were 250 unresolved enforcement cases over 2 years old. Now the oldest referral on our tracking list is July 8, 2010. 11

12. Permits--Percent of Statutory Days 12

13. 25 Years of Progress Water Quality: Combined Sewer Overflows –All 98 State lead CSO Communities and 7 of the 10 Federal lead Communities have entered legal agreements to address their CSO issues. –We are working with U.S. EPA to speed the progress on the remaining 3 Federal lead CSO Communities. –At least 32 of the CSO Communities have completed their projects to address the release of untreated sewage during rain events. 13

14. NWI 75 ppb OZONE DESIGNATION March 11, 2009, Indiana proposed designating Lake and 11 other counties as nonattainment due to 2006-2008 monitor data (Whiting at 0.077 ppm). U.S. EPA announced it was reconsidering the 0.075 ppm ozone standard and did not proceed with nonattainment designations. September 2, 2011, President Obama cancels reconsideration of ozone standard. 14

15. NWI 75 ppb OZONE DESIGNATION September 22, 2011, U.S. EPA announces it is proceeding with ozone nonattainment designations, does not allow additional state input. December 9, 2011, U.S. EPA notifies Governor Daniels that all of Indiana will be designated attainment except Lawrenceburg in Dearborn County. 15

16. NWI 75 ppb OZONE DESIGNATION January 31, 2012, U.S. EPA notifies Governor Daniels that due to data provided by Illinois on December 7, 2011; Lake, Porter and Jasper Counties will be designated as nonattainment for ozone. April 13, 2012, Indiana sends package explaining why Lake, Porter and Jasper counties should be designated as attainment. 16

17. NWI 75 ppb OZONE DESIGNATION Reasons for Indiana ozone attainment recommendation: –A single monitor out of 22 apparently exceeded the standard by 0.4 ppb (0.0004 ppm) –Illinois caused the violation by discontinuing full implementation of its automotive inspection program in 2008 without making a 110 (l) demonstration, thereby violating its SIP and the Clean Air Act. 17

18. NWI 75 ppb OZONE DESIGNATION –Milwaukee, which is designated as attainment, has a higher contribution to the violating monitor than Lake County or Porter County. On May 31, 2012, Administrator Jackson signed the nonattainment designation for the Chicago Area including Lake and Porter Counties in Indiana—Milwaukee remains designated as an attainment area. 18

19. NWI 75 ppb OZONE DESIGNATION EPA Clarifies: “Consistent with our treatment of urbanized areas throughout the U.S. in our determination of ozone nonattainment area boundaries, we have focused our assessment of the Chicago area on the Combined Statistical Area or Core Based Statistical Area. EPA has concluded that for urban scale pollutants, such as ozone, this is generally an appropriate starting point for assessing whether nearby areas contribute to portions of the urbanized area that do not meet the standards. Milwaukee is not part of the Chicago-Naperville-Michigan City IL-IN-WI CSA, and therefore was not included in our assessment of violating and contributing areas in the vicinity of Chicago.” 19

20. NWI 75 ppb OZONE DESIGNATION IDEM Responds: “I understand this is the U.S. EPA one voice answer. I am disappointed that it follows neither the science which shows that Milwaukee contributes more to the 76.3 ppb monitor than Indiana does, or the law which applies the MSA concept only to serious, severe or extreme nonattainment areas and specifically allows EPA to concur with a Governor’s recommendation for a smaller area (see 107 (d) (4) (A) (iv) and (v) of the Clean Air Act as amended in 1990). Since this is apparently U.S. EPA’s final answer, Indiana will pursue appropriate remedies outside of the Agency to try and resolve this issue to our satisfaction.” 20

21. NWI 75 ppb OZONE DESIGNATION Remedies being considered or implemented: –Petition Courts for Reconsideration of nonattainment designations. –Petition Courts for a Stay of the designations. –Litigate to require implementation of Illinois SIP. –File a redesignation petition for Lake and Porter. –Ask impacted congressional delegation for help. 21

22. Why is Illinois I & M Key? Beginning in 2007, Illinois went to the OBD inspection system which exempts the 1968 through 1995 vehicles from inspection. Data from Indiana’s system shows that inspection of 1968 through 1995 vehicles accounted for 67% of the HC, 85% of the NOx, and 79% of the CO reductions in 2008. 22

23. 2008 Vehicle Emissions NWI 23

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26. Environmental Rules Board Change is response to questions from the Select Committee on Government Reduction. This 16 Member Board Replaces: –Air Pollution Control Board. –Water Pollution Control Board. –Solid Waste Management Board. 26

27. Environmental Rules Board Ex Official MembersRepresentative of Labor Commissioner, State Department of Health Representative of Environmental Interests Director, Natural Resources DepartmentRepresentative of Local Government Lieutenant GovernorRepresentative of Small Business Secretary of CommerceLicensed Health Professional Commissioner, IDEM (Non Voting)Representative of Solid Waste Management Industry PUBLIC MEMBERSRepresentative of Public Electric Utility Representative of AgricultureGeneral Public Representative of ManufacturingGeneral Public 27

28. Environmental Rules Board Board shall select, from a list of 3 qualified individuals recommended by the governor, an independent third party who is not an employee of the State to serve as technical secretary. –$50 per meeting plus travel expenses. –Subject to Conflict of Interest Laws prohibiting doing other Environmental Work in Indiana. 28

29. Environmental Rules Board Board may select, from a list of 3 qualified individuals recommended by the governor, an independent third party who is not an employee of the State to serve as legal counsel. –$50 per meeting plus travel expenses. –Subject to Conflict of Interest Laws. 29

30. Environmental Rules Board Governor to Appoint Board Members before December 31, 2012. Board Member Appointments are for Four Year Terms—Terms Continue until a Replacement is Named. Governor Annually Appoints Chair and Vice Chair of the Board. 30

31. “New” IDEM Programs (Water) Antidegradation—Applies to new or increased loadings of regulated pollutants due to deliberate actions. There are exemptions for: –Short term temporary discharges. –De minimis discharges (<10% of available capacity). –Changes in loadings covered by an existing permit. 31

32. Water Antidegradation Three basic tests: –Is the new loading necessary? –Is the proposed treatment (discharge) level appropriate? –Do the social and economic benefits of the activity outweigh the environmental degradation? Additional protection requirements for Outstanding State Resource Waters. 32

33. IDEM 2011-2012 GOALS AND CHALLENGES 33

34. 2011-2012 IDEM Major Goals Complete Antidegradation Rulemaking Process. Done WPCB Final Adoption March 14, 2012. Obtain U.S. EPA approval of attainment designations for PM 2.5 for all of Indiana: Evansville, Cincinnati and Northwest Indiana are final and effective. U.S. EPA will not proceed with attainment designations for the Indianapolis and Louisville areas until the court rules on the CSAPR litigation. 34

35. 2011-2012 IDEM Major Goals Complete CAFO/CFO Rulemaking Process. Done Final Adoption November 9, 2011. Adopt Remediation Closure Guidance and Remediation Program Guidance as NPDs. Done presented to SWMB February 21, 2012. Effective March 22, 2012. Start Rulemaking for Numeric Nutrient WQS. 35

36. 2011--2012 IDEM Challenges Administratively reissue NPDES General Permits and address antidegradation requirements. Develop and implement plan for seamless implementation of water program responsibilities currently assigned to: IDEM, ISDH, IDNR, IDHS, and ISDA. 36

37. Questions? Tom Easterly Commissioner Indiana Department of Environmental Management 317-232-8611 teasterly@idem.in.gov 37