EPA’s designation of partial carbon capture and sequestration (CCS) as the best system of emission reduction (BSER) in its proposed New Source Performance Standards (NSPS) to control greenhouse gas (GHG) emissions from coal-fired power plants has been under attack for running afoul of the Energy Policy Act of 2005 (EPAct05). 

Somewhat slow at first in addressing the charge, the Agency has now come out with a 33-page technical support document (TSD) devoted entirely to the legal foundation of partial CCS as a BSER in the proposed NSPS.

The only option

The Clean Air Act (CAA) requires that a BSER must be “adequately demonstrated.”  In its proposal, the EPA stated that a review of existing projects that implement CCS, existing projects that implement various components of CCS, planned CCS projects, and scientific and engineering studies of CCS showed that partial CCS met the adequately demonstrated criterion.  Based on partial CCS, affected sources under the proposed NSPS would need to meet an emissions limit of 1,100 pounds of carbon dioxide (CO2) per gross megawatt-hour. 

Many have viewed this limit as impossible to meet absent some form of CCS and, thus, have characterized the proposal as an effort by the EPA to end construction of conventionally designed coal-fired power plants.

EPAct05

Among the many arguments stakeholders have aimed at the proposal is a provision in EPAct05 that places a boundary on the use of a new technology as a BSER if the development of that technology has received EPAct05 funding.  Specifically, EPAct05 Section 402(i) states:

“No technology, or level of emission reduction, solely by reason of the use of the technology, or the achievement of the emission reduction, by 1 or more facilities receiving assistance under this Act, shall be considered to be adequately demonstrated for purposes of section 111 of the Clean Air Act….”

The EPA readily concedes that some of the CCS projects discussed in the NSPS proposal received financial assistance under EPAct05, including grants and loan guarantees. 

Sole reliance?

Senator David Vitter (R-LA), the ranking member of the Senate Environment and Public Works Committee (EPW), has been particularly vocal in questioning the Agency’s use of EPAct05-supported projects to substantiate CCS as a BSER.  “[EPAct05] prohibits technology used at projects receiving [Clean Coal Power Initiative] funding to be considered ‘adequately demonstrated’ for the purposes of Section 111 of the CAA, thus exposing the legal overreach of the proposed rule,” said Vitter. 

In a January 16, 2014, EPW hearing, the Senator directly asked EPA Administrator Gina McCarthy how the Agency can make use of EPAct05-funded projects to justify partial CCS in the proposed NSPS.  At that time, McCarthy responded briefly that EPAct05 states that funded projects may not be used as the exclusive basis for a BSER. 

That position forms the core of the TSD.  “By their terms, EPAct05 sections 402(i) and 421(a) prohibit EPA from relying exclusively—‘solely’—on facilities that receive assistance under EPAct05 when determining whether a particular technology, or level of emission reduction, is adequately demonstrated for purposes of section 111 of the Clean Air Act,” states the Agency.  “EPA thus may rely on such projects for its BSER determination if there is additional evidence supporting such a determination.” 

The Agency goes on to explain that it has relied on a wide range of information to support the proposed determination that partial CCS is the BSER adequately demonstrated. This includes literature reviews, the experience of facilities that predate EPAct05, the experience of facilities in foreign nations, and projects that have been developed after the enactment of EPAct05, only some of which have received assistance under EPAct05.

Tax credits

The TSD also addresses a number of issues of interpretation under the Internal Revenue Code (IRC) that could limit the use of information the EPA is using in the NSPS rulemakings.  The EPA nonetheless believes that even if the IRC is interpreted to preclude EPA from, under any circumstances, relying on the experience of facilities that have been identified as having been allocated an IRC 48A tax credit, the remaining information set forth in the proposal provides an adequate basis for EPA’s proposed determination.

The TSD, document EPA-HQ-OAR-2013-0495-1873