[Federal Register Volume 79, Number 5 (Wednesday, January 8, 2014)]
[Proposed Rules]
[Pages 1352-1354]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-31079]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 60

[EPA-HQ-OAR-2011-0660; FRL-9901-51-OAR]
RIN 2060-AQ91


Withdrawal of Proposed Standards of Performance for Greenhouse 
Gas Emissions From New Stationary Sources: Electric Utility Generating 
Units

AGENCY: Environmental Protection Agency (EPA).

ACTION: Withdrawal of proposed rule.

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SUMMARY: The United States EPA (EPA) is withdrawing the proposal for 
new source performance standards for emissions of carbon dioxide 
(CO2), which was published on April 13, 2012, for new 
affected fossil fuel-fired electric utility generating units (EGUs). 
The EPA received more than 2.5 million comments on that notice and has 
received new information, which together necessitates substantial 
changes in the proposed requirements. The changes not only affect 
determinations of potentially covered sources but could also result in 
substantial changes in what some sources must do to comply with the 
standards and could thereby cause them to alter planned facility 
designs or technological control systems. These changes concern the 
addition of a determination of the best system of emission reduction 
for fossil fuel-fired boilers and IGCC units; an alternative compliance 
option for solid fuel-fired EGUs; the treatment of certain units that 
had received permits to construct but for which construction had not 
yet commenced; the limits for natural gas-fired stationary combustion 
turbines; and the application of CO2 emission fees under the 
title V operating permit program. These changes are of substantial 
consequence and are sufficient to merit withdrawal (i.e., rescission) 
of that notice of proposed rulemaking. At the same time, in a separate 
notice of proposed rulemaking published in today's Federal Register, 
the EPA is issuing new proposed requirements for new fossil-fuel-fired 
electric generating units, which are based on different analyses from 
the original proposal and would establish requirements that differ 
significantly from the original proposal.

DATES: The proposed rule published on April 13, 2012 (78 FR 22392), is 
withdrawn as of January 8, 2014.

ADDRESSES: Docket: A rulemaking docket for the April 13, 2012, notice 
of proposed rulemaking was established and identified as EPA-HQ-OAR-
2011-0660. All documents in the docket are listed in the http://www.regulations.gov index. Although listed in the index, some 
information is not publicly available (e.g., CBI or other information 
whose disclosure is restricted by statute). Certain other material, 
such as copyrighted material, will be publicly available only in hard 
copy. Publicly available docket materials are available either 
electronically at http://www.regulations.gov or in hard copy at the EPA 
Docket Center, EPA West, Room 3334, 1301 Constitution Ave. NW., 
Washington, DC. The Public Reading Room is open from 8:30 a.m. to 4:30 
p.m., Monday through Friday, excluding legal holidays. The telephone 
number for the Public Reading Room is (202) 566-1744, and the telephone 
number for the Air Docket is (202) 566-1742. Visit the EPA Docket 
Center homepage at http://www.epa.gov/epahome/dockets.htm for 
additional information about the EPA's public docket.
    In addition to being available in the docket, an electronic copy of 
this action will also be available on the Worldwide Web (WWW) through 
the Technology Transfer Network (TTN). Following signature, a copy of 
the action will be posted on the TTN's policy and guidance page for 
newly proposed or promulgated rules at the following address: http://www.epa.gov/ttn/oarpg/. The TTN provides information and technology 
exchange in various areas of air pollution control.

FOR FURTHER INFORMATION CONTACT: Mr. Christian Fellner, Energy 
Strategies Group, Sector Policies and Programs Division (D243-01), U.S. 
EPA, Research Triangle Park, NC 27711; telephone number (919) 541-4003, 
facsimile number (919) 541-5450; email address: 
[email protected] or Dr. Nick Hutson, Energy Strategies Group, 
Sector Policies and Programs Division (D243-01), U.S. EPA, Research 
Triangle Park, NC 27711; telephone number (919) 541-2968, facsimile 
number (919) 541-5450; email address: [email protected].

SUPPLEMENTARY INFORMATION:

I. General Information

A. Overview

    In 2009, the EPA issued a finding that greenhouse gas (GHG) air 
pollution may reasonably be anticipated to endanger Americans' public 
health and welfare, now and in the future, by contributing to climate 
change. In the notice of proposed rulemaking that was published on 
April 13, 2012 (April 2012 document), the EPA proposed to limit

[[Page 1353]]

GHG emissions from new fossil fuel-fired power plants through standards 
for CO2 emissions.\1\ These power plants are the largest 
stationary sources of U.S. GHG emissions.
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    \1\ In the April 2012 document, we referred to these sources, 
interchangeably, as power plants, affected sources, fossil fuel-
fired electric generating units, and electric generating units 
(EGUs).
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    The April 2012 document proposed federal standards of performance 
for new fossil fuel-fired power plants that the EPA concluded could be 
met with existing technology. Specifically, the EPA proposed a single 
electricity-output-based emission standard of 1,000 pounds of 
CO2 per megawatt-hour of gross electrical output (1,000 lb 
CO2/MWh) for all new affected fossil fuel-fired power 
plants. This standard was based on the demonstrated performance of 
recently constructed, modern natural gas combined cycle (NGCC) units, 
which the EPA concluded were in wide use throughout the country and 
were likely to be the predominant fossil fuel-fired technology for new 
generation in the future. Indeed, modeling conducted in support of that 
proposal predicted no new coal-fired EGUs would be constructed at least 
until after 2020. However, the EPA recognized that a very small number 
of new fossil fuel-fired utility boilers and IGCC units may be built, 
and if so, they could meet the proposed standard through the use of 
available carbon capture and storage (CCS) technology. To assist such 
sources in complying with the standard, the EPA proposed an alternative 
30-year averaging option that would be available only for affected 
coal- and petroleum coke-fired sources complying with the standard 
through the use of CCS.
    In addition, the EPA identified as ``transitional'' sources certain 
coal-fired power plants that had received approval of their PSD 
preconstruction permits as of the date of the April 2012 proposal (or 
that had approved PSD permits that expired and were in the process of 
being extended, if they were participating in a Department of Energy 
CCS funding program), and that commenced construction within one year 
of the date of the April proposal. For those sources, the EPA did not 
propose a standard of performance.
    The EPA also stated that it was not proposing standards of 
performance for simple cycle combustion turbines or for non-continental 
sources (i.e., those in Hawaii or the U.S. territories).
    In a separate notice of proposed rulemaking published in today's 
Federal Register, the EPA has made several key changes to its original 
proposal. First, instead of proposing a single limit covering all 
affected fossil fuel-fired EGUs, the EPA is proposing three different 
limits: (1) A limit of 1,000 lb CO2/MWh for large natural 
gas-fired stationary combustion turbines, (2) a limit of 1,100 lb 
CO2/MWh for small natural gas-fired stationary combustion 
turbines, and (3) a limit of 1,100 lb CO2/MWh for fossil 
fuel-fired utility boilers and IGCC units. Second, instead of proposing 
an alternative 30-year averaging compliance option for new solid fuel-
fired EGUs, the EPA is proposing an alternative 7-year (84-operating 
month) averaging option and is soliciting comment on a limit of 1,000 
to 1,050 lb CO2/MWh. Third, the EPA is no longer excluding 
all previously identified transitional sources (but is considering a 
subcategory for one to three coal-fired projects that are still 
currently under development). Fourth, instead of proposing to exempt 
simple cycle combustion turbines, the EPA is proposing to exempt units 
that sell to the grid a relatively small portion of their potential 
electric output. These exempt units generate less than one-third of 
their potential electric output over a three year rolling averaging 
period.

B. Why is the EPA withdrawing the proposed rule?

    In response to the proposed rule, the EPA received over 2.5 million 
public comments on all aspects of its proposal. Many commenters were 
supportive of the Agency's proposed actions, other commenters opposed 
the proposed actions, and many commenters provided new information and/
or recommended significant changes in the EPA's proposed requirements. 
In addition, the EPA has obtained and analyzed new information that 
significantly alters its views on important assumptions and which 
counsel for major changes in some of the requirements proposed in the 
April 2012 document.
    We fully describe the actions we are proposing to take in response 
to the comments received and the results of our analyses of new 
information in a notice of proposed rulemaking published elsewhere in 
today's Federal Register. The following is a description of the 
principal reasons why those changes warrant rescission of the April 
2012 document and issuance of a new proposal.
1. Changes in Proposed Applicability Requirements
    Changes to the proposed rule's applicability will impact which 
sources are potentially covered. By changing the proposed rule's 
applicability, projects based on NGCC technology that are intended to, 
and that do, generate less than one-third of their potential electric 
output on a three year rolling average, which would have been covered 
by the original proposal, are not covered by today's proposal. Such 
projects could be beneficial because they are likely to be more 
efficient and lower emitting and could potentially cost less than 
natural gas-fired simple cycle combustion turbines in some instances. 
If we did not withdraw the original proposal, developers might not 
consider this technology because they may perceive a greater risk that 
we would finalize the applicability requirements of the original 
proposal. This could have the unintended effect of potentially stifling 
development of NGCC technology that can be used to meet peak energy 
demand.
2. Changes With Respect to Proposed Standards
    The Agency is also proposing significant substantive changes from 
the original proposal in today's new proposal with respect to the 
standards themselves.
a. Projected New Coal-Fired Electrical Generating Capacity
    In the April 2012 proposal, although the EPA acknowledged the 
possibility of a very small amount of construction of new coal-fired 
generating capacity, the EPA relied primarily on several modeling 
analyses, including analyses using the EPA's Integrated Planning Model 
(IPM), which projected that there would be no construction of new coal-
fired generation through the year 2030 without CCS even assuming the 
potential for higher future electric demand or with higher future 
natural gas prices. Comments received, along with new information, have 
brought more clearly into focus the possibility that, in fact, there 
could well be limited new coal-fired generating capacity being 
constructed within the planning timeframe covered by the proposed rule. 
This new capacity could be in response to the need for companies to 
establish or maintain fuel diversity in their generation portfolios or 
the ability of some companies to combine coal-fired generation of 
electricity with the profitable sale of by-products from gasification 
or combustion of coal. As a result, even though our baseline analysis 
does not project any new coal that would not meet the originally 
proposed standard, the EPA believes it is appropriate to develop 
separate standards for coal-fired capacity, which, as it turns out, 
differ from those for new natural gas-fired EGUs.

[[Page 1354]]

b. Best System of Emission Reduction for Coal-Fired EGUs
    The April 2012 proposal set a single standard of performance for 
all affected fossil fuel-fired EGUs, regardless of generation 
technology or fuel, based on our proposed findings that the best system 
of emission reduction adequately demonstrated (BSER) for fossil fuel-
fired units is natural gas combined cycle technology. Thus, in the 
April 2012 proposal, we did not propose a separate BSER for coal- and 
other solid fossil fuel-fired EGUs, although we identified carbon 
capture and storage (or sequestration) (CCS) technology as a compliance 
alternative for those EGUs and we proposed a 30-year averaging 
compliance option for those EGUs that implemented CCS.
    We received significant public comments on this approach. Our 
evaluation of those comments has led us to modify significantly our 
conclusions regarding the BSER and the resulting emission limitations 
for fossil fuel-fired sources, and we no longer consider it appropriate 
to propose a single standard for all such units.
    Instead, we are proposing separate emission standards based on 
separate BSER determinations for (i) fossil fuel-fired utility boilers 
and IGCC units and (ii) natural gas-fired stationary combustion 
turbines. For fossil fuel-fired utility boilers and IGCC units, we are 
proposing partial-capture CCS as the BSER. Additionally, we now believe 
that a shorter compliance averaging option than the 30-year scheme 
proposed in the April 2012 notice may be more appropriate.
    These changes are significant. Moreover, they affect at least one 
unit in advanced stages of project development. As a result, the EPA 
believes it is important to withdraw the original document, in part to 
make it clear to the developer of this project--and any other projects 
in development--that their new source performance standards will be 
based on a BSER determination that is more closely aligned with 
technology appropriate to those projects.
c. Emission Standards for Natural-Gas Fired Stationary Combustion Units
    As noted, in the new action, the EPA is proposing separate emission 
standards for fossil fuel-fired utility boilers and IGCC units and for 
natural gas-fired stationary combustion turbines. In the new proposal, 
the EPA also is proposing separate emission standards for smaller 
natural gas-fired stationary combustion turbines and for larger natural 
gas-fired stationary combustion turbines. This differentiation may be 
significant to projects under development.
d. Treatment of Transitional Sources
    We received numerous comments objecting to our proposed treatment 
of transitional sources. In light of many of those comments and 
additional information we have obtained, we have reassessed this issue 
and are revisiting our proposed treatment of these types of units.
e. Title V Permit Fees
    When EPA finalizes CO2 emission requirements for new 
fossil fuel-fired EGUs, GHGs will, for the first time, fall within the 
definition of ``regulated air pollutant'' in parts 70 and 71, which 
implement the title V permitting program. This would trigger 
requirements related to the calculation of permit fees under federal 
and state title V operating permit programs. The April 2012 proposal 
did not address title V fee issues related to GHG emissions, but we 
recognize that it is important to do so. The reproposal addresses title 
V fees for GHG emissions and includes several options for calculating 
the reasonable costs associated with GHG permitting.

II. Impacts of This withdrawal

    The April 2012 document provided estimated air and energy impacts, 
as well as projected compliance costs, economic and employment impacts, 
and benefits associated with the proposed rule. This action withdraws 
the April 2012 proposal, and thus any projected impacts associated with 
it are being replaced with the results of a new assessment accompanying 
the notice of proposed rulemaking published elsewhere in today's 
Federal Register.

III. Statutory Authority

    Pursuant to CAA section 307(d)(1)(V), the Administrator is 
determining that this action is subject to the provisions of CAA 
section 307(d). The statutory authority for this action is provided by 
sections 111, 301 and 307(d) of the CAA as amended (42 U.S.C. 7411, 
7601 and 7607(d)).

List of Subjects in 40 CFR Part 60

    Environmental protection, Administrative practice and procedure, 
Air pollution control.

    Dated: September 20, 2013.
Gina McCarthy,
Administrator.
[FR Doc. 2013-31079 Filed 1-7-14; 12:45 pm]
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