CAIR Replacement Rule

Discussions between CenSARA and EPA

April 1, 2009

I.  Introduction

	On Wednesday, April 1, 2009, EPA held a call with Central States Air
Resource Agencies (CenSARA) to discuss the CAIR replacement rule.  The
brief summary that follows covers the key issues discussed during the
call.  More detailed notes, including a list of all participants in the
call, are being prepared.  

II.  EPA Opening Comments

	Sam Napolitano, CAMD, began with a short introduction, explaining that
EPA was beginning the process of creating a replacement rule for CAIR. 
The Agency is reviewing all options, setting up analyses, and preparing
technical models.  The goal is to finalize a replacement rule within two
years.  

	The primary objectives are to help states comply with the NAAQS and to
reduce interstate transport.  Therefore, EPA has decided that it would
be best to start working with states immediately.  EPA would like to
hear from the states about what type of replacement rule would most help
them meet air quality requirements.  Sam stressed that this is the
beginning of a dialogue process, and that EPA intends to continue these
types of discussions throughout the rule development process.  

	This is a chance for the states to talk to the key EPA staff that will
actually develop and write the rules, as well as the OGC attorneys
assigned to the rule development.  Sam stressed that EPA is interested
in hearing the states' thoughts and concerns.  Everything is on the
table as EPA puts together ideas for the new Assistant Administrator for
Air and Radiation, who should arrive within the next couple of weeks.  

III.  CenSARA Opening Comments 

	Arturo Blanco, City of Houston, Air Quality Control, thanked EPA for
the opportunity to share thoughts and ideas about how to approach a CAIR
replacement rule.  He noted that the session would be an informal
opportunity for states and other members to ask questions, express
concerns, or generally share ideas.  Although notes will be taken on the
call, it is understood that the ideas or suggestions brought up on the
call are not necessarily the official positions of the different
government agencies represented on the call.  

IV.  Core Issues Outlined by EPA

	Sam Napolitano said that EPA would lay out the issues, but that he
would be unable to indicate how EPA would eventually proceed, as the
Agency is uncertain at present as to how to respond to the issues raised
by the CAIR court decision.  The options for a replacement rule are very
broad and EPA is looking at new ways to address the section 110(a)(2)(D)
finding of failure.  The purpose of this meeting is to gather different
ideas and thoughts to present to the new Assistant Administrator for
Air, whose responsibility it will be to decide how to address the
ramifications of the court decision.  

	Sam Napolitano, Tim Smith, OAQPS, and Sonja Rodman, OGC, then outlined
the key issues EPA is considering in the CAIR replacement rule.  Sam
asked that speakers identify themselves as notes of the meeting were
being prepared and would be shared with all participants on the call.

	EPA outlined the following major issues:

1.  Baseline  

	What is the starting point?  What is the baseline?  When the original
CAIR rule was developed there were many questions about how to set up a
baseline and what to take into account when creating the baseline.  The
situation has continued to change, and EPA would like to know how states
believe the baseline should be created, and what factors should be
considered in the baseline.

2.  Quantifying significant contribution  

	This is one of the key issues from the court decision.  The court held
that CAIR failed to adequately quantify and then eliminate each state's
significant contribution.  There are many smaller issues that come up
under this general rubric, but the key questions pivot on how
significant contribution is quantified and then what part of the
quantified emissions must be eliminated.   

	

3.  Remedy

	What remedy should be applied to the quantified significant
contribution?  What types of approaches should be considered?  Is the
trading option practical?

4.  Affected Area/National Ambient Air Quality Standards (NAAQS)

	Which states or regions should be covered by the rule?  What should the
timing of the rule look like?  Should EPA start with existing NAAQS? 
Or, should it try to integrate the newer NAAQS into a replacement rule? 
Timing becomes a key element when considering which NAAQS to target.  

	

V.  CenSARA Response to Core Issues

1.  Baseline

In response to a question about why BART would be an issue in a future
CAIR baseline, Tim Smith explained that many states were relying on CAIR
to meet the BART requirements.  Because CAIR now can be in effect for
only a limited period of time, and because it is unclear what will
replace CAIR, many states are turning back to the BART requirements. 
EPA is trying to decide how much consideration, if any, to give the
probable reductions from plants installing BART controls when
considering a baseline for the replacement CAIR program.

	Calvin Ku, Missouri DNR, noted that the states use the current year
data during the SIP process and that using future year projections might
not give a realistic view of the emissions.  Using the current year data
lines up with the states' process and ensures that the baseline is
generated from fully quality-assured data.  He also suggested that if a
future baseline year were to be used, it would be best to align it with
the 2012 and 2018 non-attainment deadlines.  

	Sonja Rodman mentioned that use of a future year baseline was one of
the parts of CAIR that the court upheld.  Other participants supported
using a future year baseline, but wanted to know which year of data the
future year baseline would be based on.  Tim said he believed that
future year modeling would be based on 2005 emissions data. 

	Kim Herndon, TCEQ, mentioned that it would be most helpful for states
if the replacement CAIR implementation dates corresponded to the
attainment dates for the 2008 NAAQS.  

2.  Significant contribution

	Tyler Harris, City of Saint Louis Air Pollution Control, said he
thought EPA should raise the level of control considered cost effective.
 He noted that EPA's determination of what controls a unit needed to put
on under CAIR was based on a determination of what controls were highly
cost-effective.  The tightening of the standards might require a level
of control that had not been considered highly cost-effective in the
earlier analysis.

	Calvin Ku was concerned about how EPA might deal with maintenance
areas.  He suggested a higher cost-effectiveness trigger for maintenance
areas than for non-attainment areas because using the same standard for
both might unfairly punish some sources. 

	Tim Smith explained his understanding of the LADCO proposal that had
been outlined in an earlier call.  LADCO is looking at the CAMx modeling
to apportion contribution by states.  States that contribute 4% of the
standard or more would be required to put on the most stringent
controls, states between the 4% and 1% level would be required to put on
less stringent controls, and states below 1% of the threshold would be
required to put on the least stringent controls.  Tim noted that his
explanation was based on a preliminary outline, and that LADCO would be
issuing the official proposal soon.  

3.  Remedy

	There were not many comments related to remedy.  Some participants
asked EPA about the types of plans the Agency was considering.  EPA
responded that the Agency is considering the full range of
possibilities.  Some of the specific suggestions that have been offered
include a strictly performance-based standard that all sources would be
required to meet.  Other ideas have included a performance-based
standard with trading, perhaps limited to intrastate trading.  

	One of the big questions for the Agency is whether section
110(a)(2)(D), which requires EPA to specifically quantify each states'
contribution to another state, also requires the Agency to fully
eliminate that quantified contribution, or whether EPA is allowed to
provide a partial remedy.  

	Calvin Ku suggested that EPA needs to look at large industrial boilers
in addition to EGUs.  He also said that he believed cement kilns should
be considered as sources to control.  Tyler Harris mentioned that
according to modeling in the St. Louis area, mobile sources play a large
role in attainment problems in St. Louis.  Tyler also noted that some
steel mills have a large impact.

	The Iowa representative suggested that EPA look at source apportionment
not simply on a state-by-state basis, but also on the basis of the
contributing sectors in the states.  A breakdown of apportionment by
sector would provide a detailed analysis of what needs to be controlled
and would allow EPA to target a program to those sources that have the
largest impact on non-attainment.  

4.  Affected Area/Standards 

	Jim Kavanaugh, Missouri DNR, and Eddie Terrill, Oklahoma DEQ, suggested
that CAIR should be a national program, with Oklahoma representatives
specifically stating that Oklahoma should be included in any future CAIR
region.  

	In suggesting that the CAIR replacement program should be national,
CenSARA members also indicated that EPA should create a rule addressing
the most recent NAAQS.  They noted that if EPA addressed the most recent
standards, the program would by definition include a large geographic
area, which could help justify a national program.  

	CenSARA members advocated for a strong multi-pollutant program based on
the most recent standards.  States are currently being asked to comply
with the new, lower standards.  Because of the continued lowering of the
standards, it is clear states will need strong regional and national
multi-pollutant programs, such as the CAIR replacement rule, to meet the
recent, more stringent NAAQS.  

	Sam Napolitano asked what other types of pollutants the states would
like to see a replacement CAIR rule address.  Jim suggested EPA might
consider the new annual and 24-hour PM standards and how the Agency
might control direct PM type pollutants and volatiles, with an emphasis
on the direct PM pollutants.  

	Many areas mentioned interest in getting federal help to deal with
non-attainment issues.  EPA noted that the federal government could help
with the transport part of non-attainment.  However, under section
110(a)(2)(D) EPA is only allowed to look at the parts of non-attainment
caused by interstate transport.  Thus, local controls will always play a
vital role in meeting the attainment and maintenance standards.  

	There was some confusion about why EPA created a summer and an annual
program.  Tyler Harris said he thought that sources should be required
to use whatever controls were installed year round.  Sam noted that the
summer program was created as extra insurance at the behest of the
eastern states and would likely be included in a replacement program.  

VI.  Conclusion

	David Thornton, MPCA, suggested that EPA consider the potential impact
of other possible climate control programs, specifically on states that
were not originally in CAIR, but which might be included under an
expanded replacement program.  These states, and sources in those
states, will be making critical choices about what technologies to
install and how to invest in emission controls; thus, having some idea
of the future regulatory landscape would be very useful.  EPA noted that
on an earlier call the environmental NGOs had also asked EPA to take a
holistic approach.  

	In response to questions about further comments, EPA suggested that
participants use notes of this meeting, which will be distributed to all
the participants, as one avenue for further comments.  Once the formal
process is started a docket will be opened and official comments can be
submitted.  Otherwise, participants should feel free to email EPA
contacts with suggestions or ideas.  

	Sam Napolitano concluded the call by saying that this call was one of
the first series of teleconferences with states and other stakeholders,
including LADCO, OTC, NACAA, industry representatives, and environmental
groups.  When this series has concluded, EPA will meet with states again
to report what EPA has heard from all of the groups.  This will allow
them to react and respond, and to continue the general dialogue.

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