Tailoring rule could harm gas industry, association officials warn

The presidents of three large natural gas trade associations expressed concern with the US Environmental Protection Agency’s tailoring rule under the agency’s proposed greenhouse gas emission regulations.

Nick Snow
OGJ Washington Editor

WASHINGTON, DC, Jan. 22 -- The presidents of three large natural gas trade associations expressed concern with the US Environmental Protection Agency’s tailoring rule under the agency’s proposed greenhouse gas emission regulations.

The rule, which EPA has said is designed to relieve small businesses of regulatory burdens, would apply to Prevention of Significant Deterioration (PSD) and Title V programs under the Clean Air Act. It also potentially could delay permit approvals, “impeding capital projects for all segments of the natural gas industry,” the three officials told EPA Administrator Lisa P. Jackson in a Jan. 22 letter.

Barry Russell of the Independent Petroleum Association of America, Donald F. Santa Jr. of the Interstate Natural Gas Association of America, and R. Skip Horvath of the Natural Gas Supply Association said that proposals to require gas operations to use best available control technology (BACT) also might be a mistake.

EPA’s own figures from the GHG reporting rule’s proposed rulemaking notice indicate that 45% of the compression stations in the US gas transmission system would be considered “major sources” subject to PSD regulation for GHGs if the tailoring rule is adopted as proposed, the letter said.

Results from a survey which INGAA prepared for its comments to the proposed tailoring rule suggest that the actual number of affected transmission-related compressor stations could be much higher, it continued. “The same holds true for the construction of new compressor stations,” it added.

‘Woefully underestimates’
“These GHG regulations will impose PSD permitting on a huge number of projects that would not have previously required a PSD permit for criteria pollutants,” the letter said. “It appears that the proposed tailoring rule woefully underestimates the number of facilities affected, and there is no indication that the permitting authorities are prepared to handle an increase in workload of this magnitude.”

With no precedent for issuing GHG emissions permits, the three officials warned that it is likely the program’s initial years “will be plagued by lengthy data-gathering and BACT analyses, as well as litigation over individual permitting decisions.” The resulting delay and legal uncertainty will fall heavily on gas infrastructure facilities, which already face significant regulatory hurdles, they said.

The concept of BACT has limited applications to gas facilities’ GHG emissions, they continued. Pipeline compressor stations’ large engines and other gas combustion units already are designed to operate with optimal efficiency, and with carbon capture and sequestration technology years away from being widely available, no “add-on” control technology is available to further mitigate GHG emissions from these sources, the letter said. Mandating use of electric instead of gas compressors simply would transfer GHG emissions to local electric utilities, it added.

“We believe that gas facilities are already implementing BACT for GHG emissions and predict that a PSD permitting process would not yield any significant environmental benefit. Therefore, gas facilities should be presumed to comply with BACT,” Russell, Santa, and Horvath said. If EPA decides to apply the CAA to GHG emissions from gas infrastructure facilities, they continued, it should consider a separate rulemaking with opportunity for notice and comment, in lieu of the PSD permit-by-permit BACT approach for the gas industry.

Citing gas’s role in emerging national climate change policies, the three officials told Jackson it would be counterproductive if EPA’s GHG regulations under the CAA “stifle the very infrastructure needed to produce and deliver the fuel that could most help in reducing the country’s GHG emissions.” They said they were anxious to work with Jackson and her staff, and requested a meeting with her to discuss the matter further.

Contact Nick Snow at nicks@pennwell.com.

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