Good news: New EPA boiler regs include output-based standards

Finally the day you’ve all been waiting for has arrived: EPA has released its new boiler emissions rules for hazardous pollutants! (The cool kids call it “the boiler MACT.”) Most review and discussion of these rules so far has been silent on the most significant aspect: they introduce output-based emissions standards. As Grist readers know, I’ve been preaching the virtues of output-based standards for years now — this is a wonky subject, but one greens would do well to understand.

Output-based standards have been adopted by several states, but somewhat haphazardly, in part because of a lack of consistent EPA guidance. Given the formidable disincentives to efficiency imposed by the structure of current EPA rules, a shift to output-based standards may well be the single most meaningful thing EPA can do to lower CO2 emissions.

So EPA deserves a lot of praise for starting a transition to output-based standards in the boiler MACT. Success will depend ultimately on the degree to which that rule is integrated into other EPA rule-making, but the first step is a pretty good one.

Let’s review what EPA has done and what they’ll (hopefully) do next.

Old boiler MACT

It’s important to understand the boiler MACT’s scope and limitations. In particular:

1. It only regulates “air toxics.” Permits related to other air pollutants (e.g., NOx and SOx) are unaffected.
2. It does not apply to all boilers (large utility boilers are subject to separate rules).
3. It regulates pollution at the point of release.
4. It sets different allowable pollution levels depending on fuel and combustion technology.

This an extremely narrow focus, a characteristic weakness of U.S. environmental policy, which tends to focus on trees rather than forests. So changes to the boiler MACT need to be understood in the context of existing constraints — but also with an eye towards what they might look like if comparable (dare I say “conforming”?) changes were made to other parts of U.S. environmental policy.

New boiler MACT

Others have written about the stringency (or lack thereof) of the emissions limits in the new rule. I won’t repeat all that, except to note an overlooked aspect: all affected boilers have to meet these new standards. This will come as a shock to older boilers that were “grandfathered” out of compliance with previous air standards.

Paradoxically, grandfathering rules enriched the dirtiest boilers by placing the burden for air quality on new installations, letting (cheap-fuel favoring, fully amortized) old boilers benefit in markets where marginal costs were set by (clean-fuel favoring, partially-amortized) new boilers. Grandfathering has obvious political support, but has always been an economically and environmentally stupid idea. Regardless of the quantitative pollution limits, getting rid of grandfathering is good policy that demands political courage; EPA deserves praise on both counts.

So here’s what the new rules do on output-based standards (warning: geekspeak ahead):

1. Regulated sources can elect to be permitted on an input- or output-basis.
2. If they use an output-basis, their input-based emissions will be converted into output based on the efficiency of the best-performing existing units. (In other words, if the input standard implied an input-based rate of 10 lbs/MMBtu fuel input, and the best performing units have an operating efficiency of 82 percent, you would have a maximum allowable emissions level of 10/0.82 or 12.2 lbs/MMBtu of useful energy.)
3. Relative to an output-based standard, emissions are calculated as measured emissions divided by metered boiler thermal output.
4. In the event that the boiler is part of a combined heat and power plant, the output of the power plant will be treated at a heat rate of 10,000 Btu/kWh (language is a little vague, but seems to suggest that this would be used to convert useful electric output into useful thermal output to be added to the denominator of an output-based emissions standard).

Observations

This is a great start, but it has some obvious holes for future EPA rulemakings or tweaks to address.

In the short-term, the rule needs more guidance on metering of useful thermal output. Virtually all affected boilers have metering in place that is theoretically capable of calculating delivered thermal energy, but in practice most of these meters are inaccurate. Most industrial processes need precise temperature control, and safety considerations will usually compel precise pressure control, but unless the boiler is owned/operated by a third party, it’s rare to see an industrial that has invested in accurate steam flow meters.

That’s easy to fix, and the energy service community has developed a host of protocols and commercial tricks to address this data-insufficiency problem. For the purposes of this rule, what’s important is simply that EPA acknowledge the problem and provide explicit guidance on how to address it.

In the longer-term, the effectiveness of the new boiler MACT will depend on how closely it is integrated into future EPA rulemakings. Specifically:

1. Output-based standards should apply to all regulated pollutants. Existing EPA rules often provide disincentives to efficiency. Shifting to an output basis fixes this problem, but has to be done across the board to work properly. Using mercury permits to encourage efficiency investments while simultaneously maintaining NOx permits that discourage efficiency encourages … schizophrenia. EPA should adopt the output-based approach for all air-pollution regulations.
2. Output-based standards should apply to all regulated sources, not just a subset of the nation’s steam boilers. This rule pretty clearly makes a backpressure steam turbine — a turbine that captures power from the pressure differential between boiler operating levels and plant consumption levels — a pollution control device. However, it doesn’t offer guidance for an industrial considering the replacement of their boilers with a gas turbine CHP plant. Let’s hope EPA continues to amend existing rules for consistency with boiler MACT so as to provide comparable and consistent treatment of energy efficiency across all air regulations.
3. EPA should transition to site-wide (rather than stack-specific) permitting. It makes sense for an output-based standard to include power generation from a backpressure turbine-generator. But the backpressure turbine-generator is not a regulated source, for the simple reason that it doesn’t generate any emissions. Lots of other fuel-free generators don’t require air permits, but don’t get to contribute to the denominator of an output-based standard so long as the standard fails to take the entire facility into consideration. Better to encourage facility-wide efficiency than focus on pollution control at individual stacks.