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Louisiana Issues Nation's First GHG Permits, but Questions Linger

The EPA found major deficiencies with the state-issued permits, leaving open questions over who is ultimately in charge

Mar 22, 2011
Industry near New Orleans, Louisiana

A pair of iron plants in Louisiana have become the first facilities in the nation to get permits for their greenhouse gas emissions, and it's leaving local environmentalists holding their breath as state and federal jurisdictional issues get worked out.

The local groups say they are not convinced the state-issued permits are in compliance with the Obama administration's new climate rules, and want clarity soon in a process they say has been hampered by confusion.

Officials at the Louisiana Department of Environmental Quality (LDEQ), however, chalk up any ambiguity to the fact that they're learning as they go along.

"With other pollutants, LDEQ generally has a lot of data it can look to and see what emission rates are achievable and what types of devices work," said Bryan Johnston, administrator of the LDEQ air permits division. "Greenhouse gas add-on control technology is essentially non-existent."

On January 31, the LDEQ issued greenhouse gas permits to steel giant Nucor Corporation for two plants in the town of St. James Parish, 40 miles southeast of Baton Rouge. The permits were the first to include U.S. EPA "tailoring" rules to reign in heat-trapping gases, which kicked in on Jan. 2.

But the regional EPA office found major deficiencies with the permits, and still has yet to formally approve or reject them, leaving questions over who is ultimately in charge.

Green groups such as the Sierra Club and Louisiana Environmental Action Network, who are worried over the plants' pollution footprint, say they may intervene.

"The EPA has not delivered an official response on [Nucor], so we are looking at drafting an appeal" before a May 3 deadline, said Jordan Macha, conservation organizer for the Sierra Club Delta Chapter, referring to the last day the regional EPA can be petitioned over the Nucor permits.

Macha expressed concern over the precedent that could be established for future greenhouse gas permits.

"We are definitely in support of the EPA and the greenhouse gas rules that they passed, and part of our engagement in this permitting process ... is to ensure that whatever rules EPA has actually hold up," she told SolveClimate News.

Nucor Trims Carbon Footprint of Facilities

The controversial EPA climate rules require big carbon emitters to get Prevention of Significant Deterioration (PSD) and Title V Operating permits to curb emissions at new and modified facilities through cost-effective Best Available Control Technology, or BACT.

Under the program, part of the Clean Air Act, EPA gives state agencies guidance and acts a resource, but specific permitting decisions are in states' hands — though EPA can enforce compliance.

The EPA "tailored" the rules last May to include only power plants, refineries and large industrial facilities with greenhouse gas emissions that exceed 75,000 tons of carbon dioxide equivalent each year.

Together, these facilities account for nearly 70 percent of the nation's global warming pollution from stationary sources. Small emitters like farms and manufacturers are exempt from adding pollution-control technologies.

In Nucor's case, it initially won permits last summer for a single 500-megawatt coal-fired pig iron plant. But community organizations hotly contested the plant, saying its enormous 9 million tons of annual CO2 emissions would only aggravate the environmental and health problems in an industry-intensive area known as "cancer alley."

A 500-megawatt coal plant, by contrast, releases roughly 3 million tons of carbon dioxide a year, according to the Pew Center on Global Climate Change.

By the end of 2010, Nucor had reduced the size of its proposed facility and applied again for operating permits for a direct reduced iron (DRI) facility, which uses natural gas, and a modified pig iron plant — the first two steps in a five-phase, $3.4 billion investment in the works for the next decade.

A Nucor spokesperson did not return repeated phone and e-mail requests seeking comment.

The project has received strong support from Gov. Bobby Jindal, who called the Nucor facilities an "economic win" that could create up to 1,250 direct jobs for Louisianans.

Agency Issues GHG Permits Anyway

On Jan. 7,  EPA's Region 6 office sent the LDEQ an 11-page letter expressing its many concerns with the greenhouse gas permits, but the state agency went ahead and issued them weeks later.

The EPA office declined to be interviewed for this story, offering only the agency's March 4 comments to LDEQ. That document followed a 45-day review period of the permits and commends Nucor's "proactive approach to reduce both greenhouse gases and criteria air pollutants."

But it also points out that BACT measures to determine how much CO2 could be released from the facility were not "practically enforceable" as written, and that the modeling used to determine potential air pollution of the plants was not comprehensive.

The EPA also questions why the facilities are permitted as individual plants, as opposed to one collective steelmaking plant. "If the 'projects' should have been aggregated, then several additional environmental analyses and requirements would have needed to be performed," the March letter said.

Johnston of LDEQ told SolveClimate News that the Nucor permitting process is an ongoing learning experience for both the department and the EPA.

Nucor, for instance, had to rule out the possibility of carbon capture and sequestration (CCS) technologies for BACT because its geographical location doesn't allow for it. Under the tailoring rule, all facilities must consider CCS to control pollution.

In addition to limited BACT options, "a lot of actual emissions data is hard to come by," Johnston explained. "The more that permitting authorities make determinations, the more data becomes available in the permitting process.

"I think we are now better prepared for the questions that the EPA may ask and we are better equipped to ask PSD applicants on GHG emissions."

Johnston said the LDEQ would respond to the EPA's concerns by the end of March and is "treating greenhouse gases as any other PSD pollutant."

Construction on Hold to Resolve Concerns

The $750-million DRI plant would be the first of its kind in the U.S. to convert natural gas and iron ore pellets into raw materials, which the pig iron plant will use along with recycled scrap materials for making steel products.

The LDEQ estimates that the DRI plant will emit 3.4 million tons of CO2 per year. Figures for the pig iron plant have yet to be updated for the modified facility, but are expected to surpass the DRI plant due to the coal-fired blast furnace.

Industrial CO2 emissions in 2009 contributed 2 percent to total U.S. CO2 emissions. Of that 2 percent, about 35 percent came from iron and steel production that year, according to the EPA.

Construction of the DRI facility has already begun, although a stay has been placed on the pig iron facility permit — at Nucor's request — to resolve concerns about the high levels of greenhouse gas and air pollutants the plant is expected to produce.

Not Entirely Convinced Permits Will Work

Sierra Club's Macha said that local environmental groups remain skeptical that EPA's comments and the back-and-forth between the agencies will result in actual enforcement of the tailoring rule's GHG regulations.

She said that a definitive approval of amended permits — or a rejection due to their inconsistencies — could help set the standard for future air quality permits in Louisiana's industrial sector.

But even with greenhouse gas controls, St. James Parish residents are concerned that adding another facility to the 140-plus industrial plants between Baton Rouge and New Orleans would further pollute the southern region's air and water.

In addition to CO2 levels, the modified pig iron facility will still emit high levels of sulfur dioxide and nitrogen oxides per year, as well as mercury, arsenic and benzene, the Sierra Club said.

Some neighbors are already seeking a buyout from Nucor and area industries to relocate the community of Romeville away from the facilities.

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