By Roy S. Belden

Stringent new rules for reducing nitrogen oxide emissions took effect in most northeastern and mid-Atlantic states on May 1. As a consequence, many power plants in the region may have to install additional pollution controls or pay over $5,000 a ton to emit nitrogen oxide, or NOx, above allocated allowance levels. Power plants that sell power and have a rated output of at least 15 megawatts and large industrial combustion facilities — like fossil fuel-fired boilers and indirect heat exchangers with a maximum rated heat input of 250 mmBtu’s an hour — are required by the new rules to hold NOx allowances to emit NOx during the ozone season from May 1 to September 30. An allowance is the right to emit one ton of NOx. The new rules will reduce the NOx emissions allowed by upwards of 65% from 1990 emission levels.

NOx Reductions Expected to Be Costly

Congress established an Ozone Transport Commission in 1990 to address migration of ozone, precursor gases such as NOx and volatile organic compounds in the northeast and mid-Atlantic ozone transport region.

The Commission adopted a memorandum of understanding on September 27, 1994 that commits states signing the memorandum to implement a regional NOx emission reduction program. The District of Columbia and all states in the region, except Virginia, signed the memorandum. Each of the states has put NOx emission reduction regulations in place. However, implementation of the Maryland NOx regulations has been delayed by a successful court challenge by the Potomac Electric Power Company and Baltimore Gas & Electric.

States that signed the NOx memorandum were given until May 1, 1999 to implement regulations requiring facilities in the “inner zone” to reduce their rate of NOx emissions by 65% from 1990 base-year levels or to emit NOx at a rate no greater than 0.2 pounds per mmBtu. The “inner zone” consists generally of areas in nonattainment with the federal ozone ambient air standards.

Facilities in other parts of the northeast and mid-Atlantic region, except Vermont and portions of upstate New Hampshire, New York, and Maine, are required to reduce their rates of NOx emissions by 55% from base year levels or to emit NOx at a rate no greater than 0.2 pounds per mmBtu.

Additional regulations requiring upwards of 75% reductions from base year levels are scheduled to be implemented by May 1, 2003.

Emission reductions in the northeast and mid-Atlantic states are being implemented through a market-based “cap and trade” program that is based on the acid rain SO2 emission allowance trading program. Each power plant or large combustion source will receive a NOx budget allocation authorizing the source to emit one ton of NOx for each allowance. Facilities typically have until December 31 each year to ensure that they have enough allowances in their compliance accounts to cover their NOx emissions during the previous ozone season. Some state NOx regulations currently allow trading among states in the northeast and mid-Atlantic region. However, these interstate trades must usually be approved in advance by the various state environmental regulatory agencies.

The market for NOx budget allowances is very tight with current prices running to over $5,000 per ton. Some facilities are expected to install costly NOx pollution control technologies, such as selective catalytic reduction, to meet the NOx reduction requirements.

Haze Rules May Trigger New Pollution Controls

The US government also moved in late April to cut haze that reduces visibility in the national parks. Vice President Gore announced a final “regional haze rule” on April 22. Regional haze is caused primarily by sulfur dioxide, or SO2, NOx and fine particulate matter emissions, and it potentially obscures the clarity, color, texture, and form of scenic vistas.

The new regional haze rule will probably trigger new pollution control requirements for power plants that were installed before 1977 and are suspected of contributing to reduced visibility at certain national parks and wilderness areas like the Grand Canyon and Shenandoah National Park. States are required to submit their own plans to reducing regional haze to the federal Environmental Protection Agency between 2004 and 2008.

The new haze rule is supposed to improve visibility in 156 national parks and wilderness areas — called “class I areas” — across the United States. The rule calls for states to establish long-term strategies for reducing emissions of SO2, NOx, and fine particulates that allegedly contribute to visibility impairment. The goal of the rule is to reach “natural visibility conditions” by the year 2064.

The rule requires each state to conduct an analysis to establish visibility goals for each affected class I area to improve visibility on the haziest days and to ensure no degradation occurs on the clearest days. In developing long-term strategies to meet the visibility goals, states are directed to address all types of man-made emissions, including those from stationary sources, mobile sources, area sources, and forest fires.

One key element of the rule is it addresses installation of “best available retrofit technology,” or BART, for certain existing stationary sources that went into operation between August 1962 and August 1977 and have a potential to emit at least 250 tons a year of any air pollutant. The final rule allows states to establish BART emission limitations on a source category-wide basis rather than a case-by-case basis. States also have the option of developing an emissions trading program applicable to BART sources as long as the trading program achieves greater emission reductions than would be achieved by applying BART to each individual source.

The federal government plans to coordinate the regional haze rule with the revised ambient air quality standards for ozone and fine particulates, or PM2.5. As a result, state implementation plans will generally not need to be submitted to the Environmental Protection Agency until 2004 at the earliest.

Given this timetable, it will be several years before any power plants may need to install BART controls.

by Roy S. Belden, in Washington