1. UPDATE - The South Coast AQMD Moratorium
on P
Permits
i
James A. Westbrook
BlueScape Environmental
June 4 2009
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2. Webinar Agenda
• Snapshot of moratorium impacts
• Recap New Source Review and offsets
• Update the permit moratorium situation
– State Legislative Action SB696
Action,
– Court Appeals
– Rule 1315 Tracking System Re-adoption
Re adoption
– District Workshops and NSR “Reform”
• Current ERC pricing
• Permit actions
• Questions
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3. About BlueScape
• Air quality permitting & compliance
• New Source Review; CA and national
• ERC applications and market strategies
• AERMOD, ISCST3 and HARP air quality modeling
q y g
• GHG management, AB32, registries, life-cycle
analysis, carbon trading
• 20 years experience with i d t i i S th C
i ith industries in South Coast
t
• Regulatory strategies to move business forward
See www.bluescapeinc.com/about/index.html for more information.
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4. Snapshot – Permit Moratorium Impacts
• Facilities cannot get certain permits without offsets,
or emission reduction credits (ERCs)
– Permits to construct (P/Cs) to build
– Permits to operate (P/Os) to operate
• Offsets are scarce and very expensive
• AQMD estimates 3,150 permits may be impacted
• Costs to acquire offsets > $4 billion
– $ 150 million for a landfill gas waste-to-energy plant
– $ 1.6 million to permit a tortilla fryer and oven
• Impacts:
– Project delays, lost jobs
– Difficulty getting permits for essential services
– Diffi lt deploying stimulus f di
Difficulty d l i ti l funding, cleaner equipment
l i t
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5. see www.yesonSB696.com
Reference: www.yesonsb696.com
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6. Recap: Offsets in Permitting
• New Source Review (NSR) - Regulation XIII
– Rule 1303 requires offsets for nonattainment pollutants
– District policy, emission increases 0.5 lb/day and
greater
• Rule 1304 exemptions from offsets
• Rule 1309.1 offset bank (Priority Reserve) for large
essential projects, e.g. power plants
• Rule 1309.2 offset budget for other projects
• Rule 1315 new source review tracking system
• Exemptions and Priority Reserve previously funded by the
District Offset Bank
• Rule 1309.2 offset budget not active
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7. Timeline – Then & Now
• Nov. 2008: LA Superior Court Ruling (BS110792) –
invalidates Rule 1315 District Bank Tracking
• Dec 2008: Court appeals filed
• Jan 2009: South Coast AQMD issues moratorium
– P
Permits need offsets
it d ff t
– Rule 1304 exemptions no longer available
– Could be retroactive to permits issued after Sep. 8, 2006
• Feb 2009: amended SB696 by state Senator Wright
• Mar 2009: Rule 1315 amendment proposed, CEQA
Initial Study, N ti
I iti l St d Notice of P
f Preparation
ti
• District NSR Stakeholder workshops, reform
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8. State Legislative and Court Activity
• State Legislation - SB696 (Wright)
– Limited CEQA exemption to offset rules
– Allow access to District offsets bank with
requirements met
– Bill pulled from committee, negotiations (Capital
Weekly, May 21)
– www yesonsb696 com
www.yesonsb696.com
• Court Activity
– Municipal court appeals, stay on invalidating
appeals
previous permits
– Federal court case pending
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9. Rule 1315 & 1309.2 Rule Revision
and CEQA Programmatic Study
• Purpose of amendments:
– Ability to issue permits using District internal offsets
– Codify procedures
– Specify types of reductions
• Rule 1309.1 for large projects will not be amended
• Amended Rule 1309.2 must be approved by EPA
• Program Environmental Assessment
• Scheduled to go to AQMD Board Oct 2, 2009
• No Rule 1304 exemptions currently allowed pending
re-adoption of Rule 1315
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10. District NSR Workshops, Reform
• Workshops held on Jan 21, Mar 11, Apr
16,
16 & May 12
• Near-term and long-term solutions
• Supply-Side and Demand-side
• Requires rule revisions
• Next workshop on July 16
See: http://aqmd.gov/prdas/nsr/051209/FinalNSR051209.pdf
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13. What to do Now?
• A lot happening, nothing has changed .. yet
• Can you wait, or need to act now?
- Permit process length and difficulty
- Offset scarcity and market direction
- Business opportunity, stimulus funding
• Consider costs to purchase market offsets
costs,
versus other options
• Consult a permitting expert – make the right
decision, ideas to get your permit
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14. Current Open Market ERC Prices
Coastal (lb/day) Inland (lb/day)
NOx PM10 VOC NOx PM10 VOC
$90,000
$90 000 – $270,000
$270 000 - $5,000
$5 000 - $55,000
$55 000 - $100,000
$100 000 - $5,000
$5 000 -
$150,000 $350,000 $9,500 $80,000 $170,000 $9,000
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15. Summary
• Relief may come, from different fronts
• South Coast AQMD permitting is complicated,
develop a permit strategy
• BlueScape will help you:
– Review your permit situation business goals and
situation,
other factors
– Develop and analyze various options
p y p
– Execute a permitting strategy
• Stay on top of the changing New Source Review
landscape
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16. Contact with Questions
James A. Westbrook
BlueScape Environmental
877-486-9257
jwestbrook@bluescapeinc.com
www.bluescapeinc.com
Los Angeles ~ San Diego
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