Commenter 9191 stated that the rule will ban the use of coal as a fuel for new electric generating units because it would not be used as a result of market factors thereby assuring that coal could not be used even if market factors change.
 See preamble section V. L.
Commenter 9201 stated that based on CAA Section 111 following steps should be used as factors for BSER:
   * First, determine BSER that has been adequately demonstrated for all sources within the source category considering the cost of installing and operating the control system as well as the non-air quality health and environmental impacts and the energy requirements of the technology or system;
   * Second, calculate the degree of emissions reduction that is achievable through the application of the BSER including any adjustments to reflect the ability of sources to achieve the emissions reductions under the full range of operating conditions by all sources within the source category. In this case that would include adjustments to the control level in order to reflect what can be achieved on a consistent basis for a broad range of boiler and coal types.
   * Third, formulate a specific performance standard (numeric emission limit, averaging time, and monitoring) that may be achievable by all sources within the source category.
This is essentially the precise process EPA engaged in in this proceeding (see preamble section V), although the commenter is mistaken in suggesting that existing plants must be operating a control technology for the technology to be considered as BSER.
Commenter 9514 stated that the statute and case law authorize EPA not only to evaluate the costs of achieving the standard, but also the cost-effectiveness of emissions control options comprising the "best" system of emission reduction. Commenter further stated that in past courts have used varying formulations in discussing EPA's authority to take costs "into account," each has followed the same fundamental standard: an NSPS will be upheld unless the costs it imposes are exorbitant or too great for the industry to bear. Commenter also stated that the D.C. Circuit has never invalidated an NSPS for being too costly. 79 Fed. Reg. at 1464. Commenter stated that this does not require the application of a strict cost-benefit test; rather, reviewing courts have upheld performance standards so long as the costs are not exorbitant (i.e., too high for the industry to bear) in light of the pollution reduction benefits they will yield.
EPA largely agrees with this comment.  See preamble section V.H.2.
Commenter 9514 stated that the EPA may consider byproduct revenue evaluating the costs associated with its standards. Commenter further stated that the court has held that the agency has authority to evaluate all of the statutory factors in a BSER determination "in the broadest possible sense," and to consider costs "at the national and regional levels and over time as opposed to simply at the plant level in the immediate present." Sierra Club, 657 F.2d at 331. Commenter further stated that given that, it is appropriate for EPA to consider revenue streams from the co-production of CO2 in its determination that carbon capture and storage ("CCS") is BSER for coal-fired EGUs. Commenter also stated that if costs of disposal of byproducts must be taken into account during cost analysis, revenue from the sale of economically valuable products as a co-benefit of achieving a particular performance standard should also be taken into account. See 79 Fed. Reg. at 1,464. Commenter stated that to the extent that the sale of captured CO2 may generate revenues for plant operators, those revenues should be factored into a determination of the proposed rule's costs.
EPA agrees that by-product revenue can appropriately be considered, and indeed the D.C. Circuit has so held.  However, EPA is adopting a conservative costing methodology here whereby it is evaluating the costs of post-combustion CCS (i.e. the BSER) without accounting for by-product revenues which a new source could likely generate (as it Boundary Dam, and as planned at Kemper).
Commenter 9514 stated that the EPA's prior actions are consistent with the notion that byproduct revenue may be considered when the agency sets a performance standard. For example, in 2012, EPA and the National Highway Traffic Safety Administration finalized new fuel economy standards for light duty vehicles. See 77 Fed. Reg. 62,624 (Oct. 15, 2012). Commenter further stated that in its cost analysis, the agencies determined that the benefits that would result from more stringent standards would "far outweigh higher vehicle costs" to consumers, largely due to the 170 billion gallons of fuel that would be saved throughout the lives of vehicles sold over an eight-year period. Id. at 62,629, 62,631. Commenter further stated that from a macroeconomic standpoint, these savings are functionally indistinguishable from the revenue that would accrue if those 170 billion gallons of fuel were a direct byproduct of the new technology, rather than the amount saved due to reduced demand. Commenter stated that same year, EPA analyzed revenues from the sale of natural gas and condensate recovered through the installation of pollution controls when describing costs associated with the NSPS for oil and natural gas production. See 77 Fed. Reg. 49,490, 49,534 (Aug. 16, 2012) (estimating that the proposed standards would save approximately $11 million annually if revenues from additional recovery were considered).
See previous response.
Commenter 9514 stated that EPA considered a wide range of potential market conditions for EGUs and fuels through at least 2030, reflecting analyses by EIA and industry in addition to the agency's own evaluations. Commenter further stated that this analysis found that electric utilities are likely to choose lower-cost natural gas rather than coal for all, or almost all, new fossil fuel-fired generating units during the relevant time period. New combined cycle gas plants are already likely to satisfy the proposed rule's emission limits, creating no additional costs. Commenter further stated that the most efficient combined cycle units are cost-effective and satisfy the lower emission levels proposed by Joint Environmental Commenters. Commenter also stated that to the extent that new coal plants with partial CCS are constructed in the coming years, EPA correctly asserts that they will not impose exorbitant costs on the industry. Commenter stated that as such, the proposed standard for new coal-fired plants satisfies section 111's cost component.
This comment is consistent with EPA's analysis in RIA section 4.  EPA notes, however, that its consideration of costs is not open-ended.  That is, although new coal capacity is unlikely to be built for reasons of lack of cost competitiveness for the reasons the commenter states, EPA is not thereby concluding that any control costs are non-exorbitant by definition.  Rather, as at proposal, EPA is comparing costs with those of a comparable non-NGCC baseload, dispatchable electricity-generating technology.
In this regard, EPA also does not accept the comment of Murray Energy, arguing that because nuclear capacity is zero carbon emitting, the relevant comparison must be coal with full-scale CCS.  Murray Energy Comment pp. 81-82.  The statutory text, of course, does not decree such a result since the requirement that EPA consider costs affords considerable discretion in how EPA does so.  It is furthermore reasonable, in responding to assertions that the incremental cost of partial-CCS will render new coal capacity uncompetitive for reasons of cost when the technology is already uncompetitive for reasons of cost, to look to the costs of other technologies which are more expensive than NGCC but which, like coal, provide baseload, dispatchable power and which might be selected for similar reasons of preservation of fuel diversity/as a hedge against rising natural gas costs.  Finally, in considering capital costs associated with the final standard of performance, EPA did consider the incremental increase in cost associated with deployment of partial CCS, the type of comparison the commenter advocates.  See preamble section V.H.4.  In addition, in considering the emission reductions and quantifiable benefits of the standard, EPA again compared an SCPC with SCPC plus post-combustion partial CCS.  See RIA chapter 5 and preamble section V.J.
Commenter 10095 stated that based on Section 111(b) of the CAA, EPA must follow the three-step process in establishing performance standards for affected sources, which includes identifying the BSER that is Adequately Demonstrated, determining levels of emissions that are achievable, and selecting a standard that represents the best balance of economic, environmental, and energy consideration.
EPA's methodology is discussed at length in preamble section V and is entirely consistent with section 111 (a) (not (b) as the commenter would have it) of the Act.
Commenter 10095 stated that if EPA maintains a nonsubcategorized subpart Da, the category's applicable standard must be technically and economically achievable by coal, oil, and natural gas-fired steam boilers and IGCCs. Commenter further stated that the EPA has not adequately analyzed all of the affected subpart Da sources and their applicable CO2 control options. Commenter also stated that the EPA must therefore complete individual BSER determinations for each affected subpart Da type of source and establish separate emission standards accordingly or a single standard that is achievable for all affected sources.
The final standard of performance is achievable by IGCC, or IGCC operating with some relatively minor amount of natural gas cofiring. See preamble section V.P.  This technology is available at reasonable cost (see preamble table 9), and does not pose adverse nonair quality impacts or unreasonable energy requirements.  See preamble section V.O.2 and 3.  With respect to new oil-fired capacity, EPA finds the possibility of a new oil-fired unit being constructed to be too remote to warrant any further subcategorization of the source category.  There has not been any such unit constructed for over 30 years, and there are strong reasons no units would be built in the future.
Nor did any commenter provide any information either that a new oil-fired steam electric unit might be constructed, that any are contemplated, or that there is any basis for believing that such a unit might be constructed.  Accordingly, the EPA is not making a separate BSER determination for this non-existent type of new source.  See Kennecott v. EPA, 780 F. 2d 445, 454 (4[th] Cir. 1985) (EPA need not set separate NSPS for hydro-metallurgical plants under technology-based standard-setting authority of Clean Water Act when "no hydro-metallurgical plant is in the process of being built or even contemplated"); see also Portland Cement Ass'n v. EPA 665 F. 3d at 410 (section 111 standards of performance may legitimately reflect less polluting types of designs and discourage perpetuation of more polluting designs, especially where compliance paths exist for the more polluting type of technology) .
Commenter 10952 stated that the proposal including information contained in the rulemaking docket presents no information that could lead to a rational conclusion that full or partial carbon capture can be deployed as part of a BSER immediately and, at a reasonable cost. Commenter agreed with EPA that case law suggests that the agency can compensate for a shortage of data by qualitative methods and reasonable extrapolation of technology performance in other industries. Proposal at 1479, (quoting Lignite Energy Council v. EPA 198 F.3d 930, 934 (D.C. Cir. 1999)). Commenter further stated that the EPA has failed to provide any explanation in this rulemaking's docket to document what carbon capture technologies in other industries it is utilizing and how it is technically appropriate to extrapolate those technology applications to coal-fired steam electric generation that must operate under required and specific duty cycles that do not mimic those required in other industries. Commenter also stated that an insurmountable problem with the proposal is that based on the information provided in this rulemaking docket there is no reasonable basis to conclude that carbon capture is technically available at a reasonable cost for use as BSER as applied to fossil fuel fired EGUs in the immediate future and perhaps not available as a BSER for many years to come.
EPA believes its discussion in section V of the preamble to the final rule fully explains its basis for selection of SCPC with post-combustion partial CCS as BSER, and that there is substantial record support for those determinations.
Commenter 10952 stated that the court's interpretation of adequately demonstrated technology clearly mandates that the BSER must be achievable at a reasonable cost immediately. See Portland Cement 486 F.2d 375, 391, (Since the standards here put into effect will control new plants immediately, as opposed to one or two years in the future, the latitude of the projection is correspondingly narrowed). Commenter assumed that if the EPA's theory that cost of carbon capture technology decreases as it matures is accurate here, this proposal provides no adequate, rational basis to conclude that an EGU could be built tomorrow and meet the proposal's LCOE assumptions based on next commercial offering. Commenter questioned that What can be gleaned not from the proposal but from the DOE studies of which EPA relies is that the proposal embraces DOE study conclusions that apparently have not been peer reviewed and where, in many cases, the underlying assumptions are unknown. Commenter further stated that in short, whatever rationale EPA utilized here is not available and thus not reviewable in connection with this rulemaking. Commenter further stated that from the information supplied in the rulemaking docket, it is impossible to conclude that EPA made a valid projection and not a crystal ball prediction regarding cost reasonableness of BSER. Commenter further stated that regarding questions of available technology in evaluating NSPS application "...the reliability of the prediction rests on the validity of the assumptions". Portland Cement, 486 F. 2d at 392. Commenter also stated that the assumptions here are not even available for review and comment. Commenter stated that the lack availability of information material to this rulemaking and its conclusions for review and comment is yet another reason why this proposal is arbitrary and capricious.
The commenter correctly states that a standard reflecting performance of BSER must be achievable immediately.  EPA has shown reasonably why the 1400 lbCO2 /MWh standard is immediately achievable by a new SCPC.  The commenter is incorrect regarding peer review of the NETL studies.  See response in unit 2.4.2 below on Data Quality Act issues.  The commenter further mischaracterizes the NETL materials, which are notably transparent in documenting every assumption and line item of cost, essentially down to the last nut and bolt.  The latest NETL cost estimates, in fact, reflect the costs of the operating system in present commercial use at the Boundary Dam facility, so EPA regards these costs as a valuable and most up-to-date information available.
Commenter 10952 stated that the CAA Section 111 must be viewed in conjunction with Section 169 to ascertain the potential breadth as well as limitations of EPA's discretion to promulgate NSPS that eliminates coal use for future generation in those areas where, as we have pointed out earlier, the CO2 pipeline transportation and sequestration infrastructure do not exist and will not exist within the foreseeable future. Commenter further stated that the Section 169 defines Best Available Control Technology (BACT) in conjunction with the CAA Prevention of Significant Deterioration (PSD) provisions. Commenter further stated that the Section 111 and Section 169 have some commonality but also have notable differences. Commenter further stated that the Section 169(3) requires a case by case source specific analysis for each project to derive a source specific BACT taking into account energy, environment and economic impacts.
Commenter further stated that Section 111 NSPS, must be applicable to sources within an entire source category. As Section 111(b)(1)(B) dictates, NSPS must establish standards for new sources within each category. Commenter further stated that although under Section 111(b)(2) EPA may subcategorize within a source category by distinguishing between different classes, types and sizes within the source category when determining NSPS, NSPS must apply broadly to all new sources within the category or subcategory as the case may be. Section 169(3) contains a lengthy definition of BACT that includes requirements for a maximum degree of reduction determined on a case by case basis that is achievable for the facility as previously described and also contains the stipulation that in no case can the application of BACT for any source exceed the emissions allowed by any applicable standard established by Section 111. As discussed earlier, in practice this means an NSPS emission limitation serves as the floor for a BACT determination.
 As explained in other comment responses, the final standard of performance is not geographically constrained.  The EPA agrees with the commenter that the final standard of performance creates a floor for purposes of future BACT permits for affected EGUs under this rule.
Commenter 10952 stated that as the court observed, BACT may require source design adjustments only if such readjustments do not mandate source redefinition. Commenter further stated that the court recognized that requiring design readjustments at Prairie State to utilize low sulfur coal in lieu of high sulfur coal would require source redefinition not because using low sulfur coal would be improper redesign but because the source's definition included mine mouth coal that happened to be high sulfur coal. Commenter further stated that required source design can mandate not only coal-fired generation utilizing a particular fuel source, but also source combustion technology. For example grid reliability may only require smaller baseload generation where natural gas in unavailable. Commenter further stated that the proposal links CCS applicability with IGCC and SCPC combustion. Commenter further stated that the fluidized bed technology (FBT) may be the only coal-based technology applicable in situations where smaller generation needs are needed and perhaps only to supplement renewable resources. In these cases CCS technology would be inapplicable.
The doctrine of redefinition of a source arises in a context different from section 111 (a), as the commenter recognizes.  It thus has only remote applicability, by somewhat strained analogy if at all, under section 111 (a).  In any case, the final standard of performance can be met by any newly-constructed coal-fired EGU anywhere in the country.
Commenter 9666 (UARG) stated (pp 24-5) that EPA altered the basic requirements of section 111 (a), in essence by using factors "such as size of emission reductions and promotion of technological development" to "outweigh the requirements of adequate demonstration and achievability".  The commenter surveys caselaw as requiring a three-part NSPS process: 1) identification of a system or systems that have been adequately demonstrated; 2) determining what emission levels are achievable by that system; and 3) after making these determinations, exercise its discretion to choose an emission level reflecting performance of the best system.  The commenter maintains that EPA instead an authority to balance various factors resulting in selection of systems of performance and standard neither demonstrated nor achievable.
EPA disagrees with parts of this comment.  The comment is largely at variance with EPA's actual approach here.  EPA has determined that partial post-combustion CCS is a best system of emission reduction adequately demonstrated by evaluating the technology, its capabilities, its costs, and collateral nonair and energy consequences of its deployment. EPA has then evaluated the level of performance this best system is capable of achieving, as the caselaw (and the comment) indicate.  See Essex, 486 F. 2d at 433 ("it is the system which must be adequately demonstrated and the standard which must be achievable").  The EPA is not balancing these considerations against size of emission reductions and promotion of technology development, as the commenter asserts.  The commenter evidently believes that CCS is not demonstrated, and that EPA has overridden this consideration by looking to other factors, but this is not the case.  As discussed at   preamble section V.D, the EPA has found reasonably that post-combustion CCS is a demonstrated technology due to its successful operation at both commercial scale and partial scale.  Consideration of promotion of technology development or size of emission reductions does not figure into that determination (beyond the obvious fact that partial CCS is a "best system" because it is demonstrated to reduce emissions of CO2 beyond those achieved by the business-as-usual supercritical boiler applications).  EPA has evaluated the costs of partial CCS, and considered nonair quality health and environmental impacts, satisfying itself reasonably that the plenary regulatory control requirements for CO2 pipelines and geologic sequestration of CO2 assure permanent sequestration of captured CO2, and that water use associated with use partial CCS do not result in undue burdens or infeasibility of application of the control technology.  See preamble section V.O.  This methodology is consistent with section 111 (a) and applicable caselaw.
To reiterate, EPA here has considered carefully the different demonstrated and feasible systems for controlling CO2 emissions; based on considerations of cost, energy, and nonair impacts, has determined which of these systems is the best system of emission reduction adequately demonstrated; and determined the emission limit this best system is capable of achieving considering the full range of variability experienced when properly designed and operated.  See also 77 FR 49490, 49494 (Aug. 16, 2012) (describing the three-step analysis in setting a standard of performance).  This formulation differs from the one put forward in UARG's comment, which appears to advocate the same starting point, identifying a range of achievable limits for all the different systems, and then picking a limit reflecting the factors of cost, nonair impacts and energy considerations.  EPA believes its approach reasonably and correctly reflects the statutory text.
Commenter 9666 (p. 26) states that `adequate demonstration' requires more than mere `technical feasibility'  -  the technology must be shown to be reasonably reliable, reasonably efficient, and not unreasonably costly.  The commenter claims that EPA has ignored these factors by failing to recognize that adequate demonstration and achievability are separate requirements.  The commenter further states (p. 27) that EPA appears ignorant of the requirements of National Lime I, 627 F. 2d at 435-42 and 431 n. 46, which requires that to be achievable, a technology-based standard must account for a source's normal range of operating variability when properly designed and operated technology is deployed.
The commenter again fails to correctly describe EPA's approach here.  The EPA agrees that technologic feasibility does not equate to "adequately demonstrated"  -  an adequately demonstrated system of emission reduction must be "reasonably reliable, reasonably efficient, and ... can reasonably be expected to serve the interests of pollution control without becoming exorbitantly costly in an economic or environmental way."    Essex, 486 F. 2d at 433.  The EPA has considered precisely those questions in determining whether partial CCS is adequately demonstrated, for example in carefully assessing the deployment and performance of the technology in full-scale commercial applications at the Boundary Dam and Dakota Gasification facilities.  Moreover, in selecting an achievable standard, the EPA has separately assessed the level of performance partial CCS can attain at both PC and IGCC facilities, and, consistent with National Lime I and progeny (see, e.g. 627 F. 2d at 433), has assessed the full range of operating variability (including different coal types and operation during startup and shutdown) in doing so.  See   Preamble section V. J.
Commenter 9666 states (p. 23) that EPA is adopting a "new four-factor balancing test that eliminates the distinct threshold questions of whether a standard is achievable based on the use of technology that has been adequately demonstrated"; asserts mistakenly that a standard need not be achievable for all types of sources in a category throughout the country; can be based exclusively on costs considered at a national level; and can be selected to promote an emerging technology even though that technology is not adequately demonstrated.
The commenter misstates or overstates on all counts.  First, as noted in the response above, EPA agrees that a best system of emission reduction must be adequately demonstrated (considering issues of cost, nonair impacts, and energy requirements) and then determines what level of performance that system can achieve.  This determination is not somehow trumped by consideration of technology promotion, nor has EPA done so here.  EPA has also considered the costs of a standard on both the level of the individual source, and nationally.  See, e.g.  preamble section V. H.5 (consideration of LCOE on an individual plant basis)  and 6; see also Sierra Club v. Costle, 657 F. 2d at 331 (concluding that EPA may consider the various factors on a national or regional level and not only on a plant-specific level).  The EPA has also shown how the actual standard of performance is achievable for all types of sources in the category.
Commenter 9666 notes (p. 21) that EPA has traditionally set NSPS such that at least 99 percent of new units would be expected to comply.
EPA believes that any new steam electric plant can meet the promulgated standard of performance and that there are multiple compliance paths for doing so.
Commenter 9666 states that an adequately demonstrated system must have an operational history that shows more than mere technical feasibility: it must be dependable, effective, individually affordable, and "based on actual operating experience with the source category or at sufficiently similar sources."
The commenter is incorrect as a matter of law, given that case law indicates a standard of performance can be based on extrapolations, literature, and testimony of vendors and experts.  Portland Cement 486 F. 2d at 402.  However, the issue here is mostly academic, since here a chief justification for the final standards of performance is the full scale commercial operation of both post-combustion CCS in the steam electric generating sector, and pre-combustion CCS in a sufficiently related application to be readily transferable to the steam electric source category.
Commenter 9666 stated that after EPA has identified the emission levels achievable through the use of adequately demonstrated technology, the Agency selects a standard from the range of demonstrated technologies that represents the best balance of economic, environmental, and energy considerations. Sierra Club, 657 F.2d at 330. Commenter further stated that at this stage, in addition to the statutory factors of the cost of achieving such reduction and any non-air quality health and environmental impact and energy requirements, CAA 111(a)(1), EPA may consider a proposed standard's projected emission reductions and its potential to promote technological innovation, Sierra Club, 657 F.2d at 326, 347. Commenter further stated that in determining BSER, EPA must ensure that standards do not give a competitive advantage to one State over another in attracting industry. Id. at 325.
See responses immediately above.
Commenter 9666 stated that EPA may not use national-level costs and aggregate environmental and energy impacts driven by projections that few new units will be built to justify a standard that would impose large costs and impacts at the source level. Commenter further stated that the CAA allows EPA to account for national-level impacts as a safety valve to avoid standards of performance that cause more economic or environmental harm than they prevent, and not as a method for the Agency to demand additional emission reductions.
EPA is considering costs on an individual plant basis, as noted in responses above.
Commenter 9666 stated that EPA's interpretation of the requirements for a standard of performance under section 111(a)(1) is fundamentally flawed. Commenter further stated that the EPA's legal analysis departs significantly from the text of the CAA and is based on misinterpretations and omissions of the relevant case law. In particular, EPA errs by: (i) eliminating the requirement of "adequate demonstration" and replacing the CAA's legal requirements with a novel four-part balancing test; (ii) asserting that a standard of performance need not be achievable by all types of new sources in a category throughout the country; (iii) considering long-term, nationwide impacts at the expense of unit-specific impacts; and (iv) relying on an asserted interest in "technological development" to mandate technology that has not been adequately demonstrated.
EPA disagrees. See responses above.
Commenter 9666 stated that EPA's proposed rule articulates, for the first time in the over 40 year history of NSPS rulemaking, a four-part balancing analysis for determining BSER and setting NSPS. Id. at 1462. Commenter further stated that the Agency asserts that the D.C. Circuit has directed EPA to consider four key considerations to determine the best demonstrated system: (i) feasibility; (ii) size of emissions reductions; (iii) costs; and (iv) promotion of technology development. Commenter further stated that the EPA's claims that it has the discretion to weigh these considerations, may determine that some merit greater weight than others, and may treat some source categories differently from others. Id. Commenter further stated that the D.C. Circuit has outlined an entirely different analysis for EPA to follow when setting standards under section 111(b), which EPA has inexplicably abandoned in this rulemaking.
See responses immediately above.
Commenter 9666 stated that although the CAA does allow EPA to balance factors such as cost, emission reductions, energy and non-air quality environmental impacts, and technological development, see id. at 347, it may do so only after making the threshold findings that the technology underlying the proposed standard has been adequately demonstrated and that the standard is achievable using that technology. Commenter further stated that the EPA does not have discretion to find that factors such as size of emission reductions and promotion of technological development outweigh the requirements of adequate demonstration and achievability, as EPA's proposed four-part balancing test would allow.
EPA has not done so. See responses above.
Commenter 9666 stated that the interpretation of section 111 that EPA advances in this proposal would write the adequate demonstration and achievability requirements out of the CAA entirely. Commenter further stated that the EPA appears to have combined these two distinct threshold requirements into its consideration of the technical feasibility of the proposed standard, with the Agency free to grant this factor as little or as much weight as it deems appropriate relative to the other three factors described. 79 Fed. Reg. at 1462-63. Commenter further stated that at the outset, this approach fundamentally misstates the legal requirements for standards of performance under section 111 by incorrectly assuming that it is the achievability of the standard, rather than the reliability, effectiveness, and cost of the underlying control technology, that must be adequately demonstrated. Id. at 1463 (ability of plant to meet standard on a few occasions adequately demonstrated that the standard was achievable). Commenter further stated that the D.C. Circuit has repeatedly held that it is the underlying technology that must be adequately demonstrated, and the ultimate emission standard that must be achievable. See, e.g., Essex Chem. Corp., 486 F.2d at 433; Nat'l Lime Ass'n, 627 F.2d at 430.
As noted in previous responses, EPA agrees that a best system of emission reduction must be adequately demonstrated (considering issues of cost, nonair impacts, and energy requirements) and then determines what level of performance that system can achieve.  This determination is not somehow trumped by consideration of technology promotion, nor has EPA done so here.  EPA has also considered the costs of a standard on both the level of the individual source, and nationally.  See, e.g.  preamble section V. H. 5 (consideration of LCOE on an individual plant basis) and H.6; see also Sierra Club v. Costle, 657 F. 2d at 331 (concluding that EPA may consider the various factors on a national or regional level and not only on a plant-specific level).  The EPA has also shown how the actual standard of performance is achievable for all types of sources in the category.
Commenter 9666 stated that in the proposed rule, EPA states that it "may consider the various factors it is required to balance on a national or regional level and over time, and not only on a plant-specific level at the time of the rulemaking." 79 Fed. Reg. at 1465 (citing Sierra Club, 657 F.2d at 351). Commenter further stated that the Sierra Club authorizes EPA only to examine the national scale in addition to not instead of assessing a standard's impact on individual sources. See Sierra Club, 657 F.2d at 330. Commenter further stated that before proceeding to consider broader-scale factors, the Agency must first determine that the source-level impacts of its proposed standard are consistent with all of the statutory criteria of section 111. Commenter also stated that the EPA may not set an NSPS based on national-scale considerations that would impose unreasonable costs, environmental impacts, or energy requirements at the level of individual plants.
EPA has based its determination of BSER, and its adequate demonstration, on source-level impacts.  See, e.g. preamble section V.H.4 (capital costs considered on individual plant basis).
Commenter 9666 stated that the EPA misapplies the statutory factors for determining a standard based on the "best system of emission reduction." Commenter further stated that the EPA improperly focuses on the impacts of the proposed NSPS on a broad national level - impacts that are only minimal because the Agency incorrectly projects that few EGUs subject to the standard would be built. Commenter further stated that at the same time, EPA ignores that CCS is geologically out of reach, or otherwise prohibitively expensive for individual new sources throughout the country. Commenter further stated that the Agency's cost estimates are unreasonable, and its proposal overlooks significant energy and environmental impacts associated with CCS, including parasitic energy requirements and increased water use. Commenter also stated that the EPA wrongly asserts that it can mandate an unproven technology in the interest of promoting technological development and that an NSPS need not be achievable by all sources throughout the country to which the standard applies.
CCA is not an unproven technology.  See NETL 2015 at 36 ("[t]he capture and compression technologies have commercial operating experience with demonstrated ability for high reliability"); preamble section V.D (post-combustion CCS, including operation at full scale at Boundary Dam, which plant developers characterize as operating highly reliably and exceeding expectations).  See previous responses explaining that the final standard of performance is achievable nationally, and so does not advantage any particular region of the country.  EPA has also assessed the rule's costs and other impacts on a per-plant basis, and per-plant considerations underly the BSER determination, including the determination that the BSER is adequately demonstrated.  See responses above.
Commenters (9396, 9487, 9650, 9774, 10017, 10023 and 10618) stated that the EPA is seeking to move away from establishing specific emissions standards based on the Best System of Emission Reduction (BSER) that is adequately demonstrated and achievable at the plant level source, regardless of the plant location. Commenters further stated that the EPA argues that it is not necessary to be able to site a coal plant with Carbon Capture and Sequestration (CCS) throughout the country since if a coal plant with CCS is too expensive or not feasible, a utility can build a natural gas or nuclear base load plant. Commenters further stated that the EPA indicates that regulation applies to electric supply and electric generation since coal, natural gas and nuclear power all serve the same essential function of producing electricity. Commenters further stated that this radical policy change would, in effect, permit EPA to make fuel choices in lieu of the current situation where fuel choice is selected by the utility through its integrated resource planning (IRP) and affirmed by state public utility commissions, municipal utility commissions or cooperative boards. Commenters further stated that the EPA's exercise of its discretion in balancing economic, environmental and energy factors, as practiced in this rule, would allow EPA to rule out whole categories of fuels based on an ever-increasing reliance on emphasizing CO2 emissions reductions over the economic costs to ratepayers and radically de-emphasizing the value of fuel diversity and energy security.
The premise of all of these comments is that a standard of performance predicated on partial CCS effectively precludes any new coal capacity from being built, or at least, precludes such construction in many areas of the country.  We show in the preamble to the final rule that sequestration and EOR capacity is widely available, that electricity can be transmitted long distances so that a coal plant can be located proximate to a sequestration site and still furnish electricity for areas which might lack such capacity.  See preamble section V.M.  However, we further note that there are alternative compliance pathways available to meet the promulgated standard which do not involve carbon capture and which would not face any geographic constraint related to CO2 transport and sequestration.
Commenters (7977, 9407, 10087 and 10097) stated that the NSPS is applicable to new facilities yet to be constructed, it is permissible for the administrator to "make a projection based on existing technology, though the projection is subject to the restraints of reasonableness and cannot be based on "crystal ball" inquiry." Portland Cement 665 F.3d at 391. Commenters further stated that since under Section 111 (a)(2) facilities that have not yet commenced construction at the time of a proposed NSPS regulation must meet the proposed standards, the corresponding technology must be available for new facilities "immediately as opposed to one or two years into the future". Portland Cement 486 F.2d 375, 391-392 (D.C. Cir 1973) (emphasis added). Commenters further stated that the EPA has provided no factual basis for determining the proposed BSER is immediately available, reasonably reliable or available at a reasonable cost.
The commenters correctly cite these portions of the caselaw.  The final standard of performance reflects full-scale, commercial operation of post-combustion CCS (and, for that matter, pre-combustion CCS) (although such full-scale operation is not an a priori requirement under section 111 (a)(1)).
Commenter 9034 stated that the Proposed Rule seeks to establish separate CO2 emissions standards for new coal- and natural gas-fired electric generating units ("EGUs") using separate determinations of BSER, which EPA claims have been adequately demonstrated. Commenter further stated that under the Proposed Rule, natural gas-fired units exceeding 850 MMBtu/hr would have an emissions limit of 1,000 lbs CO2/MWh, while those at or under 850 MMBtu/hr would have an emissions limit of 1,100 lbs CO2/MWh. Commenter further stated that these standards are based on natural gas combined cycle ("NGCC") technology as the BSER. Commenter further stated that the proposed standards for coal-fired EGUs, which includes fossil fuel-fired utility boilers and integrated gasification combined cycle ("IGCC") units, are 1,100 lbs COz/MWh over a 12-month operating period or 1,000-1,050 lbs CO2/MWh over an 84-month (7 year) operating period. Commenter further stated that these standards are based on CCS technology as the BSER. Commenter further stated that while new NGCC plants can purportedly meet the proposed standards for natural gas-fired units without any add-on emission controls, EPA concedes that coal-fired units will have to implement CCS technology to meet the proposed standards for coal plants. Commenter further stated that the EPA estimates that a super critical pulverized coal-fired EGU produces approximately 1,800 lbs CO2/MWhr. Commenter further stated that it would be impossible for coal-fired units to meet the proposed standards without controls to capture and store at least 40% of the CO2 produced. Commenter further stated that CCS technology is not commercially available for coal-fired power plants.
The commenters appear to be suggesting that if the EPA determines that the BSER for one category of sources is efficient generating technology, then the BSER for another category of sources must also be efficient generating technology and cannot be an add-on control system, like CCS. The proposition is logically flawed and incorrect. The EPA clearly has the authority to determine that an add-on control system is adequately demonstrated and is therefore the BSER for a category of sources, as the Agency has done countless times over the past 40 years. In regards to the comment that CCS is not commercially available for coal-fired power plants, the commenters are clearly wrong. Post-combustion CCS is not only commercially available for coal-fired plants, it is currently being operated at full scale at the Boundary Dam facility.
Commenter 9507 stated that the proposed NSPS represents a dramatic departure, both in its underpinning logic and its ultimate outcome, from greenhouse gas PSD/BACT permitting guidance issued in November 2010. Commenter further stated that the Agency's prerogative to change its own mind, we do not agree that the fundamental factors espoused in the 2010 BACT guidance have changed significantly in the intervening period. Commenter further stated that in this proposal EPA does not contend - nor could they - that those factors have changed in any way. Commenter further stated that the relationship between NSPS and BACT is salient because the former, once established, must serve as the floor level for the latter; i.e., BACT can be no less stringent than NSPS. Commenter further stated that the reverse can occur; a permitting authority may issue a more stringent emission standard than NSPS if, on a case-by-case basis, considering economic, energy, and non-air environmental impacts, it is determined that such lower standard is achievable. Commenter further stated that the case-by-case aspect is particularly telling. Commenter further stated that BACT standards may vary based on site-specific factors but NSPS must be achievable by all affected units. Commenter further stated that the current proposal fails to meet this fundamental criterion.
See preamble section XII.C.
Commenter 10023 stated that the EPA's claim that an NSPS can lawfully preclude construction of new sources in certain geographic locations is flatly wrong. Commenter further stated that it is inconsistent with the CAA, relevant case law.
This issue is not posed by the final standard given available sequestration and EOR capacity, plus alternative compliance pathways which do not involve CO2 capture.
Commenter 0784 stated that the EPA should annually review research and commercial-size pilot/demonstration projects to determine whether the best available technology has improved. Commenter further stated that when new technologies have been proven technologically and cost effective, the emission standards for the next new plants can be made more stringent. Commenter further stated that the FERC and DOE can serve as advisors to the EPA in evaluating best technologies, the robustness of the electric grid, and help determine the economic implications of proposed lower emission standards on customer utility bills, the general economics of the nation, and the public's health.
 The 8 year review period for NSPS creates an obligation for EPA to continue to monitor technical developments along the lines suggested in this comment.
Commenter 7977 stated that after reviewing the rationale for each of the four factors, the EPA failed to demonstrate and justify its selection of BSER for new coal-fired EGUs and IGCC units.
EPA disagrees. See preamble section V.
Commenter 10046 (Murray Energy) stated that the EPA's lack of understanding of what is needed to spur development of an emerging technology like CCS can be seen in its reliance on AEP's decision not to proceed with the second phase of its Mountaineer project, where CCS would be scaled up to operate on 235 megawatts (MW). Commenter further stated that the EPA cites AEP's cancellation of that phase of the project, allegedly due to AEP's inability to get state approval for recovery of the costs absent a regulatory requirement to reduce GHG emissions, as evidence that its proposal will promote further development of the technology, since it is now providing the regulatory mandate deemed lacking. Commenter further stated that the EPA's proposal applies only to new coal plants, and therefore would not have addressed the state regulatory concerns over cost recovery because there is no relevant GHG mandate for gas. Commenter further stated that the AEP could simply build a new gas plant and not have to address GHG emission reduction issues at all. Commenter further stated that the regulatory gap EPA identified in the AEP decision still exists because EPA is not setting a federal requirement to reduce GHG emissions from the fossil-fuel power sector generally it is only setting a federal requirement to reduce GHG emissions related to coal. EPA's failure to even recognize, let alone address, this issue in its assessment of a CCS mandate on new coal units reflects a profound misunderstanding of the issue.
First, AEP's reasoning is not "alleged." AEP stated publically and prominently that "as a regulated utility, it is impossible to gain regulatory approval to recover our share of the costs for validating and deploying the technology without federal requirements to reduce greenhouse gas emissions already in place".  http://www/aep.com/newsroom/newsreleases/?id=1704.  It is a fair inference from AEP's statement that providing regulatory certainty at the federal level for a GHG reduction requirement can promote use of GHG reduction technologies by creating a path to cost recovery.  It is also a fair inference that a federal requirement makes it easier to attract other partners ("[t]he uncertainty also makes it difficult to attract partners to help fund the industry's share" (id.)).  The EPA also notes the positive statements from AEP executives regarding the project and CCS generally:  "AEP still believes the advancement of CCS is critical for the sustainability of coal-fired generation."  This statement looks to the future, and thus encompasses potential new coal capacity.
Murray Energy disputes this, arguing that the AEP Mountaineer project involved retrofitting an existing source, and that in any case there is no regulatory certainty provided because the new source standards apply to coal, or at least only to new coal facilities would reduce GHG emissions ("EPA is not setting a federal requirement to reduce GHG emissions from the fossil-fuel power sector generally it is only setting a federal requirement to reduce GHG emissions related to coal").  The commenter's logic is difficult to follow.  There are new source standards for NGCC promulgated as part of this rulemaking.  New NGCC will also be subject to permit limits reflecting performance of Best Available Control Technology (BACT) (indeed, many commenters referred to the BACT permits for natural gas -- fired sources in their comments to this proceeding).   The commenter's distinction between new and existing sources also seems to be a distinction without a difference  -  AEP was addressing CCS technology, not whether the technology would be deployed on new or existing sources  -  and in any case the EPA is also adopting emission guidelines for existing sources as well.  EPA thus does not find this comment persuasive.  See also preamble section V.P.1.b.
Commenter 10396 stated that the EPA lacks adequate reasoning and justification to require CCS technologies to meet proposed emission limits for coal plants. Commenter further stated that this action sets a dangerous precedent allowing federal agencies to establish regulations not based on statutory or legal requirements and lacking sound technological or economic reasoning.
The commenter is mistaken.  The final standard of performance is well-justified based on the requirements of CAA section 111 (a).
Commenter 9773 stated that after accounting for the cost of CO2 transport, states like Wisconsin that lack proven sequestration sites will be at a competitive disadvantage when it comes to energy resources. Commenter further stated that this condition would be detrimental to Wisconsin's generation portfolio, which is predominantly coal, and our strong manufacturing economy. Commenter further stated that in the preamble to the proposed rule, citing Sierra Club v. Costle, 657 F.2d 298 (D.C. Cir App 1981), EPA recognized that an NSPS standard cannot create an advantage for one state over another. Commenter further stated that an NSPS that mandates the use of CCS will clearly put states without carbon sequestration capacity, such as Wisconsin, at an economic disadvantage which, as noted, is contrary to the CAA.
The final standard of performance does not mandate use of any particular technology, both because it is a performance standard (rather than a section 111 (b) (5) design standard), and because the EPA has reasonably found on the record that there are a variety of compliance paths available, some of which do not involve the necessity of carbon capture, EPA does not believe that this comment is accurate.
Selection of a Technology as BSER to Promote Technological Development
Commenters (10098 and 10660) stated that in the absence of actual operating data, EPA may also base its "adequately demonstrated" finding on "other qualitative methods, including the reasonable extrapolation of a technology's performance in other industries." Lignite Energy Council v. USEPA, 198 F.3d 930, 934 (D.C. Cir. 1999) ... see also Int'l Harvester, 478 F.2d at 642 ("One must distinguish between prediction and prophecy" by requiring "a showing of reliability of the methodology of prediction."). Commenters further stated that although EPA may take into consideration emerging technologies, it ultimately must rely on hard, objective data demonstrating that the technology will perform reliably for the source category under consideration. Commenters further stated that standards may not be based on emission control technologies that are "purely theoretical or experimental," Essex Chem., 486 F.2d at 434, nor "based on a 'crystal ball' inquiry." Portland Cement Ass'n, 486 F.2d at 391; see Costle, 657 F.2d at 362 (emission limit could not be achievable based on test data from "non-lime/limestone processes" because they "are not widely available"). Commenter 10098 (API pp. 16-17) draws from these cases the proposition that, although BSER may be an emerging technology, "[a]ll projections of future performance must be grounded in a showing that control technologies are ready for relatively wide-spread commercial use" after considering cost and other enumerated factors.  The commenter, in particular, cites Sierra Club, 657 F. 2d at 362, for this proposition.
These comments accurately quote these passages from the caselaw.  However, API goes too far in its assertion that a control technology must be in widespread commercial use as a pre-condition to its selection as BSER.  Indeed, consistent with the legislative history to section 111, the D.C. Circuit has held otherwise since the inception of its review of section 1111 NSPS. Thus, in Portland Cement, the court stated "The Senate Report made clear that it did not intend that the technology `must be in actual routine use somewhere'.  The essential question was whether the technology would be available for installation in new plants".  486 F. 2d at 391, quoting S. Rep. No. 9-1196, 91[st] Cong. 2d Sess. 16 (1970).  The commenter, moreover, reads too much into Sierra Club.  At issue in this part of the opinion was whether a level of 92 % removal was achievable using scrubbers.  The court upheld the standard, even though it was "higher than has been actually demonstrated over the long term by currently operating lime scrubbers at plants burning high sulfur coal."  Id. at 364.  Key items of record information providing substantial support were EPA's engineering description of steps that could be taken to improve performance, technology vendors' support for the standard, and availability of the technology performing at the higher level overseas.  Id. at 363-64.  The court looked exclusively to information on lime/limestone systems for evidence of achievability, given EPA's emphasis on these systems and because "non-lime/limestone processes are not widely available".  Id. at 362.  EPA views this part of the opinion as specific to the facts involved, where the agency itself placed emphasis on a different technology to show that a particular level of performance was achievable.  The facts here differ.  At issue here is availability of partial CCS (rather than its level of performance), and EPA has shown both that the technology is available (including full-scale operation at the Canadian Boundary Dam facility), how (for pre-combustion applications) it can be adapted for use at an IGCC facility (should a source choose this alternative compliance path), and how pilot and demonstration scale projects can be successfully scaled up.  These facts are similar to those which the court cited to uphold the 92% standard (e.g. explanation of how performance can be adapted, foreign facility operation, some full scale commercial application).
Commenters (9201, 9425, 9514 and 10098) stated that the EPA has exceeded its authority under the NSPS to enact technology-forcing provisions by selecting a standard that can only be met by a single control technology that is not yet commercially viable. Commenter 10098 further stated that the Clean Air Act requires a review of the NSPS no later than every eight years to determine if adequately demonstrated technologies have changed. Commenter further stated that after that review, if a new control technology meets all the CAA criteria, EPA may then propose changes to the NSPS.
First, the record here indicates that partial CCS is adequately demonstrated:  available for the next new coal EGU (either SCPC or, should an alternative compliance pathway be selected, IGCC), at reasonable cost and reliability after considering potential nonair quality impacts and energy requirements.  Nor is the technology in a chrysalis state.  Full scale, commercial demonstration of the technology exists for post- (Boundary Dam), and pre-combustion (Dakota Gasification, which technology is transferable to the fossil fuel EGU sector).
Commenter 10098 stated that in explaining how it selected CCS as BSER for coal-fired EGUs, EPA overstates the technology-forcing nature of the NSPS. Commenter further stated that nothing in Section 111 or EPA's implementing regulations supports this claim. See generally, 42 U.S.C. section 7411(a)(1) (defining "standard of performance"); 40 C.F.R, Part 60. Commenter further stated that the EPA relies heavily on Sierra Club v. Costle, 657 F.2d 298 (D.C. Cir. 1981) to justify its selection of CCS on technology-forcing grounds, however, Costle involved a very different situation. Commenter also stated that the EPA justified its use of a variable sulfur dioxide emission limitation, in part, to accommodate the future development of dry scrubbing technology. Id. at 340-341. Commenter also stated that the court upheld this decision because the emission limitation was deemed to be achievable by wet scrubbers and coal washing, which were commonly used in commercial operations at the time, Id. at 348, 356, not because EPA selected a risky experimental technology with a dearth of operating data. Commenter also stated that the court in Costle allowed EPA to select a flexible emission limitation that could accommodate both controls in commercial operation at the time and those on the verge of commercial operation. Commenter also stated that is far different than EPA's exclusive reliance on pollution controls that are not yet used in commercial operations.
The EPA is not here selecting a "risky experimental technology" in order to promote its development, nor is it raising consideration of technology development to a level of more importance than the enumerated statutory factors.  As noted in other responses, the EPA would select partial CCS as BSER whether or not the objective of promoting technology (as a factor in "best") were considered.  Moreover, CCS is considerably further developed than was dry scrubbing in 1979.  Unlike dry scrubbing in 1979, CCS (indeed, full CCS) is demonstrated in full-scale commercial application for both post- and pre-combustion capture.  Compare with Sierra Club, 657 F. 2d at n. 157; see also id. at 363-64 (upholding 92% removal standard for SO2 based on performance of lime scrubbing even though no existing plant was achieving that level of performance, based in part on EPA's engineering explanation of how performance could be improved).
Commenter 10098 stated that the EPA's assertion that a regulatory de facto mandate to use CCS is required in order to develop CCS is false and ignores the legal standard of Section 111. Commenter further stated that the EPA and other permitting agencies have repeatedly refused to require CCS for coal-fired EGUs as BACT. Commenter further stated that nevertheless, EPA claims that coal-fired EGUs using CCS are progressing to the demonstration stage. See 70 Fed. Reg. at 1,435 (discussing two CCS projects that are under construction and two other planned projects). Commenter also stated that in fact, CCS for coal-fired EGUs has progressed to some degree over the past thirty years on the strength of government-funded research and development, not regulatory mandates.
First, EPA may not, and has not ignored the requirements of section 111 (a).  it is the basis for the agency's action here, and EPA has carefully adhered to this provision's requirements.  Second, responses related to individual, plant-specific BACT determinations (none made by EPA involving a coal-fired EGU, incidentally) are found at preamble section XII.C.  See preamble section V.L regarding explaining how a regulatory standard predicated on performance of partial CCS can serve to promote use of the technology.
Commenters (10052 and 10098) stated that the goal of promoting the development and deployment of one specific technology - CCS - is unlawful under the CAA. Commenters further stated that there is no statutory or regulatory provision permitting EPA to consider the promotion or development of any specific control technology in determining BSER. Commenters also stated that in fact, the NSPS explicitly prohibits this rationale: CAA section 111(b)(5) does not "authorize the Administration to require, any new or modified source to install and operate any particular technological system of continuous emission reduction to comply with any new source standard of performance." 42 U.S.C. section 7411(b)(5). Commenters stated that the EPA's rationale that CCS must be selected as BSER (to the exclusion of any other option) in order to promote the development and deployment of CCS is arbitrary, capricious, and not in accordance with the Clean Air Act.
The final standard of performance is not a section 111 (b)(5) design standard.  It is a numerical performance standard, which can be met by any means a source chooses.  The EPA has shown that various compliance paths are available for coal-fired steam electric generating units, some of which do not involve CO2 capture.
Commenters (9780, 10023, 10036, 10098 and 10119) stated that the advancement of CCS technologies is not dependent upon EPA's selection of CCS as BSER, but largely on other factors. Commenters further stated that to the contrary, EPA's selection of CCS as BSER is likely to inhibit the development of the technology.
Commenter 9664 stated that the proposed rule discourages private sector investment in CCS technology development, and without that investment, the technology may never be commercialized.
See preamble section V.I.4 and L.
Commenters (5537 and 9664) stated that while the 1990 Amendments removed explicit references to the selection of technology, the D.C. Circuit has since expressed that the forward looking and technology-forcing nature of the statute has not changed. Commenters further stated that the recent case law aligns with decisions in all of the cases since section 111 was enacted, holding that EPA must look to the technological vanguard when setting new source standards so as to encourage innovation and avoid the additional costs associated with the need to later retrofit controls. Commenters also stated that the statutory factors which EPA must weigh (when setting performance standards) are broadly defined and include within their ambit subfactors such as technological innovation." Sierra Club, 657 F.2d at 346. Commenters further stated that the agency may thus promulgate standards that reflect "improved design and operational advances" that the regulated industry has yet to realize, so long as there is substantial evidence that such improvements are feasible and will produce the improved performance necessary to meet the standard. Id. at 364; see also Portland Cement Ass'n v. EPA (Portland Cement III), 665 F.3d 177, 190 (D.C. Cir. 2011) (EPA properly based the NSPS for new cement kilns on a recent and more efficient model, even though many older kilns still existed that did not utilize the same technology). Moreover, EPA can "extrapolat[e] . . . a technology's performance in other industries," and look beyond domestic facilities to those used abroad. Lignite Energy Council, 198 F.3d at 933-34 & n.3.
 The EPA largely agrees with these comments.
Commenter 9664 stated that the EPA's analysis of future electric power markets concludes that without the proposed rule, no new fossil fuel fired power plants with CCS will be built throughout both the 8-year assessment period described in the RIA, or through the more extended outlook provided by EIA's projection (2034). Commenter further stated that the EPA's analysis also concludes that, with the proposed rule requiring CCS on any new coal-fueled power plants, no new fossil fueled power plants with CCS will be built throughout the analysis period. Commenter also stated that it is difficult to discern how EPA has reasoned from these conclusions that the proposed rule will encourage deployment of CCS technology.
See preamble section V.I.4.
Commenter 9406 stated that the EPA never explains why, in its view, requiring CCS of coal-fired units would promote the development and implementation of technology, but requiring it of gas-fired units would not. Commenter further stated that in fact, by offering the choice between CCS-controlled coal on the one hand and uncontrolled NGCC units on the other, EPA is instead providing a distinct disincentive, and likely a roadblock, to the further development and deployment of CCS technologies. Commenter also stated that given the cost disparities, as admitted by EPA in its LCOE analysis and discussed earlier in these comments, between CCS equipped coal units and NGCC units without CCS, the proposed NSPS simply and irretrievably incentivies a further build-out of NGCC units and the freezing of any new investments in the development of CCS. Commenter stated that by effectively forcing utilities to choose natural gas over coal, EPA just as effectively frustrates the further development and implementation of CCS technology, because no one is required to install CCS on gas units.
 See preamble section IX.C.4.
Commenter 9406 stated that the EPA has made consistent practice of determining BSER under section 111(b) by examining existing sources, as well as technologies that have been either newly developed or used only in other industries. Commenter further stated that the EPA has followed that practice in this rulemaking for coal-fired units.
Case law has held repeatedly that BSER need not be based on technology already operating at commercial scale.  See preamble section V.G.1 and responses above.
Commenter 10034 stated that the reason that EPA determined that partial CCS was BSER was that this system ensures that any new fossil fuel-fired utility boiler or IGCC unit will achieve meaningful emission reductions in CO2, and it will also encourage greater use, development, and refinement of CCS technologies. Commenter further stated that the EPA's analysis indicates that this rule not result in "meaningful" emission reductions, or even in any emission reductions at all. Commenter also stated that the fact that EPA does not predict that any new coal-fired power plants will be built means that there will not be an opportunity for "greater use, development, and refinement of CCS technologies." Commenter stated that any use and development of CCS technologies will only come from existing EGUs that are not regulated by this standard. Commenter also stated that the on both counts, EPA's determination of BSER rings hollow due to the contradictions between these goals and EPA's cost estimates and EGU projections. Commenter stated that either the reasons why EPA determined partial CCS as BSER are false, and the regulation will not result in significant CO2 reductions, or EPA's projections for coal-fired power plants are inaccurate, and the regulation will have substantial costs.
In some ways, the various commenters on this issue are trying to have it both ways.  Public comments from industry to EPA's initial proposal, which would have based a standard on performance of NGCC as BSER, maintained that a standard should reflect the possibility of new coal-fired capacity being constructed, and comments both to that proposal and the present one further maintained that a standard should reflect performance of an SCPC.  We demonstrate in the record here both that post-combustion CCS is available, technically feasible, and adequately demonstrated within the meaning of section 111 (a), and that its performance will result in considerable reductions of CO2 compared to an SCPC.  See preamble section V.K.  Although we continue to project that no new non-compliant coal-fired capacity will be constructed during the review period for reasons unrelated to this rule, see RIA chapter 4, if commenters are correct (although no specifics appear in any of the comments), the regulatory standard will not only result in emission reductions but will also serve to promote the technology.  See preamble section V.I.4 noting among other things AEP's public statements of withdrawing from the Mountaineer (successful) pilot project based on lack of regulatory certainty that standards based on use of CCS will be required, and general uncertainty as to what will be required.  That uncertainty is now eliminated.
Commenter 9666 stated that the EPA is correct that the D.C. Circuit has allowed the Agency to consider "which level of required control will encourage or preclude development of a technology that promises significant advantages" with respect to the statutory factors of cost, environmental, and energy impacts. Sierra Club, 657 F.2d at 347. Commenter further stated that this consideration may come, however, only after EPA has eliminated as BSER those technologies that have not been adequately demonstrated. Id. at 330. Commenter also stated that the Agency cannot use section 111 to mandate the use of unproven control systems under the guise of "promoting technological development." Commenter stated that the CAA permits EPA to consider what emission limit, selected from a range of limits achievable using adequately demonstrated controls, would encourage the development of other technologies not chosen as BSER. See id. at 348 (noting that technology being promoted was not adequately demonstrated or BSER).
The EPA agrees that simply promoting an otherwise unproven technology, no matter how promising, would be insufficient to show that the technology is "adequately demonstrated" under section 111 (a).  The EPA has not done so here.  After careful consideration of technical feasibility, cost, nonair quality impacts and energy requirements, the agency has found that partial CCS is BSER.  Key supporting evidence for this determination is the successful operation of the technology at full commercial scale (unlike the situation for dry scrubbing in Sierra Club, cited by the commenter).
Commenters (4926, 8501, 9396, 9486, 10391 and 10395) stated that the EPA is wrongly conflating adoption of proven, reliable, cost-effective and achievable technology with the ability to force technology development by requiring adoption of a technology still in development. Commenters further stated that the EPA inappropriately seeks to force technology development through a BSER determination. Commenters further stated that the EPA argues that only by requiring the technically feasible CCS technology will industry develop and adopt it. Commenters further stated that the D.C. Court of Appeals has found that a newer technology must meet a far higher standard to assure that it is achievable by industry. Commenters further stated that where deployment of the technology is very limited, then cost becomes a much more significant factor in determining BSER. Commenters further stated that the EPA claims that a D.C. Circuit Court of Appeals decision, Portland Cement Ass'n v. Ruckelshaus, 486 F.2d 375 (D.C. Cir. 1973), supports its position that Section 111 is technology forcing, quoting the court as stating that Section 111 looks toward what may fairly be projected for the regulated future, rather than the state of the art at present, since it is addressed to standards for new plants. Commenters further stated that the EPA fails to mention is the court's further statements that, it is the achievability that is at issue, and, since the standards here put into effect will control new plants immediately, as opposed to one or two years in the future.
The EPA is mindful that new source standards must be met by the next plant to be built, and is not basing its BSER determination on the desire to promote an emerging technology.  As noted in the preamble and in other comment responses, the EPA would make the same determination whether or not considering the (legitimate and recognized) factor of technology innovation (as an aspect of best system) while weighing the enumerated statutory factors.  Cf. Sierra Club, 657 F. 2d at 346 ("So long as EPA considers innovative technologies in terms of their prospective economic, energy, nonair health and environmental impacts the agency is within the scope of its authorized analysis").
Commenter 10618 stated that the States have retained authority for the regulation of electricity production and no federal statute provides EPA with authority to preempt state decisions regarding the need for, location of, design, services provided by, or rates to be charged to recover the costs of electricity generation. Commenter further stated that the EPA's standard of 1,100 pounds of CO2 per MWh of electricity and its reliance on CCS to support that standard, usurp States' authority to incentivize siting and development of the more efficient coal-fired generating technologies that EPA rejected in establishing the standard. Commenter further stated that the EPA fails to recognize the broader role coal production and handling play in the economies of certain States, and the unavailability of economic opportunities for CCS to be used in conjunction with EOR opportunities.
EPA is mindful of States' authorities.  Nothing in the final standard of performance preempts state decisions regarding state public utility authority regarding location, design, or rates.
Commenters (9197 and 10294) stated that instead of mandating technology that is not commercially-available, the final NSPS rule needs to recognize the DOE timeline and allow for commercially-available technology to reduce CO2 emissions and allow utilities the flexibility to continue to innovate and achieve greater efficiency, as well as allow commercial CCS technology to "come into its own," all while utilizing our abundant, affordable, and reliable coal reserves. Commenters further stated that failure to do so will greatly increase electricity prices, increase reliance on natural gas and threaten the reliability of the grid by diminishing fuel choices to generate stable, baseload electricity, as well as cause the loss of thousands of jobs in the coal-mining and manufacturing sectors.
The DOE timeline referred to by commenters was for full CCS, not partial.  Nor is EPA mandating use of a technology in this rule, but rather adopting a standard achievable through use of BSER but which can be met in any manner a source chooses.
Commenter 9486 stated that any requirement that results in the reliance of one particular control technology is in contradiction with Section 111 (b)(5) of the CAA. Commenter further stated that the EPA has evaluated GHG emission reductions focuses solely on a limit of CO2 per megawatt hour and only relies on CCS as a means to meet the requirement. Commenter further stated that the EPA has not adequately evaluated other possibilities of achieving cost-effective reductions, including the use of more efficient generation such as Ultra-Supercritical Generation.
As noted in other responses, the final standard is not a section 111 (b)(5) design standard given that there are multiple potential compliance pathways.  As explained in section V.P of the preamble to the final rule, ultra-supercritical PC units still do not perform as well as units utilizing post-combustion partial CCS.
Commenter 9497 stated that the EPA's past experience in the successful promotion of emissions reductions in the power sector should serve as a guide in its current efforts with respect to CO2. Commenter further stated that the success of efforts to control SO2 and NOx emissions resulted from the synergies between the push of technological development and the pull of regulation. Commenter further stated that beginning with the 1970 Clean Air Act, such synergies between the push of technologies developed through government-supported research, development and demonstration (RD&D) programs, and the regulatory pull of pollution control rules, including the compliance flexibility allowed by cap and trade programs, were highly effective in reducing power plant emissions of SO2 and NOx. Commenter further stated that when cap and trade proves unavailable, setting emission limits must take into consideration the maximum feasible pace of technological RD&D. Commenter further stated that it took more than a decade of U.S. government RD&D sponsorship for SO2 wet scrubbers to be perfected from an already existing technology developed in Britain before World War II, and decades longer for scrubbers to reach their current efficiency and economics of operation.
 See preamble section V.L and V.I.4.
Commenter 9497 stated that given the current costs and stages of the necessary technology, EPA's proposed rule can be expected to stifle, not promote, investment in CCS, because it raises the prospect of penalties when and if CCS fails to achieve the standards. Commenter further stated that with the rule in place with specific, restrictive standards utilities will be more reluctant to commit time, effort and dollars to unproven technology, even if it promises some degree of CO2 control. Commenter further stated that utilities and their state regulators will have even greater incentives to build only gas-fired generation resources to meet load growth and replace retiring power plants.
The technology is not unproven.  It is demonstrated at full scale at Boundary Dam, and (as pre-combustion CCS) at Dakota Gasification.
Commenter 9396 (AFFORD p. 16 and Table 1) contrasted the amount of information available for wet scrubbers and dry scrubbers in 1971 and 1979 with the state of development of CCS here.  Specifically, the commenter noted the amount of operating capacity, financing, and construction, and concluded that far less operating history and information is available for CCS than for wet scrubbing (which was judicially sustained as BSER), and that the situation is more comparable to dry scrubbing (found not to be adequately demonstrated).
See preamble section V.G.3, as well as other comment responses, explaining that there is in fact considerably more information regarding the demonstration and feasibility of post-combustion CCS than was available for dry scrubbing, and that EPA easily satisfies the standard set out by the court in Sierra Club for showing that a technology is demonstrated.
Commenters (9650 and 10046) stated that the EPA has no reasonable basis to conclude that a CCS mandate will do anything other than retard CCS development, the EPA is obligated, for this reason alone, to change its proposal. Commenters further stated that it is also required because the legislative history EPA cites in the preamble makes clear that Congress did not grant EPA authority to set a technology-forcing NSPS that would inhibit development of the technology EPA is trying to force.
See preamble section V.I.4.
2.1.4 Promulgation of Rules Not Proposed
Commenter 10098 stated that the NSPS rulemakings are subject to CAA section 307(d). CAA section 307(d)(1)(C). Commenter further stated that among other requirements, the rulemaking proposal must "be accompanied by a statement of its basis and purpose," that includes: (A) the factual data on which the proposed rule is based, (B) the methodology used in obtaining the data and in analyzing the data; and (C) the major legal interpretations and policy considerations underlying the proposed rule. Id. section 307(d)(3). Commenter also stated that all of those required "data, information, and documents" must be "included in the docket on the date of publication of the proposed rule." Id. CAA section 307(d) also establishes requirements for final rules. Commenter stated that among other things, the promulgated rule must be accompanied by (1) a statement of basis and purpose like that required for the proposed rule, (2) an explanation of the reasons for any major changes in the promulgated rule, and (3) a response to each of the significant comments submitted during the comment period. Id. section 307(d)(6)(A), (B). Commenter further stated that these requirements are fundamental to both reasoned decision making and judicial review. Small Refiner Lead Phase-Down Task Force v. EPA, 705 F.2d 506, 519 (D.C. Cir. 1983) (the fundamental purpose of CAA section 307(d)(3) is to require that "EPA give a detailed explanation of its reasoning at the proposed rule stage" of the rulemaking process); Home Box Office, Inc. v. FCC, 567 F.2d 9, 35 (D.C. Cir. 1977) (per curiam) (without a response to significant comment, the "opportunity to comment is meaningless").
EPA has fully complied with all requirements of CAA section 307 (d), including explanations for changes from the proposal made in response to public comment.  See, e.g. preamble section IV.B.1.
Commenter 5731 stated that the best system of emission reduction must be source-based and not system-based. Commenter further stated that standards of performance should be based on reductions in CO2 emissions that can be reasonably achieved through actions at individual electric generating units, such as on-site energy efficiency measures. Commenter further stated that once the source performance standards are set, then the states should have flexibility in implementing the standards to help reduce compliance costs.
We discuss in the preamble our views on the type of BSER that the EPA may determine under CAA section 111(a)(1).
Commenters (0840 and 5731) stated that the States should be afforded maximum flexibility and discretion in developing their plans and determining how each EGU within the state may comply, taking into account remaining useful life. Commenters further stated that each state is different with respect to electric generation mix and energy markets. Commenters further stated that with such diversity, there can be no one-size-fits-all approach. Commenters further stated that a single numerical standard for all EGUs is not feasible, but state plans could justify source-specific standards and a best management practice approach, including heat rate improvements through operations optimization and best available technology economically achievable.
This comment refers to provisions in CAA section 111(d)(1) and is not relevant for this section 111(b) rulemaking.
One commenter (1681) stated that EPA's carbon regulations should provide states with all the flexibility they need in order to develop plans that suit their unique circumstances, including continuing their reliance on coal if they choose that approach. Also, the EPA must give states ample time to develop and implement their plans.
This comment refers to provisions in CAA section 111(d)(1) and is not relevant for this section 111(b) rulemaking.
Commenter 9425 supported the flexible concepts of using energy efficiency, demand side management, renewables, biomass, offsets and retirements as options to demonstrate compliance with a GHG NSPS.  Commenter requested the EPA to proceed with caution and avoid setting a "one size fits all" generating unit efficiency requirement.  Commenter further stated that energy efficiency improvement opportunities are unique to each facility and even each unit, and should be considered on a case-by-case basis.  Commenter further stated that credit should be given for efficiency improvements already achieved prior to rule implementation.
The final standard of performance is achievable (see preamble section V.J) and there are multiple available compliance paths for doing so.  The EPA believes this provides ample operational flexibility.
Commenters (0840, 2472, 4814, 4867, 8501, 8970, 9201, 9320, 9779, 9780, 10555 and 10869) stated that when EPA and the states ultimately promulgate standards for existing EGUs under CAA section 111(d), they should ensure that owners and operators of such existing EGUs receive the benefit of a safe harbor from the section 111 GHG standards for modified EGUs. Commenters further stated that owners and operators of EGUs should have certainty that physical or operational changes made to their facilities for the purpose of complying with a CAA section 111(d) standard will not trigger the standards for modified EGUs. Commenters further stated that the EPA has integrated such safe harbors in past CAA section 111(d) regulations.
We address this issue in the section 111(d) rulemaking.
Commenters (9486 and 10239) stated that the EPA's proposed approach to EGUs, we urge the EPA to avoid repeating the errors in this approach for other manufacturing sectors in the future. Commenters further stated that there are distinctions between the utility and manufacturing sectors that warrant fundamentally different considerations and approaches to regulating these other sectors. Commenters further stated that the GHG emissions associated with other source categories are generally significantly lower than those from EGUs, the technologies and processes utilized are typically more complex, and the ability to switch fuels and designs is more constrained. Commenters further stated that most manufacturing sectors, unlike EGUs, are trade exposed and are unable to pass through the cost of compliance.
This comment is beyond the scope of the present proceeding, although, as noted in other comment responses, since the inception of the section 111 (a) program, courts have noted that each standard is to be justified independently, and determinations for one industry are not precedential for different industries. See Portland Cement, 486 F. 2d at 389.
Commenter 9779 stated that to avoid unintended negative impacts on the power sector, PSE requests that EPA allow the use of market-based approaches, as contemplated in the Presidential Memorandum, rather than require technology-forcing approaches similar to those proposed in the current Section 111(b) rule.
 The final standard of performance is achievable by a number of different pathways, and is not constraining.  See also preamble section XI.
Commenter 9779 requested the EPA to promote off-facility measures that could be implemented across the entire power sector, such as credits for renewable resources and energy efficiency measures.
We discuss in the preamble the types of the BSER under section 111.
Commenter 10119-2594 states the Proposed Rule must be revised to include performance standards for modified and reconstructed facilities in accordance with the plain requirements of the Clean Air Act.  Commenter 10119 further objects to EPA's proposal with respect to the Wolverine project in Michigan, the Plant Washington project in Georgia and the Holcomb 2 project in Kansas.
In this rule, EPA is finalizing requirements for reconstructed sources and certain modified sources. With respect to certain other modified sources, EPA is deferring action, as discussed in Sections VI and IX in the Preamble. With respect to the comment on EPA's proposal concerning the Wolverine project in Michigan, the Plant Washington project in Georgia and the Holcomb 2 project in Kansas, as discussed in Section III.J. of the preamble, EPA is not finalizing this proposal.
Commenter 9596 stated that the EPA should continue to employ its authority to subcategorize among EGUs in the utility sector. Commenter further stated that the EPA's decision to set a single standard for all fossil-fueled EGUs in its now-withdrawn 2012 proposed NSPS for CO2 was not only legally suspect, but also represented bad energy policy because it would have effectively banned the use of coal for new electricity generation. Commenter further stated that the EPA's decision to propose separate standards for coal and natural gas units corrects the agency's earlier departure from its own precedent, and represents a more appropriate approach to regulating EGUs.
We are finalizing separate standards for steam EGUs and for natural gas units in the final rule.
Commenter 9513 stated that in reviewing the proposed NSPS we are mindful of the relationship between the NSPS under 111(b) and the forthcoming guidelines for existing sources that the EPA will issue in June of 2015 under section 111(d). Commenter further stated that as a legal matter regulation under section 111(b) is a predicate for the 111(d) guidelines that will follow for existing sources. Commenter further stated that the EPA may find it difficult to justify a requirement for efficiency improvements at the large majority of existing units that would already meet the NSPS. Commenter further stated that the EPA proposal would exempt large numbers of CTs and CCGTs from the NSPS, which could affect the manner in which the 111(d) guidelines address existing CT and CCGT units.
The applicability requirements of this rule and the section 111(d) are consistent, so that this rule serves as a predicate for the section 111(d) rule with respect to the sources that are affected EGUs under the section 111(d) rule.
Commenter 4814 stated that the timing of requirements for reducing GHG emissions from existing power plants should factor in the realities of coal plant closures. Commenter further stated that these plants are being closed due to several factors including: economics of the plants versus natural gas facilities; cost of environmental compliance; uncertainty regarding additional environmental compliance; little or no load growth in the utility service territories; and the natural end of useful life of a significant portion of the coal fleet in the U.S. Ensuring continued reliability must be a key consideration when these rules are established.
We respond to comments similar to this in the section 111(d) rulemaking. This comment is not relevant for this rulemaking.
Commenter 4814 stated that through resolutions adopted by the National Association of Regulatory Utility Commissioners and the Southeastern Association of Regulatory Utility Commissioners, public utility regulators agree with the attorneys general that the Clean Air Act and its implementing regulations for existing power plants limit EPA to issuing guidelines pertaining to existing fossil generating units. Commenter further stated that these regulators recommend that the guidelines recognize emissions reductions that have already been achieved. Commenter further stated that Regulators cautioned EPA not to impinge on the flexibility of states to develop and implement existing power plant regulations that lower both the cost and reliability risks from the regulation. Commenter recommended that EPA engage with the policymaker teams in all SSEB states as the President directed in his June 25, 2013, memorandum to EPA, and that EPA include other federal agencies and departments having expertise in and responsibility for the economy and the electric system.
We address comments similar to this in the section 111(d) existing source rule. This comment is not relevant for this rule.
2.1.5 Application of BSER
Commenter 10098 stated that it is a basic principle of administrative law that, where an agency changes its position, it "must supply a reasoned analysis." Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 57 (1983). Commenter further stated that the proposed rule dramatically reverses EPA's assessment of the state of CCS technology from the 2012 proposed rule but provides no reasoned analysis to support this departure. Commenter also stated that the EPA has not cited any new information justifying a change in its initial position that CCS should not be designated as BSER. Commenter stated that each of the projects it relies upon in the current proposed rule to justify its selection of CCS was also cited in the 2012 rule. Commenter further stated that no coal-fired power plant has begun successful commercial operations with a CCS unit and there have been no breakthroughs to ease the technical and economic burdens of the technology. Commenter further stated that many of these projects have suffered delays and/or significant cost overruns that threaten their viability. Without actual operating data or some new information showing that CCS has been successfully employed at the commercial scale, EPA cannot provide any "reasoned analysis" explaining its change in position.
The EPA finds dubious the commenter's proposition that a withdrawn proposal reflects a definitive agency position for which change requires a full-blown justification.  State Farm and progeny apply to changes from definitive positions established by final agency action.  Moreover, major aspects of the withdrawn 2012 proposal discussion of CCS remain unchanged.  There, as here, EPA indicated (initially) that CCS was technically feasible.  77 FR at 22414.  There, as here, EPA indicated that sequestration of captured CCS was technically feasible and available, and noted the Class VI regulatory program and the subpart RR reporting and monitoring rules as support.  Id. at 22415.  EPA proposed a 30-year compliance option based on performance of CCS (at a higher capture rate than the BSER ultimately selected here).  The less stringent standard being adopted makes this approach unnecessary.  The EPA has done further cost analysis since the 2012 rule which justifies the promulgated standard of performance.   In addition, the EPA is influenced by further experience gained from operation of CCS (including successful deployment of full CCS at the Boundary Dam facility  -  where the plant operators themselves predicted significant reductions in next CCS projects reflecting their operating experience), as well as current vendor estimates of CCS costs which are supportive of the estimates of costs on which EPA evaluated costs of partial CCS here.  Finally, EPA notes that the 2012 proposal was considering a higher capture rate (and commensurately more stringent standard of performance) than ultimately adopted here, so that the estimated costs were higher for that reason alone.
Commenter 9034 stated that the EPA's BSER determination also is defective because it failed to look beyond the costs of this rulemaking to consider the cumulative costs associated with the myriad of recent regulations impacting coal-fired EGUs, such as the Mercury and Air Toxics Rule, new effluent limitations guidelines for wastewater discharges, the Coal Combustion Residuals Rule, as well as numerous others. Commenter further stated that these regulations have already placed coal at a competitive disadvantage with respect to natural gas as a fuel for new generating capacity. Commenter also stated that requiring new coal plants to implement costly and unproven CCS technology will most certainly exacerbate this problem. Commenter stated that this is command and control, rather than market economics at work.
The commenter is incorrect.  The costs of these other rules are reflected in the baseline costs.  See NETL 2015 p. 29 (cost analysis for model plant designed to meet all standard for section 112 air toxics, and the most recent PM, SO2 and NOx limits); RIA at p. 4-7 ("For the analysis of the final 111(b) rule, the EPA used the IPM v. 5.14 base case, which relied on the electric demand forecast in AEO 2014.  The base case accounts for the effects of the finalized MATS and CSAPR rules, New Source Review settlements and state rules through 2014 impacting sulfur dioxide (SO2), NOx, directly emitted particulate matter and CO2, and final actions the EPA has taken to implement the Regional Haze Rule. The EPA's IPM base case also includes two federal non-air rules effecting EGUs: the Cooling Water Intakes (316(b)) Rule and the Disposal of Coal Combustion Residuals from Electric Utilities Rule").
Commenter 9034 stated that the SaskPower Project is located in Canada. Thus, it is not subject to U.S. laws and regulations and therefore is not relevant for purposes of the BSER determination.
The commenter is mistaken that a best system of emission reduction determination cannot consider deployment of a system outside of domestic boundaries.  The commenter cites no support for its proposition, and the EPA is aware of none.  Certainly, the language of section 111 imposes no such constraint; it refers to a "best system of emission reduction adequately demonstrated", not a best system of emission reduction deployed domestically which is adequately demonstrated.  See also Sierra Club, 657 F. 2d at 364 (achievability of standard upheld, even though no domestic source was achieving the promulgated limit, due in part to successful operation of the technology in Japan).
Commenter 10119 stated that it is possible that EPA chose to forgo advanced NGCC technology for natural gas power plants when it initially proposed a single standard for both coal- and natural gas-fired EGUs to allow coal-fired plants to meet that standard more easily. Commenter further stated that two standards are contemplated, however, any such rationale no longer applies. Commenter also stated that to the contrary, each standard requires a full explanation and accounting of its consequences.
EPA agrees, and has separately justified the standards of performance for new coal-fired EGUs and new NGCC.
Commenters (9426 and 9514) stated that the Clean Air Act ("CAA") provides that the EPA "shall, at least every eight years, review and, if appropriate, revise" 42 U.S.C. Section 7411(b)(1)(B) standards of performance for new sources. Commenter further stated that if in eight years CCS is developed to the point that the record supports a finding that CCS is BSER for fossil fuel-fired boilers and IGCC units, the EPA can make that finding and adopt corresponding emissions standards. Commenter also stated that the current record, however, does not support the EPA's proposed CO2 emission limits for new fossil fuel-fired boilers and IGCC units, being based, as it is, on the Agency's proposed finding that the misnamed partial carbon capture, which only results in separation, is BSER for these types of units.
The EPA believes that the record reasonably supports that partial CCS is BSER for fossil-fuel steam generating units.  For a response to the (mistaken) comment that the standard reflects separation only, see response to UARG (#9666) in unit <IP_ADDRESS> above.
Commenter 10087 stated that the EPA's rule arbitrarily proposes CCS as "best system of emission reduction" for coal, but not natural gas.
 See preamble section IC.C.4.
Commenter 9201 stated that the EPA's proposed finding that CCS is BSER for coal-fired EGUs rests in part on what the agency believes are insignificant CO2 emissions reductions from new advanced, higher-efficiency SCPC and IGCC units. Commenter further stated that the EPA concedes that equipping gas-fired NGCC units with CCS would result in significant CO2 emissions reductions. Commenter also stated that the it is impossible to reconcile EPA's recognition that significant emission reductions could be obtained through application of CCS to NGCC units with the agency's simultaneous determination that CCS is not BSER for NGCC, particularly once one considers EPA's other underlying assumption - that most new base load power plants constructed under this rule will be NGCC. Commenter stated that the EPA is eschewing CCS as BSER for the very type of power plant that will be built in nine out of ten cases, and notwithstanding EPA's concession that requiring CCS for those plants would result in significant additional CO2 reductions.
 See preamble section IX.C.4.
Commenter 9201 stated that the EPA also attempts to use the lower CO2 concentration in the flue gas stream of natural gas combustion as a reason for not finding CCS to be BSER for natural gas-fired units. Commenter further stated that there is ample demonstration of carbon capture on NGCC plants to obviate such concerns. Commenter also stated that the lower concentrations of CO2 in natural gas flue streams should lower the costs for carbon capture's application to NGCC in terms of capture, compression and storage, especially if new NGCC plants are operating as base load power and producing more CO2 as a result.
 See preamble section IX.C.4.
Commenter 9201 stated that the EPA speculates that while most natural gas turbines will serve base load demand, others will cycle more frequently than coal-fired coal plants; EPA also states that it is unclear how part-load operation would impact the efficiency and reliability of CCS. Commenter further stated that it is one that applies equally to coal-fired EGUs in the real world, as their operations are subject to economic dispatch, meaning that they too will cycle their operations. Commenter also stated that in the proposed finding that CCS is BSER for coal-fired EGUs, EPA does not evaluate or even mention this important consideration. Commenter stated that all of the literature EPA relies upon for its determination that CCS is BSER for coal-fired EGUs similarly (and equally incorrectly) assumes that these plants will not cycle frequently. Accordingly, the reason EPA proffers here for not finding CCS to be BSER for NGCC supports the very same finding for coal-fired EGUs.
 See preamble section IX.C.4.
Commenter 9201 stated that the EPA's reasoning that an NGCC plant might be delayed more than a coal plant if NGCC plants were required to use CCS is perplexing, to say the least. Commenter further stated that the EPA surmises that NGCC plants can be built more quickly than coal plants, so any delay occasioned by installation of CCS would have a relatively greater impact on NGCC plants. Commenter also stated that the delays involved in installing CCS should be the same, no matter the type of plant involved. Commenter stated that the EPA did not cite any evidence that equipping an NGCC unit with CCS is inherently or relatively more time-consuming than it is for a coal plant. Commenter stated that all of the technology is essentially identical; in fact, installing CCS on a coal-fired unit is likely to be more complex and time -consuming than installing gas on an NGCC unit, because of the need to assure that the carbon capture systems are compatible with the other emission control equipment on the coal-fired unit that are not present on a gas-fired EGU.
 See preamble section IX.C.4.
Commenter 9201 stated that the EPA has not supplied a reasoned and lawful basis for making different determinations on the technical feasibility of CCS as BSER for coal-fired EGUs but not for NGCC plants. Commenter further stated that each of the reasons offered by EPA is lacking in any support, is inherently contradictory, and demonstrates an irrational weighting of the considerations EPA claims are central to its proposed findings. Commenter also stated that the best and only permissible course of action is for EPA to reconsider and find that CCS is not BSER for coal-fired EGUs, just as it proposes to find that CCS is not BSER for natural gas-fired units.
 See preamble section IX.C.4.
Commenters (9514 and 10952) stated that the legislative history of section 111(b) indicates that Congress intended for NSPS to reflect the most highly-effective emission reduction systems that are technically and economically feasible, including new and innovative pollution control technologies that are not in routine use. Commenters (9514 and 10952) stated that the legislative history of section 111(b) indicates that Congress intended for NSPS to reflect the most highly-effective emission reduction systems that are technically and economically feasible, including new and innovative pollution control technologies that are not in routine use. Commenters further stated that the Congress attempted to insure that EPA would limit new source pollution "to the greatest degree practicable if the national goal of a cleaner environment was to be achieved." Essex Chem. Corp., 486 F.2d at 443 n.14. Commenters also stated that in interpreting the 1970 language of the CAA, the Portland Cement I court found that the term "adequately demonstrated" required a showing by EPA "that there will be 'available technology'" during the regulated future." Portland Cement I, 486 F.2d at 391 (emphasis added).
The EPA largely agrees with these comments.
Commenter 9514 stated that the 1977 amendments defined best technology "in terms of 'long-term growth,' [and] 'long-term cost savings.'" Sierra Club, 657 F.2d at 331 (quoting Clean Air Act Conference Report, 123 Cong. Rec. at 27,021). Commenter further stated that requiring new stationary sources to adopt pollution control technology at the time of construction, when plant owners and operators can most efficient install the equipment, rather than waiting for environmental degradation to occur and only then requiring expensive retrofits, achieves long term savings. See H.R. Rep. No. 95-294 at 185; see also Nat'l Asphalt Pavement Ass'n, 539 F.2d at 783.
Commenter 9514 stated that the in 1990, Congress amended section 111 once again, reviving the original (1970) language of section 111(a)(1). The D.C. Circuit has since expressed that "section 111 'looks toward what may fairly be projected for the regulated future, rather than the state of the art at present.'" Lignite Energy Council, 198 F.3d at 934 (quoting Portland Cement I, 486 F.2d at 391) (emphasis added). Commenter further stated that the recent case law aligns with decisions in all of the cases since section 111 was enacted, holding that EPA must look to the technological vanguard when setting new source standards so as to encourage innovation and yield long-term cost savings.
The EPA largely agrees with these comments.
Commenter 9514 stated that the EPA is easily within its authority to seek deep cuts in carbon emissions from EGUs based on the best available systems of emissions reduction. Commenter further stated that in fact section 111 requires the agency to set technology-based emissions limits for sources that cause or contribute to endangerment of public health or welfare, as fossil fuel-fired EGUs clearly do. See 42 U.S.C. section 7411(b)(1)(A), (B); see also AEP, 131 S.Ct. at 2533, 2536 (noting EPA's endangerment finding for greenhouse gases, including CO2, and stating that defendant power plants represent "the largest emitters of carbon dioxide in the United States").
The EPA largely agrees with these comments.  See also earlier response that section 111 requires technology-based standards, not standards which result in some specified quantum of environmental result.
Commenters (9194, 9734 and 10395) stated that the proposed NSPS for coal-fired EGUs requiring carbon capture is not supported by the existing state of carbon capture technology as applied to EGUs, and EPA does not have the discretionary authority to impose it in the way proposed in this rulemaking.
The commenters are mistaken.  See, e.g. preamble section V.D. (describing why post-combustion partial CCS is available, demonstrated at commercial scale, and operating reliably).
Commenters (9201, 9505 and 9677) stated that the Proposal suggests that Clean Air Act 111 allows a promulgation of a standard that is not achievable by substantial parts of a source category. Commenters further stated that this appears to have been arrived at by EPA through mischaracterization of the case law and legislative history cited in the Proposal. Commenters further stated that there is case law that indicates it was Congress intention for standards to be acceptable only if achievable "throughout the industry". Commenters stated that this is illustrated in Nat'l Lime Ass'n v. EPA, 627 F.2d 416 (D.C .Cir. 1980).
The EPA has shown that any new fossil-fuel fired steam generating unit could meet the promulgated standard, either through use of partial CCS or by alternative compliance pathways such as IGCC co-firing with natural gas.  EPA has also carefully examined variability of operating conditions and showing that the standard is achievable accounting for normal range of operating variability when control technologies are properly designed and operated.  See preamble section V. J.
Commenters (2470 and 9513) supported EPA's decision to revise its previously proposed rule by establishing separate categories for electric utility steam generating units (boilers and integrated gasification combined cycle (IGCC) units) and combined cycle units. Commenters further stated that the difference, however, in the CO2 emissions standards proposed in the revised proposed rule between coal-fired generating units and natural gas-fired combined cycle units is negligible.
The difference between the two subcategories is greater in the final rule.
Commenter 9665 stated that the EPA's determination of the "best system of emission reduction," or BSER, is critical to the establishment of Section 111(b) standards that are consistent with statutory requirements. Commenter further stated that the courts have found that this determination occurs in a three-step process: (1) EPA identifies a system/systems that has/have been "adequately demonstrated" for the affected sources in the category; (2) EPA determines the emission levels "achievable" using the adequately demonstrated system or systems; and then, finally, (3) EPA "exercises its discretion to choose an achievable emission level which represents the best balance of economic, environmental, and energy considerations." Commenter further stated that while any NSPS must be based on the performance of BSER with respect to the type of source to which the standard applies, individual new sources are not required to actually install or operate the particular technology or system identified as BSER, only to meet the numerical performance level established by the NSPS.
The final standard  -  1400 lbs. CO2/MWh  -  is quite evidently a numerical performance standard.
Commenters (2658 and 9515) stated that the Administration must perform a thorough analysis of costs and benefits, accounting for the cascading effects costly energy regulations will have on businesses, markets, employment and households.
EPA has carefully examined potential energy implications of the present standard, as required under section 111 (a).  Our conclusion, well documented, is that the final standards of performance will not have significant impact on energy requirements.  See preamble section V.O.3 and XIII.C.
Commenters (7977, 10023, 10046 and 10396) stated that the EPA cannot show that the proposed 1,100 lb CO2/MWh standard is "achievable" for Subpart Da units applying CCS. Commenters further stated that once EPA identifies a system of emission reduction as "adequately demonstrated," it must separately determine what emission level is "achievable" by individual sources applying that system. EPA has failed to do that.
The EPA has identified 1400 lbs. CO2/MWh as the level of emission reduction achievable by applying the best system of emission reduction adequately demonstrated.  See   preamble section V.J explaining why that level of performance is achievable.
Commenter 9654 stated that this move to reduce the flexibility of fuel usage is based in part on an erroneous assumption that all future GTCC power plants will operate only on natural gas without the need for liquid hydrocarbon fuels. Commenter further stated that this erroneous assumption alone should be sufficient to invalidate the proposed NSPS CO2 emissions limits.
 The final standard of performance is not set up to restrict available fuel usage, as the commenter would have it.  See preamble section V.I.4.
Commenter 10929 encourages the EPA to support the deployment of a diverse mix of new generating units by recognizing Best System of Emission Reduction performance unique for generating fuel type and design.  Commenter further requested that the EPA proceeds with imposing a CO2 emission rate constraint on new generating units, that EPA provide for NSPS emission rate restrictions that are developed to reflect the Best System for Emission Reduction considering commercially mature generation technology for each fuel type.
EPA has indeed promulgated separate standards for coal- and gas-fired units.
Commenters (7994 and 9723) requested the EPA to use this authority to subcategorize the EGU source category by the type of fuel burned, generating technology used, etc. and set separate performance standards for each subcategory of EGUs.
EPA has accounted for different coal types in its analysis of standard achievability, and shown that the standard is achievable considering different fuel types.  See preamble section V.J.  Subcategorization is consequently not appropriate.
Commenter 9422 stated that the EPA should make rules flexible enough that CCS can advance in the United States, which would allow for the transfer of CCS to developing countries that are building new coal plants. Commenter further stated that this would allow the United States to be a technology leader in carbon control technology and in the long run will do more to reduce CO2 globally than to simply ban new coal plants in the United States.
The final standard of performance relies on a lower capture rate than proposed and there are a number of compliance pathways available to achieve that standard.
Commenter 3594 requested that the standards require that all new EGUs, whether coal or gas, be designed to accommodate full CCS in the near future, and that a roadmap for intended improvements also be defined.  Commenter further stated that the goal is that all new units built under these rules will meet a standard of essentially zero net emissions, by a date, such as 2025, well in advance of the completion of their full service life.  Commenter further stated that this will allow the costs of such upgrades to be appropriately considered in the determination of prudent investments in new generation.
These comments are largely beyond the scope of this proceeding.  However, EPA has reasonably determined that full CCS is not BSER at this time.  See preamble section V.P.2.
Commenter 10048 stated that in identifying the best system of emissions reduction (BSER) for coal-fired boilers and integrated gasification combined cycle (IGCC) units, EPA chose emission limits that would force new coal boilers to install CCS technology. Commenter further stated that the Congress recognized that Section 111 may hamper the ability of air emissions sources to locate in certain places due to local air quality issues. Commenter further stated that since greenhouse gas emissions are associated with non-local, global effects, the proposed rule fails to comport with Congressional intent.
 The final standard of performance will not result in geographical constraints.  See preamble section V.M.
Commenter 10029 stated that given the current and projected price of natural gas it is unlikely that new coal EGU's will be built for some time. Commenter further stated that the likelihood that carbon capture will be deployed for PC, SCPC, IGCC, or Oxy Fuel in the next decade is rather remote. Commenter further stated that it is also unlikely that existing coal powered EGU's will be retrofitted with carbon capture when the cost of a new natural gas EGU is less than the carbon mitigation retrofit alone for an existing coal powered EGU. Commenter further stated that the logical reference case for CCS is then NGCC with post combustion carbon capture.
The comment is largely consistent with EPA's own analysis set out in RIA chapter 4.  Nonetheless, there are possibilities that new coal capacity might be built for energy-diversity reasons, or other non-economic concerns, in which case the standard of performance would result in emission reductions (both CO2 and SO2) over the base case.  See RIA chapter 5.
Commenter 9407 stated that the EPA's reliance on NRDC v EPA is equally off point. NRDC v EPA, 489 F.3d 1364, 1376 (D.C. Cir. 2007). Commenter further stated that this case centered on establishing Section 112 standards for existing composite wood production, where cost is not an issue, and had nothing to do with establishing Section 111 NSPS where, as EPA notes, the technology must be adequately demonstrated at a reasonable cost. Commenter further stated that neither NRDC v. EPA nor any other legal authority cited in this proposal stand for the preposition that an NSPS can relegate the siting of new facilities only within a few select areas of the nation. Commenter further stated that in fast any NSPS that geographically prohibits sources from locating throughout major portions of the country contradicts the statute and its legislative intent, and is therefore impermissible.
As noted in other comment responses, there are no geographic constraints imposed by the final NSPS here.  Adequate geologic sequestration and EOR capacity are available, or access thereto (including transmission of electricity to more distant customers via use of existing grid transmission (`coal-by-wire'), or sources can utilize another compliance method.  With respect to the Plywood MACT case, see responses above, stating that the case holds that EPA did not have to create a subcategory for a particular plant which could not comply with a technology-based standard, in part because other means of compliance were available.  That is very similar to the facts here.
Commenter 4814 stated that the existing plant regulation should provide guidelines that are achievable as best system of emission reductions adequately demonstrated for affected power plant units as prescribed under the Clean Air Act and its implementing regulations 40 CFR 60. Commenter further stated that 40 CFR 60 refers to affected facilities, not electricity systems.
We address comments similar to this in the section 111(d) rulemaking for existing fossil fuel-fired EUGs.  This comment is not relevant for this rulemaking.
Commenter 9590 stated that more fundamentally, the proposed standard is not based upon any "system" of actual emissions reduction from the source. Commenter further stated that the proposed standard is based solely upon one component of CCS carbon separation and capture - and, according to EPA, the disposition of the captured CO2 is outside the scope of the rule. Commenter further stated that the proposal is a standard for CO2 separation, and there is no emissions reduction of CO2 from the source. Commenter further stated that the CO2 emissions will actually increase because carbon separation and capture consumes a substantial portion of the plant's electrical generation output, so the plant will have to be designed to be substantially larger to accommodate the parasitic load needed to operate the carbon separation and capture process.
See response to commenter 9666 in unit <IP_ADDRESS> above.
Commenter 10607 stated that legal interpretations of the CAA have concluded that in determining whether BSER has been adequately demonstrated, EPA must consider certain factors, including four that EPA says are most relevant in this context:
   * Feasibility - Is the system of emission reduction technologically feasible?
   * Costs- Are the costs of the system reasonable?
   * Size of emissions reductions - What is the amount of emissions reductions that the system would generate?
   * Technology- Does the system promote implementation and further development of technology?
Commenter further stated that the EPA's determination that the BSER for coal-fired power plants is partial capture CCS technology is based on its conclusion that partial capture CCS provides meaningful emissions reductions, has been adequately demonstrated to be technically feasible, can be implemented at a reasonable cost, and promotes deployment and further development of the technology.
The EPA agrees with this comment.
Commenter 10662 stated that the EPA must establish the level of control achievable through the application of BSER from a scientifically and practically sound bottom-up approach. Commenter further stated that the EPA's stated goal of a 17 percent reduction in CO2 emissions by 2020 has no bearing on the determination of BSER under the CAA, nor in the application of BSER for determining the level of control achievable in the chosen regulatory approach. Commenter further stated that adherence to these underlying energy policy goals, rather than a reliance on sound science, does not allow for an objective evaluation of BSER in accordance with the CAA.
The EPA's determination that partial CCS is BSER does not reflect some a priori consideration of a desired reduction in CO2 emissions.  It reflects an assessment of the criteria relevant under section 111, notably technology performance and feasibility, cost, nonair quality impacts, and energy requirements.
Consideration of Proposed CCS Projects Under EPAct
2.2.1	EPAct Bars Consideration of the Proposed CCS Projects
Comment 2.2-1: Commenters 8966, 9190, 9191, 9498, 9505, 9510, 9665, 9666, 9725, 10088, 10095, 10098, 10137, 10239, 10500, 10552, 10554, 10680 state that EPA inappropriately relies on facilities that have received government funding (CCPI-funded projects) to determine that CCS is adequately demonstrated for the BSER. The EPAct of 2005 provides funding for clean coal technology, but prohibits EPA from relying on such facilities when imposing NSPS standards under Section 111.
Commenter 9396 states that Congressional intent is clear; if federal funding is necessary to get a project to proceed it cannot be determined to be "adequately demonstrated." Commenter continues noting that EPA should remove all federally funded facilities from its proposal and re-evaluate CCS as BSER.
Commenter 9201 states that EPAct05 prohibits EPA from considering or relying on projects receiving certain federal assistance for the development of technologies as evidence that BSER is adequately demonstrated under CAA Section 111. EPA violated these provisions by considering and relying on the Kemper Facility, TCEP, and HECA in making its determination that partial CCS is BSER that has been adequately demonstrated. All three of these facilities received CCPI assistance from DOE and were awarded Section 48A tax credits. Consequently, EPA's overwhelming reliance on these three facilities in determining that partial capture CCS is BSER that has been adequately demonstrated is a violation of EPAct05, and the agency cannot consider these facilities as part of its BSER analysis in the final rule. EPA's overwhelming reliance on these projects is a direct violation of EPAct05, and is impermissible. Had EPA done a proper and thorough BSER analysis of adequately demonstrated technology---as explained at length previously in these comments---the agency could not have made a good faith determination that partial capture CCS is BSER that has been adequately demonstrated for coal-fired EGUs. As such, the proposal by the agency cannot stand as is.
Commenter 10660 states that EPA improperly relied on literature regarding U.S. based CCS demonstration projects. These included projects that the Department of Energy (DOE) was authorized to undertake a program called the Clean Coal Power Initiative (CCPI) to demonstrate clean coal technologies, including CCS, under the Energy Policy Act of 2005 (EPAct 2005). Three projects cited by EPA in support of partial CCS as BSER were each supported by DOE through the CCPI program.  Federal law (under EPAct 2005) prohibits EPA from basing its finding of BSER on these CCPI projects. EPA has limited data on which to base its determination that partial CCS is adequately demonstrated for coal. These projects therefore constitute a significant portion of the foundation on which EPA has made its BSER determination. Because EPA may not base its BSER determination on these projects, the partial CCS BSER determination lacks foundation and the Forum does not support it.
Commenter 9666 states that EPA has known that Congress prohibited it from considering certain technologies in a section 111 "adequately demonstrated" analysis since 2005 when EPAct was enacted. The Agency was reminded of the prohibition on June 25, 2012, in comments submitted to EPA on its April 2012 GHG NSPS proposal, which has since been withdrawn. Joseph Euitizi, San Miguel Elec. Coop., Comments on the Standards of Performance for Greenhouse Gas Emissions for New Stationary Sources: Electric Utility Generating Units, Proposed Rule, 77 Fed. Reg. 22392 at 3 (June 25, 2012), Docket ID No. EPA-HQ-OAR-2011-0660-9964. Commenter continues to state the issue was brought to EPA's attention again on November 15, 2013, in a letter to EPA from the Republican leadership of the U.S. House of Representatives Energy and Commerce Committee. Letter from Reps. Fred Upton, Chairman, H. Comm. on Energy & Commerce, Ed Whitfield, Chairman, Subcomm. on Energy and Power, Joe Barton, Chairman Emeritus, and Steve Scalise, Vice-Chair, Subcomm. on Energy and Power, to Gina McCarthy, Administrator, EPA (Nov. 15, 2013). Commenter continues that despite years of notice to analyze and address the implications of EPAct, EPA not only failed to acknowledge the issue in the proposed rule that was published on January 8, 2014, it in fact violated the express terms of EPAct by considering in the proposed rule technologies it is not permitted to consider. EPA's attempt to address these shortcomings on a post hoc basis in the EPAct TSD six weeks after the proposed rule was published fail.
Commenter 10088 states that the facilities that EPA chose to demonstrate CCS is adequately demonstrated violate the EPAct05, as the facilities are CCPI funded or heavily subsidized by foreign government.
Commenter 9664 states that EPA may consider subsidies and subsidized project in evaluating BSER.
 As described in the responses below and in section III.H.3.g. of the preamble of the final rule, the EPA interprets EPAct05 -- specifically sections 402(i), 421(a), and 1307(b) (adding 26 U.S.C. § 48A(g) to the Internal Revenue Code) -- to prevent the EPA, in determining the BSER, from finding that a technology or emission limit is adequately demonstrated based exclusively on evidence from facilities supported under EPAct05. However, the EPA interprets all three relevant EPAct05 provisions to allow the EPA to consider and rely upon information from EPAct05-supported facilities in combination with information from other facilities. The EPA's interpretation is based on the plain language of the three provisions and Congressional intent that EPAct05 support the advancement and commercialization of CCS technology, as described more fully below. The EPA does not believe that the plain language of EPAct05, or the legislative history, bars the EPA from all consideration of information from EPAct05-supported facilities.
 The EPA gave notice of and sought public comment on its interpretation of the EPAct05 provision in a Notice of Data Availability and accompanying Technical Support Document, which were published in the Federal Register on February 26, 2014, 79 Fed. Reg. 10750. These documents supporting the EPA's proposed rule provided ample time for public review in advance of the final rule, in accordance with Clean Air Act section 307(h), 42 U.S.C. § 7607(h), and are not "post hoc" rationalizations.
 See Section V.D and V.E of the preamble of the final rule for a description of the information and facilities upon which the EPA has relied in making its BSER determination.
2.1.2 Statutory Analysis and Interpretation