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 Resources: GHG Management
September 26, 2013
How High Is the Bar for 'Adequately Demonstrated'?

Legitimate questions are being asked about the legal validity of EPA’s recently proposed New Source Performance Standards (NSPS) for greenhouse gas (GHG) emissions for new coal-fired power plants.  Under Section 111 of the Clean Air Act (CAA), NSPS must be based on the best system of emission reduction (BSER) that “the [EPA] Administrator determines has been adequately demonstrated.” 

As with many other parts of the CAA, this phrase affords the EPA a certain amount of latitude in assessing the commercial availability and economic feasibility of emissions reduction systems that the Agency has no hands-on experience with.  But industry has expressed doubts over how far that latitude extends.

Partial CCS as BSER

In the proposed NSPS, the EPA has selected partial carbon capture and sequestration (CCS) as the BSER.  To show that partial CCS meets the adequately demonstrated criterion, the EPA provides examples of CCS occurring in pilot projects and its planned occurrence in larger commercial projects.  The Agency also cites studies on the technical feasibility of carbon capture and transport as well as the many geological formations throughout the country the U.S. Geological Survey has found can store liquefied CO2.  Examples of the long-standing use of CO2 injection to expedite oil and gas development are also provided. 

Overall, the EPA cannot provide extensive information on the use of CCS at coal-fired power plants.  But, apparently, the Agency does not believe it has to offer much in the way of real-world experience to clear the adequately demonstrated hurdle.  Rather, the Agency relies more on the legislative history of the CAA and several court decisions that expound on the meaning of “adequately demonstrated” as used in the statute.

Legislative history

For example, the EPA cites the following from the Senate Committee report on the 1970 CAA amendments:
“Standards of performance should provide an incentive for industries to work toward constant improvement in techniques for preventing and controlling emissions from stationary sources, since more effective emission control will provide greater latitude in the selection of sites for new facilities”  (emphasis added).

Also cited is a statement during floor debate by Senator Edmund Muskie, one of the architects of the 1970 amendments, when discussing the overall requirements of the 1970 amendments:
“These five sets of requirements will be difficult to meet.  But the committee is convinced that industry can make compliance with them possible or impossible.  It is completely within their control.  Industry has been presented with challenges in the past that seemed impossible to meet, but has been made possible.”

While these statements were made over 40 years ago, they underline the technology forcing philosophy behind much of the CAA that continues to influence regulatory decisions today.  That thinking was expressed by the Senate committee report in conjunction with the 1977 CAA amendments:
“The Section 111 Standards of Performance for New Stationary Sources required the use of the ‘best system of emission reduction which (taking into account the cost of achieving such reduction) the Administrator determines has been adequately demonstrated.’  This requirement sought to assure the use of available technology and to stimulate the development of new technology” (emphasis added).

D.C. Circuit opinions

The EPA also finds backup for CCS as BSER in several opinions in which the U.S. Court of Appeals for the D.C. Circuit considered the meaning of adequately demonstrated.  For example, when it first addressed Section 111 in a 1973 opinion (Portland Cement Ass’n v. Ruckelshaus), the D.C. Circuit stated:
“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.... It is the ‘achievability’ of the proposed standard that is in issue....
“The Senate Report made clear that it did not intend that the technology ‘must be in actual routine use somewhere.’  The essential question was rather whether the technology would be available for installation in new plants.... The Administrator may make a projection based on existing technology, though that projection is subject to the restraints of reasonableness and cannot be based on ‘crystal ball inquiry.’”

In the preamble to the NSPS proposal, the EPA adds, “In subsequent cases, the D.C. Circuit has consistently reiterated this formulation of ‘achievable.’”

The EPA cites another 1973 case (Essex Chemical Corp. v. Ruckelshaus), wherein the D.C. Circuit upheld a standard of performance as “achievable” on the basis of test data showing that the tested plant emitted less than or at the standard on three occasions and emitted above the standard on 16 occasions, and that, on average, it emitted 15 percent above the standard on a total of 19 occasions.

“The fact that the plant had achieved the standard on at least a few occasions, even though the plant had not done so on the great majority of occasions, ‘adequately demonstrated’ that the standard was ‘achievable,’” says the EPA.
Based on the above, it does appear that the bar presented in the CAA, which the EPA must clear to show that CCS is adequately demonstrated, is not high at all.  It will be up to industry in comments on the proposal and in possible subsequent litigation to show that this is not what Congress had in mind.

EPA's proposed NSPS for GHG emissions from new fossil-fuel power plants