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Oregon Environmental News

Registration for Oregon Clean Fuels Program Due June 30th – Possible Impacts to Suppliers in Surrounding States

Friday, June 07, 2013

The CFP applies to entities that import, produce, sell, supply or offer certain regulated transportation fuels for sale in Oregon.  Entities that are subject to the Oregon Clean Fuels Program (CFP) must submit an application for registration to the Department of Environmental Quality (DEQ) by June 30, 2013.  Since this program applies to importers of fuel, it will potentially affect fuel suppliers in surrounding states (e.g., Washington, Idaho, and California) as well as Oregon suppliers. 

The purpose of the CFP is to mitigate Oregon's GHG emissions by reducing the carbon intensity of fuels used in Oregon by at least 10% below 2010 levels.   Fuel suppliers will eventually accomplish this reduction by comparing the carbon intensity of their fuels to a declining carbon intensity schedule, calculating corresponding surpluses and shortfalls relative to this schedule, and reconciling any shortfalls by obtaining credits in a market-based system.  However, the current phase of the CFP program (Phase 1, codified under OAR 340-253) is intended only to gather information necessary to establish the second phase of the program, which will include a declining carbon intensity schedule for each fuel.  Accordingly, regulated parties are not required to balance surpluses and shortfalls at this time. 

Any entity that is not subject to Oregon's CFP may become an opt-in party by registering with DEQ.  Opt-in parties must keep records and submit reports as required by the CFP for opt-in fuels.  The following table lists regulated fuels that will trigger CFP requirements, opt-in fuels that trigger requirements if an entity chooses to opt-in to the program, as well as fuels and fuel uses that are exempt from the CFP:

Oregon Clean Fuels Program Fuel Types

 

 Regulated Transportation Fuels

Opt-in Transportation Fuels

 Exempt Fuels and Fuel Uses

Gasoline

Hydrogen fuel

Fuel types sold or supplied to Oregon that totals aggregate volume of less than 360,000 gasoline gallon equivalents per year (gge) from all providers

Diesel fuel

Hydrogen blends

Fossil liquefied natural gas that is imported, but not transferred by a natural gas pipeline in Oregon

Fossil liquefied natural gas derived from fuel delivered through a natural gas pipeline

A fuel blend containing ethanol

Fossil compressed natural gas

Fuel produced by R&D or demonstration facility if annual production volume is either (1) less than 10,000 gallons or (2) less than 50,000 gallons and producer uses entire volume in its own vehicles

A fuel blend containing biomass-based diesel or biodiesel

Biogas compressed natural gas

Ethanol or denatured ethanol (i.e., E100)

Biogas liquefied natural gas

Neat biomass-based diesel and biodiesel (i.e., B100)

Liquefied petroleum gas

Fuels sold or supplied for use in aircrafts, racing and military vehicles, locomotives, ocean-going vessels, farm vehicles and tractors, and motor trucks used to transport logs

Any other liquid or non-liquid fuels not listed as opt-in fuels or exempt fuels

Electricity

 

A complete registration application must be submitted for each type of fuel that the entity has imported, produced, sold, supplied, or offered for sale on or before July 1, 2013, and for each fuel type that the entity plans to continue to handle in those ways after July 1, 2013.   Furthermore, if an entity plans to begin handling a new type of fuel in the aforementioned ways after July 1, 2013, then the entity must submit a complete application to DEQ for that fuel type on or before the date it begins to provide the fuel for use in Oregon.   The registration must include company identification information, the fuel types that will be sold, supplied, or offered for sale in Oregon, the producer of each type of fuel, and a proposed carbon intensity value for each fuel type. 

The following types of entities are considered initial regulated parties under the CFP:

  • Oregon producers:  (1) For liquid blendstocks or finished fuels, the person who makes the fuel at an Oregon production facility is considered to be the Oregon producer; (2) for biogas produced in Oregon, the person who refines the gas to pipeline quality is considered to be the Oregon producer.
  • Large Oregon importers:  Any person who imports more than 250,000 gallons of fuel in a given calendar year into Oregon is classified as a large Oregon importer.
  • Small Oregon importers:  Any person who imports 250,000 gallons of fuel or less in a given calendar year into Oregon is classified as a large Oregon importer. 

If fuel is transferred from one regulated party to another, the regulated party subject to CFP requirements may also change.  The specific circumstances for transferring the CFP compliance obligation from one entity to another vary depending on whether the initial regulated party is a large or small Oregon importer.  For example, if a Washington refinery sells gasoline to a company that will be importing the fuel into Oregon, then the importer must notify the refinery of its status as an Oregon producer, a large Oregon importer, or a small Oregon importer before actual fuel ownership is transferred from the refinery to the importer. 

  • Scenario 1:  If the importer is designated as a large Oregon importer, then the importer becomes the regulated party and is subject to the CFP registration, recordkeeping, and reporting requirements for that fuel, unless the refinery chooses to remain the regulated party. 
  • Scenario 2:  If the importer is designated as a small Oregon importer, then the refinery remains the regulated party unless the importer chooses to become the regulated party for that fuel. 

Considering the potential for transferring a CFP compliance obligation for a given fuel type, producers of regulated transportation fuels in surrounding states should communicate with companies that purchase their fuel to determine whether it will eventually be imported into Oregon (and if so, whether the company importing the fuel will be designated as a large or small Oregon importer), in order to assess whether they are subject to registration, recordkeeping, and reporting requirements.

Each regulated and opt-in party must complete registration, recordkeeping, quarterly reporting, and annual reporting requirements established for Phase 1 of the CFP under OAR 340-253.  Entities that satisfy the exemptions listed in the above table must demonstrate that the exemption applies, obtain exemption approval from DEQ, and maintain required documentation as described in OAR 340-253-0250 .  Implementation of Phase 2 of the CFP is expected to begin in late 2015 or 2016.  Phase 2 will mandate a 10% reduction in the carbon content of certain transportation fuels over a 10-year period.  DEQ is asking the state legislature to remove the current 2015 sunset date for the program before they proceed with the development of Phase 2.

Trinity's upcoming webinar (June 12th at 12:00 PM) will provide a more detailed overview of this program. If you have questions or require assistance with evaluating the applicability of the CFP for your operations, please contact Maren Seibold at Trinity Consultants' Seattle office at (253) 867-5600 or mseibold@trinityconsultants.com

EPA Authorizes GHG Permitting Deferral for Biogenic Sources

Friday, July 01, 2011

On July 1, 2011, EPA signed the Deferral for CO2 Emissions from Bioenergy and Other Biogenic Sources under the Prevention of Significant Deterioration (PSD) and Title V Programs. According to the pre-publication copy of the rule currently available on EPA’s website, the final rule becomes effective immediately upon the date of its publication in the Federal Register, which is expected to follow the rule signing by one to two weeks. EPA justifies this immediate effective date, rather than the typical 30 day delay, by citing that the deferral eliminates uncertainty in the permitting process and that affected parties need not modify their behavior to accommodate the rule.

Although EPA’s deferral will be immediately effective at the federal level, the applicability and effective date of this rule modification in a particular state will vary. The biogenic deferral is effective immediately upon publication for Title V and PSD permitting programs implemented by EPA under 40 CFR part 71 and 40 CFR 52.21, respectively (i.e., delegated programs). However, the deferral is optional for any state, local, or tribal permitting authorities that implement the Title V and PSD permitting programs under 40 CFR part 70 and 40 CFR 51.166, respectively (i.e., SIP-approved programs). Since Oregon’s is a delegated program, the biomass deferral will be immediately effective upon the rule's publication in the Federal Register. Therefore, permits issued after the date of publication will be eligible for the biomass deferral.[i]

Though not mandatory, EPA encourages states that expect to receive permit applications from a number of biomass facilities to submit the necessary SIP revisions or Title V program revisions to implement this three-year deferral. According to EPA, if a state was able to implement the Final Tailoring Rule without making any changes to state regulations, then it is likely that the state will be able to implement the deferral without regulatory changes. If permit program revisions were necessary for a state to implement the Final Tailoring Rule, then revisions will likely be necessary to implement the deferral.

EPA is implementing the deferral by amending the definition of “subject to regulation” in its PSD and Title V regulations. Only biogenic CO2 emissions will be deferred; therefore, a source must still consider other GHGs (e.g., methane and nitrous oxide) emitted from the combustion of biomass fuel when determining whether a stationary source meets the PSD and Title V applicability thresholds. It should also be noted that this action does not affect compliance obligations for biogenic CO2 emissions under EPA’s mandatory GHG reporting rule (codified under 40 CFR 98). Following a technical review of the net carbon cycle impact of biofuels, EPA plans to make additional rules within the three-year deferral period that will establish an approach for accounting for these emissions on a permanent basis.

Since this deferral is intended to temporarily exclude biogenic CO2 emissions from the definition of “subject to regulation,” as that term was defined in the Tailoring Rule, questions may arise regarding whether existing permits will require modification because of the deferral, or whether permits issued during this three-year period will need to be modified after the deferral. According to EPA’s rulemaking package, “this rule does not require that a PSD permit issued during the deferral period be amended or that any PSD requirements in a PSD permit existing at the time the deferral takes effect, such as BACT limitations, be revised or removed from an effective PSD permit for any reason related to the deferral or when the deferral expires.” In other words, if a source is subject to BACT conditions for biogenic CO2 emissions as a result of a PSD permit issued before the effective date of the deferral, the deferral does not require that these conditions be removed. Similarly, unless a separate permitting action is triggered, PSD permits issued during the deferral period need not be modified when the deferral expires and biogenic CO2 emissions are no longer eligible to be excluded.

If the deferral is not effective in a particular state at the time a PSD permit is issued, then the permit must include appropriate BACT limitations for GHGs. EPA’s interim guidance for biogenic CO2 emissions, entitled “Guidance for Determining Best Available Control Technology for Reducing Carbon Dioxide Emissions from Bioenergy Production,” is intended to assist permitting authorities with establishing BACT for biogenic CO2 emissions prior to the effective date of the deferral. Specifically, this document supports the conclusion that the combustion of biomass fuels can be considered BACT for biogenic CO2 emissions at stationary sources.

Trinity recommends that potentially affected sources, particularly sources with PSD and Title V permits in progress, communicate with ODEQ to discuss how this deferral may affect their permitting efforts.

[1] Phone conversation between Mr. David Ogulei, WDOE, and Ms. Linda Nguyen, Trinity Consultants, July 12, 2011.

Recent Changes to Oregon Air Permitting Rules

Thursday, April 21, 2011

On April 21, 2011, the Oregon Department of Environmental Quality (DEQ) adopted new PM2.5 and greenhouse gas permitting rules. These rules replace the temporary rule that DEQ adopted on August 19, 2010. For sources permitted after May 1, 2011, an initial netting basis and Plant Site Emission Limit (PSEL) for PM2.5 and GHG will be established for the source as part of its first permitting action issued after July 1, 2011.

In Oregon’s NSR permitting program, the difference between the new PSEL after a project and the netting basis is used to determine whether a proposed project is required to go through the more stringent PSD permitting program. Originally, the DEQ had proposed several different options for establishing the netting basis for PM2.5 and GHG. In the final rule, different options were chosen for each pollutant.

For PM2.5, the initial netting basis and source-specific PSEL will be the PM2.5 fraction of the source’s current PM10 netting basis. The PM2.5 fraction is defined as the fraction of PM2.5 to PM10 for each emissions unit that is included in the netting basis and PSEL.This approach incorporates PM2.5 into the program without the need to establish a separate baseline period for PM2.5. The DEQ has also proposed that a onetime increase of up to 5 tons in the PM2.5 netting basis may be allowed to avoid making a source retroactively subject to NSR/PSD for PM2.5 (for previously approved modifications that increased PM10 emissions).

For GHG, the initial netting basis will be based on actual greenhouse gas emissions during any consecutive 12-month period during calendar years 2000 through 2010. This 10-year look-back approach is similar to the method used by other states that follow the standard federal PSD rules.

The adopted rules can be referenced here: http://www.deq.state.or.us/regulations/rules.htm.

Setting the netting basis will have important future permitting implications for your facility. If you have any questions or need assistance with setting these emissions levels, please contact Ms. Linda Nguyen at 253-867-5600.

Proposed Changes to Oregon Air Permitting Rules

Wednesday, December 15, 2010

The Oregon Department of Environmental Quality (DEQ) has recently proposed a number of changes to its air permitting rules to incorporate PM2.5 and greenhouse gas (GHG) permitting into its New Source Review (NSR) and Title V permitting programs. For PM2.5, the proposed rules will revise and replace a temporary rule that the DEQ had adopted on August 19, 2010.

After the rules become applicable, sources will be required to establish a netting basis and Plant Site Emission Limit (PSEL) for PM2.5 and for GHG at their next permitting action.In NSR permitting, the difference between the new PSEL after a project and the netting basis is used to determine whether a given project is required to go through the more stringent PSD permitting program.

The DEQ has proposed four options for establishing the netting basis for PM2.5 and GHG.

  • Option 1: Set the netting basis proportional to the netting basis used for other pollutants. For PM2.5, the netting basis would be tied on the source’s current PM10 netting basis by using a ratio between the source’s PM2.5 and PM10 emissions. For GHG emissions, the netting basis would be related to the production parameters used to establish the netting basis.
  • Option 2: Set a netting basis equal to emissions in 1977/78
  • Option 3: Set a netting basis equal to emissions in 2006 or 2007
  • Option 4: Use the approach similar to the federal NSR program that would set the netting basis based on any consecutive 24-month period in the past 10 years

The DEQ has recently extended the comment deadline for the proposed rules until December 23, 2010, and has announced plans to recommend adoption of the rules at the April 21-22, 2011 Environmental Quality Commission meeting.

New General Permits Available

Tuesday, January 26, 2010

The Oregon Department of Environmental Quality (DEQ) proposed general air permits and/or permit attachments for the following source categories:

  • Perchloroethylene Dry Cleaners (permit)
  • Stage I and Stage II Gasoline Dispensing Facilities (permit and permit attachment)
  • Hospital Ethylene Oxide Sterilizers (permit and permit attachment)
  • Wood Preserving (permit attachment)

Owners and operators of these source categories are encouraged to review the proposed permits and/or permit attachments and provide comments to ensure that the permit applicability and content is appropriate. DEQ developed these general air permits to streamline the Air Contaminant Discharge Permit (ACDP) process for a variety of source categories that are comprised of numerous substantially similar operations. These general permits establish identical emission limitations, monitoring, recordkeeping, and reporting conditions for all sources covered by a general ACDP. If you own or operate a listed source category, it is recommended that you review and comment on the proposed general permit to ensure that it accommodates your operations. Written comments are due by February 12, 2010. OAR 340-216-0060(5) contains a full listing of source categories for which general permits are available.

Public Comment Period Open for Oregon GHG Reporting Protocols

Thursday, September 10, 2009

The Oregon Department of Environmental Quality (ODEQ) is allowing an opportunity for public comment on the Greenhouse Gas (GHG) Emissions Quantification Methodologies (EQMs) recently released by the Western Climate Initiative (WCI). ODEQ plans to require the use of these EQMs for its mandatory GHG reporting program established under Oregon Administrative Rules (OAR) 340-215. ODEQ is currently holding a 30-day public comment period for these EQMs, which began on September 8th and will end on October 9th, 2009. Stakeholders are encouraged to review the EQMs that apply to their operations and to comment on whether these methods enable a facility to estimate its 2009 emissions, or whether modification is necessary. After reviewing comments, a list of DEQ-approved reporting protocols will be finalized and posted to the agency's website.

Although the Environmental Quality Commission approved mandatory GHG reporting rules for industrial sources in Oregon in 2008, the rules do not establish specific calculation methodologies for GHG sources. Rather, OAR 340-215 requires the use of “Department-approved reporting protocols.” As a member of the WCI, Oregon has been working with the regional initiative to develop sector-based protocols and EQMs. On July 16, 2009, WCI released the final version of its reporting guidance document entitled Essential Requirements for Mandatory Reporting. This document establishes EQMs for the following fifteen source categories:

  • General Stationary Combustion
  • Refinery Fuel Gas Combustion
  • Electricity Generation
  • Electricity Imports
  • Primary Aluminum Manufacturing
  • Cement Manufacturing
  • Coal Storage
  • Hydrogen Production
  • Iron and Steel Manufacturing
  • Lime Manufacturing
  • Petroleum Refining
  • Pulp and Paper Manufacturing
  • Soda Ash Production
  • Petrochemical Production
  • Adipic Acid Manufacturing

It should be noted that WCI is currently developing EQMs for eighteen additional source categories; however, these additional methodologies will be issued for stakeholder review at a later time.

The Oregon reporting rule requires certain listed sources that emit 2,500 metric tons or more of carbon dioxide equivalents (CO2e) per year to annually register and report GHG emissions beginning with 2009 emissions, which will be reported in 2010. For 2009, ODEQ expects reporters to make use of all available data called for in the applicable WCI methodology. Where such information is not available, reporters are expected to begin collecting the information as soon as practical following the finalization of the EQMs; however, if a facility must install new equipment to facilitate the data collection, collection may begin as late as January 1, 2010. You can obtain up-to-date information on the Oregon GHG reporting program and corresponding EQMs at ODEQ’s website:

http://www.deq.state.or.us/aq/climate/reporting.htm#Model_Rule_Development

It should also be noted that ODEQ is working on a proposal that would revise the existing reporting rules to include electricity importers and fuel distributors, and to establish fees to fund the reporting program. The first meeting to discuss this proposal is open to the public and will be held on September 23, 2009 at ODEQ’s Northwest Region office. Additional information about the advisory committee is also included on ODEQ’s website:

http://www.deq.state.or.us/committees/greenhousegasadvcom.htm

Trinity Consultants is available to assist you with reviewing and preparing comments on the proposed EQMs, assessing your company’s monitoring and reporting burden under the Oregon reporting rule and corresponding EQMs, or developing an emission inventory and reporting strategy to ensure compliance with the state program. Please contact Trinity Consultants at (253) 867-5600, or email Maren Seibold at mseibold@trinityconsultants.com for assistance.