Oil and Gas Update

Sierra Club Expands War on Gas in Challenge to Air Permit for Gas Plant: Claims Emissions from Gas Supply Pipeline and Associated Compression Should be Included in Analyses

August 23, 2016

By: Robert G. McLusky

The Sierra Club and its acolytes have openly derided those who advocate using gas as a “bridge fuel.” Now, the group seeks to slow the construction of both a new gas-fired power plant in Virginia and the Atlantic Coast Pipeline slated to provide fuel to the Plant.  The Appalachian Mountain Advocates (“Appalmad”), who serve frequently as counsel to the Sierra Club, have bragged openly that “we’ve been highly effective … at the forefront of the fight against coal for 15 years”—“the natural gas industry is next.”  They have been quoted as saying that the construction of gas-fired power plants and pipelines is unnecessary and should be opposed because it delays and reduces spending on renewable energy sources.

The Sierra Club and Appalmad have now teamed up to challenge a new air permit issued in Virginia. After claiming that their earlier efforts caused the permit agency to impose conditions limiting emissions from the plant (“Groups Force Stronger Pollution Protections on Dominion’s Proposed Fracked-Gas Plant”), they have challenged the permit they claim to have influenced.

The Permit

In June, a subsidiary of Dominion Resources obtained an air permit from the Virginia Air Pollution Control Board for a new combined cycle natural gas-fired power plant (Greensville County Power Station). According to the Sierra Club, the permit application conceded that the Station was a “major stationary source” of the so-called criteria pollutants (NO_x, particulates, VOCs, carbon monoxide, sulfuric acid mist and greenhouse gases).  Consistent with the Clean Air Act and the approved Virginia air program, those emissions were subjected to “new source review,” which triggered application of a program called the “Prevention of Significant Deterioration” (“PSD”). 

PSD permits require applicants to demonstrate that they will apply “best available control technology” (“BACT”) by conducting a BACT analysis. That analysis requires the applicant and agency to start with the most stringent technologies and work down the list of controls only after finding that the more stringent controls are unavailable because of technical, energy, environmental or economic considerations.  The BACT analysis rejected control of greenhouse gases after determining that the only candidate technologies were carbon capture and sequestration, lower carbon fuels and energy efficiency. 

The application did not identify the Plant as a major source of “hazardous air pollutants” such as formaldehyde.  According to the Sierra Club, the applicant used EPA’s standard emissions projections (called “emissions factors”) to project emissions for all hazardous pollutants except for formaldehyde.  The applicant projected formaldehyde emissions using information from the manufacturer of the gas turbines, which yielded lower projected emissions than did EPA’s “emission factors.”  This, according to the Sierra Club, may have allowed the applicant to escape control based on the application of “maximum achievable control technology” or “MACT”) (kind of a BACT for hazardous air pollutants). 

Finally, the Sierra Club noted that Dominion did not include expected emissions associated with either the planned Atlantic Coast Pipeline or its associated Buckingham County compressor station in the application for the Plant permit, even though the pipeline will be operated by Dominion and supply gas to the Plant.  By not aggregating the emissions from the compressor station with those of the Plant, the Sierra Club claims Dominion has been allowed to treat the compressor station as a “minor” source for air permitting purposes—a fact which will allow it to escape the BACT and MACT reviews applicable to “major” sources.

The Appeal

On August 16, 2016, the Sierra Club challenged the air permit in the Circuit Court for the City of Richmond. The Appeal makes the following claims:

1. That the Board’s written permit decision fails to provide a clear and concise statement of its legal bases and justification and contains only conclusory statements.
2. That the Board should have aggregated the pipeline and compressor emissions with those of the Plant. It claims that those emissions should be added to the Plant’s because the pipeline and compressor are part of the same “industrial grouping” and will be operated by a common operator on “one or more contiguous properties.”  Accordingly, claims the Sierra Club, the Plant, the pipeline and compressor are a single “major source” which would require the compressor to undergo applicable BACT/MACT review.  (See this discussion of what facilities are considered part of a single source.)
3. That the Board failed to include a BACT analysis of the Plant which analyzed “auxiliary solar generation” as an available control technology. The Sierra Club concedes that there is an exception from BACT review for major sources where the control technology would essentially “redefine” the source by requiring a change in the source’s proposed primary fuel.  Thus, a wind farm would not be considered an applicable control technology for a proposed gas plant.  However, the Sierra Club claims this “redefinition” exception does not apply to “partial” fuel switches or “supplementation” of the primary fuel.  Accordingly, it claims that the Board erred by not requiring a BACT analysis “that considered auxiliary solar generation as an available control technology.”
4. That the Board failed to ensure the Plant was not a major source of formaldehyde for purposes of applying the MACT standards for hazardous air pollutants. The Sierra Club says the Board did not consider whether the estimates supplied by Dominion included emissions during low/intermediate load operations or during startup/shutdown or malfunctions and, therefore, inadequately analyzed the Plant’s “potential to emit” formaldehyde.

This article was authored by Robert G. McLusky.