Closing the gap: using the Clean Air Act to control lifecycle greenhouse gas emissions from energy facilities.

• Author: Hagan, Colin R.

1. INTRODUCTION II. BEHIND THE SCENES: LIFECYCLE ANALYSIS DEMONSTRATES THAT FOCUSING ON SMOKESTACK EMISSIONS IGNORES ADDITIONAL EMISSIONS A. Lifecycle Emissions from Coal B. Lifecycle Emissions from Natural Gas C. Lifecycle Emissions from Biomass D. Lifecycle Emissions from Nuclear and Non-emitting Renewables III. EPA Authority to Require Lifecycle Analysis for Greenhouse Gas-emitting Energy Facilities A. Statutory Authority for Lifecycle Analysis in Section 211 of the Clean Air Act B. Lifecycle Analysis Under the Clean Air Act's PSD Regulations C. Using Biomass and Energy Efficiency as BACT Control Options Implicates Analysis of Offsite Emissions D. EPA May Regulate Lifecycle Emissions Through the Clean Air Act's New Source Performance Standards IV. CONTROLLING LIFECYCLE EMISSIONS FROM NON-EMITTING ENERGY RESOURCES V. CONCLUSION I. INTRODUCTION

   As the United States moves forward with regulations to address climate change and policies to achieve a low-carbon energy mix, regulators and utilities should undertake a full and accurate comparison of the greenhouse gas consequences of available energy resources. (1) Specifically, a lifecycle analysis (LCA) of greenhouse gas emissions that includes emissions at all stages of production will help determine the total climate impact of generating electricity with a particular resource. This accounting is necessary in order to ensure that national energy policy and utilities' decisions about energy resource options will reduce the United States' greenhouse gas emissions as much and as efficiently as possible.

   As greenhouse gases become subject to regulation under the Clean Air Act, taking lifecycle emissions into account could help encourage innovation in reducing emissions associated with electricity generation. In 2008, several utilities, technology companies, and nonprofit environmental organizations recognized the benefit of this type of analysis. The coalition of businesses and the Environmental Defense Fund released a set of principles for regulating greenhouse gases in the wake of the United States Supreme Court's decision in Massachusetts v. EPA. (2) Although the coalition acknowledged "divergent views" on the Environmental Protection Agency's role in regulating greenhouse gases absent new legislation, (3) its members nevertheless agreed that "EPA's leadership in understanding and addressing the development of rigorous lifecycle analysis, the interactions among various pollutants, and the promise of emerging technologies will be invaluable." (4) As these businesses and environmental organizations suggest, "rigorous lifecycle analyses" are necessary in order to understand the full implications of our nation's greenhouse gas emissions and can help make reducing emissions more cost effective. (5)

   Congress has already recognized the need for this type of analysis in a limited context. The Energy Independence and Security Act of 2007 (EISA) amended the Clean Air Act to require that some biofuels undergo lifecycle analysis to ensure that their use actually yields net emission reductions. (6) In addition, Congress explicitly prohibited the federal government from entering into long-term contracts for synthetic petroleum fuels with higher lifecycle greenhouse gas emissions than conventional petroleum. (7) In contrast, legislators and regulators have paid little attention to the lifecycle emissions from electricity generation.

   This comment identifies a legal framework for reducing lifecycle emissions from electric power plants. First, this comment reviews the need for full lifecycle analysis and summarizes the results of attempts to quantify the full lifecycle impact of different energy resources. Second, this comment explores whether the Clean Air Act authorizes the United States Environmental Protection Agency (EPA), the agency chiefly responsible for implementing the nation's environmental laws, to require consideration of lifecycle analysis in Clean Air Act regulations for greenhouse gas-emitting power plants. Finally, this comment explores how lifecycle analysis may be applied to non-emitting renewable resources that might not be subject to Clean Air Act regulations.

2. BEHIND THE SCENES: LIFECYCLE ANALYSIS DEMONSTRATES THAT FOCUSING ON SMOKESTACK EMISSIONS IGNORES ADDITIONAL EMISSIONS

   Analysis of power plant emissions should include full lifecycle accounting because a significant quantity of the emissions from generating electricity occurs at some stage of production prior to the smokestack. For example, as much as a quarter of the total emissions from coal- or natural gas-fired power plants occur "upstream" in the production process. (8) Resources such as wind and solar do not generate greenhouse gases directly, yet they are not completely benign from a climate change standpoint. Rather, most greenhouse gas emissions from non-emitting resources such as wind and solar occur prior to the point of generation during manufacturing, transportation, and installation. (9)

   For mitigation strategies in the power sector." (10) As one researcher put it, applying lifecycle analysis, which includes "all processes directly and indirectly associated with the production of electricity," provides the means for a consistent evaluation of complete energy chains." (11) Although taking a regulated power source's upstream emissions into account could present some risk of double counting, accurate monitoring and emissions reporting could minimize this risk. (12)

   The Clean Air Act section regulating transportation fuels defines "lifecycle greenhouse gas emission" as the

   aggregate quantity of greenhouse gas emissions (including direct emissions and significant indirect emissions such as significant emissions from land use changes), as determined by the Administrator, related to the full fuel lifecycle, including all stages of fuel and feedstock production and distribution, from feedstock generation or extraction through the distribution and delivery and use of the finished fuel to the ultimate consumer, where the mass values for all greenhouse gases are adjusted to account for their relative global warming potential. (13) Pursuant to this definition, and based on significant scientific assessment and peer review, EPA has developed a method for calculating lifecycle emissions for a variety of renewable transportation fuels. (14) Although a review of EPA's analytical flame work is outside the scope of this comment, these processes demonstrate that EPA has the expertise and resources to conduct lifecycle analysis. If EPA sought to apply lifecycle analysis to stationary power sources, it could easily draw on lessons from the transportation sector.

   Upstream emissions from fossil fuel resources are significant and varying as a result of the processes involved in extraction and generation. (15) In addition, fossil fuel resources vary in the amounts of energy they produce per unit of fuel. In order to compare emissions from fossil fuel resources with different production processes and efficiency rates, researchers use aggregate data to determine emission factors per unit of heat produced (measured in pounds of pollutants per million Btu). (16) Additionally, because power generation produces several different greenhouse gases, most studies reflect lifecycle emissions in terms of carbon dioxide equivalent (C[O.sub.2]e) for consistent comparison.

   1. Lifecycle Emissions from Coal

      The coal lifecycle is relatively straightforward. The major steps include mining and processing, transportation, and use and combustion. (17) Emissions at each of these stages can be significant. Emissions at this stage can include emissions due to transportation or mining. Still, most of the emissions associated with coal generation occur at the smokestack.

      The vast majority of coal transportation occurs by rail, followed by barge and truck. (18) One study using an economic model developed at Carnegie Mellon University found that rail transport produces 43.6 tons of C[O.sub.2]e per million-ton miles of transportation and that truck transportation produces 69 tons of C[O.sub.2]e. Meanwhile, barge or water-based transportation produces 5.89 tons of C[O.sub.2]e. (19) Coal mining also contributes significantly to upstream emissions. For example, above-ground strip mining, which includes mountaintop-removal coal mining, accounts for approximately two-thirds of domestic coal extraction. (20) Because strip mining permanently alters landscapes that otherwise could store carbon, much of the carbon stored in forests and fields is lost. As a result, such mining can increase the total lifecycle emissions associated with coal-fired electricity generation by up to twelve percent. (21)

      To be sure, upstream emissions are relatively minor compared to emissions at the smokestack. (22) Indeed, "the life-cycle [greenhouse gas] emissions of electricity generated with coal are dominated by combustion." (23) Yet upstream emissions are not insignificant. The upstream emissions associated with coal use range from 220 to 500 pounds per megawatt-hour of electricity. (24) Moreover, lifecycle emissions from coal are greater than that of other resources, (25) but that is because they produce so much at the stage of combustion. As with upstream emissions from other resources, this area might offer additional, cost-effective opportunities to reduce emissions.

   2. Lifecycle Emissions from Natural Gas

      Emissions from natural gas power production are similar to those caused by coal power production in that most of the emissions occur at the power plant. Yet, when it comes to upstream emissions, the lifecycle for natural gas power production is more complicated than that of coal. Natural gas is produced from wells, and then sent into the transmission system for storage or power generation. Liquefied, synthetic, and shale-derived natural gas undergo additional stages of processing. For example, liquefied natural gas is extracted as a gas, liquefied...