EPA and Texas have an ongoing fight about many things, greenhouse gas regulation and permitting being only one of them. The State refused to accept EPA’s decision under what is known as the Tailoring Rule to require states to implement as part of air emissions permits for certain new and modified existing sources a greenhouse gas permitting requirement. As a result, in Texas, for facilities that emit over a certain amount of greenhouse gases, they have to apply to the Texas Commission on Environmental Quality (TCEQ) for a permit for conventional emissions and a permit from EPA for emissions of GHGs. One of the key issues is whether carbon capture will be required, and whether the State will ultimately take over the greenhouse gas permitting from EPA.
As Texas desperately needs new power plants to avoid rolling brownouts and blackouts, some of these permits are for new natural gas power plants. One of the critical issues that arises is to what extent carbon capture and storage (CCS) or carbon capture and utilization (CCU) is required. In every permit for a power plant, EPA Region 6 is requiring a demonstration under the Best Available Control Technology (BACT) that CCS or CCU is not economically feasible.
In Texas, there are several plants under development on the coal side and one on the natural gas side that are seeking to capture CO2 for use for enhanced oil recovery in old oil fields that have extracted all of the oil they can in primary and secondary processes. CO2 has long been used to remove even more oil in a tertiary process. Historically, the CO2 has been obtained from natural sources. Today there is greater demand than supply from natural sources. Several oil companies are seeking to obtain CO2 from man-made sources.
The long-term viability of these processes may to some extent affect BACT analysis for power plants under the Prevention of Significant Deterioration (PSD) process under the federal Clean Air Act. CCU for enhanced oil recovery (EOR) may prove one way to cost effectively capture CO2. This will need to be proven through plants that are yet to be built.
These developments may also affect EPA developing regulation on existing and new power plants. So far the approach has been to set emissions from natural gas power plants as the standard under proposed rules for both natural gas and coal-fired power plants. CCS or CCU/EOR has not been identified as a standard by EPA.
The construction of plants particularly natural gas fired plants with CCS may prove to be an interesting development over the next several years. The ability to build and technically operate these plants and the ability to show they are economically viable may provide fodder for EPA regulation and technology requirements for fossil fueled power plants in the coming decade. What may be a significant limitation is the cost to implement capture and the ability and cost to transport CO2 to its point of use in an old oil field. Much of the country may simply not have the CO2 pipelines or oil fields for utilizing the CO2.
In Texas, the issue is much more of an issue because EPA is implementing the program, and the state has lots of old oil fields, which can use CO2, and the history of CO2 use dates back many decades. There are no known cases of any problems with CO2 coming back to the surface.
A current question is whether the TCEQ will take over GHG permitting in Texas. A bill has been proposed in the Texas legislature that would require the TCEQ to take over the job from EPA. Several industry groups have testified in favor of the bill, to allow a streamlining of the air permitting process, and to reduce the time to get an EPA permit. Some of the industry representatives are concerned that the EPA is taking too long to issue the permits. The President and Chief Operating Office of Targa Resources and President of the Gas Processors Association is reported to have testified in favor of the bill.
