Environmental UpdateROHIT SHARMALyondellBasell, Environmental Issues Manager

August 21, 2013

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AGENDA

Monitoring Data Air Quality Regulatory Activity Impact to Utilities

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REAL & MEASURED IMPROVEMENTS

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C78

C555

C560

C557C26

C561

C559

C554 C408

C562

C410

C409

C53

C84

C558

C619C1034

C1022

C620

C570C572

C571

C406

C45

C608C556

C35

C552

C611

C610

C553

C551

C607

C617

C1015

C15

C603

C1

C405

C8

C403

C601

C81

C411

C604

C11

C618

Location of Ozone Monitors in HGB

TCEQ

HRM

City

Harris County

Independent

C1016

C5005

Source: Houston Regional Monitoring (HRM)

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6

7

8

9

10

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REGULATORY ACTIVITY

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OZONE 1979 1hr Ozone Standard (120 ppb)

HGB Area must meet the standard by November 15, 2007. Very close to meeting standard. Controls: Billions $ spent on overall 80% NOx controls and HRVOC monitoring

1997 8hr Ozone Standard (85 ppb) HGB Area must meet the standard by June 15, 2018. Very close to meeting the standard. Controls: A 25% reduction in the overall HRVOC cap

2008 8hr Ozone Standard (75 ppb) Bush administration/EPA lowered standard to 75 ppb Obama administration/EPA immediately announced lowering of standard to between 60 – 70 ppb

but eventually did not Texas non-attainment counties

Dallas/Ft Worth - Collin, Dallas, Denton, Ellis, Johnson, Kaufman, Parker, Rockwall, Tarrant, Hood, Wise

Houston – Brazoria, Chambers, Fort Bend, Galveston, Harris, Liberty, Montgomery, Waller Controls: TCEQ is conducting modeling; Also looking at “Exceptional Events” and “International

Emissions” contributions Next Standard

Next 5 year review cycle for the Standard is underway Current EPA timeline is to publish a draft proposal by year end 2013 and a final rule by Sept. 2014 Compliance deadline will depend on classification of Area: 2017 for Marginal, 2020 for Moderate,

2023 for Serious, and 2029 for Severe Proposals are for standard to be lowered to between 55 – 70ppb

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BOILER MACT Final rule issued on March 21, 2011. Applicable to Boilers &

Process Heaters Reconsidered final published in Federal Register 1-31-2013.

Existing sources – have 3 years from publication to comply. May request an additional year.

New sources – comply Jan 31, 2013 or upon startup Many more subcategories of Boilers Requirements include CO / O2 CEMS, performance tests, energy

assessments, and controls if not meeting emission limits. Strict PM, HCL, Hg, CO and Dioxin limits for existing liquid and some fuel gas

burning boilers Very strict limits for coal burning boilers

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BOILER MACT Boiler Energy Assessments

A visual inspection of the boiler or process heater system. An evaluation of operating characteristics of the boiler or process heater systems,

specifications of energy using systems, operating and maintenance procedures, and unusual operating constraints.

An inventory of major energy use systems consuming energy from affected boilers and process heaters and which are under the control of the boiler/process heater owner/operator.

A review of available architectural and engineering plans, facility operation and maintenance procedures and logs, and fuel usage.

A review of the facility's energy management practices and provide recommendations for improvements consistent with the definition of energy management practices, if identified.

A list of cost-effective energy conservation measures that are within the facility’s control.

A list of the energy savings potential of the energy conservation measures identified. A comprehensive report detailing the ways to improve efficiency, the cost of specific

improvements, benefits, and the time frame for recouping those investments. And a lot more requirements…………………..

Other Rules Risk and Technology Review (RTR rules)

Polymers & Resin IV, Pesticides, Polyether Polyols (3P) rule proposed Jan 9, 2012. Final rule by Jan 31, 2014

Polycarbonate, Acrylic & Modacrylic fibers, Polymers & Resins III proposal by Dec 11, 2013

Off-Site Waste & Recovery Operations (OSWRO) proposal by Dec 11, 2013

Ethylene MACT Section 114 request likely to be sent out in 4Q 2013OLD, MON, HON, NSPS review could be in 2014

Flares EPA pursuing Consent DecreesEPA planning to propose Refinery rule on flares. 1Q 2014.Will set precedent for the chemicals sector

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Greenhouse Gas (GHG) NSPS for GHGs

NSPS for GHGs for Utilities (new sources) – EPA to re-propose by Sept 20, 2013 and finalize by June 1, 2014.

NSPS for GHGs for Utilities (existing sources) – EPA to propose by June 1, 2014 and finalize by June 1, 2015.

NSPS for GHGs for Refineries – after the Utilities

President’s Climate Action Plan (CAP) 17% reduction in carbon emissions from 2005 to 2020 Energy efficiency standards for industry

Mandatory Reporting Rule (MRR) CBI data – possible proposal 4Q 2013

TCEQ had two outstanding suits against EPA on GHGs – On July 26, 2013 the Court of Appeals sided with EPA

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Impact to Utilities

On Aug 21, 2012 the Cross State Air Pollution Rule (CSAPR) vacated by the courts but CAIR remains in place.Goal is power sector emissions reductions However, was broadened to include chemical/refinery sector

co-generation facilitiesEPA/NGOs successfully petitioned to Supreme Court

Mercury & Air Toxics Standard (MATS)

Cooling Tower Intake Rule Effects Utilities with large intake of cooling water from streams

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Source: American Coalition For Clean Coal Electricity (ACCCE)

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2013 Texas Legislative Session

HB 788 (PASSED) - This bill authorizes the TCEQ to accept delegated authority from EPA for greenhouse gas permitting and streamlines the permit process.

SB 1300 (PASSED) - amends the Texas Environmental, Health, and Safety Audit Privilege Act to expand the definition of "environmental or health and safety audit" to include a systematic voluntary evaluation, review, or assessment of compliance with environmental or health and safety laws or with any permit issued under an environmental or health and safety law conducted by a person, including an employee or independent contractor of the person, that is considering the acquisition of a regulated facility or operation.

SB 1727 (PASSED) - Relating to the use of the Texas Emissions Reduction Plan (TERP) fund. Several changes to the TERP program were made in this bill along with language negotiated by industry relating to credit for 185 fees.

SB 1756 (PASSED) - Relating to the expedited processing of certain applications for permits under

the Clean Air Act. Requires TCEQ to adopt a program to expedite the processing of permits, amendments, registrations, or variances for applicants for projects that will benefit the local or state economy.

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