Presentation to the Kentucky Professional Engineers in Mining Seminar

September 6, 2013

To Protect and Enhance Kentucky’s Environment

KY Department for Environmental Protection- DEP Update-

Presentation Overview1. USEPA Clean Water Act (CWA)

regulatory issues2. KY DEP water regulatory issues3. KY CWA 402 permitting issues4. KY air quality trends and litigation5. USEPA Clean Air Act (CAA) regulatory

issues

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USEPAClean Water Act (CWA)

Regulatory Issues

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EPA: Clean Water ActSteam Electric Effluent Guidelines. Revisions were

proposed on April 19, 2013. Comments are due Sept. 20, 2013. Final rule to occur no later than May 22, 2014

Definition of Waters of the U.S. guidance. Proposed guidance was issued in April 2011. Comments were due July 31, 2011. Final guidance is currently undergoing interagency review. Federal rulemaking is also being internally developed.

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EPA: Clean Water ActFederal Water Quality regulations (40 CFR Part

131). Regulations have not been revised in over 25 years. EPA proposed revisions on Sept. 4, 2014. Comments are due Dec. 3, 2013.

Federal water quality standards for Selenium. EPA has been working on this for several years. EPA proposed a revision in 2004, but was not finalized. Recent indications are that EPA may propose revised standards in CY2013-14

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KY DEP Regulatory Issues

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Wastewater Lab Certification regulation401 KAR 5:320 goes into Sept. 5, 2013 requiring

certification of wastewater labs performing CWA 402 data analysis and applications will be accepted after this date for processing.

General wastewater labs must be certified by Jan. 1, 2015.

Wastewater labs performing field analysis only (D.O., TRC, pH, temperature, conductivity, and turbidity) must be certified by Jan. 1, 2016.

Don’t wait until the last minute to get certified. 7

KY Triennial Review of KY Water Quality Regulations Among the proposed changes include a revision to the water

quality criteria for selenium to reflect the latest available science: Aug. 2012, KY proposed to delete existing acute criteria of 20 µg/l Feb. 2013, as a result of comments received, the agency proposed

revised Kentucky state specific acute and chronic water quality criteria for selenium:oAcute criteria = ≤ 258 µg/LoChronic criteria = 8.6 µg/g total selenium dw whole body fish

tissue, or, 19.3 µg/g total selenium dw egg/ovary tissue. April 2013, proposal approved by KY legislative committee. May 22-23, 2013, proposed regulation sent to EPA for review and

action (EPA has 60-90 days for review). Numerous conversations with USEPA – still awaiting final EPA response.

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CWA 402Permitting Issues

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CWA 402 Permitting issues Of the ~10,000 KPDES active permitted entities, approximately

1750 KPDES permits are for coal mining operations in Kentucky. Currently, there are approximately 180 coal mining operations

permit applications (105 IP’s and 75 GP’s) that are being reviewed and processed.

Oversight by USEPA of proposed CWA 402 permits continues to be a challenge for processing individual permit applications. Proposed surface coal mining individual permits in

Appalachia for new and expanded activities have not been able to be processed through EPA.

36 EPA permit objections are still pending, some for as long as 2-3 years.

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Total KPDES Permits Pending – Coal only

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Total KPDES Permits Pending – Coal IP’s only

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Total KPDES Permits Pending – Coal GP’s only

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Coal Mining Permitting: Priority Focus Continue to work with USEPA and affected permit applicants

regarding pending coal mining permit applications to: Issue GP permit coverage’s as appropriate under existing GP prior to

permit expiration July 31, 2014, Draft proposed IP’s for EPA review, and Continue to work toward resolution of EPA’s permit objections following

June 5 & 7, 2012 EPA public hearings on 36 EPA draft individual permit objections.

Reissuance of the Coal General Permit prior to expiration on July 31, 2014. Intention is to reissue two (or more) KY Coal Mining General Permits, one

each for western Kentucky and eastern Kentucky respectively. Plan to public notice before end of CY2013.

Development of e-NOI for permit application submittals & e-DMR for compliance monitoring submittals for coal mining sector.

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CWA 402 Permitting: Key Dates What should I plan for between now and the reissuance

of the Coal GP(s) in order to obtain GP coverage under the existing Coal GP prior to expiration on July 31, 2014:

To ensure coverage for an eligible activity, a permit application (NOI) should be submitted by or before June 1, 2014.

Applications (NOIs) submitted between June 1, 2014 and July 31, 2014 cannot be assured of being processed prior to July 31, 2014.

Operations are free at any time to submit an individual permit application if preferred

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CWA 402 Permitting: Key Dates What happens when the new Coal GP(s) are reissued?

The newly issued Coal GP(s) will describe in the permit itself the process for maintaining or obtaining permit coverage for both existing and new operations

It is anticipated that for existing operations that do not have a change in operation, that a new application (e-NOI) with some information will need to be submitted to be processed in a streamlined manner – TO BE DETERMINED IN COAL GP

For operations that have new or expanded operations, a new application (e-NOI) will need to be submitted and processed consistent with the current permitting process.

Operations are free at any time to submit an individual permit application if preferred to 1) convert an existing GP coverage to an individual permit, or 2) permit a new or expanded operation.

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CWA 402 Permitting: Key Dates What happens in the unintended event that the existing Coal GP

expires on July 31, 2014 before new Coal GP(s) are reissued? Current Coal GP coverage holders as of the expiration of the

current GP will be authorized to continue to operate without submitting a new permit application (NOI)

However, a new GP coverage cannot be issued for a new or expanded operation after the existing Coal GP expires on July 31, 2014 until a new Coal GP is reissued.

An ownership change to an existing Coal GP coverage may occur at any time as a minor modification

Operations are free at any time to submit an individual permit application if preferred to 1) convert an existing Coal GP coverage to an individual permit, or 2) permit a new or expanded operation.

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CWA – Decisions must be madeGiven what we have discussed thus far, it is

extremely clear: We must obtain timely resolution to water

quality regulation issues and CWA permitting requirements and processes in order to achieve certainty in the process so that everyone knows the expectations and can plan accordingly.

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Kentucky’s Air Quality

Continues to Improve

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Air Quality Improvements Are Projected to Continue

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85% actual reduction since

1980, 90% projected by 2016

Kentucky utilities are projected to meet vacated CSAPR SO2 targets

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Kentucky utilities are projected to meet vacated CSAPR NOx targets

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Air Litigation: Ozone SIPConn, Delaware, and Maryland filed petition with the

6th Circuit Court of Appeals to review EPA’s approval of KY’s and TN’s 2008 8-hour ozone SIP which EPA approved on March 2013. The Sierra Club has also filed suit. Kentucky intervened in this action on June 19, 2013. As previous slides show, KY projects that it will meet the

vacated emission reduction targets of CSAPR which went beyond that required for CAA “good neighbor” and NAAQS’s requirements

Is Kentucky a significant downwind state contributor? No.

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Air Litigation: SO2 Designations• Sierra Club, North Carolina, North Dakota, Nevada, South Dakota and

Texas have all sent EPA Notices of Intent (“NOI”) to sue for failing to designate areas as attainment, non-attainment or unclassifiable for the 2010 SO2 National Ambient Air Quality Standard. Under Section 107(d) of the Clean Air Act, EPA has a non-discretionary

duty to designate areas after the promulgation of a new or revised standard. EPA’s deadline was June 3, 2013.

Only two counties in Kentucky received designations (Jefferson & Campbell).

On August 26, 2013, the Sierra Club and Natural Resources Defense Council filed a complaint in the U.S. District Court for the Northern District of California.

Kentucky filed a NOI on Sept. 4, 2014 citing EPA’s failure to make designations.

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USEPACAA Regulatory Issues

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President’s Climate Action Plan2009: President pledged to reduced GHG emissions

by 17% from 2005 levels by 20202013: President’s Climate Action Plan

1. Cut carbon pollution in America.2. Prepare the U.S. for impacts of climate change.3. Lead international efforts to address global

climate change.

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President’s Memo to EPA – New EGUsNew Power Plants:

Directed EPA to issue revised standards under CAA Section 111(b) for new power plants by September 20, 2013.

Original standard of 1000 lbs CO2/MWhour was proposed April 13, 2012.

Depending upon what EPA decides with the final rule, this could be a “game-changer” regulation that would effectively eliminate the ability to build a new coal fired power plant absent cost-effective and technically viable use of carbon capture sequestration (CCS) or other currently non-existent commercially available technology.

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President’s Memo to EPA – Existing EGUsExisting, Modified, or Reconstructed Power Plants:

Issue proposed standards under CAA Section 111(d) by June 1, 2014.

Issue final standard by June 1, 2015. States submit a State Implementation Plan (SIP) to EPA by June 30,

2016. Huge implications for Kentucky:

oHow much flexibility will we have regionally or within a state?oWhat will the implementation schedule be once rules are

finalized?oCoal currently accounts for 92% of KY electricity generation.

Kentucky’s current coal fleet in CY2012 averaged 1969 lbs CO2/MWhour.

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KY’s position in U.S. manufacturing Why is this issue so important to Kentucky? The manufacturing sector employs more than 213,000 Kentuckians. Manufacturing accounts for 17% of state GDP.

The state’s most energy-intensive industries—aluminum smelting, iron & steel mills, paper mills, chemical production, and glass manufacturing employ more than 12,000 Kentuckians and account for 3.2% of state GDP.

KY has the most electricity-intensive manufacturing economy in the United States. Consequently, KY plays a vital role in U.S. manufacturing even though KY is only 1.3% of nation’s population: Aluminum (~40%), Stainless Steel (~30%), 3rd largest automobile manufacturer

Per capita carbon footprint is 50% higher than the national average. The manufacturing sector is very susceptible to increasing electricity

costs.

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KY has the most electricity-intensive manufacturing economy in the United States

What should KY’s position be on GHG rules? Therefore, in light of KY’s energy portfolio with coal, manufacturing

economy, cost of electricity, relatively low state per capita income, and other factors – if a GHG rule is to be proposed, what should EPA do? EPA should not establish a GHG emission requirement for existing EGU’s

under CAA 111(d) that is a fuel specific and rate-based (ex., lbs CO2/MWHr for coal EGU’s). In this approach, Kentucky and a few other states would inequitably bear significantly disproportional impacts on the behalf of the U.S. while achieving nominal GHG emission reductions..

A mass based percent emission reduction guideline on the other hand would require all states to achieve equitable overall GHG percent reductions and would achieve much more substantial overall GHG emission reductions in the U.S. consistent with the President’s stated goals while lessening impact to the economies of states like KY.

Must be allowed state flexibility and time to achieve reductions.

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Questions?• Contact:

R. Bruce ScottCommissioner, KY DEP

300 Fair OaksFrankfort, KY

502-564-2150Bruce.Scott@ky.gov

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