South Coast Air Quality Management District to End RECLAIM Program
At the monthly South Coast AQMD Governing Board meeting in March, the board directed staff to come up with dates that they believe the RECLAIM program can be ended and those facilities that are in the program be switched to command and control regulations. Staff was given until the May 5th board meeting to present the dates. In response, staff organized two working group meetings to be held before then to come up with some time frames. Naturally, other issues other than just the timing on the ending of the program were discussed at these meetings which took place on March 24th and April 19th.
Many of the larger, more complex facility operators - petroleum refiners for example – would like to see the program extended as long as possible while some smaller facilities would probably like to exit the program sooner and environmentalists would like to see the program end all together as soon as possible. The larger operators are going to have to probably spend many millions of dollars updating their equipment in order to meet the BARCT (Best Available Retrofit Control Technology) standards that will be required once the cap and trade program is ended and say it will require many years of planning and research. Some of the smaller facilities in RECLAIM would already meet BARCT due to having upgraded equipment over the years or having otherwise reduced emissions below the levels that pulled them into the program in the first place. These operators would like to exit the program as soon as they can in order to rid themselves of the onerous recordkeeping and reporting requirements that go along with it.
At the April meeting, staff – led by Dr. Phillip Fine – suggested a tentative end year of 2025. This year was chosen as it aligns with the further board directive to reduce emissions from the RECLAIM program an additional 5 tons per day by 2025 in addition to the previous directive to reduce them by 12 tons per day by 2022. Representatives for the petroleum industry and others thought that 2025 would be too soon for some of them and thought there should be a range of dates with perhaps 2031 being the outside date. One environmentalist said she would like to see the program ended “tomorrow”. Staff indicated that there would likely be a range, allowing those who wish to do so to leave the program earlier and probably cutting off the pulling of new facilities into the program (those who exceed 4 tons of NOx or SOx emissions in a year) completely by next year if not sooner. The question of what to do about SOx RECLAIM was also asked because the board directive only pertains to NOx. Staff suggest that because all SOx RECLAIM facilities are also in NOx RECLAIM and there are only a handful of them, that SOx RECLAIM should also be ended. There did not seem to be any opposition to this idea from the working group.
One of the biggest concerns expressed at both working group meetings was what will happen to RTCs with the program ending. Will they be converted to ERCs [Emission Reduction Credits which must be purchased when a facility seeks to increase emissions over certain thresholds]? Dr. Fine stated that he did not believe the transition from RECLAIM to command and control was “an NSR [New Source Review] event” and therefore would not require ERCs and that RTCs will not be converted. The only caveat in this was for those facilities that are allowed to sell their purchased (non-allocated) RTCs in the event of a shut-down – those facilities may be able to convert to ERCs since RTCs will soon be without value. These kinds of details will have to be ironed out down the road.
The meetings concluded with no definitive dates nor an answer as to what staff will tell the board at the May meeting but that they will be sending out emails with their thoughts on this as they digest the comments of the working group. The 2025 date was a benchmark that I think they will be looking at as the outside year to end the program. It would be surprising if it was allowed to continue as long as 2031. While the sunsetting timeline is something that has to be decided in the near future, there are a great many details on how this transition will take place. Dr. Fine indicated that they would likely be conducting monthly working group meetings to this end for at least the next four to five years.
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Article by Kimba Anderson, Senior Associate Consultant at Alta.