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Pages 1-14

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From page 1...
... A permit is also required before an existing major stationary source may be modified -- that is, physically changed, or changed in operation, in a way that increases emissions.1 The permit applicant must show that the construction or modification will include advanced emission controls. The applicant must also show that the project will not disrupt progress toward attaining the nation's ambient air quality standards nor violate limits, known as increments, that restrict growth in air pollution in clean air areas.
From page 2...
... Congress directed EPA to arrange for an independent study by the National Research Council (NRC) to estimate the effects of the 2002 NSR rule changes and the 2003 equipment replacement provision.
From page 3...
... The committee's analyses of existing data and computer simulations provided several insights into the potential effects of the NSR changes, as indicated in this report. However, the committee concluded overall that, because of a lack of data and the limitations of current models, it is not possible at this time to quantify with a reasonable degree of certainty the potential effects of the NSR rule changes on emissions, human health, energy efficiency, or on other relevant activities at facilities subject to the revised NSR program.
From page 4...
... The committee used an expanded version of the approach used by EPA in its prospective regulatory impact analysis of the 2003 equipment replacement provision. In assessing the potential effects of the equipment replacement provision compared to the prerevision NSR rules,3 EPA assumed that, under 3In this report, the term prereision NSR rules refers to the NSR rules prior to the 2002 and 2003 changes.
From page 5...
... Three sets of model scenarios were run assuming that those choices would be made for a minimum of 2%, 5%, and 7.5% of facilities each year, respectively. Those scenarios allowed the committee to consider the possibility that aggressive implementation of the prerevision NSR rules would have compelled changes to be made at coal-fired facilities to a much greater extent than would the equipment replacement provision.
From page 6...
... Based on the committee's IPM analysis, the potential effects of the equipment replacement provision on national emissions from electricitygenerating facilities depend on whether CAIR is assumed to be in place or not. The IPM results suggest the following conclusions if indeed the prerevision NSR rules would have compelled significantly more retrofits: · For SO2, without implementation of CAIR, the equipment replacement provision would be expected to result in a moderate decrease in emissions in the first 6 years or so (compared with prerevision NSR)
From page 7...
... Also, the net effects of the equipment replacement provision would depend heavily on how electricity producers respond to the rule changes. Under the revised NSR rules, fewer investment projects would require NSR permits, thus reducing the costs of such projects, both in terms of avoiding NSR-permit-related emission controls and potential delays and uncertainties caused by the NSR permitting process.
From page 8...
... When the IPM simulation allowed facilities to trade emissions in the lower-emission-cap scenario, the model predicted greater use of low-sulfur coal and natural gas and fewer retrofits of emission controls by the affected facilities. IPM results suggest that if lower national emissions of pollutants are desired, setting emissions caps below those set for CAIR would be a more cost-effective means of attaining national emission goals than the type of regulatory approach used for the NSR rules.
From page 9...
... FUTURE ANALYTICAL APPROACHES FOR dETERMINING EFFECTS OF RULE CHANGES Modeling efforts to date have provided some insights into the potential effects of the NSR rule changes on national emissions from the electric power industry. However, such models cannot be used to quantify how much emissions may change at individual facilities and thus cannot be used to assess potential health effects as is usually done for other air regulations.
From page 10...
... . The evaluation depends on comparing investment activity at facilities in states where the revised NSR rules have been implemented with investment activity at facilities in states that have not implemented the changes.
From page 11...
... The variability could be even greater if the relationships are not linear. This reinforces the importance of understanding detailed geographic patterns of emission increases and decreases as a result of NSR rule changes.
From page 12...
... Development of those models should strive to achieve qualities recommended for electricity-sector models. Econometric Models Reduced-form econometric analyses of investment and emission data from sets of facilities in various states that differ in the effective date of the NSR rule changes could be a useful complement to industry-sector simulation models.
From page 13...
... Overall, because of a lack of data and the limitations of current models, available information is insufficient to quantify the effects of the NSR rule changes with reasonable certainty. A combination of empirical analysis and modeling will be necessary to determine the effects of the implemented NSR rule changes and associated uncertainties for affected industry sectors.


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