New rules on greenhouse gases could strain impacted industries

In a change that could bring challenges to Minnesota's mining industry, utilities, refineries and paper mills, large industries that emit significant amounts of greenhouse gases will soon need to obtain permits from the federal government.

Starting in January, the permits require that the industries use the "best available control technology" to reduce their emissions. The Environmental Protection Agency already uses the rule for other air pollution when a new facility is built or an existing one expanded.

The rules apply to any facility that emits more than 100,000 tons of greenhouse gases each year. The problem is there is no available technology for controlling carbon monoxide, the most common greenhouse gas.

Here's how the EPA rules work: companies that come under the rule have to identify potential control technologies, set aside those that aren't technically feasible, compare the others based on cost and effectiveness, and choose the best one.

"As time passes it will become easier for facilities to do this analysis," said Barbara Conti, a research scientist with the Minnesota Pollution Control Agency, which will enforce the rule. "But the first few companies who go through it, it's very challenging because they're basically inventing what it would be."

"But the first few companies who go through it, it's very challenging because they're basically inventing what it would be."

For the time being, it will come down to energy efficiency. That's because for the most common greenhouse gas, carbon dioxide, a cost-effective control technology doesn't exist. Researchers are working on techniques to capture and store carbon dioxide from industry smokestacks. But there are lots of questions about whether that's feasible, and how soon it might be affordable.

Energy experts say U.S. industries could save a huge amount of energy and money by becoming more efficient. But paper mill operators don't see it that way, said Wayne Brandt, executive director of Minnesota Forest Industries.

"Our members have been under such tremendous cost pressure for the past five to seven years, that if there were simple things they could do to improve their efficiencies, they've already done that," he said.

Brandt said for the more expensive methods, they're waiting for a better economy.

Xcel Energy is unlikely to achieve dramatic efficiencies anytime soon, according to Rick Rosevold, air quality manager for Xcel's northern region.

"I think it's more looking at how do we get the regulatory framework in place, and how do we collect information so we can start making informed decisions as a nation and as an industry," Rosevold said.

Ethanol plants may need to obtain federal permits for the first time. Most are operating under state permits, but the fermentation that turns corn into ethanol releases carbon dioxide.

Mike Yerke, general manager of Chippewa Valley Ethanol Company, said his industry is trying to persuade the federal government to exempt so-called biogenic emissions -- emissions from processes that are part of a short-term carbon cycle.

"We recognize the overall good that we're all driving for, reduction of greenhouse gas emissions," Yerke said. "But we've got to get the definitions right, and we don't want to inadvertently negatively impact an industry that's been championing this cause for quite some time."

Recent scientific research has called attention to changes in land use which likely add to the carbon intensity of biofuels. EPA officials say the agency will try to resolve the question soon.

States and industry groups have filed dozens of lawsuits to stop the EPA's plans to regulate climate pollution. Among the backers of the legal challenges are the American Iron and Steel Institute, which represents some of Minnesota's taconite mines, and the Competitive Enterprise Institute, which has been supported by foundations of the Koch brothers, owners of the Flint Hills Refinery in Rosemount.

On Dec. 10, a federal appeals court ruled that the government can go ahead with its plans. But that ruling is expected to be challenged.

Environmental groups don't see the rules as a way to secure big reductions in greenhouse gas emissions right away -- partly because they only apply to new and expanding sources. But J. Drake Hamilton, a science policy advisor at St. Paul-based Fresh Energy, said they're a good start.

"Companies have never before had a market signal that says that they need to reduce greenhouse gas emissions, so that has not been a factor in their production decisions, in their operational decisions," Hamilton said. "So I think what we'll see is a much more concerted effort, and much more innovation on the part of all kinds of industries that are subject to this permit requirement, that they will get better."

The EPA is planning to take another step and require industry to actually reduce greenhouse gas emissions. But all these rules could be shunted aside if Republicans in Congress achieve one of their top goals -- to strip the EPA of its power to use the Clean Air Act to force reductions in greenhouse gases.

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