Marten Law: First State Air Permit With Enforceable CO2 Limits Issued for Idaho Coal-Fueled Fertilizer Plant

In this Emerging Issues commentary, Svend Brandt-Erichsen of Marten Law PLLC discusses a proposed Idaho coal-fueled fertilizer plant, which is the first in the US to have been issued a permit with enforceable limits on carbon dioxide emissions. The plant will gasify coal as a feedstock for fertilizer. Svend discusses the development of the permit limit on emissions, the plan for carbon sequestration and the future significance of the permit's limit. He writes:
"This CO2 emission limit would not take effect until five years after mechanical completion of the plant. The plant would then be obligated to capture CO2 in excess of the limit and send the CO2 offsite for use in enhanced oil recovery (EOR) and permanent sequestration. During the five year period between mechanical completion and the compliance date, the plant would be obligated to purchase greenhouse gas offsets equivalent to its annual emissions in excess of the 58 percent reduction threshold. At full operating rates, this would amount to 1.1 million tons in offset credits per year."
"Sierra Club has indicated it hopes that the Idaho permit helps set a national standard for carbon sequestration from coal plants. As there currently is no underlying regulatory requirement applicable to CO2 emissions, the legal basis for the permit's CO2 limit remains open to question, at least when it comes to extending the requirement to other facilities. However, the requirement clearly is enforceable against Southeast Idaho Energy, not only because it is incorporated into the project's permit, but also because the settlement agreement among Southeast Idaho Energy, Sierra Club, and Idaho Conservation League allows the conservation groups to seek specific performance in the event of any breach of the agreement."
"The precedential value of the Idaho permit remains to be seen. While the Sierra Club and others have had success in blocking or delaying permits for new conventional coal plants and in discouraging investment in new plants, no laws yet require limits on CO2 emissions from power plants. This may change soon, as a result of EPA's final "endangerment" finding on CO2 emissions from new cars, with resulting fallout for permitting of stationary sources. However, until it does, any other projects that follow the lead of the Southeast Idaho Energy project will be doing so voluntarily."
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