TESTIMONY BEFORE THE
U.S. SENATE COMMITTEE ON PUBLIC WORKS AND THE ENVIRONMENT
on
Mercury, Sulfur Dioxide, and Nitrogen Oxide Reductions under S. 556
Dirksen Senate Office Building
Presented by
Jeffrey C. Smith
INSTITUE OF CLEAN AIR COMPANIES
www.icac.com
November 15, 2001
Good morning, Mr. Chairman. I am Jeff Smith, Executive Director, Institute of Clean Air Companies (“ICAC” or “the Institute”). The Institute is the nonprofit, national association of companies that supply air pollution control and monitoring technology for all types of stationary sources, including coal-fired power plants that are the subject of this hearing. Members supply the complete spectrum of competing control technologies for emissions of mercury, sulfur dioxide (SO2) and nitrogen oxide (NOx), along with all other criteria pollutants and the 189 hazardous air pollutants identified to-date. Thus the Institute speaks for the entire industry, not just one technology. We do not, however, supply technology for CO2 control and I will therefore not address CO2. For more on the Institute, see www.icac.com. I have submitted detailed testimony for the record, but in the few minutes I have here this morning, I will begin with the “bottom-line.”
I. Summary
The air pollution control technology industry has the technology to achieve the NOx, SO2, and mercury reductions contemplated by Sen. Jefford’s bill (S. 556), and the resources to deliver that technology within the time frames the bill contemplates. Of course there will be site-specific issues, but in the 31-year history of the Clean Air Act the air pollution control technology industry has always delivered on the charge this Committee has given it. There is no reason to believe this time will be any different. A multi-pollutant approach makes sense both technically and cost-wise. And experience strongly suggests that a multi-pollutant bill will be the Committee’s one chance to achieve the twin goals of an adequate energy supply and clean air. Here is why we feel this way.
II. Discussion
Well-Demonstrated, Conventional Control Technologies Exist to Reduce SO2, NOx, and PM2.5 Emissions. There is no real debate that reliable, demonstrated-in-practice control technology exists for coal-fired power plants to remove 95% of sulfur dioxide (SO2) emissions, 99.9% of particulate matter (PM) emissions, and 90+% of nitrogen oxide emissions (NOx). Members of our industry are guaranteeing these removal levels today. The harder question is what can be done to control mercury emissions, and I will focus my testimony on that question.
Air Pollution Control Technology Markets Have Worked Well. The 31-year history under the Clean Air Act shows that clear, enforceable standards yield cost-effective compliance options. Study after study shows a strong link between establishment of regulatory drivers and technical performance and cost improvement. This is true even when control options have been limited or untested at the time the rules were introduced. The advanced state of technologies for controls of sulfur dioxide (SO2) and nitrogen oxide (NOx) emission was reached after (not before) regulatory drivers were adopted. Total costs (capital and O&M) fall dramatically as control technology moves from research and development to full-scale commercialization. In the case of selective catalytic reduction – widely used to remove NOx emissions from coal-fired boilers -- the costs in $/ton removed fell 80-90% from 1989 to 1998. See, e.g., Environmental Regulation and Technology Innovation: Controlling Mercury Emissions from Coal-Fired Boilers, Northeast States for Coordinated Air Use Management, Boston, September 2000.
Technology users (e.g., electric utility industry) and suppliers have proven to be more innovative than one may expect at the outset of a regulatory program. Electric utility users are outstanding in their ability to use control technology effectively. The air pollution control technology industry, like nature herself, is extremely competitive, “red in tooth and claw.” This is good for technology users and government regulators, because it yields increasingly cost-effective solutions; if your competitor discovers a way to reduce emissions more cost-effectively, you will be out of business quickly if you do not improve as well. And many have exited our industry for that reason.
The key to well-functioning markets is regulatory certainty. If the goal is technological innovation, then issue a clear, certain, performance-based mandate.
Development of Mercury Removal Technologies Will Be No Different. It is reasonable to assume that the traditional, successful workings of the air pollution control market will apply to the development and enhancement of mercury emission controls. The technology supplier industry is more competitive that ever. Utilities are increasingly sophisticated as customers of technology, and more demanding of cost-effectiveness in a deregulated environment. The development focus for mercury controls is in many areas on optimizing controls already demonstrated for other pollutants (e.g., SO2, PM, NOx), so the learning curve is not as steep. Financial incentives for our industry are sufficient to invest in research and development, particularly once a clear, certain regulatory goal is set. Even in the absence of a legislative directive, there are a large number of mercury control demonstrations underway along with significant investment by both technology suppliers and end-users (Appendix II). Indeed, we have already seen cost estimates of mercury- and multi-pollutant control by the U.S. Environmental Protection Agency (EPA) and others fall dramatically.
A Multi-Pollutant, Performance-Based Approach Is Sensible from a Technology-Development Standpoint. The Institute applauds and confirms S. 556’s approach. It allows both utilities and technology suppliers like ourselves to develop integrated compliance plans and maximizes incentives for innovation and competition.
ICAC also supports performance-based approaches, which harness market mechanisms. As Sen. Smith noted at the Committee’s recent hearing on November 1st, original estimates of the cost of removing SO2 in the acid rain program were $7 billion, but the actual cost was about $1 billion. This is a dramatic example of the market’s power, as well as the positive effects of regulatory certainty on cost and performance improvements of air pollution control technology.
A Multi-Pollutant, Performance-Based Approach Is Sensible from Policy and Cost-Effectiveness Standpoints Too. This multi-pollutant approach has the potential to lead to simultaneous compliance with numerous regulatory programs, including acid rain, ozone attainment (both the one-hour and eight-hour), regional haze, and fine particulate (PM2.5). We feel insufficient attention has been given to the benefits of PM2.5 reductions that S. 556 would achieve by lowering SO2 and NOx levels (which contribute to PM2.5 formation in the atmosphere). Indeed, by default PM2.5 is the fifth pollutant controlled in this bill.
The effect of this multi-pollutant approach is to lower the evaluated cost for each individual pollutant that may otherwise be addressed in a separate regulatory program. For example, if a scrubber is installed to control acid rain and PM2.5, but it reduces mercury emissions as well, only a portion of its cost should be attributed to compliance with the mercury reduction requirements. Cost estimates for mercury controls should therefore be scrutinized carefully for how they allocate technology costs among various regulatory elements of a multi-pollutant bill.
Conventional Emissions Controls Are Removing Mercury Without Even Trying. As EPA’s data shows (see Appendix I), existing controls are already removing mercury, and in some cases large amounts of mercury, as a side-benefit of the removal of other pollutants. For example, controls to remove SO2 may significantly reduce mercury and PM2.5 (precursor) emissions as well. Mercury removal efficiencies depend on numerous factors. Among the biggest is whether the coal burned is bituminous or sub-bituminous.
Control Technology Demonstrated Today Can Achieve Mercury Removal of 90% on Bituminous Coals, and 70% on Sub-Bituminous Coals. Of course there may be site-specific issues, but in general the industry believes technology available today can achieve total mercury reductions of 90% on bituminous coals, and 70% on sub-bituminous coals. This conclusion is supported by measurement programs the electric utility industry conducted for EPA (Appendix I). What is the most cost-effective approach will differ for site-specific reasons, such as the type of control equipment currently being used.
Research on mercury control technology has been underway in the U.S. for a decade, and the enactment of a multi-pollutant bill will, as discussed above, stimulate more R&D and results. Appendix II is a partial list of on-going R&D projects. They are in general designed for 50-70% mercury removal by 2005, and 90% removal by 2010, with the additional objective of cutting costs by 50-75% by 2010. The important point here is that the R&D is maturing to the point of full-scale demonstrations today and covers a wide range of coal types and existing equipment configurations. Note that many of these project teams include utility end-users as well as technology developers, which indicates the wide-ranging, cooperative effort underway. By the required compliance deadline, therefore, we believe this R&D, along with already-demonstrated technology, will yield a variety of increasingly cost-effective options for achieving the NOx, SO2 and mercury removal requirements of S. 556.
(A question for the Committee, however, is whether it makes sense to base the level of required control on what can be guaranteed today, or rather what history and other factors show will likely be available in seven or ten or twelve years when compliance is required. This is particularly appropriate since as discussed below it is not likely that this program will be amended mid-stream, and indeed the premise of certainty in this multi-pollutant approach is that the rule will not be amended. An answer is suggested by hockey great Wayne Gretsky, who said a reason for his success was that he skated to where the puck was going to be, not to where it was.)
The Committee does not have to pick technology winners and losers; the marketplace is adept at doing so. The course of technology development is too unpredictable to say what the best approach will be in 7 or 10 or 12 years for each unique application. Industry experience strongly indicates that there will not be one universal approach. We suggest you must simply have a reasonable assurance that technology markets are working and that you have provided an incentive for development. As I have said, these markets will continue to work well, and S. 556 provides the requisite incentives for technology development by providing clear goals without specifying the precise compliance technology.
This Is Likely the Committee’s One Chance to Assure Twin Objectives of Adequate Energy Supply and Clean Air. For now and the near future, an adequate energy supply arguably depends on burning coal. Coal-burning electric utilities are the largest industrial source of air pollution, with adverse health effects well-documented by scientific and medical authorities. Fortunately, air pollution control technology, if required, can allow coal to be consistent with human health and environmental imperatives. This, it should be noted, is likely the Committee’s one chance to assure these goals are met. The history of the Clean Air Act shows that it is not easily amended, and indeed the premise of certainty in this multi-pollutant approach is that the law will in fact not be amended mid-stream.
III. Conclusion
The multi-pollutant, performance-based approach reflected in the Jeffords
bill (S. 556) makes sense from a technical and cost viewpoint. The required reductions for NOx, SO2, and mercury are achievable assuming, in the case of sub-bituminous coals, continued technological progress with control technology, which is a reasonable assumption. Control technology markets have worked well and will continue to do so, yielding progressively more cost-effective compliance solutions. Therefore, the issue of control technology should not determine whether the NOx, SO2, and mercury removal requirements in this bill, or a similar one, are enacted. History under the Clean Air Act suggests strongly that consideration of a multi-pollutant bill is likely to be the Committee’s one chance to assure our Nation’s twin goals of adequate energy and clean air over the foreseeable future.
Thank you for this opportunity to testify. I look forward to your questions.
Appendix I
The Mercury Reductions Conventional Controls Can Achieve on
Coal-Fired Power Plants (Without Even Trying)
(average mercury control, percentage)
Technology* Bituminous Coal Sub-bituminous Coal
CS-ESP 29 (18) 3 (9)
HS-ESP 11 (9) 0
(12)
FF 89 (6) 73 (6)
SDA+ESP 45 (3) 0 (9)
SDA+FF 93+ (9) 23 (9)
CS-ESP+Wet FGD 78 (6) 16
(9)
HS-ESP+Wet FGD 39 (9) 8 (9)
FF+Wet FGD 97
(6) --
*CS-ESP=cold-side ESP; HS-ESP=hot-side ESP;
SDA=dry scrubber; FGD=wet scrubber
Source: U.S.
EPA, ICR Control Data Summary, 4/24/01,
www.epa.gov/ttn/atw/combust/utiltox/utoxpg.html. Parenthetical number denotes number of tests.
l
Technology* Bituminous
HS-Appendix II
Research on Mercury Emissions Control Technology
A great deal of research is currently underway
regarding the capabilities of technology to remove mercury from coal-fired
power plants. Much of this R&D
focuses on enhancements of conventional technology, that is, technology that
would be used anyway to remove SO2, NOx, and/or PM2.5
to achieve compliance with programs such as acid rain, regional haze, and
attainment of the one- and eight-hour ozone and fine particulate (PM2.5)
ambient standards. For example, R&
D is underway to assess the ability of the most widely-used high efficiency NOx
control technology, selective catalytic reduction (SCR), to oxidize
mercury so that it can be removed by other control technology that might
already be in-place or installed for other purposes. Other private R&D will demonstrate (full-scale) the
conversion of a technology that has been successfully applied to control
mercury emissions at waste combustors to coal-fired power plants.
Since, however, private research is to some extent
just that, i.e., private, for competitive reasons, we have supplied the
following non-exclusive list of ongoing public research projects funded by the
U.S. Department of Energy. These
projects are nearly all in advanced development stages. They are in general designed for 50-70%
mercury removal by 2005, and 90% removal by 2010, with the additional objective
of cutting costs by 50-75% by 2010.
Many of these technologies would tie-in mercury controls with processes
that reduce other air pollutants such as SO2 and NOx.
This partial list illustrates the wide-range of on-going research based only on
an expectation of a legislative directive. Note that many of these project
teams include utility end-users as well as technology developers, which
indicates the market forces driving development. (For more information, go to the press releases dated June 18,
2001 and October 16, 2001, at www.fe.doe.gov/).
·
McDermott
Technology, Alliance, Ohio
Project
Summary: The goal is to commercialize a
method for enhanced control of mercury emissions from Michigan South Central
Power Agency’s 55 MW Endicott Station and Cinergy’s 1,300 MW Zimmer Station (OH)
equipped with wet FGD systems. The two
specific objectives are demonstration of 90% total mercury removal (stack
emission versus mercury in the coal burned) and annual levelized costs 50-75%
less than commercial available, activated carbon mercury removal technologies.
·
ADA-Environmental
Solutions, Littleton, CO
Project
Summary: This project involves testing
on a plant owned by Alabama, a plant owned by Wisconsin Electric power company,
and two PG&E sites. The company’s
technology requires minimal equipment and minimal downtime for
installation. Flue gas is injected with
a sorbent of activated carbon which combines with the mercury so that it can be
removed with a filter.
·
The
Energy & Environmental Research Center at the University of North Dakota,
Grand Forks, ND
Project
Summary: The Energy & Environmental Research Center at the University of
North Dakota, Grand Forks, ND, will develop an advanced hybrid particulate
collector (AHPC) that promises to remove 90 percent of all mercury emissions at
a price lower than today's estimates. The AHPC combines the best features of
electrostatic precipitators and baghouses in a configuration that boosts
efficiency between particulate collection and dust disposal. By doing so, the
problem ESPs generally have in collecting excessive fine particulates is solved
as is re-collecting dust in conventional baghouses. The system is to be
bench-scale batch tested so that new work is tied to earlier results; the AHPC
would also undergo larger, pilot-scale testing on a coal-fired combustor. The
technology could be retrofitted to ESP-equipped plants, installed in a new
plant or applied to industrial boilers requiring mercury control. Partners are
W.L. Gore & Associates, Elkton, MD, and the Otter Tail Power Company, Fergus
Falls, MN, which will host field tests.
·
URS
Group, Inc., Austin, TX
Project
Summary: URS Group, Inc., Austin, TX, will pilot test mercury-oxidation
catalysts already identified as being effective through earlier, smaller-scale
research funded by DOE. The project's pilot tests, conducted at plants using
wet flue gas desulfurization systems and particulate collection systems, are on
a larger scale and will be conducted for longer periods to provide data for
future, full-scale designs.
Mercury-oxidation potential will be measured continually to provide
longer-term catalyst life data. The project is applicable to about 90,000
megawatts of generation capacity. Project partners are the Electric Power
Research Institute, Palo Alto, CA, which will co-manage and co-fund the pilot
tests, and two utilities.
·
CONSOL,
Inc., Library, PA
Project
Summary: CONSOL, Inc., Library, PA, will construct a pilot-plant facility
producing flue gas from a coal-fired utility to test technologies that remove
not only mercury, but will reduce nitrogen, sulfur and carbon dioxide emissions
as well. The facility will be composed of an air preheater, an electrostatic
precipitator (ESP) to collect fine particulates, and an alkaline-sorbent
injection system to control sulfur condensation. An alkaline additive is
injected into the air heater, which will operate at 200-250o F, to
neutralize the sulfur. Mercury will be collected with the fly ash in the ESP.
The work addresses several
utility
issues: mercury removal at lower-than-normal temperatures, using spray cooling
to lower temperatures, and the additive's effects on specific plant components
performance.
·
Southern
Research Institute, Birmingham, AL
Project
Summary: Southern Research Institute will test the effectiveness of
calcium-based sorbents and oxidizing agents in controlling mercury from coal
plants by using a technique that combines mercury oxidation with adsorption.
Incorporating mercury oxidation along with lime and silica lime additives
produces more efficient sorbents that remove sulfur dioxide in addition to
mercury. Pilot-scale studies will be performed on a coal-combustion system
using a recirculating fluidized bed for multi-pollutant control. Lime and
silica lime sorbents will be tested because they are chemically similar to wastes
produced by dry
scrubbers.
Using calcium-based sorbents could lower mercury removal costs by almost 50
percent from current estimates. Project partners are ARCADIS Geraghty &
Miller Inc., Denver, CO; Southern Company Services, Birmingham, AL; and the
Tennessee Valley Authority, Knoxville, TN.
·
Powerspan
Corp., Durham, NH
Project
Summary: Powerspan Corp. will pilot test a multi-pollutant technology that
converts mercury into mercuric oxide, nitrogen oxide to nitric acid and sulfur
dioxide to sulfuric acid from coal-fired flue gas streams with gas flow rates
up to 4,000 cubic feet/minute. Fine particulates will also be collected.
Mercury capture is to exceed 90 percent, and an understanding of what
influences mercury removal is to be investigated. The project will be conducted
at FirstEnergy Corporation's R.E. Burger Generation Station in Akron, OH.
·
Apogee
Scientific Inc., Englewood, CO
Project Summary: Apogee Scientific Inc. will assess up to a dozen carbon-based and other sorbents that are expected to remove more than 90 percent of mercury and cost 40 to 75 percent less than commercial sorbents because they feature inexpensive precursors and simple activation steps. Six to 12 sorbents will undergo fixed-bed adsorption tests with the most promising three to six being further evaluated by injecting them into a pilot-scale electrostatic precipitator and baghouse. Commercial flue gas desulfurization activated carbon will provide the baseline for comparisons. A portable pilot system will be constructed and would accommodate a slipstream ESP or baghouse at minimal cost. Tests will be conducted at Wisconsin Electric's Valley power plant in Milwaukee, WI, and Midwest Generation's Powerton Station in Pekin, IL. The project team consists of URS Radian, Austin, TX; the Electric Power Research Institute, Palo Alto, CA; the Illinois State Geological Survey, Champaign, IL; ADA Environmental Solutions, Littleton, CO; and
Physical
Sciences Inc., Andover, MA.
·
CONSOL
Energy Inc, South Park, PA
Project
Summary: CONSOL will demonstrate a
multi-pollutant system to reduce NOx, SO2, mercury ,
acidic gases, and fine particles from smaller coal plants for less money than
it costs to control NOx and SO2 separately. Among the innovations CONSOL plans to
install at the AES Greenridge Power Plant near Dresden, NY, is a catalytic NOx
reduction technology that works inside the plants ductwork, a low-NOx
combustion technology that burns coal mixed with biomass, and a flue gas
scrubber that is less complex and half the cost of conventional systems.
·
The
Energy and Environmental Research Center at the University of North Dakota,
Grand Forks, ND
Project
Summary: The project addresses the
impact that SCR, SNCR, or flue gas conditioning systems have on total mercury
emission and on the speciation of mercury.
The completion date for the final report is June 30, 2002.
Appendix III
A. Employment Created by NOx SIP Call Controls
Alone
|
Category |
Person-Years (’99-05) |
Average No. of Jobs per Year |
|
Direct
Labor |
|
|
|
- System Design, Manufacture,
Supply |
16,495 |
2,356 |
|
-
Construction/Installation |
16,915 |
2,416 |
|
-
Component/Auxiliary |
8,750 |
1,250 |
|
- Other
Technology-specific – Raw Materials, Outside A/E and Consulting Firms,
Testing (Performance, Startup) |
3,090 |
442 |
|
- Other Direct – Additional
Utility Support Staff, R&D, Sales Reps, Consults./Services |
14,000 |
2,000 |
|
Subtotal
Direct Labor |
59,250 |
8,464 |
|
Indirect
Labor |
118,500 |
16,928 |
|
Total SIP Call NOx-related
Labor |
177,750 |
25,392 |
Assumptions/Comments
·
This
table shows employment created directly from the NOx SIP-call and
Section 126 Petitions over the 7-year period 1999-2005. It does not include effects from other
market influences such as new gas turbine/combined cycle plants, new coal-fired
units, refinery/process heaters, industrial boilers, IC engines, and other
industrial sources (e.g., cement, steel), which would substantially increase
the labor figures given. Also not
included are effects from other regulatory drivers such as ozone attainment controls
outside the SIP Call region (e.g., California, Texas), new source review,
regional haze, and multi-pollutant.
·
The
figures are based on assumptions and analysis from a March 1994 study prepared
by H&W Management Science Consultants (co-sponsored by ICAC) for the U.S.
EPA entitled, “Employment Created by NOx Control and Continuous
Emission Monitoring Requirements of Title IV of 1990 Clean Act
Amendments.” This study developed labor
factors associated with specific NOx-control technologies in terms
of labor hours per kW based on in-depth interviews with air pollution control
industry stakeholders. These factors
were applied to projections of affected megawatts.
·
The
above table assumes that the SIP Call will generate 110 GW of SCR, 24 GW of
SNCR/Reburn, and 34 GW of low NOx burner (LNB) and other activity
from 1999-2005. These assumptions are
consistent with ICAC and H&W’s “Air Pollution Control Equipment Market
Forecasts,” Issue No. 20, September 2001.
After applying the labor factors, in terms of labor hours, SCR, SNCR,
and LNB account for 84%, 6%, and 10% respectively.
·
This
analysis assumes 2,080 person-hours in a year.
It further assumes the technology costs from the March 1994 study, i.e.:
$60/kW for SCR, $20/kW for SNCR/Reburn, and $20/kW for LNB/Other combustion
modifications. Higher (lower) costs
will inflate (deflate) employment figures proportionately.
· Economists frequently multiply the number of direct person-hours by two, and sometimes three, to estimate indirect employment. The purchase power associated with goods and services provided by direct labor is called “the multiplier effect”. To be conservative, we applied a ratio of two indirect jobs for each direct job in this analysis.
B. Employment in the Air Pollution
Control Technology Industry
Dollars spent on compliance are
recycled in the economy, generating jobs in construction and materials
fabrication, in addition to jobs in air pollution control technology
companies. According to the U.S.
Department of Commerce, in 1997 air pollution control equipment firms employed
over 111,000 men and women, with companies and jobs arrayed throughout the
United States, as shown in Table 1.
Table 1. Employment in the Air Pollution Control Equipment Sector (1997)*
(States Represented by Committee Members, Total)
State: Number of Jobs: Revenues (millions of dollars):
California 13,107 1,848.1
Colorado 993 139.9
Connecticut 1,681 237.0
Delaware 707 99.6
Florida 3,235 456.1
Idaho 235 33.2
Missouri 2,862 403.5
Montana 225 31.7
Nevada 218 30.7
New
Hampshire 334 47.1
New
Jersey 6,736 949.7
New
York 7,204 1,015.8
Ohio 6,569 926.2
Oklahoma 2,235 315.1
Oregon 1,025 144.4
Pennsylvania 9,841
1,387.5
Rhode
Island 259 36.4
Vermont 140 19.7
Virginia 2,012 283.7
TOTAL 111,560 15,730
*All
figures taken from U.S. Department of Commerce, International Trade
Administration, Environmental Technologies Exports, Environmental Industry
of the United States, January 1999, Washington, D.C.
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