Article published Dec 22, 2007

Opponents of coal plant seek CO2 limitations

By KARL PUCKETT

Tribune Staff Writer

HELENA — Opponents of the proposed coal-fired Highwood Generating Station argued here Friday that Montana has a rare opportunity to set an example for the nation by placing limits on the power plant's emissions of carbon dioxide, a leading suspect in climate change.

Legal counsel for the state Department of Environmental Quality and plant developer Southern Montana Generation & Transmission Cooperative countered that the gas is not a regulated pollutant under state and federal clean air acts. Nor has any other state in the country acted on its own in requiring carbon dioxide limits for generating plants, they said.

Those realities would make a decision by the state to go it alone in regulating carbon emissions difficult to legally defend, they said during a hearing appealing the plant's air-quality permit. The attorneys added that it would be unfair to the Highwood Generating Station, proposed east of Great Falls, to apply rules that are not in place today even if they are likely to be approved in the future. The DEQ issued the air-quality permit in May.

"CO2 is not yet so regulated," SME attorney Kenneth A. Reich said.

SME is seeking a land rezoning from Cascade County as well as federal financing to build the $720 million circulating-fluidized-bed electricity plant on farmland eight miles east of Great Falls. Private financing also is a possibility.

Bozeman-based Earthjustice is challenging in federal court a U.S. Rural Utilities decision approving the plant. The group also is representing Great Falls-based Citizens for Clean Energy and the Montana Environmental Information Center of Helena in an appeal of Highwood's state-issued air-quality permit.

The state Board of Environmental Review, which hears air permit appeals, convened a special meeting Friday in the Metcalf Building in Helena to hear arguments attacking and defending the permit before a smattering of plant supporters and opponents.

The seven-member board deferred a decision on the carbon dioxide question until Jan. 11.

Attorneys for both sides agreed that no other state permitting agency in the country regulates carbon dioxide in air-quality permits. They disagreed on whether permitting agencies should regulate the greenhouse gas.

"Is CO2 subject to regulation is the question you need to decide, and the answer is yes," Abigail Dillen, the attorney for Citizens for Clean Energy and the Montana Environmental Information Center, told board members.

States across the nation limit emissions of regulated pollutants under an analysis called "best available control technology." Whether carbon dioxide is a regulated pollutant was at the heart of the more than five-hour-long quasi-judicial proceeding Friday.

Dillen urged board members not to wait for the federal Environmental Protection Agency to establish carbon dioxide emissions limits as she said the EPA has been slow to address climate change.

Carbon dioxide could be regulated under the existing BACT process, she said, adding that board members have a rare opportunity in the Highwood Generating Station case not only to require it for facilities in Montana "but to set a national example that would engender change."

Congress already requires facilities to monitor and report carbon emissions to states. Dillen said those requirements wouldn't be in place if carbon dioxide wasn't considered a regulated pollutant. An April U.S. Supreme Court ruling concluded that carbon dioxide is a pollutant, which has "changed the legal landscape," she said.

"There's no more argument; you have the authority to regulate CO2," Dillen said.

DEQ attorney David Rusoff said carbon dioxide isn't regulated just because the Supreme Court decided it was a pollutant. The ruling, he pointed out, wouldn't have contained 30 pages addressing whether it was regulated if that were the ruling's intent, he said. Besides, that case involved tailpipe emissions from automobiles, not coal-fired power plants, he said.

He also said that monitoring requirements required by Congress do not amount to full-blown regulations.

"The department followed the same standards in this case followed by not only EPA but other permitting agencies in the country," Rusoff said.

There's also a dispute over Highwood's fine particulate emissions. The Board of Environmental Review voted 4-3 to reject arguments from both sides and set an evidentiary hearing on that issue for Jan. 22.

Citizens for Clean Energy and MEIC say the state should have specifically analyzed fine particulate matter and required technology to control it. The state and SME argue that fine particulate matter was studied, but as a subset of an analysis of larger particulate.