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Wednesday, 15 January 2014 14:59

The cost of cleaner air: New pollution standards would cost paper mill $50 million in upgrades

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out frEvergreen Packaging’s Canton paper mill will be writing some big checks over the coming years as it moves to comply with an Environmental Protection Agency rule 10 years in the making.

It’s been more than a decade since the EPA first proposed stricter limits for toxic pollutant emissions from boilers, but once it released the final regulation in December 2012, companies nationwide began gearing up for the expensive upgrades necessary to comply. Evergreen is among them.

 

“These paper mills, they’re very energy-intensive,” said Steve Schliesser, engineer for the N.C. Department of Environment and Natural Resources Division of Air Quality. “That’s why they need a lot of boilers.”

Of Evergreen’s seven industrial boilers, five — one coal-and-wood-burning and four coal-burning — would be affected by the rule, which puts new limits on toxic air pollutants.

Evergreen refused to comment for this article, but others familiar with the mill’s situation attested to financial burden the regulation will cause.

Mark Clasby, economic development director for Haywood County, said the paper mill will likely comply with the limits by switching its boilers to natural gas, which is a cleaner-burning fuel. But that change will bear a price tag of about $50 million, he said.  

“It’s still a lot of money for them, even to a company their size,” Clasby said. 

The plant is Haywood County’s largest employer. It has 1,100 employees, who make an average $78,300 in salary and benefits.

That statistic, plus the $330 million that the mill has already spent on environmental improvements since 1990, leads N.C. Rep. Michele Presnell, R-Yancey, to give jobs the priority over environmental regulation in this situation. 

“I think there’s a lot of regulation there, and I’d like to back off on that,” Presnell said.

Presnell is supporting Evergreen’s request for financial assistance from the state to pay for the natural gas upgrade. The mill is seeking a $12 million grant from the N.C. Job Maintenance and Capital Development Fund and $2.8 million from the state’s Department of Commerce.

“This is a lot of jobs, and they are good, high-paying jobs,” Presnell said. “That’s my number one. That’s what we’ve got to keep.”

The mill’s importance to Haywood County’s economy is not in question — what is, is the importance of economic costs versus environmental benefits. 

“We are not trying to close the plant,” said Julie Mayfield, co-director of Western North Carolina Alliance, a regional environmental advocacy group. “We do think the plant should operate in an environmentally responsible way, and as our understanding of impacts develops and changes, they have to change with that.”

 

Regulation overload or missed opportunity?

But others believe that the regulation doesn’t go far enough. To meet the emissions standard, Evergreen will fuel its boilers with natural gas, which burns more cleanly than coal. Representatives of environmental organizations like the Canary Coalition, however, believe a more drastic solution is needed. 

“This is a once-in-a-generation opportunity for Evergreen to take the lead in showing the world a new way that is both environmentally responsible and economically practical and profitable,” said Avram Friedman, executive director of Canary Coalition, an air quality advocacy group based in Sylva. 

Rather than moving from one fossil fuel to another, Friedman said, Evergreen should combine sun, wind and geothermal energy with an efficiency remake of the plant to replace the need for these fuels. 

“It could become the cleanest paper plant ever to operate, anywhere. That’s the legacy we would like to see begin in Canton,” he said.

But Paul Muller, regional supervisor for the state air quality division, said the technology and supply infrastructure for the mill to use renewables as its primary energy source just aren’t there yet.

“The challenge with wind and solar is just the quantity,” he said. “It would take a lot of wind and solar to equal the quantity of a coal-fired boiler. As the technology develops, we’ll continue to go that direction. It’s just having the resources to make that happen.”

 

A question of capacity 

At the moment, natural gas is dirt cheap, but the fuel’s prices are historically volatile, so they can’t be relied upon to remain low, Friedman said. And while natural gas is less polluting than coal, it’s still a fossil fuel — and it’s one that requires a specific infrastructure to transport. 

A natural gas pipeline does run through Canton, but it’s unlikely that line would be able to supply the quantity of natural gas that an energy-intensive plant like Evergreen needs to operate. 

“That’s the big question — capacity,” Clasby said. “That’s been the challenge.”

 

Nothing new

This won’t be the first time Evergreen has had to make changes to comply with EPA air quality regulations. In 1990, Congress passed a set of amendments to the Clean Air Act of 1970 that gave the EPA the authority to regulate emissions of 189 hazardous air pollutants.

They called the framework MACT, which stands for Maximum Achievable Control Technology. The EPA continually ratchets up its emission standards under MACT, using the best-performing facilities as a benchmark. 

High-performing facilities set the bar for what’s expected of similar plants. The EPA looks at the emissions levels of the top 12 percent of facilities and bases the new standards on those levels. 

Evergreen has had to make upgrades under MACT in the past.

But according to Schliesser, this one is the big kahuna. 

“For coal or wood-fired boilers, the cost would be substantial,” Schliesser said, adding that facilities could face upgrades of anywhere from $30 to $100 million. “I guess that’s why industry is so interested in the EPA getting this rule right, because the cost is so expensive.”

Since Evergreen refused to comment for this story, its hard to say whether the upgrades are a financial burden the company can bear or whether they will cost locals their jobs. But either way, no one disputes that the cost will be substantial. 

“To say it’s huge would be an understatement,” Schliesser said. 

The initial timeline to comply with the new standards was 2015.

But after the U.S. Court of Appeals for the D.C. Circuit vacated the rules that the EPA had proposed in 2004, the EPA did not meet the 2007 compliance date for the rule. Therefore, states had to step in with their own standards as placeholders until the federal regulation could be completed.

North Carolina’s standards are less stringent than the EPA’s, Schliesser said, so boiler operators such as Evergreen will likely be able to find workaround methods of complying instead of making one change for the state’s March 2015 compliance date and another for the federal January 2019 compliance date. 

“You don’t want to make two sets of small changes if you have the opportunity to make one big change,” Schliesser said. “It’s more cost-effective and more resource-effective just to make one change.”

 

A lengthy process

And it will be a big one, both in time and money. Because of the cost involved, the mill would likely need about one year to explore its options, Schliesser said, and then it would likely take about two years to order the equipment, wait for it to be made, ship it and install it. 

“It’s a pretty lengthy process,” he said. 

Lengthiness may be a problem when it comes to logistics, but when it comes to rule-making, it can be a good thing. 

“The boiler MACT rule is one of the largest EPA rules with far-reaching impacts,” Schliesser said. “They’re trying to get it right, even if it takes multiple attempts to develop a rule.”

 

What’s in the regulation?

New federal air pollution rules are forcing factories and power plants with older coal- or oil-fired boilers to clean up their act.

Tighter controls on heavy metals, acidic gases, particulate matter and toxic organic compounds have been mandated through a regulation known as Maximum Achievable Control Technology, or MACT, which seeks to limit emissions of 189 different toxic pollutants.

Since monitoring 189 different substances is a lot of monitoring, only representative pollutants would actually be tested for, acting as surrogate for similar pollutants in the same family. 

For example, carbon monoxide emissions will be monitored as a reflection of toxic organic compounds. And mercury would be monitored as a reflection of various heavy metal emissions.

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