cid Rain Program
2005 PROGRESS REPORT
-------
\ Acid Rain Program
2005 Progress Report
CONTENTS
Summary 2
Origins of the Acid Rain Program 4
SO2 Emission Reductions 5
SO2 Program Compliance 7
SO2 Allowance Market 8
SO2 Compliance Options 10
NOX Emission Reductions and Compliance 11
Emission Monitoring and Reporting 13
Status and Trends in Air Quality, Acid Deposition, and Ecological Effects 14
Air Quality 17
Acid Deposition 20
Recovery of Acidified Lakes and Streams 22
Quantifying Costs and Benefits of the Acid Rain Program 24
Further National Controls to Protect Human Health and the Environment 26
Online Information, Data, and Resources 27
Endnotes.. ...28
EPA-430-R-06-015
Clean Air Markets Division
Office of Air and Radiation
U.S. Environmental Protection Agency
October 2006
-------
he U.S. Environmental Protection Agency (EPA)
publishes an annual report to update the public
on compliance with the Acid Rain Program
(ARP), status of implementation, and progress toward
achieving environmental goals.
The Add Rain Program 2005 Progress Report updates
Jata reported in previous years, specifically:
• Sulfur dioxide (SO2) emissions, allowance market
information, and program compliance.
Nitrogen oxides (NOX) emissions and program
compliance.
• Status and trends in acid deposition, air quality, and
ecological effects.
• Future programs that build on the ARP to further
address environmental quality.
The Add Rain Program 2005 Progress Report includes
special sections on fuel switching, EPA's framework for
accountability, program costs and benefits, surface water
quality monitoring, impact assessment, environmental
justice, and new rules.
For more information on the ARP, including addi-
tional information on SO2 and NOX emissions, acid
deposition monitoring, environmental effects of acid
deposition, and detailed unit-level emissions data, please
visit EPA's Clean Air Markets Web site at
< www. epa. gov/airmarkets>.
-------
2 <0" Acid Rain Program, 2005 Progress Report
Summary
Sulfur dioxide (SO2) and nitrogen oxides (NOX)
are the key pollutants in the formation of acid rain.
These pollutants also contribute to the formation of
fine particles (sulfates and nitrates) that are associat-
ed with significant human health effects and region-
al haze. Nitrates are transported and deposited at
levels harmful to sensitive ecosystems in many areas
of the country. Additionally, NOX combines with
volatile organic compounds (VOCs) to form
ground-level ozone (smog).The U.S. electric power
industry accounts for approximately 67 percent of
total U.S. SO2 emissions and 22 percent of total
U.S. NOX emissions from man-made sources.1
The Acid Rain Program (ARP) was created
under Title IV of the 1990 Clean Air Act
Amendments to reduce the adverse effects of acid
deposition through reductions in annual emissions
of SO2 and NOX. The act calls for SO2 reductions
of 10 million tons from 1980 emission levels, large-
ly achieved through a market-based cap and trade
program, which utilizes emission caps to perma-
nently limit the level of SO2 emissions from power
plants. NOX reductions are achieved through a
program closer to a more traditional, rate-based
regulatory system. The NOX program is designed to
achieve a 2 million ton reduction from what NOX
emission levels were projected to be in the year
2000 without implementation ofTitle IV
Since the start of the ARP in 1995, reductions
in SO2 and NOX emissions from the power sector
have contributed to significant air quality and
environmental and human health improvements.
The SO2 program affected 3,456 operating electric
generating units in 2005 (with most emissions pro-
duced by about 1,100 coal-fired units).The NOX
program applied to a subset of 982 operating coal-
fired units in 2005.
The 2005 compliance year marked the
eleventh year of the program. During this period,
the ARP has:
• Reduced SO2 emissions by more than 5.5 mil-
lion tons from 1990 levels, or about 35 percent
of total power sector emissions. Compared to
1980 levels, SO2 emissions from power plants
have dropped by more than 7 million tons, or
about 41 percent.
• Cut NOX emissions by about 3 million tons
from 1990 levels, so that emissions in 2005 were
less than half the level anticipated without the
program. Other efforts, such as the NOX Budget
Trading Program in the eastern United States,
also contributed significantly to this reduction.
-------
Acid Rain Program, 2005 Progress Report v- 3
• Led to significant reductions in acid deposition.
For example, between the 1989—1991 observa-
tion period and the 2003—2005 observation
period, wet sulfate deposition decreased 36 per-
cent in the Northeast and 32 percent in the
Midwest. These decreases have resulted in posi-
tive changes in environmental indicators, includ-
ing improved water quality in lakes and streams.
• Provided the most complete and accurate
emissions data ever developed and made those
data available and accessible through compre-
hensive electronic data reporting and Web-
based tools for agencies, researchers, affected
sources, and the public.
• Delivered pioneering e-gov-
ernment results, automating
administrative processes,
reducing paper use, and pro-
viding online systems for
doing business with EPA.
• Achieved extremely high
compliance levels. No units
operating in the ARP during
2005 were found out of com-
pliance with the allowance
holding requirements.
• Reduced implementation
costs by allowing sources to
choose cost-effective compli-
ance strategies.
After 11 years of implementation, monitoring,
and assessment, the ARP has proven to be an effec-
tive and efficient means of meeting emission reduc-
tion goals under the Clean Air Act. A 2005 study2
estimated the program's benefits at $122 billion
annually in 2010, while cost estimates are around
$3 billion annually (in 2000$). Despite the pro-
gram's historic and projected benefits, however,
EPA analyses of recent studies of human health,
data from long-term monitoring networks, and
ecological assessments have revealed the need for
additional emission reductions to protect human
health and continue ecological recovery and pro-
tection. EPA recognized the need for further SO2
and NOX controls on the power industry to address
transport problems many states face in efforts to
attain National Ambient Air Quality Standards
(NAAQS) for ozone and fine particles. The success
of the ARP and NOX control programs, along with
the need for further reductions, provided the impe-
tus for a suite of new rules promulgated in 2005:
the Clean Air Interstate Rule (CAIR), the Clean
Air Visibility Rule (CAVR), and the Clean Air
Mercury Rule (CAMR).
Building on the ARP model, EPA promulgated
CAIR in March 2005 to address transport of fine
particles and ozone in the eastern United States;
CAVR to improve visibility in national parks and
\vilderness areas; and CAMR to reduce nation-wide
mercury emissions from coal-
fired power plants. Starting in
2009 and 2010, CAIR establishes
regional caps on SO2 and NOX
emissions for affected eastern
states. Annual SO2 emissions are
capped at 3.7 million tons in
2010 and 2.6 million tons in
2015. Annual NOX emissions are
capped at 1.5 million tons in
2009 and 1.3 million tons in
2015. CAIR -will operate concur-
rently with the ARP.
CAVR addresses SO2 and
NOX emissions from non-CAIR
states located in the West and
parts of New England. Affected
sources under CAVR must
reduce SO2 and NOX emissions impairing visibility
in national parks and -wilderness areas. Notably,
EPA has proposed to allow power plants and other
stationary sources to establish regional cap and
trade programs to accomplish these reductions.
CAMR establishes a national cap on mercury
emissions beginning in 2010 and utilizes a market-
based cap and trade program. Additionally, new and
existing coal-fired power plants—the nation's
largest sources of mercury emissions—will be
required to meet standards of performance that
limit mercury emissions. These programs will serve
as a key component of strategies to protect human
health and the environment across the United
States into the next decade.
-------
4 -v* Acid Rain Program, 2005 Progress Report
Origins of the Acid Rain Program
Acid deposition, more com-
monly known as acid rain, occurs
when emissions of sulfur dioxide
(SO2) and nitrogen oxides (NOX)
react with water, oxygen, and oxi-
dants in the atmosphere to form
various acidic compounds.
Prevailing winds transport these
compounds hundreds of miles,
often across state and national bor-
ders, where they impair air quality
and damage public health, acidify
lakes and streams, harm sensitive
forests and coastal ecosystems,
degrade visibility, and accelerate
the decay of building materials.
The Acid Rain Program
(ARP), established under Title IV
of the 1990 Clean Air Act
Amendments, requires major
reductions of SO2 and NOX emis-
sions from the electric power
industry. The SO2 program sets a permanent cap
on the total amount of SO2 that may be emitted
by electric generating units in the contiguous
United States. The program is phased in, with the
final 2010 SO2 cap set at 8.95 million tons, a level
of about one-half of the emissions from the power
sector in 1980.
As seen in Figure 1, emissions of both SO2 and
NOX have dropped markedly under the ARP
while combustion of fossil fuel, measured as "heat
input," for electricity generation has increased sig-
nificantly.
Using a market-based cap and trade mecha-
nism to reduce SO2 emissions allows flexibility for
individual combustion units to select their own
methods of compliance. Currently, one allowance
provides a regulated unit limited authorization to
emit one ton of SO2.The Clean Air Act allocates
allowances to regulated units based on historic
fuel consumption and specific emission rates prior
Figure 1: Trends in Electricity Generation,* Fossil Energy Use,
Prices,** and Emissions from the Electric Power Industry
Year
* Generation from fossil fuel-fired plants.
** Constant year 2000 dollars adjusted for inflation.
Source: Energy Information Administration, Annual Energy Review, 2005 (electricity genera-
tion, retail price); EPA (heat input, emissions), 2005
to the start of the program. The total allowances
allocated for each year equal the SO2 emission cap.
The program encourages early reductions by
allowing sources to bank unused allowances in one
year and use them in a later year.
The ARP has closer to a traditional approach
to achieve NOX emission reductions. Rate-based
limits apply to most of the coal-fired electric utility
boilers subject to the ARP.
The ARP is composed of two phases for SO2
and NOX. Phase I applied primarily to the largest
coal-fired electric generation sources from 1995
through 1999 for SO2 and from 1996 through
1999 for NOX. Phase II for both pollutants began
in 2000. In 2005, the SO2 Phase II requirements
applied to 3,456 operating units; the Phase II NOX
requirements applied to 982 of those operating
units that are >25 megawatts and burned coal
between 1990 and 1995.
-------
Acid Rain Program, 2005 Progress Report v- 5
SO2 Emission Reductions
Electric power generation is by far the largest single source of
SO2 emissions in the United States, accounting for approximately
67 percent of total SO2 emissions nation-wide.3
As shown in Figure 2, Acid Rain Program (ARP) sources
have reduced annual SO2 emissions by 41 percent compared to
1980 levels and 35 percent compared to 1990 levels. Reductions
in SO2 emissions from other sources not affected by the ARP
(including industrial and commercial boilers and the metals and
Figure 2: SO2 Emissions from Acid Rain Program Sources
8
I/)
c
O 8.0
.2 6.0
O
in 2-°
17.3
16.1
15.7
I All Affected Sources "Phase I (1 99S-1 999) Sources
I Phase II (2000 on) Sources Allowances Allocated
11.9
13.0 13.1
12.5 , 12.5
8.71
8.3
7.1
11.2
7.0 •7.0
10.6
10.6
10.Q
9.6 • 9.5 Mg.5
9.5
1980 1985 1990 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Year
Source: EPA, 2006
Figure 3: SO2 Emissions and the Allowance Bank, 1995-2005
| Allowances Allocated that Year
| Unused Allowances from
Previous Year (bank)
Actual Emissions from Affected Sources
19.9
18.8
18.2
17.1
16.4
25
1/1
C 20
B
c
O
I15
1/1
c
.2 10
1/1
1/1
'E
LU
d 5
l/l
o
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Source: EPA, 2006 Year
SO2 Emission
Reductions
from Acid Rain
Program Sources:
Cost-Effective
Progress
4- In 1995, the first
year of implementa-
tion, SO2 emissions
decreased by 24
percent—nearly
4 million tons—from
1990 levels.
•v" During the past
decade, SO2 emis-
sions dropped an
additional 14 percent
from 1995 levels
despite a 24 percent
increase in power
generation (based on
heat input).
^> In 2005, SO2 emis-
sions from all ARP
units totaled 10.2
million tons, a 35
percent decrease
from 1990 levels
(15.7 million tons).
•0" Until SO2 allowance
prices began to
increase in 2004 in
anticipation of EPA's
2005 Clean Air
Interstate Rule
(CAIR), prices gener-
ally remained under
$200/ton, well below
expected control costs
for the program.
-------
6 •v' Acid Rain Program, 2005 Progress Report
refining industries) and use of cleaner fuels in resi-
dential and commercial burners have contributed
to a similar overall decline (42 percent) in annual
SO2 emissions from all sources since 1980. National
SO2 emissions have fallen from 25.9 million tons in
1980 to an estimated 15 million tons in 2005 (see
).
For 2005, EPA allocated approximately 9.5
million SO2 allowances under the ARE Together
with more than 6.8 million unused allowances car-
ried over (or banked) from prior years, there were
nearly 16.4 million allowances available for use in
2005. Sources emitted 10.2 million tons of SO2 in
2005, somewhat more than the allowances allocat-
ed for the year, but far less than the total
allowances available (see Figure 3).4
The number of banked allowances dropped from
6.8 million available for 2005 compliance to 6.2 mil-
lion available for 2006 and future years, a 10 percent
reduction of the total bank. In the next several years,
industry anticipation of stringent emission require-
ments under the Clean Air Interstate Rule (CAIR) is
expected to encourage sources to pursue additional
reductions. While these reductions will result in an
increase in banked allowances, tighter retirement
ratios under CAIR will lead to depletion of the bank
and further emission reductions. In 2010, the total
number of Title IV allowances allocated annually
drops to 8.95 million (about half of the emissions
from the power industry in 1980) and remains statu-
torily fixed at that annual level permanently. Table 1
explains in more detail the origin of the allowances
that were available for use in 2005, and Table 2 on
page 7 shows how those allowances were used.
The states with the highest emitting sources in
1990 have seen the greatest SO2 reductions during
the ARP (see Figure 4). Most of these states are
upwind of the areas the ARP was designed to
protect, and reductions have resulted in important
environmental and health benefits over a large
regional scale. In addition, the states that reduced
emissions from 1990 to 2005 had total annual reduc-
tions of approximately 6 million tons, while the
states that increased emissions—krgely attributable to
growth and not increases in emission rates—had
much smaller annual increases of approximately
Table 1: Origin of 2005 Allowances
Type of
Number Explanation
Allowance ofSO-
of Allowance
Allocation Allowances Allocation Type
Initial
Allocation
Allowance
Auction
Opt-in
Allowances
9,191,897
250,000
97,678
Initial allocation is the
number of allowances
granted to units*
based on the product
of their historic uti-
lization and emission
rates specified in the
Clean Air Act.
The allowance auc-
tion provides
allowances to the
market that were set
aside in a Special
Allowance Reserve
when the initial
allowance allocation
was made.
Total 2005 9,539,575
Allocation
Total
Banked
Allowances**
6,845,477
Opt-in allowances are
provided to units
entering the program
voluntarily. There
were eight opt-in
units in 2005.
Banked allowances
are those allowances
accrued in accounts
from previous years,
which can be used for
compliance in 2005
or any future year.
Total 2005 16,385,052
Allowable
Emissions
Source: EPA, 2006
*ln this report, the term "unit" means a fossil fuel-fired combustor that
serves a generator that provides electricity for sale. The vast majority of
SO2 emissions under the program result from coal-fired generation units,
but oil and natural gas units are also included in the program.
**Total banked allowances are adjusted from the 2004 Progress Report to
account for additional deductions made for electronic data reporting
(EDR) resubmissions after 2004 reconciliation was completed.
-------
Acid Rain Program, 2005 Progress Report
470,000 tons. For 32 states and
the District of Columbia, annu-
al SO2 emissions in 2005 were
lower than 1990 emissions.
Among these states, 13
decreased their annual emissions
by more than 100,000 tons
between 1990 and 2005:
Florida, Georgia, Illinois,
Indiana, Kentucky,
Massachusetts, Missouri, New
York, Ohio, Pennsylvania,
Tennessee, West Virginia, and
Wisconsin. The states with the
greatest annual reductions were
in the Midwest and include
Ohio (1.1 million tons
reduced), Illinois, Indiana,
Missouri, Tennessee, and West
Virginia, each of which reduced
over 500,000 tons per year.
Figure 4: State-by-State SO2 Emission Levels, 1990-2005
• SO2 Emissions in 1990
I I SO2 Emissions in 1995
I I SO2 Emissions in 2000
I I SO2 Emissions in 2005
Scale: Largest bar equals
2.2 million tons of SO2
emissions in Ohio, 1990
SO2 Program Compliance
Approximately 10.2 million
allowances were deducted from
sources' accounts in 2005 to cover
emissions. Table 2 displays these
allowance deductions, as well as the
remaining banked allowances from
1995 through 2005. In 2005, all Acid
Rain Program (ARP) units were in
compliance with the allowance hold-
ing requirements and no excess emis-
sions penalties were paid.5 Title IV
set a penalty of $2,000 per ton in
1990, which is adjusted annually for
inflation. The 2005 penalty level was
set at $3,042 per excess ton, but no
penalties were levied. The ARP's cap
and trade approach offers emission
sources the flexibility to comply with
regulations using their choice of the
most cost-effective strategies avail-
able. Since the program's inception,
the compliance rate has consistently
been extraordinarily high.
Table 2: SO2 Allowance Reconciliation Summary, 2005
TOTAL HELD ON MARCH 1, 2006* 16,385,052
Unit Accounts Subject to Reconciliation 1 3,102,070
TOTAL DEDUCTIONS
Other Accounts**
Emissions*
Penalties (2006 Vintage)
3,282,982
10,222,847
10,222,847
TOTAL BANKED
Unit Accounts Subject to Reconciliation
Other Accounts
0
6,162,205
2,879,223
3,282,982
Source: EPA, 2006
* March 1, 2006, is the allowance transfer deadline, the point in time at which unit
accounts were frozen and after which no transfers of 1 995 through 2005 allowances were
recorded. The freeze on these accounts was removed when annual reconciliation was
complete.
** Other accounts include general accounts and unit accounts that are not subject to recon-
ciliation. General accounts can be established in the Allowance Tracking System (ATS) by
any utility, individual, or other organization.
*** Includes 310 allowances deducted from opt-m sources for reduced utilization.
-------
8 & Acid Rain Program, 2005 Progress Report
SO2 Allowance Market
The allowance trading mechanism enables Acid
Rain Program (ARP) sources to pursue a variety
of compliance options, while the cap on SO2
emissions ensures that reductions are achieved and
maintained over time. Some sources have opted to
reduce their SO2 emissions below the level of their
allowance allocation in order to bank their
allowances for use in future years or to sell them.
Other sources have been able to postpone or
reduce expenditures for control by purchasing
allowances from sources that controlled below
their allowance allocation level. The allowance
prices ultimately reflect
these flexible compliance
decisions. Economists refer
to this as the marginal cost
of compliance—the cost of
reducing the next ton of
SO2 emitted from the
power sector.
The cost of emission
allowances was initially
projected to be between
$250 and $500 per ton
during Phase I (1995 to
1999) and $500 to $1,000
per ton in Phase II (beyond 2000). As shown in
Figure 5, actual allowance prices were in the $100
to $200 range, with a low of $65 in 1996. Even as
the more stringent Phase II requirements became
effective in 2000, prices were generally below the
$200 per allowance mark until they started to rise
at the end of 2003. Market observers believe that
the lower than expected prices early in the pro-
gram were due primarily to reduced compliance
costs. The availability of low-cost, low-Sulfur
coal resulted in larger than expected emission
reductions, which increased the supply of
allowances and put downward pressure on the
market. In addition, technological innovation
reduced the expected marginal costs of scrubbers
by over 40 percent from original estimates. These
cost and emission reductions led to a large bank of
allowances from Phase I that were available for
compliance in Phase II, contributing to the lower
than anticipated prices.
In 2004, the market started to react to the like-
lihood of future emission reduction requirements
that went beyond the existing caps of the ARP.
The price of SO2 allowances continued to rise
during 2005, ending the year at about $1,550 after
beginning the year at about $700. Market
observers believe this price run-up occurred due
to initial uncertainty as EPA finalized the Clean
Air Interstate Rule (CAIR). CAIR requires fur-
ther SO2 reductions from sources in many eastern
states beginning in 2010. These additional reduc-
tions cause an increase in
the expected marginal
cost of compliance in
future years. Because
allowances are bankable
today for use in future
years, estimates of future
control costs impact the
current market price of
allowances. However, an
apparent overly conserva-
tive reaction by buyers,
who wanted assurance
that they could cover cur-
rent and future allowance
needs, caused market prices to exceed EPA's esti-
mate of future control costs. In the first half of
2006, however, allowance prices have fallen sharply,
and were just over $600 per ton at the end of June
2006.This price level is more consistent with
where EPA has expected allowances to be today,
given estimates of the marginal cost of reducing
SO2 emissions under CAIR. EPA has seen
temporary run-ups in the allowance markets
before, with appropriate downward adjustments as
buyers and sellers more completely assess market
fundamentals. For instance, at the beginning of
compliance with the NOX Budget Program,
EPA observed a similar pattern of market run-up
followed by a self-correction.
In fact, current SO2 allowance market condi-
tions (as of September 2006) track closely with
EPA's estimates. The current SO2 allowance market
-------
Acid Rain Program, 2005 Progress Report 9
has factored the costs of com-
pliance with the new suite of
regulatory programs into its
pricing decisions. As can be
seen in Figure 6, EPA has pro-
jected that pre-2010 vintage
allowances would be worth
$721 per allowance in 2010,
and that 2010-2014 vintage
allowances would be worth
approximately $360 per
allowance due to the 2:1 retire-
ment ratio that applies to those
vintage allowances for sources
in the CAIR region.
July 2006 spot market prices
show that prices for the earlier
vintage are trading for $610 to
$740 per ton, and the later vin-
tages (2010-2014) are trading for
$308 to $390 per ton.
In 2005, nearly 5,700 private
allowance transfers (moving
roughly 19.9 million allowances
of past, current, and future vin-
tages) were recorded in the
EPA Allowance Tracking System
(ATS). About 10 million
(50 percent) were transferred in
economically significant transac-
tions (i.e., between economically
unrelated par ties). Transfers
between economically unrelated
parties are a better indicator of a
vibrant market than are transac-
tions among the various units of
a given company. In the majority
of these transfers, allowances
were acquired by power compa-
nies. Figure 7 shows the annual
volume of SO2 allowances trans-
ferred under the ARP (exclud-
ing allocations, retirements, and
other transfers by EPA) since
official recording of transfers
began in 1994.
Figure 5: SO2 Allowance Prices for Current Vintage
Year
Source: Cantor Fitzgerald Market Price Index, 2006
Figure 6: Actual and Forecast Allowance Prices
EPA Projected Allowance Price
in 2010 (in 2006 Dollars)
$721
$360
Up to 2010 Vintage 2010-2014 Vintage 2006 Vintage
July 2006 Spot
Market Price Range*
$740
TT
$610
$390
$308
2010 Vintage
EPA analysis suggests that 2006 vintage allowances should be selling for about
per allowance and 2010 allowances should be about $300 per allowance.
Source: EPA, 2006, and Evolution Markets, LLC, 2006
Figure 7: SO2 Allowances Transferred under the
Acid Rain Program
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Year
Between economically unrelated organizations (significant transfers).
Between economically related organizations.
Source: EPA, 2006
-------
10 -0" Acid Rain Program, 2005 Progress Report
Figure 8 shows the cumulative volume of
SO2 allowances transferred under the ARE The
figure differentiates between allowances trans-
ferred in private transactions and those annually
allocated and transferred to sources' accounts by
EPA. Private transactions are indicative of both
market interest and use of allowances as a com-
pliance strategy. Of the nearly 300 million
allowances transferred since 1994, about 63 per-
cent were traded in private transactions. In
December 2001, parties began to use a system
developed by EPA to allow online allowance
transfers. In 2005, account holders registered
about 98 percent of all private allowance transfers
through EPA's online transfer system.6
Figure 8: Cumulative SO2 Allowances
Transferred through 2005
"Si"
c
0
1
8
c
5
_o
<
300
250
200
150
100
50
0
EPA Transfers to Account
I Private Transactions
1994 1995 1996 1997 199S 1999 2000 2001 2002 2003 2004 2005
Year
Source: EPA, 2006.
SO2 Compliance Options
Since 1995, the majority of units affected by
the Acid Rain Program (ARP) have chosen to
comply with the emission reduction requirements
by using or blending low-sulfur coal, installing
SO2 and NOX controls such as scrubbers and
low-NOx burners, or purchasing allowances from
the market or using banked allowances.
According to the Energy Information
Administration, the 1987 repeal of the Power
Plant and Industrial Fuel Use Act prohibiting the
use of natural gas by new electric generating units
led to a large increase in natural gas generating
capacity through 2000.7 Additional factors
contributing to this increase were low natural gas
prices through the 1990s, the availability of
increasingly efficient natural gas technology in the
form of advanced combined cycle units, the short
construction-to-operation time to build new com-
bined cycle units, and the attractiveness of
natural gas as a trace SO2-emitting fuel source.
However, coal-fired generation grew from
1990 to 2004, taking advantage of the excess
capacity available at existing plants. Today, coal
remains the largest single fuel used for generating
electricity in the United States, at 50 percent of
net generation in 2005 (see Figure 9).
Figure 9: Net Electric Generation
by Energy Source
Other Renewables
Hydroelectric
Nuclear
Natural Gas
Petroleum
Coal
Figure 10: Comparison of Electric Generation Costs in 1995 of
Base Load Coal-fired and Gas-fired Electric Generation Units*
V? s
w 4.5
C- 3
^
2.5
Q- 1.:
J2
Jo.:
• Capital costs "Variable O & M
• Fuel costs Q Fixed O & M
I I , I—I , I I , M , M
Existing
pulverized
coal plant
retrofitted
with SCR and
FGD
Exisiting
pulverized
coal plant
w/o SCRand
FGD
New
pulverized
coal plant
with BACT
controls
New
combined
cycle plant
with BACT
controls
New
pulverized
coal plant
w/o BACT
controls
Source: EPA, 2006
*Unit sizes used in this analysis are around 325 megawatts.
Source: EPA, 2006
New
combined
cycle plant
w/o BACT
controls
-------
Acid Rain Program, 2005 Progress Report & 11
Figure 11: Distribution of Natural Gas Generation, 1990-2004
:? 300,000,000
| 250,000,000
= 200,000,000
g 150,000,000
£ 100,000,000
-jj 50,000,000
i n
—
-
~~
D 1990
n 1995
n 2000
• 2004
r-
n
_ ~~L_ rT~B
I
Ldl
r-m
1
1
Source: Energy Information Administration, 2006
These factors contributed to an economic situ-
ation where it became more economical in many
regions of the country to retrofit existing baseload
coal plants with scrubbers than to build new coal-
fired capacity to enhance existing load or to build
new coal-fired capacity where excess coal capacity
was available at existing plants. Where excess coal-
fired capacity was not an alternative, building new
combined cycle units was the cheapest alternative
to meet new load requirements (see Figure 10).
Finally, most of the new natural
gas capacity built in the last 15 years
has been in three particular Census
regions: West South Central (Arkansas,
Louisiana, Oklahoma,Texas); Pacific
Contiguous (California, Oregon,
Washington); and South Atlantic
(Washington DC, Delaware, Florida,
Georgia, Maryland, North Carolina,
o^ South Carolina,Virginia, West
' Virginia). For the most part, these
areas have been, and continue to be,
comparatively high users of natural gas
and oil and have the infrastructure to
support natural gas-fired electric gen-
eration. In particular, the West South Central and
Pacific Contiguous regions, which contribute
over half of the electricity generated by natural
gas in the United States, have a long history of
oil and gas generation that precedes the imple-
mentation of the ARP in 1995 (see Figure 11).
Additionally, the West South Central and Pacific
Contiguous regions have not traditionally been
heavily affected by the requirements of the ARP.
NOX Emission Reductions and Compliance
Title IV of the 1990 Clean
Air Act Amendments requires
NOX emission reductions for
certain coal-fired electric gener-
ating units. Unlike the SO2 pro-
gram, Congress applied
rate-based emission limits based
on a unit's boiler type to achieve
NOX reductions (see Table 3).
The NOX emission limit is
expressed as pounds of NOX per
unit of heat input (Ibs/million
British thermal units [mmBtu])
for each boiler subject to a NOX
limit. Owners can meet the
NOX limits for each individual
unit or meet group NOX limits
through averaging plans for
groups of units that share a
common owner and designated
Table 3: Number of NOX-Affected Title IV Units by Boiler Type
and NOX Emission Limit
Coal-Fired Boiler Type
Title IV Standard
Emission Limits
(Ib/mmBtu)
Number of
Units
Phase 1 Group 1 Tangentially Fired
Phase I Group 1 Dry Bottom,
Wall-fired
Phase II Group 1 Tangentially Fired
Phase II Group 1 Dry Bottom,
Wall-fired
Cell Burners
Cyclones > 155 MW
Wet Bottom >65 MW
Vertically Fired
0.45
0.50
0.40
0.46
0.68
0.86
0.84
0.80
132
113
301
295
37
54
24
26
Total n/a 982
Source: EPA, 2006
-------
12 & Acid Rain Program, 2005 Progress Report
representative. In 2005, all
sources met their emission limit
requirements under the Acid
Rain NCX program.
Figure 12: NOX Emission Trends for Acid Rain Program Units,
1990-20058
1/1
o
'in
.2
LLJ
The NOX program seeks to
attain a 2 million ton annual
reduction from all Acid Rain
Program (ARP) sources relative
to the NOX emission levels that
were projected to occur in
2000 absent the ARP (8.1 mil-
lion tons).This goal was first
achieved in 2000 and has been
met every year thereafter,
including 2005. Figure 12
shows that NOX emissions from
all ARP sources were 3.6 mil-
lion tons in 2005.This level is
4.5 million tons less than the
projected level in 2000 without
the ARP, or more than double
the Title IV NOX emission
reduction objective. These
reductions have been achieved
while the amount of fuel burned
to produce electricity at all ARP
units in 2005, as measured by
heat input, has increased 38 per-
cent since 1990. While the ARP
was responsible for a large por-
tion of these annual NOX reduc-
tions, other programs (such as
the Ozone Transport
Commission's NOX Budget
Program, EPA's NOX State
Implementation Plan (SIP) Call,
and regional NOX emission con-
trol programs) also contributed
significantly to the NOX reduc-
tions achieved by sources in
2005.
As with SO2, the states with the highest
NOx-emitting sources in 1990 tended to see the
greatest power plant NOX emission reductions
(see Figure 13). The sum of reductions in the 39
states and the District of Columbia that had lower
I III II
NOX Program Affected Sources
Title IV Sources Not Affected by NOX Program
Year
Source: EPA, 2006
Figure 13: State-by-State NOX Emission Levels for Acid Rain
Program Sources, 1990-2005
Source: EPA, 2006
annual NOX emissions in 2005 than in 1990 was
approximately 2.8 million tons, while the sum of
increases in the nine states that had higher annual
NOX emissions in 2005 than in 1990 was much
smaller, about 61,000 tons. Eight of the 11 states
with NOX emission decreases of more than
100,000 tons were in the Ohio River Basin.
-------
Acid Rain Program, 2005 Progress Report -0- 13
Emission Monitoring and Reporting
Source: EPA, 2006
The Acid Rain Program
(ARP) requires program partic-
ipants to measure, record, and
report emissions using continu-
ous emission monitoring sys-
tems (GEMS) or an approved
alternative measurement
method.The vast majority of
emissions are monitored with
GEMS while the alternatives
provide an efficient means of
monitoring emissions from the
large universe of units with
lower overall mass emission
levels (see Figures 14 and 15).
Since the program's incep-
tion in 1995, emissions have
been continuously monitored
and reported, verified, and
recorded by EPA, and provided
to the public through EPA's
Web site. Hourly emissions data
are reported for all affected
sources in quarterly electronic Source: EPA, 2006
reports, and EPA conducts
automated software audits that
perform rigorous checks to ensure the complete-
ness, quality, and integrity of the emissions data.
GEMS and approved alternatives are a cornerstone
of the ARP's accountability and transparency. All
emissions data are available to the public at EPA's
Clean Air Markets Data and Maps Web site at
.The site also pro-
vides access to a variety of other data associated
with emission trading programs, including reports,
queries, maps, charts, and file downloads covering
source information, emissions, allowances, program
compliance, and air quality.
Figure 14: Monitoring Methodology for the Acid Rain Program,
Number of Units
176
D Coal Units w/CEMS BWaste Units w/CEMS • Oil Units w/ CEMS
DOil Units w/oCEMS D Gas Units w/o CEMS D Gas Units w/CEMS
Figure 15: Monitoring Methodology for the Acid Rain Program,
Total SO2 Mass
<0.1% 1% <0.1% 2% <0.3%
D Coal Units w/CEMS
DOil Units w/o CEMS
• Waste Units w/CEMS
D Gas Units w/o CEMS
• Oil Units w/ CEMS
D Gas Units w/CEMS
The emission monitoring requirements for the
ARP are found in 40 CFR Part 75.These provi-
sions are also required for participation in the NOX
Budget Trading Program, a NOX summer season
trading program implemented by many eastern
states in response to EPA's 1998 NOX SIP Call.
The Part 75 requirements will also be used in the
future to implement the Clean Air Interstate Rule
(CAIR) and the Clean Air Mercury Rule
(CAMR).
-------
14 < Acid Rain Program, 2005 Progress Report
The National Acid
Precipitation
Assessment Program
The National Acid
Precipitation Assessment
Program (NAPAP) 2005
Report concluded that
Title IV has been quite suc-
cessful in reducing
emissions of SO2 and NOX
from power generation.
These reductions have
improved air quality,
visibility, and human
health at a relatively low
cost compared to the
benefits generated.
However, the report also
noted that several scientific
studies indicate that
recovery of acid-sensitive
ecosystems will require
40 to 80 percent further
emission reductions
beyond those anticipated
with full implementation of
Title IV Power generation
currently contributes
approximately 67 percent
of the SO2 emissions and
22 percent of the NOX
emissions nationwide. Even
if all SO2 emissions from
power plants were elimi-
nated, reductions from
other source categories
would be needed for
full protection of all acid-
sensitive ecosystems affect-
ed by acid deposition.
To view the report, visit:
Status and Trends in Air
Quality, Acid Deposition,
and Ecological Effects
The emission reductions achieved under the Acid Rain Program
(ARP) have led to important environmental and public health benefits.
These include improvements in air quality with significant benefits to
human health, reductions in acid deposition, the beginnings of recovery
from acidification in fresh water lakes and streams, improvements in visi-
bility, and reduced risk to forests, materials, and structures. Table 4 shows
the regional changes in key air quality and atmospheric deposition
measurements linked to the ARP's SO2
and NOX emission reductions.
Table 4: Regional Changes in Air Quality and Deposition of
Sulfur and Nitrogen, 1989-1991 Versus 2003-2005
Measurement
Unit Region
Averag
e
1989-1991 2003-2005
Wet Sulfate
Deposition
Wet Sulfate
Concentration
Ambient Sulfur
Dioxide
Concentration
kg/ha Mid-Atlantic
Midwest
Northeast
Southeast
mg/L Mid-Atlantic
Midwest
Northeast
Southeast
M.g/m3 Mid-Atlantic
Midwest
Northeast
Southeast
27
23
23
18
2.4
2.3
1.9
1.3
13
10
6.8
5.2
20
16
14
15
1.6
1.6
1.1
1.1
8.4
5.8
3.1
3.4
Percent
Change*
-24
-32
-36
-19
-33
-30
-40
-21
-34
-44
-54
-35
Ambient Sulfate
Concentration
Wet Inorganic
Nitrogen
Deposition
Wet Nitrate
Concentration
Ambient Nitrate
Concentration
Total Ambient
Nitrate Concentra-
tion (Nitrate +
Nitric acid)
ug/m3
kg/ha
mg/L
ug/nf
ug/m3
Mid-Atlantic
Midwest
Northeast
Southeast
Mid-Atlantic
Midwest
Northeast
Southeast
Mid-Atlantic
Midwest
Northeast
Southeast
Mid-Atlantic
Midwest
Northeast
Southeast
Mid-Atlantic
Midwest
Northeast
Southeast
6.4
5.6
3.9
5.4
5.9
6.0
5.3
4.3
1.5
1.4
1.3
0.8
0.9
2.1
0.4
0.6
3.5
4.0
2.0
2.2
4.5
3.8
2.5
4.1
5.5
5.5
4.1
4.4
1.0
1.2
0.9
0.7
1.0
1.8
0.5
0.7
3.0
3.5
1.7
2.1
-30
-33
-36
-24
-23
+2
-29
-14
+5
-14
+20
+ 17
-14
-12
-13
-5
Source: Clean Air Status and Trends Network (CASTNET) and the National Atmospheric
Deposition Program/National Trends Network (NADP/NTN)
* Percent change is estimated from raw measurement data, not rounded; some of the measure-
ment data used to calculate percentages may be at or below detection limits.
-------
Acid Rain Program, 2005 Progress Report 0* 15
Framework for Accountability
EPA is expanding its capacity to track the effectiveness of programs to protect ecosystems
from air pollution and examine the effects of changes in deposition and air concentrations on
the health of sensitive receptor species in aquatic and forest ecosystems, human health, and
visibility.
This effort stems from the recommendations in the 2004 National Academy of Sciences
(NAS) report, Air Quality Management in the United States, which recognized the significant
reduction in air pollution achieved under the Clean Air Act, and recommended a course of
action to achieve further progress. For ecosystem protection, the recommendations include:
•v" Improving monitoring and tracking of ecosystems and science to support secondary or
alternative standards.
•v" Taking an "airshed" approach.
•v" Emphasizing results, accountability, and dynamic, data-based program adjustment.
EPA's Clean Air Act Advisory Committee (CAAAC) expanded on the NAS recommendations
with further ecosystem-related recommendations, including the establishment of:
•v" A framework for accountability
•v" Benchmarks and measures of the ecological impacts of air pollution
•0" Effects of multiple pollutants
•0" Measures of ecosystem response
•0" Collaborative integrated assessments
•0" Critical loads and thresholds
Air Quality Management in the United States, National Academies Press:
*
-------
16 < Acid Rain Program, 2005 Progress Report
Understanding the Monitoring Networks
To evaluate the impact of emission reductions on the environment, scientists and policymakers
use data collected from long-term national monitoring networks such as the Clean Air Status
and Trends Network (CASTNET) and the National Atmospheric Deposition Program/National
Trends Network (NADP/NTN). These complementary, long-term monitoring networks provide
information on a variety of indicators necessary for tracking temporal and spatial trends in
regional air quality and acid deposition (see Table 5).
CASTNET provides atmospheric data on the dry deposition component of total acid deposition,
ground-level ozone, and other forms of atmospheric pollution. Established in 1987, CASTNET
now consists of nearly 90 sites across the United States. EPA's Office of Air and Radiation oper-
ates most of the monitoring stations; the National Park Service (NPS) funds and operates
approximately 30 stations in cooperation with EPA. Many CASTNET sites are approaching a
continuous 20-year data record, reflecting EPA's commitment to long-term environmental moni-
toring. Public access to CASTNET data is available at .
EPA also uses data from other ambient monitoring networks, including the State and Local
Ambient Monitoring and National Ambient Monitoring Systems (SLAMS/NAMS). These net-
works are used to document attainment of National Ambient Air Quality Standards (NAAQS)
and show trends in ambient air quality over time.
NADP/NTN is a nationwide, long-term network tracking the chemistry of precipitation.
NADP/NTN offers data on hydrogen (acidity measured as pH), sulfate, nitrate, ammonium, chlo-
ride, and base cations. The network is a cooperative effort involving many groups, including the
State Agricultural Experiment Stations, U.S. Geological Survey, U.S. Department of Agriculture,
EPA, NPS, National Oceanic and Atmospheric Administration (NOAA), and other governmental
and private entities. NADP/NTN has grown from 22 stations at the end of 1978 to more than 250
sites spanning the continental United States, Alaska, Puerto Rico, and the Virgin Islands.
Table 5: Air Quality and Acid Deposition Measurements
hemicals Cher
Sulfate Ion
Nitrates Ion
Nitric Acid
Ammonium
Ion
Calcium
Magnesium
Potassium
Sodium
X
X
X
X
X
X
X
X
: these measured by the netwo
Primary precursor of wet and dry acid deposition; primary pre-
cursor to fine particles in many regions.
Major contributor to wet acid deposition; major component of
fine particles in the Midwest and eastern regions; can be trans-
ported over large distances; formed from reaction of sulfur
dioxide in the atmosphere.
Contributor to acid and nitrogen wet deposition; major com-
ponent of fine particles in urban areas; formed from reaction
of NOX in the atmosphere.
Strong acid and major component of dry nitrogen deposition;
formed as a secondary product from NOX in the atmosphere.
Contributor to wet and dry nitrogen deposition; major compo-
nent of fine particles; provides neutralizing role for acidic com-
pounds; formed from ammonia gas in the atmosphere.
Indicator of acidity in precipitation; formed from reaction of
sulfate and nitrate in water.
These base cations neutralize acidic compounds in precipita-
tion and the environment; also play a major role in plant nutri-
tion and soil productivity.
-------
Acid Rain Program, 2005 Progress Report 0" 17
Air Quality
Sulfur Dioxide
Figure 16: National SO2 Air Quality,
1980-2005 (Based on Annual Arithmetic Average)
Sulfur data collected from the State and Local
Air Monitoring Stations (SLAMS) and the National
Air Monitoring Stations (NAMS) monitoring net-
works show that the decline in SO2 emissions from
the power industry has improved air quality. In the
entire United States, there has not been a single
monitored violation of the SO2 ambient air quality
standard since 2000. Based on EPA's latest air quality
trends data located at ,
the national composite average of SO2 annual mean
ambient concentrations decreased 48 percent
between 1990 and 2005, as shown in Figure 16.
The largest single-year reduction (21 percent)
occurred in the first year of the Acid Rain Program
(ARP), between 1994 and 1995.
These trends are consistent with the ambient
trends observed in Clean Air Status and Trends
Network (CASTNET). During the late 1990s,
following implementation of Phase I of the ARP,
dramatic regional improvements in SO2 and
ambient sulfate concentrations were observed at
Figure 17a: Annual Mean Ambient Sulfur
Dioxide Concentration, 1989-1991*
Source: CASTNET
Year
Source: EPA air emission trends,
CASTNET sites throughout the eastern United
States due to the large reductions in SO2 emissions
from ARP sources. Three-year mean annual
concentrations of SO2 and sulfate from CAST-
NET long-term monitoring sites are compared
from 1989 through 1991 and 2003 through 2005
in both tabular form (see Table 4 on page 14) and
graphically in maps (see Figures 17a through 18b).
Figure 17b: Annual Mean Ambient Sulfur
Dioxide Concentration, 2003-2005
Source: CASTNET
• '^ t -^
*Dots on all maps represent monitoring sites. Lack of shading for southern Florida on Figures 1 7a, 1 8a, and 1 9a indicates lack of monitoring coverage
-------
18 -0- Acid Rain Program, 2005 Progress Report
Figure 18a: Annual Mean Ambient Sulfate
Concentration, 1989-1991
Figure 18b: Annual Mean Ambient Sulfate
Concentration, 2003-2005
Source: CASTNET
>8.0
Source: CASTNET
Figure 19a: Annual Mean Total Ambient
Nitrate Concentration, 1989-1991
5.0
>6.0
Figure 19b: Annual Mean Total Ambient
Nitrate Concentration, 2003-2005
-5.0
L>6.0
Source: CASTNET
Source: CASTNET
-------
Acid Rain Program, 2005 Progress Report 0" 19
The map in Figure 17a shows that from 1989
through 1991, prior to implementation of Phase I
of the ARP, the highest ambient concentrations of
SO2 in the East were observed in western
Pennsylvania and along the Ohio River Valley.
Figure 17b indicates a significant decline in those
concentrations in nearly all affected areas after
implementation of the ARP.
Also, in 1989 through 1991, the highest
ambient sulfate concentrations, greater than
7 micrograms per cubic meter ((ag/m3), were also
observed in western Pennsylvania, along the Ohio
River Valley, and in northern Alabama. Most of the
eastern United States experienced annual ambient
sulfate concentrations greater than 5 (ag/m3. Like
SO2 concentrations, ambient sulfate concentrations
have decreased since the ARP was implemented,
with average concentrations decreasing approxi-
mately 30 percent in all regions of the East. Both
the size of the affected region and magnitude of
the highest concentrations have dramatically
declined, with the largest decreases observed along
the Ohio River Valley (see Figures 18a and 18b).
Assessing Recent Monitoring Data—Sulfate
Air quality monitoring networks such as the Clean Air Status and Trends Network (CASTNET),
report air concentration data for both primary (sulfur dioxide) and secondary (sulfate) pollu-
tants as an indication of changes in power plant emissions. Continuous emission monitors on
fossil fuel-burning power plants at the unit or stack level provide the data for SO2 emissions,
which show a national decrease from 2004 to 2005. Interestingly, ambient monitoring data from
CASTNET for 2005 show an increase in sulfate (SO42) concentrations—an important constituent
of fine particulate matter—across much of the eastern United States. This observed increase does
not correlate with the relatively steady or declining emissions data from regional sources and is
likely to be the result of year-to-year variations in meteorological conditions or other factors.
Sulfate ion formation is the result of complex chemical and physical processes involving emis-
sions from Acid Rain Program (ARP) sources, non-ARP sources (i.e., industrial processes, agri-
culture and transportation), meteorological conditions, and other phenomena. EPA employs a
range of analytical and assessment protocols to understand these processes, including modeling
of source/receptor relationships, source apportionment, and atmospheric transport processes.
Although the ARP has achieved significant reductions in SO2 from coal-burning power plants—over
35 percent since 1990—sulfate deposition and concentrations vary from year to year. This illustrates
the importance of long-term monitoring and accounting for annual variability to determine status
and trends over time. Another steep reduction
Sulfate Concentrations jn SO2 emissions is projected to be achieved by
the Clean Air Interstate Rule (CAIR), which will
cap eastern SO2 emissions at 2.6 million tons in
2015, much lower than the ARP's toughest cap
that starts in 2010. As with the ARP, this program
is expected to result in significant emission reduc-
tions. These reductions may be followed by periodic
fluctuations in regional and source-specific
emissions as sources seek to comply with the cap,
as well as fluctuating signals from the air quality
Source: CASTNET and deposition monitoring networks.
-------
20 v- Acid Rain Program, 2005 Progress Report
Nitrogen Oxides
The ARP has met its NOX reduction targets,
and these reductions are correlated with decreases
in total ambient nitrate concentrations (the sum of
particulate nitrate and nitric acid) at CASTNET
sites. The ratio of these two components in the
atmosphere is dependent on emissions of NOX,
SO2, and other pollutants from electric generation
and other sectors (such as motor vehicles and
agriculture).
In some areas, NOX levels can also be affected by
emissions transported via air currents over wide
regions. From 2003 to 2005, reduced NOX emissions
from power plants under the NOX Budget Trading
Program led to more significant region-specific
improvements in some indicators. For instance, mean
total annual ambient nitrate concentrations (nitric
acid plus particulate nitrate) for 2003 through 2005
decreased in the Midwest by about 12 percent from
the annual mean concentration in 1989 through
1991 (see Figures 19a and 19b).While the cause of
the reductions has not yet been determined conclu-
sively, these improvements may be partly attributed
to added NOX controls installed for compliance with
the NOX Budget Trading Program.
Acid Deposition
National Atmospheric Deposition Program/
National Trends Network (NADP/NTN) moni-
toring data show significant improvements in most
deposition indicators. For example, wet sulfate
deposition—sulfate that falls to the earth through
rain, snow, and fog—has
decreased since the implemen-
tation of the Acid Rain
Program (ARP), particularly
throughout the early 1990s in
much of the Ohio River Valley
and northeastern United
States. Some of the greatest
reductions have occurred in
the mid-Appalachian region,
including Maryland, New
York, West Virginia, Virginia,
and most of Pennsylvania.
Other less dramatic reductions
have been observed across
much of New England,
portions of the southern
Appalachian Mountains, and
in some areas of the Midwest.
Between the 1989-1991
and 2003-2005 observation
periods, average decreases in wet deposition of
sulfate ranged from 36 percent in the Northeast to
19 percent in the Southeast (see Table 4 on page
14 and Figures 20a and 20b). Along with wet sul-
fate deposition, wet sulfate concentrations have
also decreased significantly. Since 1991, average
levels decreased 40 percent in the Northeast, 33
percent in the Mid-Atlantic, and 30 percent in the
Midwest. A strong correlation
between large-scale SO2 emis-
sion reductions and large
reductions in sulfate concentra-
tions in precipitation has been
noted in the Northeast, one of
the areas most affected by acid
deposition.
A reduction in the long-
range transport of sulfate from
emission sources located in the
Ohio River Valley is a principal
reason for reduced concentra-
tions of sulfate in precipitation
in the Northeast. The reductions
in sulfate documented in the
Northeast, particularly across
New England and portions of
New York, were also affected
by SO2 emission reductions in
eastern Canada. NADP data indicate that similar
reductions in precipitation acidity, expressed as
hydrogen ion (H+) concentrations, occurred
concurrently with sulfate reductions.
-------
Acid Rain Program, 2005 Progress Report 0" 21
Figure 20a: Annual Mean Wet Sulfate
Deposition, 1989-1991
Figure 20b: Annual Mean Wet Sulfate
Deposition, 2003-2005
.„. , WetS042
/ (kg/ha)
Source: National Atmospheric Deposition Program
Figure 21 a: Annual Mean Wet Inorganic
Nitrogen Deposition, 1989-1991
•
Source: National Atmospheric Deposition Program
Figure 21 b: Annual Mean Wet Inorganic
Nitrogen Deposition, 2003-2005
Source: National Atmospheric Deposition Program
Source: National Atmospheric Deposition Program
Reductions in nitrogen deposition recorded
since the early 1990s have been less dramatic
than those for sulfur. As noted earlier, emissions
from source categories other than ARP sources
significantly affect air concentrations and nitrogen
deposition. Inorganic nitrogen deposition decreased
in the Mid-Atlantic and Midwest (8 percent) and
more significantly in the Northeast (23 percent), but
remained virtually unchanged in the Southeast (see
Figures 21 a and 21b).
-------
22 -0- Acid Rain Program, 2005 Progress Report
Improvements in Surface Wat
Long-term monitoring networks provide information on the
chemistry of lakes and streams, which demonstrates how
water bodies are responding to changes in emissions.9 The
data presented in the figure below show regional trends in
acidification from 1990 to 2004 in areas of the eastern United
States. For each lake or stream in the network, measurements
of various indicators of recovery from acidification were taken.
These measurements were plotted against time, and trends for
the given lake or stream during the 15-year period were then
calculated as the change in each of the measurements per year
(e.g., change in concentration of sulfate per year). Using thi
trends calculated for each water body, median regional
changes were determined for each recovery measure. A nega-
tive value of the "slope of the regional trend" means that the
measure has been declining in the region, while a positive value
means it has been increasing. The greater the value of the
trend, the greater the yearly change in the measurement.
Movement toward recovery is indicated by positive trends in
acid neutralizing capacity (ANC) and negative trends in sul-
, V ' -_, -figure 22: Regional Trends. Lakes and
nvdrogen ° °
Streams, 1990-2004
i i^\ r-» —i f» /H '
^m
^B
So. Appalachians!
Adirondack Lakes
New England Lake
reams (n-65)
n-49)
(n-21)
•
^m
i i I IVUIC £-£-, IVCVIWIIO-I lldllUO. L-dlXCD CLIIU
hvdrosen & &
Streams, 1990-2004
ion, and
aluminum. sulfate
"v i -
-------
Acid Rain Program, 2005 Progress Report > 23
Table 6: Results of Regional Trend Analyses on Lakes and Streams, 1990-2004
Chemical Variable
New England Adirondack No. Appalachian So. Appalachian
Lakes Lakes Streams Streams
(n = 21) (n = 49) (n = 9) (n = 65)
Sulfate (|jeq/L/yr)
Nitrate (|jeq/L/yr)
Acid Neutralizing Capacity (ueq/L/yr)
Base Cations (ueq/L/yr)
Hydrogen (ueq/L/yr)
Organic Acids (ueq/L/yr)
Aluminum (ug/L/yr)
-1.4
-0.02
+0.18
-1.35
-0.02
+0.02
Insufficient data
-2.0
-0.45
+1.08
-1.24
-0.26
+0.15
-4.72
-2.3
-0.31
+0.76
-2.63
-0.01
-0.03
Insufficient data
+1.7
-0.55
-4.44
-4.56
-0.01
Insufficient data
Insufficient data
Values show the slope of the regional trend (the median value for the trends in all of the sites in the region). Regional trends that are statistically signif-
icant are shown in bold.
Source: EPA, 2004
England. It should be noted, however, that decreas-
ing nitrate concentrations do not appear to be
related to the magnitude of changes in emissions
or deposition in these areas, but are likely a result
of ecosystem factors that are not yet fully under-
stood.
As a result of declining sulfate (and to some
extent nitrate) concentrations, the acidity of lake
and stream water is decreasing in three of the four
regions. In the Adirondacks and northern
Appalachians, acid neutralizing capacity (ANC, an
indicator of aquatic ecosystem recovery) is increas-
ing. For example, 48 out of 49 monitored
Adirondack lakes showed reductions in sulfate con-
centrations that coincide with reductions in atmos-
pheric concentrations of sulfur. These decreases in
sulfate, as well as decreases in nitrate concentrations
that do not appear to be due to changes in atmos-
pheric nitrogen deposition, have resulted in
increased pH and ANC as well as decreases in the
amount of toxic inorganic aluminum in Adirondack
lakes. In New England, ANC appears to be increas-
ing only slightly, and is not statistically significant,
but hydrogen ion concentrations are declining.
Declining hydrogen ion concentrations represent an
increase in pH, which also is elevated by statistically
significant levels in the Adirondacks. In contrast,
increasing sulfate concentrations are evident in the
southern Appalachians. This regional increase may
be explained in part by the region's soils, which can
store large amounts of sulfate delivered by deposi-
tion. When large amounts of sulfate have accumu-
lated in the soils over time, stream water sulfate con-
centrations can also continue increasing over time.
Thus, despite decreasing sulfate in atmospheric dep-
osition, an increase in sulfate concentrations in-
stream has been observed in that region.
Base cations are important because they buffer
the impact of sulfur and nitrogen deposition. Base
cation concentrations in lakes and streams are
expected to decrease when rates of atmospheric
deposition decline, but if they decrease too much,
they limit recovery in pH and ANC. While the
high rates of base cation decline in the northern
Appalachians may be of concern, they do not cur-
rently seem to be preventing recovery. However,
their behavior in the future will bear watching.
Organic acids are natural forms of acidity.
Lakes and streams vary widely in how much natu-
ral acidity they have, and increases in organic acids,
like declining base cations, over time can limit
recovery. Organic acid concentrations are currently
increasing in many parts of the world, but the
cause is still being debated. Of the regions moni-
tored by EPA, only the Adirondacks are showing
significant increases in organic acids, and their
increase may be responsible for 10 to 15 percent
less recovery (in ANC) than expected. In order to
fully understand and assess response and recovery
of sensitive ecosystems to emission reduction pro-
grams, this area may require further investigation.
-------
24 -0" Acid Rain Program, 2005 Progress Report
Benefits
•v" Preliminary estimates of annual benefits
EPA can monetize are substantial.
-v" Benefits are driven by:
Reduced premature deaths.
Lowering aggravation and
incidence of heart and lung
ailments.
Visibility improvements in some parks.
-v" Many benefits are not included in
estimates:
Mercury reductions.
Acid rain environmental benefits.
Remaining visibility benefits from
parks and urban areas.
- Others.
^ Benefits from CAIR/CAMR for Canada
have not yet been quantified.
Figure 23: Combined
Estimated Annual Benefits
for ARP, CAIR, and CAMR
Source: EPA, 2006, derived from Chestnut & Mills Analysis
"A fresh look at the benefits and costs of the US acid rain
program" (Oct. 1, 2004) and EPA's Multi-pollutant Regula
Analysis: CAIR, CAVR, CAMR (Oct. 200S). Acid Rain 202C
benefits extrapolated from 2010 estimates. Consumer
Price Index-Urban was used to convert 1999 dollars and
Most of the regions do not have sufficient
aluminum data to estimate trends. Aluminum is a
critical element because it increases when lakes and
streams acidify and is very toxic to fish and other
wildlife. The one region where good aluminum
data exist (the Adirondacks) is showing strong
declines in the most toxic form of aluminum
(inorganic monomeric aluminum). As mentioned
earlier, the southern Appalachians are unusual in
both their physiography and response to changing
atmospheric deposition. Because sulfate concentra-
tions in streams are increasing strongly in this
region, many of the other chemical variables (e.g.,
ANC and pH) show trends typical of acidifying
conditions, rather than recovery.
Quantifying Costs and
Benefits of the Acid
Rain Program
A 2005 analysis10 of the annual benefits and
costs of the Acid Rain Program (ARP) updated
those of the National Acid Protection Assessment
Program (NAPAP) 1990 Integrated Assessment
and a 1995 EPA report" by integrating scientific
knowledge that has emerged since the 1990s.
An expanded list of impacts has increased the
program's estimated benefits, while newer imple-
mentation strategies—unforeseen in 1990—have
lowered estimated costs. The estimated value of the
program's annual benefits in the year 2010 now
totals $122 billion (in 2000$).These benefits result
mostly from the prevention of health-related
impacts (such as premature deaths, illnesses, and
workdays missed due to illness), but also include
improved visibility in parks and other recreational
areas and ecosystem improvements. These benefits
stem from the substantial difference that the ARP is
expected to make in many areas meeting the
National Ambient Air Quality Standards (NAAQS)
by 2010 for fine particles less than 2.5 micrometers
in diameter (PM25) and ozone (see Figure 25).
Notably, some significant benefits are not quantified,
such as the 20 percent reduction in mercury emis-
sions from coal-fired power plants; improvements to
-------
Acid Rain Program, 2005 Progress Report 0" 25
urban visibility, forest health, and surface water
quality; and increased longevity and reduced soiling
of painted and stone surfaces.
The 2005 study finds that the estimated annual
cost of the ARP in 2010 will be $3 billion, with
the SO2 program accounting for about $2 billion.
These findings are generally consistent with other
recent independent findings and are far less than
the original NAPAP estimates.12 EPA expects
NOX costs to be no more than $1 billion annually,
and likely less, from the limited analysis that has
been completed in this area. This leads to a more
than 40:1 benefit-cost ratio. Among the most
important factors in reducing SO2 program costs
were changes in transportation and production of
coal, which enabled sources to increase the use of
low-sulfur coal. The flexibility offered by the SO2
program also may have enabled technological
innovations that lowered compliance costs. For
instance, boiler adaptations and lower than expect-
ed installation and operation costs for flue gas
desulfurization systems (scrubbers) reduced costs
below original estimates.13 See Figure 23 on page
24 for the combined estimated benefits of the
ARP, Clean Air Interstate Rule (CAIR), and
Clean Air Mercury Rule (CAMR).
Environmental Justice Analysis
In September 2005, EPA published a staff report evaluating
the public health benefits of the ARP, focusing on the
changes in exposure of minority and low-income popula-
tions to ambient concentrations of PM2 5 as a result of
the ARP. Analyses of SO2 and NOX emissions show that,
in general, the areas with highest emissions prior to the
program have also experienced the greatest emission
reductions. However, since the ARP does not mandate
reductions from specific sources, the exact effects of the
ARP on specific populations or localities are harder to
assess. To explore the potential environmental justice
issues related to the ARP, EPA investigated how trading
SO2 emissions under the ARP might affect minority and
low-income communities, and how trading SO2 emis-
sions has impacted air quality at both regional and local
levels. In formulating this analysis of the ARP, EPA meas-
ured exposure to PM2 5 concentrations in relation to region-
al locations, population size, race, and income levels. This
investigation led EPA to the following conclusions:
0- There is no evidence that the cap and trade mechanism has led to increased human
exposure to air pollution.
•0" The ARP improved air quality substantially overall.
0- The ARP improved air quality substantially for all population groups.
•v* No disproportionately high and adverse human health or environmental effects were found
for minority or low-income groups.
To view the complete report, visit .
-------
26 -0" Acid Rain Program, 2005 Progress Report
Further National Controls to Protect Human
Health and the Environment
A combination of existing
programs and future regulations
that address the interstate trans-
port of ozone and fine particles
and mercury deposition will
help ensure further improve-
ments in human health and
environmental protection. With
the Acid Rain Program (ARP),
the NOX SIP Call in the eastern
United States, and mobile source
rules covering new cars, trucks,
buses, and nonroad equipment,
states have critical controls to
help achieve ozone and fine
particle National Ambient Air
Quality Standards (NAAQS).
In the spring of 2005, EPA
promulgated a suite of air quality
rules designed to achieve addi-
tional reductions of SO2, NOX,
and mercury from power plants.
These rules include Clean Air
Interstate Rule (CAIR), Clean
Air Mercury Rule (CAMR),
and Clean Air Visibility Rule
(CAVR).14 See Figure 27 for an
implementation timeline.
EPA expects that the air
quality impacts of these regula-
tions, coupled with recent rules
to reduce fine particles and NOX
from motor vehicles, will be
extensive. Figures 24-26 show
areas projected to attain the
NAAQS in 2010 and 2020 with
these regulations, compared to
today. Figure 24 shows ozone
and PM2 5 nonattainment areas
primarily occurring in eastern
states and California. As the new
rules are implemented, nonat-
tainment is expected to decline
steadily, with 92 fewer areas by
Figure 24: Ozone and Fine Particle Nonattainment Areas, April 2006
Source: EPA, 2006
Note: 1 29 areas currently designated as nonattainment for PMn 5 and/or 8-hour ozone.
Figure 25: Projected Nonattainment Areas in 2010 After
Reductions From CAIR and Existing Clean Air Act Programs
Area
Count
Both PM and Ozone
N o nattai n ment
PM Only
N o nattai n ment
Only
N o nattai n ment
Nonattainment Areas
Projected to Attain
Source: EPA, 2006
Note: Areas forecast to remain in nonattainment may need to adopt additional local or regional controls
to attain the standards by dates set pursuant to the Clean Air Act. These additional local or regional
measures are not forecast here, and therefore this figure overstates the extent of expected nonattainment.
Figure 26: Projected Nonattainment Areas in 2020 After Reductions
From CAIR, CAVR, and Existing Clean Air Act Programs
Source: EPA, 2006
Note: Areas forecast to remain in nonattainment may need to adopt additional local or regional controls
to attain the standards by dates set pursuant to the Clean Air Act. These additional local or regional
measures are not forecast here, and therefore this figure overstates the extent of expected nonattainment.
-------
Acid Rain Program, 2005 Progress Report -0- 27
2010 (see Figure 25), and
106 fewer areas by 2020 (see
Figure 26).
As the maps indicate,
implementing these three
new regulations is an impor-
tant step toward improving
air quality in the United
States, protecting human
health and the environment,
and helping states and local
communities meet NAAQS
for fine particles and ozone.
Figure 27: CAIR, CAMR, CAVR Implementation Timeline
CAIR
CSP Early Emission Reduc
(annual CAIR NOxp
(07 and 03)
FIP
(June 06
SIPs due
1,ep 06)
Phase
(ozon
ion Period
rogram)
© © © ©
CAMR
signed
» SP, Due „, ionl|
CAVR (No. 06) slp,Du,
signed
:C
J -S
~.~t
AIR NOx Programs Early reductions for CAIR NOX ozone-season
eason and annual) program and CAIRSO2 program begin
/09) immediately because NOX SIP Call and Tide IV
allowances can be banked into CAIR.
Phase 1 : CAIR SO2 Program Phase " ; CAIR NOx and
,10, SO2 Programs Begin
/ (15)
© © 0 © © ©
Haz
(De
\
Phase I : CAMR He Proeram
'o? (10)
' CAVR BART C
(5 years after
© © © ©
Phase II : CAMR Hg Program
(18)
ontrols Required
*H SIPs approved)
States develop SP:
(18
Source: EPA, 2006
CAM Rand CAVR
Online Information, Data, and Resources
About the Clean Air Markets Division
The availability and transparency of data, from emission
measurement to allowance trading to deposition monitoring,
is a cornerstone of effective cap and trade programs. The
Clean Air Markets Division in the Office of Air and
Radiation's Office of Atmospheric Programs develops and
manages programs for collecting these data and assessing the
effectiveness of cap and trade programs, including the Acid
Rain Program (ARP).
Regulatory Information
To learn more about how emissions cap and trade
programs work, see:
www.epa.gov/airmarkets/arp
Acid Rain Program
www.epa.gov/airmarkets/progsregs/noxview.html
NOX Budget Trad ing Program
www.epa.gov/airmarkets/capandtrade/index.html
General Cap and Trade Information
Also, See Recent Related Rulemakings:
www.epa.gov/cair
Clean Air Interstate Rule (CAIR)
www.epa.gov/CAM R/index.htm
Clean Air Mercury Rule (CAMR)
www.epa.gov/visibility
Clean Air Visibility Rule (CAVR)
http://www.epa.gov/airmarkets/cair/analyses/
naaqsattainment.pdf
CAIR, CAMR, CAVR and NAAQS Attainment
Progress and Results
Several reports have assessed the progress and results, and projected
future impacts of the Acid Rain Program.
www.sciencedirect.com/science/ journal/03014797
Chestnut, L G., Mills, D. M. (2005, November). A fresh look at
the benefits and costs of the U.S. acid rain program. Journal of
Environmental Management, Vol. 77, Issue 3, 252-256.
www.al.noaa.gov/AQRS/reports/napapreport05.pdf
2005 National Acid Precipitation Assessment Program Report to
Congress.
www.epa.gov/airmarkets/articles/adaq.html
U.S. Environmental Protection Agency, Office of Air and
Radiation, Clean Air Markets Division. (2005, September).
The Acid Rain Program and Environmental Justice: Staff Analysis.
www.rff.org/Documents/RFF-RPT-Adirondacks.pdf
Banzhaf, S., Burtraw, D., Evans, D., and Krupnick, A. (2004,
September). Valuation of natural resource improvements in the
Adirondacks. Resources for the Future.
www.adirondacklakessurvey.org
Jenkins,]., Roy, K., Driscoll, C., Beurkett, C. (2005, October).
Acid rain and the Adirondacks: A Research Summary. Adirondack
Lakes Survey Corporation.
Emissions, Allowances, and Environmental Data
For more information on emissions, allowances, and environmental
data, see:
cfpub.epa.gov/gdm
EPA Clean Air Markets Data and Maps
www.epa.gov/castnet
Clean Air Status and Trends Network (CASTNET)
www.epa.gov/airmarkets/deposition/2005atlas.pdf
Atmosphere in Motion Results from the National Deposition
Monitoring Networks: 2005 Atlas
nadp.sws.uiuc.edu
National Atmospheric Deposition Program/
National Trends Network
-------
28 < Acid Rain Program, 2005 Progress Report
Endnotes
1 See: (Based on 2002 National Emissions Inventory).
2 Chestnut, L. G., Mills, D. M. (2005, November). A fresh look at the benefits and costs of the U.S. acid rain program. Journal of
Environmental Management, Vol. 77, Issue 3, 252-256.
3 See: .
4 Detailed emissions data for ARP sources are available on the Data and Maps portion of EPA's Clean Air Markets Web site at
. Allowance transfers are posted and updated daily on .
5 During 2005, EPA found that there were two small units at a plant that the Agency believes should have been in the ARP since 2000,
and EPA is now working to resolve this legal issue.
6 Allowance transfers are posted and updated daily on .
7 Gruenspecht, Howard. (2006, February 9). Deputy Administrator of the Energy Information Administration, Department of Energy.
Statement before the Subcommittee on Clean Air, Climate Change, and Nuclear Safety of the Committee on Environment and Public
Works in the United States Senate, p.3.
8 Other programs such as the NOX SIP Call, the OTC NOX Budget Program, and state laws also contribute to reductions, especially
after 2000.
9 Monitoring data from the Temporally Integrated Monitoring of Ecosystems (TIME) and Long-Term Monitoring network.
10 Chestnut and Mills, 2005.
11 Human Health Benefits from Sulfate Reduction under Title IV of the 1990 Clean Air Act Amendments. EPA-430-R-95-010.
12 See, for example:
Ellerman, D. (2003). Lessons from Phase 2 compliance with the U.S. Acid Rain Program. Cambridge, Massachusetts: MIT Center for Energy
and Environmental Policy Research.
Carlson, C.P., Burtraw, D, Cropper, M., and Palmer, K. SO2 control by electric utilities: What are the gains from trade? Journal of Political
Economy,Vol. 108, No. 6: 1292-1326.
Office of Management and Budget. (2003). Informing Regulatory Decisions: 2003 Report to Congress on the Costs and Benefits of Federal
Regulations and Unfunded Mandates on State, Local, and Tribal Entities. Office of Information and Regulatory Affairs.
.
13 EPA estimates recognize that some switching to lower-sulfur coal (and accompanying emission reductions) would have occurred in the
absence of Title IV as railroad deregulation lowered the cost of transporting coal from Wyoming's Powder River Basin electric power
plants in the Midwest and as plant operators adapted boilers to different types of coal.
14 CAIR (see ), CAMR (see ), CAVR (see ).
-------
H^
a)
m
•
1-
-------
&EFW
United States
Environmental Protection Agency
Office of Air and Radiation
Clean Air Markets Division
1200 Pennsylvania Avenue, NW (6204J)
Washington, DC 20460
EPA-430-R-06-015
October 2006
www.epa.gov/airmarkets
Recyclable—Printed with Vegetable Oil Based Inks on 100% Postconsumer, Process Chlorine Free Recycle
------- |