Washington (Platts)--29Jun2009

A US Environmental Protection Agency proposal released Monday set the
first-ever hourly national air quality standard (NAAQS) for nitrogen dioxide
at between 80 parts per billion and 100 ppb. The standard may require the use
of NO2-removal equipment at those coal-fired power plants that do not have
such controls in place.

In addition, EPA said the proposed standard would require NO2 monitors
within 50 meters of major highways and roads in cities with at least 350,000
residents. The agency said short-term exposure to NO2 emissions from
automobiles is "generally highest on and near major roads."

Currently, EPA has an average annual National Air Quality Standard of 53
parts per billion, which was set in 1971. The agency said the current average
annual NO2 concentrations range between 10 ppb and 20 ppb.

The agency is proposing an hourly standard range of 80 ppb-100 ppb, but
is seeking comment on levels down to 65 ppb and up to 150 ppb. The agency also
is proposing to retain the annual average of 53 ppb.

EPA noted that "all areas presently meet the current (1971) NO2 NAAQS,
with annual NO2 concentrations measured at community-wide monitors well below
the standard (53 ppb)."

But an industry source said the plants are meeting an annual standard,
"not an hourly standard." An hourly standard would require coal-fired plants
to install controls, such as selective catalytic reduction units or
low-nitrogen oxide burners, if they do not already have them in place.

But it all depends on the level of the standard that EPA adopts, the
source said. Right now, it is "too broad for me to say definitively what
impact it could have on coal-fired power plants. If it's as high as 150 ppb
then there will be no effect, but if it is as low as 50 ppb then there will be
a dramatic effect," the source said.

The last time EPA set NAAQS for NO2 was in 1971. Since that time, EPA
has reviewed the standards twice, but chosen not to update them. The current
proposed rule is in response to a court-ordered settlement which required EPA
to propose a standard by June 26 and finalize it by January 22, 2010. Upon
implementation, EPA would have another two years until January 2012 to
designate areas in compliance.

States would then have another two years to modify their implementation
plans and affected sources would be given a year at least to incorporate the
updated standards in their permit limits. "That means compliance would not
take place at least until 2016 or 2017 for coal-fired power plants," said the
utility source, adding that other air quality standards, such as those for
ozone and particulate matter, would take effect before and require compliance
through the addition of controls.

EPA estimates the new monitoring requirements would result in the
placement of 165 monitoring sites near major roadways.

According to the American Lung Association, man-made sources in the US
emit 19.4 million metric tons of NO2 from burning fuels. Cars, trucks, and
buses are the largest sources of emissions followed by coal-fired power
plants, diesel-powered heavy construction equipment and other movable engines
as well as industrial boilers.

ALA had recommended that EPA propose a one-hour daily maximum standard of
50 ppb or below because such a short-term standard would reduce the likelihood
of asthma in children. The group also supported tightening the annual average
standard of 53 ppb.

EPA took up the advice of the Clean Air Scientific Advisory Board which
recommended a new one-hour daily maximum standard below 100 ppm, but advised
in favor of retaining the average annual standard.

--Amena Saiyid, amena_saiyid@platts.com