What Have We Learnt? Based on Incidents Involving First Responders in Process Industries
- Conference: AIChE Spring Meeting and Global Congress on Process Safety
- Year: 2017
- Proceeding: 2017 Spring Meeting and 13th Global Congress on Process Safety
- Group: Global Congress on Process Safety
Wednesday, March 29, 2017 - 4:30pm-5:00pm
Emission Reduction Credits (ERCs) are required for companies with new projects or expansions that exceed certain emission thresholds in nonattainment areas in the country. Depending on the area of the country and source of ERCs, ERCs may never expire, expire after 5 years, or expire after 10 years. This can create and has created significant volatility in prices and supply in certain counties and parishes across the country. The Gulf Coast and Northeast are two areas of the US experiencing a shortage of ERCs and has seen a significant rise in ERC prices due to a reduction of supply. For example, Houston-Galveston-Brazoira (HGB) has seen VOC ERC prices increase from $5,000/ton to a high of $300,000 ton in less than three years. Baton Rouge, Louisiana ERCs have increased over 800% in VOC ERCs over a three period as well. ERCs can be a fatal flaw for a project. Some companies have moved the location of new projects due to shortage of ERCs and other companies have significantly moved up the timing of the procurement of ERCs. This trend may only continue given the forecasted tight ERC supply going forward in certain nonattainment areas.
On October 1st, 2015, EPA announced the lower of the NAAQS standards from 75 ppb to 70 ppb. This is expected to significantly increase the number of counties and parishes that will be classified as nonattainment. This will increase the projects that will require ERCs for their new projects and expansions. Numerous companies that have operated in attainment areas will have to adjust to permitting and offsetting their future emissions which will increase cost and complexity to their expansions.
In response to the shortage of VOC ERCs, many companies and industries are pushing for the ability to use NOx ERCCs to offset VOC emissions. This has occurred in Texas, and Louisiana has just passed a new regulation and states in the Northeast are being approached as well.
The ability for companies to understand the offsetting rules, supply of ERCs, demand of ERCs, procurement and contracting of ERCs along with ERC prices will be critical for companies. I plan to present price charts and discuss supply and demand.