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Designing a Transborder Trading Scheme Structuring Border Trades: El Paso Electric and Brick Kilns 1 As discussed in Chapter I, El Paso Electric Company (EPE) is using transborder emission trading to meet nitrogen oxides (NO x ) emission targets at its Newman Station plant. Newman Station includes three grandfathered electric generating facilities that are natural gas-fired boilers. EPE must reduce NO x emissions below stricter new levels or obtain additional allowances. Rather than install on-site abatement technology, EPE determined it would be more cost-effective to obtain additional allowances by using credits generated in Ciudad Juárez. 2 These credits are generated by replacing existing primitive brick kilns with new, low-emission Marquez kilns, thereby reducing PM 10 . Texas law allows inter-pollutant trading under some circumstances. The brick kiln project involves the exchange of reductions in PM 10 emissions for NO x . In designing the emission trade, EPE and the Texas Commission on Environmental Quality (TCEQ) had to deal with a number of the issues inherent in the design of emissions trading programs. Baseline Determining the emission reduction from conversion to Marquez kilns involved two steps. First, field tests were conducted by New Mexico State University. These determined that PM 10 emissions and emissions of some volatile organic compounds (VOCs) were significantly reduced when using Marquez kilns compared to standard kilns. In the second step, EPE constructed a test kiln in Sunland Park, N.M., near the Texas border. Emissions from these kilns were measured using the methodology established by the U.S. Environmental Protection Agency (EPA) for sampling and analysis of emissions from unmodified and modified kilns. Testing determined that the reduction in emissions available for credit creation was 3.3 tons of PM 10 per kiln per year. By using well-established, replicable methodology, EPE established quantifiability for the brick project. The emission reductions are also permanent in that they can be expected to last for the life of EPE’s Newman Station facility. 107
Improving Transboundary Air Quality with Binational Emission Reduction Credit Trading The emission reductions are also real; the credit is generated by substituting a low-emission technology rather than by reducing brick production. Coverage EPE indicated that it would give preference to kilns located near the U.S.-Mexican border. However, any kiln in the municipo of Ciudad Juárez is eligible. Monitoring and Enforcement Issues associated with monitoring and enforcement are greatly reduced because the proposed kiln modification involves a onetime process change. Each affected kiln owner enters into an agreement with EPE under which EPE funds construction of a Marquez kiln. In exchange, the kiln owner agrees to the destruction of his existing kiln and operates the new kiln in a manner that will create credits for EPE. Texas requires EPE to provide an annual report documenting the ongoing use of the new kiln. Liability Any enforcement action will involve EPE only. No enforcement action is expected by Mexican officials. Harmonization Enforcement resides with TCEQ and is governed by the Texas State Implementation Plan. EPE must comply with Texas law. 1 This section is based on El Paso Electric 2003. 2 EPE advocated aggressively for statutory and regulatory changes, which culminated in the passage of 30 TAC § 101.337. This lobbying strategy was an integral part of EPE’s strategy for emission targets. 108
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THE SCERP MISSION The Southwest Con
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Authors SCERP Monograph Series, no.
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Published by San Diego State Univer
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Contents Foreword v Prefacio ix Pre
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Improving Transboundary Air Quality
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Prefacio “Si vale la pena tener u
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Prefacio pudiera ser difícil, cost
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I Introduction THE VIEW FROM EL PAS
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Introduction Resource Conservation
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Introduction approaches to correcti
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Introduction into the environment.
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Introduction maquiladoras, to hire
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Introduction (PM 10 and PM 2.5 )—
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Introduction installing scrubbers,
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Introduction The existence of emiss
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Introduction would require an initi
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Introduction EPE generated emission
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OVERVIEW Introduction This volume i
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II A Snapshot of the Border THE MEA
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A Snapshot of the Border states—B
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A Snapshot of the Border Table 1. U
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A Snapshot of the Border Interestin
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Table 3. Percentage Change in Borde
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A Snapshot of the Border Another so
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A Snapshot of the Border plants tha
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A Snapshot of the Border Air Qualit
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A Snapshot of the Border quality. T
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A Snapshot of the Border million in
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A Snapshot of the Border THE ENVIRO
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Page 162 and 163: abatement activities, 4, 6-7, 16, 1
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Page 166 and 167: nitrogen oxide (NO x), 9-10, 16-18,
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