[Federal Register Volume 74, Number 206 (Tuesday, October 27, 2009)]
[Proposed Rules]
[Pages 55292-55365]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-24163]



[[Page 55291]]

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Part II





Environmental Protection Agency





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40 CFR Parts 51, 52, 70, et al.



Prevention of Significant Deterioration and Title V Greenhouse Gas 
Tailoring Rule; Proposed Rule

Federal Register / Vol. 74, No. 206 / Tuesday, October 27, 2009 / 
Proposed Rules

[[Page 55292]]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 51, 52, 70, and 71

[EPA-HQ-OAR-2009-0517; FRL-8966-7]
RIN 2060-AP86


Prevention of Significant Deterioration and Title V Greenhouse 
Gas Tailoring Rule

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: EPA is proposing to tailor the major source applicability 
thresholds for greenhouse gas (GHG) emissions under the Prevention of 
Significant Deterioration (PSD) and title V programs of the Clean Air 
Act (CAA or Act) and to set a PSD significance level for GHG emissions. 
This proposal is necessary because EPA expects soon to promulgate 
regulations under the CAA to control GHG emissions and, as a result, 
trigger PSD and title V applicability requirements for GHG emissions. 
If PSD and title V requirements apply at the applicability levels 
provided under the CAA, State permitting authorities would be paralyzed 
by permit applications in numbers that are orders of magnitude greater 
than their current administrative resources could accommodate. On the 
basis of the legal doctrines of ``absurd results'' and ``administrative 
necessity,'' this proposed rule would phase in the applicability 
thresholds for both the PSD and title V programs for sources of GHG 
emissions. The first phase, which would last 6 years, would establish a 
temporary level for the PSD and title V applicability thresholds at 
25,000 tons per year (tpy), on a ``carbon dioxide equivalent'' 
(CO2e) basis, and a temporary PSD significance level for GHG 
emissions of between 10,000 and 25,000 tpy CO2e. EPA would 
also take other streamlining actions during this time. Within 5 years 
of the final version of this rule, EPA would conduct a study to assess 
the administrability issues. Then, EPA would conduct another 
rulemaking, to be completed by the end of the sixth year, that would 
promulgate, as the second phase, revised applicability and significance 
level thresholds and other streamlining techniques, as appropriate.

DATES: Comments. Comments must be received on or before December 28, 
2009. Under the Paperwork Reduction Act, comments on the information 
collection provisions are best assured of having full effect if the 
Office of Management and Budget (OMB) receives a copy of your comments 
on or before November 27, 2009.
    Public Hearing: If anyone contacts us requesting to speak at a 
public hearing on or before November 16, 2009, we will hold a public 
hearing approximately 30 days after date of publication in the Federal 
Register.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-
OAR-2009-0517 by one of the following methods:
     http://www.regulations.gov. Follow the online instructions 
for submitting comments. Attention Docket ID No. EPA-HQ-OAR-2009-0517.
     E-mail: a-and-r-docket@epa.gov. Attention Docket ID No. 
EPA-HQ-OAR-2009-0517.
     Fax: (202) 566-9744. Attention Docket ID No. EPA-HQ-OAR-
2009-0517.
     Mail: EPA Docket Center, EPA West (Air Docket), Attention 
Docket ID No. EPA-HQ-OAR-2009-0517, U.S. Environmental Protection 
Agency, Mailcode: 2822T, 1200 Pennsylvania Avenue, NW., Washington, DC 
20460. Please include a total of 2 copies. In addition, please mail a 
copy of your comments on the information collection provisions to the 
Office of Information and Regulatory Affairs, Office of Management and 
Budget (OMB), Attn: Desk Officer for EPA, 725 17th Street, NW., 
Washington, DC 20503.
     Hand Delivery: U.S. Environmental Protection Agency, EPA 
West (Air Docket), 1301 Constitution Avenue, Northwest, Room 3334, 
Washington, DC 20004, Attention Docket ID No. EPA-HQ-OAR-2009-0517. 
Such deliveries are only accepted during the Docket's normal hours of 
operation, and special arrangements should be made for deliveries of 
boxed information.
    Instructions. Direct your comments to Docket ID No. EPA-HQ-OAR-
2009-0517. EPA's policy is that all comments received will be included 
in the public docket without change and may be made available online at 
http://www.regulations.gov, including any personal information 
provided, unless the comment includes information claimed to be 
Confidential Business Information (CBI) or other information whose 
disclosure is restricted by statute. Do not submit information that you 
consider to be CBI or otherwise protected through http://www.regulations.gov or e-mail. The http://www.regulations.gov Web site 
is an ``anonymous access'' system, which means EPA will not know your 
identity or contact information unless you provide it in the body of 
your comment. If you send an e-mail comment directly to EPA without 
going through http://www.regulations.gov, your e-mail address will be 
automatically captured and included as part of the comment that is 
placed in the public docket and made available on the Internet. If you 
submit an electronic comment, EPA recommends that you include your name 
and other contact information in the body of your comment and with any 
disk or CD-ROM you submit. If EPA cannot read your comment due to 
technical difficulties and cannot contact you for clarification, EPA 
may not be able to consider your comment. Electronic files should avoid 
the use of special characters, avoid any form of encryption, and be 
free of any defects or viruses. For additional information about EPA's 
public docket, visit the EPA Docket Center homepage at http://www.epa.gov/epahome/dockets.htm.
    Docket. All documents in the docket are listed in the http://www.regulations.gov index. Although listed in the index, some 
information is not publicly available, e.g., CBI or other information 
whose disclosure is restricted by statute. Certain other material, such 
as copyrighted material, will be publicly available only in hard copy. 
Publicly available docket materials are available either electronically 
in http://www.regulations.gov or in hard copy at the Air and Radiation 
Docket and Information Center, EPA/DC, EPA West Building, Room 3334, 
1301 Constitution Ave., NW., Washington, DC. The Public Reading Room is 
open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding 
legal holidays. The telephone number for the Public Reading Room is 
(202) 566-1744, and the telephone number for the Air Docket is (202) 
566-1742.

FOR FURTHER INFORMATION CONTACT: Mr. Joseph Mangino, Air Quality Policy 
Division, Office of Air Quality Planning and Standards (C504-03), 
Environmental Protection Agency, Research Triangle Park, NC 27711; 
telephone number: (919) 541-9778; fax number: (919) 541-5509; e-mail 
address: mangino.joseph@epa.gov.
    To request a public hearing, please contact Pam Long, Air Quality 
Planning Division, Office of Air Quality Planning and Standards (C504-
03), Environmental Protection Agency, Research Triangle Park, NC 27711; 
telephone number: (919) 541-0641; fax number: (919) 541-5509 no later 
than November 16, 2009 to request a hearing.

SUPPLEMENTARY INFORMATION:

[[Page 55293]]

I. Preamble Glossary of Terms and Abbreviations

    The following are abbreviations of terms used in the preamble.

APA Administrative Procedure Act
ANPR Advance Notice of Proposed Rulemaking
APA Administrative Procedure Act
AQRV Air Quality Related Value
BACT Best Available Control Technology
CAA Clean Air Act
CAM Compliance Assurance Monitoring
CBI Confidential Business Information
CFR Code of Federal Regulations
CH4 Methane
CO2 Carbon Dioxide
CO2e Carbon Dioxide Equivalent
CO Carbon Monoxide
EG Emission Guidelines
EPA U.S. Environmental Protection Agency
FERC Federal Energy Regulatory Commission
FIP Federal Implementation Plan
FLM Federal Land Manager
FTC Federal Trade Commission
FTE Full-Time Equivalent
GHG Greenhouse Gas
GWP Global Warming Potential
HAP Hazardous Air Pollutant
HFC Hydrofluorocarbon
HFE Hydrofluorinated Ether
ICR Information Collection Request
IPCC Intergovernmental Panel on Climate Change
MWCs Municipal Waste Combustion Facilities
NAAQS National Ambient Air Quality Standard
NESHAP National Emission Standards for Hazardous Air Pollutants
NOD Notice of Deficiency
NOX Nitrogen Oxides
NSPS New Source Performance Standard
NSR New Source Review
OMB Office of Management and Budget
OTAQ Office of Transportation and Air Quality
PFC Perfluorocarbon
ppm Parts Per Million
PSD Prevention of Significant Deterioration
PTE Potential to Emit
RIA Regulatory Impact Analysis
SBA Small Business Administration
SO2 Sulfur Dioxide
SF6 Sulfur Hexafluoride
SIP State Implementation Plan
Tg Teragrams
TIP Tribal Implementation Plan
tpy Tons Per Year
UNFCCC United Nations Framework Convention on Climate Change

II. General Information

A. Does this action apply to me?

    Entities affected by this proposed action include sources in all 
sectors of the economy, including commercial and residential sources. 
Entities potentially affected by this proposed action also include 
States, local permitting authorities, and tribal authorities. The 
majority of categories and entities potentially affected by this action 
are expected to be in the following groups:

------------------------------------------------------------------------
             Industry Group                          NAICS\a\
------------------------------------------------------------------------
Agriculture, fishing, and hunting......  11.
Mining.................................  21.
Utilities (electric, natural gas, other  2211, 2212, 2213.
 systems).
Manufacturing (food, beverages,          311, 312, 313, 314, 315, 316.
 tobacco, textiles, leather).
Wood product, paper manufacturing......  321, 322.
Petroleum and coal products              32411, 32412, 32419.
 manufacturing.
Chemical manufacturing.................  3251, 3252, 3253, 3254, 3255,
                                          3256, 3259.
Rubber product manufacturing...........  3261, 3262.
Miscellaneous chemical products........  32552, 32592, 32591, 325182,
                                          32551.
Nonmetallic mineral product              3271, 3272, 3273, 3274, 3279.
 manufacturing.
Primary and fabricated metal             3311, 3312, 3313, 3314, 3315,
 manufacturing.                           3321, 3322, 3323, 3324, 3325,
                                          3326, 3327, 3328, 3329.
Machinery manufacturing................  3331, 3332, 3333, 3334, 3335,
                                          3336, 3339.
Computer and electronic products         3341, 3342, 3343, 3344, 3345,
 manufacturing.                           4446.
Electrical equipment, appliance, and     3351, 3352, 3353, 3359.
 component manufacturing.
Transportation equipment manufacturing.  3361, 3362, 3363, 3364, 3365,
                                          3366, 3369.
Furniture and related product            3371, 3372, 3379.
 manufacturing.
Miscellaneous manufacturing............  3391, 3399.
Waste management and remediation.......  5622, 5629.
Hospitals/Nursing and residential care   6221, 6231, 6232, 6233, 6239.
 facilities.
Personal and laundry services..........  8122, 8123.
Residential/private households.........  8141.
Non-Residential (Commercial)...........  Not available. Codes only exist
                                          for private households,
                                          construction and leasing/sales
                                          industries.
------------------------------------------------------------------------
\a\ North American Industry Classification System.

B. Where can I get a copy of this document and other related 
information?

    In addition to being available in the docket, an electronic copy of 
this proposal will also be available on the World Wide Web. Following 
signature by the EPA Administrator, a copy of this action will be 
posted on the EPA's New Source Review (NSR) Web site, under Regulations 
& Standards, at http://www.epa.gov/nsr.

C. What should I consider as I prepare my comments for EPA?

    1. Submitting CBI. Do not submit this information to EPA through 
http://www.regulations.gov or e-mail. Clearly mark the part or all of 
the information that you claim to be CBI. For CBI information in a disk 
or CD ROM that you mail to EPA, mark the outside of the disk or CD ROM 
as CBI and then identify electronically within the disk or CD ROM the 
specific information that is claimed as CBI. In addition to one 
complete version of the comment that includes information claimed as 
CBI, a copy of the comment that does not contain the information 
claimed as CBI must be submitted for inclusion in the public docket. 
Information so marked will not be disclosed except in accordance with 
procedures set forth in 40 CFR part 2. Send or deliver information 
identified as CBI only to the following address: Roberto Morales, OAQPS 
Document Control Officer (C404-02), U.S. EPA, Research Triangle Park, 
NC 27711, Attention Docket ID No. EPA-HQ-OAR-2009-0517.
    2. Tips for preparing your comments. When submitting comments, 
remember to:
     Identify the rulemaking by docket number and other 
identifying information (subject heading, Federal Register date and 
page number).
     Follow directions--The agency may ask you to respond to 
specific questions or organize comments by referencing a

[[Page 55294]]

Code of Federal Regulations (CFR) part or section number.
     Explain why you agree or disagree; suggest alternatives 
and substitute language for your requested changes.
     Describe any assumptions and provide any technical 
information and/or data that you used.
     If you estimate potential costs or burdens, explain how 
you arrived at your estimate in sufficient detail to allow for it to be 
reproduced.
     Provide specific examples to illustrate your concerns, and 
suggest alternatives.
     Explain your views as clearly as possible, avoiding the 
use of profanity or personal threats.
     Make sure to submit your comments by the comment period 
deadline identified.

D. How can I find information about a possible public hearing?

    People interested in presenting oral testimony or inquiring if a 
hearing is to be held should contact Ms. Pamela S. Long, New Source 
Review Group, Air Quality Policy Division (C504-03), U.S. EPA, Research 
Triangle Park, NC 27711, telephone number (919) 541-0641. If a hearing 
is to be held, persons interested in presenting oral testimony should 
notify Ms. Long at least 2 days in advance of the public hearing. 
Persons interested in attending the public hearing should also contact 
Ms. Long to verify the time, date, and location of the hearing. The 
public hearing will provide interested parties the opportunity to 
present data, views, or arguments concerning these proposed rules.

E. How is the preamble organized?

    The information presented in this preamble is organized as follows:

I. Preamble Glossary of Terms and Abbreviations
II. General Information
    A. Does this action apply to me?
    B. Where can I get a copy of this document and other related 
information?
    C. What should I consider as I prepare my comments for EPA?
    D. How can I find information about a possible public hearing?
    E. How Is the preamble organized?
III. Overview of Proposed Rule
IV. Background
    A. What are greenhouse gases and their sources?
    B. What are the general requirements of the PSD program?
    C. What are the general requirements of the title V operating 
permits program?
    D. What is the current treatment of GHG emissions under the 
title V and PSD programs and what future actions may change that 
treatment?
V. What would be the administrative burdens of implementing PSD and 
title V at the current permitting thresholds?
    A. PSD Implications
    B. Title V Implications
    C. ANPR Comments
VI. What is the legal rationale for this proposed Action?
    A. ``Absurd Results'' Doctrine
    B. ``Administrative Necessity'' Doctrine
    C. Step-by-Step Process
    D. What were the ANPR comments received on GHG tailoring options 
for regulating GHG emissions under PSD and title V?
VII. Streamlining options and tools To address the administrative 
burdens of PSD and title V for GHGs
    A. Permit Streamlining Techniques for PSD and Title V
    B. Implementation of Streamlining Techniques and Overall 
Approach To Administering PSD and Title V Programs
    C. Strategies for Obtaining GHG Reductions From Sources Under 
the Proposed GHG Permit Thresholds
VIII. Description and Rationale of Proposed Action
    A. Proposed Permitting Thresholds for GHGs
    B. What is the definition of the GHG pollutant for the proposed 
permitting thresholds?
    C. What is the rationale for selecting the proposed GHG 
permitting thresholds for PSD?
    D. What is the rationale for selecting the proposed first-phase 
GHG permitting threshold for title V?
    E. how will EPA assess the GHG permitting thresholds in the 
first phase of the tailoring program, and how will epa develop the 
second phase?
IX. What would be the economic impacts of the proposed rule?
    A. What entities are affected by this rule?
    B. What are the estimated benefits to small sources due to 
regulatory relief?
    C. What are the economic impacts of this rulemaking?
    D. What are the costs of the proposed rule for society?
X. What implementation issues are related to this proposal?
    A. CAA Provisions Concerning SIP Requirements for PSD Programs, 
State Submittal Requirements, and EPA Action
    B. What PSD-Specific implementation considerations are there?
    C. What title V-Specific implementation issues are there?
    D. GHGs and title V permit fees
    E. Implementation assistance and support
XI. Statutory and Executive Order Reviews
    A. Executive Order 12866--Regulatory Planning and Review
    B. Paperwork Reduction Act
    C. Regulatory Flexibility Act
    D. Unfunded Mandates Reform Act
    E. Executive Order 13132--Federalism
    F. Executive Order 13175--Consultation and Coordination With 
Indian Tribal Governments
    G. Executive Order 13045--Protection of Children From 
Environmental Health Risks and Safety Risks
    H. Executive Order 13211--Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use
    I. National Technology Transfer and Advancement Act
    J. Executive Order 12898--Federal Actions To Address 
Environmental Justice in Minority Populations and Low-Income 
Populations
    K. Determination Under Section 307(d)
XII. Statutory Authority

III. Overview of Proposed Rule

    EPA is proposing to tailor the major source applicability 
thresholds for GHG emissions under the PSD and title V programs of the 
CAA by setting first-phase levels under both programs, setting a first-
phase PSD significance level \1\ for GHG emissions, undertaking efforts 
to streamline administrability of the programs, and committing to an 
assessment of administrability within 5 years and a second-phase 
rulemaking within 6 years.
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    \1\ ``Significant levels'' for regulated NSR pollutants are 
commonly called ``significance levels'' or ``significance 
thresholds,'' and these terms are used interchangeably for purposes 
of this proposed action.
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    This proposal is necessary because EPA expects soon to promulgate 
regulations under the CAA to control GHG emissions from light-duty 
motor vehicles and, as a result, trigger PSD and title V applicability 
requirements for GHG emissions. When the light-duty vehicle rule is 
finalized, the GHGs subject to regulation under that rule would become 
immediately subject to regulation under the PSD program, meaning that 
from that point forward, prior to constructing any new major source or 
major modifications that would increase GHGs, a source owner would need 
to apply for, and a permitting authority would need to issue, a permit 
under the PSD program that addresses these increases. Similarly, for 
title V it would mean that any new or existing source exceeding the 
major source applicability level for those regulated GHGs, if it did 
not have a title V permit already, would have 1 year to submit a title 
V permit application.
    If PSD and title V requirements apply at the applicability levels 
provided under the CAA, many small sources would be burdened by the 
costs of individualized PSD control technology requirements and permit 
applications. In addition, State permitting authorities would be 
paralyzed by enormous numbers of these permit applications; the numbers 
are orders of magnitude greater than the current inventory of permits 
and would vastly exceed the current administrative resources of the 
permitting authorities. Based on the long-established judicial 
doctrines of

[[Page 55295]]

``absurd results'' and ``administrative necessity,'' this proposed rule 
would phase in PSD and title V applicability. As the first phase, this 
rule would establish applicability thresholds for both the PSD and 
title V programs at the level of 25,000 tpy CO2e, and would 
establish a PSD significance level of between 10,000 and 25,000 tpy 
CO2e. This rule also marks the beginning of a concerted 
effort by EPA to streamline administration of the PSD and title V 
programs as much as possible and as quickly as possible. In addition, 
EPA commits that, within 5 years of promulgating the first phase, EPA 
will conduct a study of the permitting authorities' ability to 
administer the programs going forward, and then, within a year, conduct 
rulemaking for the second phase of the program. This second phase will 
either confirm the first-phase permitting levels or establish revised 
ones or other streamlining techniques. EPA also proposes to identify as 
the pollutant subject to PSD and title V for applicability purposes the 
group of up to six GHG emissions, each one weighted for its global 
warming potential, that are included in regulations for their control 
under the CAA. EPA also proposes to conform its action on PSD State 
implementation plans (SIPs) and title V programs to match the proposed 
Federal applicability requirements.
    More specifically, following this overview, section IV of this 
preamble provides background information as to the nature of GHG 
emissions and the general requirements of the PSD and title V programs. 
Currently, PSD applies to sources that emit at least 100 or 250 
(depending on the source category) tpy of pollutants subject to 
regulation under the CAA, and title V generally applies to sources that 
emit at least 100 tpy of pollutants subject to regulation under the 
CAA. Currently, PSD and title V requirements apply on the basis of 
emissions applicability thresholds that are pollutant-specific mass 
emissions rates expressed in tpy. Under PSD, construction of a 
stationary source that has the potential to emit (PTE) a regulated NSR 
pollutant in an amount exceeding 100 or 250 tpy (depending on the 
source category) (the ``major stationary source'' threshold, in the 
terminology of EPA regulations) triggers PSD permitting requirements. 
PSD permitting requirements are also triggered if a major stationary 
source undertakes a modification that is projected to increase 
emissions of a regulated NSR pollutant above an emissions threshold 
(the ``significance level''). For any particular pollutant, this level 
is zero unless and until EPA establishes one on the basis of de minimis 
emissions or administrative necessity. Under title V, a source with 
emissions exceeding a ``major source'' emissions threshold--generally 
100 tpy on a PTE basis--triggers title V permitting requirements.
    It should be noted that, as further explained in the background 
section, there are no geographic areas currently designated 
``nonattainment'' for GHG pollutants; as a result, this action affects 
only the PSD program, and we are not proposing to amend the 
``nonattainment NSR'' provisions of our major NSR program at this time, 
nor are we proposing to amend any provisions that affect minor NSR 
permitting.
    Section IV of this preamble further describes the current and 
expected future treatment of GHG emissions for applicability purposes 
under those PSD and title V programs. In particular, section IV 
describes the light-duty motor vehicle rule, which EPA recently 
proposed and expects to promulgate by the end of March 2010, and which 
will control GHG emissions from certain mobile sources. Under EPA's 
current interpretation of PSD and title V applicability requirements, 
promulgation of this motor vehicle rule will trigger the applicability 
of PSD and title V requirements for stationary sources that emit GHGs.
    In section V of this preamble, EPA describes the administrative 
burdens on permitting authorities if the requirements of PSD and title 
V programs are triggered without having this tailoring rule in place. 
In short, without this tailoring rule, the administrative burdens would 
be immense, and they would immediately and completely overwhelm the 
permitting authorities. Without this tailoring rule, permitting 
authorities would receive approximately 40,000 PSD permit applications 
each year--currently, they receive approximately 300--and they would be 
required to issue title V permits for approximately some six million 
sources--currently, their title V inventory is some 15,000 sources. 
These increases are measured in orders of magnitude. We estimate the 
additional resource burdens in full-time equivalents (FTEs) and time 
delays in processing permits, but the sheer numbers of additional 
permits by themselves paint the picture of the overwhelming 
administrative burdens.
    In section VI of this preamble, we describe the legal rationale for 
this tailoring rule. The judicial doctrine of ``absurd results'' 
authorizes departure from a literal application of statutory provisions 
if it would produce a result that is inconsistent with other statutory 
provisions or congressional intent, and particularly one that would 
undermine congressional purposes. The judicial doctrine of 
``administrative necessity'' authorizes an agency to depart from 
statutory requirements if the agency can demonstrate that the statutory 
requirements, as written, are impossible to administer. However, the 
agency must first attempt to mitigate administrative problems through 
techniques consistent with the statutory requirements, and, if variance 
from the statutory requirements nevertheless is necessary to allow 
administrability, the variance must be limited as much as possible.
    As discussed in section VI of this preamble, to apply the statutory 
PSD and title V applicability thresholds to sources of GHG emissions 
would bring tens of thousands of small sources and modifications into 
the PSD program each year, and millions of small sources into the title 
V program. This extraordinary increase in the scope of the permitting 
programs, coupled with the resulting burdens on the small sources and 
on the permitting authorities, were not contemplated by Congress in 
enacting the PSD and title V programs. Moreover, the administrative 
strains would lead to multi-year backlogs in the issuance of PSD and 
title V permits, which would undermine the purposes of those programs. 
Sources of all types--whether they emit GHGs or not--would face long 
delays in receiving PSD permits, which Congress intended to allow 
construction or expansion. Similarly, sources would face long delays in 
receiving title V permits, which Congress intended to promote 
enforceability. For these reasons, the absurd results doctrine applies 
to avoid a literal application of the thresholds.
    By the same token, the impossibility of administering the permit 
programs brings into play the administrative necessity doctrine. This 
doctrine also justifies EPA to avoid a literal application of the 
threshold provisions.
    Instead, these doctrines authorize EPA to apply the PSD and title V 
applicability provisions through a phased program. The first phase 
would establish the applicability thresholds at the 25,000-tpy levels 
and vigorously develop streamlining measures that would facilitate 
applying PSD and title V on a broader scale with overburdening sources 
and administrators. In this manner, the phased approach reconciles the 
language of the statutory provisions with the results of their 
application and with congressional intent.

[[Page 55296]]

    In section VII of this preamble, we describe the streamlining 
techniques--short of limiting the applicability of PSD and title V to 
higher-emitting sources--that may be available to improve 
administrability. These techniques range from defining ``potential to 
emit''--which is the basis for calculating the statutory thresholds--to 
be closer to actual emissions, to general permits and presumptive best 
available control technology (BACT), which is the principal control 
requirement under the PSD program. Although these techniques offer 
promise over the long term to improve administrability, they cannot be 
in place by March 2010, when we expect PSD and title V requirements to 
be triggered for GHG emitters, or within a several-year period 
thereafter. Accordingly, this tailoring rule is necessary at this time.
    In section VIII of this preamble, we describe in detail our 
proposed tailoring rule. For the PSD program, we are proposing to 
establish, as the first phase, the GHG ``major stationary source'' 
emissions applicability threshold level at 25,000 tpy on a 
CO2e basis. That is, sources that emit at this level or 
higher would be considered ``major stationary sources'' and therefore 
would become subject to PSD requirements when they construct or modify. 
We are also proposing to establish in this first phase a PSD 
``significance level'' emissions rate for GHGs and are proposing a 
range for that value of 10,000 to 25,000 tpy CO2e for 
comment. The ``significance'' level is important for determining 
whether existing sources that make physical or operational changes 
become subject to PSD and for determining whether sources that are 
subject to PSD for other pollutants are also subject to PSD for their 
GHG emissions.
    As further described in section VIII of this preamble, for the 
title V operating permits program, we are also proposing to establish 
the GHG emissions applicability threshold level at 25,000 tpy 
CO2e for this first phase. That is, sources that emit at 
this level or higher would be considered ``major sources'' and 
therefore would become subject to title V requirements.
    As further described in section VIII of this preamble, as an 
integral part of the tailoring rule, EPA proposes to commit to 
complete, within 5 years of a final rule, a study to evaluate the 
actual administrative burden resulting from the proposed GHG permitting 
thresholds and possible other thresholds, and the progress of 
developing streamlining techniques and augmentation of permitting 
authorities' resources. In addition, EPA commits to propose and 
promulgate a rulemaking--informed by the study--within 6 years from the 
effective date of a final version of this rulemaking (i.e., 1 year from 
the completion of the study) that would establish the second phase, 
which would either reaffirm the GHG permitting thresholds, promulgate 
alternative thresholds, adopt other streamlining techniques, and/or 
take other action consistent with the goal of expeditiously meeting CAA 
requirements in light of the administrative burden that remains at that 
time.
    During this first phase of the tailoring program, EPA proposes to 
make a concerted effort to assess and implement streamlining options, 
tools, and guidance--some of which we describe in section VII of this 
preamble--to reduce the administrative burden on permitting authorities 
when implementing PSD and title V for GHGs. EPA proposes to undertake 
as many of these streamlining actions as possible and to do so as 
quickly as possible. In addition, for larger sources that would be 
subject to PSD and title V requirements during the first phase, EPA 
intends to work closely with the stakeholders to develop efficient 
methods for implementing those requirements. For smaller sources for 
which PSD and title V requirements would not apply during the first 
phase due to the increase in the major source applicability threshold, 
EPA intends to identify cost-effective opportunities available as soon 
as possible to achieve GHG reductions through means other than PSD and 
title V (e.g., energy efficiency and other appropriate measures).
    Section VIII of this preamble further describes our proposal to 
define the relevant pollutants as the group of up to six GHG emissions 
that have been regulated for control, calculated on the basis of global 
warming potential (GWP).\2\
---------------------------------------------------------------------------

    \2\ The Intergovernmental Panel on Climate Change (IPCC) 
describes GWP as an index, based upon radiative properties of well-
mixed GHGs, measuring the radiative forcing of a unit mass of a 
given well-mixed greenhouse gas in the present-day atmosphere 
integrated over a chosen time horizon, relative to that of 
CO2. The GWP represents the combined effect of the 
differing times these gases remain in the atmosphere and their 
relative effectiveness in absorbing outgoing thermal infrared 
radiation. (Intergovernmental Panel on Climate Change (IPCC), 
Glossary of Terms used in the IPCC Fourth Assessment Report, WG1). 
http://www.ipcc.ch/
---------------------------------------------------------------------------

    Section IX of this preamble describes the burden and economic 
impacts of the proposed rule.
    Section X of this preamble discusses implementation issues related 
to this proposal. These include conforming EPA approval of the PSD 
programs in SIPs and EPA approval of the State title V programs to be 
consistent with the proposed applicability threshold levels. By way of 
background, as soon as EPA promulgates a rule regulating for control of 
GHG emissions--which we expect to occur with the proposed light-duty 
motor vehicle rule, scheduled for promulgation at the end of March 
2010--stationary sources will become subject to PSD and title V 
requirements. The major source thresholds for PSD and title V, 
significance level for PSD, and identification of GHGs subject to PSD 
and title V as proposed in this tailoring rule would each take effect 
immediately in the Federal PSD program (codified at 40 CFR 52.21) and 
in the Federal operating permits program (codified at 40 CFR 71), as 
applicable. To conform EPA action on PSD SIPs and State title V 
programs, EPA intends to limit its previous approval of those SIPs and 
title V programs to cover only the permitting of sources of GHG 
emissions at or above the proposed threshold levels. EPA will take no 
action on--that is, EPA will not disapprove--the PSD SIPs and title V 
programs to the extent they require permitting of GHG emitters at 
levels below the proposed thresholds. EPA proposes to take this action 
by virtue of its authority to reconsider its previous regulatory 
actions. Section X of this preamble also explains how we propose to 
address the treatment of GHGs in the fee programs under title V.

IV. Background

A. What are greenhouse gases and their sources?

    Gases that trap heat in the atmosphere are often called GHGs. Some 
GHGs such as carbon dioxide (CO2) are emitted to the 
atmosphere through natural processes as well as human activities. Other 
gases, such as fluorinated gases, are created and emitted solely 
through human activities. The primary GHGs of concern directly emitted 
by human activities include CO2, methane (CH4), 
nitrous oxide (N2O), hydrofluorocarbons (HFCs), 
perfluorocarbons (PFCs), and sulfur hexafluoride (SF6). 
These six primary GHGs will, for the purposes of this proposal, be 
referred to collectively as ``the six primary GHGs.'' These six gases, 
once emitted, remain in the atmosphere for decades to centuries. Thus, 
they become well-mixed globally in the atmosphere and their 
concentrations accumulate when emissions exceed the rate at which 
natural processes remove them from the atmosphere. The heating effect 
caused by the human-induced buildup of GHGs

[[Page 55297]]

in the atmosphere is very likely the cause of most of the observed 
global warming over the last 50 years. A detailed explanation of 
climate change and its impact on health, society, and the environment 
is included in EPA's technical support document for the endangerment 
finding proposal (Docket ID No. EPA-HQ-OAR-2009-0171-0137).\3\
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    \3\ ``Document for Endangerment and Cause or Contribute Findings 
for Greenhouse Gases under Section 202(a) of the Clean Air Act,'' 
Climate Change Division, Office of Atmospheric Programs, U.S. 
Environmental Protection Agency, Washington, DC. April 17, 2009.
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    In the U.S., the combustion of fossil fuels (e.g., coal, oil, gas) 
is the largest source of CO2 emissions and accounts for 80 
percent of total GHG emissions. More than half the energy-related 
emissions come from large stationary sources such as power plants, 
while about a third come from transportation. Of the six primary GHGs, 
four (CO2, CH4, N2O, and HFCs) are 
emitted by motor vehicles. Industrial processes (such as the production 
of cement, steel, and aluminum), agriculture, forestry, other land use, 
and waste management are also important sources of GHG emissions in the 
U.S. These emissions are inventoried at a national level by EPA in the 
Inventory of U.S. Greenhouse Gas Emissions and Sinks.\4\
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    \4\ For additional information about the Inventory of U.S. 
Greenhouse Gas Emissions and Sinks, and for more information about 
GHGs, climate change, climate science, etc., see EPA's climate 
change Web site at http://www.epa.gov/climatechange/.
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    Different GHGs have different heat-trapping capacities. It is 
useful to compare them to each other through the use of the 
CO2e metric. This metric incorporates both the heat-trapping 
ability and atmospheric lifetime of each GHG and can be used to adjust 
the quantities, in tpy, of all GHGs relative to the GWP of 
CO2. When quantities of the different GHGs are multiplied by 
their GWPs, the different GHGs can be summed and compared on a 
CO2e basis. Depending on which GWP values are used, the 
calculated GHG emissions on a CO2e basis will vary. 
Throughout this preamble, we are applying the GWP values established by 
the Intergovernmental Panel on Climate Change (IPCC) in its Second 
Assessment Report (SAR) (IPCC 1996).\5\ For example, CH4 has 
a GWP of 21, meaning each ton of CH4 emissions would have 21 
times as much impact on global warming over a 100-year time horizon as 
1 ton of CO2 emissions. Thus, on the basis of heat-trapping 
capability, 1 ton of CH4 would equal 21 tons of 
CO2e. The GWPs of the six primary GHGs range from 21 (for 
CH4) up to 23,900 (for SF6). Aggregating all GHGs 
on a CO2e basis at the source level allows a facility to 
evaluate its total GHG emissions contribution based on a single metric. 
For a complete list of the applicable GWP values for each GHG, please 
refer to EPA's Inventory of U.S. Greenhouse Gas Emissions and Sinks.
---------------------------------------------------------------------------

    \5\ ``Inventory of U.S. Greenhouse Gas Emissions and Sinks: 
1990-2007,'' U.S. Environmental Protection Agency, EPA 430-R-09-004, 
April 15, 2009. Table 1-2, p. 1-6. http://www.epa.gov/climatechange/emissions/usinventoryreport.html.
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B. What are the general requirements of the PSD program?

1. Overview of the PSD Program
    The PSD program is a preconstruction review and permitting program 
applicable to ``new major stationary sources'' and ``major 
modifications'' at existing major stationary sources, in the 
terminology of EPA's implementing regulations. The PSD program applies 
in areas meeting the health-based National Ambient Air Quality 
Standards (NAAQS) or for which there is insufficient information to 
determine whether they meet the NAAQS (``unclassifiable'' areas). The 
PSD program is contained in part C of title I of the CAA. The 
``nonattainment NSR'' program applies in areas not meeting the NAAQS 
and in the Ozone Transport Region, and is implemented under the 
requirements of part D of title I of the CAA. Collectively, we also 
commonly refer to these two programs as the major NSR program. The 
governing EPA rules are contained in 40 CFR 51.165, 51.166, 52.21, 
52.24, and part 51, appendices S and W. There is no NAAQS for 
CO2 or any of the other primary GHGs, nor does EPA plan to 
promulgate one; therefore, we do not anticipate that the 
``nonattainment'' major NSR program will apply to GHGs.
    The applicability of the PSD program to a particular source must be 
determined in advance of construction or modification and is pollutant-
specific. The primary criterion in determining PSD applicability is 
whether the proposed project is sufficiently large (in terms of its 
emissions) to be a major stationary source or major modification, both 
of which are described below.
a. Major Stationary Sources
    Under PSD, a ``major stationary source'' is any source type 
belonging to a specified list of 28 source categories which emits or 
has a PTE of 100 tpy or more of any pollutant subject to regulation 
under the CAA, or any other source type which emits or has the 
potential to emit such pollutants in amounts equal to or greater than 
250 tpy. See, e.g., 40 CFR 52.21(b)(1). We may refer to these levels as 
the 100/250-tpy thresholds. A new source with a PTE at or above the 
applicable ``major stationary source threshold'' amount is subject to 
major NSR. These limits originate from section 169 of the CAA, which 
applies PSD to any ``major emitting facility'' \6\ and defines the term 
to include any source with a PTE of 100 or 250 tpy, depending on source 
category.
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    \6\ EPA's regulations employ the term ``major stationary 
source'' in lieu of ``major emitting facility.'' e.g., 40 CFR 
52.21(a)(2)(i), (b)(1)(i).
---------------------------------------------------------------------------

b. Major Modifications
    PSD applies to not only new construction but also to existing 
sources that undertake a ``major modification,'' which is defined in 
terms of the following three criteria:
    (1) A physical change in, or change in the method of operation of, 
a ``major stationary source'' must occur;
    (2) The change must result in an increase in emissions that is 
``significant,'' that is, equal to or above the significance level 
defined for the pollutant in question, e.g., in 40 CFR 52.21(b)(23)); 
and
    (3) The increase in emissions resulting from the change must be a 
significant net emissions increase. In other words, when the increase 
from the project is added to other contemporaneous increases or 
decreases in actual emissions at the source, the net emissions increase 
must be significant (equal to or above the significance level defined, 
e.g., in 40 CFR 52.21(b)(23)).
    Generally, significance levels for PSD are pollutant-specific 
emissions rates. For example, the significance level for emissions of 
nitrogen oxides (NOX) is 40 tpy. See, e.g., 40 CFR 
52.21(b)(23)(i). However, for a regulated NSR pollutant for which no 
specific significance level is listed, PSD applies to ``any increase.'' 
See, e.g., 40 CFR 52.21(b)(23)(ii). Thus, if GHGs were to become 
subject to regulation and PSD review, and no significance levels for 
GHGs had been established, the default value would be ``zero.''
    EPA has promulgated significance levels for criteria pollutants and 
certain other pollutants, which EPA generally based on levels that 
represent a de minimis contribution to air quality problems. For 
example, for certain pollutants regulated under the new source 
performance standards (NSPS), EPA generally based significance levels 
at 20 percent of the NSPS. These concentrations were compared to 
available health and welfare data to assure that significant adverse 
effects

[[Page 55298]]

were avoided.\7\ To this point, EPA has not established a significance 
level for GHGs, and we currently do not have an adequate supporting 
record to establish a similar health and welfare-based de minimis level 
for significance for GHGs.
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    \7\ EPA established significance levels for hazardous air 
pollutants on a similar basis, but subsequently, in the 1990 Clean 
Air Act Amendments, Congress mooted them by exempting hazardous air 
pollutants from PSD, under CAA section 112(b)(6).
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2. General Requirements for PSD
    Under the PSD program, one of the principal requirements is that a 
new major source or major modification must apply BACT, which is 
determined on a case-by-case basis taking into account, among other 
factors, the cost and effectiveness of the control. EPA has developed a 
``top-down'' approach for BACT review which involves a decision process 
that includes identification of all available control technologies, 
elimination of technically infeasible options, ranking of remaining 
options by control and cost effectiveness, and then selection of BACT. 
Under PSD, once a source is determined to be major for any regulated 
pollutant, a BACT review is performed for each attainment pollutant 
whose emissions exceed its PSD significance level as part of new 
construction or modification projects at the source.
    In addition to performing a BACT review, the source must analyze 
the impact of the project on ambient air quality to assure that no 
violation of any NAAQS or PSD increments will result, and must analyze 
impacts on soil, vegetation, and visibility. Sources or modifications 
that would impact Class I areas (e.g., national parks) may be subject 
to additional requirements to protect air quality related values 
(AQRVs) that have been identified for such areas. Under PSD, if a 
source proposes to locate within 100 kilometers of a Class I area, the 
Federal Land Manager (FLM) is notified and is responsible for 
evaluating a source's projected impact on the AQRVs and recommending 
either approval or disapproval of the source's permit application based 
on anticipated impacts. There are currently no NAAQS or PSD increments 
established for GHGs, and therefore these PSD requirements would not 
apply to GHG emissions sources, even when PSD is triggered for GHG 
emissions sources. However, as noted previously, if PSD is triggered 
for a GHG emissions source, all regulated NSR pollutants which the new 
source emits in significant amounts would be subject to PSD 
requirements. Therefore, if a facility triggers review for regulated 
NSR pollutants that are non-GHG pollutants for which there are 
established NAAQS or increments, the air quality, additional impacts, 
and Class I requirements would apply to those pollutants.
    When the reviewing authority reaches a preliminary decision to 
authorize construction of a proposed new major source or major 
modification, it must provide notice of the preliminary decision and an 
opportunity for comment by the general public, industry, and other 
interested persons. After considering and responding to the comments, 
the reviewing authority may issue a final determination on the 
construction permit in accordance with the PSD regulations.
    Usually NSR permits are issued by State or local air pollution 
control agencies. In these cases, State and local air pollution control 
agencies may have their own permit programs that are approved by EPA in 
the SIP or they may be delegated the authority to issue permits on 
behalf of EPA. In some areas, the EPA issues the permits.
3. Minor NSR Program
    The permitting program for minor stationary sources is addressed by 
section 110(a)(2)(C) of the CAA. We commonly refer to this program as 
the minor NSR program. A minor stationary source means a source whose 
PTE is lower than the major source applicability threshold for a 
particular pollutant as defined in the applicable nonattainment major 
NSR program or PSD program. As with nonattainment NSR requirements, the 
CAA does not require that minor source programs apply to GHGs because 
there are no NAAQS for GHGs.

C. What are the general requirements of the title V operating permits 
program?

1. Overview of Title V
    The title V operating permits program was added to the CAA by 
Congress in 1990. The operating permits program requirements under 
title V are intended to improve sources' compliance with the 
requirements of the CAA. In summary, the title V program requires major 
sources (generally defined as sources that actually emit or have the 
potential to emit 100 tpy) and certain other sources to obtain 
operating permits that: Consolidate all CAA requirements into a single 
document; provide for review of these documents by EPA, States, and the 
public; and require permit holders to track, report, and annually 
certify their compliance status with respect to their permit 
requirements.
    Title V will be triggered for GHG emissions when EPA regulates them 
for control under another provision of the CAA. Section 502(a) of the 
Act sets forth the sources required to obtain operating permits under 
title V. These sources include: (1) Any affected source subject to acid 
rain rules under title IV of the Act; (2) any major source; (3) any 
source required to have a permit under part C or D (PSD/NSR) of title I 
of the Act; (4) ``any source subject to section 111 [NSPS] or section 
112 [NESHAP];'' and (5) any other source designated by rule. See also 
40 CFR 70.3(a) and 71.3(a). The requirements of section 502(a) are 
primarily implemented through the operating permit program rules at 40 
CFR part 70, which sets out the minimum requirements for title V 
operating permit programs administered by State, local, and tribal 
permitting authorities (57 FR 32261; July 21, 1992); and part 71, the 
Federal operating permit program requirements that apply where EPA or a 
delegate agency authorized by EPA to carry out a Federal permit program 
is the title V permitting authority (61 FR 34228, July 1, 1996).
    Title V generally does not add new substantive requirements for 
pollution control, but it does require that each permit contain all of 
a facility's ``applicable requirements'' under the CAA, and that 
certain procedural requirements be followed, especially with respect to 
compliance with these requirements. ``Applicable requirements'' for 
title V purposes include all stationary source requirements, but do not 
include mobile source requirements.
2. Title V Permit Requirements
    When a source becomes subject to title V, it must apply for a 
permit within 1 year of the date it became subject. The application 
must include identifying information, a description of emissions and 
other information necessary to determine applicability of CAA 
requirements, identification and certification of the source's 
compliance status with these requirements (including a schedule to come 
into compliance for any requirements for which the source is currently 
out of compliance), a statement of the methods for determining 
compliance, and other information. The permitting authority then uses 
this information to issue the source a permit to operate, as 
appropriate. A title V source may not operate without a permit, except 
that if it has submitted a complete application, the submission acts as 
a ``shield'' that

[[Page 55299]]

authorizes it to operate while awaiting issuance of its permit.
    Title V permits must contain the following main elements: (1) 
Emissions standards to assure compliance with all applicable 
requirements; (2) a duration of no more than 5 years, after which the 
permit must be renewed; (3) monitoring, recordkeeping, and reporting 
requirements necessary to assure compliance, including a semiannual 
report of all required monitoring and a prompt report of each deviation 
from a permit term; (4) provisions for payment of permit fees as 
established by the permitting authority such that total fees collected 
are adequate to cover the costs of developing and implementing the 
program; and (5) a requirement for an annual compliance certification 
by a responsible official at the source. An additional specific 
monitoring requirement, compliance assurance monitoring (CAM), also 
applies to some emissions units operating at major sources with title V 
permits. The CAM rule requires source owners to design and conduct 
monitoring of the operation of add-on control devices used to control 
emissions from moderately large emissions units. Source owners use the 
monitoring data to evaluate, verify, and certify the compliance status 
for applicable emissions limits. The CAM rule is implemented in 
conjunction with the schedule of the operating permits program. While 
these are the main elements relevant to a discussion of GHGs, there are 
numerous other permit content requirements and optional elements, as 
set forth in the title V regulations at 40 CFR 70.6.
    In addition to the permit content requirements, there are 
procedural requirements that permitting authorities (typically States) 
must follow in issuing title V permits, including (1) determining and 
notifying the applicant that its application is complete; (2) providing 
public notice and a 30-day public comment period on the draft permit, 
as well as the opportunity for a public hearing; (3) giving notice to 
EPA and affected States; and (4) preparing and providing to any 
requester a statement of the legal and factual basis of the draft 
permit. The permitting authority must take final action on permit 
applications within 18 months of receipt. EPA also has 45 days from 
receipt of a proposed permit to object to its issuance, and citizens 
have 60 days to petition EPA to object. Permits may also need to be 
revised or reopened if new requirements come into effect or if the 
source makes changes that conflict with, or necessitate changes to, the 
current permit. Permit revisions and reopenings follow procedural 
requirements which vary depending on the nature of the necessary 
changes to the permits.

D. What is the current treatment of GHG emissions under the title V and 
PSD programs and what future actions may change that treatment?

    This section of the preamble describes the current treatment of GHG 
emissions under the PSD and title V programs--under which GHG emissions 
are not included for purposes of determining applicability--including 
recent regulatory and legal developments related to this action, and 
then describes what future action may change that treatment.
1. Regulation of GHGs Under the CAA
a. The Massachusetts U.S. Supreme Court Decision
    On April 2, 2007, in Massachusetts v. EPA, 549 U.S. 497 (2007), the 
U.S. Supreme Court held that GHGs are air pollutants covered by the 
CAA. Therefore, the Court further held that GHG emissions are subject 
to CAA section 202(a) under which the Administrator must determine 
whether or not emissions of GHGs from new motor vehicles or motor 
vehicle engines cause or contribute to air pollution which may 
reasonably be anticipated to endanger public health or welfare, or 
whether the science is too uncertain to make a reasoned decision. This 
decision resulted from a petition for rulemaking under section 202(a) 
filed by more than a dozen environmental, renewable energy, and other 
advocacy organizations. As a result of this decision, EPA decided to 
issue an advance notice of proposed rulemaking (ANPR), discussed later 
in this preamble, soliciting comment on how GHG emissions should be 
regulated under the CAA.
b. The EPA ANPR
    On July 30, 2008, EPA published an ANPR in the Federal Register 
entitled, ``Regulating Greenhouse Gas Emissions under the CAA.'' 73 FR 
44354, July 30, 2008. This ANPR presented information relevant to, and 
solicited public comment on how to respond to, the U.S. Supreme Court's 
decision in Massachusetts v. EPA, holding that GHGs are air pollutants 
subject to the CAA. The notice reviewed the various CAA provisions 
(including the PSD and title V requirements) that may be applicable to 
sources of GHGs, examined the issues that regulating GHGs under those 
provisions may raise, provided information regarding potential 
regulatory approaches and technologies for reducing GHG emissions, and 
raised issues relevant to possible legislation and the potential for 
overlap between legislation and CAA regulation.
    In addition, the notice described and solicited comment on 
petitions the EPA had received to regulate GHG emissions from ships, 
aircraft, and nonroad vehicles such as farm and construction equipment. 
Finally, the notice discussed several other actions concerning 
stationary sources for which EPA has received comment regarding the 
regulation of GHG emissions, including promulgation of performance 
standards or guidelines under CAA section 111 for new and existing 
sources in various source categories. The EPA included options for 
phasing in the PSD program and title V programs to mitigate burdens 
that would occur if GHGs were to be regulated under the CAA and 
solicited comments on those actions. Section V.C of this preamble 
summarizes some of the substantive comments received on the ANPR. In 
issuing the ANPR, EPA made clear that it believed that the best way to 
address the problems posed by GHG emissions would be through 
legislation directly addressing GHG emissions, rather than through use 
of the tools in the CAA.
2. Current Applicability of the PSD Program to Sources of GHG Emissions
    As explained earlier in this preamble, EPA treats sources as 
subject to PSD requirements only if they emit ``regulated NSR 
pollutants'' at specified threshold levels. Currently, EPA does not 
consider GHG emissions to be ``regulated NSR pollutants'' under the PSD 
program because GHG emissions have not, thus far, been subject to 
regulation requiring control under the CAA. As discussed later in this 
preamble, EPA is in the process of reviewing its approach to PSD 
applicability and is in the process of developing a rulemaking--the 
light-duty motor vehicle rule--that will trigger PSD applicability for 
GHG emissions.
a. PSD Interpretive Memorandum
    EPA is currently reconsidering the PSD Interpretive Memorandum 
(previously referred to as the ``Johnson Memorandum''), which describes 
the circumstances under which EPA considers a pollutant subject to PSD 
requirements. See memorandum (in docket for this rulemaking) from 
Administrator Stephen L. Johnson to Regional Administrators, ``EPA's 
Interpretation of Regulations that Determine Pollutants Covered by 
Federal Prevention of Significant Deterioration (PSD) Permit Program,'' 
December 18, 2008. The PSD

[[Page 55300]]

Interpretive Memorandum followed a decision by the Environmental 
Appeals Board (EAB) in In re Deseret Power Electric Cooperative, on 
November 13, 2008. PSD Appeal No. 07-03 (EAB 2008) (In re Deseret). 
There, the Board remanded a PSD permit that EPA Region VIII issued on 
August 30, 2007, to Deseret Power Electric Cooperative, authorizing the 
latter to construct a new waste-coal-fired electric generating unit 
near its existing Bonanza Power Plant, in Bonanza, Utah. The primary 
issue before the Board was whether the permit had to include BACT 
limits for CO2, which depended on whether CO2 
meets the definition of a ``regulated NSR pollutant'' under 40 CFR 
52.21(b)(50), which in turn interprets the provisions in CAA sections 
165 and 169 that apply the BACT requirement to ``each pollutant subject 
to regulation'' under the CAA. The Board rejected arguments by the 
petitioner, the Sierra Club, that the CAA compelled a broad 
interpretation of the phrase ``subject to regulation,'' which, 
according to the petitioner, required EPA to apply BACT to pollutants 
as long as they are subject to monitoring and reporting requirements. 
Currently, and since 1993, sources covered by the Acid Rain program 
have been required to monitor and report CO2 emissions 
pursuant to the CAA. The Board also rejected the view advanced by the 
EPA offices involved in the case--Region VIII and the Office of Air and 
Radiation--that EPA had already established an interpretation of 
``subject to regulation,'' which was that this term authorized BACT 
only for pollutants subject to actual regulatory controls. Thus, the 
Board remanded the permit to the Region to ``reconsider whether or not 
to impose a CO2 BACT limit in light of the `subject to 
regulation' definition under the CAA.'' In re Deseret, slip op. at 63.
    On December 18, 2008, EPA's then-Administrator Stephen Johnson 
issued a memorandum establishing an interpretation clarifying the scope 
of the PSD program under the CAA (the PSD Interpretive Memorandum). 
This memorandum interprets the definition of ``regulated NSR 
pollutant'' to include each pollutant subject to either a provision in 
the CAA or regulation adopted by EPA under the CAA that requires actual 
control of emissions of that pollutant, and to exclude pollutants for 
which EPA regulations only require monitoring or reporting.
    On February 17, 2009, EPA Administrator Lisa Jackson responded to 
an amended petition for reconsideration dated January 6, 2009, filed on 
behalf of the Sierra Club and other parties (petitioners), seeking 
reconsideration of the PSD Interpretive Memorandum. In Administrator 
Jackson's response, she granted the petition for reconsideration in 
order to allow for public comment on issues raised in the memorandum 
and stated that EPA will also seek public comment on any issues raised 
by the opinion of the EAB with regard to the In re Deseret decision (as 
discussed in the PSD Interpretive Memorandum), to the extent they are 
not coextensive with the issues raised in the memorandum. However, 
Administrator Jackson made clear that the current interpretations in 
the PSD Interpretive Memorandum remain in effect during the 
reconsideration process.
    Because the PSD Interpretive Memorandum concerns PSD applicability, 
its reconsideration will identify the circumstances under which GHG 
emissions are treated as ``subject to regulation under the CAA'' and, 
therefore, are ``regulated NSR pollutants.'' Once GHG emissions are 
considered ``regulated NSR pollutants,'' PSD program requirements for 
existing thresholds (100/250 tpy) are triggered. The PSD Interpretive 
Memorandum reconsideration is being addressed in a proposed rule 
published in the Federal Register on October 7, 2009 (74 FR 51535). 
Although several possible triggering events may be considered in that 
action, the latest of these events would be the one that applies under 
EPA's current interpretation: A nationwide rule controlling or limiting 
GHG emissions. Presently, the EPA expects that the first such rule will 
be the light-duty motor vehicle rule.
b. Light-Duty Vehicle Rule
    EPA is currently developing a rule to regulate GHGs from mobile 
sources under title II of the CAA (74 FR 24007; May 22, 2009). EPA 
expects to promulgate this rule by the end of March 2010. As described 
in the PSD Interpretive Memorandum, it is EPA's position that new 
pollutants become subject to PSD and title V when a rule controlling 
those pollutants is promulgated (and even before that rule takes 
effect). Accordingly, as soon as GHGs become regulated under the light-
duty motor vehicle rule, GHG emissions will be considered pollutants 
``subject to regulation'' under the CAA and will become subject to PSD 
and title V requirements.
3. Current Applicability of Title V Program to GHGs
    CAA section 502(a) and related definitions under sections 302 and 
501, require that specified types of sources have operating permits. 
These include any source that emits or has a potential to emit 100 tpy 
of a pollutant subject to regulation (consistent with EPA's policy 
interpretation) \8\, any source with a NSR or PSD permit, any major 
source of a hazardous air pollutant (HAP), any source subject to acid 
rain requirements, and certain minor sources subject to section 111 or 
section 112 standards. As with the PSD program, currently GHGs are not 
considered to be subject to regulation and have not been considered to 
trigger title V applicability.
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    \8\ EPA included this policy interpretation that title V 
addresses 100-tpy sources of ``pollutants subject to regulation'' in 
a memorandum from Lydia Wegman. Memorandum from Lydia N. Wegman, 
Deputy Director, Office of Air Quality Planning and Standards, U.S. 
EPA, ``Definition of Regulated Air Pollutant for Purposes of Title 
V'' (Apr. 26, 1993). EPA continues to maintain this interpretation. 
The interpretation in this memorandum was based on: (1) EPA's 
reading of the definitional chain for major source under title V, 
including the definition of ``air pollutant'' under section 302(g) 
and the definition of ``major source'' under 302(j); (2) the view 
that Congress did not intend to require a variety of sources to 
obtain title V permits if they are not otherwise regulated under the 
Act, (see also CAA section 504(a), providing that title V permits 
are to include and assure compliance with applicable requirements 
under the Act); and (3) promoting consistency with the approach 
under the PSD program. While the specific narrow interpretation in 
the Wegman Memorandum of the definition of ``air pollutant'' in CAA 
section 302(g) is in question in light of the Massachusetts v. EPA 
decision (finding this definition to be ``sweeping''), EPA believes 
the core rationale for its interpretation of the applicability of 
title V remains sound. EPA continues to maintain its interpretation, 
consistent with CAA sections 302(j), 501, 502 and 504(a), that title 
V applies to 100 tpy sources of pollutants subject to regulation. 
This interpretation is based primarily on the purpose of title V to 
include all regulatory requirements applicable to the source in one 
document to assure compliance, see, e.g., CAA section 504(a), and to 
promote consistency with the approach under the PSD program.
---------------------------------------------------------------------------

V. What would be the administrative burdens of implementing PSD and 
title V at the current permitting thresholds?

    This section of the preamble describes the additional 
administrative burdens for the PSD and title V programs in terms of 
staffing needs, time for processing permits, and costs that permitting 
authorities would incur if sources of GHG emissions were to trigger PSD 
and title V at the statutory thresholds, which we shorthand as the 100/
250-tpy thresholds. Evidence we have collected to this point makes it 
clear that if PSD and title V applicability requirements are triggered 
at those threshold levels, an enormous influx of permits would occur--
tens of thousands of PSD permits and millions of title V permits--which 
would create enormous administrative burdens for permitting authorities 
that would far exceed their current capacity to administer the PSD and 
title V programs. It is also worth noting here that, under a scenario 
where

[[Page 55301]]

State or local permitting authorities do not have the resources to 
implement the title V or PSD programs for GHG sources at current CAA 
permitting applicability thresholds, EPA may withdraw its approval, in 
which case, EPA would become the permitting authority and the enormous 
resource requirements would shift to EPA to implement these programs.

A. PSD Implications

    We evaluated the additional administrative burden and cost of 
including GHG emitters in the PSD program at the current 250-tpy major 
source permitting threshold (but not at 100 tpy \9\). To calculate the 
administrative burdens and cost, we first estimated the number of new 
sources and modifications that would be subject to PSD if GHGs were 
included at the 250-tpy threshold level. We developed these estimates 
of number of new sources and modifications as part of our GHG threshold 
data analyses. For more information on these analyses, see the 
technical support documents entitled ``Technical Support Document for 
Greenhouse Gas Emissions Thresholds Evaluation'' and ``Methodology for 
Estimating Modified Sources That Would Be Subject to PSD Permitting for 
GHGs;'' Prepared by EPA Staff; August 2009 in the docket for this 
rulemaking.
---------------------------------------------------------------------------

    \9\ In light of time and resource constraints, we did not 
calculate the additional administrative burden and cost of including 
in the PSD program sources that emit between 100 tpy and 250 tpy and 
that are among the 28 source categories identified in CAA section 
169(l). Including these sources in the calculation would increase 
the administrative burdens and costs of implementing PSD at the 
statutory thresholds.
---------------------------------------------------------------------------

    After estimating the number of affected facilities and sources, we 
then evaluated the additional administrative burden and cost of 
including these numbers of new and modified GHG emitters in the PSD 
program. Our burden estimates are based on labor and cost information 
from the existing Information Collection Requests (ICRs) for PSD 
programs.\10\
---------------------------------------------------------------------------

    \10\ ``Summary of ICR-based Data Used to Estimate Avoided Burden 
and Evaluate Resource Requirements at Alternative GHG Permitting 
Thresholds;'' Prepared by EPA Staff; August 2009.
---------------------------------------------------------------------------

    Based on our GHG threshold data analysis, we estimate that almost 
41,000 new and modified facilities per year would be subject to PSD 
review, based on the current rate of modifications at major sources, if 
a GHG major source threshold of 250 tpy CO2e were applied. 
Compared to the 280 PSD permits currently issued per year, this would 
be an increase in permits of more than 140-fold.
    We estimated the number of workload hours and cost a permitting 
authority would expend on each new source and each modification. We 
based these estimates on the workload hours and cost for processing 
permits for new sources of non-GHG emissions, which we derived from 
labor and cost information from the existing ICRs for PSD programs. The 
ICRs show that permitting authorities expend 301 hours to permit a new 
or modified industrial source. For more detail on information used from 
the PSD ICR for this evaluation, please refer to the docket for this 
rulemaking.
    We then made assumptions for number of workload hours and costs for 
new sources of GHG emissions. We assumed that permitting new industrial 
GHG sources that emit in excess of the 250-tpy threshold would be of 
comparable complexity to permitting non-GHG emitting industrial sources 
that are subject to PSD. Thus, for these sources, we assumed that 
permitting authorities would expend the same number of workload hours 
and costs, on a per-permit basis, as they do for non-GHG emitting 
industrial sources. On the other hand, for commercial and residential 
GHG sources that emit GHGs above the 250-tpy threshold (and as a result 
would be subject to the requirements of the PSD permitting program at 
this threshold level), we assumed that the workload hours and cost for 
permitting these sources would be significantly less than--only 20 
percent of--the hours and cost necessary to prepare and issue initial 
PSD permits or permit modifications for industrial GHG sources. This 
20-percent estimate amounts to 60 hours of permitting authority time 
per residential or commercial permit.
    Based on these assumptions, the additional annual permitting burden 
for permitting authorities, on a national basis, is estimated to be 3.3 
million hours at a cost of $257 million to include all GHG emitters 
above the 250-tpy threshold.
    In addition to conducting our burden analysis, we also reviewed 
summary information from State and local air permitting agencies 
regarding additional resources and burden considerations if GHG sources 
that emit above the 100/250-tpy thresholds were subjected to the PSD 
and title V programs. This information covered 43 State and local 
permitting agencies, representing programs from different regions of 
the country and various permitting program sizes (in terms of 
geographic and source population coverage). A summary of this 
information can be found in the docket for this rulemaking.\11\ This 
information showed significant burdens projected by permitting agencies 
with adding sources of GHG emissions in terms of staffing, budget, and 
other associated resource needs. Importantly, the agencies based their 
analysis on the assumption that, for purposes of determining whether a 
source is major, its emissions would be calculated on an actual 
emissions (``actuals'') basis, and not on a PTE basis. On an actuals 
basis, the agencies estimated a 10-fold increase in the number of 
permits.
---------------------------------------------------------------------------

    \11\ ``NACAA Summary on Permitting GHGs Under the Clean Air 
Act''; Memorandum from Mary Stewart Douglas, National Association of 
Clean Air Agencies to Juan Santiago, EPA/OAQPS, September 3, 2009.
---------------------------------------------------------------------------

    Specifically, the agencies estimated that:
     Assuming, again, that number of permits was to increase by 
10-fold (based on actual emissions), the resulting workload would 
require an average of 12 more FTEs per permitting authority at an 
estimated cost of $1 million/year;
     Without the additional FTEs, the average processing time 
for a permit would increase to 3 years, which is three times the 
current average processing time;
     Permitting authorities would need 2 years on average to 
add the necessary staff;
     Permitting authorities would also need, on average, eight 
additional enforcement and judicial FTEs;
     Ninety percent of the permitting agencies indicated that 
their staff would need training in all aspects of permitting for 
sources of GHG emissions; and
     A quarter of the permitting agencies reported that they 
were currently under a hiring freeze.
    It is important to reiterate that the State and local permitting 
information on burden was based on the number of additional facilities 
subject to PSD because their emissions of GHGs exceed the 100/250-tpy 
thresholds at actual emissions rates, not PTE-based emissions rates. 
However, the PSD applicability requirements are based on PTE. By 
adjusting the increase in number of permits to account for GHG sources 
that exceed the 100/250-tpy applicability thresholds based on their PTE 
emissions, EPA estimated a 140-fold increase in numbers of PSD permits, 
much more than the 10-fold increase estimated by the States based on 
actual emissions.
    The GHG threshold analyses used to identify the number of 
facilities that would be affected at current PSD permitting thresholds, 
and which is also used later in Section VIII for evaluating

[[Page 55302]]

alternative thresholds, are based on the PTE of GHG sources. PTE is 
defined as the maximum capacity of a stationary source to emit a 
pollutant under its physical and operational design, including certain 
legal limitations, for example, on emissions or hours of operation. PSD 
and title V programs both use PTE for defining major sources. Our 
threshold analyses begin with actual emissions estimates, but we then 
adjust the numbers upward to account for potential-to-emit. PTE 
adjustments for industrial sources are generally based on industry-
specific capacity utilization factors, while those used for commercial 
and residential sources are based on general sector-based information 
on heating equipment and appliance usage in these sectors. While these 
PTE adjustments are important for estimating affected facilities in all 
sectors, they are a particularly relevant concern for determining the 
number of facilities in the commercial and residential sector that may 
be affected, where CO2 emissions are primarily due to space 
heating/appliance usage and combustion units are likely to be used at 
levels well below constant operation at maximum capacity. For example, 
our PTE adjustment for commercial and residential sources resulted in 
an upwards adjustment ranging from 85 to 90 percent in emissions from 
their actual emission values. The basis for our PTE adjustments is 
described in the ``Technical Support Document for Greenhouse Gas 
Emissions Thresholds Evaluation'' found in the docket for this 
proposal. We ask for specific comment on the reasonableness of these 
PTE adjustments as they apply to the different sectors and source 
categories, in particular, the commercial and residential sectors where 
there is limited information available on equipment capacity 
utilization.
    There are multiple sources of uncertainty in our approaches for 
estimating emissions, and thus for estimating numbers of sources. For 
example, the PTE adjustment factors just described may overstate or 
understate the maximum emissions from sources particularly for the 
commercial and residential sectors. In addition, there are inherent 
uncertainties in developing source counts from nationally aggregated 
statistics, as was done for the estimates for commercial and 
residential sources which rely on the allocation of national level 
statistics for energy consumption. The allocation factors we used, 
based on U.S. Energy Information Administration statistical sampling 
procedures, are likely the best available to estimate the population of 
residential and commercial sources exceeding different GHG thresholds. 
Again, these uncertainties may result in either overestimates or 
underestimates. The uncertainty is less for industrial categories, 
where we generally utilized facility-based methodologies, but because 
it was necessary to use varying methodologies for different source 
types, as described in the Technical Support Document, the 
uncertainties will not be uniform across all categories. We request 
comment on all aspects of our threshold analysis, possible sources of 
error, suggestions for reducing uncertainties, and alternate approaches 
to estimating emissions from commercial and residential sources.

B. Title V Implications

    The triggering of title V requirements for GHG would result in 
administrative burdens that stem from sources' obligation to apply for 
permits. These obligations apply differently depending on whether the 
source already has a title V permit. Most significant are the more than 
six million sources of GHGs that would become newly subject to title V 
requirements because they exceed the 100-tpy threshold for GHG but did 
not for previously regulated pollutants. Although there are generally 
not applicable requirements for GHGs that apply to such sources, these 
six million sources would be required to submit a title V permit 
application within 1 year. Permitting authorities would need to issue 
these permits within 18 months of receipt of a complete application, 
and these permits would need to include any requirements for non-GHGs 
that may apply to the source, such as provisions of an applicable SIP. 
For any such requirements, permitting authorities would also need to 
develop terms addressing the various compliance assurance requirements 
of title V, including monitoring, deviation reporting, six-month 
monitoring reports, and annual compliance certifications.
    Adding to the burden described above would be the burden to add GHG 
terms to the 14,700 existing title V permits. While, in general, 
existing title V permits would not immediately need to be revised or 
reopened to incorporate GHG (because as noted above, there are 
generally not applicable requirements for GHGs that apply to such 
sources), permitting authorities may face burdens to update existing 
title V permits for GHG under two possible scenarios: (1) EPA 
promulgates or approves any applicable requirements for GHGs that would 
apply to such a source, which would generally require a permit 
reopening or renewal application, or (2) the source makes a change that 
would result in an applicable requirement for GHGs to newly apply to 
the source, such as PSD review, which would generally require an 
application for a permit revision. Permitting authorities will also 
need to process permit renewal applications, generally on a 5-year 
cycle, and such renewals would need to assure that the permit properly 
addresses GHG. Finally they would have to process title V applications 
for new sources (including all the PSD sources previously discussed).
    Obviously, this massive influx of permit applications would 
overwhelm permitting authorities' administrative resources. Indeed, 
permitting authorities report that they currently are having difficulty 
keeping up with their existing permit workloads. The Title V Operating 
Permits System database, which tracks permit issuance, confirms that 
issuance of many permits is already delayed. By increasing the volume 
of permits by over 400 times, the administrative burden would be 
unmanageable.
    As with PSD, we have quantified the extent of the administrative 
problem that would result in workload hours and cost on the basis of 
information concerning hours and costs for processing existing title V 
permits that is indicated on ICRs. However, we recognize that more than 
97 percent of these new sources would be commercial and residential 
sources. We estimate that for permitting authorities, the average new 
commercial or residential permit would require 43 hours to process, 
which is 10 percent of the time needed for the average new industrial 
permit. For an average existing permit, which permitting authorities 
would need to process through procedures for significant revisions and 
permit renewals, adding GHG emissions to the permit would result in, we 
estimate, 9 additional hours of processing time, which is 10 percent of 
the amount of time currently necessary for processing existing permits. 
We estimate that the total nationwide additional burden for permitting 
authorities for title V permits from adding GHG emissions at the 100-
tpy threshold would be 340 million hours, which would cost over $15 
billion.
    As noted in this preamble's discussion of PSD burdens, we also 
reviewed summary information from State and local permitting agencies, 
which showed significant burdens associated with adding GHGs in their 
title V programs in terms of staffing, budget, and other associated 
resource

[[Page 55303]]

needs.\12\ Again, note that the permitting agencies based their 
estimates on numbers of permits that would be required from sources 
subject to the 100-tpy title V applicability threshold on an actuals-
not PTE-basis. Based on that level, the agencies assumed a 40-fold 
increase in numbers of permits, and estimated that:
---------------------------------------------------------------------------

    \12\ ``NACAA Summary on Permitting GHGs Under the Clean Air 
Act''; Memorandum from Mary Stewart Douglas, National Association of 
Clean Air Agencies to Juan Santiago, EPA/OAQPS, September 3, 2009.
---------------------------------------------------------------------------

     The resulting workload would require an average of 57 more 
FTEs per permitting agency at an estimated cost of $4.6 million/year;
     Without the additional FTEs, the average processing time 
for a permit would increase to almost 10 years, which is 20 times the 
current average permit processing time;
     Permitting authorities would need 2 years on average to 
add the necessary staff;
     On average, permitting authorities would need 29 
additional enforcement and judicial staff;
     Eighty percent of the permitting authorities indicated 
that their staff would need training in all aspects of permitting for 
sources of GHG emissions; and
     A quarter of the permitting authorities reported that they 
were currently under a hiring freeze.
    It is important to reiterate that, as with PSD, the State and local 
information on projected permitting burden is based on the number of 
additional facilities subject to title V because their emissions of 
GHGs exceed the 100-tpy thresholds at actual emissions rates, not the 
PTE-based emissions rates. However, the title V applicability 
requirements are based on PTE. As noted elsewhere in this preamble, the 
State and local agencies estimated a 40-fold increase in numbers of 
title V permits based on the amount of GHG sources' actual emissions. 
By adjusting the summary estimates provided by the State and local 
agencies to account for GHG sources that exceed the 100-tpy threshold 
based on their PTE emissions, EPA estimated that the average permitting 
authority would need 570 more FTEs to support its title V permitting 
program.

C. ANPR Comments

    We examined the ANPR comments received for further information on 
the additional administrative burdens that permitting programs would 
carry if PSD requirements for sources of GHG emissions were triggered 
at the current 100/250-tpy thresholds and title V requirements were 
triggered at the current 100-tpy threshold. Most industry stakeholders 
who commented on the ANPR believe that triggering title V and PSD 
applicability for GHG emissions sources would be disastrous and that a 
regulatory gridlock would ensue. Many of these industry commenters 
agreed with the U.S. Chamber of Commerce's study \13\ which found that 
regulating GHGs under the CAA would cause 1,000,000 commercial 
buildings, nearly 200,000 manufacturing operations, and about 20,000 
large farms to become CAA-regulated stationary sources. In fact, most 
of the industry commenters believed that these estimates underestimated 
the impacts. Commenters expressed that the implications of all these 
sources becoming CAA-regulated stationary sources would cause a large 
permitting backlog, as States do not have the staff or training to take 
on such a large burden. In addition, commenters stressed that many of 
these sources have never needed an air permit before and would have to 
obtain basic knowledge of the permitting regulations and how to comply 
with them, which would also impose more burdens on the permitting 
authorities. Many of the new sources would be small emitters not 
previously regulated under the CAA.
---------------------------------------------------------------------------

    \13\ ``A Regulatory Burden: The Compliance Dimension of 
Regulating CO2 as a Pollutant''; Prepared for the U.S. 
Chamber of Commerce; September 2008. See Docket ID No. EPA-HQ-OAR-
2008-0318-0402.1.
---------------------------------------------------------------------------

VI. What is the legal rationale for this proposed action?

    This section of the preamble discusses the legal rationale for 
phasing in the applicability thresholds for PSD and title V purposes as 
proposed, which are two doctrines that courts have relied on in 
interpreting and applying statutory requirements: The ``absurd 
results'' doctrine and the ``administrative necessity'' doctrine. These 
doctrines are related, apply in this case because of the same factual 
circumstances, and justify the same application--that is, the phased 
approach--of the PSD and title V applicability provisions. But they are 
independent justifications, and therefore will be discussed 
independently.

A. ``Absurd Results'' Doctrine

    This proposed action establishing the first phase of the PSD and 
title V applicability thresholds, in lieu of applying the statutory 
100/250 tpy thresholds literally for GHG sources, is supported by a 
judicial doctrine that may be termed the ``absurd results'' doctrine. 
Applying the threshold provisions literally for the period immediately 
after PSD and title V are triggered for GHG emissions would lead to 
results that contravene congressional intent and, in fact, undermine 
Congress's purposes for both permitting programs.
1. Overview
    As discussed in detail below, the courts are reluctant to invoke 
this doctrine precisely because it entails departing from the literal 
application of statutory provisions, but they nevertheless do so when 
the literal application produces results that are inconsistent with 
other statutory provisions, run contrary to expressed congressional 
intent or actually undermine congressional intent, or are otherwise so 
illogical or contrary to sensible policy as to be beyond anything that 
Congress could reasonably have intended. This is one of the rare cases 
in which the doctrine applies because the extraordinary increases in 
PSD and title V permit applications that would result from a literal 
application of the 100/250 tpy threshold requirements would, at least 
during the near term--until EPA and the permitting authorities can 
develop streamlining methods and ramp up resources--extensively disrupt 
the two permitting programs and impose undue regulatory burdens in the 
aggregate on the sources newly subject to PSD and title V permit 
requirements. These results would create tensions with other explicit 
requirements of the PSD and title V provisions, run contrary to 
expressed congressional intent for the PSD and title V provisions, and, 
in fact, severely undermine both programs.
    The applicability of the absurd results legal doctrine to this 
proposal should be reviewed with EPA's proposed action in mind: EPA 
proposes to establish a process for implementing the PSD and title V 
applicability requirements, including a first phase that would consist 
of establishing the specified thresholds and vigorously developing 
streamlining methods; then, after 5 years, preparing an assessment; and 
then, by the sixth year, promulgating a rulemaking for further action. 
In addition, during this first phase, we expect the permitting 
authorities to ramp up resources for permit issuance.
    With respect to PSD, a literal application of the applicability 
thresholds in CAA sections 165(a)(1) and 169(2)(C) of 100 or 250 tpy 
for GHG emitters would create significant tensions with two other PSD 
provisions during at least the first phase in period after the 
triggering of PSD applicability by the light-duty vehicle rule, and 
before the development of streamlining

[[Page 55304]]

methods and the addition of permitting resources. First, a literal 
application would render it impossible for permitting authorities to 
meet the requirement in CAA section 165(c) to process permit 
applications within 12 months. During this initial period, the number 
of permit applications would increase by 150-fold, an unprecedented 
increase that would far exceed administrative resources. Permitting 
authorities have estimated that it would take 10 years to process a PSD 
permit application, on average, and the resulting backlog would affect 
the permit applications for all sources, not just the GHG emitters.
    This backlog would grow by tens of thousands each year following 
the triggering of PSD applicability--again, for at least the first few 
years--and thereby undermine a second express PSD provision, section 
160(3). This provision describes, as one of the purposes of the PSD 
program, ``to insure that economic growth will occur in a manner 
consistent with the preservation of existing clean air resources.'' 
Because the PSD requirements apply on a preconstruction basis--that is, 
they require permits before sources may construct or modify--tens of 
thousands of sources seeking to construct or modify during at least the 
first few years after the triggering of PSD would instead face many 
years of delay. This delay would impede economic growth by precluding 
any type of source--whether it emits GHGs or not--from constructing or 
modifying for years after its business plan contemplates.
    In addition, a literal application of the 100/250 tpy threshold in 
the PSD provisions during at least the first few years after PSD is 
triggered for GHG emitters would be contrary to, and in fact would 
undermine, expressed congressional intent in several important ways: As 
just noted, it would undermine congressional intent to authorize 
economic growth, albeit with environmental safeguards. In addition, the 
PSD requirements entail significant regulatory costs to affected 
sources because the sources must identify and implement BACT on a 
source-specific basis. The legislative history of the PSD provisions 
makes clear that Congress intended the PSD program to apply only to 
larger sources, and not to smaller sources, in light of the larger 
sources' relatively greater ability to bear the costs of PSD and their 
greater responsibility for the pollution problems. In enacting the PSD 
requirements during the 1977 Clean Air Act Amendments, Congress, 
focused as it was on sources of conventional pollutants and not global 
warming pollutants, expected that the 100/250 tpy applicability 
thresholds would limit PSD to larger sources. But because very small 
sources emit CO2 in quantities as low as 100/250 tpy, a 
literal application of the threshold to GHG emitters, without 
streamlining, would sweep in large numbers of small sources and subject 
them to the high costs of determining and meeting individualized BACT 
requirements, while also overwhelming permitting authorities' capacity 
to process those applications. Thus, a literal application of the 100/
250 tpy thresholds would sweep into the PSD program tens of thousands 
of smaller sources that Congress did not intend to include, and the 
resulting strain on administrative resources would preclude the 
hundreds of larger sources that Congress did intend to be subject to 
the program from obtaining permits at least for an initial period. In 
time, the development of streamlining methods and the ramping up of 
administrative resources would bridge the gap between the literal 
language and congressional intent, and make it possible to expand the 
PSD program in a sensible manner that would make sense from the 
standpoint of the sources and the permitting authorities. But at least 
for the initial period, these circumstances qualify as ``absurd 
results'' that merit avoiding a literal application of the threshold 
provision.
    We reach similar conclusions for title V. A literal application of 
the applicability threshold in CAA sections 502(a), 501(2)(B), and 
302(j) of 100 tpy for GHG sources would bring some 6.1 million sources 
into the title V program. For at least the first few years after title 
V is triggered, until streamlining methods are developed and 
administrative resources are ramped up, this would create significant 
tensions with other title V provisions. The extraordinary number of 
permit applications would render it impossible for permitting 
authorities to meet the requirements of section 503(c) to process title 
V permit applications within 18 months. Further, this number of permit 
applications would severely disrupt implementation of the rest of the 
carefully calibrated set of statutory requirements that Congress set 
out in title V. These requirements set out specific--and brief--time 
frames for EPA review and for public participation, and they simply 
could not be complied with at least initially for this number of permit 
applications.
    A literal application of the 100 tpy threshold would also be 
inconsistent with express congressional intent concerning title V. The 
statutory provisions by their terms, supported by the legislative 
history, indicate that Congress designed the title V program to promote 
compliance by compiling into a single document all of the requirements 
applicable to the source under the Act. The legislative history 
indicates that some in Congress expected the title V permit program to 
approximate the size of the Federal water permit program. However, 
applying the 100 tpy threshold for GHG emitters would lead to permit 
applications in numbers--some 6.1 million--that are almost 100 times 
greater than what Congress expected. The large permit backlog and 
inevitable multi-year delays in permit issuance that would ensue would 
thwart Congress's purposes in enacting title V to promote compliance 
with CAA requirements. As with PSD, this disruption would affect all 
sources covered by the provisions, whether or not they emit GHGs.
    Moreover, the great majority of the 6.1 million additional 
permittees would not be subject to any CAA requirements and, as a 
result, would be issued permits that do not include any applicable 
requirements. Because Congress designed title V to require permits to 
address applicable requirements, and because Congress envisioned a much 
smaller program, immediately sweeping these sources into the program is 
contrary to congressional intent. Yet, their inclusion in the program 
would overwhelm administrative resources for at least an initial 
period, until streamlining methods are developed, and preclude the 
timely issuance and reissuance of permits to sources that Congress 
clearly contemplated should be included in the program. Thus, a literal 
application of the title V threshold provisions would bring in millions 
of sources that Congress did not intend to cover, and thereby interfere 
with the administration of the program for the thousands of sources 
that Congress did intend to cover. As with PSD, in time, the 
development of streamlining methods and the ramping up of 
administrative resources would bridge the gap between the literal 
language and congressional intent, and make it possible to include more 
of these sources in the title V program in a manner that makes sense 
for both the permittees and the permitters. But for the initial period, 
as with PSD, these circumstances qualify as ``absurd results'' that 
merit avoiding a literal application of the threshold provisions.
    In the cases that apply the ``absurd results'' doctrine, the courts 
go on to apply the statutory provisions in question in a manner that--
while not in

[[Page 55305]]

accordance with their literal reading--effectuates congressional intent 
as much as possible. We believe that the process we propose in this 
notice, which includes a first phase that establishes thresholds at the 
specified levels while allowing time to develop streamlining approaches 
and ramp up resources, followed by a study and further rulemaking, is 
consistent with this caselaw.
2. Tailoring Approach
    In discussing the absurd results caselaw and its applicability in 
this case, it is important to keep in mind EPA's proposed action. As 
discussed in detail elsewhere in this notice, EPA proposes a phased 
plan designed to achieve full compliance with the PSD and title V 
threshold requirements. The first phase entails the establishment of 
applicability thresholds at the 25,000 tpy CO2e levels, and 
significance levels at between 10,000 and 25,000 tpy CO2e. 
In addition, the first phase entails development of streamlining 
methods--including potential revisions to the definition of potential 
to emit, general permits, and presumptive BACT--that allow us to craft 
the application of PSD and title V in ways that are achievable and 
effectively balance the burdens on both the permitting authorities and 
the regulated community with the reductions achievable. The first phase 
also includes the collection of information and further assessments in 
a report, to be completed within 5 years, and culminates in a 
rulemaking to be promulgated by the sixth year that will establish 
further action.
3. PSD and Title V Threshold Provisions
    Several PSD and title V provisions are relevant for present 
purposes because of the specific requirements that they establish and 
the window that they provide into congressional intent. These 
provisions start with the PSD and title V applicability provisions. For 
PSD purposes, the key applicability provisions are found in CAA 
sections 165(a) and 169(1), which identify the new sources subject to 
PSD, and CAA Sec.  111(a)(4), which describes the modifications of 
existing sources that are subject to PSD. CAA section 165(a), 42 U.S.C. 
7475, provides:

    No major emitting facility on which construction is commenced 
after August 7, 1977, may be constructed in any area to which this 
part applies unless--
    (1) A permit has been issued for such proposed facility in 
accordance with this part setting forth emission limitations for 
such facility which conform to the requirements of this part;
    (2) The proposed permit has been subject to a review in 
accordance with this section * * *, and a public hearing has been 
held with opportunity for interested persons including 
representatives of the Administrator to appear and submit written or 
oral presentations on the air quality impact of such source, 
alternatives thereto, control technology requirements, and other 
appropriate considerations; * * *
    (4) The proposed facility is subject to the best available 
control technology for each pollutant subject to regulation under 
this chapter emitted from, or which results from, such facility * * 
*.

    The term ``major emitting facility'' is defined, under CAA Sec.  
169(1) to include:

    * * * stationary sources of air pollutants which emit, or have 
the potential to emit, one hundred tons per year or more of any air 
pollutant from [28 listed] types of stationary sources. * * * Such 
term also includes any other source with the potential to emit two 
hundred and fifty tons per year or more of any air pollutant. This 
term shall not include new or modified facilities which are 
nonprofit health or education institutions which have been exempted 
by the State.

    The thresholds in CAA section 169(1) of 100-tpy for sources in the 
28 listed categories and 250-tpy for all other sources may be referred 
to as the 100/250-tpy thresholds.
    As for modification of existing sources, CAA section 169(1)(C) 
provides that the term ``construction,'' as used in CAA section 165(a) 
(the PSD applicability section) ``includes the modification (as defined 
in section 111(a)(4)) of any source or facility.'' Section 111(a)(4), 
in turn, provides:
    The term ``modification'' means any physical change in, or change 
in the method of operation of, a stationary source which increases the 
amount of any air pollutant emitted by such source or which results in 
the emission of any air pollutant not previously emitted.
    As interpreted by EPA regulations, these provisions, taken 
together, provide that new stationary sources are subject to PSD if 
they emit at the 100/250-tpy thresholds air pollutants that are subject 
to EPA regulation, and that existing stationary sources that emit such 
air pollutants at the 100/250-tpy thresholds are subject to PSD if they 
undertake a physical or operational change that increases their 
emissions of such air pollutants by any amount.
    For title V purposes, the key applicability provisions are found in 
CAA sections 502(a), 501(2)(B), and 302(j). These provisions provide 
that it is unlawful for any person to operate a ``major source'' 
without a title V permit, section 502(a), and define a ``major source'' 
as ``any major stationary facility or source of air pollutants which 
directly emits, or has the potential to emit, one hundred tons per year 
or more of any air pollutant.'' CAA section 501(2)(B) and section 
302(j). As noted elsewhere, these provisions, taken together and as 
interpreted by EPA, provide that stationary sources are subject to 
title V if they emit at the 100-tpy threshold air pollutants that are 
subject to EPA regulation.
    Other provisions of particular relevance are the requirements in 
the PSD and title V programs for timely issuance of permits. For PSD, 
the permitting authority must ``grant[ ] or den[y] [any completed 
permit application] not later than one year after the date of filing of 
such completed application.'' CAA Sec.  165(c). For title V, ``the 
permitting authority shall approve or disapprove a completed 
application * * * and shall issue or deny the permit, within 18 months 
after the date of receipt thereof * * *.'' CAA section 503(c). Title V 
goes on to include several provisions designed to support this 18-month 
requirement. First, the permitting authority must develop ``adequate, 
streamlined, and reasonable procedures for expeditiously determining 
when applications are complete, for processing such applications, for 
public notice * * * and for expeditious review of permit actions, 
including * * * judicial review in State court of the final permit 
action by [specified persons].'' CAA section 502(b)(6). Second, title V 
includes a ``hammer'' provision designed to reinforce timely permit 
issuance, which is that the permitting authority's program must 
include:

    To ensure against unreasonable delay by the permitting 
authority, adequate authority and procedures to provide that a 
failure of such permitting authority to act on a permit application 
or permit renewal application (in accordance with the time periods 
specified in [CAA Sec.  503] * * *) shall be treated as a final 
permit action solely for purposes of obtaining judicial review in 
State court of an action brought by any person referred to in 
paragraph (6) to require that action be taken by the permitting 
authority on such application without additional delay. CAA Sec.  
502(b)(7).

Third, the permit program must include ``[a]uthority and reasonable 
procedures consistent with the need for expeditious action by the 
permitting authority on permit applications and related matters, to 
make available to the public [certain permit-related documents]''. CAA 
section 502(b)(8).
    In addition, PSD includes a set of provisions that specifically 
state ``the purposes of [the PSD program],'' which are to balance 
environmental protection and growth. CAA Sec.  160. One of the 
purposes, in subsection (1), is specifically ``to protect public health 
and welfare,'' and another, in subsection

[[Page 55306]]

(3), is ``to insure that economic growth will occur in a manner 
consistent with the preservations of existing clean air resources.'' 
Title V does not have a parallel set of provisions describing its 
purpose, but it is clear from its provisions and its legislative 
history, discussed below, that its key goal is to gather into a single 
document the Clean Air Act requirements applicable to a source and 
impose conditions necessary to assure compliance with such 
requirements, and thereby promote the enforceability of CAA 
requirements applicable to the covered sources. CAA Sec.  503(b)(1) 
requires that the source's permit application must assure 
``compl[iance] with all applicable requirements'' of the CAA, and Sec.  
504(a) requires that ``[e]ach permit issued under [title V] shall 
include * * * such * * * conditions as are necessary to assure 
compliance with applicable requirements of [the Clean Air Act].'' See 
H.R. Rep. No. 101-490, at 351 (1990) (``It should be emphasized that 
the operating permit to be issued under this title is intended by the 
Administration to be the single document or source of all of the 
requirements under the Act applicable to the source.'').
    In addition, both PSD and title V include detailed procedures for 
implementation. The PSD provisions most relevant for sources of GHG are 
that the proposed permit for each source must be the subject of a 
public hearing with opportunity for interested persons to comment, CAA 
Sec.  165(a)(2), and each source must be subject to best available 
control technology, as determined by the permitting authority on a 
source-by-source basis, CAA Sec.  165(a)(4), 169(3). Title V includes a 
comprehensive and finely detailed implementation schedule that mandates 
timely issuance of permits while building in EPA and affected State 
review, public participation, and timely compliance by the source with 
reporting requirements. Following the date that sources become subject 
to title V, they have 1 year to submit their permit applications. CAA 
Sec.  503(c). As noted above, the permitting authority then has 18 
months to issue or deny the permit. CAA Sec.  503(c). Permitting 
authorities must provide an opportunity for public comment and a 
hearing. CAA Sec.  502(b)(6). If the permitting authority proposes to 
issue the permit, the permitting authority must submit the permit to 
EPA, and notify affected States, for review. CAA Sec.  505(a)(1). EPA 
then has 45 days to review the permit and, if EPA deems it appropriate, 
to object to the permit. CAA Sec.  505(b)(1). If EPA does object, then 
the permitting authority must, within 90 days, revise it to meet the 
objections, or else EPA becomes required to issue or deny the permit. 
CAA Sec.  505(c). If EPA does not object, then, within 60 days of the 
close of the 45-day review period, any person may petition EPA to 
object, and EPA must grant or deny the petition within 60 days. CAA 
Sec.  505(b)(2). If a permit is issued, it must include a permit 
compliance plan, under which the permittee must ``submit progress 
reports to the permitting authority no less frequently than every 6 
months,'' and must ``periodically (but no less frequently than 
annually) certify that the facility is in compliance with any 
applicable requirements of the permit, and [ ] promptly report any 
deviations from permit requirements to the permitting authority.'' CAA 
Sec.  503(b).
4. ``Absurd Results'' Doctrine
    The familiar Chevron two-step analysis provides the starting point 
for EPA's interpretation of these statutory provisions. Under Chevron 
step 1, an agency must determine whether Congress's intent in a 
particular provision on a particular question is clear; if so, then the 
agency must follow that intent. If the intent of a provision is not 
clear, then the agency may, under step 2, fashion a reasonable 
interpretation of the provision. Chevron U.S.A. Inc. v. NRDC, 467 U.S. 
837, 842-43 (1984).
    Here, the applicability provisions for PSD and title V are clear on 
their face. However, the U.S. Supreme Court has held that the plain 
meaning of a statutory provision is not conclusive ``in the `rare cases 
[in which] the literal application of a statute will produce a result 
demonstrably at odds with the intentions of the drafters' * * * [in 
which case] the intention of the drafters, rather than the strict 
language, controls.'' Ron Pair, 489 U.S. at 242 (citations 
omitted).\14\
---------------------------------------------------------------------------

    \14\ Judge Learned Hand's formulation of the doctrine is often 
quoted in the caselaw:
    Of course, it is true that the words used, even in their literal 
sense, are the primary and ordinarily the most reliable, source of 
interpreting the meaning of any writing. * * * But it is one of the 
surest indexes of a mature and developed jurisprudence not to make a 
fortress out of the dictionary; but to remember that statutes always 
have some purpose or object to accomplish, whose sympathetic and 
imaginative discovery is the surest guide to their meaning.
    Cabell v. Markham, 148 F.2d 737, 738 (2d Cir.), aff'd 326 U.S. 
404 (1945). See Giuseppi v. Walling, 144 F.2d 608, 624 (2d Cir. 
1944) (opinion by Judge Hand) (``There is no surer way to misread 
any document than to read it literally'').
---------------------------------------------------------------------------

    In describing these cases as ``rare,'' the U.S. Supreme Court 
seemed to be referring to the small percentage of statutory-
construction cases that are decided on the basis of the doctrine. The 
D.C. Circuit, in surveying the doctrine over more than a century of 
jurisprudence, characterized the body of law in absolute numbers as 
comprising ``legions of court decisions.'' In re Franklyn C. Nofziger, 
925 F.2d 428, 434 (D.C. Cir. 1991). The U.S. Supreme Court cases 
include, among others, Nixon v. Missouri Municipal League, 541 U.S. 
125, 132-33 (2004) (``any entity'' includes private but not public 
entities); Raygor v. Regents of Univ. of Minn., 534 U.S. 533, 542-45 
(2002) (``implying a narrow interpretation of * * * `any claim 
asserted' so as to exclude certain claims dismissed on Eleventh 
Amendment grounds''); Ron Pair, 48 U.S. at 242; Green v. Bock Laundry 
Machine Company, 490 U.S. 504 (1989) (provision in Federal Rule of 
Evidence that protects ``the defendant'' against potentially 
prejudicial evidence, but not the plaintiff, refers to only criminal, 
and not civil, defendants); Train v. Colorado Public Interest Research 
Group, Inc., 426 U.S. 1, 23-24 (1976) (prohibition in Federal Water 
Pollution Control Act against discharging into navigable waters 
``pollutants,'' which are defined to include ``radioactive materials,'' 
does not apply to three specific types of radioactive materials); Lynch 
v. Overholser, 369 U.S. 705, 710, (1962) (statutory construction is not 
confined to the ``bare words of a statute''); Utah Junk Co. v. Porter, 
328 U.S. 39, 44 (1946) (``literalness may strangle meaning''); Markham 
v. Cabell, 326 U.S. 404, 409 (1945) (``The policy as well as the letter 
of the law is a guide to decision.''); United States v. American 
Trucking Associations, Inc. 310 U.S. 534 (1940) (the term ``employees'' 
in the Federal Motor Carrier Act, is limited to employees whose 
activities affect safety); C.V. Sorrels v. U.S., 287 U.S. 435, 446-49 
(1932) (provisions of National Prohibition Act that criminalize 
possessing and selling liquor do not apply if defendant is entrapped; 
Court declines to apply the ``letter of the statute'' because doing so 
``in the circumstances under consideration is foreign to its 
purpose''); Holy Trinity Church v. U.S., 143 U.S. 457, 516-17 (1892) 
(``any alien'' does not include a foreign pastor; Court stated, ``It is 
a familiar rule, that a thing may be within the letter of the statute 
and yet not within the statute, because not within its spirit, nor 
within the intention of its makers * * * If a literal construction of 
the words be absurd, the Act must be construed as to avoid the 
absurdity''); United States v. Kirby, 7

[[Page 55307]]

Wall, 482, 486, 19 L.Ed. 278 (1868) (the statute punishing obstruction 
of the mails is not to be applied to obstruction for the lawful purpose 
of arresting a mail carrier indicted for murder).
    The D.C. Circuit has also handed down several decisions that 
applied the absurd results doctrine to avoid a literal interpretation 
or application of statutory provisions. See Buffalo Crushed Stone, Inc. 
v. Surface Transportation Board, 194 F.3d 125, 129-30 (D.C. Cir. 1999) 
(regulation of Surface Transportation Board providing that if a notice 
of exemption ``contains false or misleading information, the use of the 
exemption is void ab initio'' does not apply to a notice containing 
false information when declaring the notice void ab initio would 
undermine the goals of the governing statute; a conflict between the 
``literal application of statutory language'' and maintaining the 
integrity of the regulatory scheme should be resolved by construing the 
text in accordance with its purpose); U.S. v. Stewart, 104 F.3d 1377, 
1388 (D.C. Cir. 1997) Environmental Defense Fund v. EPA, 82 F.3d 451, 
468-69 (D.C. Cir. 1996) (although Clean Air Act requires that a Federal 
action conform to the State implementation plan that is currently in 
place, EPA may instead require conformity to a revised implementation 
plan that State commits to develop; ``[t]his is one of those rare cases 
* * * [that] requires a more flexible, purpose-oriented interpretation 
if we are to avoid `absurd or futile results.' ''); In re Nofziger, 925 
F.2d 428, 434-35 (D.C. Cir. 1991) (provision authorizing payment of 
attorney fees to the subject of an investigation conducted by an 
independent counsel of the Department of Justice only if ``no 
indictment is brought'' against such individual does not preclude 
payment of attorney fees when an indictment is brought but is 
determined to be invalid).
    To determine whether ``the intentions of the drafters'' differ from 
the result produced from ``literal application'' of the statutory 
provisions in question, the courts may examine the overall context of 
the statutory provisions, including whether there are related statutory 
provisions that either conflict or are consistent with that 
interpretation,\15\ and including whether there is legislative history 
that exposes what the legislature meant by the terms in question. In 
addition, the courts may examine whether a literal application of the 
provisions produces a result that the courts characterize variously as 
absurd, futile, strange, or indeterminate, and therefore so illogical 
or otherwise contrary to sensible public policy as to be beyond 
anything Congress would reasonably have intended. After concluding this 
examination, the courts uphold an application of the provisions that, 
albeit not the literal application, is one that is nevertheless as 
consistent with congressional intent as possible.
---------------------------------------------------------------------------

    \15\ A related line of cases addresses statutory provisions that 
directly, on their face, conflict with other statutory provisions. 
In these cases, as with the ``absurd result'' cases, the courts may 
decline to interpret literally the statutory provisions in question, 
and instead interpret them to give as much effect as possible to all 
of the relevant provisions. See, e.g., Mountain States Telephone and 
Telegraph Co. v. Pueblo of Santa Ana, 472 U.S. 237 (1985); Clark v. 
Uebersee Finanz-Korporation, 332 U.S. 480 (1947); Citizens to Save 
Spencer County v. EPA, 600 F.2d 844 (D.C. Cir. 1977).
---------------------------------------------------------------------------

    The U.S. Supreme Court applied the absurd results doctrine in Green 
v. Bock Laundry Machine Company, 490 U.S. 504 (1989). There, the Court 
considered Federal Rule of Evidence 609(a), which provides:

    General Rule. For the purpose of attacking the credibility of a 
witness, evidence that the witness has been convicted of a crime 
shall be admitted * * * but only if the crime (1) [is of a specified 
type] and the court determines that the probative value of admitting 
this evidence outweighs its prejudicial effect to the defendant.

(Emphasis added.) The Court recognized that read literally, Rule 609(a) 
applies in both criminal and civil litigation and gives an advantage to 
defendants. Specifically, the rule extends to both the criminal and 
civil defendants the protection of weighing the probative value of 
evidence of certain crimes against its prejudicial effect, but as for 
plaintiffs, the rule requires that evidence of those crimes be admitted 
without weighing against prejudicial effect. The Court found that for 
criminal litigation, this result makes sense because it is consistent 
with the greater protections generally afforded to defendants. However, 
for civil litigation, the Court found that this ``literal reading would 
compel an odd result'' because, among other things, civil defendants 
are not accorded greater protections than civil plaintiffs and, in any 
event, whether a litigant is designated plaintiff or defendant often is 
happenstance. The Court emphasized that ``[n]o matter how plain the 
text of the Rule may be,'' it could not accept this result, and 
concluded that ``as far as civil trials are concerned, Rule 609(a)(1) 
`can't mean what it says.' '' 490 U.S. at 509-11 (citations omitted). 
The Court reviewed the legislative history, and concluded that 
notwithstanding the plain language, Congress ``intended that only the 
accused in a criminal case should be protected from unfair prejudice by 
the balance set out in Rule 609(a)(1).'' Id. at 523-24.
    In cases in which the ``absurd results'' doctrine of statutory 
constructions authorizes an agency to depart from the literal meaning 
of the statute, the agency must do so in as limited a manner as 
possible to effectuate underlying congressional intent. As the D.C. 
Circuit has stated:

    The rule that statutes are to be read to avoid absurd results 
allows an agency to establish that seemingly clear statutory 
language does not reflect the ``unambiguously expressed intent of 
Congress,'' * * * and thus to overcome the first step of the Chevron 
analysis. But the agency does not thereby obtain a license to 
rewrite the statute. When the agency concludes that a literal 
reading of a statute would thwart the purposes of Congress, it may 
deviate no further from the statute than is needed to protect 
congressional intent.

Mova Pharmaceutical Corp. v. Shalala, 140 F.3d 1060, 1068 (D.C. Cir. 
1998).
5. PSD and Title V Applicability Requirements
    The plain meaning of the PSD applicability provisions in CAA 
Sec. Sec.  165(a)(1) and 169(1) is clear that once PSD is triggered for 
GHG emissions, a source will be subject to PSD if it either belongs to 
one of 28 specifically identified source categories and ``emit[s], or 
ha[s] the potential to emit, one hundred tons per year or more of any 
air pollutant,'' including GHGs, or does not belong to one of those 
source categories and has ``the potential to emit two hundred and fifty 
tons per year or more of any air pollutant,'' including GHGs. 
Similarly, the plain meaning of the title V applicability requirements 
in CAA Sec. Sec.  501(2)(B) and 302(j) is clear that once the title V 
requirements are triggered, they would apply to a source that 
``directly emits, or has the potential to emit, one hundred tons per 
year or more of any air pollutant,'' including GHGs.
    As described in detail elsewhere, applying the plain meaning of 
these provisions once PSD and title V are triggered for GHG emissions 
would impose PSD and title V permitting requirements on an 
extraordinarily large number of sources: The number of sources subject 
to PSD permits would increase from less than 300 per year to some 
41,000 per year, and the number of sources subject to the title V 
requirements would grow from less than 14,000 to some 6.1 million. For 
at least an initial period of time, before permitting authorities could 
develop streamlining mechanisms, these obligations would have severe 
effects. From the permitting authorities' standpoint, the number of 
permit applications would far exceed their

[[Page 55308]]

administrative capacity, and would inevitably result in delays in 
issuance of permits to all sources--whether emitting conventional 
pollutants or GHGs--that would be measured in many years. From the 
sources' standpoints, thousands of sources that are quite small and 
that have never been confronted with CAA obligations would incur the 
expenses of PSD permitting requirements, including, most importantly, 
indentifying and developing BACT controls on a source-by-source basis. 
As for title V, millions of sources would be required to submit permit 
applications that meet title V requirements, even though the great 
majority of them would not be subject to any applicable CAA 
requirements. During this initial period, permitting authorities could 
develop streamlining approaches and ramp up administrative resources so 
that afterwards, they would be better able to accommodate the large 
numbers of permit applications and sources would be better able to 
comply. But, again, during the initial period, severe problems would 
ensue.
    We believe that these effects of a literal application of the PSD 
and title V applicability thresholds and their collateral consequences 
are well beyond anything that Congress envisioned when it drafted the 
PSD and title V requirements, and indeed undermine both permitting 
programs. As a result, these effects bring into play the ``absurd 
results'' doctrine.
a. PSD
(1) Tensions With Other Statutory Requirements
    Turning first to PSD, an important indication that Congress would 
not have intended that the threshold provisions be applied literally 
under the present circumstances may be found in the tensions that this 
literal application would create with other PSD provisions. CAA Sec.  
165(c) is particularly important in this regard. It requires that the 
permitting authority grant or deny ``[a]ny completed permit application 
for a major emitting facility * * * not later than one year after the 
date of filing of such completed application.'' A literal 
interpretation of CAA sections 165(a)(1) and 169(1) to apply at the 
100/250 tpy levels for GHG sources would render compliance with this 
provision impossible by requiring far more permit applications than 
permitting authorities could process under this 12-month deadline, for 
at least an initial period of time until streamlining methods are 
developed. As noted elsewhere, States have estimated that the number of 
PSD permits that would be required under a 100/250 tpy threshold on an 
actuals basis would result in an average processing time of 10 
years.\16\
---------------------------------------------------------------------------

    \16\ As noted elsewhere, because the applicability provisions 
apply on a potential-to-emit basis, as well as an actuals basis, the 
number of permit applications would be much greater than the 
permitting authorities assumed, and therefore the processing times 
would be much longer than 10 years.
---------------------------------------------------------------------------

    A literal interpretation of CAA sections 165(a)(1) and 169(1) to 
apply at the 100/250 tpy levels would also be directly inconsistent 
with the PSD-purpose provision in CAA Sec.  160, in particular, Sec.  
160(3), which is ``to insure that economic growth will occur in a 
manner consistent with the preservation of existing clear air 
resources.'' As the legislative history makes clear, Congress enacted 
the PSD provisions to resolve issues arising when sources of criteria 
pollutants seek to build or expand in areas with air quality that meets 
the national ambient air quality standards, but that would deteriorate 
with the addition of such new or expanded sources. Congress designed 
the PSD provisions to provide a mechanism for allowing sources to 
construct or modify in those clean-air areas, but with safeguards that 
both protected health and welfare, and that also left enough room in 
the airshed for still more economic growth. See, e.g., H. Rpt. 95-294, 
95th Cong., 1st Sess., at 154 (legislation ``not only protect[s] public 
health and welfare but also assur[es] future air resources will be 
available for continuing the industrial and energy development so 
necessary for the growth of the Nation''). Because PSD is a 
preconstruction requirement, increasing permitting authorities' 
workload from 300 to 41,000 permits would severely undermine this 
purpose of facilitating economic growth, at least initially, until 
permitting authorities can develop streamlining methods and ramp up 
resources. Each year, many thousands of sources would face multi-year 
delays in receiving their permits, and as a result, for all practical 
purposes, they would be forced to place on hold indefinitely their 
plans to construct or modify.
(2) Inconsistency With Congressional Intent
    The legislative history of the PSD provisions--enacted, again, in 
the 1977 Clean Air Act Amendments--also makes clear that a literal 
application of the applicability provisions would lead to results that 
are diametrically inconsistent with Congress's expressed intent. In 
reviewing the legislative history, it should be borne in mind that 
Congress was focused on sources of criteria pollutants--primarily 
sulfur dioxide (SO2), particulate matter, nitrogen oxides 
(NOX), and carbon monoxide (CO)--and not GHG emissions. This 
focus stems from the basic purpose of the PSD program, which is to 
safeguard maintenance of the NAAQS, combined with the limited awareness 
at that time of the problem of climate change. See S 95-127 (95th 
Cong., 1st Sess.), at 27.
    Congress designed the PSD provisions to impose significant 
regulatory requirements, on a source-by-source basis, to identify and 
implement BACT and, for criteria pollutant, to also undertake certain 
studies. Congress was well aware that because these requirements are 
individualized to the source, they are expensive. Accordingly, Congress 
designed the applicability provisions to apply these requirements to 
industrial sources of a certain type and a certain size--sources within 
28 specified source categories and that emit at least 100 tpy--as well 
as all other sources that emit at least 250 tpy, and, by the same 
token, to exempt other sources from these requirements. The legislative 
history shows that Congress's limitation of PSD to larger sources was 
quite deliberate, and was based on its determination to limit the costs 
that PSD permitting entails to the larger sources in certain 
industries. The D.C. Circuit has had occasion, in Alabama Power, to 
acknowledge this legislative history: ``Congress's intention was to 
identify facilities which, due to their size, are financially able to 
bear the substantial regulatory costs imposed by the PSD provisions and 
which, as a group, are primarily responsible for emissions of the 
deleterious pollutants that befoul our nation's air.'' Alabama Power, 
636 F.2d at 353. The Court added, ``Though the costs of compliance with 
[the PSD] requirements are substantial, they can reasonably be borne by 
facilities that actually emit, or would actually emit when operating at 
full capacity, the large tonnage thresholds specified in section 
169(1).''. Id. at 354.
    Although Congress required that CAA requirements generally apply to 
``major emitting facilities,'' defined as any source that emits or has 
the potential to emit 100 tpy of any pollutant, Congress applied PSD to 
only sources at 100 tpy or higher in 28 specified industrial source 
categories, and at 250 tpy or more in all other source categories. This 
distinction was deliberate: According to Sen. McClure, Congress 
selected the 28 source categories after reviewing an EPA study 
describing 190 industrial source categories. 122 Cong. Rec. 24521 (July 
29, 1976) (statement by Sen. McClure).

[[Page 55309]]

    Congress also relied on an EPA memorandum that identified the range 
of industrial categories that EPA regulated under its regulations that 
constituted the precursor to the statutory PSD program, and listed both 
the estimated number of new sources constructing each year and the 
amount of pollution emitted by the ``typical plant'' in the category. 
The memorandum was prepared by B.J. Steigerwald, Director of the Office 
of Air Quality Planning and Standards and Roger Strelow, EPA's 
Assistant Administrator for Air and Waste Management (``Steigerwald-
Strelow memorandum). The Steigerwald-Strelow memorandum makes clear 
that the 100 tpy cut-off for the 28 listed sources categories, and the 
250 tpy cut-off for all other sources, was meaningful; that is, there 
were a large number of sources below those cut-offs that Congress 
explicitly contemplated would not be included in PSD. Id. at 24548-50.
    Consistent with this, the legislative history on the Senate side 
also specifically identified certain source categories that Senators 
believed should not be covered by PSD. The Senate bill language limited 
PSD to sources of 100 tpy or more in 28 listed source categories, and 
to any other categories that the Administrator might add. Sen. Muskie 
stated that the Senate bill excluded ``houses, dairies, farms, 
highways, hospitals, schools, grocery stores, and other such sources.'' 
123 Cong. Rec. 18021 (June 8, 1977) (statement of Sen. Muskie). Sen. 
McLure's list of excluded source categories were ``[a] small gasoline 
jobber, or a heating plant at a community college, [which] could have 
the potential to emit 100 tons of pollution annually.'' 122 Cong. Rec. 
24548-49 (July 29, 1976) (statement of Sen. McClure). The Senate 
Committee Report included a comparable list, and in describing it, 
concisely articulated the cost-conscious basis for the line-drawing: 
``[the PSD] procedure * * * must include an effective review-and-permit 
process. Such a process is reasonable and necessary for very large 
sources, such as new electrical generating plants or new steel mills. 
But the procedure would prove costly and potentially unreasonable if 
imposed on construction of storage facilities for a small gasoline 
jobber or on the construction of a new heating plant at a junior 
college, each of which may have the potential to emit 100 tons of 
pollution annually.'' S. Rpt. 95-127 at 96-97.
    The enacted legislation differs from the Senate bill by replacing 
the authorization to EPA to include by regulation source categories in 
addition to the listed 28 source categories with an inclusion of all 
other sources if they exceed 250 tpy, and with an authorization for the 
States to exempt hospitals and educational institutions. But Congress's 
overall intention remains clear, as the D.C. Circuit described in 
Alabama Power:. ``Congress's intention was to identify facilities 
which, due to their size, are financially able to bear the substantial 
regulatory costs imposed by the PSD provisions and which, as a group, 
are primarily responsible for emissions of the deleterious pollutants 
that befoul our nation's air * * * [With respect to] the heating plant 
operating in a large high school or in a small community college * * * 
[w]e have no reason to believe that Congress intended to define such 
obviously minor sources as 'major' for the purposes of the PSD 
provision.'' \17\ 636 F.2d at 353-54. However, applying the 100/250 tpy 
threshold literally to CO2 emissions would frustrate 
congressional intent by subjecting to PSD sources that Congress 
specifically intended not to include. This occurs simply because 
although Congress evaluated whether sources should be included in PSD 
by reference to the amount of the emissions of conventional pollutants, 
many sources combust fossil fuels for heat or electricity, and the 
combustion process produces quantities of CO2 that are far 
in excess of the sources' quantities of conventional pollutants and, in 
many cases, Congress's carefully considered 100 and 250 tpy thresholds. 
As a result, many of the ``typical plant[s]'' identified in the 
Steigerwald-Strelow memorandum that Congress thought would be excluded 
from PSD due to the relatively small amounts of their conventional 
pollutants would in fact be included due to the CO2emissions 
from their heating or electricity generating equipment.But the clearest 
and most important indication that applying the 100/250 thresholds 
literally in the case of GHG emissions would undermine congressional 
intent comes in considering the emissions profile of the small-sized 
boilers. Congress focused closely on identifying which sources with 
emissions in excess of 100 tpy should not be subject to PSD even though 
they are subject to CAA requirements generally. But Congress viewed a 
large set of sources as emitting below 100 tpy and therefore not 
included in the PSD program and, indeed, not even subject to debate as 
to whether they should be included in the PSD program. Chief among 
these sources, in terms of absolute numbers of sources, were small 
boilers. The Steigerwald-Strelow memorandum identified two categories 
of these boilers, differentiated by size. The first ranges in size from 
10 to 250 x 10\6\ Btu/hr, and has a ``typical plant'' size of 10\7\ 
Btu/hr, with ``BACT emissions from typical plant'' of 53 tpy, and a 
total of 1,446 sources in the category. The second category ranges in 
size from 0.3 to 10 x 10\6\ Btu/hr, and has a ``typical plant'' size of 
1.3 x 10\6\ Btu/hr, with ``BACT emissions from typical plant'' of 2 
tpy, and a total of 11,215 sources in the category. The memorandum 
discusses these two categories in the context of explaining which 
source categories exceed a size of 100 tpy--and therefore would be 
subject to PSD if a 100 tpy threshold were set--by stating, 
``Fortunately, most truly small boilers and typical space heating 
operations would not be covered.'' 122 Cong. Rec. 24549 (July 29, 
1976). However, if the CO2 emissions of these small boilers 
are considered, then most of them would be subject to PSD. In general, 
most boilers of these small sizes are fired with natural gas, and a 
natural gas boiler greater than 0.5 x 10\6\ Btu/hr emits at least 250 
tpy CO2. As a result, the small commercial and residential 
sources that include these boilers would become subject to PSD, and 
this would directly contravene Congress's intention to limit PSD to 
``industrial plants of significant impact.'' 122 Cong. Rec. 24548-49 
(statement of Sen. McClure). The legislative history also provides a 
window into the scope of the program that Congress anticipated and 
related administrability concerns. According to the Steigerwald-Strelow 
memorandum, the number of new sources each year whose ``BACT emissions 
from typical plant'' exceed 100 for the 28 listed source categories and 
250 for all other source categories is less than 100 per year. Although 
the Steigerwald-Strelow memorandum does not attempt to estimate the 
number of modifications, it appears that based on this information, 
Congress had reason to expect the total size of the PSD program to be 
measured in the hundreds of permits each year. A program of this size 
would be manageable by EPA and the permitting authorities.
---------------------------------------------------------------------------

    \17\ Note that although Congress specifically authorized the 
States to exempt ``nonprofit health or education institutions'' from 
the definition of ``major emitting facility,'' this statement by the 
D.C. Circuit should be taken as the Court's view that Congress did 
not design PSD to cover sources of the small size described.
---------------------------------------------------------------------------

    The D.C. Circuit based its holding in Alabama Power that potential-
to-emit for purposes of the applicability thresholds should be defined 
as

[[Page 55310]]

emissions at full capacity with implementation of control equipment, in 
part on its view that with this definition, the number of sources 
subject to PSD would be manageable:
    Though the costs of compliance with section 165 requirements are 
substantial, they can reasonably be borne by facilities that actually 
emit, or would actually emit when operating at full capacity, the large 
tonnage thresholds specified in section 169(1). The numbers of sources 
that meet these criteria, as we delineate them, are reasonably in line 
with EPA's administrative capability.
    Alabama Power, 636 F.2d at 354 (emphasis added). However, applying 
the thresholds literally to GHG emissions would increase the size of 
the PSD program far beyond what Congress had reason to expect and what 
the D.C. Circuit evidently had in mind. Returning to the Steigerwald-
Strelow table, applying the thresholds literally would bring into PSD 
the great majority of the small boilers constructed each year, which 
numbered, in total, 12,661. Adding more sources from other source 
categories, and, most importantly, modifications, indicates that the 
size of the PSD program would very likely be at least an order of 
magnitude greater than what Congress intended. At least for an initial 
period of time, until streamlining methods could be developed, these 
numbers of sources would be well beyond the ``administrative 
capability'' that the D.C. Circuit described EPA as having.
(3) Absurd Results
    Applying the PSD thresholds to sources of GHG emissions literally 
results in a PSD program that is so contrary to what Congress had in 
mind--and that in fact so undermines what Congress attempted to 
accomplish with the PSD requirements--that it should be avoided under 
the ``absurd results'' doctrine. As described above, Congress designed 
the PSD program as a mechanism to allow construction of new sources and 
expansion of existing sources in areas meeting the NAAQS, but only 
after those sources, on a source-by-source basis, undertook analyses to 
demonstrate that their emissions would not significantly deteriorate 
air quality and implemented controls representing BACT. Recognizing 
that PSD imposed significant costs on sources, Congress constructed a 
statutory scheme that it viewed as limiting PSD to large industrial 
sources that could bear the financial costs and that caused most of the 
pollution problem. These limits were the 100/250 tpy thresholds. 
Congress had reason to expect that with these thresholds, the program 
would approximate the size of the current PSD program, which numbers in 
the hundreds of sources each year. Throughout its deliberations, 
Congress focused primarily on emissions of conventional pollutants.
    But applying the 100/250 tpy thresholds literally to sources of 
CO2 would sweep aside this carefully designed construct by 
bringing in tens of thousands of sources of a different type and much 
smaller size than Congress had in mind: Commercial and residential 
sources whose primary--if not sole--source of emissions is 
CO2 from small boilers that primarily provide heat. 
Moreover, applying the thresholds literally would bring in many 
additional sources in the source categories Congress expected PSD to 
apply to, but of a size Congress expected to be below the cut-off. 
Congress did not intend to apply PSD to these sources because of the 
expenses that compliance with PSD entails and because Congress did not 
view these sources as causing a sufficiently great part of the 
pollution problem. Including these sources would also expand the PSD 
program to well beyond what Congress had reason to expect, and what 
permitting authorities can administer.
    The administrability problems lead the results of applying the 
thresholds literally beyond contravening congressional intent and into 
actually undermining congressional intent. At least for an initial 
period, until streamlining methods could be developed, the 
extraordinary number of sources subject to PSD would preclude the 
permitting authorities from processing permit applications for all 
sources, including those that Congress intended be subject to PSD. 
Because PSD is a preconstruction program, those sources would face many 
years of delay before they could construct or modify, which would 
undermine congressional intent to allow economic growth in PSD areas. 
These results are the types of ``absurd results'' from a literal 
reading of statutory provisions that courts have declined to sanction.
b. Title V
    For title V, the application of the absurd results doctrine 
parallels that of PSD. First, a literal application of the 100 tpy 
threshold requirement in CAA Sec. Sec.  502(a), 501(2)(B), and 302(j) 
would be in tension with a specific CAA requirement, that of CAA Sec.  
503(c), which imposes a time limit of 18 months from the date of 
receipt of the completed permit application for the permitting 
authority to issue or deny the permit. It would be flatly impossible 
for permitting authorities to meet this statutory requirement if their 
workload increases from some 14,000 permits to 6.1 million. Instead, 
permit applications would face multi-year delays in obtaining their 
permits.
    Moreover, these delays would undermine the overall statutory design 
that promotes the smooth-running of the permitting process, and the 
very purpose of the title V program itself. As noted elsewhere, 
Congress intended through title V to facilitate compliance by 
establishing an operating permit program that requires the source to 
combine in a single permit all of its CAA requirements. Congress 
established a comprehensive process to implement the operating permit 
program. Through this process, following the date that sources become 
subject to title V, they have 1 year to submit their permit 
applications. CAA Sec.  503(c). As noted, the permitting authority then 
has 18 months to issue or deny the permit. CAA Sec.  503(c). Permitting 
authorities must provide an opportunity for public comment and a 
hearing. CAA Sec.  502(b)(6). If the permitting authority proposes to 
issue the permit, the permitting authority must submit the permit to 
EPA, and notify affected States, for review. CAA Sec.  505(a)(1). EPA 
then has 45 days to review the permit and, if EPA deems it appropriate, 
to object to the permit. CAA Sec.  503(b)(1). If EPA does object, then 
the permitting authority must, within 90 days, revise it to meet the 
objections, or else EPA becomes required to issue or deny the permit. 
CAA Sec.  503(c). If EPA does not object, then, within 60 days of the 
close of the 45-day review period, any person may petition EPA to 
object, and EPA must grant or deny the petition within 60 days. This 
set of applicant, permitting authority, and EPA actions and deadlines 
establishes the process for the prompt and efficient issuance of 
operating permits for the appropriate universe of sources.
    The legislative history of title V, enacted by Congress in the 1990 
CAA Amendments, indicates that Congress expected the provisions to 
apply to a much smaller set of sources than would become subject at a 
100-tpy GHG threshold level. The Senate Committee report noted that 
under the title V provisions that would be enacted, ``the additional 
workload in managing the air pollution permit system is estimated to be 
roughly comparable to the burden that States and EPA have successfully 
managed under the Clean Water Act[,]'' under which ``some 70,000 
sources receive permits, including more than 16,000 major sources.'' S. 
Rep. 101-228,

[[Page 55311]]

at 353. Applying title V to GHG emitters at the 100-tpy threshold would 
result in approximately 6.1 million sources becoming subject to title 
V, which is far in excess of the number that Congress contemplated.
    Moreover, the great majority of these sources will not be subject 
to any CAA requirements, so that although they would need to apply for 
and receive a permit, there would be no applicable requirements to 
include in the permit and the exercise would not improve compliance. 
But at least for an initial period, until streamlining methods could be 
developed, the extraordinary numbers of these sources would sweep aside 
Congress' carefully constructed program, with its multi-step process 
and deadlines of as short as 45 days--and instead, backlog the permit 
authorities for many years. Multi-year delays in issuance of all 
permits would ensue, those for sources that have applicable 
requirements and that Congress clearly intended the program to cover, 
and for the millions of sources that are not subject to any applicable 
requirements. Thus, as with PSD, a literal interpretation of the title 
V threshold provisions would apply title V to millions of sources that 
Congress did not intend be covered, and the ensuing administrative 
burdens--at least initially--would impede the issuance of permits to 
the thousands of sources that Congress did intend be covered. This 
result is the type of ``absurd results'' from a literal application of 
statutory provisions that the courts have held should be avoided.
c. Application of PSD and Title V Thresholds
    Because a literal application of both the PSD and title V threshold 
requirements produces absurd results, EPA may develop a different 
application that promotes consistency with other statutory provisions 
and is consistent with congressional intent. We believe that this 
proposal would achieve these objectives by establishing a threshold for 
the first phase at the level of 25,000 tpy CO2e, and 
committing to vigorous efforts to streamline implementation of both 
programs' requirements and to complete a study and then conduct further 
rulemaking.
    A first phase 25,000-tpy CO2e major source GHG 
threshold, combined with vigorous efforts to develop streamlining 
methods, is consistent with congressional intent for the PSD provisions 
for several reasons. The 25,000-tpy CO2e threshold 
reconciles the PSD provisions that, absent this regulation, would be in 
tension with each other, and thereby maintains the overall functioning 
of the PSD program. The threshold maintains the environmental purposes 
of the PSD program, while allowing economic growth, as set forth in CAA 
Sec.  160. As discussed elsewhere in this preamble, a majority of 
stationary source GHG emissions in the U.S. come from a relatively 
small number of high-emitting sources that would remain subject to PSD 
because they emit at or above the 25,000-tpy CO2e threshold. 
By comparison, about 75 percent of stationary source GHG emissions come 
from all sources above 250 tpy. Accordingly, the 25,000-tpy 
CO2e threshold would, during this first phase, exempt from 
PSD numerous small sources that emit only about 7 percent of GHGs, and 
that smaller amount of emissions coverage would not jeopardize the 
environmental protection goals of PSD. Moreover, the program will 
remain of a manageable size, so that permitting authorities will be 
able to process permit applications and issue permits, which sources 
must have to construct or expand. As discussed elsewhere, the 
information available to us indicates that the 25,000-tpy 
CO2e level is the level closest to the statutory levels that 
permitting authorities can reasonably administer during this initial 
phase. The ``absurd results'' caselaw requires that if a statutory 
provision cannot be applied literally, then it should be applied as 
close to literally as possible, consistent with congressional intent. 
With this level of 25,000-tpy CO2e, permitting authorities 
would be able to reasonably comply with the 12-month deadline 
requirement for acting on PSD permit applications under CAA Sec.  
165(c). Further, the first phase threshold of 25,000 tpy and the 
development of streamlining methods is consistent with congressional 
intent to limit the PSD program--with the high costs that result from 
its source-by-source applications--to sources that can bear the costs. 
The first phase would allow for the implementation of streamlining 
methods, which could facilitate the orderly development of the program 
by reducing the costs of compliance for sources of GHG emissions. In 
addition, the first phase threshold maintains the program at a 
manageable size so that permitting authorities will be able to continue 
to timely issue permits to sources seeking to construct or expand.
    The first phase 25,000-tpy CO2e threshold, combined with 
the development of streamlining methods and the study and subsequent 
regulations, is also consistent with the purposes of the title V 
provisions. This first phase would assure a manageable size for the 
program so that permitting authorities could continue to issue permits 
to sources with applicable CAA requirements, as Congress intended. The 
implementation of streamlining methods--in particular, general 
permits--could facilitate the orderly development of the title V 
program to include a broader set of sources based on their GHG 
emissions.

B. ``Administrative Necessity'' Doctrine

1. Overview
    Once EPA takes regulatory action to trigger PSD and title V 
requirements for GHG emitters, a literal application of the PSD and 
title V applicability requirements (i.e., the 100/250-tpy PSD major 
stationary source threshold and a ``zero'' significance level 
threshold, and the 100-tpy title V threshold) would result in a volume 
of permit applications that is so high that the PSD and title V 
programs would become impossible for State and Federal authorities to 
administer. The PSD and title V permitting processes would become 
overwhelmed and essentially paralyzed.
    Under these circumstances, the judicial doctrine of administrative 
necessity authorizes EPA to undertake a process for rendering the PSD 
and title V requirements administrable. As part of this process, EPA 
must consider ways to streamline the PSD and title V definitions and 
operative requirements so that the permitting authorities may more 
efficiently process the expected influx of GHG permit applications. 
These streamlining methods may include refinements to the definition of 
PTE and issuance of some form of general permits with presumptive BACT. 
See section VII.A of this preamble for a description of what these 
streamlining methods entail for PSD and title V programs, respectively.
    However, the development, adoption, and implementation of these 
streamlining approaches would take several years, and, upon their 
completion, would still leave permitting authorities confronting a 
sufficiently large increase in workload that, absent a corresponding 
increase in resources, would continue to render the PSD and title V 
programs impossible to administer. See section VII of this preamble for 
an explanation of the procedures and timeframes necessary to develop 
these streamlining techniques.
    As a result, under the doctrine of administrative necessity, EPA is 
authorized to phase in the PSD and title V requirements in as refined a 
manner as possible, so as to allow

[[Page 55312]]

administration of the PSD and title V programs. As part of the first 
phase, EPA proposes to establish the thresholds at the levels proposed, 
as well as undertake streamlining as much as possible and as quickly as 
possible, and explore with permitting authorities methods to ramp up 
resources for processing GHG permit applications. EPA also commits to 
conduct an assessment of the administrability issue within 5 years and, 
by the end of 1 year later, promulgate the second phase of the 
tailoring process, which would include the thresholds and streamlining 
methods determined at that time to be appropriate.
2. Chevron Standard for Statutory Interpretation
    As noted above, the PSD requirements apply to the construction and 
modification of a ``major emitting facility,'' CAA Sec. Sec.  
165(a)(1), 169(2)(C), which is defined as a ``stationary source[ ] [in 
one of 28 listed categories of sources] of air pollutants which 
emit[s], or ha[s] the potential to emit, one hundred tons per year or 
more of any air pollutant'' or ``any other source with the potential to 
emit two hundred and fifty tons per year or more of any air 
pollutant,'' with certain exceptions. CAA Sec.  169(1). The title V 
requirements apply to any ``major source,'' CAA Sec.  502(a), which is 
defined to include ``any stationary facility or source of air 
pollutants which directly emits, or has the potential to emit, one 
hundred tons per year or more of any air pollutant.'' CAA Sec. Sec.  
501(2)(b), 302(j).
    Although these applicability provisions are clear by their terms, 
the Courts have held that the Chevron approach of applying the literal 
language of the provisions may not apply when the administrability of 
the provisions is at issue.
3. Doctrine of Administrative Necessity
a. Administrative Necessity Doctrine in the Context of Chevron
    The Courts have acknowledged the administrative necessity doctrine 
as an overlay on the Chevron doctrine of statutory construction, so 
that even when a statutory requirement expresses a clear congressional 
intent, if the provision is impossible for the agency to administer, 
then the agency is not required to follow the literal requirements, and 
instead, the agency may adjust the requirements in as refined a manner 
as possible to assure that the requirements are administrable, while 
still achieving Congress's overall intent. As discussed below, the D.C. 
Circuit set out the doctrine of ``administrative necessity'' in a line 
of cases that most prominently includes Alabama Power v. Costle, 636 
F.2d 323 (D.C. Cir. 1980). The Court cited the doctrine most recently 
in New York v. EPA, 443 F.3d 880, 884, 888 (D.C. Cir. 2006).\18\
---------------------------------------------------------------------------

    \18\ It should be noted that numerous cases have held that an 
agency may consider administrative factors in choosing regulatory 
policies under statutory provisions that authorize choices. See, 
e.g., National Mining Association v. EPA, 59 F.3d 1351, 1364 (D.C. 
Cir. 1995); Phillips Petroleum Co. v. EPA, 803 F.2d 545, 562 (D.C. 
Cir. 1986); National Wildlife Federation v. Gorsuch, 693 F.2d 156, 
182 (D.C. Cir. 1982). While these cases support the general 
proposition that administrative considerations are important, they 
differ from the ``administrative necessity'' doctrine because in 
those cases, the Agency's actions were within the ambit of the 
statutory language; whereas under the ``administrative necessity'' 
doctrine, the Agency's actions depart from the statutory language.
---------------------------------------------------------------------------

b. Alabama Power
    The Court provided its most robust expression of the 
``administrative necessity'' doctrine in the seminal decision, Alabama 
Power Co. v. Costle, 636 F.2d 323 (D.C. Cir. 1980) (Alabama Power), a 
case that resolved industry and citizens group challenges to many 
aspects of the regulations EPA promulgated shortly after enactment of 
the 1977 CAA Amendments to implement the newly enacted statutory 
provisions. One regulatory provision purported to exempt sources that 
qualified as major emitting facilities if their actual emissions were 
50 tpy or less. EPA sought to justify this provision on grounds that 
some 2,400 major emitting facilities emit 50 tpy or less, and that the 
large burdens on the agency and industry of permit development and 
review would outweigh the small benefits of permitting. The Court 
invalidated this regulatory exemption as not authorized by the statute, 
but in so doing, recognized EPA's concerns about administrative burdens 
and, anticipating future agency efforts to adjust statutory mandates to 
administrative realities, went on to articulate the basis for the 
administrative necessity doctrine.\19\ 636 F.2d at 356-57.
---------------------------------------------------------------------------

    \19\ The Court also explained that in that case, EPA's concern 
that large numbers of small sources would be subject to PSD was 
misplaced because it was based on an erroneous interpretation of the 
requirement that the threshold for determining whether a source was 
a major emitting facility (and thereby subject to PSD) was the 
source's PTE. EPA erroneously believed that PTE had to be calculated 
without reference to pollution controls, an interpretation that 
would have meant that many sources of a low level of actual 
emissions would be treated as major emitting facilities. The Court 
held, in another part of the Alabama Power opinion, that PTE must be 
calculated with reference to pollution controls, and went on to 
observe that this holding effectively mooted EPA's concerns that 
underlay its effort to exempt 50-tpy-or-less sources from PSD 
requirements.
---------------------------------------------------------------------------

    First, the D.C. Circuit described the basis for the administrative 
necessity doctrine as, in effect, an overlay on clear statutory intent. 
Specifically, in a section of the opinion titled, ``Exemptions Born of 
Administrative Necessity,'' the Court stated:

    Certain limited grounds for the creation of exemptions are 
inherent in the administrative process, and their unavailability 
under a statutory scheme should not be presumed, save in the face of 
the most unambiguous demonstration of congressional intent to 
foreclose them.

Id. at 357.

    Second, the Court identified several types of administrative relief 
that may be available to an agency. One is ``[c]ategorical exemptions 
from the clear commands of a regulatory statute,'' which the court 
stated are ``sometimes permitted,'' but emphasized ``are not favored.'' 
Id. at 358. A second is ``an administrative approach not explicitly 
provided in the statute,'' such as ``streamlined agency approaches or 
procedures where the conventional course, typically case-by-case 
determinations, would, as a practical matter, prevent the agency from 
carrying out the mission assigned to it by Congress.'' Id. A third is a 
delay of deadlines upon ``a showing by [the agency] that publication of 
some of the guidelines by that date is infeasible.'' Id. at 359 
(quoting NRDC v. Train, 510 F.2d 692, 712 (D.C. Cir. 1974).
    Finally, the Court explained it would evaluate whether the agency 
faced an administrative impossibility, and the acceptability of the 
agency's choices, based on the essential circumstances confronting the 
agency, including the volume and nature of the tasks required of the 
agency, its financial and personnel resources, and the time available 
to it. Specifically, the Court observed that the administrative 
necessity doctrine would apply based on the ``administrative need to 
adjust to available resources * * * where the constraint was imposed * 
* * by a shortage of funds * * *, by a shortage of time, or of the 
technical personnel needed to administer a program.'' Id. at 358. The 
Court added that another administrative constraint could be ``the 
degree of administrative burden posed by enforcement.'' Id. at 405. See 
NRDC v. Train, 510 F.2d 692, 712 (D.C. Cir. 1974) (recognizing 
constraints imposed by budgetary commitments, manpower demands, or 
inability to evaluate sufficiently the necessary scientific and 
technical determinations).
    Even so, the Court went on to caution that ``administrative 
necessity'' is a high hurdle: ``[T]he agency [bears] a heavy

[[Page 55313]]

burden to demonstrate the existence of an impossibility.'' Id. at 359. 
The Court particularly noted its reticence to uphold agency claims of 
administrative impossibility when those claims are made in advance of 
actual efforts to administer or enforce: ``The agency's burden of 
justification in such a case is especially heavy.'' Id. at 359.
    In Alabama Power, the D.C. Circuit emphasized that its exposition 
of the administrative necessity doctrine was consistent with U.S. 
Supreme Court decisions holding that administrative considerations 
could factor into agency decisions. The D.C. Circuit noted that the 
Supreme Court, in Permian Basin Area Rate Cases, 390 U.S. 747 (1968), 
``approv[ed] the adopting by the FPC of area rate regulation as the 
practical means to regulate thousands of natural gas producers,'' and 
quoted the Supreme Court as explaining, ``[c]onsiderations of 
feasibility and practicality are certainly germane to the issues before 
us. * * * We cannot, in these circumstances, conclude that Congress has 
given authority inadequate to achieve with reasonable effectiveness the 
purpose for which it has acted.'' Alabama Power, 636 F.2d at 359 
(citing Permian Basin Area Rate Cases, 390 U.S. at 777). The Court in 
Alabama Power also cited Morton v. Ruiz, 415 U.S. 199, 230-31 (1973), 
in which the Supreme Court ``acknowledged the substantive authority of 
the Secretary [of the Bureau of Indian Affairs] to take appropriate 
action to cope with the administrative impossibility of applying the 
commands of the substantive statute. Alabama Power, 636 F.2d at 
359.\20\
---------------------------------------------------------------------------

    \20\ Although Alabama Power presented the D.C. Circuit's most 
robust exposition of the administrative necessity doctrine, the 
Court first identified the doctrine, albeit in the relatively narrow 
application of a deadline extension, in the 1974 decision, NRDC v. 
Train, 510 F.2d 692 (D.C. Cir. 1974). There, the Court considered 
EPA objections that it would be unable to meet a statutory 
requirement that established a deadline for promulgating effluent 
limitations. While declining to grant extensions of the deadline in 
that case, the Court acknowledged that under certain circumstances, 
judicial relief in the form of a deadline extension would be 
warranted in light of administrative considerations. The Court 
observed that ``budgetary commitments and manpower demands'' needed 
to meet a deadline could be ``beyond the agency's capacity or would 
unduly jeopardize the implementation of other essential programs;'' 
and that ``EPA may be unable to conduct sufficient evaluation of 
available control technology'' by the deadline. Under these 
circumstances, the Court stated, ``[t]he courts cannot responsibly 
mandate flat * * * deadlines * * *.'' The Court grounded its 
conclusion, that a court could consider administrative 
considerations in evaluating an agency's claimed inability to meet a 
statutorily mandated deadline, in a court's equitable powers to 
fashion appropriate relief. Id. at 713 (citations omitted). Although 
the NRDC v. Train decision concerned the agency's compliance with 
deadlines, which are a relatively narrow issue, the case established 
the proposition that an agency may, under certain circumstances, 
depart from a statutory mandate due to administrative 
considerations.
---------------------------------------------------------------------------

    It should be emphasized that the Court in Alabama Power discussed 
the ``administrative necessity'' doctrine in the context of PSD 
applicability, which, along with title V applicability, is the subject 
of this action. The Court discussed the doctrine extensively in the 
part of its opinion that followed its invalidation of EPA regulations 
that attempted to overlay an exemption for PSD applicability onto 
statutory requirements, where the Court stated it was anticipating 
future agency efforts to adjust statutory mandates to administrative 
realities. Id. at 356-57. Moreover, the Court made clear in another 
part of its opinion that the doctrine could be applied to another 
aspect of PSD applicability, concerning existing sources. There, the 
Court stated:


    EPA does have discretion, in administering the statute's 
``modification'' provision, to exempt from PSD review some emission 
increases on grounds of de minimis or administrative necessity.

Id. at 400.
c. Case Law After Alabama Power
    Shortly after Alabama Power, the D.C. Circuit reiterated the 
validity of the ``administrative necessity'' doctrine in EDF v. EPA, 
636 F.2d 1267 (D.C. Cir. 1980), which reviewed the legality of EPA's 
regulation of polychlorinated biphenyls (PCBs) under the Toxic 
Substances Control Act. As the Court noted, ``The statutory language is 
simple: ``no person may * * * use any polychlorinated biphenyl in any 
manner other than in a totally enclosed manner.'' 15 U.S.C. 
2605(e)(2)(A). Similarly, the prohibitions on manufacture, processing, 
and distribution refer to ``any polychlorinated biphenyl.'' See id. 
Sec.  2605(e)(3)(A).'' EDF v. EPA, 636 F.2d at 1281. EPA's regulations 
exempted materials containing concentrations of PCBs less than 50 parts 
per million (ppm). EPA justified the 50-ppm cutoff as an exemption 
based on administrative necessity. The Court reiterated that such an 
exemption was at least potentially available. Quoting Alabama Power, 
the Court stated:

    Under the heading of ``administrative necessity,'' this court 
has recognized that an agency may depart from the requirements of a 
regulatory statute. * * * While the court in Alabama Power 
emphasized that ``categorical exemptions from the clear commands of 
a regulatory statute, though sometimes permitted, are not favored.'' 
Id. at 358-360, it also noted that there is ``substantive authority 
(for an agency) to take appropriate action to cope with the 
administrative impossibility of applying the commands of the 
substantive statute.'' Id. at 358-359.

EDF v. EPA, 636 F.2d at 1283. However, on the facts before it, the 
Court found that EPA had not ``made [a] showing that it cannot carry 
out the statutory commands for concentrations of PCBs below fifty 
ppm,'' and therefore that ``EPA [had] fail[ed] to meet its heavy 
burden. Thus, administrative need, on this record, provides no basis 
for the fifty ppm cutoff.'' Id.
    Some 3 years later, the D.C. Circuit handed down a decision 
concerning the ``administrative necessity'' doctrine in Sierra Club v. 
EPA, 719 F.2d 436, 463 (D.C. Cir. 1983). There, the Court reviewed 
EPA's efforts to justify a narrow regulatory definition of ``dispersion 
techniques'' on administrative necessity. CAA Sec.  123 prohibits the 
use of tall stacks and ``other dispersion techniques'' to meet 
emissions limitations. The Court found that the term ``dispersion 
techniques'' should be defined broadly ``to encompass * * * the use of 
devices, alterations to the stack, or other techniques when they are 
significantly motivated by an intent to gain emissions credit for 
greater dispersion.'' Id. at 462. EPA's regulations defined the term 
narrowly to include only certain types of equipment, and not to require 
an inquiry into intent. The Court observed, that ``[s]ince the 
regulations do not regulate all the techniques contained in this 
definition, the regulations effectively create an exemption not 
indicated in the statute itself. Such categorical exemptions are 
generally not favored * * * but there are two situations in which they 
are allowed: Cases of administrative necessity and de minimis 
situations'' (citing Alabama Power). Id. Thus, the Court affirmed that 
the doctrine of ``administrative necessity'' could be used to allow an 
agency to depart from the requirements of the statute.
    The Court went on to find, however, that in this case, EPA's 
justification for ``administrative necessity'' was not sufficient. EPA 
had explained that defining ``dispersion techniques'' more broadly to 
necessitate inquiring into a source's subjective intent as to whether 
other equipment or methods were designed to disperse emissions, as 
opposed to achieving some other end, would be ``difficult'' to enforce, 
a conclusion generally supported by a few State and local agencies that 
commented on the rule. The Court found that the Agency's narrow 
definition of ``dispersion techniques'' amounted to a

[[Page 55314]]

categorical exemption from statutory requirements, and one that was 
based on Agency predictions of future enforcement difficulties rather 
than actual experience. The Court reiterated its statements in Alabama 
Power under these circumstances, that the Agency's burden of showing 
impossibility is especially heavy, and that in this case, EPA's showing 
``falls far short.'' Id. at 463. The Court added that EPA may be able 
to develop ``less taxing'' ways to define ``dispersion techniques,'' 
including developing classes of plant techniques that could be 
considered to be dispersion techniques. Id.\21\
---------------------------------------------------------------------------

    \21\ Shortly after Sierra Club, the D.C. Circuit considered 
another case that raised an ``administrative impossibility'' issue, 
Northern Colorado Water Conservancy Dist. v. FERC, 730 F.2d 1509 
(D.C. Cir. 1984) (NCWCD). However, there the Court did not appear to 
follow the line of cases that included Alabama Power. In NCWCD, the 
Court found that the Federal Energy Regulatory Commission (FERC) 
improperly failed to comply with requirements under section 4(f) of 
the Federal Power Act to give written notice to local water 
authorities of preliminary permit applications filed by private 
developers for a hydroelectric power project. In failing to give 
notice, FERC had followed a longstanding, but unannounced policy, 
which it justified in part on grounds ``that strict adherence to the 
statute's language would be administratively impossible.'' FERC 
explained that the requirement to notify municipalities required 
administrative flexibility in light of the ``estimated 50,000 
specialized local governmental units performing a myriad of 
services,'' many of which, ``such as water, utility or drainage 
districts, are not readily identifiable.''
    The Court rejected FERC's contention that those administrative 
concerns justify FERC's practices. Without citing Alabama Power or 
any of its other decisions concerning the ``administrative 
necessity'' doctrine, the Court stated that those practices must 
nevertheless remain ``within a range of reasonableness with respect 
to Congress' instruction,'' that is, within the ambit of the 
statutory requirements, as well as be reasonably well articulated 
and generally made known to the public, and that in this case, 
FERC's practices failed on all those counts. 731 F.2d at 1521. 
Notwithstanding this case, the weight of the D.C. case law supports 
the availability of the administrative necessity doctrine to 
authorize agency departure from statutory requirements in limited 
circumstances.
---------------------------------------------------------------------------

    In 1989, in Public Citizen v. FTC, 869 F.2d 1541 (D.C. Cir. 1989), 
the D.C. Circuit reiterated the validity of the ``administrative 
necessity'' doctrine, although on the facts, the Court held that the 
Federal Trade Commission's (FTC) claims of administrative necessity 
failed. There, the Court considered the Smokeless Tobacco Act, which, 
according to the Court, ``imposes a blanket requirement, subject only 
to one narrow and specifically mentioned exception for billboard 
advertising, that producers and distributors of smokeless tobacco 
products must include a warning label whenever they `advertise * * * 
any smokeless tobacco product.' 15 U.S.C. 4402(a)(2).'' Id. at 1553. In 
the face of this provision, the FTC issued an exemption for utilitarian 
items (ranging from golf balls to T-shirts) distributed for promotional 
purposes, so that such objects would not need to include the warning 
label. The FTC attempted to justify the exemption on grounds of 
administrative necessity. The Court acknowledged the doctrine, stating 
that ``there exists a narrow range of inherent discretion in an agency 
to create case-by-case exceptions in order to come within the practical 
limits of feasibility in administering a statute.'' Id. at 1556 (citing 
Alabama Power) (emphasis added by Court). However, the Court went on to 
dismiss the FTC's claims of administrative necessity, stating that the 
FTC had not justified its application and suggesting that the FTC had 
improperly undertaken a cost-benefit analysis in the guise of an 
administrative necessity claim. Id.
d. Analogous Case Law Concerning Other Legal Obligations
    There is another line of case law, which involves contempt-of-court 
proceedings, in which the Courts recognize that impossibility of 
performance is relevant to the lawful discharge of legal obligations, 
and this case law provides some analogous support to the administrative 
necessity doctrine. In contempt-of-court proceedings, as the Supreme 
Court has noted, ``a defendant may assert a present inability to comply 
with the order in question'' and may thereby be excused from the duty 
to comply. U.S. v. Rylander, 460 U.S. 752, 757 (1983) (citing Maggio v. 
Zeitz, 333 U.S. 56, 75-76 (1948); Oriel v. Russell, 278 U.S. 358, 366 
(1929)) (emphasis in original) (``Rylander''). In addition, as 
discussed below, this doctrine applies fully to administrative 
agencies, providing even closer analogous support for the doctrine of 
administrative necessity. Even so, it should be acknowledged that the 
extent of support is limited because the contempt-of-court line of 
cases involves a court's equitable discretion in enforcing court 
orders, and the administrative necessity line of cases involves the 
extent to which a Court will allow deviation from explicit statutory 
requirements.
    In Rylander, which involved a corporate officer's failure to comply 
with a civil contempt order imposed for noncompliance with an earlier 
order enforcing an IRS summons, the Court stated that ``[w]hile the 
court is bound by the enforcement order, it will not be blind to 
evidence that compliance is now factually impossible. Where compliance 
is impossible, neither the moving party nor the court has any reason to 
proceed with the civil contempt action.'' Rylander, 460 U.S. at 757 
(finding that contemnor failed to meet the burden of production 
sufficient to establish an impossibility defense).
    The D.C. Circuit, noting that ``[i]t is well established that 
impossibility of performance constitutes a defense to a charge of 
contempt,'' has recognized that the Court has an obligation to 
``consider carefully a claim by the alleged contemnor that compliance 
was impossible. * * * Although both the fact and duration of 
noncompliance with [an] order are elements to be considered, the court 
must consider as well [a party's] inability, without fault on its part, 
to render obedience.'' Tinsley v. Mitchell, 804 F.2d 1254 (D.C. Cir. 
1986) (quoting SEC v. Ormant Drug & Chemical Co., 739 F.2d 654, 656-57 
(D.C. Cir. 1984)) (remanding to District Court to adjudicate 
contemnor's claim of inability to pay fines).
    Importantly, the doctrine is fully available to government 
agencies, as the D.C. Circuit affirmed in Evans v. Williams, 206 F.3d 
1292 (D.C. Cir. 2000). There, in a class action challenging conditions 
at a public institution for the mentally retarded, the District of 
Columbia failed to comply with deadlines set in a consent decree, 
citing unanticipated ``financial problems of horrendous proportions.'' 
Id. at 1293. Discussing the district court's refusal to make 
retroactive a modification of the consent decree ameliorating the 
financial penalties for missing deadlines, the Court noted,

We do not of course suggest that a party may be relieved from the 
obligation to comply with an injunction simply by making a motion 
for a modification. But here the District claimed that it could not 
comply, despite making a good faith effort to do so. If true, this 
should have relieved it from liability. See Tinsley v. Mitchell, 804 
F.2d 1254, 1256 (D.C. Cir. 1986) (``If a party lacks the financial 
ability to comply with an order, the court cannot hold him in 
contempt for failing to obey.'')

Id. at 1299. Finding that the district court based its order on 
irrelevant information regarding the District's financial 
circumstances, the Court reversed and remanded for further proceedings. 
Id.
    The Courts have also recognized that a party may avoid compliance 
with a court order by showing that it made a good-faith effort to 
comply but fell short, and that under these circumstances, the party is 
not required to demonstrate that compliance is absolutely impossible. 
In Washington Metropolitan Transit Authority v. Amalgamated Transit 
Union, 531 F.2d 617 (D.C. Cir. 1976), the D.C. Circuit vacated a final 
contempt judgment and

[[Page 55315]]

fine against a labor union for continuing to strike in contravention of 
a restraining order; among other procedural failings, the district 
court made no findings of fact on the union's defenses of substantial 
compliance and inability to comply. Id. at 619-20. In directing the 
district court to provide adequate due process on remand, the court 
emphasized, ``[e]valuation of good faith efforts to comply, once 
raised, is necessary to determine the possibility of compliance. In our 
view good faith should also be considered in mitigation of penalty.'' 
Id. at 621 (citation omitted).
    This aspect of the doctrine is also fully applicable to agencies. 
In Chairs v. Burgess, 143 F.3d 1432 (11th Cir. 1998), the Eleventh 
Circuit emphasized that good-faith compliance efforts by a State agency 
could support a claim for relief based on impossibility. There, the 
State of Alabama was required under a consent decree to remove State 
prisoners from a county jail within a certain timeframe. Id. at 1434. 
The county sought a court order to enforce the decree and requested 
that the Court hold the State in contempt. Id. In light of the fact 
that the State was then subject to 79 identical court orders, the Court 
accepted the State's defense of present inability to comply due to 
``entirely inadequate'' resources in the State prison system. Id. at 
1437. The Court vacated the district court's order, declaring: `` 
`Inability,' as a defense to contempt, does not mean that compliance 
must be totally impossible. Instead, the inability that will absolve a 
party from being held in contempt requires only that the noncomplying 
party has made `in good faith all reasonable efforts to comply' with 
the terms of a court order.'' Id. (citations omitted).
3. Step-by-Step Process for Implementing the Administrative Necessity 
Doctrine
    We believe that the administrative necessity case law establishes a 
three-step process under which an administrative agency may, under the 
appropriate circumstances, in effect revise statutory requirements that 
the agency demonstrates are impossible to administer so that they are 
administrable. This section of the preamble describes the requirements 
for each step, along with a brief application of each step to PSD 
permitting thresholds and significance levels as well as title V 
permitting thresholds.
    In brief, the three steps are as follows: When an agency has 
identified what it believes may be insurmountable burdens in 
administering a statutory requirement, the first step the agency must 
take is to evaluate how it could streamline administration as much as 
possible, while remaining within the confines of the statutory 
requirements. The second step is that the agency must determine whether 
it can justifiably conclude that even after whatever streamlining of 
administration of statutory requirements (consistent with those 
statutory requirements) it conducts, the remaining administrative tasks 
are impossible for the agency because they are beyond its resources, 
e.g., beyond the capacities of its personnel and funding. If the agency 
concludes with justification that it would be impossible to administer 
the statutory requirements, as streamlined, then the agency may take 
the third step, which is to phase in or otherwise adjust the 
requirements so that they are administrable. However, the agency must 
do so in a manner that is as refined as possible so that the agency may 
continue to implement as fully as possible Congressional intent.
    Step 1: Reduce administrative burdens by streamlining 
administration as much as legally permissible. When an agency has 
identified what it believes may be insurmountable burdens in 
administering a statutory requirement, the agency must first evaluate 
how it could streamline administration as much as possible, while 
remaining within the confines of the statutory requirements. Sierra 
Club, 719 F.2d at 463 (even if EPA's claims that its method for 
enforcement ``is in fact impossible, there nevertheless may be less 
taxing ways to enforce the law''); Alabama Power, 636 F.2d at 358 
(``Courts frequently uphold streamlined agency approaches or procedures 
where the conventional course, typically case-by-case determinations, 
would, as a practical matter, prevent the agency from carrying out the 
mission assigned to it by Congress'').
    As discussed in detail below, EPA believes that it may have several 
potentially useful tools available in the streamlining toolbox for the 
PSD permitting threshold level, the PSD significance level, and the 
title V permitting threshold. For the PSD permitting threshold level 
and significance level, there are at least three such tools: The first 
is interpreting the definition of ``potential to emit'' so that the 
amount of a source's emissions that counts in determining whether it 
qualifies as a major source and therefore is above the permitting 
threshold requirements is closer to the amount of its emissions when it 
is in actual operation, rather than the amount of emissions that the 
source would emit if it were operating continuously. Narrowing the 
definition of PTE is a potentially extremely important tool in this 
context because identifying the amount of a source's emissions as 
closer to its actual emissions in this manner would mean that very 
large numbers of residential and commercial sources would have 
significantly lower emissions and would fall below the statutory 
threshold requirements for triggering PSD. Second, EPA believes it may 
be able to develop programs involving general permits, under which 
large numbers of similarly situated sources would each be covered by 
essentially the same permit established through a regulatory action by 
the permitting authority. This approach could achieve economies of 
scale and thereby reduce administrative burden. Third, EPA believes it 
may be able to streamline the single most time-consuming element of the 
PSD permit program, which is the determination of BACT as required 
under CAA Sec.  165(a)(4), by establishing presumptive BACT levels for 
certain source categories that comprise large numbers of sources. As 
for title V, as discussed below in detail, EPA believes that defining 
``potential to emit'' to reflect more closely a source's actual 
operation and developing a program of general permits could streamline 
the administration of title V permits.
    As also discussed below, these streamlining efforts cannot be 
implemented as soon as PSD and title V are triggered, or even shortly 
thereafter. However, EPA intends to develop these streamlining methods 
as vigorously and as quickly as possible and phase them into the 
program. These streamlining methods were described in the ANPR and EPA 
received comment on them, and EPA is continuing to develop the methods 
and to solicit further comment with this action.
    Step 2: Determine that the task that remains is impossible to 
administer. The agency must determine whether it can justifiably 
conclude that even after whatever streamlining of administration of 
statutory requirements the agency is able to effectuate, the agency's 
remaining administrative tasks are impossible for the agency because 
they are beyond its resources. To make this determination, the agency 
must consider: (1) When it can complete streamlining administration of 
the statutory requirements and how well it can administer those 
requirements in the meantime; and (2) what administrative tasks would 
remain after it achieves streamlining and how well it can handle those 
tasks. To make this latter determination, the agency must compare its 
resources to the tasks at

[[Page 55316]]

hand. The agency must then determine whether it can administer the 
statutory requirements as mandated by Congress, or whether it may 
justifiably conclude that those requirements remain impossible to 
administer.
    As discussed below, PSD and title V requirements will become 
applicable to very large numbers of sources immediately following a 
final rule regulating GHG emissions. EPA expects to complete such a 
rule, establishing emissions limits for motor vehicles, by the end of 
March 2010.
    As discussed below, although EPA intends to aggressively develop 
streamlining methods to the extent feasible, EPA simply does not have 
time to do so prior to the date that we expect PSD and title V to 
become applicable. As a result, EPA and the States will have to 
implement PSD for those sources as soon as PSD is triggered. 
Preliminary information that we have obtained concerning State 
permitting authority resources, and data we collected concerning the 
numbers of sources that emit GHGs (using both a CO2 and 
CO2e basis) at the 100- and 250-tpy levels, make clear that 
as of the date that PSD and title V applicability is triggered, the 
number of sources needing permits would overwhelm permitting 
authorities and thereby effectively paralyze the permitting.
    Specifically, the total number of PSD permits that are issued in 
the U.S. is approximately 280 per year. A permitting authority's action 
on each PSD permit is resource-intensive because for each permit, the 
authority must apply source-specific BACT, apply other source-specific 
requirements, and allow public comment. However, EPA estimates that 
when the PSD requirements are triggered for sources of GHGs, more than 
40,000 PSD permits both from newly constructed facilities that emit at 
greater than 250 tpy (using either a CO2 or CO2e 
metric) and from modifications at existing major sources will be 
required. Under the PSD program as presently constituted, permitting 
authorities' actions on each of these permits will be resource-
intensive, as described above.
    This volume of permitting represents more than a 140-fold increase 
from the current volume--again, approximately 280 permits per year--of 
major PSD permits that are processed by permitting authorities 
nationwide. We estimate that this increase in volume of PSD permits 
would require an annual increase in labor hours of almost 44 times the 
current labor allocation for PSD programs. This increase in workload 
would overwhelm the permitting authorities' resources and paralyze the 
permit issuance process.
    The problem for title V purposes is comparable. Specifically, the 
total number of existing title V permits in the U.S. is approximately 
14,700. However, EPA estimates that when the title V requirements are 
triggered for sources of GHGs, approximately 6.1 million sources that 
emit at least 100 tpy (using either a CO2 or CO2e 
metric) will be required to obtain a title V permit. These sources will 
be required to submit a permit application within 1 year, and the 
permitting authorities will be required to act on those applications, 
including allowing an opportunity for a public hearing.
    We estimate that this additional volume of permitting would require 
an annual increase in labor hours of almost 250 times the current labor 
allocation for title V programs. Like the increase in PSD workload, 
this increase in title V workload, combined with the source-by-source 
nature of the permitting process and the requirements for public input, 
would overwhelm the permitting authorities' resources and paralyze the 
permit issuance process.
    For both PSD and title V permits, permitting authorities would be 
required to hire and train staff in numbers that are multiples of their 
current staff, a task that cannot be accomplished--or, indeed, can 
barely be begun--by the time PSD and title V requirements become 
applicable to GHG emitters.
    Step 3: Implement a scheme that is administrable, but in doing so, 
depart from the statute as little as possible.
    If the EPA concludes with justification that it would be impossible 
to administer the statutory requirements, as streamlined, then the 
agency may phase in or otherwise adjust the requirements so that they 
are administrable. However, the agency must do so in a manner that is 
as refined as possible so that the agency may continue to implement as 
fully as possible congressional intent.
    In this tailoring rulemaking, EPA is proposing, as the first phase, 
to establish a temporary ``major stationary source'' threshold for PSD 
purposes, a temporary ``significance level'' threshold for PSD 
purposes, and a temporary ``major source'' threshold for title V 
purposes, for sources that emit GHGs, to levels that capture a 
significant share of GHG emissions while rendering both permitting 
programs administratively feasible. The specific options proposed for 
temporary thresholds and the rationale for their selection are 
described below.
    Moreover, and as explained in detail below, EPA intends to proceed 
aggressively to develop streamlining methods, and it is possible that 
permitting authorities will be able to augment their permitting 
resources. Even so, available information does not confirm that EPA and 
the permitting authorities will be able to rely on these steps within 6 
years after PSD and title V requirements become applicable to GHG 
emissions. Accordingly, it is necessary to maintain the major 
stationary source threshold and significance level proposed and also 
necessary to reassess the administrative situation and conduct further 
rulemaking to address it within 6 years.
5. Consistency With Case Law
    EPA's proposed application of the administrative necessity doctrine 
to phase in the major source permitting thresholds for PSD and title V 
purposes, and to establish the significance level for PSD purposes, is 
consistent with the case law.
    It is clear under the D.C. Circuit case law that the administrative 
necessity doctrine is available under certain circumstances, to 
authorize an agency to ``depart from the requirements of a regulatory 
statute.'' EDF v. EPA, 636 F.2d at 1283 (citing Alabama Power). Thus, 
it is clear that the doctrine may be applied--under the appropriate 
circumstances--to authorize EPA to phase in the major source thresholds 
for PSD and title V permitting as well as to establish a PSD 
significance level. Indeed, the D.C. Circuit established the 
administrative necessity doctrine, in Alabama Power, in the context of 
efforts by EPA to establish thresholds for PSD permitting of new and 
existing sources. Alabama Power, 636 F.2d at 357, 400.
    The D.C. Circuit has emphasized, however, that the agencies have a 
high threshold to justify the use of the doctrine, EDF v. EPA, 636 F.2d 
at 1283, and the Court did not uphold the attempts by the agencies in 
those cases to invoke the doctrine. EDF v. EPA, 636 F.2d at 1283; 
Sierra Club v. EPA, 719 F.2d at 463; Public Citizen v. FTC, 869 F.2d at 
1556.
    We believe that the facts here are much more supportive of an 
administrative necessity application than in those cases. EPA's 
application of the administrative necessity doctrine hews closely to 
the three-step process that we read the case law to establish.
    Step 1: Reduce administrative burdens by streamlining 
administration as much as legally permissible. In some of the case law 
described above, the D.C. Circuit emphasized that the agencies had 
failed to consider means of solving

[[Page 55317]]

their alleged administrative problems in ways consistent with the 
statutory requirements. In Sierra Club v. EPA, the Court invalidated 
EPA's effort to narrow the definition of ``dispersion techniques'' to 
only certain types of equipment and thereby exempt from the definition 
certain categories of methods that were intended to disperse emissions. 
The Court based its holding in part on the grounds that EPA had failed 
to explore available, ``less taxing'' regulatory alternatives that 
would reduce the administrative burden of determining the purpose of 
changes in stack or plume parameters. Sierra Club v. EPA, 719 F.2d at 
463-64. The Court offered examples of possible streamlining measures, 
such as quantifying the amount of plume rise that could be presumed to 
have an engineering rationale, or selectively exempting classes of 
improvements that have a trivial impact on the goals of the CAA or for 
which use as a dispersion technique was only theoretically possible. 
Id. at 464. Stating that ``[w]e see no evidence that EPA has adequately 
explored these regulatory alternatives,'' the Court overturned EPA's 
effective categorical exemption. Id.
    The Court used similar reasoning in EDF v. EPA, where the Court 
found that EPA's proposed 50-ppm cutoff for regulating PCBs was not 
administratively necessary. EDF v. EPA, 636 F.2d at 155. There, 
although basing its dismissal of the claim primarily on EPA's failure 
to make a prima facie showing of impossibility, the Court emphasized 
that statutorily authorized alternatives were available to EPA. See id. 
at 154-156. ``While some cutoff may be appropriate,'' the Court noted, 
``the Administrator did not explain why the regulation could not be 
designed expressly to exclude ambient sources, thus directly fulfilling 
congressional intent, rather than achieve that goal indirectly with a 
cutoff, thereby partly contravening congressional intent.'' Id. at 154.
    Here, in contrast, EPA has begun the process of narrowing the 
administrative burden through means consistent with the statutory 
requirements by evaluating what streamlining approaches would be 
feasible but, as discussed below, this process is complex and EPA 
cannot complete it for several years. EPA is soliciting comment on 
those methods and any others that may occur to stakeholders or the 
public. In NRDC v. Train, the Court indicated that an agency's 
diligent, good-faith efforts to discharge its statutory 
responsibilities will factor in favor of the Court's resolution of an 
impossibility claim. NRDC v. Train, 510 F.2d at 333.
    Step 2: Determine that the task that remains is impossible to 
administer. In Alabama Power, the D.C. Circuit described the 
administrative necessity doctrine as rooted in agency workload and 
resources: Specifically, the Court stated that the administrative 
impossibility doctrine would apply based on the ``administrative need 
to adjust to available resources * * * where the constraint was imposed 
* * * by a shortage of funds * * *, by a shortage of time, or of the 
technical personnel needed to administer a program.'' 636 F.2d at 358. 
The Court added that another administrative constraint could be ``the 
degree of administrative burden posed by enforcement.'' Id. at 405. 
However, the Court cautioned that ``the agency [bears] a heavy burden 
to demonstrate the existence of an impossibility.'' Id. at 359.
    In several of the cases described above, the D.C. Circuit 
emphasized that the agencies had failed to meet their heavy burdens of 
establishing administrative impossibility. In NRDC v. Train, EPA 
neglected to specify the resource or methodological constraints that 
prevented the agency from meeting a mandatory deadline for promulgating 
effluent limitation guidelines. NRDC v. Train, 510 F.2d at 712-13. 
Although the Court inferred from the imminent deadline that the Agency 
would likely experience a burden on its resources in promulgating the 
guidelines for most source categories, the Court was reluctant to grant 
EPA an extension in response to a merely conclusory statement that 
compliance with the deadline would be impossible. Id. at 713.
    A few years later, in EDF v. EPA, the Court based its dismissal of 
EPA's administrative necessity claim on the fact that the Agency did 
not provide sufficient data to support the claim that administering the 
statute as written was impossible. In that case, EPA failed to provide 
information relating to the amount of PCBs that would be left 
unregulated by its use of a 50-ppm cutoff, where the statute required 
``any'' PCB to be prohibited. EDF v. EPA, 636 F.2d at 155. As a result, 
EPA could not show that carrying out the statutory requirements for 
concentrations of PCBs below 50 ppm would be administratively 
impossible. Id. ``Thus,'' the Court found, ``administrative need, on 
this record, provides no basis for the fifty ppm cutoff.'' Id. 
Furthermore, the Court noted in a footnote that EPA's claim that the 
burden to industry justified a categorical exemption was undermined by 
EPA's lack of ``firm data'' on the extent of the burden. Id. at 155, 
fn. 43.
    Likewise, in Sierra Club v. EPA, EPA alleged only that it would be 
``difficult'' to administer a proposed subjective intent test that 
would examine whether dispersion techniques were used for the 
prohibited purpose of achieving compliance with emissions limitations. 
Without more, the Court determined, EPA's showing fell ``far short'' of 
meeting the heavy burden of demonstrating the existence of an 
impossibility. Sierra Club v. EPA, 719 F.2d at 461-62.\22\
---------------------------------------------------------------------------

    \22\ In Public Citizen v. FTC, the D.C. Circuit dismissed FTC's 
claims of administrative necessity where the agency's rationale for 
its categorical exemption appeared to rely on an impermissible 
weighing of the relative costs and benefits of compliance, rather 
than on the impossibility of compliance. Public Citizen, 869 F.2d at 
1556.
---------------------------------------------------------------------------

    Thus, in the cases concerning administrative necessity, the 
agencies generally did not attempt to quantify the administrative 
workload and resource constraints that they thought merited departure 
from the statutory requirements and instead limited themselves to 
generally conclusory assertions. In NRDC v. Train, the Court recognized 
that EPA could cure its insufficient record and demonstrate the 
administrative impossibility of complying with the deadline once it 
specified the actual burden on its resources. NRDC v. Train, 510 F.2d 
at 713. In the event that EPA could demonstrate that ``manpower or 
methodological constraints'' threatened to delay the promulgation of 
guidelines for particular categories of sources, the Court held open 
the possibility of an exemption from the deadline. Id. at 714.
    Here, in sharp contrast to that case law, EPA has developed 
specific factual evidence concerning the administrative difficulties of 
implementing PSD and title V at the statutory threshold levels. 
Moreover, those constraints are compelling; it is clear from just the 
evidence collected so far that at the time that EPA expects to trigger 
application of the PSD and title V programs to sources that emit GHGs--
which, if based on a possible mobile source final rulemaking, would be 
near the end of March 2010--it will be flatly impossible for permitting 
authorities to administer the PSD and title V programs at the statutory 
threshold levels. The massive number of permits would overwhelm the 
limited resources available to the permitting authorities. EPA expects 
to collect as much specific information concerning administrability as 
possible through the comment period.

[[Page 55318]]

    The administrative burdens that EPA confronts in administering the 
PSD and title V thresholds have no precedent in the case law. The 
closest situation appears to be Alabama Power, where the Court rejected 
EPA's interpretation of ``potential to emit'' as a matter of legal 
interpretation, and not on administrative necessity grounds, but where 
the Court noted that EPA's interpretation would have brought 
approximately 2,400 additional facilities into the PSD program, which 
entailed the case-by-case review and BACT determination for each permit 
application. Alabama Power, 636 F.2d at 356. Even so, the PSD and title 
V program burdens anticipated for GHG emitters at the statutory 
thresholds are exponentially greater than the burdens alleged in 
Alabama Power. The projected resource burden for administering the PSD 
program alone will be greater than 10-fold the burden alleged in 
Alabama Power: Each year, regulating GHGs under the CAA is estimated to 
trigger PSD requirements for approximately 41,000 sources that emit at 
levels greater than the 100/250-tpy threshold when they engage in new 
construction or significant modifications. As for title V, in total, 
some six million permits would be required, which would entail an 
enormous expenditure of administrative resources, as described 
elsewhere.
    It should be acknowledged that the D.C. Circuit has stated that the 
administrative necessity doctrine is particularly difficult to assert 
when the agency had not yet tried to enforce the statutory 
requirements. Sierra Club v. EPA, 719 F.2d at 463. Although the Court 
did not spell out its reasoning for this distinction, a logical reason 
would be that actual efforts to implement the statutory provision would 
more clearly establish the extent of the administrative problems than 
would advance predictions. Even so, the Court left the door open to 
approving claims of administrative necessity in advance of actual 
implementation efforts. Here, EPA does not propose to attempt to 
administer the statutory thresholds once PSD and title V requirements 
are triggered for GHG emitters, but the impact of the statutory 
thresholds on permitting authority caseloads and resources are so 
massive as to be predictable with a sufficient degree of accuracy to 
support a claim of administrative necessity. EPA has gathered a 
substantial amount of evidence concerning those impacts and intends to 
gather more through the comment period on this notice. Under these 
circumstances, it is not necessary to await actual implementation. 
Attempting to do so--that is, allowing the statutory thresholds to 
apply, assessing the extent of the administrative problem, and then 
conducting rulemaking to raise the thresholds--would leave the PSD and 
title permitting process in disarray for years.
    Step 3: Phase-in the statutory requirements to be administrable, 
but in doing so, depart from the statute as little as possible. In 
Alabama Power, the D.C. Circuit listed the types of departures from the 
statute that it would sanction, under the appropriate circumstances, on 
grounds of administrative necessity. One is ``[c]ategorical exemptions 
from the clear commands of a regulatory statute,'' which the Court 
stated are ``sometimes permitted,'' but ``are not favored.'' A second 
is an ``administrative approach,'' such as ``streamlined agency * * * 
procedures'' in lieu of, for example, case-by-case determinations, and 
a third is a delay of deadlines. 636 F.2d at 358.
    Here, turning first to PSD, EPA is proposing to phase in the 
threshold for PSD permitting, which would have the effect of allowing 
sources that are above the statutory threshold of 100/250 tpy but below 
the regulatory threshold of 25,000 tpy CO2e to build new 
facilities or modify existing ones without being subject to PSD. Thus, 
this proposal is a type of exemption.
    Although the Court has said that ``categorical exemptions'' are 
``not favored,'' the Court has indicated that they are ``sometimes 
permitted,'' and the exemption at issue here is one that should be 
permitted. For one thing, it is time limited. In addition, during phase 
one of the phase-in period, establishing the thresholds at 25,000 tpy 
CO2e and [10,000 to 25,000] tpy CO2e, and thereby 
exempting sources from PSD applicability at the time that they 
construct or modify, is the only way to address the administrative 
burdens that would otherwise result at the time that PSD is triggered. 
At that time, EPA will not have been able to develop any streamlining 
methods, which is the second type of relief that the D.C. Circuit 
identified in Alabama Power. Even so, this proposal is that, as quickly 
as possible, during the next 6 years, EPA will implement as extensive a 
streamlining of PSD requirements as possible (consistent with statutory 
requirements) and then will reassess the administrative burdens and 
conduct additional rulemaking concerning the thresholds and 
streamlining techniques. This approach has the potential to limit the 
extent of the exemption. It should be noted that a deferral of the 
permitting obligation, which is the third type of relief that the D.C. 
Circuit identified, would not be useful. For PSD purposes, because 
sources cannot construct or modify without first obtaining a permit, a 
deferral would prevent construction and modification activities. In 
addition, a deferral would simply create a backlog that would quickly 
become unmanageable at any foreseeable point in the future and would 
create unacceptable uncertainty for the regulated community. In 
particular, because sources cannot construct or modify without first 
obtaining a permit, the backlog would prevent construction and 
modification activities.
    As discussed elsewhere, for PSD purposes, the 25,000-tpy and 
[10,000 to 25,000] tpy CO2e levels proposed for the major 
source permitting threshold and significance level, respectively, are 
the lowest levels that we believe permitting authorities will be able 
to administer for the upcoming 6-year period. By the end of the first 5 
years, EPA will conduct a study and, within the following year, will 
conduct another rulemaking to revisit and possibly revise those 
thresholds, depending on the Agency's findings of the maximum extent to 
which permitting authorities can administer the statutory program. In 
this manner, the levels proposed are the least possible departure from 
the statutory requirements.
    For the title V purposes, the first phase threshold level of 25,000 
tpy CO2e must also be considered to be the narrowest 
possible departure from the statutory requirements because it is the 
lowest amount that is administrable and because there are no other 
choices. There is not enough time for EPA to develop streamlining 
measures or for the States to ramp up resources. Although sources have 
1 year to submit permit applications, and, once they submit them, they 
receive the protections of the permit shield, failure to phase in the 
threshold level would leave permitting authorities confronting an 
influx of millions of permit applications that would begin within a 
year. Little can be done during that year to meaningfully streamline 
the program.
    In addition, for title V purposes, the first-phase threshold must 
be considered a deferral of, and not an exemption from, permitting 
obligations because existing sources must apply periodically for a 
title V permit. That is, if, during the second-phase rulemaking, EPA 
lowers the threshold, sources that are able to avoid title V permitting 
obligations under the first phase may be required to obtain a title V 
permit.

[[Page 55319]]

C. Step-by-Step Process

    In addition to the ``absurd results'' and ``administrative 
necessity'' case law, a separate line of cases may be relevant for this 
action: Cases that have held that agencies may approach problems one 
step at a time. In these cases, the Courts have dismissed challenges to 
agency actions that implement part of, but not the entirety of, a 
statutory mandate, on grounds that agencies may proceed in an 
incremental fashion. In these cases, the Courts emphasized that the 
agency's partial action was a step in an overall path toward achieving 
full implementation of the statutory mandate. We solicit comment on 
whether this caselaw is supportive of our action in this notice.
    In Massachusetts v. EPA, 549 US 497, 524 (2007), the U.S. Supreme 
Court, in holding that EPA has authority under the Clean Air Act to 
regulate GHG emissions, noted that ``[a]gencies, like legislatures, do 
not generally resolve massive problems in one fell regulatory swoop.'' 
Instead, they may permissibly implement such regulatory programs over 
time, ``refining their preferred approach as circumstances change and 
as they develop a more nuanced understanding of how best to proceed.''
    The D.C. Circuit, in Grand Canyon Air Tour Coalition v. FAA, 154 
F.3d 455, 477-78 (DC Cir 1998), considered a challenge to the Federal 
Aviation Administration's (``FAA'') final rule for reduction of 
aircraft noise from sightseeing tours in Grand Canyon National Park. 
There, the 1987 Overflights Act required the FAA to develop a plan 
within 120 days for limiting aircraft overflights in order to achieve 
substantial restoration of natural quiet. The Overflights Act further 
required that the FAA implement the plan by regulation; and then, 
within 2 years after the date of the plan, submit to Congress a report 
discussing whether the plan had met the statutory goals or whether 
revisions to the plan were needed. The FAA did issue a final rule--the 
one that was challenged--but did not do so until 10 years after 
enactment, and that rule required only partial action for limiting 
overflights. At the same time that it issued the rule, the FAA proposed 
two additional rules, and stated that the set of three rules together 
would achieve substantial restoration of natural quiet in another 10 
years. The Court upheld the final rule and declined to compel the FAA 
to take additional action on a faster time frame. The Court explained:

    We agree that it would be arbitrary and capricious for an agency 
simply to thumb its nose at Congress and say--without any 
explanation--that it simply does not intend to achieve a 
congressional goal on any timetable at all. * * * But the FAA has 
not taken that course here. It has never defended the Final Rule as 
the sole means for restoring the natural quiet, but only as the 
first of three steps. Its contemplation was that the three rules 
together would achieve that goal [within 10 additional years].

Id.
    Similarly, in City of Las Vegas v. Nevada Dev. Comm'n, 891 F.2d 
927, 935 (DC Cir 1989), the Court upheld the Department of Interior's 
emergency regulation listing as endangered species the tortoise 
population in the Nevada portion of the Mojave Desert, even though the 
regulation excluded the population in the Sonoran portion. The Court 
found that ``agencies have great discretion to treat a problem 
partially,'' and held that it would not strike down agency action ``if 
it were a first step toward a complete solution.''
    In these cases, the agencies were required to implement a statutory 
directive through rulemaking. The D.C. Circuit upheld partial action by 
the agencies when the Court considered it to be an initial step towards 
meeting the directive. This action is set in a somewhat different 
context. The statutory provisions at issue here--the PSD and Title V 
applicability thresholds --provide that when GHG requirements are 
triggered, GHG emitters must obtain permits. When the triggering event 
occurs, the agency need take no further action before regulatory 
consequences ensue; sources included within the PSD and Title V 
programs must obtain permits once these statutory provisions are 
triggered. However, as we have described, if sources are required to 
apply for permits in accordance with the literal requirements of the 
statute, the permitting authorities would not have the resources to 
process those permits, and severe adverse results would occur. This 
action would ameliorate that situation by establishing a process for 
compliance with the statutory requirements. As discussed elsewhere, 
this process consists of a first phase that entails establishing the 
applicability thresholds at the specified levels, developing 
methodologies for general permits and other streamlining approaches, 
collecting data, preparing an assessment, and then promulgating 
rulemaking for further action. This process would allow us to craft the 
application of PSD and title V in ways that are achievable and 
effectively balance the regulatory burdens with the reductions 
achievable. In this sense, this action bears similarity to the agency 
actions upheld by the D.C. Circuit as partial steps.
    We solicit comment on whether this line of cases is relevant for 
our action in this notice.
    In particular, we solicit comment on whether an approach that 
includes step-downs in the applicability thresholds, coupled with 
regular examination of whether the administrative situation is 
improving, is an appropriate way to achieve compliance while taking 
into account the administrative imperatives. If so, we ask for 
suggestions on how we could structure such an approach (e.g., when 
future phases should begin, how we should determine the appropriate 
thresholds for each phase, etc.) In addition, we solicit comment on the 
level of detail with which we would be required to identify our path 
towards facilitating full administration of the PSD and title V 
applicability requirements in order for the Court to uphold our initial 
steps under this case law. We also solicit comment on whether this 
proposal establishes such a path with sufficient detail and, if not, 
what further actions we should include in the final rulemaking or 
commit to undertake in subsequent rulemaking.

D. What were the ANPR comments received on GHG tailoring options for 
regulating GHG emissions under PSD and title V?

    Responses to the ANPR give us some perspective of the initial views 
of some of the permitting authorities, sources, and the public on 
permit GHG tailoring options. Many of the ANPR commenters, including 
representatives from States, environmental groups and industry, 
recommended that EPA limit permitting, at least initially, to higher-
emitting sources. While there were few recommendations on specific 
permitting levels, suggestions ranged from 10,000 to 100,000 tons per 
year CO2. A number of environmental groups stated that if 
the rationale for treating smaller sources differently relies on 
principles of administrative necessity, the cutoff point should relate 
to what is administratively feasible while maximizing the objectives of 
the CAA.
    Most industry stakeholders, representing a broad profile of 
affected sources, stated that title V and PSD applicability for sources 
of GHG emissions at current permitting thresholds would be economically 
disastrous and would create regulatory gridlock. Alternatively, some 
environmental groups opposed any temporary permitting thresholds, 
stating that EPA does not have legal authority to change thresholds to 
limit applicability.
    Some States and environmental groups recommended streamlining

[[Page 55320]]

through the use of general permits and presumptive BACT. This option 
was supported mostly by States, but one industry commenter also agreed 
that it was an alternative worth pursuing if EPA insisted on regulating 
GHG emissions under the current CAA. Some States noted that they have a 
successful history of using general permits and believe the use of 
general permits as well as presumptive BACT could be part of an 
effective and reasonable approach to reduce regulatory costs and 
administrative burdens. Other industry groups said that presumptive 
BACT and general permits are unaffordable and require too much 
negotiation, and EPA lacks authorization to use them.
    States and industry commenters acknowledged that it would take a 
significant amount of time to define presumptive BACT or general 
permits for different categories, although some States said that, over 
time, they have developed similar approaches to permitting with success 
for non-GHG gases for certain source categories. Industry commenters 
argued that the case-by-case review of permit applications that the NSR 
program requires is the epicenter of NSR, and that a one-size-fits-all 
approach will not mesh with the diversity of different manufacturing 
industries of all sizes. Furthermore, even with the use of these 
streamlining approaches, industry claims that there will still be tens 
of thousands of previously unregulated sources who would need to 
undergo PSD permitting. To review comments received on the ``Regulating 
Greenhouse Gas Emissions Under the Clean Air Act'' ANPR (73 FR 44354, 
July 30, 2008), see Docket ID No. EPA-HQ-OAR-2008-0318.

VII. Streamlining Options and Tools To Address the Administrative 
Burdens of PSD and Title V for GHGs

    As noted in earlier sections of this preamble, we believe that the 
application of PSD and title V requirements to sources of GHG emissions 
at current statutory thresholds would be administratively impossible at 
the time that we expect PSD and title V requirements to be triggered 
for those sources, which we expect to be the end of March 2010. These 
requirements would also impose undue burdens on the sources. However, 
we recognize that there are several streamlining techniques with the 
potential to reduce over time the burdens on sources and the 
administrative burdens of the PSD and title V requirements. We have 
initially assessed the general availability and usefulness of the 
streamlining techniques that are consistent with the statutory 
requirements to address, manage and reduce the administrative burden on 
permitting authorities. In addition, if we are compelled to promulgate 
regulatory requirements that depart from the statutory requirements, we 
recognize that we must do so to the smallest extent possible and must 
remain as close as possible to congressional intent. Other of these 
streamlining techniques may depart from the statutory requirements, but 
they may be preferable to the extent that the departure is to a smaller 
degree than raising the applicability thresholds.
    However, as we will discuss below, we do not believe that we can 
develop and implement any of these streamlining techniques in the near 
term in the manner necessary to make the programs administrable at the 
statutory PSD and title V permitting thresholds. Accordingly, at this 
time, we cannot rely on these techniques in lieu of phasing in the 
applicability thresholds in the manner that we propose. However, we 
believe that these streamlining techniques should be an integral part 
of a strategy during the first phase of the phase-in period--which 
includes evaluating the threshold we propose to establish--to address 
and reduce the burden on permitting authorities. Thus, during the first 
phase, we plan to aggressively pursue further development of these 
techniques, and we plan to implement as many of them for as many source 
categories as possible and to do so as soon as possible. The 
reassessment and additional rulemaking that we propose to undertake at 
the end of the first phase will take into account the extent to which 
these streamlining techniques, as well as the permitting authorities' 
ability to enhance their resources, promote administrability. Moreover, 
for smaller sources for which PSD and title V requirements would not 
apply due to the increase in the major source applicability thresholds, 
EPA will also assess and identify cost-effective opportunities 
available in this notice to achieve GHG reductions through means other 
than PSD (e.g., energy efficiency and other appropriate measures).
    In section VII.A of this preamble, we discuss streamlining 
techniques that either have been used or could potentially be used in 
the PSD and title V programs. Some techniques may have applications to 
both programs (e.g., general permits), while some are applicable to 
only one program (e.g., presumptive BACT for PSD). In sections VII.B 
and VII.C of this preamble, we describe the implementation of these 
techniques as they relate both to permitting GHG emitters under current 
PSD and title V permitting thresholds and to a broader GHG tailoring 
strategy that involves the applicability thresholds proposed with this 
action.
    We solicit comment on the permit streamlining approaches discussed 
in section VII.A of this preamble and also request information and 
comment on any other tools or options that could address or reduce the 
administrative burden of implementing PSD and title V for major GHG 
sources and reduce the burdens on the sources.

A. Permit Streamlining Techniques for PSD and Title V

    We believe that a strategy to address the administrative burden 
associated with implementing the PSD and title V programs for sources 
of GHGs could include one or more of the following permit streamlining 
techniques or processes.
1. Redefining ``Potential to Emit''
    Both PSD and title V requirements apply to ``major'' sources, and 
``major'' sources are defined as sources that emit, on a PTE basis, 
100/250 tpy for PSD purposes and, in general, 100 tpy for title V 
purposes. PTE is basically defined as the maximum capacity of a source 
to emit any air pollutant under its physical and operational design, 
including legal limitations, if any, on, for example, emissions or 
hours of operation. Many source categories have no legal limits on 
their hours of operation and, as a result, are treated as if operating 
24 hours per day, seven days per week--which totals 8,760 hours per 
year--and emitting during that entire time. As a result, basing the 
applicability thresholds on PTE, rather than on actual emissions, has 
the effect of sweeping enormous numbers of additional sources into the 
PSD and title V programs. For example, sources that do not in fact 
operate for part of the year, but that have no legal limitation on 
their operating hours, must calculate their PTE on the basis of the 
amount of emissions that would result if those sources did operate, and 
therefore emit, on a year-round basis.
    However, sources in such situations may take legally and 
practically enforceable limits on their operational parameters, by, for 
example, agreeing to operate during only part of the year or during 
only a limited number of hours per day, or employing control devices. 
These limitations would lower the sources' PTE and thereby allow them 
to avoid classification as ``major.'' PTE limits are already frequently 
used in PSD and title V permitting programs. There, the permitting 
authorities

[[Page 55321]]

typically apply PTE limits as a source-specific limit that is crafted 
in a facility's minor source permit and tailored to the source's 
individual circumstances.
    This approach of reducing PTE to more closely approximate a 
source's actual emissions--and, in the case of smaller sources, thereby 
allowing the PTE to fall below the ``major'' source threshold that 
triggers PSD or title V applicability--offers promise to significantly 
reduce the number of sources subject to PSD and title V, and thereby 
significantly ease administrability of those programs once GHG emitters 
become subject to them.
    This approach may be particularly suitable to sources in certain 
categories of GHG-emitting, combustion-related, small sources that do 
not operate at anywhere close to the 8,760 possible hours over a given 
year that is generally assumed in the PTE calculation. These categories 
may include: Furnaces, which likely only operate during the winter 
season and parts of spring and fall; water heaters, which only combust 
fuel at periodic intervals necessary to maintain water temperature; and 
small stationary engines, which may operate only for limited and 
defined periods of time for certain businesses.
    The permitting authorities typically apply PTE limits as a source-
specific limit that is crafted in a facility's minor source permit and 
tailored to the source's individual circumstances.
    However, creating PTE limits for very large numbers of GHG-emitting 
sources nationwide would require a more efficient approach than 
creating them through individual minor source permits, as permitting 
authorities have done to date. Otherwise, the sheer volume of permits 
and the process involved for each permit would themselves create 
administrative burdens that would be self-defeating. This could 
particularly be the case for the title V program, for which many 
sources may seek PTE limits as soon as the program becomes effective 
for GHG emitters, and as a result, permitting authorities would need to 
deal with a large number of sources at the same time.
    In lieu of individual minor source permitting, we intend to 
evaluate and to consider adopting, or encouraging State permitting 
authorities to adopt, rules for source categories that we expect to 
include large numbers of sources whose actual GHG emissions are well 
below major source thresholds but which, absent such rules, have PTE 
above those thresholds.
    There are several approaches through which EPA could take this 
action or encourage States to undertake similar actions. For certain 
source categories, it may be possible to define the source so that its 
PTE more closely tracks its actual emissions. To return to one of the 
examples provided earlier, it may be possible to define furnaces (which 
have the potential to operate year-round) to include the thermostats to 
which they are attached, which constrain them from operating in warmer 
weather. In this manner, the PTE of the furnace-thermostat source would 
take into account the operational constraints, so that PTE would more 
closely approximate actual emissions. This type of rule would not 
constitute any legal constraint within which the source must comply; 
rather, it would define the source as including specified pieces of 
equipment that, in turn, incorporate operational constraints.
    For other source categories, it is conceivable that the only way to 
limit PTE would be to promulgate regulations that limit a source's 
operation. These regulations are often referred to as ``prohibitory 
rules.'' For example, the permitting agency could promulgate a 
regulation that would preclude certain sources from operating for more 
than a certain number of hours per year, while also providing a 
streamlined method to allow a source to operate for longer hours upon 
request to the permitting agency.
    We have some experience with developing and issuing guidance on PTE 
calculation methodologies through 1990s guidance for States wishing to 
create PTE limits through prohibitory rules or other mechanisms for 
several categories that were subject to seasonal operational shutdowns 
or that did not operate at maximum capacity for each hour of each day, 
so that actual emissions were well below their unadjusted PTE. See the 
memorandum entitled ``Potential to Emit (PTE) Guidance for Specific 
Source Categories,'' from John S. Seitz, Director, OAQPS, OAR, EPA, to 
EPA Regions, April 13, 1998, found at EPA-HQ-OAR-2009-0517. These 
categories included grain elevators, industrial boilers, gas stations, 
emergency generators, printing operations, and cotton gins. The 
guidance document provided assumptions and calculations that States 
could use to develop prohibitory rules or other mechanisms to easily 
limit the PTE of sources in these categories.
    We envision a similar approach to establish PTE calculation methods 
for various categories of sources that emit GHGs. The following steps 
would need to occur for full development and implementation of such a 
program:
    Step 1: EPA identifies source categories that are generally 
conducive to this approach, considering the amount of their GHG 
emissions, complexity of operations, and emissions unit 
characteristics.
    Step 2: EPA collects data from the industry and individual sources 
on typical operations, including emissions unit and process parameters.
    Step 3: Acting through guidance or regulatory changes to the 
Federal PSD regulations, EPA develops PTE calculation methodologies and 
implementation procedures for the appropriate source categories.
    Step 4: EPA solicits comment from permitting authorities and 
affected sources on PTE calculation methodologies and implementation 
procedures.
    Step 5: EPA issues the final regulations or guidance.
    Step 6: Permitting authorities adopt revisions that incorporate 
EPA's regulations or guidance.
    Step 7: Sources comply with any applicable legal limits.
    Based on our efforts in the 1990's, we believe that it would take 
EPA approximately 1 year to issue guidance for a given source category. 
We believe many States would be able to immediately apply this 
guidance. Some States may need to adopt the guidance in their SIP, 
which EPA must then approve, a process that could take approximately 3 
years. Finally, for those rules that would not be self-implementing, 
sources would need time to meet the requirements of the rule. We ask 
for specific comment on stakeholders' experience with limiting PTE by 
rule rather than through individual permits, considerations in phasing 
in this approach to GHG sources, and identification of categories that 
might benefit from the use of rules limiting PTE.
2. Presumptive BACT
    CAA section 165(a)(4) requires that sources subject to PSD 
implement BACT for each pollutant subject to regulation under the Act, 
and CAA section 169(3) requires that BACT emissions limits be 
determined ``on a case-by-case basis'' that reflects the use of state-
of-the-art demonstrated control technology at the time of the permit 
action. Thus, BACT is required to be source-specific, changes over 
time, and requires continual updating. The permitting authority's 
decision as to what control requirements constitute BACT affords 
flexibility to consider a range of case-specific factors, such as 
available control options and collateral cost, energy, and 
environmental impacts.

[[Page 55322]]

However, full consideration of those factors requires significant data 
and analysis in order for permitting authorities to arrive at a case-
by-case permitting decision that is appropriate for each individual 
source when it constructs or modifies. For all these reasons, 
determining BACT for a particular source can often be a complicated, 
resource-intensive, time-consuming, and sometimes contentious process. 
If the number of required PSD permitting decisions increases 
significantly, these challenges will be magnified, and BACT 
determinations will be a major factor contributing to uncertainty and 
delay for sources seeking PSD permits. Furthermore, the increase in 
workload of BACT determinations will require large investments of 
resources by permitting authorities, sources, EPA, and the public 
interested in commenting on these decisions.
    In order to streamline the BACT process for the many new small 
sources that will be brought into the PSD program based on their GHG 
emissions, EPA will investigate ways to move from a system under which 
permitting authorities set BACT limits on an individual, case-by-case 
basis to a system under which they make BACT determinations for common 
types of equipment and sources, and apply those determinations to 
individual permits with little to no additional revision or analysis. 
The EPA has previously introduced this concept, known as ``presumptive 
BACT'', to streamline permitting for desulfurization projects at 
refineries as well as in other instances,\23\ and some State permitting 
authorities have adopted similar approaches.\24\ Based on our 
understanding of the types of sources that will become subject to PSD 
if GHG emissions are regulated at the statutory 100/250-tpy threshold, 
we believe the presumptive BACT process could offer significant 
streamlining benefits. These benefits arise because many of the sources 
that would become subject to BACT will likely have very similar 
emissions producing equipment, and there will be little variation 
across sources with respect to the cost, energy, and environmental 
considerations in the BACT decision.
---------------------------------------------------------------------------

    \23\ See Memorandum, ``BACT and LAER for Emissions of Nitrogen 
Oxides and Volatile Organic Compounds at Tier 2/Gasoline Sulfur 
Refinery Projects,'' from John S. Seitz, Director, Office of Air 
Quality Planning and Standards, to Regional Air Division Directors 
(January 19, 2001).
    \24\ For example, Wyoming has a minor source permitting program 
that includes a BACT analysis, and they use a presumptive BACT 
process for issuing minor source permits to a particular source 
category--oil and gas production facilities. See Permitting Guidance 
for Oil and Gas Production Facilities, Wyoming Dept. of 
Environmental Quality, Air Quality Division (August 2007 revision).
---------------------------------------------------------------------------

    The central component of a presumptive BACT approach would be the 
recurring technical determination, subject to notice and comment, of 
the presumptive BACT levels for various categories. Because of the 
limited data currently available about the number and types of sources 
that would become subject to the BACT requirement for GHGs, we cannot 
at this time predict how many or which categories might benefit from 
such an approach. We recognize that considerable work will be needed to 
determine what options exist for controlling GHG emissions from these 
categories of sources and the various types of emitting equipment they 
use.
    As noted above, the CAA requirement for BACT, found in sections 
165(a)(4) and 169(3), mandate that BACT determinations be made for each 
pollutant on a ``case-by-case basis.'' Accordingly, we need to explore 
whether we can develop a process that benefits from the efficiencies 
that presumptive BACT would provide while also allowing for 
individualization of permits. A possible approach would be to develop, 
through notice-and-comment rulemaking, a presumptive BACT level for 
sources in a particular source category, but require that permitting 
authorities allow public comment on individual permits as to whether 
there are significant case-specific energy, economic, and/or 
environmental impacts that would require adjustment of the presumed 
limit for that particular source. This phase in approach could 
streamline the BACT determination process to some extent, although the 
prospect that presumptive BACT determinations would, as a result of 
public comment, still have to be reviewed for numerous individual 
sources could well negate those streamlining benefits.
    Accordingly, we believe that we also need to investigate a system 
under which presumptive BACT levels for a source category are developed 
through notice-and-comment rulemaking but applied to individual sources 
in that category without requiring permitting authorities to 
individualize the BACT determination or to allow for public comment on 
how presumptive BACT levels would apply to an individual source. The 
D.C. Circuit, in the Alabama Power case discussed above, stated that 
courts ``frequently uphold streamlined agency [regulatory] approaches 
or procedures where the conventional course, typically case-by-case 
determinations, would, as a practical matter, prevent the agency from 
carrying out the mission assigned to it by Congress.'' 636 F.2d at 358. 
The Court recognized that such streamlining measures may be needed when 
time or personnel constraints or other practical considerations ``would 
make it impossible for the agency to carry out its mandate.'' See id. 
at 359. Given the significant increase in new sources that would likely 
be brought into the PSD program once GHGs are regulated, maintaining 
individual case-by-case BACT determinations may well be impractical and 
may well warrant a presumptive BACT approach that does not authorize 
individualized, source-specific determinations. This approach could 
well be an important tool to allow EPA, State and local permitting 
authorities to carry out the PSD program in as timely and efficient 
manner as necessary to promote (rather than hinder) control of GHG 
emissions from the many new, small source categories that would be 
required to have PSD permits based on their GHG emissions. This 
approach would preserve opportunities for public participation by 
taking comment during the determination of presumptive BACT levels for 
a source category. Although this type of presumptive BACT approach--one 
that does not permit individualized, source-specific determinations--
would depart from a literal application of the statutory requirements 
for BACT, it may nevertheless remain closer to the congressional intent 
for the PSD program than maintaining the applicability threshold at a 
level higher than the statutory level. If this is the case, then EPA 
could be required to establish a presumptive BACT approach and lower 
the applicability thresholds from the first phase level proposed in 
this action.
    Several other factors should be taken into account when considering 
a change from case-by-case BACT determinations to a presumptive BACT 
process for some specific source categories within the PSD program. As 
a general matter, we will need to consider how such presumptive BACT 
limits should be established and used, and what provisions in the CAA 
would set requirements or limits on their establishment and use. In 
particular, EPA recognizes the CAA section 169(3) requirement to set 
BACT limits after taking into account site-specific energy, economic, 
and environmental impacts (otherwise known as collateral impacts).
    In addition, while case-by-case BACT determinations allow for the 
continual evolution of BACT requirements over time (as controls applied 
in prior

[[Page 55323]]

permits are considered in each subsequent case-by-case BACT 
determination), EPA recognizes that application of presumptive BACT to 
a category of sources over many permitting decisions may diminish the 
technology forcing effects of PSD. EPA is interested in options that 
would help maintain advances in control technologies, such as a 
requirement to update and/or strengthen BACT at set intervals (such as 
after 3 years).
    EPA seeks comment on all aspects of the use of presumptive BACT 
limits within the PSD program, including EPA's authority to do so, 
whether there is need for and value to such an approach, and 
suggestions for how such limits could be established, updated, and used 
consistently within the requirements of the CAA, or by departing as 
little as possible from those requirements. We also ask for comment on 
whether there are issues at traditional PSD major sources that arise 
for GHGs and that would not be addressed by a presumptive BACT 
approach. If so, we ask for comment on additional options for 
streamlining the BACT requirement to address these issues.

3. General Permits and Permits-by-Rule

    A general permit is a permit that the permitting authority drafts 
one time, and then applies essentially identically (except for some 
source-specific identifying information) to each source of the 
appropriate type that requests coverage under the general permit. 
Congress expressly codified the concept of general permits when it 
enacted the title V program and States have been using general permits 
and similar processes for years in their own permit programs, 
particularly for minor source NSR and operating permits. Due to the 
case-by-case nature of PSD for ``traditional'' major sources and the 
differences among individual PSD sources, there has not been much 
interest or activity in general permitting for the PSD program. 
However, we believe this approach merits strong consideration for both 
PSD and title V programs due to the large number and similar 
characteristics of many of the sources that EPA expects will become 
newly subject to these permitting programs because of their GHG 
emissions.
    A general permit provides a streamlined application and permitting 
process for sources that are similar in terms of operations, emissions 
units, and applicable requirements. By issuing a general permit, a 
permitting authority indicates that it approves the activities 
authorized by the general permit, provided that the owner or operator 
of the source registers with the permitting authority and meets the 
requirements of the general permit.
    Permit-by-rule provisions may be very similar to general permit 
provisions, but they typically authorize a source owner to operate in 
accordance with certain requirements provided that the source owner 
registers with the permitting authority or certifies that they are 
complying with all applicable requirements. Thus, a source subject to 
the permit-by-rule would not need to wait for permitting authority 
approval, as is the case with the general permit, prior to operating 
under a permit-by-rule.
    General permits are attractive in their ability to dramatically 
reduce permitting timeframes for affected source types. At the same 
time, general permits are highly conducive to automation and the 
development of web-based applications. For example, New Jersey's 
Department of Environmental Quality has fully automated its air general 
permitting process, allowing source owners to go online, apply for a 
general permit, build the permit themselves, issue it to themselves by 
printing it out, and pay for it by credit card. This type of one-stop 
processing has the potential to dramatically streamline the air 
permitting process for source types covered by general permits, and the 
resulting electronic records create spillover benefits for compliance 
tracking, inspection management, and pollution prevention outreach.
a. General Permits for the PSD Program
    EPA has limited experience in developing general permits and 
permits-by-rule under the PSD program due to the predominance of the 
case-by-case BACT decision process described in section VII.A.2 of this 
preamble. In considering the use of general permits within the PSD 
program, EPA is considering how such general permits should be 
established and used, and what provisions in the CAA might limit their 
establishment and use. One option is to model PSD general permits on 
the general permits used in title V, as provided in 40 CFR 70.6(d). 
However, an important consideration in establishing PSD general permits 
is the requirement in CAA Sec.  165(a)(2) that permits be issued after 
``a public hearing has been held with opportunity for interested 
persons including representatives of the Administrator to appear and 
submit written or oral presentations.'' One option for addressing this 
public participation requirement at least to some extent is the 
approach followed for title V general permits in 40 CFR 70.6(d), which 
provides that permitting authorities may establish general permits 
after following notice-and-comment procedures required under 40 CFR 
70.7(h) and then grant a source's request to operate under a general 
permit without repeating the public participation procedures. Other 
considerations for establishing general permits under the PSD program 
include the requirement to determine BACT on a case-by-case basis (as 
discussed in an earlier section of this preamble), and the other 
procedural requirements referred to in section VII.A.3 of this preamble 
concerning the Class I consultation and the analysis of air quality and 
other potential impacts under CAA section 165(e).
    Because permitting authorities have had minimal experience in 
developing general permits and permits-by-rule for PSD, sufficient time 
would be needed to develop them as useful tools to reduce the 
administrative burden associated with the application of the PSD 
program to major GHG sources. Sufficient time would be needed for the 
following steps: (1) EPA must determine best candidate sources for 
general permits and permits-by-rule; (2) EPA must determine similar 
types of processes and source types and sizes to combine; (3) EPA must 
prioritize the development and use of general permits and permits-by-
rule; (4) EPA must issue guidance or rulemaking (as needed) for each 
grouping of similar sources; (5) States must adopt the guidance or 
rulemaking in their SIPs, as needed; and (6) sources must implement the 
requirements. We estimate that EPA would require more than 3 years to 
develop and deploy general permits and permits-by-rule would require 
more than 3 years to develop and deploy for a candidate group of 
sources, and that additional time would be needed for the States and 
sources to take the indicated steps.
    EPA seeks comment on the use of general permits within the PSD 
program, including both EPA's authority to do so and suggestions for 
how general permits would be established and used consistent with the 
requirements of the CAA and identification of source categories that 
could benefit from such an approach.
b. General Permits for the Title V Program
    In contrast to the PSD program, in the title V program, general 
permits are specifically authorized under CAA section 504(d), which 
provides:
    The permitting authority may, after notice and opportunity for 
public hearing, issue a general permit covering numerous similar 
sources. Any general

[[Page 55324]]

permit shall comply with all requirements applicable for permits under 
this subchapter. No source covered by a general permit shall thereby be 
relieved from the obligation to file an application under section 503 
of this Act.
    EPA regulations describe general permits in 40 CFR Sec.  70.6(d). 
These provisions specifically authorize the use of general permits 
covering numerous similar sources under the title V program. The 
general permit must also follow the public participation requirements 
of 40 CFR 70.7(h). The information development and review conducted as 
part of streamlining for an individual source can be used by the 
permitting authority to generate a general permit for similar sources 
or portions of sources. If a general permit were used, EPA and public 
review beyond that needed to issue the general permit would not be 
necessary when sources subsequently applied for the streamlined permit 
conditions established under the general permit. Even where a general 
permit is not issued, the availability of information obtained from the 
streamlining of one source may be useful as a model for future 
streamlining actions involving other similar sources. EPA notes that 
the part 71 regulations addressing title V permits issued by EPA (and 
delegated authorities) contain parallel provisions regarding general 
permits. See 40 CFR 71.6(d).
    We believe general permits may have more near-term applications for 
the title V program than for the PSD program because of past experience 
of permitting authorities, however limited, in using this permit 
streamlining technique for title V. Certain States have already used 
general permits for a relatively narrow population of certain minor, 
mainly area-type sources with a simple set of applicable requirements 
that were relatively easy for both permitting authorities and sources 
to implement. These general permits allowed the sources a more focused 
``roadmap'' to meeting their regulatory requirements with far less 
burden associated with applying for the permits and administering them 
in general. In response to the ANPR, some State commenters noted that 
they have a successful history of using general permits and believe the 
use of general permits could be an effective and reasonable approach to 
reduce regulatory costs and administrative burdens.
    We agree that there are similarities between the way general 
permits have been used in the past, particularly under title V, and the 
challenges permitting authorities would face for permitting GHG 
emissions for sources that would not already have, or necessarily need, 
a more comprehensive title V permit. However, most permitting 
authorities lack experience with general permits and with GHG sources 
in general. As a result, we believe that the process of developing 
general permits for title V purposes would parallel in certain respects 
the process of developing them for PSD purposes. Specifically, title V 
permitting authorities would need sufficient time to (1) determine 
candidate sources for general permits, (2) determine similar permit 
elements for those sources and develop adequate templates and formats 
for the general permits for those sources, (3) conduct formal EPA and 
public review of the general permit, and (4) develop an adequate 
implementation plan for sources to apply for such permits and for 
permit review staff to process such permits. After this, sources would 
need additional time to comply with the general permits. We believe 
this process would take at least 2 to 3 years for a partial set of 
general permits to be fully developed and ready for deployment.
4. Electronic Permitting
    Implementation of electronic permitting (e-permitting) systems is 
growing across the U.S., as more and more States implement new or 
upgraded systems. We believe these systems, possibly in conjunction 
with general permitting procedures, could assist in addressing some of 
the administrative burden created by adding GHG emissions sources to 
the PSD and title V programs.
    Most States are currently using agency Web sites to deliver a range 
of air permitting program services, from enabling electronic submittal 
of permit applications to providing the public web access to permits 
and related documents. Permitting authorities find value in e-
permitting systems because these systems can lead to improved customer 
service, decreased data entry errors, shortened permit review 
timeframes, and improved systems for managing permitting processes. In 
short, e-permitting systems can make better permits more quickly. 
Common State e-permitting activities include:
     Development of air permit application forms which can be 
accessed, completed, and submitted online;
     Development of specialized software or database 
applications to review submitted permit applications and to support the 
permit development process; and
     Posting issued permits and draft permit documents to air 
permitting Web sites.
    New technology is expanding the opportunity for collaboration and 
joint development around information system tools. To enable permitting 
authorities to handle the administrative workload associated with the 
application of the PSD and title V programs to GHG sources, EPA could 
assess and identify best practices for e-permitting system 
implementation and support States in implementing effective and 
efficient systems using targeted e-permitting tools and resources. For 
example, EPA could work with States to develop effective GHG permitting 
strategies in the following areas:
     Permit application submittal which would involve processes 
for facilities to identify permits needed, determine the scope of 
information to include in permit applications, access and complete 
application forms, and submit those forms and supporting data to State 
and local permitting authorities.
     Application review and draft permit generation which would 
involve processes for State and local permitting authorities to conduct 
administrative and technical permit application reviews, develop permit 
conditions, and sometimes create draft permit documents. This category 
could also include a broad range of information technology tools and 
resources that could support permit writers in preparing better permits 
more quickly.
     Draft permit review and final permit issuance which would 
involve processes for State and local permitting authorities to manage 
completion of external reviews (including public and EPA review 
periods) and any related updates to the draft permit document, issuance 
of the final permit, and collection of permit fees.
     Post-issuance activities which would incorporate all 
activities related to permits that are managed by State and local 
permitting authorities after permits are issued (including public 
access to permits and related documents, permit appeals, permit 
modifications, permit renewals, and inspections and compliance 
monitoring).
     Workflow tracking and management which would incorporate 
all of the management procedures and tools that State and local 
permitting authorities use to track the permit development process, 
including internal permit authority timeline tracking and public access 
to workflow information.

[[Page 55325]]

5. ``Lean'' Techniques for Permit Process Improvement
    In the business world, ``lean'' techniques refers to a collection 
of process improvement principles, methods, and tools designed to help 
organizations identify and eliminate non-value-added activity 
(``waste''), in order to meet customer needs better, more quickly, and 
more efficiently. Lean techniques have been adopted across numerous 
business sectors and been adapted to address both production and 
administrative processes. Lean process improvements could help 
permitting authorities to address administrative burdens that are 
created if numerous GHG sources are added to their air permitting 
programs.
    In the context of air permitting, Lean improvement events typically 
focus on eliminating the following types of administrative process 
waste: Backlogs in permitting; errors in documents; unnecessary rework 
on documents; and delays associated with transmission of documents 
between the various parties that develop and approve them. Since 2003, 
State environmental agencies have increasingly used Lean manufacturing 
principles and methods to drive rapid, continuous improvement in air 
permitting and other agency processes.

B. Implementation of Streamlining Techniques and Overall Approach To 
Administering PSD and Title V Programs

    As noted above, these potential streamlining options and tools will 
require time to develop, issue, and reach full deployment. Each 
technique would generally take from 3 to 4 years to fully develop and 
implement. Therefore, if we did not phase in the applicability 
thresholds for sources of GHG emissions as soon as PSD and title V 
requirements are triggered for them, there would be a significant time 
period when numerous GHG sources exceeding the statutory permitting 
thresholds for PSD and title V would need to obtain permits, and 
permitting agencies would be faced with overwhelming administrative 
burdens. Also, at this point in time we do not have enough information 
to predict the full potential applications and impact of these 
streamlining techniques for permitting GHG sources. Therefore, it is 
impossible to predict a specific time in the future when and if such 
streamlining techniques would reduce the administrative burden of 
permitting authorities sufficiently for them to administer PSD and 
title V programs for GHGs at the current permitting thresholds. 
Instead, we propose to commit to investigating and developing these 
techniques as vigorously and as soon as possible as part of an overall 
GHG tailoring strategy that involves phasing in the GHG major source 
permitting thresholds as soon as PSD and title V requirements are 
triggered for GHG emitters, but that further involves reassessing the 
situation, completing a study within 5 years, and then taking up to 1 
additional year to finalize regulations adopting the lowest threshold 
that we conclude is administrable based on the study.
    Even so, we have enough information now about some streamlining 
techniques, such as presumptive BACT in support of PSD permitting and 
general permits in support of title V permitting, to recognize that 
those techniques are quite likely to be beneficial to both permitting 
agencies and affected sources. We believe that within the framework we 
propose in this action there will be sufficient time to deploy the 
streamlining techniques and to evaluate their effectiveness in 
addressing administrative burden.
    Therefore, in conjunction with our proposed action to tailor the 
GHG permitting thresholds, we are committing to a concurrent effort to 
investigate, evaluate, and support the implementation of permit 
streamlining techniques to address GHG sources. We believe that while 
the proposed temporary thresholds will allow the permitting authorities 
to implement their programs for PSD and title V, it is also necessary 
for us to pursue applicable streamlining techniques that may help our 
assessment of the temporary thresholds as part of the threshold 
evaluation study. We believe that at the end of the threshold 
evaluation period we will have a better understanding and a sufficient 
record of the effectiveness of different permit streamlining techniques 
and how these techniques may influence the need to consider alternative 
thresholds.
    We request comment on which types of streamlining techniques, and 
for what source categories, would be of most value to permitting 
authorities and affected sources. We also request comment on the 
anticipated impact such techniques would have on permitting 
authorities' administrative capabilities to address GHG permitting and 
how such impact would affect the need for the temporary thresholds 
proposed under this action. We also request comment on the time periods 
needed to develop and implement any such streamlining techniques and on 
how such time frames can expeditiously meet CAA requirements in light 
of the administrative burden that would remain.

C. Strategies for Obtaining GHG Reductions From Sources Under the 
Proposed GHG Permit Thresholds

    In addition to pursuing permit streamlining techniques that may 
ultimately have application to smaller GHG source categories (e.g., 
those in the commercial and residential sectors), we also recognize 
that there are both current and future EPA programs that could be used 
to mitigate GHG emissions from these smaller sources. It may well be 
the case that, for the smaller sources, these approaches, which are 
summarized in this section, will result in more efficient and cost-
effective regulation than would case-by-case permitting. We therefore 
intend to fully explore the use of all available tools for addressing 
these sources at the same time as we explore streamlining the 
permitting programs.
    While EPA is proposing that during the first phase, GHG sources 
less than 25,000 tpy CO2e will not be subject to PSD and 
title V requirements for purposes of applicability, there are feasible, 
cost-effective opportunities for reductions from these sources through 
means other than PSD and title V during the first phase. The tailoring 
proposal does not restrict our ability to explore these opportunities 
during this first phase. EPA has strong interest in pursuing such 
opportunities and therefore requests your comments on the 
practicability of near-term regulatory and nonregulatory programs to 
address smaller sources.
    The near-term opportunities for GHG emissions reductions in 
smaller-scale stationary sources include increased energy efficiency, 
process efficiency improvements, recovery and beneficial use of process 
gases, and certain raw material and product changes that could reduce 
inputs of carbon or other GHG-generating materials. The use of 
alternative fuels and energy are also promising methods for achieving 
GHG reductions.
    One key challenge in addressing sources emitting less than 25,000 
tpy CO2e is their diversity. The source types may range from 
landfills to small stationary fuel combustion devices to waste water 
treatment plants and electronics manufacturing. In addition to 
including a range of processes, these source categories may include 
large (>25,000 tpy CO2e) and small sources. EPA is 
soliciting public comment on a fair and systematic way to address the 
diverse number of categories where individual sources are comparatively 
small, but the source category could be addressed through some cost 
effective means.

[[Page 55326]]

    Controls on sources at this scale would likely involve decisions on 
how proposed installations of equipment and processes for a specific 
source category can be redesigned to make those sources more energy 
efficient, for example, while taking cost considerations into account. 
However, these types of approaches have yet to be adopted widely, 
because of market barriers, insufficient financial and legal 
incentives, or other barriers. Below, EPA provides some examples of 
approaches that could be taken and existing programs that could provide 
useful platforms to address smaller sources.
    We request comment on the types of strategies that may be 
appropriate for these sources, considerations--such as cost and 
feasibility--with respect to implementing programs for smaller sources, 
approaches to incentivize these types of programs, and ways to measure 
the effectiveness of such initiatives. We also request comment on 
whether these initiatives have the potential to be developed in such a 
way as to meet the essential PSD and title V program requirements for 
sources, even if the initiatives do not necessarily meet the letter of 
those requirements (such as the case-by-case determinations required 
under the PSD program), based on administrative imperatives.
    For instance, EPA could design a hybrid approach where sources on 
the larger end of the below-25,000-tpy CO2e range could be 
required to analyze pathways to reduce GHG emissions by a certain 
percentage, but EPA or the States could use flexible criteria in 
requiring reductions from those sources, including the timeframe for 
achieving such reductions. These requirements could be supplemented by 
an incentive program, through which a State could use loan, grant, or 
emissions credit incentives to help such sources lower their GHG 
emissions profile, especially when the source is performing a 
modification. Any approach would have to be systematic, in that the 
criteria used would have to be responsive to the source volume of 
emissions, the reductions that might be achieved, cost-effectiveness, 
permanence and enforceability.
    A further alternative would be the use of section 111(d) of the CAA 
to work with smaller sources to reduce emissions. In contrast to other 
provisions in the Act which require regulation of all sources above 
specific size thresholds, section 111 gives EPA significant discretion 
to identify the facilities within a source category that should be 
regulated. To define the affected facilities, EPA can use size 
thresholds for regulation and create subcategories based on source 
type, class or size. Emissions limits also may be established either 
for equipment within a facility or for an entire facility. EPA also has 
significant discretion to determine the appropriate level for the 
standards.
    In addition to exploring regulatory options, EPA will continue to 
consider existing nonregulatory programs to achieve cost-effective 
emissions reductions. Some of the EPA's current programs, discussed 
below, are aggressively working to cost-effectively mitigate GHG 
emissions through energy efficiency in industry and consumer products 
and other voluntary programs that address several key CH4 
and other high-GWP sources. The source categories discussed below are 
not exhaustive, and are discussed as illustrative examples. It is also 
important to note that particular sources in these categories could 
fall above or below a threshold value of 25,000 tpy CO2e.
    Energy efficiency is one of the lowest cost means for addressing 
climate change. Since 1992, EPA, through the ENERGY STAR program, has 
achieved GHG reductions by helping U.S. businesses adopt cost-
effective, energy-efficient technologies and practices. The program 
combines several elements, including: ENERGY STAR branding of 
commercial products with superior energy performance and promoting 
strategic energy management practices across the commercial and 
industrial sectors. We also work with States to leverage wider use of 
such ENERGY STAR products as commercial roofing materials, furnaces, 
and boilers in commercial settings. States can promote the purchasing 
of ENERGY STAR qualified products in residential multi-family housing 
and commercial buildings such as offices, hospitals, hotels, schools, 
and warehouses. These building types comprise the vast majority of 
sources that would have emissions below the proposed 25,000-tpy 
CO2e major source threshold.
    Also for these building types, States can take advantage of EPA 
tools to encourage, track and reward improvements in building 
efficiency. Already, States are leveraging such tools as Portfolio 
Manager to make disclosure of building efficiency part of sale/lease 
transactions. Many States also use ENERGY STAR to incentivize adoption 
of energy-efficient equipment and buildings through regulated utilities 
and other energy efficiency program sponsors. Finally, EPA provides 
resources to help--or to enable States to help--manufacturers improve 
energy efficiency through a transferable platform that States can adopt 
which includes sector-targeted energy efficiency guidance, energy 
program development tools, and a national rating system that scores the 
energy performance of plants and enables documentation of energy 
improvement for those interested in demonstrating change in 
performance. For additional information on these programs, visit http://www.energystar.gov.
    Methane and other high-GWP gases, including PFCs, HFCs, and 
SF6, are potent GHGs that contribute to climate change. In 
an effort to reduce emissions of these gases, EPA is working 
cooperatively with a variety of companies and organizations in the 
energy, waste management, agriculture, and industrial sectors to 
implement voluntary programs that encourage cost-effective emissions 
reductions. These programs offer a range of technical and policy 
information products and exchanges and track emissions reductions in 
the following key sectors: landfills, oil and gas systems, animal 
waste, coal mines, industrial processes including aluminum production, 
semiconductor manufacturing, electric power transmission, magnesium 
production and processing, and the production of HCFC-22, and 
wastewater from domestic or industrial sources. Experience and lessons 
learned through these programs can be used by States and EPA for 
regulatory and nonregulatory initiatives. For additional information on 
the CH4 and high-GWP programs, visit http://www.epa.gov/methane/voluntary.html and http://www.epa.gov/highgwp/voluntary.html. 
For more information on opportunities for GHG reductions at wastewater 
treatment facilities, visit http://www.epa.gov/chp/documents/wwtf_opportunities.pdf.

VIII. Description and Rationale of Proposed Action

A. Proposed Permitting Thresholds for GHGs

    Based on the legal rationale of ``absurd results'' and 
``administrative necessity'' described in section VI of this preamble, 
EPA is proposing with this action to establish the first phase of the 
thresholds for determining applicability under both the PSD and title V 
permitting programs and to set a significance level for GHGs under the 
PSD program. For both PSD and title V purposes, we are proposing to set 
the applicability threshold at 25,000 tpy CO2e. In addition, 
for the PSD significance level, we are proposing a range from 10,000 to 
25,000 tpy CO2e. Upon finalization of this rule, and based

[[Page 55327]]

on comments received and the supporting record, we will establish a 
singular value for the GHG significance level.
    EPA is also proposing in this action to commit to evaluating the 
impact, effectiveness, and need for these GHG permitting thresholds as 
well as other aspects of the administrative burden for permitting 
authorities in a study to be completed within 5 years from the 
promulgation date of the final version of this rulemaking. Based on the 
results of that study, EPA would propose and promulgate a rulemaking 
within a year later that would establish the second phase of the 
tailoring program. This rulemaking would reaffirm the first-phase GHG 
permitting thresholds or revise those thresholds, promulgate other 
streamlining techniques, and/or take action consistent with the goal of 
expeditiously meeting CAA requirements in light of the administrative 
burden that remains at that time.
    This section of the preamble defines the GHG metric used for 
purposes of determining whether the proposed thresholds are exceeded, 
describes the policy and technical rationale for selecting the proposed 
applicability thresholds for PSD and title V, and discusses the 
proposed 5-year threshold evaluation study.
    While the rest of this section discusses the details of our 
proposed approach, we note at the outset that there may be other ways 
to structure the first phase of permit program applicability for GHGs 
than the one we describe as our preferred approach. For example, we 
could address the administrative burden by defining the sources in the 
first phase subject to permitting for GHGs to include only sources that 
are or become subject to title V or PSD permitting obligations under 
the existing 100/250 tpy statutory thresholds on the basis of their 
emissions of a non-GHG pollutant. Under this approach, for example, a 
new source that triggered PSD for a non-GHG regulated NSR pollutant and 
that also emits GHGs, or an existing source going through a 
modification that triggered PSD for a non-GHG regulated NSR pollutant 
and which also increased its GHG emissions would have to do a BACT 
analysis for GHGs. This BACT process would be expected to identify 
control options which are technically feasible and cost effective for a 
particular source based on the tons emitted, thereby ensuring that the 
first phase of permitting would apply to the largest sources of GHG 
that are currently subject to CAA regulation based on emissions of non-
GHG pollutants. Sources that do not trigger PSD or title V for a non-
GHG pollutant would not be subject to these programs solely on the 
basis of their GHG emissions. Under such an approach, we may still need 
to establish a significance level for GHG emissions at sources that are 
subject to PSD due to their non-GHG emissions, but we could consider 
setting this based on the 10,000 ton CO2 eq significance 
level proposed elsewhere in this package. We solicit comment on this 
approach, and on other potential variations on our proposal that 
commenters believe could address the administrative concerns in more 
effective ways.

B. What is the definition of the GHG pollutant for the proposed 
permitting thresholds?

1. Background on GHG Metrics
    The selection of a GHG metric is an important consideration in 
developing the GHG permitting threshold options because it sets the 
basis for evaluating whether a particular source exceeds a given 
threshold. As noted in section IV.A of this preamble, one commonly 
utilized metric is to estimate and report emissions of GHGs as the 
collective sum of emissions of the six primary GHGs, with applicable 
GWPs applied to the non-CO2 gases. When GWPs are applied to 
the mass emissions of one of the primary GHGs, the resulting weight is 
referred to as CO2e (see section IV.A of this preamble for a 
description of CO2e). Another possible metric would consist 
of individual mass-based emissions for each GHG, without their GWP 
values applied. The choice of the GHG metric can have a significant 
impact on design and implementation of the GHG permitting threshold.
    For example, if a source only evaluated its CO2 
emissions against a permitting threshold, it may fall below the 
threshold, but if it evaluated the sum of all its primary GHG emissions 
on a CO2e basis, it may fall above the threshold. Although 
there may be a variety of considerations for including one GHG metric 
over another, the choice of a GHG metric, whether it be the sum of the 
CO2e emissions or individual GHGs, for both PSD and title V 
programs, must include any of the individual GHGs that may be subject 
to regulatory action under the CAA, as discussed in section IV.D of 
this preamble.
    One of the reasons EPA is undertaking this rulemaking is because it 
intends to propose and finalize a separate rule that regulates GHG 
emissions from light-duty motor vehicles and that would trigger PSD and 
title V permitting requirements for stationary GHG emissions sources. 
The light-duty motor vehicle rule will identify a GHG pollutant or 
pollutants subject to regulation. However, at the time of this proposal 
there is uncertainty as to exactly what GHG metric will ultimately be 
finalized in the light-duty motor vehicle rule. Also, as discussed in 
the ANPR, there may be other future regulatory actions or decisions by 
EPA that would determine what form of GHGs would be subject to 
regulation under the CAA, such as new source performance standards for 
certain source categories under CAA section 111. This uncertainty over 
the form of the GHG metric in future regulatory actions is an important 
factor in our selection of the GHG metric for the permitting threshold.
    In order to better inform our consideration of different GHG 
metrics for the proposed GHG permitting thresholds, we also reviewed 
the GHG metrics used in two recent EPA proposals: the endangerment 
finding and the GHG mandatory reporting rule.
    In the proposed endangerment finding for GHGs, the Administrator 
proposed to define the air pollutant as the ``[c]ollective class of the 
six greenhouse gases,'' and referred to the widespread use of 
CO2e as a means to evaluate the six primary GHGs as a group 
(74 FR 18886, April 24, 2009). The Administrator also identified this 
collective approach to defining GHGs, for the contribution test, as 
most consistent with the treatment of GHGs by those studying climate 
change science and policy, where it has become common practice to 
evaluate GHGs on collective CO2e basis. However, the 
Administrator also recognized in the proposed finding that each GHG 
could be considered a separate air pollutant and that defining the air 
pollutant as the group of six GHGs does not preclude setting standards 
that control emissions of individual GHGs, as constituents of the 
group.
    Under EPA's GHG Mandatory Reporting Rule proposal, the emissions-
based applicability thresholds for reporting are based on total 
CO2e calculated from the sum of a facility's emissions of 
the six primary GHGs plus other fluorinated GHGs, applying GWP values 
to non-CO2 gases (74 FR 16448, April 10, 2009). However, 
annual reporting is required for both total CO2e and 
individual GHGs on a mass basis, with no GWPs applied for non-
CO2 gases.
    We also note that both domestic regional cap-and-trade programs 
(e.g., the Regional Greenhouse Gas Initiative) and international 
trading programs (e.g.,

[[Page 55328]]

the European Union Emission Trading Scheme) make use of the 
CO2e metric for purposes of offsets accounting and emissions 
trading that involves different GHGs. Under the United Nations 
Framework Convention on Climate Change (UNFCCC), the U.S. and other 
countries also report their annual emissions of the six GHGs in terms 
of CO2e units.
2. Rationale for GHG Metric Selection for Proposed Permitting 
Thresholds
    As discussed elsewhere, EPA interprets the PSD and title V 
requirements to apply to each ``air pollutant'' that is ``subject to 
regulation'' under other provisions of the CAA. It is important to 
determine which GHGs to treat as the ``air pollutant'' that is subject 
to PSD and title V requirements and how to measure those GHGs. Taken 
together, this is termed the GHG metric. As noted above, in the 
proposed endangerment and cause or contribute findings under section 
202(a) of the CAA, EPA proposed to define the ``air pollutant'' for the 
contribution analysis as the class of six GHGs CO2, 
CH4, N2O, SF6, HFCs, and PFCs); but 
EPA also took comment on the concept of defining each GHG as a separate 
air pollutant. In connection with the light-duty vehicle rule under CAA 
Sec.  202(a) that EPA is proposing at the same time as this action, 
four of those six GHGs which are emitted by light-duty motor vehicles 
are proposed to be subject to controls under the light-duty vehicle 
rule (all but SF6 and PFCs). As EPA explains in the light-
duty vehicle rule and below, EPA has discretion under section 202(a) to 
establish controls at the GHG-specific level regardless of whether the 
final definition of ``air pollutant'' for the contribution analysis is 
the class of six GHGs or each GHG individually. In light of the ongoing 
relevant rulemakings, this proposal discusses several possible ways for 
identifying the GHG metric for PSD and title V requirements. First, the 
metric could address each GHG individually, or it could address them as 
a single GHG group. Second, the metric could include (whether 
individually or as a group) all six of the GHGs, or only those four 
GHGs subject to controls in the light-duty vehicle rule. Third, the 
metric could measure the GHGs (whether individually or as a group) on 
the basis of their actual tonnage or their equivalent tonnage based on 
global warming potential (GWP), which we refer to as CO2 
equivalent, or CO2e.
    We propose to identify the GHG metric as the group of six GHGs, on 
a CO2e-basis. Using a CO2e basis, a source's 
emissions for any of the six primary GHGs that are ``subject to 
regulation'' under the Act, and therefore considered ``regulated NSR 
pollutants,'' are summed on a CO2e basis using their GWP 
values. The summed CO2e emissions would then be compared to 
the applicable permitting threshold to determine whether the source is 
subject to PSD and title V requirements. We solicit comment on whether 
we should identify the GHG metric in a different way, such as one of 
the options identified above.
a. Legal Rationale
    Because PSD and title V apply to each ``air pollutant'' subject to 
regulation, it is necessary both to examine the definition of ``air 
pollutant'' and to determine which air pollutant or pollutants are 
proposed to be subject to regulation under CAA Sec.  202(a).
    PSD applies to a ``major emitting facility,'' under CAA Sec.  
165(a), and that term is defined under CAA Sec.  169(1) as--

any of the following stationary sources of air pollutants which 
emit, or have the potential to emit, one hundred tons per year or 
more of any air pollutant from * * * stationary sources [in 28 
listed categories]. * * * Such term also includes any other source 
with the potential to emit two hundred and fifty tons per year or 
more of any air pollutant.

(Emphasis added.) Similarly, Title V requirements apply to ``major 
source[]s,'' under CAA Sec.  502(a), and that term is defined under CAA 
Sec.  501(2)(B) and CAA Sec.  302(j) as--

any stationary facility or source of air pollutants which directly 
emits, or has the potential to emit, one hundred tons per year or 
more of any air pollutant * * *.

(Emphasis added.) The term ``air pollutant,'' which, as just noted, is 
central to the applicability provisions of both PSD and title V, is 
defined under CAA Sec.  302(g) as--

any air pollution agent or combination of such agents, including any 
physical, chemical, biological, radioactive * * * substance or 
matter which is emitted into or otherwise enters the ambient air.

    As just noted, EPA treats sources emitting air pollutants as 
subject to PSD and title V requirements only if the air pollutants are 
``subject to regulation'' under other provisions of the CAA. EPA's 
current interpretation of ``subject to regulation'' is found in the PSD 
Interpretive Memorandum, which defines the term as meaning subject to 
either a provision in the CAA or a regulation adopted by EPA under the 
CAA that requires actual control of emissions of that pollutant, and to 
exclude pollutants for which EPA regulations only require monitoring or 
reporting. Accordingly, under the PSD Interpretive Memorandum, the air 
pollutant that is subject to regulation is the air pollutant for which 
actual controls are required under other provisions of the CAA.
    We believe that PSD and title V requirements will be triggered for 
GHGs if EPA completes the rulemaking that EPA is currently proposing 
for light-duty vehicles and vehicle engines. That rule is based on CAA 
Sec.  202(a). Paragraph (1) of Sec.  202(a) provides, in relevant part:

    The Administrator shall by regulation prescribe (and from time 
to time revise) in accordance with the provisions of this section, 
standards applicable to the emission of any air pollutant from any 
class or classes of new motor vehicles or new motor vehicle engines, 
which in his judgment cause, or contribute to, air pollution which 
may reasonably be anticipated to endanger public health or welfare.

(Emphasis added.) This provision, by its terms, requires, as a pre-
requisite for regulating an ``air pollutant'' from the described mobile 
sources, that EPA must make what has come to be called an 
``endangerment finding'' for that ``air pollutant;'' and further 
requires that once EPA makes that endangerment finding, EPA must 
proceed to ``set standards [for new motor vehicles] applicable to the 
emission of [the] air pollutant'' for which the endangerment and 
companion cause or contribute finding was made. EPA has already 
proposed an endangerment finding for the air pollutant comprised of the 
collective group of six GHGs: CO2, CH4, 
N2O, SF6, HFCs, and PFCs, as well as a finding 
that new motor vehicle emissions of the 6 GHGs, viewed as a single 
group air pollutant, contribute to this endangerment. 74 FR 18886, 
18904, 18907 (April 24, 2009).\25\ Four of these GHGs are emitted by 
light-duty motor vehicles; as a result, concurrently with this rule, 
EPA is proposing to set emissions standards for those four GHGs. As 
noted in the light-duty vehicle rule and below, EPA can set standards 
for the specific GHGs emitted by light-duty motor vehicles versus for 
the single air pollutant that is comprised of the six GHG, and still 
comply with the requirement in section 202(a) regardless of how EPA 
finally defines ``air pollutant'' in the final endangerment and 
contribution findings. EPA is proposing to regulate the GHGs emitted by 
light-duty vehicles by establishing separate emission

[[Page 55329]]

standards that limit emissions of CO2, CH4, and 
N2O. EPA would also allow credit towards the CO2 
standard based on vehicle air conditioner controls that reduce 
emissions of HFCs.
---------------------------------------------------------------------------

    \25\ In the proposed endangerment finding, the Administrator 
also stated that if each of the four GHGs emitted by new motor 
vehicles were treated as separate air pollutants, she would find 
that each of the four contributes individually to the air pollution 
that endangers.
---------------------------------------------------------------------------

    In light of how the proposed endangerment and contribution finding 
identifies, and light-duty vehicle rule regulates, emissions of, the 
``air pollutant'' under CAA Sec.  202(a), EPA's task in this proposal 
is to identify the ``air pollutant'' for which PSD and title V will 
become applicable under CAA Sec. Sec.  165(a)/169(1) and CAA Sec. Sec.  
502(a)/501(2)/302(j). This ``air pollutant,'' for PSD and title V 
purposes, is the ``air pollutant'' that is ``subject to regulation'' 
under CAA Sec.  202(a), according to EPA interpretation.
    We are proposing that the relevant ``air pollutant'' for purposes 
PSD and title V applicability is the single air pollutant that is 
comprised of the group of six GHGs, as proposed in the Sec.  202(a) 
endangerment and contribution findings. These six GHGs as a class 
comprise the air pollutant that is the subject of the endangerment 
finding and companion contribution finding and constitute the air 
pollutant that is regulated by the light-duty vehicle rule through 
measures that address the components of that air pollutant that are 
emitted from the mobile sources. Thus, although the CAA Sec.  202(a) 
proposal establishes controls only with respect to four GHGs, as a 
legal matter the proposal covers the entire set of GHGs that as a class 
are the single ``air pollutant'' in the proposed endangerment and 
contribution findings.
    We also solicit comment on whether only the four GHGs actually 
controlled under the mobile source rule should be treated as the ``air 
pollutant'' subject to PSD and title V applicability. In particular, we 
solicit comment on whether such an approach would be consistent with 
our treatment of other ``air pollutants'' that are comprised of 
numerous individual substances (e.g., VOCs or PM), and how it interacts 
with EPA's duty under section 202(a) to sets standards for emissions of 
the ``air pollutant'' for which a contribution finding is made under 
that section.
    In addition, we further believe that the definition of ``air 
pollutant'' for PSD and title V purposes provides for sufficient 
flexibility that the form of the standard--that is, the metric--that 
EPA adopts for PSD purposes may differ from the form that EPA adopts 
for purposes of regulation under CAA Sec.  202(a). Section 202(a) 
authorizes EPA to set ``standards applicable to the emission of [the] 
air pollutant.'' This provides EPA significant discretion in 
determining how to structure its new motor vehicle standards, as long 
as they are ``applicable to emission'' of the air pollutant. How EPA 
exercises its discretion under this provision, whether by separate 
standards, a collective standard, or some combination of these, as has 
been proposed, does not change the fact that each of these approaches 
has the same result--regulating the air pollutant which is the subject 
of the contribution finding under section 202(a). It is this overall 
result--regulation of the air pollutant--that determines the 
applicability of PSD and title V, not the particular form of the 
standards adopted under section 202(a). To reiterate, under 302(g), 
``air pollutant'' means ``any air pollution agent or combination of 
such agents, including any physical, chemical, biological, radioactive 
* * * substance or matter which is emitted into or otherwise enters the 
ambient air.'' We believe that as long as the same ``air pollution 
agent or combination of such agents'' is regulated for PSD and title V 
purposes as is regulated under CAA Sec.  202(a), then the PSD and title 
V applicability requirements are met, whether or not the structure of 
the regulation is the same as employed under section 202(a). 
Accordingly, we believe that as long as the six GHGs that are the ``air 
pollutant'' being regulated under CAA Sec.  202(a) are subject to PSD 
and title V applicability through some metric, then the precise metric 
through which they are subject to PSD and title V may differ from the 
precise manner in which they are regulated under CAA Sec.  202(a). 
Thus, we believe we may treat the six GHGs as a group for PSD and title 
V purposes, and weight them by their GWP, even though they are 
generally regulated individually under the mobile source rule.
b. Policy and Programmatic Rationale
    For individual GHGs, differing CO2 equivalent factors 
(such as GWP values) are found in the literature. As noted earlier in 
this preamble, the U.S. and other countries report their annual 
emissions of the six GHGs in terms of CO2e units, following 
UNFCCC guidelines. The UNFCCC reporting guidelines for national 
inventories, as updated in 2006, require the use of GWPs from the IPCC 
SAR (IPCC 1996) for CO2e calculations, even though the IPCC 
has subsequently updated its GWP values.\26\ Consistent with these most 
recent guidelines, we are proposing to use the same SAR-derived GWP 
values, which are based on the effects of GHGs over a 100-year time 
horizon, for purposes of calculating GHG emissions in tpy 
CO2e for this tailoring rule.
---------------------------------------------------------------------------

    \26\ ``Inventory of U.S. Greenhouse Gas Emissions and Sinks: 
1990-2007,'' U.S. Environmental Protection Agency, EPA 430-R-09-004, 
April 15, 2009. p. ES-3. See also the SAR GWPs (IPCC 1996) in table 
1-2, p. 1-6. http://www.epa.gov/climatechange/emissions/usinventoryreport.html.
---------------------------------------------------------------------------

    We recognize a number of advantages in the use of a cumulative 
CO2e measure (``cumulative'' here refers to the summation of 
emissions of CO2e for all applicable GHGs) using GWP over an 
individual, mass-based metric, including: (1) A cumulative 
CO2e metric, by incorporating the GWP values, addresses the 
combined radiative forcing of the GHGs emitted; (2) a cumulative 
CO2e metric by definition includes any of the six primary 
GHGs that are emitted and therefore would effectively include any one 
or combination of the six primary GHGs that might become subject to 
regulation, thus encompassing a greater variety of possible future 
regulatory approaches; (3) a cumulative CO2e metric would be 
consistent with the proposed mandatory reporting rule thresholds 
(thereby creating a ``common currency'' for recordkeeping for both 
industry and permitting authorities); and (4) a CO2e metric 
could allow more flexibility for designing and implementing control 
strategies that maximize reductions across multiple GHGs and would also 
likely align better with possible future regulations that allow for 
such flexibility.
    We also considered a GHG permitting threshold metric based on 
individual GHGs on a mass basis, with no GWP applied. The main benefit 
of an individual-GHG-based metric is that it may provide some ability 
to better differentiate sources and project emissions that affect one 
particular GHG. Because of this differentiation, it also may allow for 
simpler program implementation with regards to establishing emissions 
limits, establishing BACT, compliance assessment, and measurement/
monitoring methods. However, we believe that the benefits in using the 
cumulative group of GHGs outweigh any implementation advantages to 
using an individual-GHG-based metric. In particular, the cumulative-
GHG, CO2e-based metric addresses all GHGs and their 
radiative forcing potential and would provide some flexibility to a 
source to design and maximize GHG reductions across the facility. 
Conversely, an individual-GHG-based metric may limit a facility's 
flexibility to maximize GHG reductions across GHGs and is generally 
less consistent with the widespread treatment of GHGs in inventory, 
reporting, and emissions

[[Page 55330]]

offset protocols mentioned in section VIII.B.1 of this preamble.
    We solicit comment on the benefits and limitations of our proposed 
GHG PSD and title V permitting threshold metric based on 
CO2e. We also request comments on proposed alternative 
metrics (such as individual GHG basis) and the effect those alternative 
metrics would have on setting permitting thresholds for GHGs.
3. Possible Limitation of Proposed Metric for PSD and Title V 
Thresholds and for PSD Netting Purposes
a. PSD and title V applicability thresholds
    This proposed metric may also warrant a limitation for PSD and 
title V threshold purposes. In rare instances, it is possible that a 
source may emit only a non-CO2 GHG in very small amounts, on 
a mass basis, but one that carries a very large GWP. In this case, it 
is possible that the source may emit the GHG in amounts that fall below 
the PSD statutory applicability threshold of 100/250 tpy on a mass 
basis, and fall below the title V statutory applicability threshold of 
100 tpy on a mass basis, but exceed the 25,000 CO2e PSD and 
title V applicability thresholds (which, as discussed above, are 
calculated on a GWP basis) proposed in this action. Under these 
circumstances, the source would trigger PSD and title V under our 
proposed rule even though its GHG mass emissions would not, in fact, 
exceed the statutory triggers.
    We seek comment on whether we should address this case; that is, 
whether such a source should be subject to PSD or title V. Because the 
PSD and title V statutory thresholds are expressed on a mass basis--
i.e., tpy--we are concerned that the metric proposed with this action 
could have the effect of subjecting to PSD or title V requirements a 
source whose emissions fall below the statutory threshold limits on a 
mass basis. Accordingly, we seek comment on whether we should include 
some refinements to the CO2e metric, such as adding a 100- 
or 250-tpy metric that is mass-based. Under this refinement, a source 
would be subject to PSD and title V only if its GHG emissions exceeded 
the statutory threshold levels on an actual tonnage basis and if its 
GHG emissions exceeded the first phase threshold emissions proposed in 
this notice on a CO2e basis.
    However, we are also concerned that efforts to address this 
circumstance--for example, by requiring separate tracking of individual 
GHG mass emissions in addition to CO2e for up to six gases--
would be complex and confusing to administer. Similarly, as discussed 
above, we are concerned that implementing permitting only on an 
individual gas basis would have several disadvantages compared to our 
proposed CO2e-based approach.
b. Netting
    The same issue is also a concern as the proposal relates to PSD 
netting. By way of background, an existing source becomes subject to 
PSD when it makes a major modification, which generally occurs when the 
source is a major emitting facility and makes a physical or operational 
change that increases its emissions of a regulated air pollutant by a 
significant amount. In calculating the amount of the increase in 
emissions, the source must add to the increase the amount of any 
contemporaneous--generally, within the previous 5 years--increases and 
decreases that resulted from other changes the source made. If the 
total amount, so calculated, does not exceed the significance level, 
then the source is not subject to PSD for the change, and instead has 
``netted out'' of PSD.
    In rare instances, it is possible that a source of two or more 
different types of GHGs, with different GWPs, may make two or more 
contemporaneous changes that increase its emissions of one type of GHG 
and decrease its emissions of another type of GHG. The effect of those 
changes may be that the source will have decreased its emissions of its 
GHGs on a mass basis, but increased its emissions of GHGs on a 
CO2e basis above the significance level. Under these 
circumstances, we are seeking comment on whether that source should be 
treated as being subject to PSD due to its physical or operational 
change.
    We could prevent the source in this example from becoming subject 
to PSD by requiring that for an existing source's physical or 
operational change to be treated as a modification that triggers PSD 
due to its GHG emissions, the change must, taking into account 
contemporaneous changes, increase GHG emissions on a mass basis by any 
amount, and increase GHG emissions on a CO2e basis by the 
amount of the significance level proposed in this action. However, we 
are concerned that efforts to address this circumstance would be even 
more complex and confusing to administer for netting than it would be 
for major source determinations.
    We therefore solicit comment on how best to address these 
situations involving new source permitting and netting in light of our 
proposed choice of a GHG PSD and title V permitting threshold metric 
based on CO2e. We are asking for comment on whether these 
rare circumstances should be addressed in light of the statutory 
language, and if so, how. Would a mass-based metric for each individual 
GHG be an appropriate way to address the issue and, if so, should it be 
implemented in addition to, or in place of, our proposed 
CO2e metric?

C. What is the rationale for selecting the proposed GHG permitting 
thresholds for PSD?

1. Major Stationary Source Applicability Threshold for Sources of GHGs
    With this action, we are proposing to establish, for the first 
phase of the PSD GHG tailoring program, the PSD major source threshold 
at 25,000 tpy CO2e and the significance level at 10,000 to 
25,000 tpy CO2e, based on the legal doctrine of ``absurd 
results'' and ``administrative necessity,'' as described in section VI 
of this preamble. This first phase will be followed by a study and then 
promulgation of additional rulemaking that will establish the next 
phase of requirements. This section provides a more detailed discussion 
of the technical and policy basis for establishing these threshold 
levels.
    a. Administrative Burdens Associated With the Statutory Threshold 
Level and the Proposed Permitting Threshold Level
    As noted previously, for PSD purposes, if we do not establish a 
different ``major'' source level for GHG emitters, the effect would be 
that the statutory threshold level would apply, so that GHG sources in 
the 28 listed categories under CAA section 169(1) would be subject to a 
100-tpy threshold, and all other GHG sources would be subject to a 250-
tpy threshold. Under this scenario, tens of thousands of sources each 
year would undertake projects that would have to comply with the PSD 
program, which would overwhelm the permitting authorities and interfere 
with the issuance of permits to all sources, whether they emit GHGs or 
not.
    Accordingly, EPA is proposing a PSD ``major'' source applicability 
threshold of 25,000 tpy CO2e. The rationale for this level 
is to reduce the administrative burden to the point where it is no 
longer administratively impossible to implement the PSD program. 
Although requiring permitting authorities to permit sources of GHG 
emissions at 25,000 tpy CO2e and higher would increase the 
level of PSD permitting and therefore increase administrative burdens, 
compared to current permitting levels, EPA believes that this increase 
would not exceed the capacity

[[Page 55331]]

of permitting authorities to implement the PSD program.
    EPA calculated the administrative burden of permitting GHG emitters 
at the 25,000-tpy CO2e threshold level as follows: As noted 
earlier in this preamble, EPA conducted a threshold data analysis that 
provided information on the numbers of facilities that could 
potentially be subject to PSD review under different CO2e-
based emissions thresholds and the administrative resources needed to 
process permits for these facilities. Through the process described in 
this section of the preamble, we estimate that, at a 25,000-tpy 
CO2e applicability threshold for PSD major sources, 
approximately 400 additional new or modified facilities would be 
subject to PSD review in a given year. These include approximately 130 
new facilities and approximately 270 modifications at existing major 
sources that would be subject to PSD review as major modifications. 
Many, but not all, of these facilities would be subject to PSD review 
for other pollutants that they emit. These estimates compare to the 280 
PSD permits that are currently issued in a typical year.
    We acknowledge that our estimates for both new facilities and 
modifications are highly uncertain because they rely on growth trends 
in industries and businesses, which are inherently difficult to 
predict, especially under changing economic conditions.
    We developed these estimates as follows: To estimate the number of 
new sources, we identified the various source or industry categories 
included in the threshold data analysis, along with the number of 
sources in each category. We then applied source- or industry-specific 
growth rates to estimate the number of new facilities that would be 
added in a year at a given major source threshold for a source or 
industry category. The methodology and results for estimating new 
sources is described in the Technical Support Document, in the docket 
for this rulemaking.\27\
---------------------------------------------------------------------------

    \27\ ``Technical Support Document for Greenhouse Gas Emissions 
Thresholds Evaluation;'' Air Quality Policy Division, Office of Air 
Quality Policy and Standards; U.S. Environmental Protection Agency; 
July 7, 2009.
---------------------------------------------------------------------------

    To estimate the number of modifications at existing major sources, 
EPA first calculated the number of existing facilities that would be 
treated as ``major'' sources due to their PTE-based CO2e 
emissions rates. At a 25,000-tpy CO2e permitting threshold, 
EPA estimates that about 13,600 existing facilities would be classified 
as ``major'' sources. Second, EPA determined the current rate of PSD-
permitted modifications occurring at major sources nationwide, which is 
approximately 2 percent of existing major sources. The basis for this 
modification rate is described in a technical support document found in 
the docket for this rulemaking.\28\ Then, we assumed that GHG sources 
would modify at the same 2-percent rate. Based on this assumption, EPA 
estimates that approximately 270 modifications would result from a 
25,000-tpy CO2e major source permitting threshold.
---------------------------------------------------------------------------

    \28\ ``Methodology for Estimating Modified Sources That Would be 
Subject to PSD Permitting for GHGs;'' Prepared by EPA Staff; August 
2009.
---------------------------------------------------------------------------

    We calculated the additional administrative burden in workload 
hours and costs based on the per-permit hourly workload estimates and 
costs for PSD permitting from the PSD ICR.\29\ Of the group of 130 new 
sources, we estimated the number of industrial sources and of 
commercial or residential sources. For the industrial sources, we 
assumed that permitting authorities would need to spend 301 hours, on a 
per-permit basis, for issuing permits that cover both the GHG and non-
GHG emissions. This is the same amount of time that permitting 
authorities need to permit non-GHG emissions from industrial sources. 
We did not assume additional workload requirements for the GHG 
emissions because permitting authorities will have some experience with 
the emissions units, sources, and configurations at these facilities. 
Also, although there will be new and unique GHG sources to consider at 
some of these facilities, this experience should provide some 
administrative efficiencies in preparing and processing GHG-based 
permit applications for these facilities. Note that some of the 130 new 
sources would be sources that are subject to PSD only because of their 
GHG emissions. We estimate that the permitting authorities would need 
to spend the same amount of time and money on these permits, on a per-
permit basis, as the authorities do on new sources of non-GHG 
emissions. For the commercial or residential sources, we assumed that 
permitting authorities would require 20 percent of the time for 
industrial sources, or 60 hours, because these sources tend to be less 
complex than industrial sources.
---------------------------------------------------------------------------

    \29\ ``Summary of ICR-based Data Used to Estimate Avoided Burden 
and Evaluate Resource Requirements at Alternative GHG Permitting 
Thresholds;'' Prepared by EPA Staff; August 2009.
---------------------------------------------------------------------------

    The next group of permittees is the 270 GHG sources that are 
subject to PSD each year because they undertake modifications. For 
modifications involving industrial sources, we assumed that permitting 
authorities would need to expend 301 hours, the same as for new 
sources; for modifications involving commercial or residential sources, 
we assumed 60 hours--the same, again, as for new sources.
    All told, the increase in burden for permitting authorities from 
including sources of GHGs at a 25,000-tpy CO2e level, on a 
total national basis, would be approximately 112,000 staff hours at an 
additional cost of approximately $8 million. This workload amount 
represents an increase of about 1.3 times, or 32 percent, in the 
current burden for permitting authorities on a nationwide basis. We 
believe that this additional burden is manageable, but that it will 
necessarily pose some challenge to permitting authorities, and that to 
accommodate the additional burden, permitting authorities may need to 
expand their resources or seek efficiencies in processing permits. We 
believe that any threshold lower than 25,000 tpy CO2e, would 
create undue administrative burdens. Thus, we believe that the amount 
of administrative burden attendant to a threshold level of 25,000 tpy 
CO2e is consistent with the administrative necessity case 
law, which, as described earlier, we read to limit us to depart from 
the statutory requirements to the smallest extent possible, consistent 
with congressional intent.
    We request specific comments on our estimated burden at the 25,000-
tpy CO2e threshold and on whether the additional workload 
would be manageable to permitting authorities.
    We also request comment specifically on the assumptions we used for 
calculating the administrative burden from modifications. As noted 
earlier, our estimate for the number of modifications that would 
undergo PSD review as a result of a 25,000-tpy CO2e 
permitting threshold is based on the modification rate at existing 
major sources for currently regulated pollutants, which means that the 
estimate assumes that the modification rate for GHG sources is similar 
to that for sources of currently regulated pollutants despite the 
potential difference in types of projects and significance levels. We 
acknowledge that our estimates for modifications are highly uncertain 
because they rely on growth trends in industries and businesses, which 
are inherently difficult to predict, especially under changing economic 
conditions. Thus, there is significant uncertainty in applying this 
modification rate and therefore in predicting not only how many major 
sources will undergo

[[Page 55332]]

physical or operational changes in any given year, but also which of 
those changes would result in GHG emissions increases that would exceed 
a proposed GHG significance level. We are therefore requesting specific 
comment on our estimate of modification rates at major sources and 
soliciting any additional information and data that would improve our 
estimate of the number of modifications affecting GHG emissions at 
different types of source categories.
b. Administrative Burdens Associated With Other Permitting Threshold 
Levels
    In addition to the 25,000-tpy threshold for CO2e, we 
also considered major source applicability thresholds for PSD ranging 
from 1,000 to 100,000 tpy CO2e. Using the basic analysis of 
new and modified facilities that would become subject to PSD review as 
described above, we estimated the number of new facilities and 
modifications at each of these thresholds. A summary of these results 
is shown in table VIII-1. The results shown in table VIII-1 are based 
on estimates of potential to emit, measured in short tons of 
CO2e, from affected facilities at each threshold level. It 
should be noted that the use of short tons here, while consistent with 
the units used for existing major source thresholds for other 
pollutants identified in the CAA and permitting program rulemakings, 
differs from the units of metric tons used in EPA's GHG Mandatory 
Reporting Rule proposal. For consistency within the permitting 
programs, all data and discussion in this rule are based on short tons.
    We believe that the number of new permits that would be subject to 
PSD at the 10,000-tpy-and-below CO2e major source thresholds 
would not be administratively feasible for permitting authorities. For 
example, we estimate that the 10,000-tpy CO2e threshold 
would cause an approximately three-fold increase in the number of PSD 
permits annually (830 compared to 280), resulting in an additional 
workload for permitting authorities of approximately 187,000 hours, or 
an increase of about 2.2 times over their current PSD workload. We 
believe that this increase in the number of PSD permits and workload 
would create insurmountable resource demands for permitting agencies in 
the near term, which would jeopardize the functioning of the PSD 
program. These time demands are due to not only the increase in number 
of permits but also the need to implement BACT determinations, GHG 
emissions evaluations, and other evaluations required under the PSD 
program for a wide variety of formerly unpermitted sources, including 
significant numbers and varieties of small manufacturing and commercial 
establishments. Permitting authorities would confront substantial 
challenges because the authorities have little experience with these 
sources and their GHG emissions.
    We request comment on our assessment of the impact of major source 
GHG thresholds lower than 25,000 tpy CO2e on PSD program 
administration, including any additional information on the number of 
sources and modification projects that might be affected at these lower 
thresholds for different GHG source categories. We also request comment 
on our conclusion that the 10,000-tpy threshold (or a lower threshold) 
would be too low to sufficiently address the administrative concerns.

   Table VIII-1--Estimated Number of Existing Facilities and Annual Number of Newly Constructed Facilities and
            Modifications Potentially Subject to PSD Review at Different GHG Major Source Thresholds
----------------------------------------------------------------------------------------------------------------
                                                                                                    Number of
                                                                                                modifications at
                                                                Number of       Number of new       existing
                                                                existing       facilities that   facilities that
    Major stationary source threshold level (tpy CO2e)         facilities       would exceed      would exceed
                                                                exceeding         threshold         threshold
                                                                threshold      (facilities/yr)   (modifications/
                                                                                                       yr)
----------------------------------------------------------------------------------------------------------------
1,000.....................................................           278,340             4,330             5,567
5,000.....................................................            52,888               532             1,058
10,000....................................................            26,898               289               538
25,000....................................................            13,661               128               273
50,000....................................................             7,245                77               145
100,000...................................................             4,850                66                97
----------------------------------------------------------------------------------------------------------------

    At the 50,000-tpy CO2e threshold, we estimate 
approximately 220 PSD permit actions due to GHG emissions. We do not 
believe that this level of permit activity would challenge the capacity 
of permitting authorities to properly administer the PSD program to the 
extent we described above for the 25,000-tpy CO2e threshold. 
As noted elsewhere in the legal discussion of the absurd results and 
administrative necessity doctrines, we are foreclosed from adopting 
higher thresholds when we believe a lower threshold would be possible 
to implement. We request comment on our assessment of the impact of 
major source GHG thresholds higher than 25,000 tpy CO2e on 
PSD program administration, including any additional information on the 
number of sources and modification projects that might be affected at 
these higher thresholds for different GHG source categories. We also 
request comment on our determination that this assessment supports a 
conclusion that the 25,000-tpy threshold is administrable and thus we 
do not need to adopt a threshold of 50,000 tpy. We note that the 
50,000-tpy level does involve about 6,400 fewer major sources than the 
25,000-tpy level, including about 1,600 sources that would have been 
newly defined as major (e.g., landfills, hospitals, offices, hotels). 
In light of this, we specifically ask for comment on whether a 50,000-
tpy level, which would exclude these sources, is administratively 
necessary.
c. Emissions Impacts
    We also evaluated the amount of GHG emissions emitted by facilities 
that would be subject to PSD requirements at the proposed thresholds, 
although, strictly speaking, this information is not relevant to the 
administrative-necessity basis for selecting the proposed major source 
threshold level for CO2e. The objective of the emissions 
evaluation was to generally assess the extent to which, on a national 
basis, GHG emissions sources would be covered at the proposed 
thresholds. The basis for this evaluation, with a detailed summary of 
the results, is provided in the docket for this rulemaking.\30\
---------------------------------------------------------------------------

    \30\ ``Technical Support Document for Greenhouse Gas Emissions 
Thresholds Evaluation; Air Quality Policy Division, Office of Air 
Quality Policy and Standards; U.S. Environmental Protection 
Agency''; July 7, 2009.
---------------------------------------------------------------------------

    We estimate that a 25,000-tpy CO2e threshold captures 
approximately 68

[[Page 55333]]

percent of national CO2e stationary source GHG emissions 
(including approximately 87 percent of CO2). This emissions 
coverage is comparable to national stationary source NOX 
emissions coverage of 72 percent at the existing PSD major source 
permitting threshold of 250 tpy NOX. Lowering the 
CO2e threshold to 10,000 tpy increases the amount of 
emissions covered by only 2 percent compared to the 25,000-tpy 
threshold but almost doubles the number of facilities covered. We 
estimate that a 10,000-tpy CO2e threshold would also affect 
approximately 7,000 commercial and multi-family residential sources. A 
50,000-tpy CO2e threshold would virtually eliminate all of 
the commercial/residential sector from being affected for GHG but would 
fail to capture some high emitters within key GHG categories (for 
example, iron/steel, refineries, electric generation, pulp and paper, 
petrochemical) and would reduce emissions coverage by about 2 percent 
compared to 25,000 tpy CO2e. A summary of the percentage of 
national stationary source GHG emissions associated with the affected 
facilities at different GHG emission thresholds is shown in Table VIII-
2.

  Table VIII-2--Percentage of National Stationary Source GHG Emissions
      From Affected Facilities at Different GHG Emission Thresholds
------------------------------------------------------------------------
                                                           Percent of
                                          Number of         national
  Major stationary source threshold       existing         stationary
          level (tpy CO2e)               facilities        source GHG
                                          exceeding         emissions
                                          threshold         (percent)
------------------------------------------------------------------------
1,000...............................           278,340                73
5,000...............................            52,888                71
10,000..............................            26,898                70
25,000..............................            13,661                68
50,000..............................             7,245                65
100,000.............................             4,850                64
------------------------------------------------------------------------

    Estimates of emissions coverage at different thresholds are not the 
same as estimates of the actual quantities of emissions that would be 
reduced through the PSD permitting program at these permitting 
thresholds; however, they do illustrate that at the proposed 25,000-tpy 
CO2e source threshold, the most significant contributors to 
stationary source GHG emissions would still be covered by the PSD 
program as major sources, and therefore any modifications or new 
additions at these source categories would potentially be subject to 
PSD requirements, including BACT.
2. Significance Levels
    With this action, we are also proposing a temporary, first phase 
GHG PSD significance level threshold based on administrative necessity. 
As noted previously, there are no existing PSD significance levels set 
for any of the GHG pollutants.
    Until we establish significance levels for these pollutants, those 
levels in effect remain at zero tpy, so that any physical or 
operational change that increases GHG emissions by any amount would 
constitute a modification and therefore would be subject to PSD. Thus, 
for any major source, any minor change that increases fuel combustion 
even slightly would increase GHG emissions and, as a result, 
potentially trigger PSD review. As with administrative burdens 
associated with the statutory major source PSD applicability threshold, 
the burdens associated with the hundreds of thousands of modification 
projects that would have to comply with the PSD program under these 
circumstances would be enormous, at least in the short term. They would 
overwhelm the permitting authorities as well as the regulated 
community, and would interfere with the issuance of PSD permits to 
sources of all types, whether emitting GHGs or not.
    As a result, we believe that the same legal doctrines of absurd 
results and administrative necessity apply for establishing the 
significance level. We need to phase in a significance level for GHGs 
by establishing, in the first phase, a reasonable significance level 
based on administrative necessity, and then by conducting a study and 
promulgating further rulemaking to establish the requirements for the 
second phase.
    To do so, we need information concerning the number of modification 
projects occurring at a facility level for different source categories 
that would exceed various possible significance levels for GHGs in any 
given year. However, it is very difficult to acquire or develop this 
information--and therefore there is great uncertainty in calculating 
specific administrative burdens associated with modifications--for 
several reasons. First, information is not available across sectors and 
source categories on the types and numbers of specific physical and 
operational changes that would result in emissions increases in amounts 
that can be estimated and that therefore can be compared to various GHG 
emissions significance levels. Second, there is general uncertainty in 
how many project modifications will occur within any given year because 
decisions on these projects are driven by facility- and sector-based 
growth patterns and business planning decisions. Lastly, some source 
categories and units that emit GHGs have not previously been subject to 
any type of permitting or reporting requirements; as a result, for 
these sources, there is very little historical record for use in 
estimating the number and types of projects that would occur at these 
sources and, in turn, establish an appropriate significance level for 
GHGs.
    Absent comprehensive information on the types and numbers of 
modification projects nationally that result in increases in GHG 
emissions, we are proposing and soliciting comment on a range of 
possible significance levels for CO2e. Our proposed range 
starts at 10,000 tpy CO2e, which reflects, subject to the 
uncertainty noted above, our current estimate of what would constitute 
a GHG significance level below which permitting authorities would be 
unable to adequately administer PSD, and goes up to 25,000 tpy 
CO2e, which is our proposed major source applicability 
threshold for GHGs under PSD. We believe that a 25,000-tpy 
CO2e significance level for GHGs would be the highest level 
we could consider because it is not reasonable to propose a 
significance level that is higher than the proposed major source 
threshold.
    We selected the GHG significance level at the lower end of the 
proposed range by analyzing inventory

[[Page 55334]]

information for key source categories that would have a substantial 
number of modification projects potentially subject to PSD permitting 
requirements for GHGs. Most importantly, depending on the significance 
level for CO2e, small fossil fuel-fired combustion units, 
which are numerous and ubiquitous, could have a substantial number of 
modifications that would be subject to PSD. Our threshold data analysis 
shows that almost 80 percent of the facilities that exceed the 25,000-
tpy CO2e major source threshold do so because of fossil fuel 
combustion units that emit CO2. Also, the U.S. national GHG 
inventory shows that approximately 80 percent of all GHG emissions 
result from fossil fuel combustion sources. The prevalence of 
combustion units across all affected sectors, and the dominant 
contribution of CO2 fuel combustion-related emissions to 
their GHG emissions total, leads us to conclude that an administrative 
necessity-based significance level for CO2e should be based 
on modifications that involve these combustion units.
    Thus, we analyzed sales data for two of the most affected 
categories of units: Boilers and stationary engines. Our analysis 
indicates that, on a yearly basis, almost 2,000 of these new combustion 
units would emit more than 10,000 tpy CO2e. The exact number 
of PSD permits that would result from modifications involving these new 
emissions units would likely be less than 2,000, depending on whether 
these units are located at a major source facility, whether multiple 
units are aggregated at one facility or the units are placed at 
different facilities, and whether they are considered new additions/new 
capacity or one-for-one replacements. However, we believe these data on 
combustion unit sales suggest that the significance level should be at 
least 10,000 tpy CO2e because, while the estimated 
population of new units with the potential to trigger PSD is something 
below 2,000 per year, that is still likely well above the current 
number of modifications (fewer than 300) that are currently subject to 
PSD each year. Any lower level would risk enormous numbers of permit 
applications that would be administratively impossible to process, and 
therefore we do not propose a GHG significance level lower than 10,000 
tpy CO2e. Further support for the 10,000-tpy CO2e 
level is the fact that the combustion units in the industrial sector 
that emit GHGs at this rate tend to be larger units: boiler-type units 
with an approximate heat input rating of 15-20 MMBtu/hr (depending on 
fuel type); and stationary internal combustion (IC) or compression 
ignition (CI) engines with a rating of greater than 2,000 horsepower. 
Units of this size provide a good representation of combustion units 
utilized in the industrial sector that should be subject to PSD. At the 
same time it does not capture an enormous number of very small 
combustion units that would overwhelm permitting authorities from an 
administrative standpoint. For example, using the same sales 
information referenced above on combustion units, we estimate that 
approximately 29,000 new boilers and stationary engines would exceed a 
250-tpy CO2e level. A summary of our significance level 
analysis for CO2e is provided in the docket for this 
rulemaking.\31\
---------------------------------------------------------------------------

    \31\ ``Summary of Administrative Necessity Basis for a 
CO2-e Significance Level''; Prepared by EPA Staff; August 
2009.
---------------------------------------------------------------------------

    Although our significance level range is driven by our analysis of 
CO2 combustion units, we believe that the level of 10,000 
tpy CO2e should be administratively feasible for other 
sources of GHG emissions. Our threshold data analysis shows 
approximately 3,000 facilities that would have the potential to emit 
amounts of non-CO2 GHGs exceeding a 25,000-tpy 
CO2e major source threshold based on their non-
CO2 emissions alone. Although this estimate is not directly 
related to the number of possible modification projects that may exceed 
a 10,000-tpy CO2e significance level for non-CO2 
emissions alone, this estimate provides a relative sense of the number 
of facilities emitting non-CO2 emissions at rates that 
approximate the 10,000-tpy CO2e level, only a portion of 
which may actually undergo modifications that would potentially be 
subject to PSD review. For example, if the 3,000 facilities are assumed 
to have a modification rate of 2 percent, as described above, and each 
modification results in emissions increases of at least 10,000 tpy 
CO2e (in, again, non-CO2 GHG emissions), then 
approximately 60 modification projects would come under PSD review just 
for principally non-CO2 sources. This alone would be an 
approximate 20- to 25-percent increase above the current level of 280 
annual permits. We believe that an additional PSD permit increase of 
this magnitude, on top of the modifications resulting from 
CO2 emissions from combustion-related projects, may stretch 
the capacity of, but may not necessarily create an unadministrable 
burden for, permitting authorities.
    Although we believe 10,000 tpy CO2e represents a 
reasonable lower bound for the range we are proposing for the GHG 
significance level, we specifically request comments on whether: (1) A 
level lower than 10,000 tpy CO2e would still be 
administratively feasible; (2) a level higher than 25,000 
CO2e is necessary to avoid an administratively overwhelming 
number of modification projects becoming subject to PSD permitting due 
solely to their GHG emissions; and (3) there are data suggesting an 
appropriate number we should select within the 10,000- to 25,000-tpy 
range. In suggesting alternative thresholds, we request that commenters 
submit any available information and data that would allow us to better 
characterize the number and types of modification projects that would 
become subject to the PSD program at different GHG significance levels 
and for different types of source categories.
    We note that this basis contrasts with that of our prior 
significance levels determinations, which were based on de minimis 
emissions levels.

D. What is the rationale for selecting the proposed first phase GHG 
permitting threshold for title V?

    With this action, we are proposing a temporary, first phase GHG 
title V major source threshold of 25,000 tpy CO2e, based on 
the administrative imperatives that underly both the absurd results and 
administrative necessity legal doctrines.
    As noted earlier, if we do not establish a different ``major 
source'' level under title V for GHG sources, those sources would 
become subject to the statutory 100-tpy threshold. Under these 
circumstances, we estimate that 6.1 million sources would have to 
comply with the title V permitting program. The resulting 
administrative burdens would be enormous in the short term and would 
overwhelm the permitting authorities, as well as posing severe burdens 
on the regulated community. Accordingly, we need to phase in title V 
applicability by establishing, in the first phase, an administrable 
permitting threshold, and then by conducting a study and promulgating 
further rulemaking to establish the requirements for the second phase.
    The criterion for establishing the title V major source threshold 
is to reduce administrative burdens to the point at which the title V 
program can be implemented. Our analyses, discussed in detail later in 
this preamble, establish this threshold at 25,000 tpy CO2e. 
Although this level would likely see an increase in the volume of title 
V permitting, compared to current permitting levels, and although this 
increase would pose some challenges to

[[Page 55335]]

permitting authorities, EPA believes that this increase would not 
exceed the capacity of permitting authorities to implement the program.
    The title V permitting program requires all existing major sources 
to obtain operating permits, as compared to the PSD program, which 
requires permits only for newly constructed major source facilities and 
major modifications at existing major sources. Therefore, to evaluate 
permitting thresholds for title V, we analyzed the number of existing 
facilities that would exceed a given GHG threshold. We considered 
alternative major source thresholds ranging from 1,000 to 100,000 tpy 
CO2e.
    Our estimates for the existing number of facilities whose emissions 
would exceed different GHG thresholds are summarized in table VIII-1 
and discussed in more detail in the Technical Support Document in the 
docket for this rulemaking.\32\ For comparison purposes, note that 
currently there are approximately 14,700 title V operating permits 
nationwide. We estimate that at a 25,000-tpy CO2e permitting 
threshold, about 13,600 existing facilities would be classified as 
``major sources'' for their PTE-based CO2e emissions. As 
discussed later in this preamble, these 13,600 facilities present 
additional workload demands on permitting authorities, either because 
they are not currently required to obtain a title V permit (because 
their non-GHG emissions fall below the ``major source'' threshold) or 
because, although they already are required to obtain a title V permit 
(due to their non-GHG emissions), their permits would need to be 
revised to cover their GHG emissions. In contrast, at a 10,000-tpy 
CO2e threshold the number of existing facilities exceeding 
the threshold jumps to almost 27,000. At a 50,000-tpy CO2e 
threshold, the number of existing facilities exceeding the threshold 
falls to about 7,200. We believe, based on these estimates, that a 
25,000-tpy CO2e major source threshold is appropriate 
because it renders the title V program administrable, albeit with 
additional workload requirements. As discussed later in this preamble, 
as we move below the 25,000-tpy CO2e threshold, we believe 
the administrative burdens related to the increasing number of 
facilities covered, as well as to the variation in the type of 
facilities covered, become insuperable. At both the 50,000- and 
100,000-tpy CO2e thresholds, however, we do not believe that 
the potential level of permit activity would fill the capacity of 
permitting authorities to properly administer the title V program, and 
similar to PSD considerations, we believe it would potentially exclude 
some high-emitting facilities within key GHG source categories.
---------------------------------------------------------------------------

    \32\ ``Technical Support Document for Greenhouse Gas Emissions 
Thresholds Evaluation; Air Quality Policy Division, Office of Air 
Quality Policy and Standards; U.S. Environmental Protection 
Agency''; July 7, 2009.
---------------------------------------------------------------------------

    Although we believe a 25,000-tpy CO2e threshold would 
add an additional permitting burden to permitting authorities, we 
believe that this additional burden could be adequately administered. 
We expect that many of the 13,600 existing facilities that would exceed 
the proposed 25,000-tpy CO2e threshold--the majority of 
which consist of electric generating units and industrial facilities--
already have a title V operating permit for other regulated pollutants, 
and thus would potentially require only a permit revision or 
modification to address GHGs. We believe that these permit revisions or 
modifications under title V would initially be limited due to the lack 
of new applicable GHG requirements to include in the permits, but would 
increase in complexity and content as facilities move through PSD 
permitting processes and as other possible stationary source 
requirements emerge.
    In addition, with a 25,000-tpy CO2e threshold, some of 
the 13,600 existing facilities are not currently subject to title V 
requirements and therefore would require new title V permits. These 
facilities constitute primarily additional landfills (we estimate 
approximately 1,700 landfills may be added to the title V program) and 
some large commercial facilities, primarily large hospitals. These 
facilities number approximately 800, but the number of new permits they 
would need would be less than this because approximately 180 are 
currently subject to permitting under title V for pollutants currently 
subject to regulation under the Act. Permitting the newly subject 
sources would not solely involve GHG requirements but may also involve 
other pollutants emitted by the source.
    We estimate that the combination of title V permit revisions, 
modifications, and new permits that would result from a 25,000-tpy 
CO2e applicability threshold would require an estimated 
additional 492 FTEs by permitting authorities nationwide, or an 
estimated 50-percent increase over current title V staffing levels, to 
meet the initial permitting requirements that would apply at the time 
title V applicability is triggered for GHG sources. We do not believe 
this 50-percent increase in resources would be administratively 
impossible to achieve, given that title V is self-funded, and that 
there are efficiencies gained in revisiting existing title V permits 
and sources with which the permitting staff are familiar.
    In contrast, at a 10,000-tpy CO2e threshold, we estimate 
that an additional 1,357 FTEs (an estimated 135-percent increase over 
current title V staffing levels) would be required by permitting 
agencies nationwide (again, based on initial permitting requirements). 
In addition, there would be substantial influx of new title V permits--
greater than 13,000--that would need to be processed and issued. This 
would include over 7,000 newly permitted commercial and residential 
sources covering a wide variety of source types, including office 
buildings, retail malls, hotels, apartment buildings and educational 
facilities. The new variety of sources included at the lower threshold 
also would require additional training for permitting staff to become 
familiar with the configuration and emissions from those sources. For 
these reasons, we believe that at threshold levels below 25,000 tpy 
CO2e, even considering the capability of permitting 
authorities to eventually add additional staff funded through 
permitting fees, permitting authorities would not be capable of 
ensuring reasonable processing times for both new permits and revisions 
resulting from the additions of GHG emitters to the program.
    We request specific comment on our estimated burden at the 25,000-
tpy CO2e major source threshold for title V and on whether 
the additional workload would be manageable to permitting authorities. 
We also request specific comment on our assessments of the impact of 
title V major source GHG thresholds higher and lower than 25,000 tpy 
CO2e on title V program administration, including any 
additional information on the number of sources affected and the 
permitting burdens created at these thresholds. We further request 
comment on our conclusion that the 10,000-tpy threshold (or a lower 
threshold) would be too low to address the administrative necessity 
concerns, that the 25,000-tpy threshold is administrable, and that 
there is therefore no need to adopt a threshold of 50,000 tpy.
    There are additional policy and programmatic considerations that, 
while not part of the administrative-necessity basis, also support 
establishing the major source GHG threshold for title V at 25,000 tpy 
CO2e. Most importantly, this level would result in 
consistency between the PSD and title V permitting threshold for GHG 
sources. Historically, there has been a strong measure of

[[Page 55336]]

consistency in the PSD and title V permitting levels since there is a 
generally applicable 100-tpy ``major source'' applicability threshold 
in title V and there is a 100-tpy ``major emitting facility'' 
applicability threshold applied in PSD for sources in 28 key industrial 
source classifications. In addition, there is a strong programmatic 
incentive for the programs to share a common permitting threshold. 
Because at least initially GHG requirements from the PSD permitting 
process would constitute the only applicable requirements to be 
included in the title V permits for many sources, a title V permitting 
threshold lower than the PSD threshold would create numerous ``empty'' 
or ``hollow'' permits, that is, permits that do not include any 
applicable requirements, and many previously unpermitted commercial 
sources would be required to obtain these hollow permits. Permits 
hollow in this respect may be viewed as unnecessary and wasteful by the 
permitting authorities and regulated community. Further, requiring such 
permits may be at tension with a primary purpose of title V to promote 
compliance and facilitate enforcement by gathering into one document 
the requirements that apply to a particular source. See CAA Section 
504(a) (each title V permit must contain terms ``necessary to assure 
compliance with applicable requirements'' of the CAA), H.R. Rep. No. 
101-490, at 351 (1990) (``It should be emphasized that the operating 
permit to be issued under this title is intended by the Administration 
to be the single document or source of all of the requirements under 
the Act applicable to the source.'').

E. How will EPA assess the GHG permitting thresholds in the first phase 
of the tailoring program, and how will EPA develop the second phase?

1. Assessment To Be Performed Within 5 Years Following Promulgation of 
the First Phase
    We consider the actions proposed in this rulemaking to set higher 
GHG major source applicability thresholds for PSD and title V, and to 
establish a GHG PSD significance level, as interim measures that will 
need to be reassessed in terms of their administrative necessity. 
Therefore, as part of this proposed action, we are committing to 
evaluate the effectiveness of the first phase of the tailoring program, 
which consists of the proposed GHG thresholds, to enable PSD and title 
V permitting authorities to adequately administer their programs with 
the inclusion of GHG emissions sources. We are proposing to complete 
this evaluation within 5 years from the effective date of this final 
rulemaking. The results of this study will form the basis for further 
regulatory action that will constitute the second phase, which may 
include continuing or lowering the GHG applicability thresholds for PSD 
and/or title V set in the first phase, adoption of other streamlining 
techniques that more accurately reflect the administrative capabilities 
of permitting authorities to address GHG sources during the second 
phase, and/or taking other actions consistent with the goal of 
expeditiously meeting CAA requirements in light of the administrative 
burden that remains at that time.
    We believe a 5-year period is necessary for the evaluation of the 
first phase of the tailoring program to provide an adequate period of 
time for permitting authorities to implement the proposed GHG 
permitting thresholds and for a sufficient record of implementation 
experience to be compiled. We also believe a number of important 
activities undertaken by EPA and the States over the 5-year evaluation 
period could potentially impact permitting authorities' administrative 
capabilities to address GHG emissions sources, and we need sufficient 
time to implement those activities and assess that impact. These 
activities will include the following:
     The first activity is the development of streamlining 
tools to specifically address GHG sources. As discussed in section 
VII.A of this preamble, several permit streamlining techniques may have 
applications for GHG emissions sources. However, EPA needs an estimated 
3 to 4 years to fully develop some of these techniques. Because many of 
these techniques are source-specific, or at least source category-
specific--e.g., presumptive BACT determinations--EPA may not be able to 
develop them for all affected sources within the evaluation period. 
However, we anticipate that EPA may make sufficient progress on enough 
streamlining techniques to impact the administrative capabilities of 
permitting authorities to address GHG emissions sources.
     The second activity during the 5-year period involves the 
ability of permitting authorities to add more staff to their permitting 
programs, especially the title V program for which additional fees for 
GHG emissions may support the addition of new staff. Based on the 
summary of State data on impacts of GHG emissions permitting, it is 
likely that even under the best-case scenarios, at least a 3- to 4-year 
period is necessary for most permitting authorities to add and 
adequately train staff for permitting duties involving GHG emitters. 
Therefore, we expect that the impact of increased staffing on the 
administrative capabilities of permitting authorities will be better 
known by the fifth year of the threshold evaluation period.
     The third activity is the collection of more detailed 
emissions information resulting from implementation of the proposed GHG 
mandatory reporting rule. Many permitting authorities have not had any 
experience to date with quantifying or evaluating emissions and 
controls of GHG source categories. EPA's proposed GHG mandatory 
reporting rule will produce significant information about key GHG 
emissions source categories that will help permitting authorities and 
EPA better understand the characteristics and quantities of GHG 
emissions, particularly at the facility level. Reporting facilities 
will begin to submit data in the year 2011, and we expect a substantial 
record of emissions data to be collected during the evaluation period. 
We believe that these facility-level GHG data will be an important 
component to increasing permitting staff knowledge of GHG emissions 
sources and will have a positive impact on the permitting staff's 
ability to address GHG emissions in their programs. We also believe 
this information will provide additional insight into the level and 
types of GHG emissions occurring at different facility types that 
should support EPA's reevaluation of the first phase GHG permitting 
thresholds.
     The fourth activity during the 5-year assessment period is 
the development of background information on control technologies and 
costs for GHG emissions source categories. As discussed in more detail 
in section X of this preamble, one of the administrative constraints is 
the fact that permitting authorities must apply BACT to GHG sources 
subject to PSD, but that endeavor would be highly resource-intensive. 
The 5-year assessment period will allow EPA and the States to develop 
information to evaluate GHG control techniques and costs, which, in 
turn, will be the basis for BACT determinations involving GHG emissions 
sources.
    The 5-year period will serve other purposes, too, including 
allowing EPA to analyze the impacts of permitting smaller GHG sources 
to develop methods to mitigate those impacts. To date, EPA has 
collected very little information on the site-specific configuration 
and GHG emissions characteristics of many of the smaller industrial and 
commercial source categories. As a result, it is difficult to fully 
assess the impact of GHG

[[Page 55337]]

emissions permitting on these sources. We believe the 5-year evaluation 
period will provide EPA the opportunity to develop a more comprehensive 
profile of these smaller GHG source categories, which will allow a 
better assessment of the impacts on the small business community and, 
in turn, ways to mitigate those impacts.
    Although we believe there are sufficient reasons to justify a 5-
year evaluation period, we ask for comment on whether the activities 
described above--or at least some portion of them sufficient to begin 
administering permit programs for significant numbers of sources below 
the proposed 25,000-tpy CO2e threshold--could be 
accomplished in a shorter time frame than our initial estimates. For 
example, we ask for comment on whether 3 years would be a sufficient 
evaluation period. We are especially interested in understanding the 
basis for such an alternative time period and what activities would 
need to occur during the period.
    We further note that, for the proposed applicability thresholds as 
described above, we did consider a step-down approach for phasing in 
GHG permitting thresholds for PSD and title V programs. Under a step-
down approach, applicability thresholds for GHGs would be lowered to 
predetermined step-down levels at specified intervals, such as every 2 
years or more. However, we rejected the step-down approach on the basis 
that, without having established sufficient information on source-
specific emissions and absent a record of experience with permitting 
GHG emissions sources on the part of permitting authorities, we were 
not in position to establish and support specific step-down thresholds. 
We believe that establishing further specific step-downs prior to 
evaluating the impact of the proposed GHG thresholds included in this 
rulemaking, as well as the impact of the proposed streamlining 
techniques, would prematurely determine what is administratively 
feasible for permitting authorities to undertake in terms of permitting 
GHG sources. Nonetheless, in light of the necessity of ultimately 
achieving compliance with the statute, we solicit comment on whether 
such an approach, coupled with regular examination of whether the 
administrative situation is improving, is an appropriate way to achieve 
compliance while taking into account the administrative imperatives. If 
so, we ask for suggestions on how we could structure such an approach 
(e.g., when future phases should begin, how we should determine the 
appropriate thresholds for each phase, etc.)
2. Rulemaking Based on Threshold Evaluation for Second Phase of 
Tailoring Program
    We propose to commit, by rule, that by 6 years after promulgation 
of the first phase of the tailoring program, and following completion 
of the threshold evaluation study, we will promulgate a follow-up 
rulemaking that will establish the second phase of the program. This 
rulemaking will either confirm the continued use of the GHG permitting 
thresholds implemented for the first phase, or promulgate alternative 
GHG permitting thresholds or other streamlining techniques. The results 
of the 5-year threshold evaluation study will form the basis for 
determining what thresholds or other techniques will be promulgated in 
the second phase rulemaking.
    At this time, we cannot anticipate specifically what the second 
phase of this tailoring program will consist of. The situation that we 
confront is unprecedented. However, we believe the process of 
establishing the first phase and then assessing it, combined with the 
development of other streamlining techniques to the extent possible, 
will provide a sufficient basis for EPA to propose a rulemaking to 
establish the second phase. Of course, that rulemaking will provide 
ample opportunity for affected parties to comment on their experiences 
with the administrative burden at current GHG permitting thresholds and 
to make recommendations for any changes in the thresholds, for adoption 
of other streamlining techniques, and/or for actions consistent with 
the goal of expeditiously meeting CAA requirements in light of the 
administrative burden that remains at that time.

IX. What would be the economic impacts of the proposed rule?

    This section of the preamble examines the economic impacts of the 
proposed rule including the expected benefits and costs of the proposed 
rule on affected entities. This proposed rule lifts, for a period of 6 
years, the burden to obtain a title V operating permit required by the 
CAA for smaller sources of GHGs and the burden of PSD requirements for 
smaller new or modifying sources of GHGs. Thus, this rule provides 
regulatory relief rather than regulatory requirements for these smaller 
GHG sources for a period of 6 years. For larger sources of GHGs, there 
are no direct economic burdens or costs as a result of this proposed 
rule, because requirements to obtain a title V operating permit or to 
adhere to PSD requirements of the CAA are already mandated by the Act 
and by existing rules and are not imposed as a result of this proposed 
rulemaking.
    The regulatory impact analysis (RIA) conducted for this proposed 
rule provides details of the benefits or regulatory relief that smaller 
GHG sources will experience in terms of costs avoided as a result of 
this proposed rule and the potential for social costs in terms of 
foregone environment benefits during this 6-year period. Complete 
details of the regulatory impact analysis conducted for this proposed 
rule may be found in the document ``Regulatory Impact Analysis for the 
Proposed Greenhouse Gas Tailoring Rule,'' in the docket for this 
rulemaking.
    This rulemaking provides permitting thresholds for sources of GHGs 
that exceed levels contained in the CAA. Specifically, sources with the 
potential to emit less than 25,000 tpy CO2e are not required 
to obtain an operating permit or PSD permit for a period of at least 5 
years at which time a study will be conducted and the decision 
revisited after 6 years. In the 6 years following promulgation of this 
rule, the EPA estimates that, compared to baseline estimates that do 
not include the effects of this rule, over six million sources of GHG 
emissions will be allowed to operate without a title V operating permit 
and tens of thousands of new sources or modifying sources per year will 
not be subject to PSD requirements for GHGs. For this large number of 
smaller sources, this rule alleviates the regulatory burden associated 
with obtaining an operating or PSD permit or complying with NSR BACT 
requirements. Therefore, this proposed action may be considered 
beneficial to these small entities as it provides relief from 
regulation that would otherwise be required.
    This decision does potentially have environmental consequences in 
the form of lesser emission reductions during the 6-year period of 
time. Given that sources between 250 and 25,000 tons per year account 
for an estimated 7 percent of the six directly emitted GHGs nationally 
from industrial, commercial, and residential source categories, while 
representing over 95 percent of the total number of sources potentially 
requiring an operating or PSD permit for GHGs under current permitting 
thresholds in the CAA, the EPA believes this is a prudent decision. 
Requiring such a large number of small sources to obtain permits for 
the first time would overtax the permitting authorities' abilities to 
process new permits without commensurate benefits. Moreover, as 
described in section VII.C

[[Page 55338]]

of this preamble, reductions from these small sources will still be 
occurring, notwithstanding the fact that permitting requirements would 
not apply to them. These smaller sources of GHG will be the focus of 
voluntary emission reduction programs and energy efficiency measures 
that lead to reductions in GHGs. The EPA will also reevaluate this 
decision after a 6-year period and complete a study of the implications 
of permitting smaller GHG sources for those sources and permitting 
authorities.

A. What entities are affected by this rule?

    As previously stated, this proposed rule is essentially providing 
regulatory relief and does not include direct regulatory provisions for 
any industrial, commercial, or residential entities. An analysis is 
presented for smaller sources expected to experience regulatory relief 
from this rule. This proposal increases the threshold to obtain a title 
V operating permit to PTE levels of 25,000 tpy CO2e or 
greater annual emissions. New sources of GHG emissions with the 
potential to emit less than 25,000 tpy CO2e that would 
otherwise be subject to PSD are not required to obtain a PSD permit or 
to comply with BACT regulatory requirements as a result of this 
proposed rule. The significance levels for major modifications at 
sources of GHG emissions are also increased in this proposal allowing 
small sources to forego obtaining a PSD permit and to avoid BACT 
regulatory requirements, when the projected emissions increase from 
such modification is less than the PSD significant level (with the 
promulgated level to be selected from a proposed range of values 
between 10,000 and 25,000 tpy CO2e). The industry, 
agricultural, residential and commercial categories anticipated to 
experience regulatory relief are shown in table IX-1. As table IX-1 
shows, this proposal lifts permitting requirements for over six million 
potential title V sources and tens of thousands of potential PSD new 
sources that would be otherwise required by the CAA to obtain permits.

Table IX-1--Estimated Number of Affected Sources Experiencing Regulatory
                                 Relief*
------------------------------------------------------------------------
                                                    Number of sources
                                                 experiencing regulatory
                                                         relief
                     Sector                    -------------------------
                                                               New PSD
                                                  Title V     (annually)
------------------------------------------------------------------------
Electricity...................................          161           20
Industrial....................................      156,545          303
Energy........................................        3,644           35
Waste Treatment...............................        1,431            0
Agriculture...................................       37,351          299
Commercial....................................    1,354,760       12,034
Residential--
    Multifamily...............................      610,340        6,397
Residential--
    Single Family.............................    3,925,000          515
                                               -------------------------
        Totals................................    6,089,232       19,603
------------------------------------------------------------------------
* Number of sources is determined on a potential to emit basis for small
  sources below 25,000 tpy CO2e threshold. Estimates for PSD sources are
  for newly constructed facilities and do not include modifications at
  existing facilities that may also be subject to PSD requirements.

B. What are the estimated benefits to small sources due to regulatory 
relief?

    EPA estimated the benefits or avoided costs for sources that are 
likely to experience regulatory relief from this proposal. This 
analysis focuses upon the burdens that are being lifted for smaller 
sources as a result of this proposed rule. In addition, an accounting 
of the benefits from this proposal as measured by avoided costs for 
State, local, and tribal permitting authorities is provided. These 
avoided costs relate specifically to information collection costs or 
burden costs postponed for smaller sources of GHG emissions otherwise 
required to obtain an operating permit under title V or required to 
modify an existing permit to address GHG emissions. Avoided costs shown 
also include information collection requirements for additional PSD 
permits postponed for new or modifying smaller sources of GHGs, as well 
as the avoided costs to State, local and tribal permitting authorities.
1. What are estimated benefits or avoided burden costs for title V 
permits?
    Table IX-2 shows that the estimated first-year information 
collection cost avoided as a result of this proposal by an industrial 
source required to obtain a title V operating permit is approximately 
$46.4 thousand (2007$) per permit. The EPA estimates that over 195 
thousand sources will avoid incurring these permitting costs for a 
period of at least 6 years as a result of this proposal. The avoided 
burden cost to obtain a new commercial or multi-family residential 
operating permit is estimated to be approximately $5.0 thousand (2007$) 
per permit with over 5.9 million sources benefitting by not incurring 
these costs due to this proposed rule. In total, EPA estimates that 
more than $38 billion (2007$) in expenditures relating to title V 
permitting will be avoided by small sources of GHG for a period of 6 
years as a result of this proposal. Much of this burden would have been 
incurred during the first year following the light-duty vehicle rule 
because sources have 1 year from the date of becoming subject to title 
V. However, some ongoing burden for new sources coming into the program 
would be incurred each subsequent year. State, local, and tribal 
permitting authorities will also benefit in terms of avoided permitting 
administrative costs by over $15 billion (2007$) as a result of the 
decisions proposed in this action. This burden would not all have been 
incurred during the first year following the light-duty vehicle rule, 
but much of it would generally have been incurred within the first 2 to 
3 years. This is because under the part 70 regulations, permitting 
authorities are required to act on applications within 18 months of 
receipt. There would also be some ongoing burden in each subsequent 
year due to new sources coming into the program.

[[Page 55339]]



    Table IX-2--Regulatory Relief Provided for Small GHG Sources and
                         Permitting Authorities
------------------------------------------------------------------------
                                    Small GHG sources not covered during
                                          first phase < 25,000 tpy
                                  --------------------------------------
    Program/affected entities       Per-permit                Total cost
                                       cost      Number of    (millions
                                     (2007$)      permits       2007$)
------------------------------------------------------------------------
              Source
Title V:
    New Industrial...............       46,350      195,895      9,079.7
    New Commercial/Residential...        4,986    5,956,513     29,699.2
                                  --------------------------------------
        Subtotal Title V Permits.  ...........  ...........     38,778.9
PSD Permits:
    New Industrial...............       84,530        3,299        278.9
    New Commercial/Residential...       16,887       37,197        628.1
                                  --------------------------------------
        Subtotal PSD Permits.....  ...........  ...........        907.0
                                  --------------------------------------
            Total Source Costs...  ...........  ...........     39,685.9
       Permitting Authority
Title V:
    New Industrial...............       19,688      195,895      3,856.8
    New Commercial/Residential...        1,978    5,956,513     11,781.9
                                  --------------------------------------
        Subtotal Title V Permits.  ...........  ...........     15,638.7
PSD Permits:
    New Industrial...............       23,243        3,299         76.7
    New Commercial/Residential...        4,633       37,197        172.3
                                  --------------------------------------
        Subtotal PSD permits.....  ...........  ...........        249.0
                                  --------------------------------------
            Total Permitting       ...........  ...........     15,887.7
             Authority Costs.....
                                  --------------------------------------
            Total Source and             184.3  ...........     55,573.6
             Permitting Authority
             Costs...............
------------------------------------------------------------------------
Notes: (1) Costs shown in ``Sources Not Covered During First Phase''
  represent estimates of the regulatory burden relief proposed by this
  rule. Title V operating permit costs represent one time costs, but
  these permits are subject to renewals every 5 years. New and modified
  PSD permits reflect the estimated annual number of new and modifying
  sources requiring permits and the associated costs.
(2) Sums may not add due to rounding.
(3) All costs are shown in 2007 dollars.

2. What are avoided burden costs associated with regulatory relief for 
small PSD sources?
    Table IX-2 summarizes the estimated burden costs avoided by sources 
and permitting authorities with this tailoring rule. The estimated 
avoided burden or reporting and recordkeeping cost associated with 
requiring new industrial sources to obtain permits is estimated to be 
$84.5 thousand for new or modified industrial sources and $16.9 
thousand for new or modified commercial or multi-family residential 
sources (2007$). This represents avoided annual costs of over $900 
million (2007$) for new and modifying small sources of GHG. State, 
local, and tribal permitting authorities are expected to avoid $249 
million (2007$) annually in administrative expenditures associated with 
postponing PSD program requirements for small GHG sources.

C. What are the economic impacts of this rulemaking?

    This proposed rulemaking does not impose economic burdens or costs 
on any sources or permitting authorities, but should be viewed as 
regulatory relief for smaller GHG emission sources and for permitting 
authorities. Although sources above the thresholds proposed in this 
rule will become subject to permitting when the light-duty vehicle rule 
is promulgated, those impacts are not attributable to the present 
rulemaking. Rather they are mandated by the CAA and existing 
regulations and automatically take effect independent of this proposal.
    In addition to considering the regulatory relief expected for 
affected entities as a result of this proposed rule, the EPA considered 
the impact of this rulemaking to small entities (small businesses, 
governments and non-profit organizations) as required by RFA and 
SBREFA. For informational purposes, the RIA includes the Small Business 
Administration (SBA) definition of small entities by industry 
categories for stationary sources of GHGs and potential regulatory 
relief from title V and NSR permitting programs for small sources of 
GHG. Since this rule does not impose regulatory requirements but rather 
lessens the regulatory burden of the CAA requirements to smaller 
sources of GHGs, no economic costs are imposed upon small sources of 
GHGs as a result of this proposed rule. Rather this proposal provides 
regulatory relief for small sources. These avoided costs or benefits 
accrue because small sources of GHGs are not required to obtain a title 
V permit and new or modifying small sources of GHGs are not required to 
meet PSD requirements for a period of 6 years. Some portion of the 
small sources may be small entities, and these entities will benefit 
from the regulatory relief proposed in this rule.\33\
---------------------------------------------------------------------------

    \33\ We note that some of the sources that remain subject to 
permitting above the proposed threshold in this rule may nonetheless 
be small businesses. Elsewhere in this preamble, we discuss our 
intent to convene a discretionary panel to examine the small 
business impacts of GHG regulation through PSD, although such 
impacts are not imposed as a result of this proposed action. The RIA 
provides a discussion of these impacts for informational purposes.
---------------------------------------------------------------------------

D. What are the costs of the proposed rule for society?

    EPA examined the social costs of this proposed rule. These social 
costs

[[Page 55340]]

represent the foregone environmental benefits that would occur if 
regulatory relief were offered to small sources of GHG emissions as 
proposed. This proposal is one such regulatory relief since it 
increases the emissions thresholds for the title V and PSD programs, as 
they apply to sources of GHG emissions, to levels above those in the 
CAA. In this preamble section, the benefits or avoided regulatory costs 
of such relief are discussed, but there is also a social cost imposed 
by such relief because this rule may forego some of the possible 
benefits associated with title V and PSD programs for sources of GHG 
emissions below 25,000 tpy CO2e but above the statutory 100/
250 tpy levels. These benefits are those attributed to title V and PSD 
permitting programs in general. These benefits are based upon the 
relevance of these programs to policymaking, transparency issues, and 
market efficiency, and therefore are very difficult to quantify and 
monetize. For title V, they include the benefits of improved compliance 
with CAA requirements that stem from (1) improved clarity regarding 
applicability of requirements, (2) discovery and required correction of 
noncompliance prior to receiving a permit, (3) improving monitoring, 
recordkeeping, and reporting concerning compliance status, (4) self-
certification of compliance with applicable requirements initially and 
annually, and prompt reporting of deviations from permit requirements, 
(5) enhanced opportunity for the public to understand and monitor 
sources' compliance obligations, and (6) improved ability of EPA, 
permitting authorities, and the public to enforce CAA requirements. 
However, it is important to remember that a title V permit does not add 
new requirements for pollution control itself, but rather collects all 
of a facility's applicable requirements under the CAA in one permit. 
Therefore, the compliance benefits above are less when title V permits 
contains few or no CAA applicable requirements. During the first phase 
under this proposal, when the title V threshold is 25,000 tpy, we 
expect that the vast majority of sources excluded from title V would be 
sources that have no CAA applicable requirements for GHG emissions and 
few or no requirements for other pollutants because their emissions of 
those pollutants are so small. For this reason while it is extremely 
difficult to measure the degree of improved compliance, if any, that 
would be foregone, or to quantify the social costs that would be 
imposed, we expect that they would be negligible.
    For PSD, the primary social cost imposed by the tailoring rule 
stems from the foregone benefit of applying BACT to the tens of 
thousands of small new sources and modifications that will be below our 
proposed thresholds during the first phase. This social cost 
potentially weighs against the cost savings described above that stem 
(in part) from avoiding the administrative and control costs of 
applying BACT to these sources. The BACT requirement assures that new 
and modified sources, when they increase their emissions are using 
state-of-the-art emission controls and affords the public an 
opportunity to comment on the control decision. It does not prohibit 
increases but it assures that such controls are applied. Delaying the 
BACT requirement for numerous small sources during the first phase of 
this proposed rule could allow increases from these smaller sources 
that are greater than they would be if BACT were applied. A detailed 
analysis of this difference is beyond the scope of this rule because we 
do not have detailed information on the universe of these tens of 
thousands of small PSD actions, the candidate BACT technologies for 
each of them, how permitting authorities would make the BACT decisions, 
and how the BACT limit would compare to what would otherwise be 
installed absent BACT.
    It is not possible at this time to quantify the social costs of 
avoided BACT. However we note that the universe of possible emissions 
that would be regulated by sources excluded under the tailoring rule is 
small compared to those that would remain subject to PSD. The sources 
excluded in the first phase of this proposal comprise only 7 percent of 
total stationary source GHG emissions, while 68 percent remain subject 
to regulation. Furthermore, we expect the emissions differences due to 
BACT controls for such sources to be relatively small due to the lack 
of available capture and control technologies for GHG at such sources 
that are akin to those that exist for conventional pollutants and 
sources, as well as the likelihood that even in the absence of BACT 
such sources would already be installing relatively efficient GHG 
technologies to save on fuel costs. Thus, while potential benefits 
would be foregone by excluding smaller sources from the permitting 
programs, these benefits are likely to be small. Under the tailoring 
rule, we will be working during the 6-year period to greatly improve 
our understanding of both the administrative costs of regulating and 
the social costs of not regulating smaller sources under PSD and title 
V, and we will be relying on that information to support our future 
threshold analyses called for under the proposal.
    In reaching the decisions for this GHG tailoring rule, the EPA 
recognizes that GHG emissions can remain in the atmosphere for decades 
to centuries, meaning that their concentrations become well-mixed 
throughout the global atmosphere regardless of emission origin, and 
their effects on climate are long lasting and significant. A detailed 
explanation of climate change and its impact on health, society, and 
the environment is included in EPA's technical support document for the 
endangerment finding proposal (Docket ID No. EPA-HQ-OAR-2009-0171). The 
EPA recognizes the importance of reducing climate change emissions for 
all sources of GHG emissions including those sources afforded 
regulatory relief in this rule and plans to address potential emission 
reductions from these small sources using voluntary and energy 
efficiency approaches. Elsewhere, we have discussed EPA's interest in 
continuing to use regulatory and/or non-regulatory tools for reducing 
emissions from smaller GHG sources because we believe that these tools 
will likely result in more efficient and cost-effective regulation than 
would case-by-case permitting.

X. What implementation issues are related to this proposal?

    In this action, EPA is proposing certain steps to ensure that 
smaller sources (meaning sources emitting GHGs at lower rates) will not 
become subject to PSD or title V upon EPA's completion of a rulemaking 
that regulates GHG emissions. Absent those steps, such a rule would 
trigger PSD and title V for many of these smaller sources. This is 
because both the CAA PSD provisions and the title V provisions are 
self-effectuating, that is, they each apply by their terms to require 
sources to undergo permitting requirements. In addition, federally 
approved State law provisions implement both the CAA PSD provisions and 
title V provisions. Those State law provisions consist of the various 
SIPs and State operating permit programs, respectively. In order to 
limit PSD and title V applicability to sources that emit at or above 
the thresholds proposed in this action, and to ensure that these limits 
apply at the time a rulemaking regulating GHG emissions is 
promulgated--which will trigger PSD and title V applicability--EPA is 
proposing to establish threshold levels on the basis that the 
administrative necessity doctrine overlays the CAA PSD and title V 
requirements, so that it

[[Page 55341]]

is the proposed threshold levels, and not the statutory threshold 
levels, that apply to sources of GHG emissions. Moreover, EPA is 
proposing a process, consisting of several components, for conforming 
the EPA-approved SIPs and title V programs to reflect those threshold 
levels. This section of the preamble provides a detailed description of 
this process, first for the SIP PSD provisions, and then for the title 
V State operating permit program provisions.

A. CAA Provisions Concerning SIP Requirements for PSD Programs, State 
Submittal Requirements, and EPA Action

    Before describing EPA's proposed action for PSD SIP implementation, 
it is useful to review the relevant background concerning the CAA 
requirements for what SIPs must include, the process for State 
submittals of SIPs, and requirements for EPA action on SIPs and SIP 
revisions.
1. SIP Requirements for State PSD Programs and Adequate Resources
    CAA section 110(a)(1) requires that States adopt and submit to EPA 
for approval SIPs that implement the national ambient air quality 
standards. CAA section 110(a)(2) contains a detailed list of 
requirements that all SIPs must include to be approvable by EPA. Of 
particular relevance for this action, subparagraph (J) of section 
110(a)(2) of the CAA imposes the requirement that the SIP must ``meet 
the applicable requirements of * * * part C * * * (relating to 
prevention of significant deterioration of air quality * * *).'' Under 
this provision, States must submit SIPs or SIP revisions that meet the 
federally mandated requirements for PSD programs.
    In addition, and also of particular relevance for this action, 
subparagraph (E)(i) of section 110(a)(2) of the CAA provides that SIPs 
must ``provide * * * necessary assurances that the State * * * will 
have adequate personnel * * * [and] funding * * * to carry out such 
implementation plan * * *.'' As applicable to PSD programs, this 
provision means that EPA may approve the SIP PSD provisions only if EPA 
is satisfied that the State will have adequate personnel and funding to 
administer the PSD program, including conducting the appropriate 
analyses for new and existing sources, issuing the permits, conducting 
enforcement, and taking other necessary administrative action.
2. SIP Requirements for State Submittals, EPA Action, and FIPs
    As noted above, under CAA section 110(a)(1)-(2), States must submit 
for EPA approval SIPs that meet the requirements of section 110(a). If 
a State does not submit a SIP or SIP revision as required, EPA is 
authorized to make a finding that the State has failed to make a 
required SIP submittal, under CAA section 179(a), and if EPA makes such 
a finding, then, under CAA section 110(a)(2)(C), ``[t]he Administrator 
shall promulgate a Federal implementation plan [(FIP)] at any time 
within 2 years after'' the date of the finding, unless the State 
corrects the deficiency, and the Administrator approves the plan or 
plan revision.
    After a SIP or SIP revision has been submitted, EPA is authorized 
to act on it under CAA section 110(k)(3)-(4). Those provisions 
authorize a full approval or, if the SIP or SIP revision meets some but 
not all of the applicable requirements, a conditional approval, a 
partial approval and disapproval, or a full disapproval. If EPA 
disapproves a SIP or SIP revision, then EPA must promulgate a FIP at 
any time within 2 years after the disapproval, unless the State 
corrects the deficiency within that period of time by submitting an 
approvable SIP revision.\34\
---------------------------------------------------------------------------

    \34\ States are subject to sanctions for failure to submit, or 
for EPA disapproval of, SIPs for nonattainment areas, under CAA 
section 179. These sanctions provisions are not relevant for this 
proposal because they do not apply to PSD SIPs.
---------------------------------------------------------------------------

    Once EPA has approved a SIP, if EPA determines that its action in 
doing so was in error, then, under CAA section 110(k)(6), EPA may 
conduct a rulemaking to correct the error without requiring any further 
action, such as submission of a request or a SIP revision, from the 
State. Specifically, section 110(k)(6) provides:

    Whenever the Administrator determines that the Administrator's 
action approving, disapproving, or promulgating any plan or plan 
revision (or part thereof), area designation, redesignation, 
classification, or reclassification was in error, the Administrator 
may in the same manner as the approval, disapproval, or promulgation 
revise such action as appropriate without requiring any further 
submission from the State. Such determination and the basis thereof 
shall be provided to the State and public.

    EPA also has authority to revise its previous action on a SIP 
through EPA's inherent authority, under CAA section 301(a), to 
reconsider prior rulemaking actions, as well as under Administrative 
Procedure Act (APA) section 553(e), which requires EPA to give 
interested persons ``the right to petition for the issuance, amendment, 
or repeal of a rule.''
    In addition, CAA section 110(k)(5) gives EPA authority to issue 
what is commonly called a ``SIP Call'' when EPA determines that the SIP 
is inadequate to meet CAA requirements. The SIP Call notifies a State 
of the inadequacies in its current SIP and requires that the State 
submit a revised SIP for EPA approval. Specifically, section 110(k)(5) 
provides:

    Whenever the Administrator finds that the applicable 
implementation plan for any area is substantially inadequate to 
[meet certain section 110 requirements] or to otherwise comply with 
any requirement of this Act, the Administrator shall require the 
State to revise the plan as necessary to correct such inadequacies. 
The Administrator shall notify the State of the inadequacies, and 
may establish reasonable deadlines (not to exceed 18 months after 
the date of such notice) for the submission of such plan revisions.

B. What PSD-specific implementation considerations are there?

    Three different requirements of the CAA PSD provisions and the PSD 
SIPs are at issue for this action. The SIPs vary in certain ways with 
respect to these requirements, so that EPA must take different actions 
for different SIPs.
    These three requirements concern the threshold level for 
applicability, the significance level, and the pollutants subject to 
PSD. The first two--threshold and significance levels--may be treated 
similarly and are discussed immediately below. The third is discussed 
after that.
1. Requirements for Thresholds and Significance Levels in PSD 
Provisions and PSD SIPs
    a. EPA's proposed action: Revision of Federal regulations and 
limitation of approval of SIPs.
    As discussed elsewhere in this action, the CAA PSD provisions apply 
to new sources at or above 100/250-tpy thresholds. CAA sections 165(a), 
169(1). These requirements are included in EPA regulations in 40 CFR 
52.21, which indicate what States should include in their SIPs. The CAA 
PSD provisions apply to existing sources that modify when those 
modifications increase emissions by any amount, CAA section 165(a), 
169(2)(C), 111(a)(4), unless EPA promulgates higher levels--which we 
term ``significance levels''--based on reasons of de minimis emissions 
or administrative necessity. Alabama Power v. Costle, 636 F.2d 323 
(D.C. Cir. 1980). This requirement is included in EPA regulations in 40 
CFR 52.21. Until EPA acts to establish a significance level for GHG 
emissions, the level in effect remains at zero for any newly regulated 
pollutants.

[[Page 55342]]

    Most jurisdictions are covered by EPA-approved PSD SIPs. Based on a 
review of these EPA-approved PSD SIPs, virtually all of them establish 
the PSD permitting threshold at the 100/250-tpy level, although a few 
States have adopted lower permitting threshold levels. In addition, 
virtually all EPA-approved SIPs establish the significance level for 
any new pollutants that it covers--including GHG emissions, if 
covered--at zero. Only a few EPA approved SIPs take a slightly 
different approach by adopting significance levels at values other than 
zero and up to the permitting thresholds. Some jurisdictions are not 
covered by EPA-approved SIPs, and instead are covered by EPA 
regulations at 40 CFR 52.21 that EPA implements (in which case, the EPA 
regulations act as a FIP) or that the State implements through 
authority delegated to it by EPA. For these States, the PSD threshold 
level is 100/250 tpy and the significance level for new pollutants, 
including GHG emissions, is, in effect, zero.
    As discussed elsewhere, this action proposes to establish the PSD 
thresholds for GHG emissions at 25,000 tpy CO2e, and 
proposes to establish the PSD significance levels at [10,000-25,000] 
tpy CO2e. EPA plans the following process to revise its 
regulations and to conform the EPA-approved SIPs to reflect these 
levels.
    First, with respect to EPA regulations, EPA proposes to revise its 
regulations to establish the permitting threshold at 25,000 tpy 
CO2e, at 40 CFR 52.21, and to establish the significance 
level at [10,000 to 25,000] tpy CO2e, at 40 CFR 52.21, based 
on the administrative necessity doctrine discussed in section VI.C of 
this preamble.
    Second, with respect to the EPA-approved SIPs, although EPA 
previously fully approved the permitting threshold level provisions and 
the significance level provisions in those SIPs, EPA proposes to limit 
its approval of those provisions in part. Specifically, EPA proposes to 
limit its approval of (i) the permitting threshold level provisions to 
the extent those provisions require permits for sources whose GHG 
emissions equal or exceed the 100/250-tpy CO2e levels but 
are less than 25,000 tpy CO2e for PSD thresholds; and (ii) 
of the significance level provisions to the extent those provisions 
apply to GHG emissions less than [10,000 to 25,000] tpy 
CO2e. As discussed below, EPA's authority for these 
limitations of approval is based on its authority under CAA section 
301(a), which incorporates the inherent authority of an agency to 
reconsider its actions, as well as under APA section 553. Even so, EPA 
is also proposing, in the alternative, to limit its approval through 
the error correction provisions of CAA section 110(k)(6).
    EPA does not propose to take any further action on the permitting 
threshold or significance level provisions for which EPA is limiting 
its approval; that is, EPA is not proposing to disapprove those 
provisions. Thus, the limitation of approval for those provisions does 
not trigger an obligation on the part of the State to revise and 
resubmit for approval the affected PSD SIP provisions and does not 
trigger a FIP obligation.
    The permitting threshold PSD SIP provisions that apply to sources 
with GHG emissions at 25,000 tpy CO2e or higher, and the 
significance level provisions that apply to sources with GHG emissions 
at [10,000 to 25,000] tpy CO2e or higher, remain fully 
approved.
    As a drafting matter, EPA proposes to accomplish the limitations of 
approval by adding to the record of its action on each SIP, as found in 
the subparts to 40 CFR 51.21, the boilerplate statements that (i) EPA 
limits its approval of the PSD permitting threshold provisions to the 
extent those provisions require permits for sources of GHG emissions 
that equal or exceed 100 tpy CO2e for sources in the 28 
categories identified in CAA section 169(1), and 250 tpy 
CO2e for all other sources, but that are less than 25,000 
tpy CO2e; and (ii) EPA limits its approval of the PSD 
significance level provisions to the extent those provisions treat as 
significant GHG emissions increases that are less than [10,000 to 
25,000] tpy CO2e.
    b. Authority for limitation of approval.
    EPA is limiting its approval through its authority under CAA 
section 301(a) ``to prescribe such regulations as are necessary to 
carry out [EPA's] functions'' under the CAA. This provision confers 
general regulatory authority upon the Administrator, and incorporates 
the Agency's inherent authority to reconsider prior rulemaking actions. 
Additional authority for EPA to limit its approval is found in APA 
section 553(e), which requires EPA to give interested persons ``the 
right to petition for the issuance, amendment, or repeal of a rule.''
    An administrative agency has the inherent authority to reconsider 
its decisions, unless Congress specifically proscribes the agency's 
discretion to do so. The D.C. Circuit recently affirmed this authority 
in New Jersey v. EPA, 517 F.3d 574 (D.C. Cir. 2008), where it explained 
that an agency normally can change its position and reverse a prior 
decision but that in the case before it, Congress limited EPA's ability 
to remove sources from the list of HAP source categories, once listed, 
by requiring EPA to follow the specific delisting process at CAA 
section 112(c)(9). See, e.g., Gun South, Inc. v. Brady, 877 F.2d 858, 
862 (11th Cir. 1989) (holding that agencies have implied authority to 
reconsider and rectify errors even though the applicable statute and 
regulations do not provide expressly for such reconsideration); 
Trujillo v. General Electric Co., 621 F.2d 1084, 1086 (10th Cir. 1980) 
(``Administrative agencies have an inherent authority to reconsider 
their own decisions, since the power to decide in the first instance 
carries with it the power to reconsider''). CAA section 307(b)(1), a 
judicial review provision that applies to all SIP actions, provides 
some confirmation because it expressly contemplates the ``filing of a 
petition of reconsideration by the Administrator of any otherwise final 
rule or action.''
    EPA recently applied this approach in connection with California 
conformity SIPs. EPA had approved the SIPs based on a mobile source 
model that was current at the time of EPA's approval. EPA proceeded to 
update the mobile source model, but under the previous SIP approvals, 
conformity decisions would continue to be made on the basis of those 
previous SIP approvals, and would not take into account the updates to 
the mobile source model. To rectify this problem, EPA conducted a 
rulemaking that revised the previous SIP approvals so that they were 
limited to the period before States submitted, and EPA found adequate, 
the mobile source budgets in new SIPs based upon the update of the 
mobile source model.
    Similarly, in this action, EPA is proposing to limit its previous 
approval to, in effect, a portion of the State PSD program, which is 
the permitting requirements that apply to sources of GHG emissions at 
or above 25,000 tpy CO2e (for permitting thresholds) and 
[10,000 to 25,000] tpy CO2e (for significance levels), 
respectively. The reason is that in light of the requirement under CAA 
section 110(a)(2)(E) that SIPs provide necessary assurances of adequate 
personnel and funding, the previous approvals of the PSD programs were 
overly broad. Specifically, EPA approved PSD programs that applied to 
all sources of regulated NSR pollutants above the 100/250-tpy statutory 
levels. At the time of the EPA approvals, the sources emitting the 
pollutants covered by the PSD programs, so approved, may have been in 
sufficiently limited numbers so that State resources were adequate to 
fully administer the PSD

[[Page 55343]]

program. However, the breadth of the applicability requirements that 
EPA approved meant that if new pollutants were regulated in the future, 
and if those new pollutants were emitted at the levels of 100/250 tpy 
or higher by large numbers of sources, then the States' PSD programs 
would become much larger and State resources accordingly will not be 
adequate to administer the program. The SIP failed to provide necessary 
assurances that the State would have sufficient personnel and funding 
to cover this possible expansion of the PSD program. In fact, those 
events are unfolding now: EPA is in the process of regulating GHG 
emissions and thereby triggering PSD applicability for GHG sources, 
and, at the applicability levels in the SIPs, State PSD programs will 
become too large for States to administer with their current levels of 
personnel and funding. For these reasons, EPA is limiting its previous 
approvals, as described above.
    c. Proposed alternative action: Error correction.
    EPA is also proposing in the alternative to revise its approval of 
the SIP threshold and significance level provisions through a CAA 
section 110(k)(6) error correction. As noted above, CAA section 
110(k)(6) authorizes EPA to correct its actions concerning SIPs and 
certain other actions through a simplified procedure. For the reasons 
described immediately above, EPA believes that the SIPs did not provide 
the necessary assurances, as required under CAA section 110(a)(2)(E), 
that the permitting authorities would have personnel and funding 
adequate to implement the extensive SIP PSD programs that could result 
from the broadly applicable PSD threshold provisions and significance 
level provisions as approved. Therefore, under this alternative 
proposal, EPA erred in approving those provisions. Rather, EPA should 
have approved those provisions only in part, and not taken action on 
the rest of the provisions.
    As a result, EPA proposes to correct those errors, under the 
authority of CAA section 110(k)(6), by limiting its approval of the PSD 
threshold provisions to the extent they apply PSD requirements to 
sources of GHG emissions between 100/250 tpy CO2e and 25,000 
tpy CO2e, and the PSD significance level provisions to the 
extent they apply to sources that emit GHGs at a rate below [10,000 to 
25,000] tpy CO2e. In accordance with CAA section 110(k)(6), 
EPA is proposing to conduct its limitation of approval through notice-
and-comment rulemaking under APA section 553, which is ``the same 
manner as [EPA conducted] the approval,'' and EPA is not requiring any 
further submission from the State.
    d. State response.
    For purposes of the federally approved SIP, this proposed action 
does not require States to submit any SIP revision. That is, if EPA 
finalizes this proposal, each federally approved PSD program will have 
a PSD threshold level for GHG emissions of 25,000 tpy CO2e 
and a significance levels for GHG emissions of [10,000 to 25,000] tpy 
CO2e; and although each State PSD program--as established by 
the State law provisions that comprise the SIP--will have a lower 
threshold and significance level, those lower levels will not be 
federally approved and therefore not federally enforceable. To 
reiterate, EPA is not proposing to disapprove those provisions; rather, 
EPA will take no further action with respect to them. As a result, no 
further action by the State, including no SIP revision, is necessary 
for Federal purposes.
    Even so, it should be noted that the lower thresholds remain on the 
books under State law, and sources therefore remain subject to them as 
a matter of State law. As a result, States may wish to consider 
revising those State law provisions. In addition, the fact that these 
provisions remain on the books under State law may create some 
confusion as to whether they are part of the federally approved SIP 
(again, with this proposed action, they would not be), and for this 
purpose too of avoiding this confusion, States may wish to consider 
revising those State law provisions.
    On the other hand, if a State wants to implement PSD permitting 
requirements at a threshold level lower than 25,000 tpy 
CO2e, or implement a significance level lower than [10,000 
to 25,000] tpy CO2e, for GHG emitters, the State may submit 
a SIP revision that identifies the lower thresholds and provides the 
necessary assurances, under CAA section 110(a)(2)(E), that it has 
adequate personnel and funding to permit at this level. If the SIP 
revision meets the CAA section 110(a)(2)(E) requirement, EPA will 
proceed to approve it. Permitting for this State would then cover such 
smaller sources. For reasons described elsewhere in this notice, the 
EPA has determined based on its national analysis that, absent 
additional streamlining measures, the PSD program will initially be 
impossible to implement at such lower levels. A State seeking to adopt 
lower levels should therefore be prepared to describe in its submittal 
the administrative burden that will be added at the proposed lower 
levels, and the measures it will take to make the program implementable 
at those levels.
    It should be noted that EPA considered, but is not proposing or 
soliciting comment on, issuing a SIP call under CAA section 110(k)(5) 
to require States to either demonstrate that they have adequate 
personnel and funding to administer their PSD programs at the 100/250-
tpy CO2e threshold level for GHG emitters, or to submit a 
SIP revision that raises the threshold to 25,000 tpy CO2e or 
some other level commensurate with their personnel and funding. EPA 
decided against this approach for several reasons. First, a SIP call 
under section 110(k)(5) takes significantly more time than actions 
taken under EPA's other authorities. For a SIP call, EPA first 
undertakes a notice-and-comment process in order to make the finding 
that a SIP is inadequate and to set a schedule for a new SIP submission 
by a State (which can be up to 18 months after EPA's determination). 
Then, EPA must provide notice and opportunity for comment regarding 
whether or not the Agency should approve the SIP revision submitted by 
a State in response to the SIP call. By contrast, the reconsideration 
of a SIP approval can be undertaken in much less time. Reconsideration 
of a SIP approval may lead to a more speedy and efficient resolution in 
a situation (such as the present) where there is no need for a further 
SIP submission to be developed and submitted to EPA by the State.
2. PSD SIP Provisions Identifying the Pollutants
    A handful of EPA-approved SIPs fail to include provisions that 
would subject GHG emissions to their PSD requirements when EPA 
promulgates regulations that regulate GHGs and thereby trigger the 
applicability of PSD. For these SIPs, EPA intends to take separate 
regulatory action, as discussed in this section of this preamble.
    a. Regulatory background.
    By way of background, in 1978, after Congress enacted the PSD 
program in the 1977 CAA Amendments, EPA promulgated a rulemaking to 
implement the program. 43 FR 26380 (June 19, 1978). This rulemaking 
required that the PSD program apply to ``each pollutant subject to 
regulation'' under the CAA. Id. at 26403, 26406 (promulgating 40 CFR 
51.21(b)(1)(i)).\35\ In 2002, EPA

[[Page 55344]]

promulgated a rulemaking that revised parts of the PSD and 
nonattainment NSR programs, which is generally known as the ``NSR 
Reform'' rulemaking, and there, EPA revised this terminology so that 
PSD requirements apply to ``regulated NSR pollutants.'' 67 FR 80186 
(Dec. 31, 2002); see 40 CFR 52.21(b)(50).
---------------------------------------------------------------------------

    \35\ After challenges by industry and environmental 
organizations, parts of this rulemaking were remanded by the D.C. 
Circuit in Alabama Power v. Costle, 636 F.2d 323 (D.C. Cir. 1980), 
and EPA promulgated revised requirements in 1980. 45 FR 52676 
(August 7, 1980). The requirement that the PSD program apply to 
``each pollutant subject to regulation'' under the Act was not at 
issue in Alabama Power and was not revised in the rule revisions 
that followed that decision.
---------------------------------------------------------------------------

    After the 1978 rulemaking, most States submitted SIPs with 
provisions that incorporated the requirement to apply PSD requirements 
to ``each pollutant subject to regulation,'' or used comparable 
terminology, and EPA approved those provisions. Following the 2002 NSR 
Reform rule, many, although not all, of these States submitted SIPs 
that EPA has approved and that have replaced that terminology with the 
requirement that PSD requirements apply to ``NSR regulated 
pollutants.''
    However, a few SIPs do not have provisions that apply the PSD 
requirements to ``regulated NSR pollutants'' or ``pollutants subject to 
regulation'' under the CAA, or use comparable terminology. Rather, 
these SIPs specifically list the pollutants to which the PSD programs 
apply, and do not include GHGs.
    b. EPA's plan of separate regulatory action.
    It is EPA's understanding that each of the SIPs that cover either 
``NSR regulated pollutants'' or ``pollutants subject to regulation'' 
under the CAA, or that use comparable terminology, will apply the PSD 
requirements to sources that emit GHGs, at the appropriate threshold 
levels, when EPA promulgates rules regulating GHGs and thereby 
triggering PSD requirements. This is because these SIP provisions 
employ broad enough terminology to encompass newly regulated 
pollutants, such as GHGs.\36\ As a result, for these SIPs, no further 
action by EPA in this proposal is necessary.\37\
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    \36\ It should be noted that if any State with these SIP 
provisions interprets their provisions to cover only pollutants 
regulated (or subject to regulation) at the time of SIP submission 
or approval, so that the provisions would not cover GHG emissions, 
then the State should so indicate during the comment period. EPA 
will take steps to resolve the proper interpretation of the 
provision. EPA proposes in this action that if EPA agrees that the 
SIP provision cannot be interpreted to cover sources of GHG 
emissions, then EPA will treat the State in the same manner as 
States that specifically list pollutants as subject to PSD 
requirements and do not include GHGs, as discussed below.
    \37\ It should be noted that in this action, EPA is not 
addressing in any way any other issue that may arise concerning any 
of these States that do not have approved PSD programs incorporating 
all of the requirements of the NSR Reform rule.
---------------------------------------------------------------------------

    However, the story is different for the few SIPs that do not have 
provisions that apply the PSD requirements to ``regulated NSR 
pollutants'' or ``pollutants subject to regulation'' under the CAA, and 
that instead specifically list the pollutants to which the PSD programs 
apply, and do not include GHGs. Although EPA approved them, these SIPs 
were, and remain, deficient because by subjecting to the PSD 
requirements only the pollutants specifically listed, they fail to 
reflect the EPA's longstanding requirements that PSD requirements apply 
to all pollutants subject to regulation under the CAA, which 
necessarily includes any newly regulated pollutants beyond those 
specifically listed.
    Importantly, for present purposes, these SIPs do not require that 
GHG emitters obtain PSD permits. However, CAA section 165(a), by its 
terms, prohibits a source that is subject to PSD from constructing or 
modifying without a permit. As noted elsewhere, as a result of the 
proposed light-duty vehicle rule, expected to be promulgated at the end 
of March 2010, sources of GHG emissions in those States will be subject 
to the requirement of CAA section 165(a) to obtain a preconstruction 
PSD permit.
    EPA recognizes the problems that arise from this situation. 
Accordingly, EPA intends a separate regulatory action in the very near 
future that will identify the SIPs in question and address them. EPA 
expects this regulatory action to be completed and to take effect by 
the time EPA promulgates the light-duty vehicle rule at the end of 
March 2010.

C. What title V-specific implementation issues are there?

    Some of the title V-specific implementation issues parallel the PSD 
SIP implementation issues. Thus, the process EPA is proposing, 
described below, to conform the EPA-approved title V programs to 
reflect the title V applicability threshold level for GHG emissions of 
25,000 tpy CO2e parallels in certain respects the process 
described above for conforming the EPA-approved SIP PSD programs.
1. CAA Provisions Concerning Title V Requirements for State Programs, 
State Submittal Requirements, and EPA Action
    Before describing EPA's proposed action for title V implementation, 
it is useful to review the relevant background concerning the CAA 
requirements for title V State operating permit programs, State 
submittals of those programs, and EPA action on State title V programs.
    a. CAA requirements under title V for State permitting programs.
    CAA section 502(d)(1) requires that each State adopt and submit to 
EPA for approval an operating permit program under State or local law 
that meets the requirements of title V. CAA section 502(b) contains a 
detailed list of requirements that all State permit programs must 
include to be approvable by EPA. Of particular relevance for this 
action, paragraph (4) of section 502(b) provides that the permit 
program must include ``[r]equirements for adequate personnel and 
funding to administer the program.'' This provision means that EPA may 
approve the State permit program only if EPA is satisfied that the 
State will have adequate personnel and funding to administer the 
program, including issuing the permits, conducting enforcement, and 
taking other necessary administrative action.
    b. State permit program submittal requirements and Federal plans.
    As noted above, under CAA section 502(d), States must submit for 
EPA approval State permit programs that meet the requirements of CAA 
section 502(b). If a State does not submit a permit program as 
required, or if EPA disapproves a program submitted, in whole or in 
part, then the Administrator ``shall, 2 years after the date required 
for submission of such a program * * *, promulgate, administer, and 
enforce a [title V] program * * * for that State,'' under CAA section 
502(d)(3).\38\
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    \38\ In addition, if EPA disapproves a title V program due to 
failures by the State concerning an area in the State and air 
pollutants for which that area is in nonattainment, then mandatory 
sanctions apply, under CAA section 502(d)(2)(B)-(C). Sanctions 
regarding offsets would not be relevant for purposes of this action 
because GHGs are not criteria air pollutants under CAA section 
108(a) and no areas are designated nonattainment for them.
---------------------------------------------------------------------------

    c. EPA action on, and revision of action for, State permit 
programs.
    After a State permit program has been submitted, EPA must approve 
or disapprove it in whole or in part. CAA section 502(d)(1). Those 
provisions authorize EPA to approve the program to the extent that it 
meets the requirements of title V.

[[Page 55345]]

    Once EPA has approved a permit program, EPA retains the authority 
to revise its action through its inherent authority to reconsider prior 
rulemaking actions, as well as under APA section 553(e), which requires 
EPA to give interested persons ``the right to petition for the 
issuance, amendment, or repeal of a rule.'' \39\
---------------------------------------------------------------------------

    \39\ Title V does not include a provision for an error 
correction that is comparable to CAA section 110(k)(6), which 
concerns SIPs.
---------------------------------------------------------------------------

    In addition, CAA section 502(i)(1) gives EPA authority to issue 
what is commonly called a ``notice of deficiency'' (NOD) when EPA 
determines that the permitting authority ``is not adequately 
administering and enforcing a program, or portion thereof.'' The NOD 
notifies a State of the inadequacies in its current permit program and 
requires that EPA promulgate, administer, and enforce a permit program 
under title V within 2 years after issuing the notice unless the State 
has corrected the deficiency, under section 502(i)(4). See also CAA 
sections 502(i)(2)-(3) regarding sanctions.
2. What title V-specific implementation considerations are there?
    Two different requirements of the CAA title V permit programs are 
at issue for this action. The permit programs are similar with respect 
to these requirements, so that EPA's action is the same for each of the 
permit programs. These two requirements concern the threshold level for 
applicability and the pollutants subject to title V permitting 
requirements.
    a. Requirements for threshold level in title V Federal regulatory 
provisions and title V State plans.
    (i) EPA's proposed action: Revision of Federal regulations and 
limitation of approval of SIPs.
    As discussed elsewhere in this action, the CAA title V 
requirements, as interpreted by EPA, generally apply to existing 
sources that emit 100 tpy or more of any air pollutant.\40\ CAA 
sections 502(a), 501(2)(B). These requirements are included in EPA 
regulations in 40 CFR 70.3.
---------------------------------------------------------------------------

    \40\ Title V requirements also apply to sources defined as major 
sources under CAA section 112 on the basis of their emissions of 
HAP, and these sources may be covered by title V even though they 
emit less than the 100-tpy threshold that generally applies.
---------------------------------------------------------------------------

    Most jurisdictions are covered by EPA-approved State title V permit 
programs. It appears that each EPA-approved title V permit program 
establishes the permitting threshold at, in general, 100 tpy. Some 
jurisdictions are not covered by EPA-approved State programs, and 
instead are covered by regulations at 40 CFR 71 that EPA implements. 
For these jurisdictions, the PSD threshold level is 100 tpy.
    As discussed elsewhere, in this action, EPA proposes to establish 
the title V permitting threshold for GHG emissions at 25,000 tpy 
CO2e. EPA plans the following process to revise its 
regulations and to conform the EPA-approved State title V programs to 
reflect these levels. This action parallels EPA's action to revise its 
PSD regulations and conform the EPA-approved State PSD programs to the 
revised PSD regulations, discussed above. First, with respect to its 
EPA regulations, EPA proposes to revise its regulations to establish 
the permitting threshold for GHGs at 25,000 tpy CO2e, at 40 
CFR 70.2. Second, with respect to the EPA-approved State permitting 
programs, although EPA previously fully approved the permitting 
threshold level provisions in those programs, EPA proposes to limit its 
approval of the permitting threshold level provisions to the extent 
those provisions require permits for sources whose emissions of GHGs 
equal or exceed 100 tpy CO2e but are less than 25,000 tpy 
CO2e. EPA's authority for this limitation of approval is 
based on CAA section 301(a), which incorporates the inherent authority 
of an agency to reconsider its actions, as well as on APA section 553.
    EPA does not propose to take any further action on the permitting 
threshold provisions for which EPA is limiting its approval; that is, 
EPA is not proposing to disapprove those provisions. Thus, the 
limitation of approval for those provisions does not trigger an 
obligation on the part of the State to revise and resubmit for approval 
the affected permitting program provisions and does not trigger any 
Federal plan obligation.
    The State permitting threshold provisions that apply to sources 
with GHG emissions at 25,000 tpy CO2e or higher remain fully 
approved.
    As a drafting matter, EPA proposes to accomplish the limitations of 
approval by adding to the record of its action on each State permit 
program the boilerplate statement that EPA limits its approval of the 
State permitting threshold provisions to the extent those provisions 
require permits for sources of GHG emissions that equal or exceed 100 
tpy CO2e but that are less than 25,000 tpy CO2e.
    (ii) Authority for limitation of approval.
    As with its action concerning the PSD program, discussed above, EPA 
is limiting its approval under CAA section 301(a), which reflects its 
inherent authority to reconsider prior rulemaking actions, as well as 
under APA section 553(e). This authority is described in detail above 
in connection with EPA's proposed parallel action concerning PSD SIP 
provisions.
    (iii) State response.
    For purposes of the federally approved State permit program, this 
proposed action does not require States to submit any revision or take 
any further action. That is, if EPA finalizes this proposal, each 
federally approved title V program will have an applicability threshold 
level of 25,000 tpy CO2e. Although the State permitting 
program--as established by the State law provisions--may have a lower 
threshold, that lower level will not be federally approved and will 
therefore not be federally enforceable. To reiterate, EPA is not 
proposing to disapprove those provisions; rather, EPA will take no 
further action with respect to them. As a result, no further action by 
the State, including no program revision, is necessary for Federal 
purposes.
    Even so, the lower thresholds remain on the books under State law, 
and sources therefore remain subject to them as a matter of State law. 
As a result, States may wish to consider revising those state law 
provisions. In addition, the fact that these provisions remain on the 
books under State law may create some confusion as to whether they are 
part of the federally approved title V program (again, with this 
proposed action, they would not be), and for this purpose too of 
avoiding this confusion, States may wish to consider revising those 
state law provisions.
    On the other hand, if a state wants to implement its operating 
permit requirements at a threshold level lower than 25,000 tpy 
CO2e for GHG emitters, the state may submit an operating 
permit program revision that identifies the lower thresholds and 
provides the necessary assurances, under CAA section 502(b)(4), that it 
has adequate personnel and funding. If the program revision meets the 
CAA section 502(b)(4) requirement, EPA will proceed to approve it.
    It should be noted that EPA considered, but is not proposing or 
soliciting comment on, issuing a NOD under CAA section 502(i)(1) to 
require States to either demonstrate that they have adequate personnel 
and funding to administer their operating permit programs at the 100-
tpy CO2e threshold level for GHG emitters, or to submit a 
permit program revision that raises the threshold to 25,000 tpy 
CO2e or some other level commensurate with state personnel 
and funding. EPA decided

[[Page 55346]]

against this approach for several reasons. First, a NOD under section 
502(i)(1) takes significantly more time than actions taken under EPA's 
other authorities. The first step in this process is publication of a 
NOD in the Federal Register that sets forth EPA's findings as to the 
deficiencies in the state program. This notice requires the state to 
take significant action within 90 days, and identifies several actions, 
such as program withdrawal and implementation of a Federal permitting 
program, that EPA may take if significant action is not taken by the 
state. If the state has not corrected the deficiency within 18 months 
after the finding described above, EPA will promulgate, administer and 
enforce a Federal program within 2 years of the finding. In contrast, 
the reconsideration of a permit program approval can be undertaken in 
much less time.
    Reconsideration of a permit program approval may lead to a more 
speedy and efficient resolution in a situation (such as the present) 
where there is no need for a further permit program submission to be 
developed and submitted to EPA by the state.
    b. Requirement that title V permit programs apply to any air 
pollutant.
    It appears that most title V-approved state permit programs apply 
to 100-tpy-or-more sources of any pollutant. As discussed elsewhere, 
EPA interprets these provisions to cover only pollutants that are 
actually regulated under other CAA provisions. These title V programs 
will include sources of GHG emissions when EPA promulgates regulations 
for GHG emissions, which EPA expects at the end of March 2010. For 
those title V programs, no further action concerning these provisions 
is needed.
    However, EPA believes that some title V programs may apply to 100-
tpy-or-more sources of only pollutants specifically identified in the 
program provisions and that these title V programs do not include a 
provision that automatically updates title V applicability to include 
any new pollutant for which EPA promulgates controls. Thus, these title 
V programs would not include GHG emitters. These programs are similar, 
for title V purposes, to the SIPs described above that specifically 
list pollutants subject to PSD that do not include a provision that 
automatically updates PSD applicability to include any new pollutant 
for which EPA promulgates controls. Thus, these title V programs carry 
the same deficiency that the SIPs do. As with the SIPs, EPA intends to 
undertake separate regulatory action in the near future to address 
these title V programs, which EPA intends to be completed and take 
effect by the end of March 2010, when EPA promulgates the light-duty 
vehicle rule that triggers title V applicability for sources of GHG 
emissions.

D. GHGs and Title V Permit Fees

    Under title V, section 502(b)(3) of the Act, permitting authorities 
(including State and local agencies, tribes, and EPA) are required to 
collect fees ``sufficient to cover all reasonable (direct and indirect) 
costs required to develop and administer the permit program 
requirements.'' The final part 70 rule grants States wide discretion in 
collecting fees from individual sources through establishment of fee 
schedules in their permit programs, provided the total fees collected 
from all sources are sufficient to cover the title V costs. See Sec.  
70.9(a), and Sec.  70.9(b)(1) and (b)(3). The initial permit program 
submittal to EPA is required to include a demonstration that the fee 
schedule will be sufficient to cover the program costs and an estimate 
of the program cost during the early years of implementation. See Sec.  
70.4(b)(7) and (8). Also, at any time, EPA may require States to 
provide a detailed accounting of fee schedule adequacy, including when 
serious questions are raised about adequacy. See Sec.  70.9(b)(5) and 
Sec.  70.9(c). Thus, title V and part 70 place primary responsibility 
on the permitting authorities to raise adequate fees and on EPA to 
perform oversight of this responsibility.
    The activities related to regulation of GHGs that would increase 
permitting authority workloads can be grouped into the following two 
categories: (1) Changing existing permits to add any necessary 
provisions to address GHGs, and (2) issuing new permits to sources 
newly subject to permitting solely because their regulated GHGs exceed 
the major source threshold.
    Thus, we need to consider the impact of this proposal and any 
future regulation of GHGs on the fee requirements of the permit 
programs, and if any revisions are needed to parts 70 and 71 in 
response to ensure collection of adequate fees to fund the permit 
programs.
1. How are the fee rates set in the permit programs?
    The part 70 rule provided a shortcut to ease the level of detail 
otherwise required in States' fee adequacy demonstrations by providing 
a ``presumptive minimum fee,'' which was specified in section 
502(b)(3)(B) of the Act. The final part 70 rule provides a rebuttable 
presumption that the fees charged by a state are sufficient to cover 
program costs if they collect an amount equal to or greater than the 
presumptive minimum fee multiplied by the actual tons of ``regulated 
pollutants (for presumptive fee calculation),'' as defined in Sec.  
70.2. The part 70 presumptive fee was initially set at $25/ton. This 
amount is adjusted for inflation, annually. See Sec.  70.9(b)(2). The 
current presumptive minimum fee, effective through September 2009, is 
$43.75. EPA calculates the inflation-adjusted part 70 presumptive 
minimum fee in October of each year and places a memorandum announcing 
the fee on a Web site it maintains for this purpose. See http://www.epa.gov/air/oaqps/permits/fees.html. Also, EPA notes that it 
believes there are currently a minority of States that base their fees 
on the presumptive minimum, perhaps at most 17 out of 112 State and 
local part 70 permits programs.
    Since the use of the presumptive minimum fee is not mandatory for 
States, States were free to set either lower or higher fees rates, 
based on a more detailed fee adequacy demonstration. See Sec.  
70.9(b)(5). States were not required to set emissions-based fees though 
most did in combination with other approaches. Emissions-based fees on 
state fee schedules range from less than $10 per ton in a rural State 
to over $100 ton in a large urban area. Examples of other fee schedule 
approaches include processing fees, such as fees for applications, 
renewals and modifications, charges for time and material, and fees 
that vary depending on source category, equipment types, regulated air 
pollutant, business size, and many other factors. See Sec.  71.9(b)(3).
    The part 71 permit program, administered by EPA and delegate 
agencies, charges a ``part 71 annual fee,'' for every actual ton of 
``regulated air pollutant (for fee calculation),'' as defined in Sec.  
71.2. Also see fee schedule at Sec.  71.9(c). The final rule for part 
71 set this rate at $32/ton. Adjusted for inflation, the part 71 annual 
fee through calendar year 2009 is $45.25 per ton. The final rule based 
the $32/ton fee on a detailed fee demonstration performed by EPA, 
placed in the docket prior to promulgation of the final rule, showing 
slightly higher costs for EPA versus state implementation of a title V 
program. The annual inflation adjustment is performed in October of 
each year and is announced on the same Web site as the part 70 
presumptive minimum.
2. Which pollutants are subject to permit fees?
    The terms ``regulated pollutant (for presumptive fee calculation)'' 
under part 70 and ``regulated pollutant (for fee

[[Page 55347]]

calculation)'' under part 71 are defined essentially the same in both 
programs. These terms are both currently defined to mean any 
``regulated air pollutant'' except: (1) Carbon monoxide, (2) any 
pollutant that is a regulated air pollutant solely because it is a 
Class I or II substance subject to a standard promulgated or 
established under title VI of the Act, or (3) any pollutant that is a 
regulated air pollutant solely because it is subject to a standard or 
regulation under section 112(r) of the Act. The part 70 fee pollutant 
definition specifies which regulated air pollutants must be considered 
in presumptive minimum analyses, while the part 71 fee pollutant 
definition specifies which regulated air pollutants are the basis for 
fees for part 71 sources. The term ``regulated air pollutant'' in parts 
70 and 71 means the following:
    (1) Nitrogen oxides or any volatile organic compounds;
    (2) Any pollutant for which a NAAQS has been promulgated;
    (3) Any pollutant that is subject to any standard promulgated under 
section 111 of the Act;
    (4) Any Class I or II substance subject to a standard promulgated 
under or established by title VI of the Act; or
    (5) Any pollutant subject to a standard promulgated under section 
112 or other requirements established under section 112 of the Act, 
including sections 112(g), (j), and (r) of the Act, including the 
following: (i) Any pollutant subject to requirements under section 
112(j) of the Act. If the Administrator fails to promulgate a standard 
by the date established in section 112(e), any pollutant for which a 
subject source would be major shall be considered regulated 18 months 
after the section 112(e) date; and (ii) Any pollutant for which the 
requirements of section 112(g)(2) of the Act have been met, but only 
with respect to the individual source subject to the requirement.
    Note that GHGs are not currently included in either definition for 
fee purposes because they are not ``regulated air pollutants,'' but 
GHGs may be covered in the future.
    Also note that section 502(b)(3) of the Act, upon which these fee 
regulations are based, does not specifically require fees for GHGs, and 
it does not specifically require fees for every regulated air 
pollutant, even those that may cause the source to be defined as a 
major source; it just requires adequate fees to cover costs. Thus, we 
believe the Act provides us with some discretion in how we treat GHGs 
for permit fee purposes. This discretion also would potentially include 
revising the part 70 and 71 rules to address workload associated with 
GHGs.
3. Proposal for Fees in State Part 70 Programs
    The permitting of GHGs has the potential to create overwhelming 
resource burdens on State part 70 programs. These burdens would be 
significantly reduced under this proposal, through raising the title V 
major source thresholds for GHGs, which will reduce the number of 
sources subject to permitting. Nonetheless, as noted above, there will 
be some remaining additional activity associated with GHG permitting 
that will likely require States to increase revenue to cover the 
expected increase in level of activity. At this time, we believe that 
the best approach to address this situation is for States to assess 
their increased workload and determine whether their current fee 
regulations need to be amended to cover any expected revenue shortfall. 
If so, States have a wide variety of possible options regarding what 
pollutants and sources to cover, and what fee structure to adopt.
    The EPA is not proposing at this time to amend its regulations to 
establish a presumptive fee approach that would involve specifically 
charging fees for GHGs. We are also not proposing at this time to 
calculate a new presumptive minimum fee under the existing presumptive 
fee approach to take GHGs into account, or to mandate revisions to fee 
regulations for GHGs in States that did not adopt the presumptive fee 
approach. We believe that the best approach at this time is to allow 
each State to determine how best to satisfy the fee adequacy 
requirement under the existing process, for EPA to monitor the 
situation, and be prepared to exercise oversight authority if 
necessary.
    Due to the large quantity of GHGs emitted relative to criteria 
pollutants, for example at a combustion source where GHGs may be from 
several hundred times to over one thousand times the emissions of other 
combustion pollutants, EPA has decided not to propose to amend its 
regulations to establish a presumptive fee approach that would treat 
GHGs similarly to current fee pollutants. Such an approach would result 
in greatly excessive revenues because agency workloads are not 
necessarily proportional to emissions for sources and GHG emissions are 
orders of magnitude larger than other emissions for many source 
categories. Thus we have rejected that approach as an option. 
Similarly, we considered and rejected proposing to require a different, 
significantly reduced presumptive minimum fee for GHG [e.g., by 
revising Sec.  70.9(b)(2)]. This is not required by the Act, provided 
States can raise revenues in the aggregate that are adequate to cover 
program costs. We also believe we would need better data to establish 
the appropriate basis for the GHG presumptive minimum. We expect our 
data will improve over time as EPA and permitting authorities gain 
experience with GHG permitting programs, but at present there are large 
uncertainties in our estimates of the additional GHG workload at the 
25,000 ton CO2 level, the level of effort needed to 
incorporate future regulations for GHGs into permits, and the 
additional revenue that would come in from fees paid for emissions 
other than GHG from newly covered sources under existing fee schedules. 
Also, for similar reasons, we have decided not to issue NODs under 
Sec.  70.10(b) for State failure to adequate implement and enforce 
their part 70 programs on the basis of failure to date to revise their 
fee schedules to cover any existing or anticipated workload for GHGs 
(for example, the workload associated with planning for future 
regulation, conducting emissions inventories of GHGs, and similar 
activities directly or indirectly related to part 70 permitting).
    Although we do not believe it is necessary to revise our part 70 
regulations to implement the fee requirements for GHGs, EPA intends to 
closely monitor State programs to ensure that incorporating GHGs into 
permits do not result in fee shortfalls serious enough to imperil the 
implementation and enforcement of the part 70 program. EPA has adequate 
authority under Sec.  70.9(b)(5) to perform audits of State fees at any 
time, at our own initiative or whenever any serious questions are 
raised about fee adequacy, and we have done so in the past. During any 
such audit, EPA would focus its review on the program support test of 
Sec.  70.9(b)(1) in order to assure that fees are adequate to support 
the program. There is also authority in Sec.  70.4(i)(3) for EPA or the 
State to initiate a program revision when relevant Federal or State 
regulations are modified or supplemented, such as when EPA takes a 
future action to regulate GHGs or when EPA has reason to believe that a 
State is not adequately administering its program, which could occur if 
a fee audit uncovers a need to increase a State's fees. This provision 
specifically authorizes EPA to request additional documents or 
information, such as a revised fee demonstration. We also have 
authority to take action for a State's

[[Page 55348]]

failure to adequately administer and enforce a part 70 permits program 
under Sec.  70.10(b). This process includes the issuance of a NOD and 
could result ultimately in withdrawal of the part 70 program and 
imposition of a Federal part 71 program in its place, if appropriate 
and timely part 70 program revisions are not made (e.g., NODs on 
questions of fee adequacy: (1) 69 FR 10167, March 4, 2004, http://edocket.access.gpo.gov/2004/04-4822.htm; and (2) 71 FR 67061, November 
20, 2006, http://www.epa.gov/EPA-AIR/2006/November/Day-20/a19555.htm). 
There are other examples where EPA has performed oversight of fee 
adequacy over State or local part 70 programs that did not ultimately 
result in the issuance of an NOD (i.e., see a December 13, 2001, letter 
from EPA Region 10 to a concerned citizen, http://www.epa.gov/region7/programs/artd/air/title5/t5memos/aktrust.pdf; and a September 23, 2002, 
letter from EPA Region 3 to a concerned citizen, http://www.epa.gov/air/oaqps/permits/response/maryland.pdf.
    For these reasons we are proposing a recommendation that each 
State, local, or tribal part 70 program review its expected resource 
needs for implementing GHGs and its fee schedule with the aim of 
determining if its fee revenues will be adequate to cover the direct 
and indirect costs of implementing its program once GHGs are brought 
into the program. If they would not be adequate, States using the 
presumptive fee approach should be proactive in raising fees on current 
``regulated pollutants (for presumptive fee calculation)'' or 
developing other alternative approaches to meet the shortfall. We may 
officially require submittal of fee analyses for GHGs at any time in 
the future, but we do not believe we need to do so at this time.
    This approach is consistent with how we have treated past Federal 
regulations that could have potentially affected title V program 
resources and fees, including final rules that resulted in new 
applicable requirements in permits and that changed the number of 
sources required to get permits (e.g., we did not require new fee 
demonstrations in response to promulgation of a large number of part 63 
emissions standards, nor in response to part 63 standards that required 
title V permits for minor sources). In those situations, we did not 
alter the Federal fee regulations or require changes to the fee 
regulations in State programs, but the requirement for adequate 
revenues still applied.
4. GHGs and Part 71 Fees
    Similar to the explanation for part 70 above, after GHGs become 
regulated for CAA purposes, we note that increased burdens will likely 
fall on part 71 permitting authorities (EPA and delegate agencies), 
resulting in the need for EPA to review the part 71 fee schedule to 
ensure there are adequate fees to cover program costs. We are also not 
proposing at this time to establish a presumptive fee approach that 
would treat GHGs similarly to current fee pollutants nor to adjust the 
fee schedule of Sec.  71.9(c) with respect to these expected burdens 
for similar reasons we explained above for part 70. EPA has not 
determined that existing part 71 fee structure will be inadequate to 
fund the part 71 program costs in the next few years with GHG 
permitting included.
    We will examine the increases in part 71 burden due to GHG-related 
permitting activity and in fees collected from part 71 sources to 
assess whether part 71 fees remain adequate. Section 71.9(c)(7) 
requires EPA to revise the fee schedule by rule if it does not reflect 
the costs of program administration, while Sec.  71.9(n)(2) requires 
the Administrator to review the fees schedule every 2 years and to 
revise it if necessary.

E. Implementation Assistance and Support

    In addition to the development of permit streamlining techniques 
during the threshold evaluation period to address administrative 
capacity issues, EPA also plans to compile and make available technical 
and background information on GHG emission factors, control 
technologies, strategies and measurement and monitoring methodologies 
for key GHG source categories. This information will be particularly 
helpful to permitting authorities in making BACT determinations for GHG 
for sources that trigger PSD during the phase-in period. We plan to 
make the information available at such time as necessary to support 
permitting agencies in their BACT determinations (e.g., on or before 
EPA completes an action that triggers PSD for GHGs). In addition, we 
will pursue using this information to develop presumptive BACT levels 
for selected source categories.
    We intend to focus our support effort on the largest emitting GHG 
source categories, those that would likely exceed the temporary major 
source GHG threshold adopted as part of this action. At this time, we 
believe that power plants, petroleum refineries, pulp and paper mills, 
iron and steel facilities and portland cement plants are some of the 
source categories for which such information would initially prove most 
useful to permitting agencies. A key objective of this support effort 
will be to help permitting authorities find cost effective ways to 
achieve GHG controls under the BACT requirement. In addition, the 
information may be useful to permit applicants in preparing BACT 
analyses as well as providing other stakeholders with an understanding 
of how GHG emissions may be mitigated.
    As an example, the information would include EPA's industrial 
energy management resources for energy intensive industries available 
through its ENERGY STAR program (see http://www.energystar.gov/index.cfm?c=in_focus.bus_industries_focus). We intend to work 
closely with stakeholders in developing the support effort and 
information. This will help assure that, to the extent possible, the 
information developed supports consistency and certainty in BACT 
determinations. In planning this effort, EPA seeks comment on the 
following: (1) Given time and resource constraints, which specific 
source categories or sectors, including emission units, should EPA 
prioritize, (2) what specific information (e.g., emission factors, 
control technologies, collateral impacts, cost information, etc.) and 
what format would be most helpful to permitting agencies in carrying 
out the provisions of the PSD and title V programs as they would apply 
to GHGs, and (3) what other types of support or assistance can EPA 
provide to initially help air pollution control agencies with the 
permitting of GHGs?

XI. Statutory and Executive Order Reviews

A. Executive Order 12866--Regulatory Planning and Review

    Under Executive Order (EO) 12866 (58 FR 51735, October 4, 1993), 
this action is a ``significant regulatory action'' because it raises 
novel legal or policy issues. Accordingly, EPA submitted this action to 
the Office of Management and Budget (OMB) for review under EO 12866 and 
any changes made in response to OMB recommendations have been 
documented in the docket for this action.
    In addition, EPA prepared an analysis of the potential costs and 
benefits associated with this action. This analysis is provided in the 
docket for this action and the analysis is briefly summarized in 
section IX of this preamble.

[[Page 55349]]

B. Paperwork Reduction Act

    This action does not impose any new information collection burden. 
Instead, this proposed action would significantly reduce costs incurred 
by sources and permitting authorities relative to the costs that would 
be incurred if EPA did not revise the rule. Based on our GHG threshold 
data analysis, we estimated that over 40,000 new and modified 
facilities per year would be subject to PSD review based on applying a 
GHG emissions threshold of 250 tpy using a CO2e metric. This 
is compared to 280 PSD permits currently issued per year, which is an 
increase of more than 140-fold. Similarly, for title V, we estimated 
that over six million new sources would be affected at the 100-tpy 
threshold for GHGs using the CO2e metric. By increasing the 
volume of permits by over 400 times, the administrative burden would be 
unmanageable without this rule. Despite this reduction of burden, the 
OMB has previously approved the information collection requirements 
contained in the existing regulations for PSD (see, e.g., 40 CFR 52.21) 
and title V (see 40 CFR parts 70 and 71) under the provisions of the 
Paperwork Reduction Act, 44 U.S.C. 3501 et seq. and has assigned OMB 
control number 2060-0003 and OMB control number 2060-0336 respectively. 
The OMB control numbers for EPA's regulations in 40 CFR are listed in 
40 CFR part 9.

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) generally requires an agency 
to prepare a regulatory flexibility analysis of any rule subject to 
notice and comment rulemaking requirements under the APA or any other 
statute unless the agency certifies that the rule will not have a 
significant economic impact on a substantial number of small entities. 
Small entities include small businesses, small organizations, and small 
governmental jurisdictions.
    For purposes of assessing the impacts of this proposed action on 
small entities, small entity is defined as: (1) A small business that 
is a small industrial entity as defined in the U.S. Small Business 
Administration (SBA) size standards (see 13 CFR 121.201); (2) a small 
governmental jurisdiction that is a government of a city, county, town, 
school district, or special district with a population of less than 
50,000; or (3) a small organization that is any not-for-profit 
enterprise that is independently owned and operated and is not dominant 
in its field.
    After considering the economic impacts of this proposed action on 
small entities, I certify that this proposed action will not have a 
significant economic impact on a substantial number of small entities. 
In determining whether a rule has a significant economic impact on a 
substantial number of small entities, the impact of concern is any 
significant adverse economic impact on small entities, since the 
primary purpose of the regulatory flexibility analysis is to identify 
and address regulatory alternatives ``which minimize any significant 
economic impact of the rule on small entities.'' 5 U.S.C. 603 and 604. 
Thus, an agency may certify that a rule will not have a significant 
economic impact on a substantial number of small entities if the rule 
relieves regulatory burden, or otherwise has a positive economic 
effect, on all of the small entities subject to the rule.
    We believe that this proposed action will relieve the regulatory 
burden associated with the major PSD and title V operating permits 
programs for new or modified major sources that emit GHGs, including 
small businesses. This is because the proposed action would raise major 
source applicability thresholds for these programs for sources that 
emit GHGs at rates below 25,000 tpy CO2e. As a result, the 
program changes provided in the proposed rule are not expected to 
result in any increases in expenditure by any small entity.
    We have therefore concluded that this proposed rule would relieve 
regulatory burden for a substantial number of small entities, and thus 
I certify that it will not have a significant economic impact on a 
substantial number of small entities. However, EPA recognizes that some 
small entities continue to be concerned about the potential impacts of 
the statutory imposition of PSD requirements that may occur given the 
various EPA rulemakings currently under consideration concerning GHG 
emissions. Accordingly, EPA will use the discretion afforded to it 
under the RFA to consult with OMB and SBA, with input from outreach to 
small entities, regarding the potential impacts of PSD regulatory 
requirements that might occur as EPA considers regulations of GHGs. EPA 
is not required to consult in this manner when it has certified that a 
rule will not have a significant economic impact on a substantial 
number of small entities, but we believe that engaging in such 
consultation before finalization of this rule will help us to better 
understand and address the potential PSD regulatory concerns of small 
entities that might experience such impacts.

D. Unfunded Mandates Reform Act

    This proposed action does not contain a Federal mandate that may 
result in expenditures of $100 million or more for State, local, and 
tribal governments, in the aggregate, or the private sector in any 1 
year. Although this proposed action would result in a small increase in 
the burden imposed upon permitting authorities by requiring States to 
revise their SIPs to incorporate the changes, the revisions would 
ultimately reduce the PSD and title V program administrative burden 
that would otherwise occur in the absence of this rulemaking. Thus, 
this proposed action is not subject to the requirements of sections 202 
or 205 of UMRA.
    This action is also not subject to the requirements of section 203 
of UMRA because it contains no regulatory requirements that might 
significantly or uniquely affect small governments. EPA has determined 
that this proposed action contains no regulatory requirements that may 
significantly or uniquely affect small governments, including tribal 
governments. However, in developing this proposed action, EPA consulted 
with small governments pursuant to a plan established under section 203 
of UMRA to address impacts of regulatory requirements in the rule that 
might significantly or uniquely affect small governments. As stated in 
sections XI.E and F of this preamble, EPA consulted with State, local, 
and tribal officials early in the process of developing the proposed 
regulation to permit them to have timely and meaningful input into its 
development by publishing an ANPR (73 FR 44354, July 30, 2008) that 
included PSD GHG tailoring options for regulating GHGs under the CAA. 
As a result, EPA received comments from these entities and took them 
into consideration when developing this proposal.

E. Executive Order 13132--Federalism

    This action does not have federalism implications. It will not have 
substantial direct effects on the States, on the relationship between 
the national government and the States, or on the distribution of power 
and responsibilities among the various levels of government, as 
specified in Executive Order 13132. These proposed amendments would 
ultimately simplify and reduce the burden on State and local agencies 
associated with implementing the PSD and title V operating permits 
programs, by providing that a source whose GHG emissions are below the 
proposed levels will not have to obtain a PSD permit or

[[Page 55350]]

title V permit. Thus, Executive Order 13132 does not apply to this 
action.
    Consistent with EPA policy, EPA nonetheless consulted with State 
and local officials early in the process of developing the proposed 
regulation to permit them to have meaningful and timely input into its 
development by publishing an advance notice of proposed rulemaking 
(ANPR) [73 FR 44354, July 30, 2008] that included PSD GHG tailoring 
options for regulating GHGs under the CAA. As a result of the ANPR, EPA 
received several comments from State and local government agencies on 
differing PSD GHG tailoring options presented in the ANPR which were 
considered in this proposal.
    In the spirit of Executive Order 13132, and consistent with EPA 
policy to promote communications between EPA and State and local 
governments, EPA specifically solicits comment on this proposed rule 
from State and local officials.

F. Executive Order 13175--Consultation and Coordination With Indian 
Tribal Governments

    Subject to the Executive Order 13175, entitled ``Consultation and 
Coordination with Indian Tribal Governments'' (65 FR 67249, November 9, 
2000), EPA may not issue a regulation that has tribal implications, 
that imposes substantial direct compliance costs, and that is not 
required by statute, unless the Federal government provides the funds 
necessary to pay the direct compliance costs incurred by tribal 
governments, or EPA consults with tribal officials early in the process 
of developing the proposed regulation and develops a tribal summary 
impact statement.
    EPA has concluded that this action may have tribal implications. 
However, it will neither impose substantial direct compliance costs on 
tribal governments nor preempt tribal law. There are no tribal 
authorities currently issuing major NSR permits; however, this may 
change in the future.
    EPA consulted with tribal officials early in the process of 
developing this regulation to permit them to have meaningful and timely 
input into its development by publishing an ANPR that included PSD GHG 
tailoring options for regulating GHGs under the CAA. [73 FR 44354, July 
30, 2008]. As a result of the ANPR, EPA received several comments from 
tribal officials on differing PSD GHG tailoring options presented in 
the ANPR which were considered in this proposal.
    Although Executive Order 13175 does not apply to this proposed 
rule, EPA specifically solicits additional comment on this proposed 
action from tribal officials.

G. Executive Order 13045--Protection of Children From Environmental 
Health Risks and Safety Risks

    This action is not subject to EO 13045 (62 FR 19885, April 23, 
1997) because the Agency does not believe the environmental health or 
safety risks addressed by this action present a disproportionate risk 
to children. We do not believe this action creates any environmental 
health or safety risks.
    The public is invited to submit comments or identify peer-reviewed 
studies and data that assess effects of early life exposure to GHGs.

H. Executive Order 13211--Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use

    This rule is not a ``significant energy action'' as defined in 
Executive Order 13211, ``Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use'' (66 FR 
28355, May 22, 2001) because it is not likely to have a significant 
adverse effect on the supply, distribution, or use of energy. This 
action will not create any new requirements for sources in the energy 
supply, distribution, or use sectors.

I. National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (``NTTAA''), Public Law 104-113, 12(d) (15 U.S.C. 272 note) 
directs EPA to use voluntary consensus standards in its regulatory 
activities unless to do so would be inconsistent with applicable law or 
otherwise impractical. Voluntary consensus standards are technical 
standards (e.g., materials specifications, test methods, sampling 
procedures, and business practices) that are developed or adopted by 
voluntary consensus standards bodies. NTTAA directs EPA to provide 
Congress, through OMB, explanations when the Agency decides not to use 
available and applicable voluntary consensus standards.
    This proposed rulemaking does not involve technical standards. 
Therefore, EPA is not considering the use of any voluntary consensus 
standards.

J. Executive Order 12898--Federal Actions To Address Environmental 
Justice in Minority Populations and Low-Income Populations

    Executive Order 12898 (59 FR 7629, February 16, 1994) establishes 
Federal executive policy on environmental justice. Its main provision 
directs Federal agencies, to the greatest extent practicable and 
permitted by law, to make environmental justice part of their mission 
by identifying and addressing, as appropriate, disproportionately high 
and adverse human health or environmental effects of their programs, 
policies, and activities on minority populations and low-income 
populations in the U.S.
    EPA has determined that this proposed rule will not have 
disproportionately high and adverse human health or environmental 
effects on minority or low-income populations because any impacts that 
it will have will be global in nature and will not affect local 
communities or populations in a manner that adversely affects the level 
of protection provided to human health or the environment.

K. Determination Under Section 307(d)

    Pursuant to sections 307(d)(1)(E) and 307(d)(1)(V) of the CAA, the 
Administrator determines that this action is subject to the provisions 
of section 307(d). Section 307(d)(1)(V) provides that the provisions of 
section 307(d) apply to ``such other actions as the Administrator may 
determine.''

XII. Statutory Authority

    The statutory authority for this action is provided by sections 
307(d)(7)(B), 101, 111, 114, 116, and 301 of the CAA as amended (42 
U.S.C. 7401, 7411, 7414, 7416, and 7601). This action is also subject 
to section 307(d) of the CAA (42 U.S.C. 7407(d)).

List of Subjects

40 CFR Part 51

    Administrative practice and procedure, Air pollution control, 
Carbon dioxide, Carbon dioxide equivalents, Environmental protection, 
Greenhouse gases, Hydrofluorocarbons, Intergovernmental relations, 
Methane, Nitrous oxide, Perfluorocarbons, Reporting and recordkeeping 
requirements, Sulfur hexafluoride.

40 CFR Part 52

    Air pollution control, Carbon dioxide, Carbon dioxide equivalents, 
Environmental protection, Greenhouse gases, Hydrofluorocarbons, 
Intergovernmental relations, Methane, Nitrous oxide, Perfluorocarbons, 
Reporting and recordkeeping requirements, Sulfur hexafluoride.

40 CFR Part 70

    Administrative practice and procedure, Air pollution control, 
Carbon dioxide, Carbon dioxide equivalents, Environmental protection, 
Greenhouse gases, Hydrofluorocarbons,

[[Page 55351]]

Intergovernmental relations, Methane, Nitrous oxide, Perfluorocarbons, 
Reporting and recordkeeping requirements, Sulfur hexafluoride.
    Administrative practice and procedure, Air pollution control, 
Carbon dioxide, Carbon dioxide equivalents, Environmental protection, 
Greenhouse gases, Hydrofluorocarbons, Methane, Nitrous oxide, 
Perfluorocarbons, Reporting and recordkeeping requirements, Sulfur 
hexafluoride.

    Dated: September 30, 2009.
Lisa P. Jackson,
Administrator.

    For reasons stated in the preamble, title 40, chapter I of the Code 
of Federal Regulations is proposed to be amended as set forth below.

PART 51--[AMENDED]

    1. The authority citation for part 51 continues to read as follows:

    Authority: 42 U.S.C. 7401, et seq.

Subpart I--[Amended]

    2. Section 51.166 is amended:
    a. By revising paragraphs (b)(1)(i)(a), and (b)(1)(i)(b);
    b. By adding paragraph (b)(1)(i)(d);
    c. By revising paragraph (b)(23)(i); and
    d. By adding paragraphs (b)(57) and (b)(58).
    The revisions and additions read as follows:


Sec.  51.166  Prevention of significant deterioration of air quality.

* * * * *
    (b) * * *
    (1)(i) * * *
    (a) Any of the following stationary sources of air pollutants which 
emits, or has the potential to emit, 100 tons per year or more of any 
regulated NSR pollutant (except for greenhouse gases (as defined under 
paragraph (b)(57) of this section), except as provided under paragraph 
(b)(1)(i)(d) of this section): Fossil fuel-fired steam electric plants 
of more than 250 million British thermal units per hour heat input, 
coal cleaning plants (with thermal dryers), kraft pulp mills, portland 
cement plants, primary zinc smelters, iron and steel mill plants, 
primary aluminum ore reduction plants (with thermal dryers), primary 
copper smelters, municipal incinerators capable of charging more than 
250 tons of refuse per day, hydrofluoric, sulfuric, and nitric acid 
plants, petroleum refineries, lime plants, phosphate rock processing 
plants, coke oven batteries, sulfur recovery plants, carbon black 
plants (furnace process), primary lead smelters, fuel conversion 
plants, sintering plants, secondary metal production plants, chemical 
process plants (which does not include ethanol production facilities 
that produce ethanol by natural fermentation included in NAICS codes 
325193 or 312140), fossil-fuel boilers (or combinations thereof) 
totaling more than 250 million British thermal units per hour heat 
input, petroleum storage and transfer units with a total storage 
capacity exceeding 300,000 barrels, taconite ore processing plants, 
glass fiber processing plants, and charcoal production plants;
    (b) Notwithstanding the stationary source size specified in 
paragraph (b)(1)(i)(a) of this section, any stationary source which 
emits, or has the potential to emit, 250 tons per year or more of a 
regulated pollutant (except for greenhouse gases (as defined under 
paragraph (b)(57) of this section), except as provided under paragraph 
(b)(1)(i)(d) of this section); or
* * * * *
    (d) Notwithstanding any provision to the contrary in this section, 
any stationary source which emits, or has the potential to emit, at 
least 25,000 tpy CO2e of greenhouse gases, as defined under 
paragraph (b)(58) of this section.
* * * * *
    (23)(i) Significant means, in reference to a net emissions increase 
or the potential of a source to emit any of the following pollutants, a 
rate of emissions that would equal or exceed any of the following 
rates:
Pollutant and Emissions Rate
Carbon monoxide: 100 tons per year (tpy)
Nitrogen oxides: 40 tpy
Sulfur dioxide: 40 tpy
Particulate matter: 25 tpy of particulate matter emissions. 15 tpy of 
PM10 emissions.
PM2.5: 10 tpy of direct PM2.5 emissions; 40 tpy 
of sulfur dioxide emissions; 40 tpy of nitrogen oxide emissions unless 
demonstrated not to be a PM2.5 precursor under paragraph 
(b)(49) of this section
Ozone: 40 tpy of volatile organic compounds or nitrogen oxides
Lead: 0.6 tpy
Fluorides: 3 tpy
Sulfuric acid mist: 7 tpy
Hydrogen sulfide (H2S): 10 tpy
Total reduced sulfur (including H2S): 10 tpy
Reduced sulfur compounds (including H2S): 10 tpy
Municipal waste combustor organics (measured as total tetra- through 
octa-chlorinated dibenzo-p-dioxins and dibenzofurans): 3.2 x 
10-6 megagrams per year (3.5 x 10-6 tpy)
Municipal waste combustor metals (measured as particulate matter): 14 
megagrams per year (15 tpy)
Municipal waste combustor acid gases (measured as sulfur dioxide and 
hydrogen chloride): 36 megagrams per year (40 tpy)
Municipal solid waste landfill emissions (measured as nonmethane 
organic compounds): 45 megagrams per year (50 tpy)
Greenhouse gases: [10,000 to 25,000] CO2e
* * * * *
    (57) Greenhouse gas, or GHG, means carbon dioxide (CO2), 
methane (CH4), nitrous oxide (N2O), sulfur 
hexafluoride (SF6), hydrofluorocarbons (HFCs), and 
perfluorocarbons (PFCs).
    (58) Carbon dioxide equivalent, or CO2e, means a metric used to 
compare the emissions from various greenhouse gases based upon their 
global warming potential (GWP). The CO2e for a gas is 
determined by multiplying the mass of the gas by the associated GWP. 
The applicable GWPs and guidance on how to calculate a source's GHG 
emissions in tpy CO2e can be found in EPA's ``Inventory of 
U.S. Greenhouse Gas Emissions and Sinks,'' which is updated annually 
under existing commitment under the United Nations Framework Convention 
on Climate Change (UNFCCC).
* * * * *

PART 52--[AMENDED]

    3. The authority citation for part 52 continues to read as follows:

    Authority:  42 U.S.C. 7401, et seq.

    4. Section 52.21 is amended:
    a. By revising paragraphs (b)(1)(i)(a) and (b)(1)(i)(b);
    b. By adding paragraph (b)(1)(i)(d);
    c. By revising paragraph (b)(23)(i); and
    d. By adding paragraphs (b)(59) and (b)(60).

    The revisions and additions read as follows:


Sec.  52.21  Prevention of significant deterioration of air quality.

* * * * *
    (b) * * *
    (1)(i) * * *
    (a) Any of the following stationary sources of air pollutants which 
emits, or has the potential to emit, 100 tons per year or more of any 
regulated NSR pollutant (except for greenhouse gases (as defined under 
paragraph (b)(59) of this section), except as provided under paragraph 
(b)(1)(i)(d) of this section): Fossil fuel-fired steam electric plants 
of more than 250 million British thermal units per hour heat input, 
coal cleaning

[[Page 55352]]

plants (with thermal dryers), kraft pulp mills, portland cement plants, 
primary zinc smelters, iron and steel mill plants, primary aluminum ore 
reduction plants (with thermal dryers), primary copper smelters, 
municipal incinerators capable of charging more than 250 tons of refuse 
per day, hydrofluoric, sulfuric, and nitric acid plants, petroleum 
refineries, lime plants, phosphate rock processing plants, coke oven 
batteries, sulfur recovery plants, carbon black plants (furnace 
process), primary lead smelters, fuel conversion plants, sintering 
plants, secondary metal production plants, chemical process plants 
(which does not include ethanol production facilities that produce 
ethanol by natural fermentation included in NAICS codes 325193 or 
312140), fossil-fuel boilers (or combinations thereof) totaling more 
than 250 million British thermal units per hour heat input, petroleum 
storage and transfer units with a total storage capacity exceeding 
300,000 barrels, taconite ore processing plants, glass fiber processing 
plants, and charcoal production plants;
    (b) Notwithstanding the stationary source size specified in 
paragraph (b)(1)(i) of this section, any stationary source which emits, 
or has the potential to emit, 250 tons per year or more of a regulated 
NSR pollutant (except for greenhouse gases (as defined under paragraph 
(b)(59) of this section), except as provided under paragraph 
(b)(1)(i)(d) of this section); or
* * * * *
    (d) Notwithstanding any provision to the contrary in this section, 
any stationary source of air pollutants which emits, or has the 
potential to emit, 25,000 tpy CO2e of greenhouse gases, as 
defined under paragraph (b)(60) of this section.
* * * * *
    (23)(i) Significant means, in reference to a net emissions increase 
or the potential of a source to emit any of the following pollutants, a 
rate of emissions that would equal or exceed any of the following 
rates:
Pollutant and Emissions Rate
Carbon monoxide: 100 tons per year (tpy)
Nitrogen oxides: 40 tpy
Sulfur dioxide: 40 tpy
Particulate matter: 25 tpy of particulate matter emissions
PM10: 15 tpy
PM2.5: 10 tpy of direct PM2.5 emissions; 40 tpy 
of sulfur dioxide emissions; 40 tpy of nitrogen oxide emissions unless 
demonstrated not to be a PM2.5 precursor under paragraph 
(b)(50) of this section
Ozone: 40 tpy of volatile organic compounds or nitrogen oxides
Lead: 0.6 tpy
Fluorides: 3 tpy
Sulfuric acid mist: 7 tpy
Hydrogen sulfide (H2S): 10 tpy
Total reduced sulfur (including H2S): 10 tpy
Reduced sulfur compounds (including H2S): 10 tpy
Municipal waste combustor organics (measured as total tetra- through 
octa-chlorinated dibenzo-p-dioxins and dibenzofurans): 3.2 x 
10-6 megagrams per year (3.5 x 10-6 tpy)
Municipal waste combustor metals (measured as particulate matter): 14 
megagrams per year (15 tpy)
Municipal waste combustor acid gases (measured as sulfur dioxide and 
hydrogen chloride): 36 megagrams per year (40 tpy)
Municipal solid waste landfill emissions (measured as nonmethane 
organic compounds): 45 megagrams per year (50 tpy)
Greenhouse gases: [10,000 to 25,000] CO2e
* * * * *
    (59) Greenhouse gas, or GHG, means carbon dioxide (CO2), 
methane (CH4), nitrous oxide (N2O), sulfur 
hexafluoride (SF6), hydrofluorocarbons (HFCs), and 
perfluorocarbons (PFCs).
    (60) Carbon dioxide equivalent, or CO2e, means a metric used to 
compare the emissions from various greenhouse gases based upon their 
global warming potential (GWP). The CO2e for a gas is 
determined by multiplying the mass of the gas by the associated GWP. 
The applicable GWPs and guidance on how to calculate a source's GHG 
emissions in tpy CO2e can be found in EPA's ``Inventory of 
U.S. Greenhouse Gas Emissions and Sinks,'' which is updated annually 
under existing commitment under the United Nations Framework Convention 
on Climate Change (UNFCCC).
* * * * *
    5. Section 52.53 is revised to read as follows:


Sec.  52.53  Approval status.

    (a) With the exceptions set forth in this subpart, the 
Administrator approves Alabama's plans for the attainment and 
maintenance of the national standards under section 110 of the Clean 
Air Act. Furthermore, the Administrator finds the plans satisfy all 
requirements of Part D, Title I, of the Clean Air Act as amended in 
1977. In addition, continued satisfaction of the requirements of Part D 
for the ozone portion of the SIP depends on the adoption and submittal 
of RACT requirements by July 1, 1980 for the sources covered by CTGs 
issued between January 1978 and January 1979 and adoption and submittal 
by each subsequent January of additional RACT requirements for sources 
covered by CTGs issued by the previous January.
    (b)(1) Insofar as the PSD permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions to 
the extent they subject to PSD requirements sources of GHG emissions 
that equal or exceed 25,000 tpy CO2e. EPA takes no action on 
the PSD permitting threshold provisions to the extent they subject to 
PSD requirements sources of GHG emissions that are less than 25,000 tpy 
CO2e.
    (2) Insofar as the PSD significance levels concern sources of GHG 
emissions, EPA limits its approval of such provisions to the extent 
those provisions treat as significant GHG emissions increases that 
equal or exceed [10,000 to 25,000] tpy CO2e. EPA takes no 
action on the PSD significance level provisions to the extent they 
treat as significant GHG emissions increases less than [10,000 to 
25,000] tpy CO2e.
    6. Section 52.72 is revised to read as follows:


Sec.  52.72  Approval status.

    (a) With the exceptions set forth in this subpart, the 
Administrator approves Alaska's plan for the attainment and maintenance 
of the national standards. The State included in the plan a regulation 
prohibiting idling of unattended motor vehicles. However, the plan 
stated that this regulation was included for informational purposes 
only, and was not to be considered part of the control strategy to 
implement the national standards for carbon monoxide. Accordingly, this 
regulation is not considered a part of the applicable plan.
    (b)(1) Insofar as the PSD permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions to 
the extent they subject to PSD requirements sources of GHG emissions 
that equal or exceed 25,000 tpy CO2e. EPA takes no action on 
the PSD permitting threshold provisions to the extent they subject to 
PSD requirements sources of GHG emissions that are less than 25,000 tpy 
CO2e.
    (2) Insofar as the PSD significance levels concern sources of GHG 
emissions, EPA limits its approval of such provisions to the extent 
those provisions treat as significant GHG emissions increases that 
equal or exceed [10,000 to 25,000] tpy CO2e. EPA takes no 
action on the PSD significance level provisions to the extent they 
treat as significant GHG emissions increases less than [10,000 to 
25,000] tpy CO2e.

[[Page 55353]]

    7. Section 52.123 is amended by adding paragraph (l) to read as 
follows:


Sec.  52.123  Approval status.

* * * * *
    (l)(1) Insofar as the PSD permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions to 
the extent they subject to PSD requirements sources of GHG emissions 
that equal or exceed 25,000 tpy CO2e. EPA takes no action on 
the PSD permitting threshold provisions to the extent they subject to 
PSD requirements sources of GHG emissions that are less than 25,000 tpy 
CO2e.
    (2) Insofar as the PSD significance levels concern sources of GHG 
emissions, EPA limits its approval of such provisions to the extent 
those provisions treat as significant GHG emissions increases that 
equal or exceed [10,000 to 25,000] tpy CO2e. EPA takes no 
action on the PSD significance level provisions to the extent they 
treat as significant GHG emissions increases less than [10,000 to 
25,000] tpy CO2e.
    8. Section 52.172 is revised to read as follows:


Sec.  52.172  Approval status.

    (a) With the exceptions set forth in this subpart, the 
Administrator approves Arkansas' plan for the attainment and 
maintenance of the national standards under section 110 of the Clean 
Air Act. Further, the Administrator finds that the plan satisfies all 
requirements of Part D of the Clean Air Act, as amended in 1977, except 
as noted below.
    (b)(1) Insofar as the PSD permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions to 
the extent they subject to PSD requirements sources of GHG emissions 
that equal or exceed 25,000 tpy CO2e. EPA takes no action on 
the PSD permitting threshold provisions to the extent they subject to 
PSD requirements sources of GHG emissions that are less than 25,000 tpy 
CO2e.
    (2) Insofar as the PSD significance levels concern sources of GHG 
emissions, EPA limits its approval of such provisions to the extent 
those provisions treat as significant GHG emissions increases that 
equal or exceed [10,000 to 25,000] tpy CO2e. EPA takes no 
action on the PSD significance level provisions to the extent they 
treat as significant GHG emissions increases less than [10,000 to 
25,000] tpy CO2e.
    9. Section 52.223 is amended by adding paragraph (f) to read as 
follows:


Sec.  52.223  Approval status.

* * * * *
    (f)(1) Insofar as the PSD permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions to 
the extent they subject to PSD requirements sources of GHG emissions 
that equal or exceed 25,000 tpy CO2e. EPA takes no action on 
the PSD permitting threshold provisions to the extent they subject to 
PSD requirements sources of GHG emissions that are less than 25,000 tpy 
CO2e.
    (2) Insofar as the PSD significance levels concern sources of GHG 
emissions, EPA limits its approval of such provisions to the extent 
those provisions treat as significant GHG emissions increases that 
equal or exceed [10,000 to 25,000] tpy CO2e. EPA takes no 
action on the PSD significance level provisions to the extent they 
treat as significant GHG emissions increases less than [10,000 to 
25,000] tpy CO2e.
    10. Section 52.323 is revised to read as follows:


Sec.  52.323  Approval status.

    (a) With the exceptions set forth in this subpart, the 
Administrator approves Colorado's plan for the attainment and 
maintenance of the national standards under section 110 of the Clean 
Air Act. Furthermore, the Administrator finds that the plan satisfies 
all requirements of Part D, Title 1, of the Clean Air Act as amended in 
1977, except as noted below.
    (b)(1) Insofar as the PSD permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions to 
the extent they subject to PSD requirements sources of GHG emissions 
that equal or exceed 25,000 tpy CO2e. EPA takes no action on 
the PSD permitting threshold provisions to the extent they subject to 
PSD requirements sources of GHG emissions that are less than 25,000 tpy 
CO2e.
    (2) Insofar as the PSD significance levels concern sources of GHG 
emissions, EPA limits its approval of such provisions to the extent 
those provisions treat as significant GHG emissions increases that 
equal or exceed [10,000 to 25,000] tpy CO2e. EPA takes no 
action on the PSD significance level provisions to the extent they 
treat as significant GHG emissions increases less than [10,000 to 
25,000] tpy CO2e.
    11. Section 52.373 is amended by adding paragraph (c) to read as 
follows:


Sec.  52.373  Approval status.

* * * * *
    (c)(1) Insofar as the PSD permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions to 
the extent they subject to PSD requirements sources of GHG emissions 
that equal or exceed 25,000 tpy CO2e. EPA takes no action on 
the PSD permitting threshold provisions to the extent they subject to 
PSD requirements sources of GHG emissions that are less than 25,000 tpy 
CO2e.
    (2) Insofar as the PSD significance levels concern sources of GHG 
emissions, EPA limits its approval of such provisions to the extent 
those provisions treat as significant GHG emissions increases that 
equal or exceed [10,000 to 25,000] tpy CO2e. EPA takes no 
action on the PSD significance level provisions to the extent they 
treat as significant GHG emissions increases less than [10,000 to 
25,000] tpy CO2e.
    12. Section 52.422 is amended by adding paragraph (c) to read as 
follows:


Sec.  52.422  Approval status.

* * * * *
    (c)(1) Insofar as the PSD permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions to 
the extent they subject to PSD requirements sources of GHG emissions 
that equal or exceed 25,000 tpy CO2e. EPA takes no action on 
the PSD permitting threshold provisions to the extent they subject to 
PSD requirements sources of GHG emissions that are less than 25,000 tpy 
CO2e.
    (2) Insofar as the PSD significance levels concern sources of GHG 
emissions, EPA limits its approval of such provisions to the extent 
those provisions treat as significant GHG emissions increases that 
equal or exceed [10,000 to 25,000] tpy CO2e. EPA takes no 
action on the PSD significance level provisions to the extent they 
treat as significant GHG emissions increases less than [10,000 to 
25,000] tpy CO2e.
    13. Section 52.472 is amended by adding paragraph (g) to read as 
follows:


Sec.  52.472  Approval status.

* * * * *
    (g)(1) Insofar as the PSD permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions to 
the extent they subject to PSD requirements sources of GHG emissions 
that equal or exceed 25,000 tpy CO2e. EPA takes no action on 
the PSD permitting threshold provisions to the extent they subject to 
PSD requirements sources of GHG emissions that are less than 25,000 tpy 
CO2e.
    (2) Insofar as the PSD significance levels concern sources of GHG 
emissions, EPA limits its approval of such provisions to the extent 
those provisions treat as significant GHG emissions increases that 
equal or exceed [10,000 to 25,000] tpy CO2e. EPA takes no 
action on the PSD significance level provisions to the extent they 
treat as significant GHG emissions increases less than [10,000 to 
25,000] tpy CO2e.

[[Page 55354]]

    14. Section 52.522 is revised to read as follows:


Sec.  52.522  Approval status.

    (a) With the exceptions set forth in this subpart, the 
Administrator approves Florida's plans for the attainment and 
maintenance of the national standards under section 110 of the Clean 
Air Act. Furthermore, the Administrator finds the plans satisfy all 
requirements of Part D, Title I, of the Clean Air Act as amended in 
1977, except as noted below. In addition, continued satisfaction of the 
requirements of Part D, for the ozone portion of the SIP depends on the 
adoption and submittal of RACT requirements by July 1, 1980 for those 
sources covered by CTGs issued between January 1978 and January 1979 
and adoption and submittal by each subsequent January of additional 
RACT requirements for sources covered by CTGs issued by the previous 
January.
    (b)(1) Insofar as the PSD permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions to 
the extent they subject to PSD requirements sources of GHG emissions 
that equal or exceed 25,000 tpy CO2e. EPA takes no action on 
the PSD permitting threshold provisions to the extent they subject to 
PSD requirements sources of GHG emissions that are less than 25,000 tpy 
CO2e.
    (2) Insofar as the PSD significance levels concern sources of GHG 
emissions, EPA limits its approval of such provisions to the extent 
those provisions treat as significant GHG emissions increases that 
equal or exceed [10,000 to 25,000] tpy CO2e. EPA takes no 
action on the PSD significance level provisions to the extent they 
treat as significant GHG emissions increases less than [10,000 to 
25,000] tpy CO2e.
    15. Section 52.572 is revised to read as follows:


Sec.  52.572  Approval status.

    (a) With the exceptions set forth in this subpart, the 
Administrator approves Georgia's plans for the attainment and 
maintenance of the national standards under section 110 of the Clean 
Air Act. Furthermore, the Administrator finds the plans satisfy all 
requirements of Part D, Title I, of the Clean Air Act as amended in 
1977, except as noted below.
    (b)(1) Insofar as the PSD permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions to 
the extent they subject to PSD requirements sources of GHG emissions 
that equal or exceed 25,000 tpy CO2e. EPA takes no action on 
the PSD permitting threshold provisions to the extent they subject to 
PSD requirements sources of GHG emissions that are less than 25,000 tpy 
CO2e.
    (2) Insofar as the PSD significance levels concern sources of GHG 
emissions, EPA limits its approval of such provisions to the extent 
those provisions treat as significant GHG emissions increases that 
equal or exceed [10,000 to 25,000] tpy CO2e. EPA takes no 
action on the PSD significance level provisions to the extent they 
treat as significant GHG emissions increases less than [10,000 to 
25,000] tpy CO2e.
    16. Section 52.623 is revised to read as follows:


Sec.  52.623  Approval status.

    (a) With the exceptions set forth in this subpart, the 
Administrator approves Hawaii's plan for attainment and maintenance of 
the national standards. The State included various provisions in its 
plan to provide for the attainment of State ambient air quality 
standards. As described in the Governor's letters of January 28, May 8, 
and May 22, 1972, these provisions were included for information 
purposes only and were not to be considered a part of the plan to 
implement national standards. Accordingly, these additional provisions 
are not considered a part of the applicable plan.
    (b)(1) Insofar as the PSD permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions to 
the extent they subject to PSD requirements sources of GHG emissions 
that equal or exceed 25,000 tpy CO2e. EPA takes no action on 
the PSD permitting threshold provisions to the extent they subject to 
PSD requirements sources of GHG emissions that are less than 25,000 tpy 
CO2e.
    (2) Insofar as the PSD significance levels concern sources of GHG 
emissions, EPA limits its approval of such provisions to the extent 
those provisions treat as significant GHG emissions increases that 
equal or exceed [10,000 to 25,000] tpy CO2e. EPA takes no 
action on the PSD significance level provisions to the extent they 
treat as significant GHG emissions increases less than [10,000 to 
25,000] tpy CO2e.
    17. Section 52.673 is revised to read as follows:


Sec.  52.673  Approval status.

    (a) With the exceptions set forth in this subpart, the 
Administrator approves Idaho's plan for the attainment and maintenance 
of the national standards.
    (b)(1) Insofar as the PSD permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions to 
the extent they subject to PSD requirements sources of GHG emissions 
that equal or exceed 25,000 tpy CO2e. EPA takes no action on 
the PSD permitting threshold provisions to the extent they subject to 
PSD requirements sources of GHG emissions that are less than 25,000 tpy 
CO2e.
    (2) Insofar as the PSD significance levels concern sources of GHG 
emissions, EPA limits its approval of such provisions to the extent 
those provisions treat as significant GHG emissions increases that 
equal or exceed [10,000 to 25,000] tpy CO2e. EPA takes no 
action on the PSD significance level provisions to the extent they 
treat as significant GHG emissions increases less than [10,000 to 
25,000] tpy CO2e.
    18. Section 52.722 is amended by adding paragraph (d) to read as 
follows:


Sec.  52.722  Approval status.

* * * * *
    (d)(1) Insofar as the PSD permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions to 
the extent they subject to PSD requirements sources of GHG emissions 
that equal or exceed 25,000 tpy CO2e. EPA takes no action on 
the PSD permitting threshold provisions to the extent they subject to 
PSD requirements sources of GHG emissions that are less than 25,000 tpy 
CO2e.
    (2) Insofar as the PSD significance levels concern sources of GHG 
emissions, EPA limits its approval of such provisions to the extent 
those provisions treat as significant GHG emissions increases that 
equal or exceed [10,000 to 25,000] tpy CO2e. EPA takes no 
action on the PSD significance level provisions to the extent they 
treat as significant GHG emissions increases less than [10,000 to 
25,000] tpy CO2e.
    19. Section 52.773 is amended by adding paragraph (k) to read as 
follows:


Sec.  52.773  Approval status.

* * * * *
    (k)(1) Insofar as the PSD permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions to 
the extent they subject to PSD requirements sources of GHG emissions 
that equal or exceed 25,000 tpy CO2e. EPA takes no action on 
the PSD permitting threshold provisions to the extent they subject to 
PSD requirements sources of GHG emissions that are less than 25,000 tpy 
CO2e.
    (2) Insofar as the PSD significance levels concern sources of GHG 
emissions, EPA limits its approval of such provisions to the extent 
those provisions treat as significant GHG emissions increases that 
equal or exceed [10,000 to 25,000] tpy CO2e. EPA takes no 
action on the PSD significance level provisions to the extent they 
treat as

[[Page 55355]]

significant GHG emissions increases less than [10,000 to 25,000] tpy 
CO2e.
    20. Section 52.822 is amended by adding paragraph (b) to read as 
follows:


Sec.  52.822  Approval status.

* * * * *
    (b)(1) Insofar as the PSD permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions to 
the extent they subject to PSD requirements sources of GHG emissions 
that equal or exceed 25,000 tpy CO2e. EPA takes no action on 
the PSD permitting threshold provisions to the extent they subject to 
PSD requirements sources of GHG emissions that are less than 25,000 tpy 
CO2e.
    (2) Insofar as the PSD significance levels concern sources of GHG 
emissions, EPA limits its approval of such provisions to the extent 
those provisions treat as significant GHG emissions increases that 
equal or exceed [10,000 to 25,000] tpy CO2e. EPA takes no 
action on the PSD significance level provisions to the extent they 
treat as significant GHG emissions increases less than [10,000 to 
25,000] tpy CO2e.
    21. Section 52.873 is amended by adding paragraph (d) to read as 
follows:


Sec.  52.873  Approval status.

* * * * *
    (d)(1) Insofar as the PSD permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions to 
the extent they subject to PSD requirements sources of GHG emissions 
that equal or exceed 25,000 tpy CO2e. EPA takes no action on 
the PSD permitting threshold provisions to the extent they subject to 
PSD requirements sources of GHG emissions that are less than 25,000 tpy 
CO2e.
    (2) Insofar as the PSD significance levels concern sources of GHG 
emissions, EPA limits its approval of such provisions to the extent 
those provisions treat as significant GHG emissions increases that 
equal or exceed [10,000 to 25,000] tpy CO2e. EPA takes no 
action on the PSD significance level provisions to the extent they 
treat as significant GHG emissions increases less than [10,000 to 
25,000] tpy CO2e.
    22. Section 52.923 is amended by adding paragraph (c) to read as 
follows:


Sec.  52.923  Approval status.

* * * * *
    (c)(1) Insofar as the PSD permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions to 
the extent they subject to PSD requirements sources of GHG emissions 
that equal or exceed 25,000 tpy CO2e. EPA takes no action on 
the PSD permitting threshold provisions to the extent they subject to 
PSD requirements sources of GHG emissions that are less than 25,000 tpy 
CO2e.
    (2) Insofar as the PSD significance levels concern sources of GHG 
emissions, EPA limits its approval of such provisions to the extent 
those provisions treat as significant GHG emissions increases that 
equal or exceed [10,000 to 25,000] tpy CO2e. EPA takes no 
action on the PSD significance level provisions to the extent they 
treat as significant GHG emissions increases less than [10,000 to 
25,000] tpy CO2e.
    23. Section 52.986 is amended by adding paragraph (c) to read as 
follows:


Sec.  52.986  Significant deterioration of air quality.

* * * * *
    (c)(1) Insofar as the PSD permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions to 
the extent they subject to PSD requirements sources of GHG emissions 
that equal or exceed 25,000 tpy CO2e. EPA takes no action on 
the PSD permitting threshold provisions to the extent they subject to 
PSD requirements sources of GHG emissions that are less than 25,000 tpy 
CO2e.
    (2) Insofar as the PSD significance levels concern sources of GHG 
emissions, EPA limits its approval of such provisions to the extent 
those provisions treat as significant GHG emissions increases that 
equal or exceed [10,000 to 25,000] tpy CO2e. EPA takes no 
action on the PSD significance level provisions to the extent they 
treat as significant GHG emissions increases less than [10,000 to 
25,000] tpy CO2e.
    24. Section 52.1022 is revised to read as follows:


Sec.  52.1022  Approval status.

    (a) With the exceptions set forth in this subpart, the 
Administrator approves Maine's plan, as identified in Sec.  52.1020, 
for the attainment and maintenance of the national standards under 
section 110 of the Clean Air Act.
    (b)(1) Insofar as the PSD permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions to 
the extent they subject to PSD requirements sources of GHG emissions 
that equal or exceed 25,000 tpy CO2e. EPA takes no action on 
the PSD permitting threshold provisions to the extent they subject to 
PSD requirements sources of GHG emissions that are less than 25,000 tpy 
CO2e.
    (2) Insofar as the PSD significance levels concern sources of GHG 
emissions, EPA limits its approval of such provisions to the extent 
those provisions treat as significant GHG emissions increases that 
equal or exceed [10,000 to 25,000] tpy CO2e. EPA takes no 
action on the PSD significance level provisions to the extent they 
treat as significant GHG emissions increases less than [10,000 to 
25,000] tpy CO2e.
    25. Section 52.1073 is amended by adding paragraph (h) to read as 
follows:


Sec.  52.1073  Approval status.

* * * * *
    (h)(1) Insofar as the PSD permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions to 
the extent they subject to PSD requirements sources of GHG emissions 
that equal or exceed 25,000 tpy CO2e. EPA takes no action on 
the PSD permitting threshold provisions to the extent they subject to 
PSD requirements sources of GHG emissions that are less than 25,000 tpy 
CO2e.
    (2) Insofar as the PSD significance levels concern sources of GHG 
emissions, EPA limits its approval of such provisions to the extent 
those provisions treat as significant GHG emissions increases that 
equal or exceed [10,000 to 25,000] tpy CO2e. EPA takes no 
action on the PSD significance level provisions to the extent they 
treat as significant GHG emissions increases less than [10,000 to 
25,000] tpy CO2e.
    26. Section 52.1123 is amended by adding paragraph (c) to read as 
follows:


Sec.  52.1123  Approval status.

* * * * *
    (c)(1) Insofar as the PSD permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions to 
the extent they subject to PSD requirements sources of GHG emissions 
that equal or exceed 25,000 tpy CO2e. EPA takes no action on 
the PSD permitting threshold provisions to the extent they subject to 
PSD requirements sources of GHG emissions that are less than 25,000 tpy 
CO2e.
    (2) Insofar as the PSD significance levels concern sources of GHG 
emissions, EPA limits its approval of such provisions to the extent 
those provisions treat as significant GHG emissions increases that 
equal or exceed [10,000 to 25,000] tpy CO2e. EPA takes no 
action on the PSD significance level provisions to the extent they 
treat as significant GHG emissions increases less than [10,000 to 
25,000] tpy CO2e.
    27. Section 52.1172 is revised to read as follows:


Sec.  52.1172  Approval status.

    (a) With the exceptions set forth in this subpart, the 
Administrator approves Michigan's plan for the attainment and 
maintenance of the National Ambient Air Quality Standards under section 
110 of the Clean Air Act. Furthermore, the

[[Page 55356]]

Administrator finds the plan satisfies all requirements of Part D, 
Title I of the Clean Air Act as amended in 1977, except as noted below. 
In addition, continued satisfaction of the requirements of Part D for 
the ozone portion of the SIP depends on the adoption and submittal of 
RACT requirements by July 1, 1980 for the sources covered by CTGs 
between January 1978 and January 1979 and adoption and submittal by 
each subsequent January of additional RACT requirements for sources 
covered by CTGs issued by the previous January.
    (b)(1) Insofar as the PSD permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions to 
the extent they subject to PSD requirements sources of GHG emissions 
that equal or exceed 25,000 tpy CO2e. EPA takes no action on 
the PSD permitting threshold provisions to the extent they subject to 
PSD requirements sources of GHG emissions that are less than 25,000 tpy 
CO2e.
    (2) Insofar as the PSD significance levels concern sources of GHG 
emissions, EPA limits its approval of such provisions to the extent 
those provisions treat as significant GHG emissions increases that 
equal or exceed [10,000 to 25,000] tpy CO2e. EPA takes no 
action on the PSD significance level provisions to the extent they 
treat as significant GHG emissions increases less than [10,000 to 
25,000] tpy CO2e.
    28. Section 52.1223 is revised to read as follows:


Sec.  52.1223  Approval status.

    (a) With the exceptions set forth in this subpart, the 
Administrator approves Minnesota's plans for the attainment and 
maintenance of the national standards under section 110 of the Clean 
Air Act. Furthermore, the Administrator finds the plan satisfies all 
requirements of Part D, Title 1, of the Clean Air Act as amended in 
1977, except as noted below.
    (b)(1) Insofar as the PSD permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions to 
the extent they subject to PSD requirements sources of GHG emissions 
that equal or exceed 25,000 tpy CO2e. EPA takes no action on 
the PSD permitting threshold provisions to the extent they subject to 
PSD requirements sources of GHG emissions that are less than 25,000 tpy 
CO2e.
    (2) Insofar as the PSD significance levels concern sources of GHG 
emissions, EPA limits its approval of such provisions to the extent 
those provisions treat as significant GHG emissions increases that 
equal or exceed [10,000 to 25,000] tpy CO2e. EPA takes no 
action on the PSD significance level provisions to the extent they 
treat as significant GHG emissions increases less than [10,000 to 
25,000] tpy CO2e.
    29. Section 52.1272 is revised to read as follows:


Sec.  52.1272  Approval status.

    (a) With the exceptions set forth in this subpart, the 
Administrator approves Mississippi's plan for the attainment and 
maintenance of national standards under section 110 of the Clean Air 
Act. Furthermore, the Administrator finds the plans satisfy all 
requirements of Part D, Title I, of the Clean Air Act as amended in 
1977.
    (b)(1) Insofar as the PSD permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions to 
the extent they subject to PSD requirements sources of GHG emissions 
that equal or exceed 25,000 tpy CO2e. EPA takes no action on 
the PSD permitting threshold provisions to the extent they subject to 
PSD requirements sources of GHG emissions that are less than 25,000 tpy 
CO2e.
    (2) Insofar as the PSD significance levels concern sources of GHG 
emissions, EPA limits its approval of such provisions to the extent 
those provisions treat as significant GHG emissions increases that 
equal or exceed [10,000 to 25,000] tpy CO2e. EPA takes no 
action on the PSD significance level provisions to the extent they 
treat as significant GHG emissions increases less than [10,000 to 
25,000] tpy CO2e.
    30. Section 52.1323 is amended by adding paragraph (n) to read as 
follows:


Sec.  52.1323  Approval status.

* * * * *
    (n)(1) Insofar as the PSD permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions to 
the extent they subject to PSD requirements sources of GHG emissions 
that equal or exceed 25,000 tpy CO2e. EPA takes no action on 
the PSD permitting threshold provisions to the extent they subject to 
PSD requirements sources of GHG emissions that are less than 25,000 tpy 
CO2e.
    (2) Insofar as the PSD significance levels concern sources of GHG 
emissions, EPA limits its approval of such provisions to the extent 
those provisions treat as significant GHG emissions increases that 
equal or exceed [10,000 to 25,000] tpy CO2e. EPA takes no 
action on the PSD significance level provisions to the extent they 
treat as significant GHG emissions increases less than [10,000 to 
25,000] tpy CO2e.
    31. Section 52.1372 is revised to read as follows:


Sec.  52.1372  Approval status.

    (a) With the exceptions set forth in this subpart, the 
Administrator approves Montana's plans for the attainment and 
maintenance of the national standards under section 110 of the Clean 
Air Act. Furthermore, the Administrator finds the plans satisfy all 
requirements of Part D, Title I, of the Clean Air Act as amended in 
1977, except as noted below.
    (b)(1) Insofar as the PSD permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions to 
the extent they subject to PSD requirements sources of GHG emissions 
that equal or exceed 25,000 tpy CO2e. EPA takes no action on 
the PSD permitting threshold provisions to the extent they subject to 
PSD requirements sources of GHG emissions that are less than 25,000 tpy 
CO2e.
    (2) Insofar as the PSD significance levels concern sources of GHG 
emissions, EPA limits its approval of such provisions to the extent 
those provisions treat as significant GHG emissions increases that 
equal or exceed [10,000 to 25,000] tpy CO2e. EPA takes no 
action on the PSD significance level provisions to the extent they 
treat as significant GHG emissions increases less than [10,000 to 
25,000] tpy CO2e.
    32. Section 52.1422 is revised to read as follows:


Sec.  52.1422  Approval status.

    (a) With the exceptions set forth in this subpart, the 
Administrator approves Nebraska's plan for the attainment and 
maintenance of the national standards. No action is taken on the new 
source review regulations to comply with section 172(b)(6) and section 
173 of the Clean Air Act as amended in 1977, and 40 CFR 51.18(j).
    (b)(1) Insofar as the PSD permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions to 
the extent they subject to PSD requirements sources of GHG emissions 
that equal or exceed 25,000 tpy CO2e. EPA takes no action on 
the PSD permitting threshold provisions to the extent they subject to 
PSD requirements sources of GHG emissions that are less than 25,000 tpy 
CO2e.
    (2) Insofar as the PSD significance levels concern sources of GHG 
emissions, EPA limits its approval of such provisions to the extent 
those provisions treat as significant GHG emissions increases that 
equal or exceed [10,000 to 25,000] tpy CO2e. EPA takes no 
action on the PSD significance level provisions to the extent they 
treat as significant GHG emissions increases less than [10,000 to 
25,000] tpy CO2e.

[[Page 55357]]

    33. Section 52.1472 is amended by adding paragraph (d) to read as 
follows:


Sec.  52.1472  Approval status.

* * * * *
    (d)(1) Insofar as the PSD permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions to 
the extent they subject to PSD requirements sources of GHG emissions 
that equal or exceed 25,000 tpy CO2e. EPA takes no action on 
the PSD permitting threshold provisions to the extent they subject to 
PSD requirements sources of GHG emissions that are less than 25,000 tpy 
CO2e.
    (2) Insofar as the PSD significance levels concern sources of GHG 
emissions, EPA limits its approval of such provisions to the extent 
those provisions treat as significant GHG emissions increases that 
equal or exceed [10,000 to 25,000] tpy CO2e. EPA takes no 
action on the PSD significance level provisions to the extent they 
treat as significant GHG emissions increases less than [10,000 to 
25,000] tpy CO2e.
    34. Section 52.1522 is amended by adding paragraph (c) to read as 
follows:


Sec.  52.1522  Approval status.

* * * * *
    (c)(1) Insofar as the PSD permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions to 
the extent they subject to PSD requirements sources of GHG emissions 
that equal or exceed 25,000 tpy CO2e. EPA takes no action on 
the PSD permitting threshold provisions to the extent they subject to 
PSD requirements sources of GHG emissions that are less than 25,000 tpy 
CO2e.
    (2) Insofar as the PSD significance levels concern sources of GHG 
emissions, EPA limits its approval of such provisions to the extent 
those provisions treat as significant GHG emissions increases that 
equal or exceed [10,000 to 25,000] tpy CO2e. EPA takes no 
action on the PSD significance level provisions to the extent they 
treat as significant GHG emissions increases less than [10,000 to 
25,000] tpy CO2e.
    35. Section 52.1573 is revised to read as follows:


Sec.  52.1573  Approval status.

    (a) With the exceptions set forth in this subpart, the 
Administrator approves New Jersey's plans for attainment and 
maintenance of the national ambient air quality standards under section 
110 of the Clean Air Act. Furthermore, the Administrator finds that the 
plan satisfies all requirements of Part D, Title I, of the Clean Air 
Act, as amended in 1977, except as noted below in Sec.  52.1581. In 
addition, continued satisfaction of the requirements of Part D for the 
ozone portion of the SIP depends on the adoption and submittal of RACT 
requirements by July 1, 1980 for the sources covered by CTGs issued 
between January 1978 and January 1979 and adoption and submittal by 
each subsequent January of additional RACT requirements for sources 
covered by CTGs issued by the previous January.
    (b)(1) Insofar as the PSD permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions to 
the extent they subject to PSD requirements sources of GHG emissions 
that equal or exceed 25,000 tpy CO2e. EPA takes no action on 
the PSD permitting threshold provisions to the extent they subject to 
PSD requirements sources of GHG emissions that are less than 25,000 tpy 
CO2e.
    (2) Insofar as the PSD significance levels concern sources of GHG 
emissions, EPA limits its approval of such provisions to the extent 
those provisions treat as significant GHG emissions increases that 
equal or exceed [10,000 to 25,000] tpy CO2e. EPA takes no 
action on the PSD significance level provisions to the extent they 
treat as significant GHG emissions increases less than [10,000 to 
25,000] tpy CO2e.
    36. Section 52.1622 is revised to read as follows:


Sec.  52.1622  Approval status.

    (a) With the exceptions set forth in this subpart, the 
Administrator approves New Mexico's plan for the attainment and 
maintenance of the national standards under section 110 of the Clean 
Air Act. Further, the Administrator finds that the plan satisfies all 
requirements of Part D of the Clean Air Act, as amended in 1977, except 
as noted below.
    (b)(1) Insofar as the PSD permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions to 
the extent they subject to PSD requirements sources of GHG emissions 
that equal or exceed 25,000 tpy CO2e. EPA takes no action on 
the PSD permitting threshold provisions to the extent they subject to 
PSD requirements sources of GHG emissions that are less than 25,000 tpy 
CO2e.
    (2) Insofar as the PSD significance levels concern sources of GHG 
emissions, EPA limits its approval of such provisions to the extent 
those provisions treat as significant GHG emissions increases that 
equal or exceed [10,000 to 25,000] tpy CO2e. EPA takes no 
action on the PSD significance level provisions to the extent they 
treat as significant GHG emissions increases less than [10,000 to 
25,000] tpy CO2e.
    37. Section 52.1673 is amended by adding paragraph (b) to read as 
follows:


Sec.  52.1673  Approval status.

* * * * *
    (b)(1) Insofar as the PSD permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions to 
the extent they subject to PSD requirements sources of GHG emissions 
that equal or exceed 25,000 tpy CO2e. EPA takes no action on 
the PSD permitting threshold provisions to the extent they subject to 
PSD requirements sources of GHG emissions that are less than 25,000 tpy 
CO2e.
    (2) Insofar as the PSD significance levels concern sources of GHG 
emissions, EPA limits its approval of such provisions to the extent 
those provisions treat as significant GHG emissions increases that 
equal or exceed [10,000 to 25,000] tpy CO2e. EPA takes no 
action on the PSD significance level provisions to the extent they 
treat as significant GHG emissions increases less than [10,000 to 
25,000] tpy CO2e.
    38. Section 52.1772 is amended by adding paragraph (c) to read as 
follows:


Sec.  52.1772  Approval status.

* * * * *
    (c)(1) Insofar as the PSD permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions to 
the extent they subject to PSD requirements sources of GHG emissions 
that equal or exceed 25,000 tpy CO2e. EPA takes no action on 
the PSD permitting threshold provisions to the extent they subject to 
PSD requirements sources of GHG emissions that are less than 25,000 tpy 
CO2e.
    (2) Insofar as the PSD significance levels concern sources of GHG 
emissions, EPA limits its approval of such provisions to the extent 
those provisions treat as significant GHG emissions increases that 
equal or exceed [10,000 to 25,000] tpy CO2e. EPA takes no 
action on the PSD significance level provisions to the extent they 
treat as significant GHG emissions increases less than [10,000 to 
25,000] tpy CO2e.
    39. Section 52.1822 is revised to read as follows:


Sec.  52.1822  Approval status.

    (a) With the exceptions set forth in this subpart, the 
Administrator approves the North Dakota plan for the attainment and 
maintenance of the national standards.
    (b)(1) Insofar as the PSD permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions to 
the extent they subject to PSD requirements sources of GHG emissions 
that equal or exceed

[[Page 55358]]

25,000 tpy CO2e. EPA takes no action on the PSD permitting 
threshold provisions to the extent they subject to PSD requirements 
sources of GHG emissions that are less than 25,000 tpy CO2e.
    (2) Insofar as the PSD significance levels concern sources of GHG 
emissions, EPA limits its approval of such provisions to the extent 
those provisions treat as significant GHG emissions increases that 
equal or exceed [10,000 to 25,000] tpy CO2e. EPA takes no 
action on the PSD significance level provisions to the extent they 
treat as significant GHG emissions increases less than [10,000 to 
25,000] tpy CO2e.
    40. Section 52.1873 is revised to read as follows:


Sec.  52.1873  Approval status.

    (a) With the exceptions set forth in this subpart the Administrator 
approves Ohio's plan for the attainment and maintenance of the National 
Ambient Air Quality Standards under section 110 of the Clean Air Act. 
Furthermore, the Administrator finds the plan satisfies all the 
requirements of Part D, Title 1 of the Clean Air Act as amended in 
1977, except as noted below. In addition, continued satisfaction of the 
requirements of Part D for the ozone portion of the SIP depends on the 
adoption and submittal of RACT requirements by January 1, 1981 for the 
sources covered by CTGs between January 1978 and January 1979 and 
adoption and submittal by each subsequent January of additional RACT 
requirements for sources covered by CTGs issued by the previous 
January.
    (b)(1) Insofar as the PSD permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions to 
the extent they subject to PSD requirements sources of GHG emissions 
that equal or exceed 25,000 tpy CO2e. EPA takes no action on 
the PSD permitting threshold provisions to the extent they subject to 
PSD requirements sources of GHG emissions that are less than 25,000 tpy 
CO2e.
    (2) Insofar as the PSD significance levels concern sources of GHG 
emissions, EPA limits its approval of such provisions to the extent 
those provisions treat as significant GHG emissions increases that 
equal or exceed [10,000 to 25,000] tpy CO2e. EPA takes no 
action on the PSD significance level provisions to the extent they 
treat as significant GHG emissions increases less than [10,000 to 
25,000] tpy CO2e.
    41. Section 52.1922 is revised to read as follows:


Sec.  52.1922  Approval status.

    (a) With the exceptions set forth in this subpart, the 
Administrator approves Oklahoma's plan for the attainment and 
maintenance of the national standards under section 110 of the Clean 
Air Act. Furthermore, the Administrator finds that the plan satisfies 
all requirements of Part D, Title 1, of the Clean Air Act as amended in 
1977, except as noted below.
    (b)(1) Insofar as the PSD permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions to 
the extent they subject to PSD requirements sources of GHG emissions 
that equal or exceed 25,000 tpy CO2e. EPA takes no action on 
the PSD permitting threshold provisions to the extent they subject to 
PSD requirements sources of GHG emissions that are less than 25,000 tpy 
CO2e.
    (2) Insofar as the PSD significance levels concern sources of GHG 
emissions, EPA limits its approval of such provisions to the extent 
those provisions treat as significant GHG emissions increases that 
equal or exceed [10,000 to 25,000] tpy CO2e. EPA takes no 
action on the PSD significance level provisions to the extent they 
treat as significant GHG emissions increases less than [10,000 to 
25,000] tpy CO2e.
    42. Section 52.1972 is revised to read as follows:


Sec.  52.1972  Approval status.

    (a) With the exceptions set forth in this subpart, the 
Administrator approves Oregon's plan for the attainment and maintenance 
of the national standards under section 110 of the Clean Air Act.
    (b)(1) Insofar as the PSD permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions to 
the extent they subject to PSD requirements sources of GHG emissions 
that equal or exceed 25,000 tpy CO2e. EPA takes no action on 
the PSD permitting threshold provisions to the extent they subject to 
PSD requirements sources of GHG emissions that are less than 25,000 tpy 
CO2e.
    (2) Insofar as the PSD significance levels concern sources of GHG 
emissions, EPA limits its approval of such provisions to the extent 
those provisions treat as significant GHG emissions increases that 
equal or exceed [10,000 to 25,000] tpy CO2e. EPA takes no 
action on the PSD significance level provisions to the extent they 
treat as significant GHG emissions increases less than [10,000 to 
25,000] tpy CO2e.
    43. Section 52.2023 is amended by adding paragraph (l) to read as 
follows:


Sec.  52.2023  Approval status.

* * * * *
    (l)(1) Insofar as the PSD permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions to 
the extent they subject to PSD requirements sources of GHG emissions 
that equal or exceed 25,000 tpy CO2e. EPA takes no action on 
the PSD permitting threshold provisions to the extent they subject to 
PSD requirements sources of GHG emissions that are less than 25,000 tpy 
CO2e.
    (2) Insofar as the PSD significance levels concern sources of GHG 
emissions, EPA limits its approval of such provisions to the extent 
those provisions treat as significant GHG emissions increases that 
equal or exceed [10,000 to 25,000] tpy CO2e. EPA takes no 
action on the PSD significance level provisions to the extent they 
treat as significant GHG emissions increases less than [10,000 to 
25,000] tpy CO2e.
    44. Section 52.2072 is revised to read as follows:


Sec.  52.2072  Approval status.

    (a) With the exceptions set forth in this subpart, the 
Administrator approves Rhode Island's plan, as identified in Sec.  
52.2070 of this subpart, for the attainment and maintenance of the 
national standards under section 110 of the Clean Air Act. Furthermore, 
the Administrator finds the plan satisfies all requirements of Part D, 
Title I, of the Clean Air Act, as amended in 1977, except as noted 
below. In addition, continued satisfaction of the requirements of Part 
D for the ozone portion of the SIP depends on the adoption and 
submittal of RACT requirements by January 1, 1981 for the sources 
covered by CTGs issued between January 1978 and January 1979 and 
adoption and submittal by each subsequent January as additional RACT 
requirements for sources covered by CTGs issued by the previous 
January.
    (b)(1) Insofar as the PSD permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions to 
the extent they subject to PSD requirements sources of GHG emissions 
that equal or exceed 25,000 tpy CO2e. EPA takes no action on 
the PSD permitting threshold provisions to the extent they subject to 
PSD requirements sources of GHG emissions that are less than 25,000 tpy 
CO2e.
    (2) Insofar as the PSD significance levels concern sources of GHG 
emissions, EPA limits its approval of such provisions to the extent 
those provisions treat as significant GHG emissions increases that 
equal or exceed [10,000 to 25,000] tpy CO2e. EPA takes no 
action on the PSD significance level provisions to the extent they 
treat as significant GHG emissions increases less than [10,000 to 
25,000] tpy CO2e.
    45. Section 52.2122 is amended by adding paragraph (c) to read as 
follows:

[[Page 55359]]

Sec.  52.2122  Approval status.

* * * * *
    (c)(1) Insofar as the PSD permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions to 
the extent they subject to PSD requirements sources of GHG emissions 
that equal or exceed 25,000 tpy CO2e. EPA takes no action on 
the PSD permitting threshold provisions to the extent they subject to 
PSD requirements sources of GHG emissions that are less than 25,000 tpy 
CO2e.
    (2) Insofar as the PSD significance levels concern sources of GHG 
emissions, EPA limits its approval of such provisions to the extent 
those provisions treat as significant GHG emissions increases that 
equal or exceed [10,000 to 25,000] tpy CO2e. EPA takes no 
action on the PSD significance level provisions to the extent they 
treat as significant GHG emissions increases less than [10,000 to 
25,000] tpy CO2e.
    46. Section 52.2172 is revised to read as follows:


Sec.  52.2172  Approval status.

    (a) With the exceptions set forth in this subpart, the 
Administrator approves South Dakota's plan as meeting the requirements 
of section 110 of the Clean Air Act, as amended in 1977. Furthermore, 
the Administrator finds that the plan satisfies all requirements of 
Part D of the Clean Air Act, as amended in 1977.
    (b)(1) Insofar as the PSD permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions to 
the extent they subject to PSD requirements sources of GHG emissions 
that equal or exceed 25,000 tpy CO2e. EPA takes no action on 
the PSD permitting threshold provisions to the extent they subject to 
PSD requirements sources of GHG emissions that are less than 25,000 tpy 
CO2e.
    (2) Insofar as the PSD significance levels concern sources of GHG 
emissions, EPA limits its approval of such provisions to the extent 
those provisions treat as significant GHG emissions increases that 
equal or exceed [10,000 to 25,000] tpy CO2e. EPA takes no 
action on the PSD significance level provisions to the extent they 
treat as significant GHG emissions increases less than [10,000 to 
25,000] tpy CO2e.
    47. Section 52.2222 is amended by adding paragraph (d) to read as 
follows:


Sec.  52.2222  Approval status.

* * * * *
    (d)(1) Insofar as the PSD permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions to 
the extent they subject to PSD requirements sources of GHG emissions 
that equal or exceed 25,000 tpy CO2e. EPA takes no action on 
the PSD permitting threshold provisions to the extent they subject to 
PSD requirements sources of GHG emissions that are less than 25,000 tpy 
CO2e.
    (2) Insofar as the PSD significance levels concern sources of GHG 
emissions, EPA limits its approval of such provisions to the extent 
those provisions treat as significant GHG emissions increases that 
equal or exceed [10,000 to 25,000] tpy CO2e. EPA takes no 
action on the PSD significance level provisions to the extent they 
treat as significant GHG emissions increases less than [10,000 to 
25,000] tpy CO2e.
    48. Section 52.2273 is revised to read as follows:


Sec.  52.2273  Approval status.

    (a) With the exceptions set forth in this subpart, the 
Administrator approves Texas' plan for the attainment and maintenance 
of the national standards under section 110 of the Clean Air Act. 
Furthermore, the Administrator finds that the plan satisfies all 
requirements of Part D, Title 1, of the Clean Air Act as amended in 
1977, except as noted below.
    (b)(1) Insofar as the PSD permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions to 
the extent they subject to PSD requirements sources of GHG emissions 
that equal or exceed 25,000 tpy CO2e. EPA takes no action on 
the PSD permitting threshold provisions to the extent they subject to 
PSD requirements sources of GHG emissions that are less than 25,000 tpy 
CO2e.
    (2) Insofar as the PSD significance levels concern sources of GHG 
emissions, EPA limits its approval of such provisions to the extent 
those provisions treat as significant GHG emissions increases that 
equal or exceed [10,000 to 25,000] tpy CO2e. EPA takes no 
action on the PSD significance level provisions to the extent they 
treat as significant GHG emissions increases less than [10,000 to 
25,000] tpy CO2e.
    49. Section 52.2323 is revised to read as follows:


Sec.  52.2323  Approval status.

    (a) With the exceptions set forth in this subpart, the 
Administrator approves Utah's plan as meeting the requirements of 
section 110 of the Clean Air Act as amended in 1977. Furthermore, the 
Administrator finds that the plan satisfies all requirements of Part D, 
Title 1, of the Clean Air Act as amended in 1977, except as noted 
below.
    (b)(1) Insofar as the PSD permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions to 
the extent they subject to PSD requirements sources of GHG emissions 
that equal or exceed 25,000 tpy CO2e. EPA takes no action on 
the PSD permitting threshold provisions to the extent they subject to 
PSD requirements sources of GHG emissions that are less than 25,000 tpy 
CO2e.
    (2) Insofar as the PSD significance levels concern sources of GHG 
emissions, EPA limits its approval of such provisions to the extent 
those provisions treat as significant GHG emissions increases that 
equal or exceed [10,000 to 25,000] tpy CO2e. EPA takes no 
action on the PSD significance level provisions to the extent they 
treat as significant GHG emissions increases less than [10,000 to 
25,000] tpy CO2e.
    50. Section 52.2372 is revised to read as follows:


Sec.  52.2372  Approval status.

    (a) With the exceptions set forth in this subpart, the 
Administrator approves Vermont's plan as identified in Sec.  52.2370 
for the attainment and maintenance of the national standards under 
section 110 of the Clean Air Act. Furthermore, the Administrator finds 
the plans satisfy all requirements of Part D, Title I, of the Clean Air 
Act, as amended in 1977, except as noted below. In addition, continued 
satisfaction of the requirements of Part D for the ozone portion of the 
SIP depends on the adoption and submittal of RACT requirements by July 
1, 1980 for the sources covered by CTGs issued between January, 1978 
and January, 1979 and adoption and submittal by each subsequent January 
of additional RACT requirements for sources covered by CTGs issued by 
the previous January.
    (b)(1) Insofar as the PSD permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions to 
the extent they subject to PSD requirements sources of GHG emissions 
that equal or exceed 25,000 tpy CO2e. EPA takes no action on 
the PSD permitting threshold provisions to the extent they subject to 
PSD requirements sources of GHG emissions that are less than 25,000 tpy 
CO2e.
    (2) Insofar as the PSD significance levels concern sources of GHG 
emissions, EPA limits its approval of such provisions to the extent 
those provisions treat as significant GHG emissions increases that 
equal or exceed [10,000 to 25,000] tpy CO2e. EPA takes no 
action on the PSD significance level provisions to the extent they 
treat as significant GHG emissions increases less than [10,000 to 
25,000] tpy CO2e.
    51. Section 52.2423 is amended by adding paragraph (t) to read as 
follows:

[[Page 55360]]

Sec.  52.2423  Approval status.

* * * * *
    (t)(1) Insofar as the PSD permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions to 
the extent they subject to PSD requirements sources of GHG emissions 
that equal or exceed 25,000 tpy CO2e. EPA takes no action on 
the PSD permitting threshold provisions to the extent they subject to 
PSD requirements sources of GHG emissions that are less than 25,000 tpy 
CO2e.
    (2) Insofar as the PSD significance levels concern sources of GHG 
emissions, EPA limits its approval of such provisions to the extent 
those provisions treat as significant GHG emissions increases that 
equal or exceed [10,000 to 25,000] tpy CO2e. EPA takes no 
action on the PSD significance level provisions to the extent they 
treat as significant GHG emissions increases less than [10,000 to 
25,000] tpy CO2e.
    52. Section 52.2473 is revised to read as follows:


Sec.  52.2473  Approval status.

    (a) With the exceptions set forth in this subpart, the 
Administrator approves Washington's plan for the attainment and 
maintenance of National Standards under section 110 of the Clean Air 
Act. The regulations included in the SIP (see Table 52.2479) are 
applicable statewide unless otherwise noted in the regulation itself. 
Furthermore, the Administrator finds that the plan as identified in 
Sec.  52.2470 satisfies requirements of Part D, Title 1, of the Clean 
Air act as amended in 1977, except as noted in the following sections. 
Continued satisfaction of the requirements of Part D for the ozone 
portion of the SIP depends on the adoption and submittal of RACT 
requirements by July 1, 1980 for the sources covered by CTGs issued 
between January 1978 and January 1979 and adoption and submittal by 
each subsequent January of additional RACT requirements for sources 
covered by CTGs issued by the previous January. New source review 
permits pursuant to section 173 of CAA will not be deemed valid by EPA 
unless the provisions of section V of the emission offset interpretive 
rule published on January 16, 1979 (44 FR 3274) are met.
    (b)(1) Insofar as the PSD permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions to 
the extent they subject to PSD requirements sources of GHG emissions 
that equal or exceed 25,000 tpy CO2e. EPA takes no action on 
the PSD permitting threshold provisions to the extent they subject to 
PSD requirements sources of GHG emissions that are less than 25,000 tpy 
CO2e.
    (2) Insofar as the PSD significance levels concern sources of GHG 
emissions, EPA limits its approval of such provisions to the extent 
those provisions treat as significant GHG emissions increases that 
equal or exceed [10,000 to 25,000] tpy CO2e. EPA takes no 
action on the PSD significance level provisions to the extent they 
treat as significant GHG emissions increases less than [10,000 to 
25,000] tpy CO2e.
    53. Section 52.2522 is amended by adding paragraph (j) to read as 
follows:


Sec.  52.2522  Approval status.

* * * * *
    (j)(1) Insofar as the PSD permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions to 
the extent they subject to PSD requirements sources of GHG emissions 
that equal or exceed 25,000 tpy CO2e. EPA takes no action on 
the PSD permitting threshold provisions to the extent they subject to 
PSD requirements sources of GHG emissions that are less than 25,000 tpy 
CO2e.
    (2) Insofar as the PSD significance levels concern sources of GHG 
emissions, EPA limits its approval of such provisions to the extent 
those provisions treat as significant GHG emissions increases that 
equal or exceed [10,000 to 25,000] tpy CO2e. EPA takes no 
action on the PSD significance level provisions to the extent they 
treat as significant GHG emissions increases less than [10,000 to 
25,000] tpy CO2e.
    54. Section 52.2572 is revised to read as follows:


Sec.  52.2572  Approval status.

    (a) With the exceptions set forth in this subpart, the 
Administrator approves Wisconsin's plans for the attainment and 
maintenance of the National Ambient Air Quality Standards under section 
110 of the Clean Air Act. Furthermore, the Administrator finds the 
plans satisfy all requirements of Part D, Title I, of the Clean Air Act 
as amended in 1977, except as noted below. In addition, continued 
satisfaction of the requirements of Part D for the Ozone portion of the 
State Implementation Plan depends on the adoption and submittal of RACT 
requirements on:
    (1) Group III Control Techniques Guideline sources within 1 year 
after January 1st following the issuance of each Group III control 
technique guideline; and
    (2) Major (actual emissions equal or greater than 100 tons VOC per 
year) non-control technique guideline sources in accordance with the 
State's schedule contained in the 1982 Ozone SIP revision for 
Southeastern Wisconsin.
    (b)(1) Insofar as the PSD permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions to 
the extent they subject to PSD requirements sources of GHG emissions 
that equal or exceed 25,000 tpy CO2e. EPA takes no action on 
the PSD permitting threshold provisions to the extent they subject to 
PSD requirements sources of GHG emissions that are less than 25,000 tpy 
CO2e.
    (2) Insofar as the PSD significance levels concern sources of GHG 
emissions, EPA limits its approval of such provisions to the extent 
those provisions treat as significant GHG emissions increases that 
equal or exceed [10,000 to 25,000] tpy CO2e. EPA takes no 
action on the PSD significance level provisions to the extent they 
treat as significant GHG emissions increases less than [10,000 to 
25,000] tpy CO2e.
    55. Section 52.2622 is revised to read as follows:


Sec.  52.2622  Approval status.

    (a) With the exceptions set forth in this subpart, the 
Administrator approves Wyoming's plans as meeting the requirements of 
section 110 of the Clean Air Act, as amended in 1977. Furthermore, the 
Administrator finds that the plans satisfy the requirements of Part D, 
Title I, of the Clean Air Act.
    (b)(1) Insofar as the PSD permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions to 
the extent they subject to PSD requirements sources of GHG emissions 
that equal or exceed 25,000 tpy CO2e. EPA takes no action on 
the PSD permitting threshold provisions to the extent they subject to 
PSD requirements sources of GHG emissions that are less than 25,000 tpy 
CO2e.
    (2) Insofar as the PSD significance levels concern sources of GHG 
emissions, EPA limits its approval of such provisions to the extent 
those provisions treat as significant GHG emissions increases that 
equal or exceed [10,000 to 25,000] tpy CO2e. EPA takes no 
action on the PSD significance level provisions to the extent they 
treat as significant GHG emissions increases less than [10,000 to 
25,000] tpy CO2e.
    56. Section 52.2672 is revised to read as follows:


Sec.  52.2672  Approval status.

    (a) With the exceptions set forth in this subpart, the 
Administrator approves Guam's plan for the attainment and maintenance 
of the National Standards.
    (b)(1) Insofar as the PSD permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions to 
the extent they subject to PSD requirements sources of

[[Page 55361]]

GHG emissions that equal or exceed 25,000 tpy CO2e. EPA 
takes no action on the PSD permitting threshold provisions to the 
extent they subject to PSD requirements sources of GHG emissions that 
are less than 25,000 tpy CO2e.
    (2) Insofar as the PSD significance levels concern sources of GHG 
emissions, EPA limits its approval of such provisions to the extent 
those provisions treat as significant GHG emissions increases that 
equal or exceed [10,000 to 25,000] tpy CO2e. EPA takes no 
action on the PSD significance level provisions to the extent they 
treat as significant GHG emissions increases less than [10,000 to 
25,000] tpy CO2e.
    57. Section 52.2722 is revised to read as follows:


Sec.  52.2722  Approval status.

    (a) With the exceptions set forth in this subpart, the 
Administrator approves Puerto Rico's plans for the attainment and 
maintenance of national standards under section 110 of the Clean Air 
Act. Furthermore, the Administrator finds that the plan satisfies all 
requirements of Part D, Title I, of the Clean Air Act, as amended in 
1977.
    (b)(1) Insofar as the PSD permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions to 
the extent they subject to PSD requirements sources of GHG emissions 
that equal or exceed 25,000 tpy CO2e. EPA takes no action on 
the PSD permitting threshold provisions to the extent they subject to 
PSD requirements sources of GHG emissions that are less than 25,000 tpy 
CO2e.
    (2) Insofar as the PSD significance levels concern sources of GHG 
emissions, EPA limits its approval of such provisions to the extent 
those provisions treat as significant GHG emissions increases that 
equal or exceed [10,000 to 25,000] tpy CO2e. EPA takes no 
action on the PSD significance level provisions to the extent they 
treat as significant GHG emissions increases less than [10,000 to 
25,000] tpy CO2e.
    58. Section 52.2772 is revised to read as follows:


Sec.  52.2772  Approval status.

    (a) With the exceptions set forth in this subpart, the 
Administrator approves the U.S. Virgin Islands plan for attainment and 
maintenance of the national standards.
    (b)(1) Insofar as the PSD permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions to 
the extent they subject to PSD requirements sources of GHG emissions 
that equal or exceed 25,000 tpy CO2e. EPA takes no action on 
the PSD permitting threshold provisions to the extent they subject to 
PSD requirements sources of GHG emissions that are less than 25,000 tpy 
CO2e.
    (2) Insofar as the PSD significance levels concern sources of GHG 
emissions, EPA limits its approval of such provisions to the extent 
those provisions treat as significant GHG emissions increases that 
equal or exceed [10,000 to 25,000] tpy CO2e. EPA takes no 
action on the PSD significance level provisions to the extent they 
treat as significant GHG emissions increases less than [10,000 to 
25,000] tpy CO2e.
    59. Section 52.2822 is revised to read as follows:


Sec.  52.2822  Approval status.

    (a) With the exceptions set forth in this subpart, the 
Administrator approves American Samoa's plan for the attainment and 
maintenance of the national standards.
    (b)(1) Insofar as the PSD permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions to 
the extent they subject to PSD requirements sources of GHG emissions 
that equal or exceed 25,000 tpy CO2e. EPA takes no action on 
the PSD permitting threshold provisions to the extent they subject to 
PSD requirements sources of GHG emissions that are less than 25,000 tpy 
CO2e.
    (2) Insofar as the PSD significance levels concern sources of GHG 
emissions, EPA limits its approval of such provisions to the extent 
those provisions treat as significant GHG emissions increases that 
equal or exceed [10,000 to 25,000] tpy CO2e. EPA takes no 
action on the PSD significance level provisions to the extent they 
treat as significant GHG emissions increases less than [10,000 to 
25,000] tpy CO2e.

PART 70--[AMENDED]

    60. The authority citation for part 70 continues to read as 
follows:

    Authority:  42 U.S.C. 7401, et seq.

    61. Section 70.2 is amended to read as follows:
    a. By adding definitions in alphabetical order for carbon dioxide 
equivalent and greenhouse gas;
    b. By revising paragraph (2) of the definition for major source; 
and
    c. By adding paragraph (4) to the definition for major source.


Sec.  70.2  Definitions.

* * * * *
    Carbon dioxide equivalent, or CO2e, means a metric used 
to compare the emissions from various greenhouse gases based upon their 
global warming potential (GWP). The CO2e for a gas is 
determined by multiplying the mass of the gas by the associated GWP. 
The applicable GWPs and guidance on how to calculate a source's GHG 
emissions in tpy CO2e can be found in EPA's ``Inventory of 
U.S. Greenhouse Gas Emissions and Sinks,'' which is updated annually 
under existing commitment under the United Nations Framework Convention 
on Climate Change (UNFCCC).
* * * * *
    Greenhouse gas, or GHG, means carbon dioxide (CO2), 
methane (CH4), nitrous oxide (N2O), sulfur 
hexafluoride (SF6), hydrofluorocarbons (HFCs), and 
perfluorocarbons (PFCs).
* * * * *
    Major source * * *
    (2) A major stationary source of air pollutants (except for 
greenhouse gases, except as otherwise provided in this section) as 
defined in section 302 of the Act, that directly emits, or has the 
potential to emit, 100 tpy or more of any air pollutant (including any 
major source of fugitive emissions of any such pollutant, as determined 
by rule by the Administrator). The fugitive emissions of a stationary 
source shall not be considered in determining whether it is a major 
stationary source for the purposes of section 302(j) of the Act, unless 
the source belongs to one of the following categories of stationary 
source:
* * * * *
    (4) A stationary source that directly emits, or has the potential 
to emit, 25,000 tpy CO2e or more of greenhouse gases that 
are subject to regulation under the Act.
* * * * *
    62. Appendix A to Part 70 is amended as follows:
    a. By revising the introductory text;
    b. By adding paragraph (d) under Alabama;
    c. By adding paragraph (c) under Alaska;
    d. By adding paragraph (e) under Arizona;
    e. By adding paragraph (d) under Arkansas;
    f. By adding paragraph (jj) under California;
    g. By adding paragraph (c) under Colorado;
    h. By adding paragraph (c) under Connecticut;
    i. By adding paragraph (d) under Delaware;
    j. By adding paragraph (d) under District of Columbia;
    k. By adding paragraph (c) under Florida;
    l. By adding paragraph (c) under Georgia;
    m. By adding paragraph (d) under Hawaii;

[[Page 55362]]

    n. By adding paragraph (c) under Idaho;
    o. By adding paragraph (c) under Illinois;
    p. By adding paragraph (d) under Indiana;
    q. By adding paragraph (k) under Iowa;
    r. By adding paragraph (e) under Kansas;
    s. By adding paragraph (c) under Kentucky;
    t. By adding paragraph (c) under Louisiana;
    u. By adding paragraph (c) under Maine;
    v. By adding paragraph (d) under Maryland;
    w. By adding paragraph (c) under Massachusetts;
    x. By adding paragraph (c) under Michigan;
    y. By adding paragraph (d) under Minnesota;
    z. By adding paragraph (c) under Mississippi;
    aa. By adding paragraph (x) under Missouri;
    bb. By adding paragraph (c) under Montana;
    cc. By adding paragraph (j) under Nebraska, City of Omaha, Lincoln-
Lancaster County Health Department;
    dd. By adding paragraph (d) under Nevada;
    ee. By adding paragraph (c) under New Hampshire;
    ff. By adding paragraph (e) under New Jersey;
    gg. By adding paragraph (g) under New Mexico;
    hh. By adding paragraph (e) under New York;
    ii. By adding paragraph (e) under North Carolina;
    jj. By adding paragraph (d) under North Dakota;
    kk. By adding paragraph (d) under Ohio;
    ll. By adding paragraph (c) under Oklahoma;
    mm. By adding paragraph (c) under Oregon;
    nn. By adding paragraph (c) under Pennsylvania;
    oo. By adding paragraph (c) under Puerto Rico;
    pp. By adding paragraph (c) under South Carolina;
    qq. By adding paragraph (c) under Rhode Island;
    rr. By adding paragraph (c) under South Dakota;
    ss. By adding paragraph (f) under Tennessee;
    tt. By adding paragraph (d) under Texas;
    uu. By adding paragraph (c) under Utah;
    vv. By adding paragraph (c) under Vermont;
    ww. By adding paragraph (c) under the Virgin Islands;
    xx. By adding paragraph (c) under Virginia;
    yy. By adding paragraph (j) under Washington;
    zz. By adding paragraph (f) under West Virginia;
    aaa. By adding paragraph (c) under Wisconsin; and
    bbb. By adding paragraph (c) under Wyoming.

Appendix A to Part 70--Approval of State and Local Operating Permits

    This appendix provides information on the approval status of 
State and Local operating Permit Programs. An approved State part 70 
program applies to all part 70 sources, as defined in that approved 
program, within such State, except for any source of air pollution 
over which a federally recognized Indian Tribe has jurisdiction. EPA 
limits its approval of the State permitting threshold provisions to 
the extent those provisions require permits for sources of GHG 
emissions that equal or exceed 100 tpy CO2e.

Alabama

* * * * *
    (d) Insofar as the State permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions 
to the extent they require permits for sources of GHG emissions that 
equal or exceed 25,000 tpy CO2e. EPA takes no action on 
such provisions to the extent they require permits for sources of 
GHG emissions that are less than 25,000 tpy CO2e.

Alaska

* * * * *
    (c) Insofar as the State permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions 
to the extent they require permits for sources of GHG emissions that 
equal or exceed 25,000 tpy CO2e. EPA takes no action on 
such provisions to the extent they require permits for sources of 
GHG emissions that are less than 25,000 tpy CO2e.

Arizona

* * * * *
    (e) Insofar as the State permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions 
to the extent they require permits for sources of GHG emissions that 
equal or exceed 25,000 tpy CO2e. EPA takes no action on 
such provisions to the extent they require permits for sources of 
GHG emissions that are less than 25,000 tpy CO2e.

Arkansas

* * * * *
    (d) Insofar as the State permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions 
to the extent they require permits for sources of GHG emissions that 
equal or exceed 25,000 tpy CO2e. EPA takes no action on 
such provisions to the extent they require permits for sources of 
GHG emissions that are less than 25,000 tpy CO2e.

California

* * * * *
    (jj) Insofar as the State permitting threshold provisions 
concern sources of GHG emissions, EPA limits its approval of such 
provisions to the extent they require permits for sources of GHG 
emissions that equal or exceed 25,000 tpy CO2e. EPA takes 
no action on such provisions to the extent they require permits for 
sources of GHG emissions that are less than 25,000 tpy 
CO2e.

Colorado

* * * * *
    (c) Insofar as the State permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions 
to the extent they require permits for sources of GHG emissions that 
equal or exceed 25,000 tpy CO2e. EPA takes no action on 
such provisions to the extent they require permits for sources of 
GHG emissions that are less than 25,000 tpy CO2e.

Connecticut

* * * * *
    (c) Insofar as the State permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions 
to the extent they require permits for sources of GHG emissions that 
equal or exceed 25,000 tpy CO2e. EPA takes no action on 
such provisions to the extent they require permits for sources of 
GHG emissions that are less than 25,000 tpy CO2e.

Delaware

* * * * *
    (d) Insofar as the State permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions 
to the extent they require permits for sources of GHG emissions that 
equal or exceed 25,000 tpy CO2e. EPA takes no action on 
such provisions to the extent they require permits for sources of 
GHG emissions that are less than 25,000 tpy CO2e.

District of Columbia

* * * * *
    (d) Insofar as the State permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions 
to the extent they require permits for sources of GHG emissions that 
equal or exceed 25,000 tpy CO2e. EPA takes no action on 
such provisions to the extent they require permits for sources of 
GHG emissions that are less than 25,000 tpy CO2e.

Florida

* * * * *
    (c) Insofar as the State permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions 
to the extent they require permits for sources of GHG emissions that 
equal or exceed 25,000 tpy CO2e. EPA takes no action on 
such provisions to the extent they require permits for sources of 
GHG emissions that are less than 25,000 tpy CO2e.

Georgia

* * * * *
    (c) Insofar as the State permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions 
to the extent they require permits

[[Page 55363]]

for sources of GHG emissions that equal or exceed 25,000 tpy 
CO2e. EPA takes no action on such provisions to the 
extent they require permits for sources of GHG emissions that are 
less than 25,000 tpy CO2e.

Hawaii

* * * * *
    (d) Insofar as the State permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions 
to the extent they require permits for sources of GHG emissions that 
equal or exceed 25,000 tpy CO2e. EPA takes no action on 
such provisions to the extent they require permits for sources of 
GHG emissions that are less than 25,000 tpy CO2e.

Idaho

* * * * *
    (c) Insofar as the State permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions 
to the extent they require permits for sources of GHG emissions that 
equal or exceed 25,000 tpy CO2e. EPA takes no action on 
such provisions to the extent they require permits for sources of 
GHG emissions that are less than 25,000 tpy CO2e.

Illinois

* * * * *
    (c) Insofar as the State permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions 
to the extent they require permits for sources of GHG emissions that 
equal or exceed 25,000 tpy CO2e. EPA takes no action on 
such provisions to the extent they require permits for sources of 
GHG emissions that are less than 25,000 tpy CO2e.

Indiana

* * * * *
    (d) Insofar as the State permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions 
to the extent they require permits for sources of GHG emissions that 
equal or exceed 25,000 tpy CO2e. EPA takes no action on 
such provisions to the extent they require permits for sources of 
GHG emissions that are less than 25,000 tpy CO2e.

Iowa

* * * * *
    (k) Insofar as the State permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions 
to the extent they require permits for sources of GHG emissions that 
equal or exceed 25,000 tpy CO2e. EPA takes no action on 
such provisions to the extent they require permits for sources of 
GHG emissions that are less than 25,000 tpy CO2e.

Kansas

* * * * *
    (e) Insofar as the State permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions 
to the extent they require permits for sources of GHG emissions that 
equal or exceed 25,000 tpy CO2e. EPA takes no action on 
such provisions to the extent they require permits for sources of 
GHG emissions that are less than 25,000 tpy CO2e.

Kentucky

* * * * *
    (c) Insofar as the State permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions 
to the extent they require permits for sources of GHG emissions that 
equal or exceed 25,000 tpy CO2e. EPA takes no action on 
such provisions to the extent they require permits for sources of 
GHG emissions that are less than 25,000 tpy CO2e.

Louisiana

* * * * *
    (c) Insofar as the State permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions 
to the extent they require permits for sources of GHG emissions that 
equal or exceed 25,000 tpy CO2e. EPA takes no action on 
such provisions to the extent they require permits for sources of 
GHG emissions that are less than 25,000 tpy CO2e.

Maine

* * * * *
    (c) Insofar as the State permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions 
to the extent they require permits for sources of GHG emissions that 
equal or exceed 25,000 tpy CO2e. EPA takes no action on 
such provisions to the extent they require permits for sources of 
GHG emissions that are less than 25,000 tpy CO2e.

Maryland

* * * * *
    (d) Insofar as the State permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions 
to the extent they require permits for sources of GHG emissions that 
equal or exceed 25,000 tpy CO2e. EPA takes no action on 
such provisions to the extent they require permits for sources of 
GHG emissions that are less than 25,000 tpy CO2e.

Massachusetts

* * * * *
    (c) Insofar as the State permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions 
to the extent they require permits for sources of GHG emissions that 
equal or exceed 25,000 tpy CO2e. EPA takes no action on 
such provisions to the extent they require permits for sources of 
GHG emissions that are less than 25,000 tpy CO2e.

Michigan

* * * * *
    (c) Insofar as the State permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions 
to the extent they require permits for sources of GHG emissions that 
equal or exceed 25,000 tpy CO2e. EPA takes no action on 
such provisions to the extent they require permits for sources of 
GHG emissions that are less than 25,000 tpy CO2e.

Minnesota

* * * * *
    (d) Insofar as the State permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions 
to the extent they require permits for sources of GHG emissions that 
equal or exceed 25,000 tpy CO2e. EPA takes no action on 
such provisions to the extent they require permits for sources of 
GHG emissions that are less than 25,000 tpy CO2e.

Mississippi

* * * * *
    (c) Insofar as the State permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions 
to the extent they require permits for sources of GHG emissions that 
equal or exceed 25,000 tpy CO2e. EPA takes no action on 
such provisions to the extent they require permits for sources of 
GHG emissions that are less than 25,000 tpy CO2e.

Missouri

* * * * *
    (x) Insofar as the State permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions 
to the extent they require permits for sources of GHG emissions that 
equal or exceed 25,000 tpy CO2e. EPA takes no action on 
such provisions to the extent they require permits for sources of 
GHG emissions that are less than 25,000 tpy CO2e.

Montana

* * * * *
    (c) Insofar as the State permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions 
to the extent they require permits for sources of GHG emissions that 
equal or exceed 25,000 tpy CO2e. EPA takes no action on 
such provisions to the extent they require permits for sources of 
GHG emissions that are less than 25,000 tpy CO2e.

Nebraska; City of Omaha; Lincoln-Lancaster County Health Department

* * * * *
    (j) Insofar as the State permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions 
to the extent they require permits for sources of GHG emissions that 
equal or exceed 25,000 tpy CO2e. EPA takes no action on 
such provisions to the extent they require permits for sources of 
GHG emissions that are less than 25,000 tpy CO2e.

Nevada

* * * * *
    (d) Insofar as the State permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions 
to the extent they require permits for sources of GHG emissions that 
equal or exceed 25,000 tpy CO2e. EPA takes no action on 
such provisions to the extent they require permits for sources of 
GHG emissions that are less than 25,000 tpy CO2e.

New Hampshire

* * * * *
    (c) Insofar as the State permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions 
to the extent they require permits for sources of GHG emissions that 
equal or exceed 25,000 tpy CO2e. EPA takes no action on 
such provisions to the extent they require permits for sources of 
GHG emissions that are less than 25,000 tpy CO2e.

[[Page 55364]]

New Jersey

* * * * *
    (e) Insofar as the State permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions 
to the extent they require permits for sources of GHG emissions that 
equal or exceed 25,000 tpy CO2e. EPA takes no action on 
such provisions to the extent they require permits for sources of 
GHG emissions that are less than 25,000 tpy CO2e.

New Mexico

* * * * *
    (g) Insofar as the State permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions 
to the extent they require permits for sources of GHG emissions that 
equal or exceed 25,000 tpy CO2e. EPA takes no action on 
such provisions to the extent they require permits for sources of 
GHG emissions that are less than 25,000 tpy CO2e.

New York

* * * * *
    (e) Insofar as the State permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions 
to the extent they require permits for sources of GHG emissions that 
equal or exceed 25,000 tpy CO2e. EPA takes no action on 
such provisions to the extent they require permits for sources of 
GHG emissions that are less than 25,000 tpy CO2e.

North Carolina

* * * * *
    (e) Insofar as the State permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions 
to the extent they require permits for sources of GHG emissions that 
equal or exceed 25,000 tpy CO2e. EPA takes no action on 
such provisions to the extent they require permits for sources of 
GHG emissions that are less than 25,000 tpy CO2e.

North Dakota

* * * * *
    (d) Insofar as the State permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions 
to the extent they require permits for sources of GHG emissions that 
equal or exceed 25,000 tpy CO2e. EPA takes no action on 
such provisions to the extent they require permits for sources of 
GHG emissions that are less than 25,000 tpy CO2e.

Ohio

* * * * *
    (d) Insofar as the State permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions 
to the extent they require permits for sources of GHG emissions that 
equal or exceed 25,000 tpy CO2e. EPA takes no action on 
such provisions to the extent they require permits for sources of 
GHG emissions that are less than 25,000 tpy CO2e.

Oklahoma

* * * * *
    (c) Insofar as the State permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions 
to the extent they require permits for sources of GHG emissions that 
equal or exceed 25,000 tpy CO2e. EPA takes no action on 
such provisions to the extent they require permits for sources of 
GHG emissions that are less than 25,000 tpy CO2e.

Oregon

* * * * *
    (c) Insofar as the State permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions 
to the extent they require permits for sources of GHG emissions that 
equal or exceed 25,000 tpy CO2e. EPA takes no action on 
such provisions to the extent they require permits for sources of 
GHG emissions that are less than 25,000 tpy CO2e.

Pennsylvania

* * * * *
    (c) Insofar as the State permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions 
to the extent they require permits for sources of GHG emissions that 
equal or exceed 25,000 tpy CO2e. EPA takes no action on 
such provisions to the extent they require permits for sources of 
GHG emissions that are less than 25,000 tpy CO2e.

Puerto Rico

* * * * *
    (c) Insofar as the State permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions 
to the extent they require permits for sources of GHG emissions that 
equal or exceed 25,000 tpy CO2e. EPA takes no action on 
such provisions to the extent they require permits for sources of 
GHG emissions that are less than 25,000 tpy CO2e.

Rhode Island

* * * * *
    (c) Insofar as the State permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions 
to the extent they require permits for sources of GHG emissions that 
equal or exceed 25,000 tpy CO2e. EPA takes no action on 
such provisions to the extent they require permits for sources of 
GHG emissions that are less than 25,000 tpy CO2e.

South Carolina

* * * * *
    (c) Insofar as the State permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions 
to the extent they require permits for sources of GHG emissions that 
equal or exceed 25,000 tpy CO2e. EPA takes no action on 
such provisions to the extent they require permits for sources of 
GHG emissions that are less than 25,000 tpy CO2e.

South Dakota

* * * * *
    (c) Insofar as the State permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions 
to the extent they require permits for sources of GHG emissions that 
equal or exceed 25,000 tpy CO2e. EPA takes no action on 
such provisions to the extent they require permits for sources of 
GHG emissions that are less than 25,000 tpy CO2e.

Tennessee

* * * * *
    (f) Insofar as the State permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions 
to the extent they require permits for sources of GHG emissions that 
equal or exceed 25,000 tpy CO2e. EPA takes no action on 
such provisions to the extent they require permits for sources of 
GHG emissions that are less than 25,000 tpy CO2e.

Texas

* * * * *
    (d) Insofar as the State permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions 
to the extent they require permits for sources of GHG emissions that 
equal or exceed 25,000 tpy CO2e. EPA takes no action on 
such provisions to the extent they require permits for sources of 
GHG emissions that are less than 25,000 tpy CO2e.

Utah

* * * * *
    (c) Insofar as the State permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions 
to the extent they require permits for sources of GHG emissions that 
equal or exceed 25,000 tpy CO2e. EPA takes no action on 
such provisions to the extent they require permits for sources of 
GHG emissions that are less than 25,000 tpy CO2e.

Vermont

* * * * *
    (c) Insofar as the State permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions 
to the extent they require permits for sources of GHG emissions that 
equal or exceed 25,000 tpy CO2e. EPA takes no action on 
such provisions to the extent they require permits for sources of 
GHG emissions that are less than 25,000 tpy CO2e.

Virgin Islands

* * * * *
    (c) Insofar as the State permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions 
to the extent they require permits for sources of GHG emissions that 
equal or exceed 25,000 tpy CO2e. EPA takes no action on 
such provisions to the extent they require permits for sources of 
GHG emissions that are less than 25,000 tpy CO2e.

Virginia

* * * * *
    (c) Insofar as the State permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions 
to the extent they require permits for sources of GHG emissions that 
equal or exceed 25,000 tpy CO2e. EPA takes no action on 
such provisions to the extent they require permits for sources of 
GHG emissions that are less than 25,000 tpy CO2e.

Washington

* * * * *
    (j) Insofar as the State permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions 
to the extent they require permits

[[Page 55365]]

for sources of GHG emissions that equal or exceed 25,000 tpy 
CO2e. EPA takes no action on such provisions to the 
extent they require permits for sources of GHG emissions that are 
less than 25,000 tpy CO2e.

West Virginia

* * * * *
    (f) Insofar as the State permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions 
to the extent they require permits for sources of GHG emissions that 
equal or exceed 25,000 tpy CO2e. EPA takes no action on 
such provisions to the extent they require permits for sources of 
GHG emissions that are less than 25,000 tpy CO2e.

Wisconsin

* * * * *
    (c) Insofar as the State permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions 
to the extent they require permits for sources of GHG emissions that 
equal or exceed 25,000 tpy CO2e. EPA takes no action on 
such provisions to the extent they require permits for sources of 
GHG emissions that are less than 25,000 tpy CO2e.

Wyoming

* * * * *
    (c) Insofar as the State permitting threshold provisions concern 
sources of GHG emissions, EPA limits its approval of such provisions 
to the extent they require permits for sources of GHG emissions that 
equal or exceed 25,000 tpy CO2e. EPA takes no action on 
such provisions to the extent they require permits for sources of 
GHG emissions that are less than 25,000 tpy CO2e.

PART 71--[AMENDED]

    63. The authority citation for part 71 continues to read as 
follows:

    Authority:  42 U.S.C. 7401, et seq.

    64. Section 71.2 is amended to follows:
    a. By adding definitions in alphabetical order for carbon dioxide 
equivalent and greenhouse gas;
    b. By revising paragraph (2) of the definition for major source; 
and
    c. By adding paragraph (4) to the definition for major source.


Sec.  71.2  Definitions.

* * * * *
    Carbon dioxide equivalent, or CO2e, means a metric used 
to compare the emissions from various greenhouse gases based upon their 
global warming potential (GWP). The CO2e for a gas is 
determined by multiplying the mass of the gas by the associated GWP. 
The applicable GWPs and guidance on how to calculate a source's GHG 
emissions in tpy CO2e can be found in EPA's ``Inventory of 
U.S. Greenhouse Gas Emissions and Sinks,'' which is updated annually 
under existing commitment under the United Nations Framework Convention 
on Climate Change (UNFCCC).
* * * * *
    Greenhouse gas, or GHG, means carbon dioxide (CO2), 
methane (CH4), nitrous oxide (N2O), sulfur 
hexafluoride (SF6), hydrofluorocarbons (HFCs), and 
perfluorocarbons (PFCs).
* * * * *
    Major source * * *
    (2) A major stationary source of air pollutants (except for 
greenhouse gases, except as otherwise provided in this section), as 
defined in section 302 of the Act, that directly emits or has the 
potential to emit, 100 tpy or more of any air pollutant (including any 
major source of fugitive emissions of any such pollutant, as determined 
by rule by the Administrator). The fugitive emissions of a stationary 
source shall not be considered in determining whether it is a major 
stationary source for the purposes of section 302(j) of the Act, unless 
the source belongs to one of the following categories of stationary 
source:
* * * * *
    (4) A stationary source that directly emits, or has the potential 
to emit, 25,000 tpy CO2e or more of greenhouse gases that 
are subject to regulation under the Act.
* * * * *
[FR Doc. E9-24163 Filed 10-23-09; 8:45 am]
BILLING CODE 6560-50-P