Texas Petition

8/8/2019 Texas Petition

1/29

STATE OF TEXAS,))Rick Perry, Governor ofTexas,

Greg Abbott, Attorney General ofTexas,Texas Commission onEnvironmental Quality,

)))))

Texas Department ofAgriculture, )Texas Railroad Commission, )Texas General Land Office, )Texas Public UtilityCommissioners Barry )Smitherman, Donna Nelson, )and Kenneth Anderson, )

PETITIONERS,v.

)) Case No. 10-6096)

UNITED STATES )ENVIRONMENTAL )PROTECTION AGENCY, ))

RESPONDENT. ))

UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT

PETITION FOR REVIEWPursuant to Section 307(b)(l) of the Clean Air Act, 42 U.S.C. 7607(b)(l),

and Rule lS(a) of the Federal Rules of Civil Procedure, the State of Texas, RickPerry, Governor of Texas, Greg Abbott, Attorney General of Texas, the TexasCommission on Environmental Quality, the Texas Department of Agriculture, the

Case: 10-60961 Document: 00511323377 Page: 1 Date Filed: 12/15/2010


2/29

Texas Railroad Commission, the Texas General Land Office, and Texas Public Utility Commissioners Barry Smitherman, Donna Nelson, and Kenneth Anderson(collectively "State of Texas" or "Texas") hereby petition for review of the finalaction of the respondent United States Environmental Protection Agency publishedin the Federal Register at 75 Fed. Reg. 77,698 (Dec. 13, 2010) and titled "ActionTo Ensure Authority To Issue Permits Under the Prevention of SignificantDeterioration Program to Sources of Greenhouse Gas Emissions: Finding ofSubstantial Inadequacy and SIP Call" ("GHG SIP Call").

The GHG SIP Call is contrary to both the Clean Air Act and theConstitution. Recognizing the proper role of the States, the Clean Air Actdeclares pollution prevention to be "the primary responsibility of States and localgovernments," and not the federal government. 42 U.S.C. 7401(a)(3). EPArejects that approach and seeks to deprive Texas of its right to manage its airresources. I t does so by unlawfully replacing a properly-approved Texas SIP,despite Texas' strong track record of reducing pollution and improving air qualityin the State. The United States Constitution also denies the federal government theauthority to commandeer the States to carry out its ends, but here EPA attemptsjust that by threatening Texas with severe economic harm unless the State adopts,on an unrealistic timeline, EPA's greenhouse gas regulations, which arethemselves unlawful.

- 2



3/29

The GHG SIP Call is arbitrary and capricious and is contrary to the Clean Air Act. The State of Texas is directly and immediately harmed by the GHG SIPCall because it purports to rescind the State of Texas' permitting authority underthe Prevention of Significant Deterioration program, 42 U.S.C. 7470 et seq., and,thereby, to impose a construction moratorium on greenhouse gas sources. Thisaction causes Texas and its citizens great and immediate injury, in the form offorgone business investment, lost jobs, lost tax revenues, and administrativeexpenses. By contrast, this regulation accomplishes no discemable environmentalbenefit. The amount of greenhouse gas emissions that would be avoided under thisregulation is miniscule; indeed, it is impossible to even measure. The State ofTexas therefore reserves the right to request that the Court stay the GHG SIP Callpending resolution of the instant Petition.



4/29

Dated: December 14, 2010 Respectfully submitted,

GREG ABBOTTAttorney General ofTexasDANIEL T. HODGEFirst Assistant Attorney GeneralBILL COBBDeputy Attorney General for CivilLitigationJ. REED CLAY, JR.Special Assistant and Senior Counselto the Attorney GeneralOffice of the Attorney General ofTexasP. O. Box 12548, Capitol StationAustin, Texas 78711-2548Telephone: (512) 936-2541Facsimile: (512) 936-0545Email: [email protected]

lsi David B. Rivkin, Jr.DAVID B. RIVKIN, JR.MARK W. DELAQUILANDREW M. GROSSMANBaker & Hostetler LLPWashington Square, Suite 11001050 Connecticut Avenue, N.W.Washington, D.C. 20036-5304Phone: 202.861.1500Facsimile: 202.861.1783Email:[email protected]

-4

mailto:[email protected]:Email:[email protected]:[email protected]:Email:[email protected]


5/29

CERTIFICATE OF SERVICEI hereby certify that on December 14,2010, I served a copy of the foregoingPetition for Review by first-class mail, postage prepaid on the following:United States Environmental Protection AgencyOffice of the Administrator1200 Pennsylvania Avenue, N.W.Washington, D.C. 20460United States Environmental Protection AgencyOffice of the General Counsel1200 Pennsylvania Avenue, N.W.Washington, D.C. 20460

By: lsi Andrew M. GrossmanAndrew M. Grossman



6/29

Monday,December 13,2010

Part II

EnvironmentalProtection Agency40 CFR Part 52Action To Ensure Authority To IssuePermits Under the Prevention ofSignificant Deterioration Program toSources of Greenhouse Gas Emissions:Finding of Substantial Inadequacy and SIPCall; Final Rule

----------- .



7/29

77698 Federal Register/Vol. 75, No. 238/Monday, December 13, 2010/Rules and RegulationsENVIRONMENTAL PROTECTIONAGENCY40 CFR Part 52[EPA-HQ-OAR-2010-01 07; FRL-9236-3]RIN-20So-AQOSAction To Ensure Authority To IssuePermits Under the Prevention ofSignificant Deterioration Program toSources of Greenhouse GasEmissions: Finding of SubstantialInadequacy and SIP CallAGENCY: Environmental Protection Agency (EPA). ACTION: Final rule. SUMMARY: Th e EPA is issuing a findingthat the EPA-approved stateimplementation plans (SIP) of 13 states(comprising 15 state and local programs)are substantially inadequate to meetClean Ai r Act (CAA) requirementsbecause they do no t apply Prevention ofSignificant Deterioration (PSD)requirements to greenhouse gas (GHG)emitting sources. In addition, EPA is

issuing a "SIP call" for each of thesestates, which requires the state to reviseits SIP as necessary to correct suchinadequacies. Further, EPA isestablishing a deadline for each state tosubmit its corrective SIP revision. Thesedeadlines, which differ among thestates, range from December 22, 2010, toDecember 1,2011.DATES: This action is effective onDecember 13, 2010. The deadline foreach state to submit its corrective SIPrevision is listed in table IV-l , "SIP CallStates an d SIP Submittal Deadlines" inthe SUPPLEMENTARY INFORMATION sectionof this rule.ADDRESSES; EPA has established adocket for this rulemaking under DocketID No. EPA-HQ-OAR-2010-0107. Alldocuments in the docket are listed inthe http://www.regulations.govindex.Although listed in the index, someinformation is not publicly available,e.g., CBI or other information whosedisclosure is restricted by statute.Certain other material, such ascopyrighted material, will be publiclyavailable only in hard copy. Publicly

available docket materials are availableeither electronically in http://www.regulations.govor in hard copy atthe U.S. Environmental ProtectionAgency, Air Docket, EPA/DC, EPA WestBuilding, Room 3334, 1301 ConstitutionAve., NW., Washington, DC. The PublicReading Room is open from 8:30 a.m. to4:30 p.m., Monday through Friday,excluding legal holidays. The telephonenumber for the Public Reading Room is(202) 566-1744, and the telephonenumber for the Air Docket is (202) 5661742.FOR FURTHER INFORMATION CONTACT: Ms.Lisa Sutton, Air Quality Policy Division,Office of Air Quality Planning an dStandards (C504-03), EnvironmentalProtection Agency, Research TrianglePark, NC 27711; telephone number:(919) 541-3450; fax number: (919) 5415509; e-mail address:[email protected].

For information related to a specificstate, local, or tribal permittingauthority, please contact the appropriateEPA regional office:

EPAregional Contact for regional office (person, mailing address, telephone number) Permitting authorityofficeDave Conroy, Chief, Air Programs Branch, EPA Region 1, 5 Post Office Square, Connecticut, Massachusetts, Maine, NewSuite 100, Boston, MA 02109-3912, (617) 918-1661. Hampshire, Rhode Island, and Vermont.

II .............. III ............ ..

IV ............ .. V .............. Vi ..............

Raymond Werner, Chief, Air Programs Branch, EPA Region 2, 290 Broadway, 25thFloor, New York, NY 10007-1866, (212) 637-3706.Kathleen Cox, Chief, Permits and Technical Assessment Branch,1650 Arch Street, Philadelphia, PA 19103-2029, (215) 814-2173. EPA Region 3,Lynorae Benjamin, Chief, Regulatory Development Section, Air, Pesticides andToxics Management Division, EPA Region 4, Atlanta Federal Center, 61 Forsyth

Street, SW., Atlanta, GA 30303-3104, (404) 562-9033.J. Elmer Bortzer, Chief, Air Programs Branch (AR-18J), EPA Region 5, 77 WestJackson Boulevard, Chicago, IL 60604-3507, (312) 886-1430.Jeff Robinson, Chief, Air Permits Section, EPA Region 6, Fountain Place 12th Floor,Suite 1200, 1445 Ross Avenue, Dallas. TX 75202-2733, (214) 665-6435.Mark Smith, Chief, Air Permitting and Compliance Branch, EPA Region 7, 901 North5th Street, Kansas City, KS 66101, (913) 551-7876..Carl Daly, Unit Leader, Air Permitting, Monitoring & Modeling Unit, EPA Region 8,1595 Wynkoop Street, Denver, CO 80202-1129, (303) 312-6416.Gerardo Rlos, Chief, Permits Office, EPA Region 9, 75 Hawthorne Street, San Francisco, CA 94105, (415) 972-3974.Nancy Helm, Manager, Federal and Delegated Air Programs Unit, EPA Region 10,1200 Sixth Avenue, Suite 900, Seattle, WA 98101, (206) 553-6908.

SUPPLEMENTARY INFORMATION:I. Genera] InformationA. Does this action apply to me?

Entities affected by this rule includestate an d local permitting authorities.1In this rule, EPA finds that any state'sSIP-approved PSD applicabilityprovisions that do not apply th e PSD1 For convenience, we refer to "states" in thisrulemaking to collectively mean states and localpermitting authorities.

program to GHG-emitting sources aresubstantially inadequate to meet CAArequirements, under CAA section110(k)(5), an d such states will beaffected by this rule. For example, i f astate's PSD regulation identifies itsregulated New Source Review (NSR)pollutants by specifically listing eachindividual pollutant and the list omits

2 Prevention of Significant Deterioration and TitleV Greenhouse Gas Tailoring Rule; Final Rule. 75 FR31514 (June 3, 2010).

New Jersey, New York, Puerto Rico, andVirgin Islands.District of Columbia, Delaware, Maryland,Pennsylvania, Virginia, and West Vir-ginia.Alabama, Florida, Georgia, Kentucky, Mis-sissippi, North Carolina, South Carolina,and Tennessee.Illinois, Indiana, Michigan, Minnesota,Ohio, and Wisconsin.Arkansas, Louisiana, New Mexico, Okla-

VII ............ VIII ........... . IX ............. . X ...............

homa, and Texas.Iowa, Kansas, Missouri, and Nebraska.Colorado, Montana, North Dakota, SouthDakota, Utah, and Wyoming.Arizona; California; Hawaii and the PacificIslands; Indian Country within Region 9and NavajO Nation; and Nevada.Alaska, Idaho, Oregon, and Washington.

GHGs, then the regulation issubstantially inadequate.Entities affected by this rule alsoinclude sources in al l industry groups,which have a direct obligation under theCAA to obtain a PSD permit for GHGsfor projects that meet the applicabilitythresholds set forth in a GHG PSD rulethat EPA recently promulgated, which

http:///reader/full/http://www.regulations.govhttp:///reader/full/www.regulations.govmailto:[email protected]:///reader/full/http://www.regulations.govhttp:///reader/full/www.regulations.govmailto:[email protected]


8/29

Federal Register/Vol. 75, No. 238/Monday, December 13, 2010/Rules and Regulations 77699we refer to as the Tailoring Rule.2 This specific to PSD an d derives from CAA affected by this action are in theindependent obligation on sources is section 165(a). Th e majority of entities following groups:

Industry group NAICS aUtilities (electric, natural gas, other systems) ............ .............. .............. .............. .............. .............. ............. ........ 2211,2212,2213 Manufacturing (food, beverages, tobacco, textiles, leather) ............. ............... ............... ................ ............... ....... 311,312,313,314,315,316 Wood product, paper manufacturing ............. .............. ............... .............. .............. .............. ............... .............. .... 321, 322 Petroleum and coal products manufacturing. ................... ................... ................. ................... ....... .................. ..... 32411, 32412, 32419 Chemical manufacturing ........................................................................................................................................ 3251, 3252, 3253, 3254, 3255.

3256,3259Rubber product manufacturing ......... ...... ................... ...... .............. ....... ............ ................................ .. .............. ..... 3261 , 3262 Miscellaneous chemical products .......................................................................................................................... 32552, 32592, 32591, 325182,32551Nonmetallic mineral product manufacturing .......................................................................................................... 3271, 3272, 3273, 3274, 3279Primary and fabricated metal manufacturing ....... ............ ............. ............ ............ ............. ............ ............ ........... 3311, 3312, 3313, 3314, 3315.3321, 3322, 3323, 3324, 3325,3326,3327,3328,3329Machinery manufacturing ...................................................................................................................................... 3331, 3332, 3333, 3334. 3335,3336,3339Computer and electronic products manufacturing ............ ............. ............. ............. .............. ............. ............. ..... 3341, 3342, 3343, 3344, 3345,4446Electrical equipment, appliance, and component manufacturing .......................................................................... 3351, 3352, 3353, 3359 Transportation equipment manufacturing .............................................................................................................. 3361, 3362, 3363, 3364, 3365, 3366, 3366, 3369 Furniture and related product manufacturing ..... .............. ............. ............. ............. .............. ............. ............. ...... 3371, 3372, 3379 Miscellaneous manufacturing ..................... ................. ................. ................. ....... .............. ................ ................ ... 3391, 3399 Waste management and remediation .. ........................ ........... ................. ............... .......... ......... ........... ................ 5622, 5629 Hospitals/nursing and residential care facilities .................................................................................................... 6221, 6231, 6232, 6233, 6239 Personal and laundry services ..................... ............. ............. ............. ............. ............. ............. .............. ............. 8122,8123 ResidentiaVprivate households .............................................................................................................................. 8141 Non-residential (commercial) ................................................................................................................................. Not available. Codes only exist for private households, construction and leasing/sales in-dustries.

a North American Industry Classification System.B. How is the preamble organized?

Th e information presented in thispreamble is organized as follows:I. General InformationA. Does this action apply to me?

B. How is the preamble organized?II. Overview of Final RuleIII. BackgroundA. CAA and Regulatory Context1. SIP PSD Requirements2. Recent EPA Regulatory ActionConcerning PSD Requirements for GHG-emitting Sources3. SIP Inadequacy and Corrective Action4. State PSD SIPsB. Proposed Action1. Finding of Substantial Inadequacy andSIP Call2. Corrective SIP RevisionIV. Final Action and Response to CommentsA. Response to CommentsB. Finding of Substantial Inadequacy andSIP Call1. Overall Basis2. State-Specific Ac tionsC. Requirements for Corrective SIP Revision

1. Application of PSD Program to GHG-Emitting Sources2. Definition and Calculation of Amount ofGHGs3. Thresholds2 Prevention of Significant Deterioration and TitleV Greenhouse Gas Tailoring Rule: Final Rule. 75 FR

31514 Uune 3. 2010).

D. Response to Procedural and Other Comments 1. Approved SIP PSD Programs That Applyto GHG Sources2. Opportun ity for Notice and Comment3. Federal Implementation PlanV. SIP SubmittalsA. EPA Action: Findings of Failure ToSubmit and Promulgation of FIPs;Process for Action on Submitted SIPs1. Actions on SIP Submittals2. Findings of Failure To Submit and Promulgation of FIPs 3. Rescission of the FIPB. Streamlining the State Process for SIPDevelopment and SubmittalC. Primacy of the SIP ProcessD. Effective DateVI. Statutory and Executive Order ReviewsA. Executive Order 12866-RegulatoryPlanning and ReviewB. Paperwork Reduction ActC. Regulatory Flexibility ActD. Unfunded Mandates ReformE. Executive Order 13132-FederalismF. Executive Orde r 13175-Consultation

and Coordination With Indian TribalGovernmentsG. Executive Order 13045-Protection ofChildren From Environmental HealthRisks and Safety RisksH. Executive Order 13211-Actions Concerning Regulations That 3 Prevention of Significant Deterioration and Title

V Greenhous e Gas Tailoring Rule: Fi nal Rule. 75 FR31514 Gune 3. 2010).

Significantly Affect Energy Supply,Distribution, or UseI. National Technology Transfer and Advancement Act J. Executive Order 128g8-Federal ActionsTo Address Environmental Justice inMinority Populations and Low-IncomePopulationsK. Congressional Review ActVII. Judicial ReviewVIII. Statutory Authority

II. Overview of Final RuleThis rulemaking is related to fourdistinct GHG-related actions recentlytaken by EPA. Some of these actions, in

conjunction with the operation of theapplicable CAA provisions, will requirestationary sources that emit largeamounts of GHGs to obtain a PSDpermit before they construct or modify,beginning January 2,2011. In one ofthese actions, which we call th eTailoring Rule, EPA limited theapplicability of PSD to GHG-emittingsources at or above specifiedthresholds. 3

Most states include EPA-approvedPSD programs in their stateimplementation plans (SIPs), and, as aresult, they act as the permitting



9/29

77700 Federal Register/Vol. 75, No. 23B/Monday, December 13, 2010/Rules and Regulationsauthority. Most ofthese states' PSDprograms apply to GHG-emittingsources, and through a separateregulatory action, EPA and these statesare now taking steps to limit theapplicabil ity of PSD to GHG-emittingsources at or above the Tailoring Rulethresholds. However, 13 states haveSIPs with EPA-approved PSD programsthat do not apply PSD to GHG-emittingsources, and it is those states that arethe subject of this rulemaking.In thIS rulemaking, EPA is (i) issuinga finding of substantial inadequacy for13 states because the ir EPA-approvedSIP PSD programs do not apply to GHG-emitting sources, (ii) issuing arequirement, which we refer to as a SIPcall, that these states submit a correctiveSIP revision to assure that their PSDprograms will apply to GHG-emittingsources, and (iii) establishing thedeadline by which each of these statesmust submit its corrective SIP revision,which differs among the various statesand ranges from December 22, 2010, toDecember 1, 2011. Each ofthese actionsis authorized under CAA section110(k)(5). The 13 states (some of whichinclude at least one local permittingagency) are: Arizona; Arkansas;California; Connecticut; Florida; Idaho;Kansas; Kentucky; Nebraska; Nevada;Oregon; Texas; and Wyoming.

If a state for which we are finalizinga SIP call in this action does not submitits corrective SIP revision by itsdeadline, EPA intends to immediatelyissue to the state a finding of failure tosubmit a required SIP revision and alsoimmediately promulgate a federalimplementation plan (FIP) for the state,under CAA section 110(c)(1)(A). EPAproposed this SIP call and the FIP byseparate notices dated September 2.2010. "Action to Ensure Authority toIssue Permits under the Prevention ofSignificant Deterioration Program toSources of Greenhouse Gas Emissions:Finding of Substantial Inadequacy andSIP Call-Proposed Rule." 75 FR 53892;"Action to Ensure Authority to IssuePermits under the Prevention ofSignificant Deterioration Program toSources of Greenhouse Gas Emissions:Federal Implementation Plan-ProposedRule," 75 FR 53883.This SIP call is important becausewithout it, large GHG-emitting sourcesin these states may be unable to obtaina PSD permit for their GHG emissionsand therefore may face delays inundertaking construction ormodification projects. This is becausewithout the further action by the statesor EPA that the SIP call is designed tolead to. sources that emit or plan to emitlarge amounts o f GHGs will. startingJanuary 2, 2011, be required to obtain

PSD permits before undertaking newconstruction or modification projects,but neither the states nor EPA would beauthorized to issue the permits. The SIPcall and, in the states in which it isnecessary, the FIP will assure that ineach of the 13 states-with theexception of Texas-either the state orEPA will have the authority to issuePSD permits by January 2, 2011, orsufficiently soon thereafter so thatsources in the state will not be adverselyaffected by the short-term lack of apermitting authority. We are planningadditional actions to ensure that GHGsources in Texas can be issued permitsas of January 2. 2011.The SIP submittal deadlines that thisrule establishes for the states reflect, inalmost all instances, a recognition byEPA and the states of the need to moveexpeditiously to assure the availabilityof a permitting authority. EPAemphasizes that for those states forwhich EPA proceeds to promulgate aFIP: (i) The purpose of the FIP is solelyto assure that industry in the state willbe able to obtain required air permits toconstruct or modify; (ii) EPA encouragesthe state to assume delegation of the FIPso that the state will become the permitissuer (although administering EPAregulations); and (iii) EPA will rescindthe FIP as soon as the state submits an dEP A approves a corrective SIP revision.The corrective SIP revision that thisrule requires must: (i) Apply the SIPPSD program to GHG-emitting sources;(ii) define GHGs as the same pollutantto which the Light-Duty Vehicle Rule 4(LDVR) applies, tha t is, a singlepollutant that is the aggregate of thegroup of six gases (carbon dioxide (C02),methane (CH4), nitrous oxide (N20) ,hydrofluorocarbons (HFCs),perfluorocarbons (PFCs), and sulfurhexafluoride (SF6)) ; and (iii) either limitPSD applicability to GHG-emittingsources by adopting the applicabilitythresholds included in the TailoringRule or adopt lower thresholds andshow that the state has adequatepersonnel and funding to administerand implement those lower thresholds.III, BackgroundA. CAA and Regulatory Context

EPA described the relevantbackground information in the SIP callproposal. 75 FR at 53896-98, as well asin the final Tailoring Rule. 75 FR at31518-21. Knowledge ofthisbackground information is presumedan d will be only briefly summarizedhere.4 "Light-Duty Vehicle Greenhouse Gas EmissionStandards and Corporate Average Fuel EconomyStandards; Final Rule." 75 FR 25324 (May 7. 2010).

1. SIP PSD RequirementsIn general, under the CAA PSDprogram. as discussed later in thispreamble. a stationary source mustobtain a permit prior to undertakingconstruction or modification projectsthat would result in specified amountsof new or increased emissions of airpollutants that are subject to regulation

under other provisions of the CAA. CAAsections 165(a). 169(1), 169(2)(C). Thepermit must, among other things,include emission limitations associatedwith the best available controltechnology (BACT). CAA section165(a)(4).Specifically, under the CAA PSDrequirements, a new or existing sourcethat emits or has the potential to emit"any air pollutant" in the amounts ofeither 100 or 250 tons per year (tpy),depending on the source category,cannot construct or modify unless thesource first obtains a PSD permit that,among other things. includes emissionlimitations that qualify as BACT. CAAsections 165(a)(1), 165(a)(4), 169(1).Longstanding EPA regulations haveinterpreted the term "any air pollutant"more narrowly so that only emissions ofany pollutant subject to regulationunder the CAA trigger PSD. Thisinterpretation currently is found in 40CFR 51.166(j)(1), 52.21(j)(2), whichapplies PSD to any "regulated NSRpollutant," a term that the regulationsthen define to include four classes of airpollutants. including, as a catch-all,"any pollutant that otherwise is subjectto regulation under the Act." 40 CFR51.166(b)(49)(iv),52.21(b)(50)(iv).The CAA contemplates that the PSDprogram be implemented by the statesthrough their SIPs. CAA section110(a)(2)(C) requires that:

Each implementation plan * * shall* * include a program to provide for * regulation of the modification andconstruction of any stationary source withinthe areas covered by the plan as necessary toassure that national ambient air qualitystandards are achieved, including a permitprogram as required in part[] C * * of thissubchapter.

CAA section 110(a)(2)0) requires that:Each implementation plan * * shall

* * meet the applicable requirements of* * part C of this subchapter (relating tosignificant deterioration of air quality Bndvisibility protection).CAA section 161 provides that:Each applicable implementation plan shallcontain emission limitations and such othermeasures as may be necessary. as determinedunder regulations promulgated under thispart [C], to prevent Significant deteriorationof air quality for such region' * designated' * as attainment orunclassifiable.



10/29

2011. 5

Federal Register / Vol. 75, No. 238/ Monday, December 13, 2010/ Rules and Regulations 77701These provisions, read in conjunctionwith the PSD applicability provisions,CAA section 165(a)(1), 169(1), mandatethat SIPs include PSD programs that areapplicable to any air pollutant that issubject to regulation under the CAA,including, as discussed later in thispreamble, GHGs on and after January 2,

2. Recent EPA Regulatory ActionConcerning PSD Requirements for GHG-emitting SourcesIn recent months, EPA has taken fourdistinct actions related to GHGs underthe CAA. Some of these. in conjunctionwith the operation of the CAA, triggerPSD applicability for GHG-emittingsources on and after January 2, 2011, butfocus the scope of PSD on the largestGHG-emitting sources. The first of thesefour actions was what we call the"Endangerment Finding," which isgoverned by CAA section 202(a). Basedon an exhaustive review and analysis of

the science, in December 2009 theAdministrator exercised her judgment toconclude that "six greenhouse gasestaken in combination endanger both thepublic health and the public welfare ofcurrent and future generations." TheAdministrator also found ''that thecombined emissions of thesegreenhouse gases from new motorvehicles and new motor vehicle enginescontribute to the greenhouse gas airpollution that endangers public healthand welfare under CAA section202(a)."6 This Endangerment Findingled directly to promulgation of what wecall the "Vehicle Rule" or the "LDVR,"also governed by CAA section 202(a), inwhich EPA set standards for theemission of greenhouse gases for newmotor vehicles built for model years2012-2016.7 The other two actions werewhat we call the "Johnson MemoReconsideration" or the "TimingDecision" 6 and the Tailoring Rule and In the Tailoring Rule, we noted that commentersargued, with some variations, that the PSDprovisions applied only to National Ambient AirQuality Standards (NMQS) pollutants, and notGHGs, and we responded that the PSD provisi onsapply to all poll utants subject to regulation,including GHGs, See 75 FR 31560-62; ''Preventionof Significant Deterioration and Title V GHG

Tailoring Rule: EPA's Response to PublicComments," May 2010, pp, 38-41. We are notreopening that issue in this rulemaking.B "Endangermentan d Cause or ContributeFindings for Greenhouse Gases Under Section202(a) ofilie Clean Air Act." 74 FR 66496(December 15, 2009).7 "Light-Duty Vehicle Greenhouse Gas EmissionStandards and Corporate Average Fuel EconomyStandards; Final Rule," 75 FR 25324 (May 7, 2010).8 "Interpretation of Regulations that DeterminePollutants Covered by Cean Air Act PermittingPrograms." 75 FR 17004 (April 2, 2010). This actionfinalizes EPA's response to a petition forreconsideration of "EPA's Interpretati on of

were governed by the PSD and title Vprovisions in the CAA. EPA issued themto address the automatic statutorytriggering of these programs forgreenhouse gases due to the VehicleRule's establishing the first controls forgreenhouse gases under the Act. Morespecifically, the Johnson MemoReconsideration provided EPA'sinterpretat ion of a pre-existingdefinition in its PSD regulationsdelineating the "pollutants" that aretaken into account in determiningwhether a source must obtain a PSDpermit and the pollutants each permitmust control. Regarding the VehicleRule, the Johnson MemoReconsideration stated that suchregulations, when they take effect onJanuary 2. 2011. will, by operation ofthe applicable CAA requirements,subject GHG-emitting sources to PSDrequirements. The Tailoring Rulelimited the applicability of PSDrequirements to the largest GHG-emitting sources on a phased-in basis.Certain specific aspects of these rulesare important to highlight for purposesof the present action. In theEndangerment Finding, theAdministrator found that six long-livedand directly emitted GHGS-C02. CH 4 ,N20, HFCs, PFCs, and SF6-mayreasonably be anticipated to endangerpublic health and welfare. The LDVRincluded applicability provisionsspecifying that the rule "containsstandards and other regulationsapplicable to the emissions of those sixgreenhouse gases." 75 FR at 25686 (40CFR 86.1818-12(a)).In the Tailoring Rule. EPA identifiedthe air pollutant that, if emitted orpotentially emitted by the source inexcess of specified thresholds, wouldsubject the source to PSD requirements.as the aggregate of the same six GHGs(C02CH 4 N20, HFCs, PFCs, and SF6),based on the LDVR. The Tailoring Rulefurther provided that for purposes ofdetermining whether the amount ofGHGs emitted (or potentially emitted)exceeded the specified thresholds, i tmust be calculated on both a massemissions basis and on a carbon dioxideequivalent (C02e) basis. With respect tothe latter, according to the rule. "PSD* .. ., applicability is based on thequantity that results when the massemissions of each of these [six] gases ismultip lied by the Global WarmingPotential (GWP) of that gas, and thensummed for all six gases." 75 FR 31518.Regulations that Determine Pollutants Covered byFederal Prevention of Significant Deterioration(PSDj Pennit Program" (which we call the "JohnsonMemo"), December 18, 2008.

3. SIP Inadequacy and Corrective ActionThe CAA provides a mechanism forthe correction of SIPs with certain typesof inadequacies. under CAA section110(k)(5), which provides:(5) Calls for plan revisionsWhenever the Administrator finds that theapplicable implementation plan for any areais substantially inadequate to " .. .. comply

with any requirement of this Act. theAdministrator shall require the State to revisethe plan as necessary to correct suchinadequacies. The Administrator shall notifythe State of the inadequacies and mayestablish reasonable deadlines (not to exceed18 months after the date o f such notice} forthe submission of such plan revisions.This provision by its terms authorizesthe Administrator to "find[] that [a SIP].. .. .. is substantially inadequate to.. .. .. comply with any requirement ofthis Act," and, based on that finding. to"require the State to revise the [SIP].. .. .. to correct such inadequacies."This latter act ion is commonly referred

to as a "SIP call." In addition. thisprovision provides that EPA must notifythe state of the substantial inadequacyand authorizes EPA to establish a"reasonable deadline[] (not to exceed 18months after the date of such notice)"for the submission of the corrective SIPrevision.I f EPA does not receive the correctiveSIP revision by the deadline, CAAsection 110(c) authorizes EPA to "find[]that [thel State has failed to make arequired submission." CAA section110(c)(1)(A). Once EPA makes thatfinding, CAA section 110(c)(1) requires

EPA to "promulgate a Federalimplementation plan at any time within2 years after the [finding]" .. .. unlessthe State corrects the deficiency, and[EPA] approves the plan or planrevision, before [EPA] promulgates such[FIPJ."4. State PSD SIPs

The states and other jurisdictions inthe U.S. may be grouped into threecategories with respect to their PSDprograms and the applicability of thosePSD programs to GHG-emitting sources:The first category is the states that donot have PSD programs approved intotheir SIPs. In those states, EPA'sregulations at 40 CFR 52.21 govern. andeither EPA or the state as EPA'sdelegatee acts as the permittingauthority,9

EPA identified the first category of states. localjurisdictions, and Indian country, in the proposalfor this action. 75 FR at 53696, n. 11. This Jist isupdated in Declaration of Regina McCarthy,Coalition for Responsible Regulation v. EPA, DCCir. No. 09-1322 (and consolidated cases)(McCarthy Declaration!, Attachment 1, Table 1,Continued



11/29

77702 Federal Register/Vol. 75, No. 23B/Monday, December 13, 2010/Rules and RegulationsThe second category comprises statesthat have approved SIP PSD programsthat do not apply to GHG-emittingsources. This second category is thesubject of this rulemaking and isdiscussed further in this preamble.The th ird category, WhICh includesmost of the states, is states that haveapproved SIP PSD programs that applyto GHG-emitting sources. Those SIPshave PSD applicability provisions thatidentify, as some or all ofthe pollutantscovered under their PSD program, any"pollutant subject to regulation" underthe CAA. Further, in these states, thisterm in effect is automatically updatingso as to cover pollutants that becomenewly subject to regulation under theCAA without further action by the state.As a result, the PSD programs of thesestates will apply to GHG emissions as ofJanuary 2, 2011, when GHGs becomesubject to regulation under the LDVR.See 40 CFR 52.21(b)(50).10

B. Proposed Action1. Finding of Substantial Inadequacyand SIP Call

In the proposal for this rulemaking,EPA proposed the SIP call for 13 stateswhose SIPs have EPA-approved PSDprograms but did not appear to apply toGHG-emitting sources. These 13 statesare listed in table III-1:TABLE 11I-1-STATES WITH SIPS THATEPA PROPOSED DO NOT ApPEARTO ApPLY PSD TO GHG SOURCES

[Presumptive SIP Call List]State (or area)AlaskaArizona: Pinal County; Rest of State (Ex-cludes Maricopa County, Pima County,and Indian Country)ArkansasCalifornia: Sacramento Metropolitan AQMDConnecticutFloridaIdahoKansasKentucky: Jefferson County; Rest of State

which can be found in the docket for thisrulemaking, except that the Northern MarianaIslands and the Trust Territories also fall into thiscategory. EPA is not taking any final action withrespect to these jurisdictions, and EPA'sidentification of them in this action is forinformational purposes only.10EPA included in the proposal a list of statesan d local jurisdictions that appeared to fall into thisthird category. 75 FR at 53899, table IV-2. This listis updated in Declaration of Regina McCarthy,Coalition/or Responsible Regulation v. EPA. DCCir. No. 09-1322 (and consolidated cases)(McCarthy Declaration), Attachment 1, Table 3.which can be found in th e docket for thisrulemaking. Except to the extent discussed later inthis preamble, EPA is not taking final action in thisrule with respect to these states and localjurisdictions.

TABLE 111-1-STATES WITH SIPs THATEPA PROPOSED Do NOT ApPEARTo ApPLY PSD TO GHGSOURCEs-Continued

[Presumptive SIP Call List]State (or area)

NebraskaNevada: Clark CountyOregonTexas

In the proposal, EPA explained that ithad identified these 13 states on thebasis ofEPNs review ofthe SIP PSDprovisions and other relevant state law,as well as the views of the states asexpressed in their written statements toEPA following promulgation of theTailoring Rule and in othercommunications with the EPA regions.EPA further explained that thisinformation appeared to indicate thatthese SIP PSD provisions did not applyto GHG-emitting sources because of oneor another of the following problems,depending on the state: (il The PSDapplicability provision applies to any"pollutant subject to regulation" underthe CAA, but other provisions of statelaw preclude what we call automaticupdating or forward adoption, so thatthis applicability provision covers onlypollutants-not including GHGs-thatwere subject to regulation at the timethe state promulgated or enacted theapplicability provision; (ii) the PSDapplicability provision does not applyto any "pollutant subject to regulation"under the CAA and instead applies toonly specifically identified pollutants,not including GHGs; or (iii) the SIPexplicitly precludes regulation of CO 2On the other hand, EPA furtherrecognized in the proposal that a statethat fits into one of the earlier-describedsubcategories might nevertheless havein its SIP or other state laws a "generalauthority clause" that affirms the state'slegal authority to issue, and enforcecompliance with, permits that areconsistent with federal requirements. Inthis case, the SIP, read as a whole, maybe considered to apply PSD to GHGsources. Even so, we added that i f a SIPappeared ambiguous as to whether itapplied PSD to GHG-emitting sources(e.g., it includes an applicabilityprovision that explicitly excludes GHGsources but also includes a generalauthority provision that could be read toauthorize permitting of GHG sources),we would consider the SIP PSD programnot to apply to GHG sources.As a related matter, we noted that ifa state with a SIP that did not appear toapply PSD to GHG-emitting sourcessubmitted a SIP revision prior to

December 1, 2010-the date EPAintended to issue the SIP call-EPAwould not include that state in the SIPcall.EPA included with the proposal atechnical support document (TSD) thataddressed each state with an approvedPSD program that did not at time ofproposal appear to apply to GHG-emitting sources. The TSD referencedthe applicable state law and the positionof the state as to PSD applicability forGHG-emitting sources, based oncommunications to EPA. EPA alsoincluded in the TSD much the sameinformation for each state with anapproved PSD program that did at timeof proposal appear to apply to GHG-emitting sources.For each ofthe 13 states, EPAproposed to issue a finding that the SIPis "substantially inadequate" .. .. to.. .. .. comply with any requirement of[the CAAJ" and EPA proposed to"require the State to revise the plan asnecessary to correct such inadequacies,"i.e., EPA proposed to issue a SIP call inaccordance with CAA section 110(k)(5).EPA expla ined that the reference inCAA section 110(k)(5) to "anyrequirement of [the CAAJ" includes thePSD requirements and that SIPs aretherefore required to include PSDprograms that apply to sources that emitpollutants subject to regulation. As aresult, EPA proposed the 13 states' SIPsmerit a finding o f substantialinadequacy because they fail to applythe PSD program to GHG-emittingsources on and after January 2, 2011.EPA further proposed that because theSIPs merit a finding of substantialinadequacy, EPA is authorized to issuea SIP call and thereby require acorrective SIP revision.EPA invited comment on its legalinterpretation of the 13 states' SIPs andmade clear tha t for any of these states,i f EP A did not receive any furtherinformation from the state or othercommenters indicating that EPA'sproposed interpretation was incorrect.EPA intended to finalize the SIP call,but that on the other hand, if EPA didreceive further information indicatingthat the proposed interpretation wasincorrect, then EPA would not finalizethe SIP call.In addition, EPA specifically solicitedcomment on its interpretation that theapproved SIPs for the other states doappear to apply the ir PSD program toGHG-emitting sources. EPA indicatedthat if it received comments indicating,for any of these latter states, that the SIPdoes not apply PSD to GHG sources,then, without further proposed action,EPA would issue a final finding ofsubstantial inadequacy and SIP call for

http:///reader/full/52.21(b)(50).10http:///reader/full/52.21(b)(50).10


12/29

77703ederal Register / Vol. 75, No. 238/ Monday, December 13, 2010/ Rules and Regulationsthat state. EPA identified these states aslisted in table 1II-2, "States with SIPsthat EPA Proposed Appear to ApplyPSD to GHG Sources (PresumptiveAdequacy List)." 11TABLE 111-2-STATES WITH SIPs THATEPA PROPOSED ApPEAR To ApPLY

PSD TO GHG SOURCES[Presumptive Adequacy List)

State (or area)Alabama: Jefferson County; Huntsville; Restof StateCalifornia: Mendocino County AQMD; Monterey Bay Unified APCD; North Coast Unitied AQMD; Northem Sonoma CountyAPCDColoradoDelawareGeorgiaIndianaIowaLouisianaMaineMarylandMichiganMississippiMissouriMontanaNew HampshireNew Mexico: Albuquerque; Rest of StateNorth Carolina: Forsyth County; Meckienburg; Western NC; Rest of StateNorth DakotaOhioOklahomaPennsylvania: All except Allegheny County 12Rhode IslandSouth CarolinaSouth DakotaTennessee: Chattanooga; Nashville; Knoxville; Memphis; Rest of StateUtahVermontVirginiaWest VirginiaWisconsin 13Wyoming 13

11 Note that in this final rule, except for any ofthese state. for which EPA is making a f inding ofsubstantial inadequacy and issuing a SIP call. EPAis not taking any action with respect to these states.lZPennsylvania's Philadelphia County correctlybelongs in the category of states that do not havePSD program s approved into their SIPs. We notethis correction for informational purposes only. asit has no bearing on this rulemaking. A correctedtable III-2 would list, "Pennsylvania: All exceptAllegheny County and Philadelphia County."However, we have not reflected the correction intable III-2 itself, for the reason that the tablerepresents ou r proposed list. In addition, as notedabove. an updated version of this category ofjurisdictions-those that have approved PSD SIPsthat apply to GHGernitting sources-appears inDeclaration of Regina McCarthy. Coalition forResponsible Regulation v. EPA. DC Cir. No. 09 1322 (and consolidated cases) [McCarthyDeclaration), Attachment 1, Table 3, which can befound in the docket for this rulemaking.

13 Note that in this final action, we are issuing aSIP call fur Wyoming. based on informationsubmitted by the state during the SIP call commentperiod.

We further stated in the proposal thatwe intended to finalize the finding ofsubstantial inadequacy and the SIP callon or about December 1,2010,approximately one month in advance ofthe January 2,2011, date when PSDrequirements will first apply to GHGemitting sources. We justified thistiming on the need to give sourcesnotice that the PSD requirements apply.In addition, we recognized that as apractical matter, some states would notobject to our imposing a FIP effective asof January 2,2011, in order to avoid anyperiod of time when the GHG'emittingsources identified in the Tailoring Ruleas subject to PSD would be unable toobtain a permit due to lack of apermitting authority to process theirPSD applications. We observed that wecould not impose a FIP until we havefirst finalized the SIP call and given thestate a reasonable period of time tomake the corrective SIP submission.

In the proposal, we also described ingreater detail the process for finalizingthe SIP call. We stated that we wouldissue the final SIP call for any state forwhich we had concluded that the PSDprogram did not as of that date apply toGHGemitting sources. However, i f astate that was included in the proposedSIP call were to submit a SIP revisionby December 1, 2010, that purported tocorrect that inadequacy, we would notfinalize the finding or SIP call for thatstate, Rather, we would take action onits SIP submittal as promptly aspossible. While we wi ll strive toexpedite approval of such SIPsubmissions, we could not commit inthe proposal to approving them byJanuary 2, 2011. We therefore cautionedin our proposal (see 75 FR at 53904) thatstates with submitted (but not EPAapproved) SIP revisions will not be ableto issue federally approved PSD permitsuntil those SIP revisions are approved.We stated that for all other states forwhich we concluded that the PSDprogram did not apply to GHG sources,on or about December 1,2010, wewould make the finding of substantialinadequacy and issue the SIP call in afinal rule and submit the notice for therule for publication in the FederalRegister as soon as possible thereafter.We stated that at the same time. wewould also notify the state of the findingof substantial inadequacy by letter andby posting the Signed SIP callrulemaking on our Web site. In view ofthe urgency of the task, which is to doeverything possible to ensure that a PSDpermitting author ity for affected GHGsources is in place by January 2, 2011,we proposed to give the final SIP call aneffective date of its publication date. We

recognized that this process is highlyexpedited, but we stated that it wasessential to maximize our and the states'opportunity to put in place a permittingauthori ty to process PSD permitapplications beginning on January 2,2011, without which sources may beunable to proceed with plans toconstruct or modify.In the proposal, EPA discussed insome detail the SIP submittal deadlineit was proposing to establish under CAAsection 110(k)(5). Under this provision,in notifying the state of the finding ofsubstantial inadequacy and issuing theSIP call, EPA "may establish reasonabledeadlines (not to exceed 18 months afterthe date of such notice) for thesubmission of such plan revisions." EPAproposed to allow the state up to 12months from the date of signature of thefinal finding of substantial inadequacyand SIP call within which to submit the

SIP revision, unless, during thecomment period, the state expresslyadvised that it would not object to ashorter period-as short as 3 weeks fromthe date of signature of the final rulein which case EPA would establish theshorter period as the deadline. EPAstated that, assuming that EPA were tofinalize the SIP call on or aboutDecember 1,2010, as EPA said itintended to do in the proposal. then theearliest possible SIP submittal deadlinewould be December 22, 2010.A few states did not inform EPA untilafter the end of the comment period for

the proposed SIP call that they wouldnot object to a deadline earlier thanDecember 2011, Nevertheless, weconsidered thei r responses whenestablishing thei r SIP submittaldeadlines in this final action.EPA made clear that the purpose ofestablishing the shorter period as thedeadline-for any state that advises usthat it does not object to that shor terperiod-is to accommodate states thatwish to ensure that a FIP is in effect asa backstop to avoid any gap in PSDpermitting, EPA also made clear that i fa state did not advise EPA that it does

not object to a shorter deadline, then the12month deadline would apply. EPAemphasized that for any state thatreceives a deadl ine after January 2,2011. the affected GHGemitting sourcesin that state may be delayed in theirability to receive a federally approvedpermit authorizing construction ormodification. That is, after January 2,2011, these sources may not haveavailable a permitting authority toreview their permit applications until



13/29

77704 Federal Register/Vol. 75, No. 238 I Monday, December 13, 2010/Ruies and Regulationsthe date that EPA either approves theSIP submittal or promulgates a FIP.EPA proposed that this 3-week-to-12month time period, although expedited,meets the CAA section 110(k)(5)requirement as a "reasonable" deadlinein light of: (i) The SIP development andsubmission process; (ii) the preferenceof the state; and (iii) the imperative tominimize the period when sources willbe subject to PSD but will not haveavailable a PSD permitting authority toact on their permit application andtherefore may face delays inconstructing or modifying.2. Corrective SIP Revision

EPA proposed certain requirementsfor each state receiving a SIP call. Thecentral requirement is that thecorrective SIP revision must apply thePSD program to GHG-emitting sources.EPA proposed two different ways for theSIP revision to do so: First, the SIPrevision could revise the PSDapplicability provisions or otherprovisions of the SIP or state law thataffect PSD applicability, to assure thatthe PSD applicability provisions areautomatically updating. This means thatthese provisions would apply PSD toany air pollutant as soon as thepollutant becomes newly subject toregulation under the CAA. As a result,the PSD applicability provisions willapply to GHGs as of January 2, 2011. Inthis case, EPA would approve the SIPrevision as fully meeting the CAArequirements. Second, and as analternative, the SIP revision couldsimply specifically identify GHGs assubject to PSD applicability, in whichcase EPA would approve the SIPrevision on the basis that the revision isSIP-strengthening, as discussed later inthis preamble. .In addition, EPA proposed to reqUirethat t he corrective SIP revision, inapplying the PSD program to GHG-emitting sources, must ei ther limit PSDapplicability to GHG-emitting sources ator above the Tailoring Rule thresholdsor adopt lower thresholds. However,EP A added that i f the state adopts lowerthresholds, then the state mustdemonstrate that it has "adequatepersonnel [and] funding * * * to carryout," that is, administer and implement,the PSD program with those lowerthresholds, in accordance with CAAsection 110(a)(2)(E)(i).EPA also noted in the proposal thatthe state must define GHGs as a singlepollutant that is the aggregate of thegroup of six gases: C02, CH 4 , N20,HFCs, PFCs, and SF6, which is thepollutant that the LDVR subjected toregulation. EPA further noted in theproposal that in the Tailoring Rule, EPA

adopted a carbon dioxide equivalent(C02e) metric and use of short tons (asopposed to metric tons) for calculatingGHG emissions in order to implementthe Tailoring Rule thresholds. 75 FR at31530,31532. A state retains theauthority to adop t lower thresholds thanin the Tailoring Rule in order to meetstatutory requirements, and, as a result,EPA stated in the proposal that the stateis not obligated to adopt the C0 2e metricor use of short tons in the corrective SIPrevision. However, if the state wishes toadopt the Tailoring Rule thresholds, butthrough a different approach, then thestate must assure that its approach is atleast as stringent as under the TailoringRule.As we noted in the preamble to theproposed rulemaking (75 FR at 53902),EPA issued a Call for Information (CFI)to solicit public comment and data ontechnical issues that might be used toconsider biomass fuels and theemissions resulting from theircombustion differently with regard toapplicability under PSD and with regardto the BACT review process under PSD.Subsequently EPA discussed theseconsiderations in its "PSD and Title VPermitting Guidance for GreenhouseGases" 14 that was released on November10, 2010, and made available for publiccomment. In that GHG permittingguidance document, EPA described onpages 8 through 10 how permittingauthorities may consider the use ofbiomass for energy generation whencarrying out their BACT analyses forGHGs. EPA also described plans forfuture guidance regarding analysis ofthe environmental, energy, andeconomic benefits of biomass in GHG BACT determinations.15

14 See http;llwww,epa.govlnsr/ghgpermitting,htmJ/for more information on EPA'srecent GHG permitting guidance document and onEPA's other permitting guidance for GHGs,15 Specifically, we stated the following in "PSDand Title V Permitting Guidance for GreenhouseGases," pages 8-10: In the annual US inventory ofGHG emissions and sinks, EPA has reported thatthe Land-Use, Land-Use Change and Forestry(LULUCF) sector (Including those stationarysources using biomass for energy) in the UnitedStates is a net carbon sink. taking into account thecarbon gains (e.g,. terrestrial sequestration) and

losses (e.g" emissions or harvesting) from thatsector, (Footnote: 2010 US Inventory Report athttp;llepo,gov!climotechongelemissionslusinventoryreport,htmJ,] On the basis of theInventory results and other considerations,numerous stakeholders requested that EPA exclude,either partially or wholly, emissions ofGHG frombioenergy and other biogenic sources for thepurposes of the BACT analysis and the PSDprogram based on the view that the biomass usedto produce bioenergy feedstocks can also be acarbon sink and therefore management of thatbiomass can playa role in reducing GHGs.[Footnote: GHG emissions from bioenergy and otherbiogenic sources are generated during combustionor decomposition of biologically-based material.

and include sources such as utilization of forest oragricultural products for energy, wastewatertreatment and livestock management facilities. andfermentation processes for ethanol production.]EPA plans to prOVide further guidance on the howto consider the unique GHG attributes of biomassas fuel.EVen before EPA takes further action, however,permitting authorities may consider. when carryingout their BACT analyses for GHG. theenvironmental, energy and economic benefits thatmay accrue from the use of certain types o f biomassand other biogenic sources (e,g . biogas fromlandfills) for energy generation. consistent witheXisting air quality standards. In particular, avariety of federal and state policies have recognizedthat some types of biomass can be part of a nationalstrategy to reduce dependence on fossil fuels andto reduce emissions ofGHGs. Federal and statepolicies, along with a number of state and regionalefforts. are currently under way to foster theexpansion of renewable resources and promotebiomass as a way of addressing climate change andenhancing forest-management. EPA believes that itis appropriate for permitting authorities to accountfor both existing federal and state policies and theirunderlying objectives in evaluating theenvironmental, energy and economic benefits ofbiomass fueL Based on these considerations.permitting authorities might determine that, withrespect to the biomass component of a facility's fuelstream, certain types of biomass by themselves areBACT for GHGs,To assist permitting authorities further inconsidering these factors, as well as to provide ameasure of national consistency and certainty, EPAintends to issue guidance in January 2011 that willprovide a suggested framework for undertaking an,analysis ofthe environmental. energy and economIcbenefits of biomass in Step 4 of the top- down BACTprocess, that, as a result. may enable permittingauthorities to simplify and streamline BACTdeterminations with respect to certain types ofbiomass,The guidance will include qualitative informationon useful Issues to consider with respect to biomasscombustion. such as specific feedstock types andtrends in carbon stocks at different spatial scales(national, regional, state), The aim of theinformation will be to assist permitting authoritiesin evaluating "carbon neutrality" in the assessmentof environmental, energy and economic impacts o fcontrol strategies under Step 4 of the BACT process,which. again. may enable the streamlining of BACTdeterminations with respect to certain types ofbiomass, The agency is currently reviewing thecomments received in response to the July 15, 2010Call for Information [CFl) that solicited feedbackfrom stakeholders on approaches to accounting forGHG emissions from bioenergy and other biogenicsources, [Footnote: The Call for Information waspublished on July 15, 2010, [75 FR 41173 and 75FR 45112), EPA received over 7,000 comments andis still assessing them. I These comments. amongother things, suggest that certain biomass f e e d s t o ~ k s (e.g" biogas) may be considered carbon neutral .wIthminor additional analysis. Such a carbon benefItmay further inform the BACT process. especiallywhere a permitting authority considers the netcarbon impact or carbon-neutrality of certainfeedstocks in accounting for the broaderenvironmental implications of using particularbiomass feedstocks.Finally, EPA also plans to dete rmine by May2011. well before the start of the second phase ofPSD implementation pursuant to the Tailoring Rule.whether the issuance of Ii supplemental rule isappropriate to address whether the Clean Air Actwould allow the Agency and permitting authoritiesor permitted sources. when determining theapplicability of PSD permitting requirements tosources of biogenic emissions, to quantify carbonemissions from bioenergy or biogenic sources byapplying separate accounting rules for different

http:///reader/full/determinations.15http:///reader/full/determinations.15http:///reader/full/determinations.15


14/29

Federal Register/Vol. 75, No. 23B/Monday, December 13, 2010/Rules and Regulations 77705IV. Final Action and Response toCommentsA. Process for Response to Comments

We proposed our SIP call and FIPactions as companion proposals. Bothproposals were signed by theAdministrator and made publiclyavailable on August 12, 2010, and bothproposals were published in the FederalRegister on September 2,2010. The SIPcall and FIP actions share a rulemakingdocket, and the majority of commentsthat were submitted to EPA during theproposals' comment periods wereprovided in the form of a letter thatintermingled comments on the SIP calland the FIP actions. We respond tocomments on the SIP call proposal inthis preamble, in a Response toComment Document for the SIP call,and in a Supplemental InformationDocument for the SIP call. TheResponse to Comment Document andSupplemental Information Documentcan be found in the docket for thisaction. We will respond to comments onthe FIP when we finalize that action.B. Finding of Substantial Inadequacyand SIP Call

In this action, EPA is finalizing itsproposal, under CAA section 110(k)(5),to: (i) Issue a finding that the SIPs for13 states (comprising 15 state and localprograms) are "substantially inadequateto * * * comply with any requirementof this Act" because their PSD programsdo not apply to GHG-emitting sources asof January 2, 2011; (ii) "require[] thestaters] to revise the [SIP] * * * tocorrect such inadequacies," that is, toissue a SIP call requiring submission ofa corrective SIP revision; and (i i i)establish a "reasonable deadline[J (not toexceed 18 months after the date of suchnotice)" for the submission of thecorrective SIP revision. This deadlineranges, for different states, from 3 weeksto 12 months after the date ofthisaction. The 13 states and their deadlinesare listed in table IV-l, "SIP Call Statesand SIP Submittal Deadlines":

TABLE IV-1-SIP CALL STATES ANDSIP SUBMITIAL DEADLINESSIPState (or area) submittaldeadline

Arizona: Pinal County............... 12122110types of feedstocks that reflect the net impact oftheir carbon emissions. This determination willtake into consideration both the LULUCF inventoryand the full record of responses to the CFI.

TABLE IV-1-SIP CALL STATES ANDSIP SUBMITIAL DEADLINES-COntinued

SIPState (or area) submittaldeadlineArizona: Rest of State (Ex-

cludes Maricopa County,Pima County, and IndianCountry) ............................... . 12122110Arkansas .................................. . 12122110California: Sacramento Metro-politan AQMD ....................... 01/31/11Connecticut ............................. .. 03101111Florida ...................................... . 12122110Idaho ....................................... .. 12122110Kansas ..................................... . 12122110Kentucky (Jefferson County):Louisville Metro Air PollutionControl District ..................... . 01101/11Kentucky: Rest of State (Ex-cludes Louisville Metro AirPollution Control District (Jef-ferson County .............. ....... 03/31/11Nebraska ........ .......................... 03/01/11Nevada: Clark County .............. 07/01111Oregon ...................................... . 12122110Texas ......................................... \ 12101/11Wyoming ................................... . 12122110This final rule is consistent withEPA's proposal, except that (i) EPA isnot finalizing the SIP call with respectto one state for which EPA proposed theSIP call, namely Alaska, because it hasalready submitted a revised SIP, and (ii)EPA is finalizing the SIP call withrespect to one state for which EPAsolicited comment but did not proposethe SIP call, namely Wyoming.In this section of this preamble, we:

(1) Explain in detail our overall basis forthese actions, including responding tocomments on that overall basis: and (2)explain concisely our basis for action foreach ofthe 13 states. In a SupplementalInformation Document, which can befound in the docket for this rulemaking,we include more detail for ourexplanations and we respond to statespecific comments we received inresponse to the proposed actions.1. Overall Basisa. Finding of Substantial Inadequacy:Final Action and Response toComments(i) Final Action

Our overall basis for issuing thefinding of substantial inadequacy andissuing the SIP call for the 13 states isthe same as we stated during theproposal. As summarized earlier in thispreamble, for each of these 13 states,EPA finds that the failure of the SIP PSDapplicability provisions to apply toGHG-emitting sources renders the SIP"substantially inadequate * * * to* * * comply with any requirement of

[the CAA]" and as a result , EPA"require[s] the State to revise the plan asnecessary to correct such inadequacies,"i.e., issues a SIP call, all in accordancewith CAA section 110(k)(5).We consider the legal basis to bestraightforward. CAA section 110(k)(5),as quoted earlier in this preamble,authorizes EPA to issue a finding that aSIP is "substantially inadequate" to meetCAA requirements. The CAA does notdefine the quoted term, and as a result,it should be given its ordinary, everydaymeaning. In the present case, the failureof a SIP to apply PSD to GHG-emittingsources means that the SIP is"substantially inadequate" to complywith CAA requirements because (i ) TheCAA requires that SIP PSD programsapply PSD to GHG-emitting sources, (ii)the SIPs at issue fail to do so, and (iii)applying PSD to GHG-emitting sourceswould affect a large number of sourcesand permitting actions.CAA section 110(k)(5) authorizes EPAto issue a finding of substantialinadequacy whenever the SIP fails tocomply with "any requirement of [theCAA]." CAA section 165(a)(1) providesthat "[n]o major emitting facility * * *may be constructed * * * unless * * *a [PSD] permit has been issued for suchproposed facility in accordance withthis part." CAA section 169(1) defines"major emitting facility" as anystationary source that emits specifiedquantities of "any air pollutant." EPAregulations have long defined "any airpollutant" as, at least in part, "anypollutant * * * subject to regulationunder the Act." 40 CFR 52.21(b)(50)(iv).Further, CAA section 161 requires SIPsto contain "emission limitations andsuch other measures as may benecessary to prevent significantdeterioration of air quality * * *" andCAA section 110(a)(2)(J) requires that"[e]ach [SIP] * * * meet the applicablerequirements of * * * part C of thissubchapter (relating to significantdeterioration of air quality." Readingthese provisions together, the CAArequires that PSD requirements apply toany stationary source that emitsspecified quantities of any air pollutantsubject to regulation under the CAA,and those PSD requirements must beincluded in the approved SIPS.16

, . EPA has long interpreted the PSD applicabilityprovisions in the CAA to be self-executing, that is.they apply by their terms so that a source that emitsany air pollutant subject to regulation becomessubject to PSD-and, therefore, cannot construct ormodify without obtaining a PSD permit-and theseprovisions apply by their terms in this mannerregardless of whether the state has an approved SIPPSD program. What's more, until an applicableimplementation plan is in place-either anapproved SIP or a FIP-no permitting authority isContinued



15/29

77706 Federal Register/Vol. 75, No. 238/Monday, December 13, 2010/Rules and RegulationsAs of January 2, 2011, GHG-emittingsources wil l become subject to PSD. Asa result, the CAA provisions describedearlier in this preamble require PSDprograms to apply to GHG-emittingsources. Accordingly, it is clear that thefailure of any SIP PSD applicabilityprovisions to apply the PSD program toGHG-emitting sources means that the

SIP fails to comply with these CAArequirements.Moreover, in this case, the failure ofthe SIPs to apply PSD to GHG-emittingsources will affect a substantial numberof sources and permit ting actions. EPAestimated in the Tailoring Rule that ona nationwide basis, many of the sourcesthat now require PSD permitapplications due to their emissions ofnon-GHG pollutants (which we call"anyway" sources) also emit GHGpollutants in quantities that wil l triggerthe application ofPSD. On average, onan annual basis nationwide, thesesources submit 688 PSD permitapplications. 75 FR at 31540. Inaddition, EPA estimated that beginningon July 2, 2011, on an annual basisnationwide, another 917 permitapplications would potentially besubmitted due to the GHG emissions ofsources undertaking construction ormodification activities, even thoughthese sources' other pollutants wouldnot, in and of themselves, trigger PSD.[d. Thus, large numbers of permittingactions are at issue. Moreover, theprincipal PSD requirement that willapply to GHG-emitting sources is therequirement to implement BACT, whichis the principal mechanism under thePSD provisions for controllingemissions from non-NAAQS pollutants.The failure of a SIP to app ly PSD toGHG-emitting sources-when the SIP isrequired to apply PSD to GHG-emittingsources and when doing so would, onaverage, result in a significant numberof additional permitting actions subjectto PSD-justifies a finding by theAdministrator that a SIP that does notapply PSD to such sources as of January2,2011, is "substantially inadequate" tocomply with CAA requirements.authorized to issue a permit to the source. In arecent decision, the 7th Circuit, mistakenly citingto PSD provisions when the issue before the courtInvolved the separate and different non-attainmentprovisions of CAA sections 171-193, concludedthat sources could continue to abide by permittingrequirements in an existing SIP until amended,even if that SIP does not comport with the law.United States v. Cinergy Corp No. 09-3344, 2010WL 4009180 (7th Cir. Oct. 12. 2010). In starkcontrast to the nonattainment provisions actually atissue in Cinergy-which are not self-executing andmust therefore be enforced through a SIP-PSD i.salf-executing; it is the statute (CAA section 165).not just the SIP, that prohibits a source fromconstructing a project without a permit issued inaccordance with the Act.

(ii) Response to Comments(I) Pollutants Subject to the SIP Call

Some commenters stated that failureof a SIP to require PSD permits for GHG-emitting sources does not constitute a"substantiaH] inadequa[cyl" under CAAsection 110(k)(5). In making this point,the commenters first state that "PSD canonly be triggered by pollutants forwhich EPA has issued a nationalambient air quality standard ("NAAQS")and only in attainment areas for suchpollutants." The commenters go on toassert that whether a SIP can beconsidered substantially inadequate dueto its failure to require PSD permitsdepends on the extent to which theforegone controls "affect" * .. thestate's ability to attain a NAAQS." Then,the commenters claim that the numbersof permits that the state would berequired to issue that would includeGHG controls beginning January 2,2011, will be such "a small number" that"the lack of a BACT limit for [GHGs]would not affect in any way the state'sability to attain a NAAQS." Thecommenters explain that the number ofpermits that would be required for GHGsources under the Tailoring Rule islimited to, on an annual basis. onaverage, in each state, (i) beginning as ofJanuary 2, 2011, "one or two permits"for sources that would be subject to PSDanyway due to their emissions of otherpollutants (which, again, we call"anyway" sources), plus (ii) beginning asof July 1, 2011, 11 permits for sourcesthat would become subject to PSD solelybecause of their emissions of GHGS.17Again, the commenters assert tha t thecontrols foregone from this "smallnumber" of permits would have toolittle an impact on a state's ability toattain a NAAQS to justify finding theSIP to be substantially inadequate underCAA section 110(k)(s).We find this argument unpersuasivefor several reasons. Most importantly,we do not accept what appear to be thepremises of this argument, which arethat PSD can only be triggered forNAAQS pollutants and that whetherdeficiencies in a PSD program canrender a SIP substantially inadequatedepend only on whether any foregonecontrols affect the s tate's ability tomaintain a NAAQS. In the TailoringRule, we addressed at length thecomment that PSD can be triggered onlyby pollutants subject to the NAAQS,and we concluded that as a matter ofChevron Step 1, this view was incorrect

11 In another part of their comments. commentersstate that the total number of affected permits is "afew permits with GHG limits in the first 6 monthsof 2011."

and that, instead, PSD applies to nonNAAQS pollutants, inc luding GHGs.(See discussion in Tailoring Rulepreamble, 75 FR at 31514 andelsewhere.)lB In this rulemaking, we arenot reopening that issue. We did notsolicit comment on it and our responseto this comment should not beconstrued to be a reopening.Second, we believe that thecommenters have understated thenumber of permitting actions that willinvolve GHG controls. As noted earlierin this preamble, we provided estimatesof the numbers of permits in theTailoring Rule. There, we addressed atlength the numbers of permittingactions that would involve GHGs,including soliciting comment on ourproposed estimates and revising ourfinal estimates based on commentsreceived. In this rulemaking, the GHGPSD SIP call, we are not reopening thatissue. We did not solicit comment on itand our response to this commentshould not be construed to be areopening. As noted earlier in thispreamble and also in the Tailoring Rule,we estimated that on an annual basis,nationwide, beginning January 2, 2011,there wou ld be 688 permitting actionsfor "anyway" sources that would requireGHG controls, and, beginning July 1,2011, there would be an additional 917permitting actions per year. These totalsare significantly higher than thecommenters' estimates. 19 Commenters also state that "EPA'sown actions further reveal the flaw in itsanalysis." They note that EPA has

proposed to issue the SIP call ongrounds that some ofthe SIPs applyPSD to only criteria pollutants and not, . We also explained our view that PSD may betriggered by non-NAAQS pollutants such as GHGsin the Tailoring Rule response to commentsdocument ("Prevention of Significant Deteriorationan d Title V GHG Tailoring Rule; EPA's Response toPublic Comments"). pp. 34-41; and in EPA'sresponse to motions for a stay filed in the litigationconcerning those rules ("EPA's Response to Motionsfor Stay," Coalition for Responsible Regulation v.EPA. DC Cir. No. 09-1322 (and consolidatedcases)), at 47-59.19 Although. again. we are not reopening in thisrule the issue of the number of permits that wouldinclude GHG controls . we note the followingadditional reasons why we do not find the

commenters' estimates persuasive: (il Thecommenters stated that they were adjustingdownward what they described as EPA's estimatesfor "anyway" sources. but the commenters did notprovide a basis for that downward adjustment. (Ii)Some of the commenters have also brought lawsuitsagainst the Tailoring Rule, and in court papers filedat approximately the same time as their commentsin this rulemaking. they stated that the numbers ofaffected permits would be significantly higher thanthe numbers that they stated in their comments inthis rulemaking. National Association ofManufacturers. et 01. "Petitioner's Motion forPartial Stay of EPA's Greenhouse Gas Regulations."Coalition for Responsible Regulation v. EPA. DCCir. No. 09-1322 (and consolidated cases) at 45, 47.

http:///reader/full/estimates.19http:///reader/full/estimates.19http:///reader/full/estimates.19


16/29

Federal Register/Vol. 75, No. 238/Monday, December 13, 2010/Rules and Regulations 77707to pollutants other than criteriapollutants, and they state that these SIPshave applied to only criteria pollutantsfor "many years." The commenters arguethat EPA has never, up until now,issued a SIP call on the basis that thePSD provisions in the SIPs do not coverpollutants more broadly.Commenters appear to infer fromEP A's failure to have initiated a SIP callfor these states in the past an indicationthat EPA does not have authority to doso. That inference is simply incorrect.An agency's not taking certain action atone point in time does not indicate alack of authority to take that action. noris the agency required to explain itsearlier inaction in order to justifysubsequent action. An agency mayproperly address an issue in step-bystep fashion. See, e.g., Grand CanyonAir Tour Coalition v. F.A.A., 154 F.3d455 (DCCir.1998), City ofLas Vegasv.Lujan, 891 F.2d 927 (DC Cir. 1989). 75FR at 31544. In addition, as discussedlater in this preamble, EPA hasdiscretion in deciding whether, andwhen, to issue a finding of substantialinadequacy. Moreover. commentershave pOinted to no statements by EPAindicating that SIPs that do not applyPSD to all pollutants subject toregulation fully meet CAArequirements; on the contrary, in the2002 NSR Reform rule.20 EPAspecifically required SIP revisions toapply PSD to all pollutants subject toregulation.(II) Requirements of Tailoring Rule(A) Comment

Some industry commenters stated thatEPA had no basis to issue a SIP call, andso should withdraw the proposal,because EPA was required to give states3 years from the date the Tailoring Rulewas published Oune 3,2010) to submitSIP revisions implementing PSDrequirements for GHG-emitting sources.The commenters' premise is thatwithout the Tailoring Rule. PSD wouldnot apply to GHG-emitting sources, andthe Tailoring Rule imposed therequirement that PSD applies to GHG-emitting sources. As evidence for itspremise that the Tailoring Rule imposedthis requirement. the commenters poin tto the fact that EPA codified certainprovisions in 40 CFR 51.166, including,for example, provisions concerning thedefinition of GHGs.20 "Prevention of SignificBDt Deteriora tion (PSO)and Nonattainment New Source Review (NNSR):Baseline Emissions Determination. Actual-toFuture-Actual Methodology, PlantwideApplicability Limitations, Clean Units, PollutionControl Projects-Final Rule," 67 FR 80186(December 31, 2002).

As a corollary to their premise, thecommenters take the position tha t EPAregulations establishing the process forSIPs to adopt PSD programrequirements govern and. therefore.require EPA to give the states up to 3years to submit their SIP revisions thatincorporate what the commenters viewas the Tailoring Rule's requirement toapply PSD to GHG-emitting sources. See40 CFR 51.166(a)(6) ("Any state requiredto revise its implementation plan byreason of an amendment to this section,including any amendment adoptedsimultaneously with this paragraph(a)(6)(i). shall adopt and submit suchplan revision to the Administrator forapproval no later than three years aftersuch amendment is published in theFederal Register."). The commenters addthat during this 3-year period, theTailoring Rule requirements that PSDapplies to GHG-emitting sources do notapply in the states. Rather, according tothe commenters, state permittingauthorities may continue to issue PSDpermits that do not includerequirements for GHGs.Commenters also argue that CAAsection 110(a)(1),which requires SIPsubmittal "within 3 years (or suchshorter period as the Administrator mayprescribe):' supports a 3-year period forthe SIPs required under the SIP call.Another commenter takes a similarposition but points to CAA section 166.which. the commenter asserts, providesa 21-month period for SIP submissionsand also prevents the application of PSDto GHG-emitting sources in themeantime.Turning to the SIP call, thecommenters view the purpose of the SIPcall as requiring the state to adopt whatthe commenters call the Tailoring Rule'srequirements to apply PSD to GHG-emitting sources. The commenters assertthat because, in their view. the adoptionprocess of 40 CFR 51.166(a)(6) applieswhich allows states 3 years to adopt theSIP revision and, in the meantime,allows states to cont inue to issuepermits without GHG controls-the SIPcall (with its 12-month or shorterdeadlines) does not apply and EPAshould withdraw its SIP call proposal.Continuing to focus on the SIP call.one of the industry commenters adds:"In the proposed SIP Call rule. EPAcharacterizes the Tailoring Rule ascreating a PSD permit moratorium,beginning on the [January 2. 2011 andJuly 1, 2011 phase-inI dates, with regardto those sources whose GHG emissionsare above the applicable Tailoring Rulethresholds." This commenter argues that"EPA's premise that the Tailoring Ruleimposes a construction moratorium,absent a SIP revision or a FIP. beginning

on January 2, 2011, is unlawful andshould be abandoned." This commenterappears to ascribe to EPA the view thatthe construction ban is a sort of sanctionthat EPA may impose; the commenterappears to read the proposed SIP call ascharacterizing the Tailoring Rule asattempting to use the constructionmoratorium in that manner. Thecommenter does not cite any statementin the proposed SIP call thatcharacterizes the Tailoring Rule in thatmanner or any provision in theTailoring Rule that could be read toattempt to use the constructionmoratorium in that manner.(B) Response

The commenters have misstated whatthe Tailoring Rule did and, in so doing,have misstated the source of therequirement that PSD applies to GHG-emitting sources. Contrary to what thecommenters state. the Tailoring Ruledid not establish the requirement thatPSD apply to GHG-emitting sources.This requirement was established byoperation of the applicable CA Aprovisions. in conjunction with theLDVR. That is. the CAA requirements (i)prohibit "major emitting facilit[iesl"from constructing or modifying withoutobtaining a permit that meets the PSDrequirements, CAA section 165(a)(1).and (ii) define a "major emitting facility"as a source that emits a specifiedquantity of "any air pollutant," CAAsection 169(1), which EPA has longinterpreted as any pollutant subject toregulation. In this manner, the CA Arequirements for PSD applicability arewhat we call automatically updating,that is. whenever EPA regulates apreviously unregulated pollutant, PSDapplies at that time to that pollutantwithout further regulatory action byEPA.EPA regulations have long codifiedthis automatically updating aspect ofthe CAA PSD requirements. See 43 FR26380,26403/3,26406 Oune 19, 1978)(promulgating 40 CFR 51.21 (b)(1)(i)) and42 FR 57479. 57480, 57483 (November3,1977) (proposing 40 CFR51.21(b)(1)(i)) (applying PSDrequirements to a "major stationarysource" and defining that term toinclude sources that emit specifiedquantities of "any air pollutant regulatedunder the Clean Air Act"). Mostrecently. in our 2002 NSR Reform rule,EPA reiterated these requirements,although changing the terminology. 67FR 80186 (December 31, 2002).Specifically. EPA required thatemissions of "any regulated NSRpollutant" be subject to PSDrequirements when emitted in specifiedquantities by sources and defined that



17/29

77708 Federal Register I Vol. 75, No. 238 I Monday, December 13, 2010 I Rules and Regulationsterm to include pollutants regulatedunder certain CAA requirements, aswell as "any pollutant that otherwise issubject to regulation under the [CAAJ."52.166(b)(49)(iv). EPA made clear in thepreamble to the NSR Reform rule thatPSD applicability was automaticallyupdating. 67 FR at 80240.As discussed elsewhere, it is theseprovisions, in conjunction with theLDVR (which subjects GHGs toregulation), that have triggered PSDapplicabil ity for GHG-emitting sources.The Tailoring Rule did not do so.In fact, rather than establishing therequirement that PSD apply to GHG-emitting sources, the Tailoring Rulealleviated that requirement for most ofthe GHG-emitting sources that wouldotherwise be affected. The TailoringRule did so by providing that the onlyGHGs "subject to regulation" are thosethat are emitted by sources at or abovespecified thresholds (the Tailoring Rulethresholds).21 In order to identify thethresholds, it was necessary for EPA toidentify (iJ the pollutant that comprisesGHGs and (ii) how to account for thatpollutant. However, the Tailoring Rulemade clear that, on the one hand, thestates may either: (a) Adopt differentrequirements for the thresholds, as longas those requirements were equivalentto the requirements of the thresholdspromulgated by EPA; or (b) apply lowerthresholds, as long as the statesaccompanied them with an assurance ofadequate resources. Thus, had EPAnever promulgated the Tailoring Rule,PSD would nevertheless apply to GHG-emitting sources; it would apply to allGHG-emitting sources at or above the100!250-tpy threshold; and it would notbe limited to GHG-emitting sources at orabove the Tailoring Rule thresholds.The SIP call that EPA is finalizing inthis action is based on the failure of theSIPs to apply PSD to GHG-emittingsources, and that failure, in turn, isrooted in the failure of the SIPs to applyPSD to newly regulated pollutants on anautomatically updating basis. The states'corrective SIP revision in response tothe SIP call that applies PSD to GHG-emitting sources may apply theTailoring Rule thresholds (or lowerthresholds, depending, as just noted, onthe state's resources), but. again, thecurrent failure of the SIPs to include theTailoring Rule thresholds is not thebasis for the SIP call.As a result, the process of 40 CFR51.166(a)(6)(i), with its 3-year deadline,does not apply in place of the SIP call,

21 More broadly. the Tailoring Rule indicated thatthe Tailoring Rule thresholds could be treated asincorporated In any of several of the componentsof the regulatory definition of "major stationarysource." 75 FR at 31582.

as the commenter suggests. 40 CFR51.166(a)(6)(i) provides, "Any StatereqUired to revise its implementationplan by reason ofan amendment to thissection, including any amendmentadopted simultaneously with thisparagraph (a)(6)(i), shall adopt andsubmit such plan revision to theAdministrator for approval no later thanthree years after such amendment ispublished in the Federal Register."(Emphasis added.) This provision wasadded as part of the 2002 rulemakingrevising the NSR program that we callthe NSR Reform rule. See 67 FR 80186(December 31, 2002). In addit ion, asnoted already, the requi rement that SIPPSD programs automatically update is alongstanding requirement, and EPAmost recently reiterated thatrequirement, wi th revised terminology,in the NSR Reform rule as well. There,EPA revised the definition of majorstationary source-the entity to whichPSD applies-to mean a source thatemits the requisite amount of "anyregulated NSR pollutant," 40 CFR51.166(b)(1)(i)(a). 67 FR at 80239-40;and EPA defined that term to include,among other things, "any air pollutantthat otherwise is subject to regulationunder the Act." 40 CFR5L166(b)(49)(iv). EPA added in thepreamble, "[tjhe PSD program appliesautomatically to newly regulated NSRpollutants, which would inc lude finalpromulgation of an NSPS applicable toa previously unregulated pollutant." 67FR at 80240. After EPA promulgated theNSR Reform rule, many states submittedSIP revisions that incorporated therevised terminology, and in thatmanner, assured that their PSDprograms automatically updated. Ofcourse, the states subject to this SIP callhave had the opportunity to submit SIPrevisions since December 31,2002almost 8 years ago-to conform to theNSR Reform rule and thereby assurethat their PSD programs areautomatically updating. 67 FR at 80241.Many of the affected states did not doso, and that has led to the failure oftheSIPs to apply PSD to GHGs, which is thesubstantial inadequacy that justifies theSIP call.

l t is true that the SIP call requires acorrective SIP revision for states toapply PSD to GHG-emitting sources(and does not mandate that states revisetheir PSD applicability provisions toincorporate an automatic updatingmechanism). In doing so, states mayadopt the Tailoring Rule thresholdsincluding certain features such as thedefinition of GHGs-or may adoptdifferently phrased requirements orlower thresholds, as explained earlier in

this preamble, but this aspect o f thestate's obligation does not, ascommenters would have it, somehowtake the requirement out of the SIP callprocess and place it in the 40 CFR51.166(a)(0 process.In addition, it is clear that thecommenters are incorrect in theirassertion that PSD applicability forGHGs must be delayed for the 3-year SIPsubmission period under 40 CFR51.166(a)(i) and in their relatedassertion that EPA's efforts to apply theTailoring Rule amount to unlawfulretroactive application ofregulatoryrequirements. The 3-year period doesnot apply to this requirement that PSDapply to GHG-emitting sources, asdiscussed earlier in this preamble; evenmore, by operation of the CAA, inconjunction with the LDVR, PSDapplies to GHGs beginning on January 2,2011, with or without the TailoringRule. Again, the Tailoring Rule simplyadds thresholds to limit thatapplicability.22For similar reasons, commenters arealso incorrect in arguing that CAAsection 110(a)(1), which requires a SIPsubmittal "within 3 years (or suchshorter period as the Administrator mayprescribe)." suppor ts a 3-year period forthe SIPs required under the SIP call andprecludes PSD applicability during thatperiod. Nothing in that provisionoverrides the operation of the CAAprovisions, discussed elsewhere, whichautomatically apply PSD to newlyregulated pollutants, and EPA'sregulations that codify those provisions,in conjunction with the LDVR, to meanthat GHG-emitting sources are subject toPSD as of January 2,2011. Moreover,this provision cannot override the SIPcall provisions, which apply for reasonsstated elsewhere. In any event, thisprovision does not mandate a 3-yearperiod for SIP submittal; rather, theprovision, by its terms, authorizes EPAto prescribe a shorter period.Another commenter is mistaken inmaking the somewhat similar assertionthat "with regard to the SIP revisionsrequired to accommodate any newregulated pollu tant under the PSDprogram Section 166(b) ofthe Actallows the States 21 months. Any SIP

22 Nor does any provision In 40 CFR 51.166mandate that states adopt the Tailoring Rulethresholds. Again, the Tailoring Rule thresholds afelimitations on PSD applicability and are notminimum PSD requirements that states must adoptunder CAA section 110(a) or the PSD provisions.Rather. a state may, i f it

Texas Petition

Documents