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75 FR 31514 - Prevention of Significant Deterioration and

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					                                                 31514                      Federal Register / Vol. 75, No. 106 / Thursday, June 3, 2010 / Rules and Regulations

                                                 ENVIRONMENTAL PROTECTION                                                   the programs. EPA is relieving these                            Avenue, Northwest, Washington, DC.
                                                 AGENCY                                                                     resource burdens by phasing in the                              The Public Reading Room is open from
                                                                                                                            applicability of these programs to GHG                          8:30 a.m. to 4:30 p.m., Monday through
                                                 40 CFR Parts 51, 52, 70, and 71                                            sources, starting with the largest GHG                          Friday, excluding legal holidays. The
                                                 [EPA–HQ–OAR–2009–0517; FRL–9152–8]                                         emitters. This rule establishes two                             telephone number for the Public
                                                                                                                            initial steps of the phase-in. The rule                         Reading Room is (202) 566–1744, and
                                                 RIN 2060–AP86                                                              also commits the agency to take certain                         the telephone number for the EPA
                                                                                                                            actions on future steps addressing                              Docket Center is (202) 566–1742.
                                                 Prevention of Significant Deterioration
                                                                                                                            smaller sources, but excludes certain
                                                 and Title V Greenhouse Gas Tailoring                                                                                                       FOR FURTHER INFORMATION CONTACT: Mr.
                                                                                                                            smaller sources from PSD and title V
                                                 Rule                                                                                                                                       Joseph Mangino, Air Quality Policy
                                                                                                                            permitting for GHG emissions until at
                                                                                                                                                                                            Division, Office of Air Quality Planning
                                                 AGENCY: Environmental Protection                                           least April 30, 2016.
                                                                                                                                                                                            and Standards (C504–03),
                                                 Agency (EPA).                                                              DATES: This action is effective on                              Environmental Protection Agency,
                                                 ACTION: Final rule.                                                        August 2, 2010.                                                 Research Triangle Park, NC 27711;
                                                 SUMMARY: EPA is tailoring the                                              ADDRESSES: EPA has established a                                telephone number: (919) 541–9778; fax
                                                 applicability criteria that determine                                      docket for this rulemaking under Docket                         number: (919) 541–5509; e-mail address:
                                                 which stationary sources and                                               ID No. EPA–HQ–OAR–2009–0517. All                                mangino.joseph@epa.gov.
                                                 modification projects become subject to                                    documents in the docket are listed in                           SUPPLEMENTARY INFORMATION:
                                                 permitting requirements for greenhouse                                     the http://www.regulations.gov index.
                                                 gas (GHG) emissions under the                                              Although listed in the index, some                              I. General Information
                                                 Prevention of Significant Deterioration                                    information is not publicly available,                          A. Does this action apply to me?
                                                 (PSD) and title V programs of the Clean                                    e.g., Confidential Business Information
                                                 Air Act (CAA or Act). This rulemaking                                      or other information whose disclosure is                          Entities affected by this action include
                                                 is necessary because without it PSD and                                    restricted by statute. Certain other                            sources in all sectors of the economy,
                                                 title V requirements would apply, as of                                    material, such as copyrighted material,                         including commercial and residential
                                                 January 2, 2011, at the 100 or 250 tons                                    is not placed on the Internet and will be                       sources. Entities potentially affected by
                                                 per year (tpy) levels provided under the                                   publicly available only in hard copy.                           this action also include States, local
                                                 CAA, greatly increasing the number of                                      Publicly available docket materials are                         permitting authorities, and tribal
                                                 required permits, imposing undue costs                                     available either electronically in http://                      authorities. The majority of categories
                                                 on small sources, overwhelming the                                         www.regulations.gov or in hard copy at                          and entities potentially affected by this
                                                 resources of permitting authorities, and                                   the EPA Docket Center EPA/DC, EPA                               action are expected to be in the
                                                 severely impairing the functioning of                                      West, Room 3334, 1301 Constitution                              following groups:

                                                                                            Industry group                                                                                          NAICS a

                                                 Agriculture, fishing, and hunting ...............................................................                11.
                                                 Mining .......................................................................................................   21.
                                                 Utilities (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, 3259.
                                                 Rubber product manufacturing .................................................................                   3261, 3262.
                                                 Miscellaneous chemical products .............................................................                    32552, 32592, 32591, 325182, 32551.
                                                 Nonmetallic mineral product manufacturing .............................................                          3271, 3272, 3273, 3274, 3279.
                                                 Primary and fabricated metal manufacturing ...........................................                           3311, 3312, 3313, 3314, 3315, 3321, 3322, 3323, 3324, 3325, 3326,
                                                                                                                                                                    3327, 3328, 3329.
                                                 Machinery manufacturing .........................................................................                3331, 3332, 3333, 3334, 3335, 3336, 3339.
                                                 Computer and electronic products manufacturing ...................................                               3341, 3342, 3343, 3344, 3345, 4446.
                                                 Electrical 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.
                                                 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. How is this preamble organized?                                            C. Preamble Acronyms and Abbreviations                         1. Overview of the PSD Program
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                                                                                                                            II. Overview of the Final Rule                                    2. General Requirements for PSD
                                                   The information presented in this                                        III. Background                                                   D. What are the general requirements of the
                                                 preamble is organized as follows:                                             A. What are GHGs and their sources?                               Title V operating permits program?
                                                 Outline                                                                       B. Endangerment Finding and the LDVR                           1. Overview of Title V
                                                                                                                               1. Endangerment Finding
                                                                                                                                                                                              2. Title V Permit Requirements
                                                 I. General Information                                                        2. Light-Duty Vehicle Rule
                                                    A. Does this action apply to me?                                           C. What are the general requirements of the                    E. The Interpretive Memo
                                                    B. How is this preamble organized?                                            PSD program?                                              IV. Summary of Final Actions



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                                                                     Federal Register / Vol. 75, No. 106 / Thursday, June 3, 2010 / Rules and Regulations                                          31515

                                                   A. How do you define the GHG pollutant                  3. Other Mechanisms                                  IX. Statutory Authority
                                                      for PSD and Title V purposes?                        4. Codification of Interpretive Memo
                                                   1. GHG Pollutant Defined as the Sum-of-                 5. Delaying Limited Approvals and Request            C. Preamble Acronyms and
                                                      Six Well-Mixed GHGs                                     for Submission of Information From                Abbreviations
                                                   2. What GWP values should be used for                      States Implementing a SIP-Approved
                                                      calculating CO2e?                                       PSD Program                                         The following are abbreviations of
                                                   B. When will PSD and Title V applicability              6. Title V Programs                                  terms used in this preamble.
                                                      begin for GHGs and emission sources?                 D. Rationale for Treatment of GHGs for               ANPR Advance Notice of Proposed
                                                   1. What are the Step 1 thresholds, timing,                 Title V Permit Fees                                 Rulemaking
                                                      and calculation methodology?                         E. Other Actions and Issues                          APA Administrative Procedure Act
                                                   2. What are the Step 2 thresholds, timing,              1. Permit Streamlining Techniques                    AQRVs Air Quality Related Values
                                                      and calculation methodology?                         2. Guidance for BACT Determinations                  BACT Best Available Control Technology
                                                   3. What about Step 3?                                   3. Requests for Higher Category-Specific
                                                                                                                                                                Btu British thermal units
                                                   4. What about the proposed 6-year                          Thresholds or Exemptions From
                                                                                                                                                                Btu/hr British thermal units per hour
                                                      exclusion for smaller sources?                          Applicability
                                                                                                                                                                CAA or Act Clean Air Act
                                                   5. When and how will EPA take further                   4. Transitional Issues Including Requests
                                                                                                                                                                CAAAC Clean Air Act Advisory Committee
                                                      action on smaller sources?                              for Grandfathering
                                                                                                                                                                CAFE Corporate Average Fuel Economy
                                                   C. How do state, local, and tribal area               VI. What are the economic impacts of the
                                                      programs adopt the final GHG                            final rule?                                       CH4 Methane
                                                      applicability thresholds?                            A. What entities are affected by this final          CO Carbon Monoxide
                                                   D. How do you treat GHGs for purposes of                   rule?                                             CO2 Carbon Dioxide
                                                      Title V permit fees?                                 B. What are the estimated annual benefits            CO2e Carbon Dioxide Equivalent
                                                   E. Other Actions and Issues                                to sources due to regulatory relief from          EPA U.S. Environmental Protection Agency
                                                   1. Timing for Permit Streamlining                          the statutory requirements?                       FDA Food and Drug Administration
                                                      Techniques                                           1. What are annual estimated benefits or             FIP Federal Implementation Plan
                                                   2. Guidance for BACT Determinations                        avoided burden costs for title V permits?         FTEs Full-Time Equivalents
                                                   3. Requests for Higher Category-Specific                2. What are annual benefits or avoided               GHG Greenhouse Gas
                                                      Thresholds and Exemptions From                          costs associated with NSR permitting              GHz Gigahertz
                                                      Applicability                                           regulatory relief?                                GWP Global Warming Potential
                                                   4. Transitional Issues Including Requests               C. What are the economic impacts of this             HAP Hazardous Air Pollutant
                                                      for Grandfathering                                      rulemaking?                                       HFCs Hydrofluorocarbons
                                                 V. What is the legal and policy rationale for             D. What are the costs of the final rule for          ICR Information Collection Request
                                                      the final actions?                                      society?                                          IPCC Intergovernmental Panel on Climate
                                                   A. Rationale for Our Approach to                        E. What are the net benefits of this final             Change
                                                      Calculating GHG Emissions for PSD and                   rule?                                             LDVR Light-Duty Vehicle Rule
                                                      Title V Applicability Purposes                     VII. Comments on Statutory and Executive               MACT Maximum Achievable Control
                                                   1. Grouping of GHGs Into a Single                          Order Reviews                                       Technology
                                                      Pollutant                                            A. Comments on Executive Order 12866—                MCL Maximum Contaminant Level
                                                   2. Identifying Which GHGs Are Included in                  Regulatory Planning and Review                    N2O Nitrous Oxide
                                                      the Group                                            B. Comments on the Paperwork Reduction               NAAQS National Ambient Air Quality
                                                   3. Use of GWP vs. Mass-Based GHG                           Act                                                 Standard
                                                      Thresholds                                           C. Comments on the RFA                               NHTSA National Highway Traffic Safety
                                                   4. Determining What GWP Values Are To                   D. Comments on the Unfunded Mandates                   Administration
                                                      Be Used                                                 Reform Act                                        NMOC Nonmethane Organic Compounds
                                                   5. Use of Short Tons vs. Metric Tons                    E. Comments on Executive Order 13132—                NOX Nitrogen Oxides
                                                   B. Rationale for Thresholds and Timing for                 Federalism                                        NPDES National Pollutant Discharge
                                                      PSD and Title V Applicability to GHG                 F. Comments on Executive Order 13175—                  Elimination System
                                                      Emissions Sources                                       Consultation and Coordination With                NSPS New Source Performance Standard
                                                   1. Overview                                                Indian Tribal Governments                         NSR New Source Review
                                                   2. Data Concerning Costs to Sources and                 G. Comments on Executive Order 13211—                NTAA National Tribal Air Association
                                                      Administrative Burdens to Permitting                    Actions That Significantly Affect Energy          NTTAA National Technology Transfer and
                                                      Authorities                                             Supply, Distribution, or Use                        Advancement Act
                                                   3. ‘‘Absurd Results,’’ ‘‘Administrative               VIII. Statutory and Executive Order Reviews            OMB Office of Management and Budget
                                                      Necessity,’’ and ‘‘One-Step-at-a-Time’’              A. Executive Order 12866—Regulatory                  PFCs Perfluorocarbons
                                                      Legal Doctrines                                         Planning and Review                               PM Particulate Matter
                                                   4. The PSD and Title V Programs                         B. Paperwork Reduction Act                           PSD Prevention of Significant Deterioration
                                                   5. Application of the ‘‘Absurd Results’’                C. Regulatory Flexibility Act                        PTE Potential to Emit
                                                      Doctrine for the PSD Program                         D. Unfunded Mandates Reform Act                      RFA Regulatory Flexibility Act
                                                   6. Application of the ‘‘Absurd Results’’                E. Executive Order 13132—Federalism                  RIA Regulatory Impact Analysis
                                                      Doctrine for the Title V Program                     F. Executive Order 13175—Consultation                RTC Response to Comment
                                                   7. Additional Rulemaking for the PSD and                   and Coordination With Indian Tribal               SBA Small Business Administration
                                                      Title V Programs                                        Governments                                       SBAR Small Business Advocacy Review
                                                   8. Rationale for the Phase-in Schedule for              G. Executive Order 13045—Protection of               SBREFA Small Business Regulatory
                                                      Applying PSD and Title V to GHG                         Children From Environmental Health                  Enforcement Fairness Act
                                                      Sources                                                 and Safety Risks                                  SF6 Sulfur Hexafluoride
                                                   9. ‘‘Administrative Necessity’’ Basis for PSD           H. Executive Order 13211—Actions That                SIP State Implementation Plan
                                                      and Title V Requirements in Tailoring                   Significantly Affect Energy Supply,               SNPR Supplemental Notice of Proposed
                                                      Rule                                                    Distribution, or Use                                Rulemaking
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                                                   10. ‘‘One-Step-at-a-Time’’ Basis for                    I. National Technology Transfer and                  TIP Tribal Implementation Plan
                                                      Tailoring Rule                                          Advancement Act                                   TRS Total Reduced Sulfur
                                                   C. Mechanisms for Implementing and                      J. Executive Order 12898—Federal Actions             TSD Technical Support Document
                                                      Adopting the Tailoring Approach                         To Address Environmental Justice in               tpy Tons Per Year
                                                   1. PSD Approach: Background and                            Minority Populations and Low-Income               UMRA Unfunded Mandates Reform Act
                                                      Proposal                                                Populations                                       UNFCCC United Nations Framework
                                                   2. Rationale for Our Final Approach to                  K. Congressional Review Act                            Convention on Climate Change
                                                      Implementing PSD                                     L. Judicial Review                                   VOC Volatile Organic Compound



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                                                 31516                Federal Register / Vol. 75, No. 106 / Thursday, June 3, 2010 / Rules and Regulations

                                                 II. Overview of the Final Rule                           account of their GHG emissions.                       that the initial streamlining techniques
                                                    EPA is relieving overwhelming                         Specifically, for PSD, Step 1 requires                will take several years to develop and
                                                 permitting burdens that would, in the                    that as of January 2, 2011, the applicable            implement.
                                                 absence of this rule, fall on permitting                 requirements of PSD, most notably, the                   We are also including in this action a
                                                 authorities and sources. We accomplish                   best available control technology                     rule that no source with emissions
                                                 this by tailoring the applicability criteria             (BACT) requirement, will apply to                     below 50,000 tpy CO2e, and no
                                                 that determine which GHG emission                        projects that increase net GHG                        modification resulting in net GHG
                                                 sources become subject to the PSD and                    emissions by at least 75,000 tpy carbon               increases of less than 50,000 tpy CO2e,
                                                 title V programs 1 of the CAA. In                        dioxide equivalent (CO2e), but only if                will be subject to PSD or title V
                                                 particular, EPA is establishing with this                the project also significantly increases              permitting before at least 6 years from
                                                 rulemaking a phase-in approach for PSD                   emissions of at least one non-GHG                     now, April 30, 2016. This is because we
                                                 and title V applicability, and is                        pollutant. For the title V program, only              are able to conclude at the present time
                                                 establishing the first two steps of the                  existing sources with, or new sources                 that the administrative burdens that
                                                 phase-in for the largest emitters of                     obtaining, title V permits for non-GHG                would accompany permitting sources
                                                 GHGs. We also commit to certain                          pollutants will be required to address                below this level will be so great that
                                                 follow-up actions regarding future steps                 GHGs during this first step.                          even the streamlining actions that EPA
                                                 beyond the first two, discussed in more                     The second step of the Tailoring Rule,             may be able to develop and implement
                                                 detail later. Our legal basis for this rule              beginning on July 1, 2011, will phase in              in the next several years, and even with
                                                 is our interpretation of the PSD and title               additional large sources of GHG                       the increases in permitting resources
                                                 V applicability provisions under the                     emissions. New sources as well as                     that we can reasonably expect the
                                                 familiar Chevron 2 two-step framework                    existing sources not already subject to               permitting authorities to acquire, it will
                                                 for interpreting administrative statutes,                title V that emit, or have the potential              be impossible to administer the permit
                                                 taking account of three legal doctrines,                 to emit, at least 100,000 tpy CO2e will               programs for these sources until at least
                                                 both separately and interdependently:                    become subject to the PSD and title V                 2016.
                                                                                                          requirements. In addition, sources that                  Further, we are establishing an
                                                 They are what we will call (1) The
                                                                                                          emit or have the potential to emit at                 enforceable commitment that we will (1)
                                                 ‘‘absurd results’’ doctrine, which
                                                                                                          least 100,000 tpy CO2e and that                       Complete a study by April 30, 2015, to
                                                 authorizes agencies to apply statutory
                                                                                                          undertake a modification that increases               evaluate the status of PSD and title V
                                                 requirements differently than a literal
                                                                                                          net emissions of GHGs by at least 75,000              permitting for GHG-emitting sources,
                                                 reading would indicate, as necessary to
                                                                                                          tpy CO2e will also be subject to PSD                  including progress in developing
                                                 effectuate congressional intent and
                                                                                                          requirements. For both steps, we also                 streamlining techniques; and (2)
                                                 avoid absurd results, (2) the
                                                                                                          note that if sources or modifications                 complete further rulemaking based on
                                                 ‘‘administrative necessity’’ doctrine,
                                                                                                          exceed these CO2e-adjusted GHG                        that study by April 30, 2016, to address
                                                 which authorizes agencies to apply
                                                                                                          triggers, they are not covered by                     the permitting of smaller sources. That
                                                 statutory requirements in a way that
                                                                                                          permitting requirements unless their                  rulemaking may also consider
                                                 avoids impossible administrative
                                                                                                          GHG emissions also exceed the                         additional permanent exclusions based
                                                 burdens; and (3) the ‘‘one-step-at-a-time’’
                                                                                                          corresponding mass-based triggers                     on the ‘‘absurd results’’ doctrine, where
                                                 doctrine, which authorizes agencies to
                                                                                                          (i.e., unadjusted for CO2e.)                          applicable.
                                                 implement statutory requirements a step                                                                           This Tailoring Rulemaking is
                                                                                                             EPA believes that the costs to the
                                                 at a time. This legal basis justifies each                                                                     necessary because without it, PSD and
                                                                                                          sources and the administrative burdens
                                                 of the actions we take with this rule—                                                                         title V would apply to all stationary
                                                                                                          to the permitting authorities of PSD and
                                                 e.g., each of the first two steps of the                                                                       sources that emit or have the potential
                                                                                                          title V permitting will be manageable at
                                                 phase-in approach—both (1) as part of                                                                          to emit more than 100 or 250 tons of
                                                                                                          the levels in these initial two steps, and
                                                 the overall tailoring approach, and (2)                                                                        GHGs per year beginning on January 2,
                                                                                                          that it would be administratively
                                                 independently of each other action we                                                                          2011. This is the date when EPA’s
                                                                                                          infeasible to subject additional sources
                                                 take with this rule. EPA also has                                                                              recently promulgated Light-Duty
                                                                                                          to PSD and title V requirements at those
                                                 authority for this Tailoring Rule under                                                                        Vehicle Rule (LDVR) takes effect,
                                                                                                          times. However, we also intend to issue
                                                 CAA section 301(a)(1), which authorizes                                                                        imposing control requirements for the
                                                                                                          a supplemental notice of proposed
                                                 the Administrator ‘‘to prescribe such                                                                          first time on carbon dioxide (CO2) and
                                                                                                          rulemaking (SNPR) in 2011, in which
                                                 regulations as are necessary to carry out                                                                      other GHGs. If this January 2, 2011 date
                                                                                                          we will propose or solicit comment on
                                                 his functions under [the CAA].’’                                                                               were to pass without this Tailoring Rule
                                                    For the first step of this Tailoring                  a third step of the phase-in that would
                                                                                                          include more sources, beginning by July               being in effect, PSD and title V
                                                 Rule, which will begin on January 2,
                                                                                                          1, 2013. In the same rulemaking, we                   requirements would apply at the
                                                 2011, PSD or title V requirements will
                                                                                                          may propose or solicit comment on a                   100/250 tpy applicability levels
                                                 apply to sources’ GHG emissions only if
                                                                                                          permanent exclusion from permitting                   provided under a literal reading of the
                                                 the sources are subject to PSD or title V
                                                                                                          for some category of sources, based on                CAA as of that date. From that point
                                                 anyway due to their non-GHG
                                                                                                          the doctrine of ‘‘absurd results,’’ within            forward, a source owner proposing to
                                                 pollutants. Therefore, EPA will not
                                                                                                          the Chevron framework. We are                         construct any new major source that
                                                 require sources or modifications to
                                                                                                          establishing an enforceable commitment                emits at or higher than the applicability
                                                 evaluate whether they are subject to
                                                                                                          that we will complete this rulemaking                 levels (and which therefore may be
                                                 PSD or title V requirements solely on
                                                                                                          by July 1, 2012, which will allow for 1               referred to as a ‘‘major’’ source) or
                                                                                                          year’s notice before Step 3 would take                modify any existing major source in a
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                                                     1 Unless otherwise indicated, references in this

                                                 preamble to ‘‘title V,’’ ‘‘title V requirements,’’ the   effect.                                               way that would increase GHG emissions
                                                 ‘‘title V program,’’ and similar references are to the      In addition, we commit to explore                  would need to obtain a permit under the
                                                 operating permit provisions in CAA sections 501–         streamlining techniques that may well                 PSD program that addresses these
                                                 506, and not the ‘‘small business stationary source      make the permitting programs much                     emissions before construction or
                                                 technical and environmental compliance assistance
                                                 program’’ under CAA section 507.                         more efficient to administer for GHGs,                modification could begin. Similarly,
                                                     2 Chevron U.S.A. Inc. v. NRDC, 467 U.S. 837          and that therefore may allow their                    title V would apply to a new or existing
                                                 (1984).                                                  expansion to smaller sources. We expect               source exceeding the 100 tpy


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                                                                     Federal Register / Vol. 75, No. 106 / Thursday, June 3, 2010 / Rules and Regulations                                                    31517

                                                 applicability level in the Act, if the                  clear, then an agency may select an                       As to how to apply the PSD program
                                                 source did not already have a title V                   interpretation that is reasonable under                to GHG sources, congressional intent, as
                                                 permit.                                                 the statute.                                           expressed in the various statutory
                                                    Under these circumstances, many                         Under the ‘‘administrative necessity’’              provisions and statements in the
                                                 small sources would be burdened by the                  doctrine, Congress is presumed, at                     legislative history, is clear that PSD
                                                 costs of the individualized PSD control                 Chevron Step 1, to intend that its                     should apply at least to the largest
                                                 technology requirements and permit                      statutory directives to agencies be                    sources initially, at least to as many
                                                 applications that the PSD provisions,                   administrable, and not to have intended                more sources as possible and as
                                                 absent streamlining, require.                           to have written statutory requirements                 promptly as possible over time—
                                                 Additionally, state and local permitting                that are impossible to administer.                     consistent with streamlining actions
                                                 authorities would be burdened by the                    Therefore, under this doctrine, an                     that we intend to consider coupled with
                                                 extraordinary number of these permit                    agency may depart from statutory                       increases in permitting authority
                                                 applications, which are orders of                       requirements that, by their terms, are                 resources—and at least to a certain
                                                 magnitude greater than the current                      impossible to administer, but the agency               point. This is the approach we take in
                                                 inventory of permits and would vastly                   may depart no more than necessary to                   this Tailoring Rule, and because it is
                                                 exceed the current administrative                       render the requirements administrable.                 consistent with congressional intent, we
                                                 resources of the permitting authorities.                Under the ‘‘one-step-at-a-time’’ doctrine,             believe it is required under Chevron
                                                 Permit gridlock would result with the                   Congress is presumed at Chevron Step 1                 Step 1. Even if congressional intent
                                                 permitting authorities able to issue only               to have intended to allow the agency to                were not clear as to how to apply the
                                                 a tiny fraction of the permits requested.               administer the statutory requirements                  PSD requirements to GHG sources, we
                                                    These impacts—the costs to sources                   on a step-by-step basis, as appropriate,               would have authority under Chevron
                                                 and administrative burdens to                           when the agency remains on track to                    Step 2 to establish a reasonable
                                                 permitting authorities—that would                       implement the requirements as a whole.                 interpretation that is consistent with the
                                                 result from application of the PSD and                  Each of these doctrines supports our                   PSD provisions, and we believe that the
                                                 title V programs for GHG emissions at                   action separately, but the three also are              tailoring approach so qualifies.
                                                 the statutory levels as of January 2,                   intertwined and support our action in a                   As for title V, the statutory provisions
                                                 2011, are so severe that they bring the                 comprehensive manner.                                  and legislative history, which of course
                                                 judicial doctrines of ‘‘absurd results,’’                  Here, we have determined, through                   are different than those concerning the
                                                 ‘‘administrative necessity,’’ and ‘‘one-                analysis of burden and emissions data                  PSD program, do not express a clear
                                                 step-at-a-time’’ into the Chevron two-                  as well as consideration of extensive                  intent as to how title V applies to GHG
                                                 step analytical framework for statutes                  public comment, that the costs to                      sources, which leads our analysis to
                                                 administered by agencies. Under the                     sources and administrative burdens to                  Chevron Step 2, and here, again, we
                                                 U.S. Supreme Court’s decision in                        permitting authorities that would result               believe that the tailoring approach is a
                                                 Chevron, the agency must, at Step 1,                    from application of the PSD and title V                reasonable interpretation that is
                                                 determine whether Congress’s intent as                  programs for GHG emissions at the                      consistent with the title V provisions.
                                                 to the specific matter at issue is clear,               statutory levels as of January 2, 2011                    For both PSD and title V, we intend
                                                 and, if so, the agency must give effect                 should be considered ‘‘absurd results.’’               to use the tailoring approach to address
                                                 to that intent.3 If congressional intent is             Therefore, we conclude that under the                  smaller GHG sources over time,
                                                 not clear, then, at Step 2, the agency has              ‘‘absurd results’’ doctrine, Congress                  consistent with Congress’s expectations
                                                 discretion to fashion an interpretation                 could not have intended that the PSD or                that the programs would not impose
                                                 that is a reasonable construction of the                title V applicability provisions—in                    undue costs to sources or undue
                                                 statute.                                                particular, the threshold levels and                   administrative burdens to permitting
                                                    To determine congressional intent,                                                                          authorities. However, we cannot say at
                                                                                                         timing requirements—apply literally to
                                                 the agency must first consider the words                                                                       this point how close to the statutory
                                                                                                         GHG sources as of that date.
                                                 of the statutory requirements, and if                      Even so, the PSD and title V                        thresholds we will eventually reach.
                                                 their literal meaning answers the                       provisions and their legislative history               Because this rule establishes only the
                                                 question at hand, then, in most cases,                  do indicate a clear congressional intent,              first two phases of the tailoring
                                                 the agency must implement those                         under Chevron Step 1, as to whether the                approach, we do not find it necessary to
                                                 requirements by their terms. However,                   two permitting programs applied to                     answer these questions in this rule, and
                                                 under the ‘‘absurd results’’ doctrine, the              GHG sources, and that the intent was in                instead we expect to resolve them
                                                 literal meaning of statutory                            the affirmative, that the permitting                   through future rulemaking. We will
                                                 requirements should not be considered                   programs do apply to GHG sources. Our                  remain mindful of the concerns that
                                                 to indicate congressional intent if that                previous regulatory action defining the                Congress expressed about including
                                                 literal meaning would produce a result                  applicability provisions made this clear,              small sources in either program. We
                                                 that is senseless or that is otherwise                  and we do not reopen this issue in this                intend to consider the issue of the
                                                 inconsistent with—and especially one                    rulemaking. Moreover, even if this long-               applicability of title V to GHG sources
                                                 that undermines—underlying                              established regulatory position were not               without applicable requirements (i.e.,
                                                 congressional purpose. In these cases, if               justifiable based on Chevron Step 1—on                 ‘‘empty permits’’) in future steps of our
                                                 congressional intent for how the                        the grounds that in fact, congressional                tailoring approach. When we do so, we
                                                 requirements apply to the question at                   intent on this point is not clear—then                 will further assess the potential for the
                                                 hand is clear, the agency should                        we believe that this position, that the                approach of excluding empty permits
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                                                 implement the statutory requirements                    statutory provisions to apply PSD and                  from title V to relieve burden consistent
                                                 not in accordance with their literal                    title V generally to GHG sources, was                  with statutory requirements.
                                                 meaning, but rather in a manner that                    justified under Chevron step 2.4                          In addition, because Congress can be
                                                 most closely effectuates congressional                                                                         said to have intended the PSD and title
                                                 intent. If congressional intent is not                    4 In this preamble and the response to comments

                                                                                                         document we fully address arguments that               so to be fully responsive, even though we believe
                                                   3 ChevronU.S.A. Inc. v. NRDC, 467 U.S. 837,           commenters and others have presented about             that this is a settled matter for which the time for
                                                 842–43 (1984).                                          congressional intent and coverage of GHGs. We do       judicial review has passed.



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                                                 V programs to apply to GHG sources,                     have demonstrated that they have                       10,000 and 25,000 tpy CO2e, but based
                                                 the Tailoring Rule is also justifiable                  adequate resources to administer those                 on consideration of the additional
                                                 under the ‘‘administrative necessity’’                  programs.                                              information we received and our further
                                                 and ‘‘one-step-at-a-time’’ doctrines.                      The thresholds we are establishing are              analysis, we are finalizing the threshold
                                                    The legal analysis just described                    based on CO2e for the aggregate sum of                 levels in the amounts and on the
                                                 justifies each of the actions in this rule.             six greenhouse gases that constitute the               schedule described previously. In
                                                 The first two steps that we promulgate                  pollutant that will be subject to                      addition, the mechanism for state, local,
                                                 in this rule, which take effect on January              regulation, which we refer to as GHGs.5                and tribal program implementation has
                                                 2, 2011 and July 1, 2011, constitute the                These gases are: CO2, methane (CH4),                   been significantly changed to reflect the
                                                 most that permitting authorities can                    nitrous oxide (N2O), hydrofluorocarbons                comments received that we needed to
                                                 reasonably be expected to do by those                   (HFCs), perfluorocarbons (PFCs), and                   develop an implementation approach
                                                 times. Similarly, the 50,000 tpy floor                  sulfur hexafluoride (SF6). Thus, in this               that states could adopt under state law
                                                 that we promulgate through at least                     rule, we provide that PSD and title V                  more expeditiously.
                                                 April 30, 2016 is reasonable because the                applicability is based on the quantity                    The remainder of this notice describes
                                                 information we have available now                       that results when the mass emissions of                our approach and rationale in more
                                                 shows that it constitutes the most that                 each of these gases is multiplied by the               detail. Following this overview, section
                                                 permitting authorities can reasonably be                Global Warming Potential (GWP) of that                 III of this preamble provides background
                                                 expected to do by that date. Finally, the               gas, and then summed for all six gases.                information on the nature of GHG
                                                 study and two additional rulemakings—                   However, we further provide that in                    emissions, recent regulatory
                                                 to take effect by July 1, 2013 and April                order for a source’s GHG emissions to                  developments that affect when and how
                                                 30, 2016—to which we commit in this                     trigger PSD or title V requirements, the               GHG emissions are subject to stationary
                                                 rule establish a track for acquiring                    quantity of the GHGs must equal or                     source permitting, and the general
                                                 additional information and for taking                   exceed both the applicability thresholds               requirements of the PSD and title V
                                                 further steps to address the application                established in this rulemaking on a                    programs. Section IV describes in detail
                                                 of PSD and title V more closely to the                  CO2e basis and the statutory thresholds                the summary of the key actions being
                                                 literal statutory levels. We intend to                  of 100 or 250 tpy on a mass basis.6                    taken in this rule, including the
                                                 apply them as closely to those levels as                Similarly, in order for a source to be                 determination of emissions, the
                                                 is consistent with congressional intent                 subject to the PSD modification                        thresholds and timing for the phase-in,
                                                 and administrative imperatives, in light                requirements, the source’s net GHG                     our approach to implementing the
                                                 of the ‘‘absurd results,’’ ‘‘administrative             emissions increase must exceed the                     phase-in, and the additional future
                                                 necessity,’’ and ‘‘one-step-at-a-time’’                 applicable significance level on a CO2e                actions we will take. Section V provides
                                                 doctrines, although, as noted                           basis and must also result in a net mass               a more detailed description of each
                                                 previously, we will consider in future                  increase of the constituent gases                      action, explaining the policy and legal
                                                 rulemaking how closely to the statutory                 combined.                                              rationale and responding to comments
                                                 thresholds we will be able to implement                    We are adopting this rule after careful             received. Section V begins with our
                                                 the PSD and title V programs as well as                 consideration of numerous public                       decisions on how to calculate the mass-
                                                 what to require with respect to a                       comments. On October 27, 2009 (74 FR                   based and CO2e-based emissions used in
                                                 potentially large number of sources with                55292), EPA proposed the GHG                           the phase-in. Section V then turns to our
                                                 empty title V permits.                                  Tailoring Rule. EPA held two public                    legal and policy rationale for the first
                                                    In this rule, we are adopting                        hearings on the proposed rule, and                     two steps of the phase-in, the 50,000 tpy
                                                 regulatory language codifying our                       received over 400,000 written public                   floor, and the subsequent study and
                                                 phase-in approach. As we will explain,                  comments. The public comment period                    rulemakings to determine whether and
                                                 many state, local and tribal area                       ended on December 28, 2009. The                        how smaller sources should be subject
                                                 programs will likely be able to                         comments have provided detailed                        to permitting. This section then
                                                 immediately implement our approach                      information that has helped EPA                        describes key implementation issues
                                                 without rule or statutory changes by, for               understand better the issues and                       including the approach to state
                                                 example, interpreting the term ‘‘subject                potential impacts of this rule, and the                adoption. After describing our plans for
                                                 to regulation’’ that is part of the                     final rule described in this preamble                  follow-up on title V fee programs, the
                                                 applicability provisions for PSD and                    incorporates many of the suggestions we                section concludes by describing permit
                                                 title V. We ask permitting authorities to               received. We respond to many of these
                                                 confirm that they will follow this                                                                             streamlining techniques; guidance on
                                                                                                         comments in explaining our rationale                   BACT for the GHG sources that are
                                                 implementation approach for their                       for the final rule, which is described in
                                                 programs, and if they cannot, then we                                                                          affected under the first two steps of the
                                                                                                         section V. The final rule adopts many                  Tailoring Rule phase-in; requests for
                                                 ask them to notify us so that we can take               elements of the proposal but differs
                                                 appropriate follow-up action to narrow                                                                         exemptions; and transitional issues,
                                                                                                         from the proposal in several important                 including grandfathering. Finally,
                                                 our federal approval of their programs                  respects. We proposed to apply PSD and
                                                 before GHGs become subject to                                                                                  section VI describes the expected
                                                                                                         title V to GHG sources that emit or have               impacts that will result from the phase-
                                                 regulation for PSD and title V programs
                                                                                                         the potential to emit at least 25,000 tpy              in approach (i.e., the narrower
                                                 on January 2, 2011. Narrowing our
                                                                                                         CO2e, and we proposed a PSD                            application of PSD and title V
                                                 approval will ensure that for federal
                                                                                                         significance level in a range between                  requirements during the phase-in
                                                 purposes, GHG sources below the size
                                                 thresholds we establish in this Tailoring                                                                      period) and sections VII and VIII
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                                                                                                           5 The term ‘‘greenhouse gases’’ is commonly used
                                                 Rule are not obligated to hold PSD or                                                                          address administrative requirements.
                                                                                                         to refer generally to gases that have heat-trapping
                                                 title V permits until the states develop                properties. However, in this notice, unless noted      III. Background
                                                 and submit revised PSD and title V                      otherwise, we use it to refer to specifically to the
                                                 programs that EPA approves, either                      pollutant regulated in the LDVR.                       A. What are GHGs and their sources?
                                                                                                           6 The relevant thresholds are 100 tpy for title V,
                                                 because they adopt our tailoring                        and 250 tpy for PSD, except for 28 categories listed
                                                                                                                                                                  Greenhouse gases trap the Earth’s heat
                                                 approach or because, if they continue to                in EPA regulations for which the PSD threshold is      that would otherwise escape from the
                                                 cover smaller GHG sources, the states                   100 tpy.                                               atmosphere into space, and form the


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                                                 greenhouse effect that helps keep the                   United States industrial processes (such               vehicles and new motor vehicle engines
                                                 Earth warm enough for life. Greenhouse                  as the production of cement, steel, and                contributes to the GHG air pollution that
                                                 gases are naturally present in the                      aluminum), agriculture, forestry, other                threatens public health and welfare.
                                                 atmosphere and are also emitted by                      land use, and waste management are                     These findings, which were published
                                                 human activities. Human activities are                  also important sources of GHGs.                        December 15, 2009 (74 FR 66496), do
                                                 intensifying the naturally occurring                       Different GHGs have different heat-                 not themselves impose any
                                                 greenhouse effect by increasing the                     trapping capacities. The concept of                    requirements on industry or other
                                                 amount of GHGs in the atmosphere,                       GWP was developed to compare the                       entities. However, they were a
                                                 which is changing the climate in a way                  heat-trapping capacity and atmospheric                 prerequisite to finalizing the GHG
                                                 that endangers human health, society,                   lifetime of one GHG to another. The                    standards for light-duty vehicles,
                                                 and the natural environment.                            definition of a GWP for a particular                   described next.
                                                    Some GHGs, such as CO2, are emitted                  GHG is the ratio of heat trapped by one
                                                 to the atmosphere through natural                       unit mass of the GHG to that of one unit               2. Light-Duty Vehicle Rule
                                                 processes as well as human activities.                  mass of CO2 over a specified time                         The LDVR, 75 FR 25324 (May 7,
                                                 Other gases, such as fluorinated gases,                 period. When quantities of the different               2010), is a joint rule between EPA and
                                                 are created and emitted solely through                  GHGs are multiplied by their GWPs, the                 the Department of Transportation’s
                                                 human activities. As previously noted,                  different GHGs can be summed and                       National Highway Traffic Safety
                                                 the well-mixed GHGs of concern                          compared on a CO2e basis. For example,                 Administration (NHTSA) that
                                                 directly emitted by human activities                    CH4 has a GWP of 21, meaning each ton                  establishes a national program
                                                 include CO2, CH4, N2O, HFCs, PFCs,                      of CH4 emissions would have 21 times                   consisting of new standards for light-
                                                 and SF6. These six GHGs will, for the                   as much impact on global warming over                  duty vehicles that will reduce GHG
                                                 purposes of this final rule, be referred to             a 100-year time horizon as 1 ton of CO2                emissions and improve fuel economy.
                                                 collectively as ‘‘the six well-mixed                    emissions. Thus, on the basis of heat-                 EPA finalized the national GHG
                                                 GHGs,’’ or, simply, GHGs, and together                  trapping capability, 1 ton of CH4 would                emissions standards under the Act, and
                                                 constitute the ‘‘air pollutant’’ upon                   equal 21 tons of CO2e. The GWPs of the                 NHTSA finalized Corporate Average
                                                 which the GHG thresholds in this action                 non-CO2 GHGs range from 21 (for CH4)                   Fuel Economy (CAFE) standards under
                                                 are based. These six gases remain in the                up to 23,900 (for SF6). Aggregating all                the Energy Policy and Conservation Act,
                                                 atmosphere for decades to centuries                     GHGs on a CO2e basis at the source level               as amended. The new standards apply
                                                 where they become well-mixed globally                   allows a facility to evaluate its total                to new passenger cars, light-duty trucks,
                                                 in the atmosphere. When they are                        GHG emissions contribution based on a                  and medium-duty passenger vehicles,
                                                 emitted more quickly than natural                       single metric.                                         starting with model year 2012. The EPA
                                                 processes can remove them from the
                                                 atmosphere, their concentrations                        B. Endangerment Finding and the LDVR                   GHG standards are projected to result in
                                                 increase, thus increasing the greenhouse                                                                       an estimated combined average
                                                                                                         1. Endangerment Finding                                emissions level of 250 grams of CO2 per
                                                 effect. The heating effect caused by the
                                                 human-induced buildup of GHGs in the                       On April 2, 2007, the U.S. Supreme                  mile for model year 2016 vehicles. The
                                                 atmosphere is very likely the cause of                  Court found that GHGs are air pollutants               standards begin with the 2012 model
                                                 most of the observed global warming                     under CAA section 302(g).                              year, with standards increasing in
                                                 over the last 50 years. A detailed                      Massachusetts v. EPA, 549 U.S. 497                     stringency through model year 2016.
                                                 explanation of greenhouse gases,                        (2007). As a result, the Supreme Court                 The standards are a fleet average for
                                                 climate change and its impact on health,                found that EPA was required to                         each manufacturer, based on a footprint
                                                 society, and the environment is                         determine, under CAA section 202(a),                   attribute curve, meaning that the actual
                                                 included in EPA’s technical support                     whether (1) GHGs from new motor                        target for a vehicle will vary depending
                                                 document (TSD) for the endangerment                     vehicles cause or contribute to air                    on the size of the vehicle. Under the
                                                 finding final rule (Docket ID No. EPA–                  pollution which may reasonably be                      footprint-based standards, each
                                                 HQ–OAR–2009–0472–11292).                                anticipated to endanger public health or               manufacturer will have a GHG standard
                                                    In the United States, the combustion                 welfare, or (2) the science is too                     unique to its fleet, depending on the
                                                 of fossil fuels (e.g., coal, oil, gas) is the           uncertain to make a reasoned decision.                 footprints of the vehicle models
                                                 largest source of CO2 emissions and                     After issuing a proposal and receiving                 produced by that manufacturer. A
                                                 accounts for 80 percent of the total GHG                comment, on December 7, 2009, the                      manufacturer will have separate
                                                 emissions. Anthropogenic CO2                            Administrator signed two distinct                      footprint-based standards for cars and
                                                 emissions released from a variety of                    findings regarding GHGs under CAA                      for trucks.
                                                 sources, including through the use of                   section 202(a):                                           The endangerment and contribution
                                                 fossil fuel combustion and cement                          • Endangerment Finding: The                         findings described previously require
                                                 production from geologically stored                     Administrator found that the current                   EPA to issue standards under section
                                                 carbon (e.g., coal, oil, and natural gas)               and projected atmospheric                              202(a) ‘‘applicable to emission’’ of the air
                                                 that is hundreds of millions of years old,              concentrations of the mix of six long-                 pollutant that EPA found causes or
                                                 as well as anthropogenic CO2 emissions                  lived and directly emitted GHGs—CO2,                   contributes to the air pollution that
                                                 from land-use changes such as                           CH4, N2O, HFCs, PFCs, and SF6 (referred                endangers public health and welfare.
                                                 deforestation, perturb the atmospheric                  to as ‘‘well-mixed greenhouse gases’’ in               The final emissions standards satisfy
                                                 concentration of CO2 and the                            the endangerment finding)—are                          this requirement for GHGs from light-
                                                 distribution of carbon within different                 reasonably anticipated to endanger the                 duty vehicles. Under section 202(a), the
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                                                 reservoirs readjusts. More than half of                 public health and welfare of current and               Administrator has significant discretion
                                                 the energy related emissions come from                  future generations.                                    in how to structure the standards that
                                                 large stationary sources such as power                     • Cause or Contribute Finding: The                  apply to the emission of the air
                                                 plants, while about a third comes from                  Administrator found that the emissions                 pollutant at issue here, the aggregate
                                                 transportation. Of the six well-mixed                   of the single air pollutant defined as the             group of six GHGs. EPA has the
                                                 GHGs, four (CO2, CH4, N2O, and HFCs)                    aggregate group of six well-mixed                      discretion under section 202(a) to adopt
                                                 are emitted by motor vehicles. In the                   greenhouses gases from new motor                       separate standards for each gas, a single


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                                                 composite standard covering various                     which emits or has the potential to emit               infeasible options, ranking of remaining
                                                 gases, or any combination of these. In                  100 tpy or more of any pollutant subject               options by control and cost
                                                 the LDVR, EPA finalized separate                        to regulation under the CAA, or any                    effectiveness, and then selection of
                                                 standards for N2O and CH4, and a CO2                    other source type which emits or has the               BACT. Under PSD, once a source is
                                                 standard that provides for credits based                potential to emit such pollutants in                   determined to be major for any
                                                 on reductions of HFCs, as the                           amounts equal to or greater than 250                   regulated NSR pollutant, a BACT review
                                                 appropriate way to issue standards                      tpy. We refer to these levels as the 100/              is performed for each attainment
                                                 applicable to emission of the single air                250-tpy thresholds. A new source with                  pollutant that exceeds its PSD
                                                 pollutant, the aggregate group of six                   a potential to emit (PTE) at or above the              significance level as part of new
                                                 GHGs. EPA did not set any standards for                 applicable ‘‘major stationary source                   construction or for modification projects
                                                 PFCs or SF6, as they are not emitted by                 threshold’’ is subject to major source                 at the source, where there is a
                                                 motor vehicles.                                         NSR. These limits originate from section               significant increase and a significant net
                                                                                                         169 of the CAA, which applies PSD to                   emissions increase of such pollutant.7
                                                 C. What are the general requirements of                 any ‘‘major emitting facility’’ and defines               In addition to performing BACT, the
                                                 the PSD program?                                        the term to include any source that                    source must analyze impacts on ambient
                                                 1. Overview of the PSD Program                          emits or has a PTE of 100 or 250 tpy,                  air quality to assure that no violation of
                                                                                                         depending on the source category. Note                 any NAAQS or PSD increments will
                                                    The PSD program is a preconstruction                                                                        result, and must analyze impacts on
                                                                                                         that the major source definition
                                                 review and permitting program                                                                                  soil, vegetation, and visibility. In
                                                                                                         incorporates the phrase ‘‘subject to
                                                 applicable to new major stationary                      regulation,’’ which, as described later,               addition, sources or modifications that
                                                 sources and major modifications at                      will begin to include GHGs on January                  would impact Class I areas (e.g.,
                                                 existing major stationary sources. The                  2, 2011, under our interpretation of that              national parks) may be subject to
                                                 PSD program applies in areas that are                   phrase discussed in the recent                         additional requirements to protect air
                                                 designated ‘‘attainment’’ or                            Interpretive Memo notice. 75 FR 17004,                 quality related values (AQRVs) that
                                                 ‘‘unclassifiable’’ for a National Ambient               April 2, 2010.                                         have been identified for such areas.
                                                 Air Quality Standard (NAAQS). The                                                                              Under PSD, if a source’s proposed
                                                 PSD program is contained in part C of                   b. Major Modifications
                                                                                                                                                                project may impact a Class I area, the
                                                 title I of the CAA. The ‘‘nonattainment                    PSD also applies to existing sources                Federal Land Manager is notified and is
                                                 new source review (NSR)’’ program                       that undertake a ‘‘major modification,’’               responsible for evaluating a source’s
                                                 applies in areas not in attainment of a                 which occurs: (1) When there is a                      projected impact on the AQRVs and
                                                 NAAQS or in the Ozone Transport                         physical change in, or change in the                   recommending either approval or
                                                 Region and is implemented under the                     method of operation of, a ‘‘major                      disapproval of the source’s permit
                                                 requirements of part D of title I of the                stationary source;’’ (2) the change results            application based on anticipated
                                                 CAA. Collectively, we commonly refer                    in a ‘‘significant’’ emission increase of a            impacts. There are currently no NAAQS
                                                 to these two programs as the major NSR                  pollutant subject to regulation (equal to              or PSD increments established for
                                                 program. The governing EPA rules are                    or above the significance level that EPA               GHGs, and therefore these PSD
                                                 contained in 40 CFR 51.165, 51.166,                     has set for the pollutant in 40 CFR                    requirements would not apply for
                                                 52.21, 52.24, and part 51, Appendices S                 52.21(b)(23)); and (3) there is a                      GHGs, even when PSD is triggered for
                                                 and W. There is no NAAQS for CO2 or                     ‘‘significant net emissions increase’’ of a            GHGs. However, if PSD is triggered for
                                                 any of the other well-mixed GHGs, nor                   pollutant subject to regulation that is                a GHG emissions source, all regulated
                                                 has EPA proposed any such NAAQS;                        equal to or above the significance level               NSR pollutants which the new source
                                                 therefore, unless and until we take                     (defined in 40 CFR 52.21(b)(23)).                      emits in significant amounts would be
                                                 further such action, we do not anticipate               Significance levels, which EPA has                     subject to PSD requirements. Therefore,
                                                 that the nonattainment NSR program                      promulgated for criteria pollutants and                if a facility triggers review for regulated
                                                 will apply to GHGs.                                     certain other pollutants, represent a de               NSR pollutants that are non-GHG
                                                    The applicability of PSD to a                        minimis contribution to air quality                    pollutants for which there are
                                                 particular source must be determined in                 problems. When EPA has not set a                       established NAAQS or increments, the
                                                 advance of construction or modification                 significance level for a regulated NSR                 air quality, additional impacts, and
                                                 and is pollutant-specific. The primary                  pollutant, PSD applies to an increase of               Class I requirements would apply to
                                                 criterion in determining PSD                            the pollutant in any amount (that is, in               those pollutants.
                                                 applicability for a proposed source is                  effect, the significance level is treated as              The permitting authority must
                                                 whether the source is a ‘‘major emitting                zero).                                                 provide notice of its preliminary
                                                 facility,’’ based on its predicted potential                                                                   decision on a source’s application for a
                                                                                                         2. General Requirements for PSD
                                                 emissions of regulated pollutants,                                                                             PSD permit, and must provide an
                                                 within the meaning of CAA section                          This section provides a very brief                  opportunity for comment by the public,
                                                 169(1) and either constructs or                         summary of the main requirements of                    industry, and other interested persons.
                                                 undertakes a modification. EPA has                      the PSD program. One principal                         After considering and responding to
                                                 implemented these requirements in its                   requirement is that a new major source                 comments, the permitting authority
                                                 regulations, which use somewhat                         or major modification must apply                       must issue a final determination on the
                                                 different terminology for determining                   BACT, which is determined on a case-                   construction permit. Usually NSR
                                                 PSD applicability, which is whether the                 by-case basis taking into account, among               permits are issued by state or local air
                                                 source is a ‘‘major stationary source’’ or              other factors, the cost effectiveness of
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                                                 whether the proposed project is a ‘‘major               the control and energy and                               7 We note that the PSD program has historically

                                                 modification.’’                                         environmental impacts. EPA has                         operated in this fashion for all pollutants—when
                                                                                                         developed a ‘‘top-down’’ approach for                  new sources or modifications are ‘‘major,’’ PSD
                                                 a. Major Stationary Source                              BACT review, which involves a                          applies to all pollutants that are emitted in
                                                                                                                                                                significant quantities from the source or project.
                                                   Under PSD, a ‘‘major stationary                       decision process that includes                         This rule does not alter that for sources or
                                                 source’’ is any source belonging to a                   identification of all available control                modifications that are major due to their GHG
                                                 specified list of 28 source categories                  technologies, elimination of technically               emissions.



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                                                 pollution control agencies, which have                  applicability of requirements and                      regulation’’ only if it is subject to either
                                                 their own permit programs approved by                   information concerning compliance                      a provision in the CAA or regulation
                                                 EPA in their State Implementation Plans                 with those requirements. The permitting                adopted by EPA under the CAA that
                                                 (SIPs). In some cases, EPA has delegated                authority uses this information to                     requires actual control of emissions of
                                                 its authority to issue PSD permits to the               develop the source’s operating permit.                 that pollutant (referred to as the ‘‘actual
                                                 state or local agency. In other areas, EPA                 Title V permits generally contain the               control interpretation’’). On February 17,
                                                 issues the permits under its own                        following elements: (1) Emissions                      2009, EPA granted a petition for
                                                 authority.                                              limitations and standards to assure                    reconsideration on the Interpretive
                                                                                                         compliance with all applicable                         Memo, and announced its intent to
                                                 D. What are the general requirements of                 requirements; (2) monitoring,
                                                 the title V operating permits program?                                                                         conduct a rulemaking to allow for
                                                                                                         recordkeeping, and reporting                           public comment on the issues raised in
                                                 1. Overview of Title V                                  requirements, including submittal of a                 the memorandum and on related issues.
                                                                                                         semiannual monitoring report and                       EPA also clarified that the Interpretive
                                                    The operating permit requirements                    prompt reporting of deviations from
                                                 under title V are intended to improve                                                                          Memo would remain in effect pending
                                                                                                         permit terms; (3) fee payment; and
                                                 sources’ compliance with other CAA                                                                             reconsideration.
                                                                                                         (4) an annual certification of
                                                 requirements. The title V program is                    certification by a responsible official.                   On March 29, 2010, EPA signed a
                                                 implemented through regulations                         The detailed requirements are set forth                notice conveying its decision to
                                                 promulgated by EPA, 40 CFR part 70,                     at 40 CFR 70.6.                                        continue applying (with one limited
                                                 for programs implemented by state and                      In addition to the permit content                   refinement) the Interpretive Memo’s
                                                 local agencies and tribes, and 40 CFR                   requirements, there are procedural                     interpretation of ‘‘subject to regulation’’
                                                 part 71, for programs generally                         requirements that must be followed in                  (‘‘Interpretation of Regulations that
                                                 implemented by EPA.                                     issuing title V permits, including                     Determine Pollutants Covered by Clean
                                                    In summary, the title V program                      (1) Application completeness                           Air Act Permitting Programs’’). See 75
                                                 requires major sources (defined and                     determination; (2) public notice and a                 FR 17004. EPA concluded that the
                                                 interpreted by EPA to include sources                   30-day public comment period,                          ‘‘actual control interpretation’’ is the
                                                 that emit or have a PTE of 100 tpy of                   including an opportunity for a public                  most appropriate interpretation to apply
                                                 any pollutant subject to regulation) and                hearing, on draft permits; (3) EPA and                 given the policy implications. However,
                                                 certain other sources to apply for                      affected state review; and (4) a statement             we refined our interpretation in one
                                                 operating permits. Under EPA’s long-                    of the legal and factual basis of the draft            respect: we established that PSD
                                                 standing interpretation, a pollutant,                   permit. The permitting authority must                  permitting requirements apply to a
                                                 such as a GHG, is ‘‘subject to regulation’’             take final action (issue or deny) on the               newly regulated pollutant at the time a
                                                 when it is subject to a CAA requirement                 permit applications within 18 months of                regulatory requirement to control
                                                 establishing actual control of emissions.               receipt. EPA also has 45 days from                     emissions of that pollutant ‘‘takes effect’’
                                                 Title V generally does not add new                      receipt of a proposed permit to object to              (rather than upon promulgation or the
                                                 pollution control requirements, but it                  its issuance, and citizens have 60 days                legal effective date of the regulation
                                                 does require that each permit contain all               after that to petition EPA to object to a
                                                 pollution control requirements or                                                                              containing such a requirement). In
                                                                                                         permit. Permits may also need to be                    addition, based on the anticipated
                                                 ‘‘applicable requirements’’ required by                 revised or reopened if new requirements
                                                 the CAA (e.g., New Source Performance                                                                          promulgation of the LDVR, we stated
                                                                                                         come into effect during the permit terms               that the GHG requirements of the
                                                 Standard (NSPS), and SIP requirements,                  or if the source makes changes that
                                                 including PSD), and it requires that                                                                           vehicle rule would take effect on
                                                                                                         conflict with, or necessitate changes to,
                                                 certain procedural requirements be                                                                             January 2, 2011, because that is the
                                                                                                         the current permit. Permit revisions and
                                                 followed, especially with respect to                                                                           earliest date that a 2012 model year
                                                                                                         re-openings follow procedural
                                                 compliance with these requirements.                                                                            vehicle may be introduced into
                                                                                                         requirements which vary depending on
                                                 ‘‘Applicable requirements’’ for title V                 the nature of the necessary change to the              commerce. In other words, the
                                                 purposes include stationary source                      permit.                                                compliance obligation under the LDVR
                                                 requirements, but do not include mobile                                                                        does not occur until a manufacturer may
                                                                                                         E. The Interpretive Memo                               introduce into commerce vehicles that
                                                 source requirements. Other procedural
                                                 requirements include providing review                      On December 18, 2008, EPA issued a                  are required to comply with GHG
                                                 of permits by EPA, states, and the                      memorandum, ‘‘EPA’s Interpretation of                  standards, which will begin with model
                                                 public, and requiring permit holders to                 Regulations that Determine Pollutants                  year 2012 and will not occur before
                                                 track, report, and annually certify their               Covered by Federal Prevention of                       January 2, 2011. We also reiterated
                                                 compliance status with respect to their                 Significant Deterioration (PSD) Permit                 EPA’s interpretation that the 100 tpy
                                                 permit requirements.                                    Program’’ (known as the ‘‘Johnson                      major source threshold for title V is
                                                                                                         Memo’’ or the ‘‘PSD Interpretive Memo,’’               triggered only by pollutants ‘‘subject to
                                                 2. Title V Permit Requirements                          and referred to in this preamble as the                regulation’’ under the Act, and we
                                                   This section provides a brief summary                 ‘‘Interpretive Memo’’) that set forth                  defined and applied that term for title
                                                 of the requirements of the title V                      EPA’s interpretation regarding which                   V purposes in the same way that we did
                                                 program that are most relevant to this                  EPA and state actions, with respect to a               for PSD purposes. That is, we stated that
                                                 action. A source generally must apply                   previously unregulated pollutant, cause                a pollutant is ‘‘subject to regulation’’ if
                                                 for a title V permit within 1 year of first             that pollutant to become ‘‘subject to                  it is subject to a CAA requirement
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                                                 becoming subject to permitting—for                      regulation’’ under the Act. Whether a                  establishing ‘‘actual control of
                                                 new sources, this is usually within 1                   pollutant is ‘‘subject to regulation’’ is              emissions;’’ that a pollutant is
                                                 year of commencing operation. The                       important for the purposes of                          considered ‘‘subject to regulation’’ for
                                                 application must include, among other                   determining whether it is covered under                title V purposes when such a
                                                 things, identifying information, a                      the federal PSD and title V permitting                 requirement ‘‘takes effect’’; and, based
                                                 description of emissions and other                      programs. The Interpretive Memo                        on the anticipated promulgation of the
                                                 information necessary to determine                      established that a pollutant is ‘‘subject to           LDVR, that the GHG requirements of the


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                                                 31522               Federal Register / Vol. 75, No. 106 / Thursday, June 3, 2010 / Rules and Regulations

                                                 vehicle rule would take effect on          regulatory language is structured such                               2. What GWP values should be used for
                                                 January 2, 2011.                           that the statutory mass-based thresholds                             calculating CO2e?
                                                   On April 1, 2010, we finalized the       (i.e., for PSD, 100/250 tpy for new                                     We are requiring that wherever you
                                                 LDVR as anticipated, confirming that       construction and zero tpy for                                        perform an emissions calculations
                                                 manufacturer certification can occur no    modifications at a major stationary                                  involving CO2e for the purposes of
                                                 earlier than January 2, 2011. Thus,        source, and for title V, 100 tpy) continue                           determining the applicability of PSD or
                                                 under the terms of the final notice for    to apply. As a result, stationary source                             title V requirements, you use the GWP
                                                 the Interpretive Memo, GHGs become         apply and stationary sources or                                      values codified in the EPA’s mandatory
                                                 subject to regulation on that date, and    modifications that do not meet these                                 GHG reporting rule.10 This approach
                                                 PSD and title V program requirements       thresholds are not subject to permitting                             will assure consistency between the
                                                 will also begin to apply upon that date.                                                                        values required for calculations under
                                                                                            requirements. While technically
                                                 IV. Summary of Final Actions               evaluation of the mass-based thresholds                              the reporting rule and for PSD or title V.
                                                    This section describes the specific     is the second step in the applicability                              In addition, because any changes to
                                                 actions we are taking in this final rule.  analysis, from a practical standpoint                                Table A–1 of the mandatory GHG
                                                 It describes the overall tailoring         most sources are likely to treat this as                             reporting rule regulatory text must go
                                                 approach for NSR and title V               an initial screen, so that if they would                             through a rulemaking, this approach
                                                 applicability, the steps we are taking to  not trigger PSD or title V on a mass                                 will assure that the values used for the
                                                 put it into place, and future actions that basis, they would not proceed to                                     permitting programs will reflect the
                                                 we commit to take. The next section, V,    evaluate emissions on a CO2e basis. We                               latest values adopted for usage by EPA
                                                 provides the legal and policy rationale    have treated evaluation of mass-based                                after notice and comment.
                                                 for these actions. In that section, we     thresholds as the initial step in our                                B. When will PSD and title V
                                                 provide a description of our rationale     descriptions. As applicable, a source                                applicability begin for GHGs and
                                                 and response to comments for each          would evaluate these mass-based                                      emission sources?
                                                 action, presented in the same order as     thresholds by summing each of the six
                                                 we describe the actions here.                                                                                   Overview
                                                                                            GHGs it emits on a mass basis (i.e.,
                                                                                                                                                                    In this action, we establish the first
                                                 A. How do you define the GHG pollutant before applying GWP). We expect that it                                  two phases of our phase-in approach,
                                                 for PSD and title V purposes?              will be very rare for a new stationary
                                                                                            source or modification to trigger                                    which we refer to as Steps 1 and 2. We
                                                 1. GHG Pollutant Defined as the Sum-                                                                            also commit to a subsequent rulemaking
                                                                                            permitting based on CO2e and not also
                                                 of-Six Well-Mixed GHGs                                                                                          in which we will propose or solicit
                                                                                            trigger based on mass alone.
                                                    We are identifying the air pollutant                                                                         comment on establishing a further
                                                                                               Determining permit program                                        phase-in, that is, a Step 3, that would
                                                 for purposes of PSD and title V
                                                                                            applicability for the GHG ‘‘air pollutant’’                          apply PSD and title V to additional
                                                 applicability to be the pollutant subject
                                                                                            by using the sum-of-six GHGs is based                                sources, effective July 1, 2013, and on
                                                 to regulation, which is the air pollutant
                                                                                            on EPA’s interpretation that the PSD                                 which we commit to take final action,
                                                 for GHGs identified in EPA’s LDVR, as
                                                 well as EPA’s endangerment and             and title V requirements apply to each                               as supported by the record,11 by no later
                                                 contribution findings.8 In the LDVR,       ‘‘air pollutant’’ that is ‘‘subject to                               than July 1, 2012.
                                                                                            regulation’’ under another provision of                                 We also commit to undertaking an
                                                 EPA set emissions standards under
                                                                                            the CAA. As discussed previously, the                                assessment of sources’ and permitting
                                                 section 202(a) that were ‘‘applicable to
                                                                                            final LDVR for GHGs makes it clear that                              authorities’ progress in implementing
                                                 emission’’ of a single air pollutant
                                                                                            the emissions standards EPA adopted                                  PSD and title V for GHG sources, and to
                                                 defined as the aggregate sum of six
                                                                                            are standards applicable to emission of                              complete this assessment by 2015. We
                                                 GHGs. The six GHGs, which are well-
                                                                                                                                                                 further commit to completing another
                                                 mixed gases in the atmosphere, are CO2, the single air pollutant defined as the
                                                                                                                                                                 round of rulemaking addressing smaller
                                                 CH4, N2O, HFCs, PFCs, and SF6. Earlier, aggregate mix of these six well-mixed
                                                                                            GHGs. See LDVR, May 7, 2010, 75 FR                                   sources by April 30, 2016. Our action in
                                                 EPA made the contribution finding for
                                                                                                                                                                 that rulemaking would address
                                                 this single air pollutant.                 25398–99, section III.A.2.c, and 40 CFR
                                                    Furthermore, as proposed, we are                                                                             permitting requirements for smaller
                                                                                            86.1818–12.9 For reasons explained in
                                                 using an emissions threshold that                                                                               sources, taking into account the
                                                                                            more detail in section V, we have                                    remaining problems concerning costs to
                                                 allows all six constituent gases to be     determined it is legally required, and
                                                 evaluated using a common metric—                                                                                sources and burdens to permitting
                                                                                            preferable from a policy standpoint, for                             authorities. Finally, we determine in
                                                 CO2e. Thus, to determine applicability,    EPA to use the same definition of the air                            this action that we will apply PSD or
                                                 a source’s GHG emissions are calculated pollutant for permitting purposes as that
                                                                                                                                                                 title V requirements to sources that emit
                                                 on a CO2e basis by multiplying the mass used in the rule that establishes the
                                                                                                                                                                 GHGs, or that conduct modifications
                                                 emissions of any of the six GHGs that      control requirements for the pollutant.                              that result in increases in emissions of
                                                 the source emits by that gas’s GWP and     We also believe there are                                            GHGs, in amounts of less than 50,000
                                                 then summing the CO2e for each GHG         implementation advantages for applying                               tpy CO2e any earlier than when we take
                                                 emitted by the source. This sum,           PSD and title V in this way. Thus, this                              the required further action to address
                                                 expressed in terms of tpy CO2e, is then    rule establishes that a stationary source                            smaller sources by April 30, 2016.
                                                 compared to the applicable CO2e-based      will use the group of six constituent
                                                 permitting threshold to determine
                                                                                            gases for permitting applicability, rather                              10 Table A–1 to subpart A of 40 CFR part 98—
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                                                 whether the source is subject to PSD                                                                            Global Warming Potentials, 74 FR 56395.
                                                                                            than treating each gas individually.
                                                 and title V requirements.                                                                                          11 Although we commit to propose or solicit

                                                    In addition, because we are             Similarly, you will include all six                                  comment on lower thresholds and to take final
                                                 implementing this phase-in through the constituent gases because that is how                                    action on that proposal by July 1, 2012, we cannot,
                                                 term ‘‘subject to regulation,’’ the        the air pollutant is defined, even though                            at present, commit to promulgate lower thresholds.
                                                                                            motor vehicles only emit four of the six.                            It will not be until the Step 3 rulemaking itself that
                                                                                                                                                                 we will gather and analyze data and receive
                                                   8 See 74 FR 66496, 66499, 66536–7. December 15,                                                               comments that determine whether we have basis for
                                                 2009.                                                     9 40   CFR 86.1818–12(a).                             promulgating lower thresholds.



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                                                                     Federal Register / Vol. 75, No. 106 / Thursday, June 3, 2010 / Rules and Regulations                                                    31523

                                                    Through this process, we will                        actions and each of the following                      2. What are the Step 2 thresholds,
                                                 implement the phase-in approach by                      conditions is met:                                     timing, and calculation methodology?
                                                 applying PSD and title V at threshold                     (1) The GHG emissions (or net
                                                                                                                                                                a. PSD Permitting
                                                 levels that are as close to the statutory               emissions increase) due to the new
                                                 levels as possible, and do so as quickly                construction (or modification) project,                   Step 2 will begin July 1, 2011. Under
                                                 as possible, at least to a certain point.               calculated as the sum of the six well-                 Step 2, anyway PSD sources—that is,
                                                 The level and timing of the thresholds                  mixed GHGs on a mass basis (no GWPs                    sources already subject to PSD based on
                                                 that we promulgate in future actions                    applied) exceed a value of 0 tpy; and                  non-GHGs and covered under Step 1
                                                 will be based on our assessment of the                    (2) The GHG emissions (or net                        previously—will remain subject to PSD.
                                                 resulting costs to sources and burdens to               emissions increase) due to the new                     In addition, sources with the potential
                                                 permitting authorities, and that, in turn,              construction (or modification) project,                to emit 100,000 tpy CO2e or more of
                                                 will depend on such variables as our                    calculated as the sum of the six well-                 GHG will be considered major sources
                                                 progress in developing streamlining                     mixed GHGs on a CO2e basis (GWPs                       for PSD permitting purposes (provided
                                                 approaches and on permitting                            applied) equal or exceed a value of                    that they also emit GHGs or some other
                                                 authorities’ progress in developing                     75,000 tpy CO2e.                                       regulated NSR pollutant above the 100/
                                                 permitting expertise and acquiring more                   The purpose of the first condition is                250 tpy (mass based) statutory
                                                 resources. At this time, we cannot                      to determine whether the GHG                           thresholds. Additionally, any physical
                                                 foresee exactly when or in what manner                  emissions or net emissions increase has                change or change in the method of
                                                 those developments will occur.                          resulted in an ‘‘increase in the amount’’              operation at a major source (including
                                                 Therefore, we cannot promulgate more                    of an air pollutant as required by the                 one that is only major due to GHGs)
                                                 components of the tailoring approach                    Act. Because EPA has not defined a                     resulting in a net GHG emissions
                                                 beyond what we promulgate in this                       mass-based regulatory significance level               increase of 75,000 tpy CO2e or more will
                                                 action. We can say only that we may                     for GHGs, that level, in effect, is treated            be subject to PSD review and
                                                 continue the phase-in process with                      as zero. See 40 CFR 52.21(b)(23)(ii) and               requirements with respect to GHGs
                                                 further rulemaking after 2016.                          51.166(b)(23)(ii). In practice, this means             (provided that it also results in an
                                                 Alternatively, we may make a definitive                 any amount of new emissions or an                      increase of GHG emissions on a mass
                                                 determination in one of the future                      emission increase will exceed the mass-                basis).
                                                 rulemaking actions that, under the                      based limit. We are not, at this time,                    Specifically, for purposes of
                                                 ‘‘absurd results’’ doctrine, PSD or title V             establishing a significance level based                determining whether a GHG emission
                                                 applies only to certain GHG sources,                    on mass emissions, and instead we are                  source, resulting from either new
                                                 and does not apply to the remaining                     establishing one based on CO2e that                    construction or a physical or operational
                                                 GHG sources, and with that rulemaking,                  addresses permitting burdens. The zero                 change at an existing source, is
                                                 bring this tailoring process to a close.                mass-based amount applies, but only as                 considered a major source under PSD,
                                                                                                         an initial screen to exclude sources or                both of the following conditions must be
                                                 1. What are the Step 1 thresholds,                      changes that have no mass increase of                  met:
                                                 timing, and calculation methodology?                    GHGs.                                                     (1) The GHG emission source, which
                                                 a. PSD Permitting                                                                                              is not major for another pollutant, emits
                                                                                                         b. Title V Permitting                                  or has the potential to emit GHG in
                                                    Step 1 of the Tailoring Rule phase-in
                                                                                                            Under Step 1, only sources required                 amounts that equal or exceed the
                                                 will begin on January 2, 2011. With
                                                                                                         to have title V permits for non-GHG                    following, calculated as the sum-of-six
                                                 respect to the PSD program, GHG
                                                                                                         pollutants (i.e., ‘‘anyway’’ title V                   well-mixed GHGs on a mass basis (no
                                                 sources will become subject to PSD for
                                                                                                         sources) will be required to address                   GWPs applied):
                                                 their GHG emissions if they undergo
                                                 PSD permitting anyway, either for new
                                                                                                         GHGs as part of their title V permitting.                 • 100 tpy for sources in any of the 28
                                                                                                         That is, no sources will become major                  major emitting facility source categories
                                                 construction or for modification
                                                                                                         for title V based solely on their GHG                  listed under PSD, or
                                                 projects, based on emissions of non-
                                                 GHG pollutants, in which case they will
                                                                                                         emissions. Note further, however, that                    • 250 tpy for any other stationary
                                                                                                         the 75,000 tpy CO2e limit does not                     source.
                                                 be subject to the PSD requirements for
                                                                                                         apply to title V, so that anyway title V                  (2) The GHG emission source emits or
                                                 GHG if they increase GHG emissions by
                                                                                                         sources must apply any title V                         has the potential to emit GHGs in
                                                 75,000 tpy CO2e or more. Under this
                                                                                                         requirements to their GHG emissions.                   amounts that equal or exceed 100,000
                                                 step, only these sources, which we refer
                                                                                                         Sources with title V permits must                      tpy CO2e basis.
                                                 to as ‘‘anyway’’ PSD sources, will
                                                                                                         address GHG requirements when they                        For determining whether a
                                                 become subject to PSD; no sources will
                                                                                                         apply for, renew, or revise their permits.             modification project at a major
                                                 become major sources for PSD purposes
                                                                                                         These requirements will include any                    stationary source is subject to PSD
                                                 or be treated as undertaking
                                                                                                         GHG applicable requirements (e.g., GHG                 review, both of the following conditions
                                                 modifications that trigger PSD based
                                                                                                         BACT requirements from a PSD process)                  must be met:
                                                 solely on their GHG emissions. As a
                                                                                                         and associated monitoring, record-                        (1) The net GHG emissions increase
                                                 result, no additional PSD permitting
                                                                                                         keeping and reporting. When a permit                   resulting from the project, calculated as
                                                 actions will be necessary solely due to
                                                                                                         application is otherwise required, they                the sum-of-six well-mixed GHGs on a
                                                 GHG emissions. However, existing or
                                                                                                         will also need to identify GHG                         mass basis (no GWPs applied) equals or
                                                 newly-constructed sources that are
                                                                                                         emissions and other information in that                exceeds 0 tpy.
                                                 determined to be major sources based
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                                                                                                         application to the extent required under                  (2) The net GHG emissions increase
                                                 on non-GHG emissions are required to
                                                                                                         40 CFR 70.5(c) and 71.5(c), including                  resulting from the project, calculated as
                                                 conduct a BACT review for their GHG
                                                                                                         information necessary to determine                     the sum-of-six well-mixed GHGs on a
                                                 emissions (from new construction) or
                                                                                                         applicable requirements.12
                                                 emissions increases (from
                                                                                                                                                                sources, the emissions description requirements in
                                                 modifications), if they are subject to                    12 EPA   notes, however, that many sources subject   the title V regulations will generally be satisfied by
                                                 PSD due to their non-GHG emissions                      to title V under Steps 1 and 2 will also be subject    referencing information provided under the
                                                 from construction or modification                       to the GHG mandatory reporting rule. For these         reporting rule.



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                                                 31524               Federal Register / Vol. 75, No. 106 / Thursday, June 3, 2010 / Rules and Regulations

                                                 CO2e basis (GWPs applied) equals or                     3. What about Step 3?                                  GHG sources that, although above the
                                                 exceeds 75,000 tpy CO2e.                                   In this rule, EPA establishes an                    statutory thresholds for those programs,
                                                    The purpose of the first condition in                enforceable commitment to complete                     are too small and relatively
                                                 both of these determinations is to                      another rulemaking no later than July 1,               inconsequential in terms of GHG
                                                 confirm whether the GHG emissions or                    2012, in which we will propose or                      contribution. Another type of such
                                                 emissions increase have exceeded, on a                  solicit comment on a Step 3 of the                     exclusion for the title V program could
                                                 mass-basis, the statutory major source                  phase-in and may also consider other                   be for sources that would otherwise be
                                                 thresholds (where the source is not                     approaches that may result in the                      required to obtain an ‘‘empty permit,’’
                                                 otherwise major) and mass-based                         permanent exclusion of a category of                   that is, for example, one that would not
                                                 statutory significance level for GHGs,                  sources from PSD or title V                            contain any applicable requirements
                                                 which, as noted previously, is 0 tpy. See                                                                      because there are none that apply to the
                                                                                                         requirements, under the Chevron
                                                 40 CFR 52.21(b)(23)(ii) and                                                                                    source. If we promulgate a permanent
                                                                                                         framework, taking account of the
                                                 51.166(b)(23)(ii).                                                                                             exclusion, we may conclude that by that
                                                                                                         ‘‘absurd results’’ doctrine.
                                                    As an example of how the mass-based                     Consistent with our phase-in                        time, we will have brought into the PSD
                                                 test would apply, consider a                            approach, it is important for us to                    and title V programs the full set of
                                                 modification project that results in a 5                                                                       sources that would be consistent with
                                                                                                         consider whether, at some point during
                                                 tpy increase of GHG emissions on a                                                                             congressional intent (or, if congressional
                                                                                                         the implementation of Step 2, it will
                                                 mass basis, associated with a high-GWP                                                                         intent on that point is unclear, with a
                                                                                                         become possible to administer GHG
                                                 GHG gas (for example, SF6, with a GWP                                                                          reasonable policy consistent with
                                                                                                         permitting programs for additional
                                                 value of 23,900), but also results in a                                                                        statutory requirements) and, under
                                                                                                         sources. For example, if EPA is able to
                                                 100 tpy reduction in CO2 emissions                                                                             those circumstances, we would find that
                                                                                                         promulgate measures that streamline
                                                 (assume no other contemporaneous                                                                               such a rule brings the tailoring process
                                                                                                         programs to at least some extent, if
                                                 increases or decreases of GHG). In this                                                                        to a close. The application of the
                                                                                                         permitting authorities increase their
                                                 example, there would be a net decrease                                                                         ‘‘absurd results’’ rationale for a
                                                                                                         resources, or if implementation
                                                 of GHG emissions on a mass basis (5                                                                            permanent exclusion is discussed in
                                                                                                         experience and more seasoned staff                     more detail in section V.B, later in this
                                                 tpy¥100 tpy = ¥95 tpy). Because there                   results in more effective use of scarce
                                                 is no mass-based increase of GHG, this                                                                         preamble.
                                                                                                         permitting resources, then we expect
                                                 project does not trigger PSD, despite the               that we will be able to phase in the                   4. What about the proposed 6-year
                                                 fact that the net GWP-adjusted                          application of PSD and title V to more                 exclusion for smaller sources?
                                                 emissions increase of SF6 in this                       sources by establishing Step 3. We do                     The tailoring proposal contemplated
                                                 example would equal 119,500 tpy of                      not have enough information now to                     at least a 6-year exclusion from
                                                 CO2e and the project would thus exceed                  establish a final Step 3, particularly                 permitting for small sources. This
                                                 75,000 tpy CO2e.                                        because there will be significant                      proposed exclusion was based on the
                                                 b. Title V Permitting                                   transition occurring in the GHG                        overwhelming numbers of permitting
                                                                                                         permitting programs during Steps 1 and                 actions at small sources and the need for
                                                    Under Step 2, ‘‘anyway’’ title V                     2. However, we believe that it will be                 time for permitting authorities to secure
                                                 sources—that is, sources already subject                possible to develop a record on which                  resources, hire and train staff, and gain
                                                 to title V based on non-GHGs and that                   to base Step 3 sometime soon after we                  experience with GHG permitting for
                                                 are covered under Step 1 previously—                    begin to implement Step 2.                             new types of sources and technologies.
                                                 will continue to be subject to title V. In                 Therefore, we plan to propose a rule                It was also based on the time needed for
                                                 addition, GHG emission sources that                     in which we solicit comment on or                      EPA to develop, and for states to adopt,
                                                 equal or exceed the 100,000 tpy CO2e                    propose lower thresholds for PSD and                   streamlining measures to reduce the
                                                 threshold will be required to obtain a                  title V applicability, and we establish an             permitting burden (e.g., concerning PTE,
                                                 title V permit if they do not already                   enforceable commitment to finalize a                   presumptive BACT, or general permits).
                                                 have one. It is important to note that the              rule in which we address those matters                 We therefore proposed such an
                                                 requirement to obtain a title V permit                  by July 1, 2012. In order to provide a                 exclusion, and proposed that it would
                                                 will not, by itself, result in the triggering           year for permitting authorities and                    last 6 years—5 years to complete a
                                                 of additional substantive requirements                  sources to prepare for any additional                  required study evaluating permitting
                                                 for control of GHG. Rather, these new                   GHG permitting action in Step 3, we                    burden and assessing the effect of
                                                 title V permits will simply incorporate                 will establish that Step 3 would take                  streamlining measures or techniques in
                                                 whatever applicable CAA requirements,                   effect on July 1, 2013. We also commit                 reducing this burden, plus an additional
                                                 if any, apply to the source being                       to explore, between now and the Step 3                 year to complete a final rulemaking that
                                                 permitted. Both of the following                        proposal, a wide range of streamlining                 would phase in additional sources as
                                                 conditions need to be met in order for                  options. In the proposal, we will take                 appropriate based on the study.
                                                 title V to apply under Step 2 to a GHG                  comment on streamlining approaches                        We are finalizing the 6-year exclusion,
                                                 emission source:                                        we think may be viable (except to the                  and for reasons described later, are
                                                    (1) An existing or newly constructed                 extent we will have already issued                     establishing that in no event will
                                                 source emits or has the potential to emit               guidance documents concerning                          sources below 50,000 tpy CO2e be
                                                 GHGs in amounts that equal or exceed                    streamlining approaches), and we will                  subject to PSD or title V permitting
                                                 100 tpy calculated as the sum of the six                address those options in the final rule.               during the 6-year period, nor will
                                                 well-mixed GHGs on a mass basis (no                        In addition, as part of the Step 3                  modifications be subject to PSD unless
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                                                 GWPs applied).                                          action, we may solicit comment on a                    they increase emissions by 50,000 tpy
                                                    (2) An existing or newly constructed                 permanent exclusion of certain sources                 CO2e or more. The exclusion will last
                                                 source emits or has the potential to emit               from PSD, title V or both, based on an                 until we take the action described later
                                                 GHGs in amounts that equal or exceed                    ‘‘absurd results’’ rationale. For example,             to address smaller sources, which is
                                                 100,000 tpy calculated as the sum of the                we may make a final determination that                 required by April 30, 2016. The
                                                 six well-mixed GHGs on a CO2e basis                     under the ‘‘absurd results’’ doctrine, PSD             exclusion provides certainty that, before
                                                 (GWPs applied).                                         and/or title V do not apply to a set of                this date, EPA will not act to cover


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                                                                     Federal Register / Vol. 75, No. 106 / Thursday, June 3, 2010 / Rules and Regulations                                                  31525

                                                 sources and modifications below these                   implementing regulations to tailor the                 effect, and thereby exempt sources
                                                 thresholds, including during the                        application of these permitting                        below the threshold from PSD and title
                                                 required Step 3 rulemaking that will                    programs to GHG emissions. We are also                 V as a matter of both federal and state
                                                 occur in 2012. In effect, this means that               finalizing a significance level for GHG                law. We are also codifying in this
                                                 Step 3 will establish a major source                    emissions for purposes of defining a                   definition EPA interpretations discussed
                                                 threshold and significance level no                     major modification under the PSD                       in our recent action ‘‘Reconsideration of
                                                 lower than 50,000 tpy CO2e. This does                   program, and add an exclusion from                     Interpretation of Regulations that
                                                 not necessarily mean we will cover                      PSD and title V permitting for GHG                     Determine Pollutants Covered by Clean
                                                 sources below this level on April 30,                   emissions, until we complete a                         Air Act Permitting Programs’’ (75 FR
                                                 2016. It simply means that the provision                rulemaking required by April 30, 2016,                 17704) to provide a complete picture of
                                                 we are adopting would assure that EPA                   for any sources that are not already                   the meaning of this phrase as it applies
                                                 does not cover such sources any sooner                  subject to PSD and title V permitting                  to all air pollutants.
                                                 than that.                                              and that emit less than 50,000 tpy of                     Because we are finalizing the rule in
                                                                                                         CO2e.                                                  a manner that will allow most states to
                                                 5. When and how will EPA take further                      As explained earlier, we are adopting               rapidly implement the final rule, and
                                                 action on smaller sources?                              thresholds that phase in the                           because our recent action on the
                                                    As we proposed, we are establishing                  applicability of GHG permitting over a                 Interpretive Memo allowed for a longer
                                                 an enforceable commitment to act                        specified time period. In adopting                     transition time than we anticipated at
                                                 within 5 years to complete a study                      regulatory changes to implement these                  proposal, we are delaying final action
                                                 projecting the administrative burdens                   thresholds, we follow an approach that                 on our proposal to issue limited
                                                 that remain for small sources after                     is substantively the same as the                       approvals for SIP-approved PSD
                                                 permitting authorities have had time to                 approach proposed, but takes a different               programs and part 70 operating permit
                                                 secure resources, hire and train staff,                 form for purposes of revisions to our                  programs.13 Instead, we are requesting
                                                 and gain experience with GHG                            PSD and title V regulations.                           that states submit information to the
                                                 permitting for new types of sources and                 Specifically, in this final rule, for our              appropriate EPA Regional Administrator
                                                 technologies, and after EPA has had                     regulations, in conjunction with the                   by August 2, 2010 so that we may
                                                 time to develop (and states have had                    definitions of ‘‘major stationary source’’             determine whether it is still necessary to
                                                 time to adopt) streamlining measures to                 and ‘‘major modification’’ (for PSD) and               finalize any of our proposed limited
                                                 reduce the permitting burden for such                   ‘‘major source’’ (for title V), we are                 approvals for any SIP-approved PSD
                                                 sources. We will use the results of this                adopting a definition of the term                      and part 70 title V state programs. In
                                                 study to serve as the basis for an                      ‘‘subject to regulation.’’ Moreover, we are            that letter, states should explain
                                                 additional rulemaking that would take                   defining this term so that GHG                         whether they will apply the meaning of
                                                 further action to address small sources.                emissions from sources above the                       the term ‘‘subject to regulation’’
                                                 Similar to the enforceable commitment                   threshold are treated as subject to                    established by EPA in this action in
                                                 to act on Step 3, we are making an                      regulation, and therefore the sources                  implementing both their PSD and part
                                                 enforceable commitment to complete                      that emit them are subject to PSD and                  70 title V permitting programs, and if so,
                                                 this rulemaking by April 30, 2016.                      title V. We are not finalizing the                     whether the state intends to do so
                                                    We cannot predict at this time what                  approach we proposed, which was to                     without undertaking a regulatory or
                                                 form that final action will take. It could              revise the numerical thresholds in the                 legislative process. If a state must revise
                                                 function as a Step 4, bringing in                       definitions so that GHG sources would                  its statutes or regulations to implement
                                                 additional sources based on, for                        have a higher threshold. Although we                   this rule, we ask that it provide an
                                                 example, streamlining actions,                          are defining the term ‘‘subject to                     estimate of the time to adopt final rules
                                                 increased permitting authority                          regulation,’’ we recognize that from a                 in its letter to the Regional
                                                 resources, and experienced and more                     substantive standpoint, our tailoring                  Administrator. If a state chooses not to
                                                 efficient permitting staff; and it could                approach entails interpreting the                      apply the approach reflected in this
                                                 further indicate that we intend to                      definitions of ‘‘major emitting facility,’’            rule, the letter should address whether
                                                 follow-up with a Step 5 to bring in more                ‘‘major modification,’’ and ‘‘major                    the state has alternative authority to
                                                 sources. Alternatively, it could also                   source’’ to phase in the applicability of              implement the final rule’s tailoring
                                                 function as a final step excluding                      PSD and title V, as applicable, to GHG                 approach or some other approach that is
                                                 certain sources permanently based on                    sources, and it makes no difference                    at least as stringent, but which also
                                                 our application of the Chevron                          whether we interpret those definitions                 addresses the expected shortfalls in
                                                 framework, taking account of the                        through a definition of the term ‘‘subject             personnel and funding that would exist
                                                 ‘‘absurd results’’ doctrine, and subjecting             to regulation,’’ revising the numerical                if the state carried out permitting at
                                                 the remaining sources to permitting.                    thresholds, or revising other terms in                 thresholds lower than those in the final
                                                 However, whatever final action we take                  those definitions.                                     rules. For any state that is unable or
                                                 would explain any necessary changes to                     We are adopting definitions of the                  unwilling to apply the permitting
                                                 the Step 3 thresholds and would                         term ‘‘subject to regulation’’ to                      thresholds in the final rules, and
                                                 supersede the 6-year exclusion for                      implement the tailoring approach                       otherwise is unable to demonstrate
                                                 sources and modifications below 50,000                  because that will facilitate rapid                     adequate personnel and funding, or
                                                 tpy CO2e.                                               implementation of the final rules by                   alternate authority to permit GHG
                                                                                                         states. Under this approach, states may                emissions sources consistent with the
                                                 C. How do state, local and tribal area                  not need to undertake a regulatory or
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                                                 programs adopt the final GHG                                                                                   final rules, EPA will move forward with
                                                                                                         legislative action before implementing                 finalizing a limited approval of the
                                                 applicability thresholds?                               the final rule. These states would be                  state’s permitting program. By the same
                                                    We are finalizing our proposed                       able to establish their interpretations of             token, if we do not receive a letter from
                                                 approach to change the definition of                    the term ‘‘subject to regulation’’ used in
                                                 ‘‘major stationary source’’ in the PSD                  existing state rules before January 2,                   13 In the alternative, we also proposed to use our
                                                 implementing regulations, and the                       2011, which is the date that the LDVR                  110(k)(6) error correction authority to revise SIP-
                                                 ‘‘major source’’ definition in the title V              and permitting requirements would take                 approved PSD programs.



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                                                 31526               Federal Register / Vol. 75, No. 106 / Thursday, June 3, 2010 / Rules and Regulations

                                                 a state in response to this request by                  to work with permitting authorities that               comments we received raising legal and
                                                 August 2, 2010, we will be obliged to                   request our assistance with developing                 policy concerns, as discussed later, that
                                                 move forward with finalizing a                          fee approaches.                                        we will have to address—we cannot
                                                 narrowing of our approval of the                                                                               commit with this action to adopt any
                                                                                                         E. Other Actions and Issues
                                                 existing SIP or title V program.                                                                               streamlining actions in particular, nor to
                                                    We also ask any state that currently                   This section describes other actions                 adopting them on any particular
                                                 lacks authority to issue PSD or title V                 we intend to take in the future related                schedule. However, we intend to pursue
                                                 permits to any GHG emissions sources                    to GHG permitting in addition to the                   streamlining options as expeditiously as
                                                 to notify the EPA Regional                              actions that we are promulgating with                  possible, beginning immediately and
                                                 Administrator by letter as to whether                   this final rule. This section also                     proceeding throughout the phase-in
                                                 the state intends to undertake                          responds to commenters’ suggestions                    period, and we encourage permitting
                                                 rulemaking to revise its rules consistent               that we undertake certain additional                   authorities to do the same.
                                                 with these applicability thresholds. For                actions in this rule, which we decline to
                                                 any state that lacks the ability to issue               do.                                                    2. Guidance for BACT Determinations
                                                 PSD or title V permits for GHG                                                                                    Through this final rule we are not
                                                                                                         1. Timing for Permit Streamlining
                                                 emissions sources consistent with the                                                                          amending our regulations or issuing
                                                                                                         Techniques
                                                 final rule, we intend to undertake a                                                                           guidance on BACT for GHGs. As
                                                 separate action to call for revisions to                   As described at proposal, we intend to              described in our proposal, we recognize
                                                 these programs. We also intend to move                  develop a series of streamlining                       the need to develop and issue technical
                                                 quickly to impose a Federal                             approaches as an integral part of our                  and policy guidance for permitting of
                                                 Implementation Plan (FIP) for PSD                       phase-in approach. The approaches we                   GHGs, and we plan to accomplish it
                                                 through 40 CFR 52.21, and use our                       described at proposal included: (1)                    through a separate effort that will
                                                 federal title V authority to ensure that                Defining PTE for various source                        involve stakeholder input. This effort is
                                                 GHG sources will be permitted                           categories, (2) establishing emission                  already underway; in addition to
                                                 consistent with the final rules. Our                    limits for various source categories that              comments EPA received on the
                                                 request for information from states is                  constitute presumptive BACT, (3)                       proposed Tailoring Rule related to GHG
                                                 discussed further in section V.C.                       establishing procedures for use of                     BACT guidance and information needs,
                                                                                                         general permits and permits-by-rule, (4)               EPA received a suite of
                                                 D. How do you treat GHGs for purposes                   establishing procedures for electronic                 recommendations from the Clean Air
                                                 of title V permit fees?                                 permitting, and (5) applying lean                      Act Advisory Committee (CAAAC) to
                                                    We are not amending the title V                      techniques to establish more efficient                 which EPA is actively responding. This
                                                 regulations for fees at this time,                      permitting processes. Taken as a whole,                includes technical guidance and
                                                 including any of the provisions                         these techniques have the potential to                 database tools that EPA anticipates
                                                 specifying the presumptive minimum                      obviate the applicability of PSD and title             issuing by June 2010, and policy
                                                 fee. We are also not, at this time, calling             V requirements for some GHG-emitting                   guidance that will be issued by the end
                                                 for each state, local or tribal program to              sources; promote more efficient                        of 2010. Thus, this important
                                                 submit new fee adequacy                                 treatment of GHG-emitting sources that                 information will be available to support
                                                 demonstrations as a result of increased                 will already be subject to PSD and title               permitting agencies in their BACT
                                                 GHG permitting workload during Steps                    V; and allow the expeditious expansion                 determinations at the time that the
                                                 1 and 2. However, as described in                       of PSD and title V applicability to more               GHGs become a regulated NSR
                                                 section VI.D the statutory and regulatory               GHG-emitting sources while protecting                  pollutant, once the LDVR takes effect in
                                                 requirement to collect fees sufficient to               those sources and the permitting                       January 2011. EPA is confident that
                                                 cover all reasonable (direct and indirect)              authorities from undue expenses.                       these measures will help support a
                                                 costs required to develop and                              As a result, we fully intend to move                smooth transition to permitting
                                                 administer title V programs still applies.              forward expeditiously with developing                  emissions of GHGs.
                                                 Therefore, we are recommending that                     streamlining approaches. However, for
                                                 each program review its resource needs                  reasons discussed in section V.E, we do                3. Requests for Higher Category-Specific
                                                 for GHG-emitting sources and determine                  not expect to develop and implement                    Thresholds and Exemptions From
                                                 if the existing fee approaches will be                  any of these approaches before Step 2                  Applicability
                                                 adequate. If those approaches will not                  begins. Moreover, we generally expect                     EPA has decided not to provide
                                                 be adequate, we suggest that state, local               that each of the first three—which are                 exemptions from applicability
                                                 and tribal agencies should be proactive                 the most far-reaching—will take several                determinations (major source and major
                                                 in raising fees to cover the direct and                 years to implement because we will                     modification) under title V and PSD for
                                                 indirect costs of the program or develop                need to undertake notice and comment                   certain GHG emission sources, emission
                                                 other alternative approaches to meet the                rulemaking to develop them, and then                   activities, or types of emissions at this
                                                 shortfall. We will closely monitor                      the permitting authorities will need to                time. Commenters requested several
                                                 approved title V programs during                        adopt them through the appropriate                     applicability exemptions with respect to
                                                 implementation of the first two steps of                state or local processes. We commit to                 GHGs from, for example, agricultural
                                                 the Tailoring Rule to ensure that the                   explore a wide range of possible                       sources, residential sources, small
                                                 added workload from incorporating                       approaches before the Step 3                           businesses, energy-intensive industrial
                                                 GHGs into the permit program does not                   rulemaking, and, in that rulemaking, to                processes (e.g., aluminum, steel,
                                                 result in fee shortfalls that imperil                   propose those that we think may be                     cement, glass, and pulp and paper
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                                                 operating permit program                                viable once we have had time to gather                 manufacturers), lime production,
                                                 implementation and enforcement. In                      and review key supporting data, and                    semiconductor production, poultry
                                                 developing alternative approaches, we                   once the states and we have key                        production, solid waste landfills,
                                                 note the value of approaches that do not                implementation experience that can                     biomass combustion/biogenic
                                                 require a per-ton fee for GHG and                       inform our thinking. Because the                       emissions, fugitive emissions, and
                                                 therefore do not require a GHG                          streamlining approaches generally carry                pollution control projects. For reasons
                                                 inventory to develop. Finally, we offer                 uncertainty—as demonstrated by                         explained in section V.E, we have


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                                                                     Federal Register / Vol. 75, No. 106 / Thursday, June 3, 2010 / Rules and Regulations                                             31527

                                                 decided to address the need for tailoring               or permit revision within 12 months of                 pollutant, and to use a GHG metric for
                                                 through a uniform threshold-based                       commencing operation or on or before                   the applicability thresholds based on
                                                 approach, rather than through a                         such earlier date as the permitting                    CO2e. The summed CO2e emissions
                                                 collection of various specific exclusions.              authority may establish. Where                         would then be compared to the
                                                                                                         additional applicable requirements                     applicable permitting threshold to
                                                 4. Transitional Issues Including
                                                 Requests for Grandfathering                             become applicable to a source after it                 determine whether the source is subject
                                                                                                         submits its permit application, but prior              to PSD and title V requirements.
                                                    For reasons explained in section V.E,                to release of a draft permit, the source               Historically, the PSD and title V
                                                 EPA has determined that transitional                    is obligated to supplement its                         regulatory provisions do not, in the first
                                                 issues for pending applications and                     application. Permitting authorities may                instance, define the ‘‘air pollutant’’ to
                                                 permitted sources are adequately                        also ask for additional information                    which they apply, but rather rely for the
                                                 addressed by existing requirements and                  during the processing of an application.               definition of the pollutant on a cross-
                                                 the amount of lead time provided before                 In addition, where a source that already               reference to the regulatory provision
                                                 permitting requirements apply to GHGs                   has a title V permit becomes subject to                under another part of the Act that
                                                 under this rule and the March 29, 2010                  additional applicable requirements, the                establishes the emission standards or
                                                 final action regarding the Interpretive                 permitting authority is required to                    limits for that pollutant that in turn
                                                 memo. This rule does not contain any                    reopen the permit to add those                         causes the pollutant to be subject to
                                                 additional exemptions or grandfathering                 applicable requirements if the permit                  regulation under PSD and title V
                                                 provisions addressing the transition to                 term has 3 or more years remaining and                 permitting. As an example, the pollutant
                                                 PSD and title V permitting for GHGs.                    the applicable requirements will be in                 ‘‘total reduced sulfur’’ (TRS) is a
                                                    We are not promulgating an                           effect prior to the date the permit is due             pollutant comprised of the sum of
                                                 exemption for PSD permit applications                   to expire.                                             multiple compounds that was originally
                                                 that are pending when Step 1 of the
                                                                                                                                                                defined under the NSPS, subpart BB,
                                                 permitting phase-in begins for those                    V. What Is the Legal and Policy
                                                                                                                                                                Standards of Performance for Kraft Pulp
                                                 sources that would otherwise need to                    Rationale for the Final Actions?
                                                                                                                                                                Mills, which then caused it to be subject
                                                 obtain a PSD permit based on emissions                     In this section, we describe the legal              to regulation under the PSD program.
                                                 of pollutants other than GHGs. Any PSD                  and policy rationale for our action,                   The actual compounds that define the
                                                 permits issued to such Step 1 sources on                including our rationale for the                        pollutant TRS are identified in the
                                                 or after January 2, 2011 will need to                   following: (1) Our approach to                         NSPS. The PSD program regulations did
                                                 address GHGs. This action makes no                      calculating GHG emissions for PSD and                  not introduce its own independent
                                                 change to the position we expressed on                  title V applicability purposes, (2) our                definition of TRS, but instead relied on
                                                 this issue on April 2, 2010.                            approach to establishing the thresholds
                                                    Final PSD permits issued before                                                                             the definition as contained in the Kraft
                                                                                                         and timing of PSD and title V                          Pulp Mills NSPS.
                                                 January 2, 2011 need not be reopened or
                                                                                                         applicability to GHG emissions sources;                   However, at the time of our proposal,
                                                 amended to incorporate requirements
                                                                                                         (3) how state, local, and tribal area                  the endangerment and cause or
                                                 for GHGs that take effect after the permit
                                                                                                         programs adopt the final GHG                           contribute findings had not been
                                                 is issued. A source that is authorized to
                                                                                                         applicability thresholds; (4) treatment of             completed and the LDVR for GHGs had
                                                 construct under a PSD permit but has
                                                                                                         GHGs for title V permit fees; (5) future               not been finalized. Thus, there was no
                                                 not yet begun actual construction on
                                                                                                         activities, including streamlining                     final agency action defining the ‘‘air
                                                 January 2, 2011 may begin actual
                                                                                                         actions. We present the rationale                      pollutant’’ consisting of GHGs to be
                                                 construction after that date without
                                                                                                         description in the following five                      considered ‘‘subject to regulation.’’
                                                 having to amend the previously-issued
                                                                                                         subsections, corresponding to the basic                Absent a definition of ‘‘greenhouse
                                                 PSD permit to incorporate GHG
                                                                                                         presentation of the approach in section                gases’’ under another regulatory
                                                 requirements, provided the permit has
                                                                                                         IV.                                                    provision that we could cross-reference,
                                                 not expired.
                                                    Sources that are not subject to PSD                  A. Rationale for Our Approach to                       we proposed to define ‘‘greenhouse
                                                 permitting requirements until Step 2                    Calculating GHG Emissions for PSD and                  gases’’ for permitting purposes as ‘‘the
                                                 need not obtain a PSD permit                            Title V Applicability Purposes                         single air pollutant that is comprised of
                                                 addressing GHGs in order to continue                                                                           the group of six GHGs, as proposed in
                                                 any actual construction that begins                     1. Grouping of GHGs Into a Single                      the [CAA] section 202(a) endangerment
                                                 before July 1, 2011, when such a source                 Pollutant                                              and contribution findings.’’ 74 FR
                                                 was not a major stationary source                          In this section, we explain our                     55329, col. 1. The six well-mixed GHGs
                                                 required to obtain a PSD permit.                        treatment of the air pollutant at issue for            identified in the proposed contribution
                                                 However, Step 2 sources that begin                      purposes of PSD and title V, such that                 finding were: CO2, CH4, N2O, SF6, HFCs,
                                                 actual construction in Step 2 may do so                 sources that emit that pollutant in the                and PFCs.
                                                 only after obtaining a PSD permit.                      requisite quantities become subject to                    In the proposal, we further recognized
                                                    The title V permitting regulations                   PSD and/or title V requirements. We                    that the LDVR for GHGs, as it was
                                                 already include a robust set of                         explain our rationale for treating the                 proposed, would result in reductions of
                                                 provisions to address the incorporation                 GHG air pollutant as a combined group                  only four of the gases, not all six,
                                                 of new applicable requirements and                      of six GHGs instead of six separate air                because only four are emitted by
                                                 other transitional considerations. A title              pollutants defined by each individual                  vehicles. However, we concluded that if
                                                 V source applying for the first time must               GHG, and our rationale for including all               the LDVR were finalized as proposed,
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                                                 submit its permit application within 12                 six of the GHGs in that group. We also                 then the air pollutant for purposes of
                                                 months after the source becomes subject                 define the GHG metric to use for                       PSD and title V applicability would be
                                                 to the operating permit program or an                   comparison to the applicability                        a single air pollutant that is the
                                                 earlier time at the discretion of the                   thresholds.                                            aggregate mix of the group of six GHGs
                                                 permitting authority. Where a source is                    We proposed to identify the air                     because—
                                                 required to obtain a PSD permit, the                    pollutant as the aggregate group of the                [t]hese six GHGs as a class comprise the air
                                                 source must apply for a title V permit                  six GHGs that comprise the GHG                         pollutant that is the subject of the



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                                                 31528               Federal Register / Vol. 75, No. 106 / Thursday, June 3, 2010 / Rules and Regulations

                                                 endangerment finding and companion                      250 tpy thresholds, or less if deemed                  is whether the pollutant or pollutants
                                                 contribution finding and constitute the air             necessary, in accordance with the                      that the source emits comprise the ‘‘air
                                                 pollutant that is regulated by the light-duty           established mechanisms of the Act and                  pollutant’’ that is ‘‘subject to regulation’’
                                                 vehicle rule through measures that address              doing so would lead to a better                        under the Act.
                                                 the components of that air pollutant that are                                                                     The phrase ‘‘subject to regulation
                                                 emitted from the mobile sources. Thus,
                                                                                                         environmental result. Finally, some
                                                 although the CAA section 202(a) proposal                commenters argued that disaggregating                  under the Act,’’ by its terms, identifies
                                                 establishes controls only with respect to four          the pollutants would also allow for                    the air pollutant that is subject to PSD
                                                 GHGs, as a legal matter, the proposal covers            more appropriate technology review.                    and title V as the same air pollutant that
                                                 the entire set of GHGs that as a class are the             After considering these comments,                   is identified in the regulatory action
                                                 single ‘‘air pollutant’’ in the proposed                and taking into account other related                  under another provision of the Act. The
                                                 endangerment and contribution findings.                 actions that have occurred since                       term is a simple cross-reference. It
                                                 74 FR 55329 col. 1.                                     proposal, we have determined that PSD                  carries no implication that EPA, in
                                                                                                         and title V permitting program                         identifying the pollutant to which PSD
                                                    We also solicited comment on
                                                                                                         requirements will apply, as proposed, to               or title V apply, may redefine the
                                                 whether we should identify the GHG
                                                                                                         the ‘‘single air pollutant that is                     pollutant that is regulated elsewhere in
                                                 metric in a different way, such as
                                                                                                         comprised of the group of six GHGs.’’ 74               the Act. Whatever the pollutant is that
                                                 addressing each GHG constituent
                                                                                                         FR 55329, col. 1. We believe that this                 is regulated elsewhere, it is that
                                                 compound individually or including
                                                                                                         approach is both compelled by the                      pollutant to which PSD and title V
                                                 (whether individually or as a group)                    statute and reflects the preferable policy             apply.
                                                 only those four GHG constituent                         approach.                                                 Since the time of our proposal, we
                                                 compounds for which reductions would                       As more fully discussed elsewhere in                have finalized both the contribution
                                                 occur through the emission standards or                 this rulemaking, the PSD requirements                  finding and the LDVR for GHGs. The
                                                 limits proposed in the LDVR.                            apply to a ‘‘major emitting facility’’ that            final LDVR for GHGs specifies, in the
                                                    A minority of the comments on our                    undertakes construction or                             rule’s applicability provisions, the air
                                                 proposal addressed this issue. Some                     ‘‘modification.’’ CAA sections 165(a),                 pollutant subject to control as the
                                                 commenters supported combining the                      169 (2)(C). The term ‘‘major emitting                  aggregate group of the six GHGs,
                                                 individual GHGs as one pollutant for                    facility’’ is defined as, in general, a                including CO2, CH4, N2O, SF6, HFCs,
                                                 purposes of determining permitting                      source that emits 100 or 250 tons of ‘‘any             and PFCs.15 Because it is this pollutant
                                                 applicability, and stated that it is not                air pollutant,’’ CAA section 169(1), and,              that is regulated under the LDVR, it is
                                                 uncommon for EPA to recognize                           similarly, the term ‘‘modification’’ is                this pollutant to which PSD and title V
                                                 ‘‘collective’’ air pollutants comprised of              defined as a physical or operational                   apply. Specifically, the applicability
                                                 many individual compounds based                         change that results in the increased or                provision in the LDVR provides a clear
                                                 upon shared threats to health and                       new emissions of ‘‘any air pollutant.’’                reference to the definition of the single
                                                 welfare, including such EPA-created                     CAA sections 169(2)(C), 111(a)(4).                     pollutant comprised of the aggregate
                                                 group pollutants as sulfur oxides,                      Through regulation, we have interpreted                group of the six well-mixed GHGs,
                                                 nitrogen oxides, volatile organic                       the term ‘‘any air pollutant,’’ as found in            which makes clear PSD and title V
                                                 compounds (VOCs), and particulate                       both the terms ‘‘major emitting facility’’             applicability depends on the same sum-
                                                 matter (PM).                                            and ‘‘modification,’’ more narrowly to                 of-six GHG construct. We must follow
                                                    On the other hand, a significant                     mean any ‘‘regulated NSR pollutant,’’                  this construct of the aggregate group of
                                                 number of commenters also raised                        and we further define this term to                     the six gases and do not have discretion
                                                 concerns about grouping the individual                  include any pollutant that is ‘‘subject to             to interpret the GHG ‘‘air pollutant’’
                                                 GHGs into one metric. Some of these                     regulation under the Act.’’ 40 CFR                     differently for the purposes of PSD or
                                                 commenters argued that grouping GHGs                    52.21(b)(50)(iv), 52.21.(b)(2).14                      title V.
                                                 is not appropriate because GHGs are not                    Similarly, as discussed elsewhere, the                 This construct of the pollutant as the
                                                 like other air pollutants that are                      title V requirements apply to a ‘‘major                aggregate group of the six gases is also
                                                 comprised of numerous substances of                     source,’’ which is defined, in general, as             consistent with the definition of the air
                                                 concern (e.g., VOCs and PM), individual                 any source that emits at least 100 tpy of              pollutant in the final contribution
                                                 GHGs do not interact or combine to                      ‘‘any air pollutant.’’ CAA sections 502(a),            finding for GHGs [see 74 FR 66496,
                                                 create a pollutant of concern, and EPA                  501(2)(B), 302(j). EPA has interpreted                 66499, 66536–7 (December 15, 2009)].
                                                 has not established a ‘‘GHG’’ NAAQS                     the term ‘‘any air pollutant’’ narrowly so             There, the Administrator defined the air
                                                 that supports the definition of the                     that applies only with respect to air                  pollutant as the ‘‘aggregate group of the
                                                 pollutant as a group. Some were                         pollutants that are subject to regulation              same six * * * greenhouse gases,’’ (74
                                                 concerned that regulating the GHGs as                   under the CAA. Memorandum from                         FR 66536), and these well-mixed GHGs
                                                 a group would increase the likelihood                   Lydia N. Wegman, Deputy Director,                      are defined to include CO2, CH4, N2O,
                                                 that a source will trigger permitting                   Office of Air Quality Planning and                     SF6, HFCs, and PFCs.
                                                 requirements, adding that this is                       Standards, U.S. EPA, ‘‘Definition of                      Moreover, even if we had discretion
                                                 unnecessary and would conflict with                     Regulated Air Pollutant for Purposes of                to identify the GHGs air pollutant
                                                 the ‘‘absurd results’’ and ‘‘administrative             Title V’’ (Apr. 26, 1993).                             differently in the permitting programs
                                                 necessity’’ doctrines because it would                     Based on these provisions, the key                  than in the LDVR, we believe it is
                                                 lead to larger numbers of sources                       issue for present purposes in                          reasonable to identify the GHGs air
                                                 becoming subject to permitting. Some                    determining whether a source is subject                pollutant through the sum-of-six
                                                 commenters opposing grouping                            to PSD (because it qualifies as a major
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                                                                                                                                                                construct for the same reasons why we
                                                 suggested that we should explore                        emitting facility that undertakes                      adopted that definition in the
                                                 regulating each of the GHG pollutants                   construction or modification) or title V               contribution finding and for additional
                                                 on an individual mass basis rather than                                                                        reasons noted below specific to the
                                                                                                           14 By the same token, CAA section 165(a)(4)
                                                 collectively because in their view, it is                                                                      permit programs. The term ‘‘air
                                                                                                         requires that a source subject to PSD impose best
                                                 reasonable and feasible to regulate and                 available control technology for ‘‘each pollutant
                                                 control emissions of each of the listed                 subject to regulation under this chapter’’ that the      15 The applicability provision of the LDVR is

                                                 pollutants, other than CO2, at the 100/                 source emits.                                          found in 40 CFR 86.1818–12(a).



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                                                 pollutant’’ is defined under CAA section                   In addition to the reasons described in             ‘‘absurd results’’ or ‘‘administrative
                                                 302(g) as ‘‘any air pollution agent or                  the endangerment and contribution                      necessity’’ doctrines. By using a
                                                 combination of such agents, including                   findings, there are CAA permitting                     consolidated and weighted
                                                 any physical, chemical, biological,                     programmatic and policy advantages to                  measurement, we are able to direct the
                                                 radioactive * * * substance or matter                   using the sum-of-six construct for the                 limited administrative resources to
                                                 which is emitted into or otherwise                      GHG air pollutant for PSD and title V                  those new sources and modifications
                                                 enters the ambient air.’’ Under this                    applicability purposes. We believe now,                with the greatest impact on GHG
                                                 definition, EPA has broad discretion to                 as we did at proposal, that the benefits               emissions.
                                                 identify an air pollutant, including, as                in using the cumulative group of GHGs                     We also believe that the additional
                                                 appropriate, treating a combination of                  outweigh any implementation                            flexibility resulting from the sum-of-six
                                                 air pollutant agents as a single air                    advantages to using an individual-GHG-                 GHG metric will provide substantially
                                                 pollutant. Here, we think that the six                  based metric. The advantages to sum-of-                more opportunities for sources to
                                                 well-mixed gases are appropriately                      six definition include that it may: (1)                address emission increases of GHGs
                                                 combined into a single air pollutant                    Allow significantly more flexibility to                than they would have had under an
                                                 because, as noted in the contribution                   sources for designing and implementing                 individual gas based metric, and,
                                                 findings, they share several important                  control strategies that maximize                       thereby, possibly reduce their
                                                 attributes: Each of the six gases:                      reductions across multiple GHGs and                    permitting burden through multi-gas
                                                    • Is directly emitted (and is not                    would also likely align better with                    mitigation strategies. We disagree with
                                                 formed by secondary processes in the                    possible future regulations that allow for             the comment that isolating BACT
                                                 atmosphere);                                            such flexibility; (2) more effectively                 review on sources that emit a single
                                                    • Is long-lived in the atmosphere after              support possible future offsets or trading             GHG necessarily leads to better
                                                 it is emitted;                                          mechanisms that involve different                      environmental results than it would for
                                                    • Is sufficiently long-lived that it                 source categories and different                        sources that undergo a combined review
                                                 becomes ‘‘well-mixed,’’ which means                     compositions of GHG emissions; and (3)                 for all six gases. To the contrary, given
                                                 that its concentration is essentially                   could better accommodate and                           that Congress built in considerations of
                                                 uniform in the atmosphere (as opposed                   harmonize with future regulations                      energy, environmental, and economic
                                                 to having significant local/regional                    because it establishes one class of                    impacts into the BACT requirement, we
                                                 variation); and                                         pollutants that includes individual                    think that allowing consideration of
                                                    • Has well understood atmospheric                    components that may, in turn, become                   those factors across six gases will likely
                                                 properties (e.g., radiative forcing).                   subject to specific emission standards                 result in decisions that more
                                                 See 74 FR 66516–66518.                                  under future regulatory efforts.                       appropriately account for those impacts
                                                                                                                                                                at the source.
                                                    In addition, treating the six GHGs as                   We disagree with commenters who
                                                 a single air pollutant is consistent with               believe that aggregating the GHGs under                2. Identifying Which GHGs Are
                                                 the actions of international scientific                 one GHG metric for permitting                          Included in the Group
                                                 bodies. For example, the                                applicability purposes would lead to an                   As discussed previously, we proposed
                                                 Intergovernmental Panel on Climate                      excessive amount of source permitting                  to include the combination of six well-
                                                 Change (IPCC) considers in various                      activity. This is because the phase-in                 mixed GHGs as the air pollutant that
                                                 reports how the six gases drive human-                  approach addresses overwhelming                        triggers PSD and title V applicability:
                                                 induced climate change and how that                     permitting burdens associated with                     CO2, CH4, N2O, SF6, HFCs, and PFCs.
                                                 affects health, society, and the                        permitting of GHGs. It does so by                      Some commenters supported including
                                                 environment. Similarly, the United                      designing our applicability thresholds to              all six. They cite the proposed
                                                 Nations Framework Convention on                         allow for a manageable amount of new                   contribution findings that identify the
                                                 Climate Change (UNFCCC) requires                        permitting actions based on the                        pollutant through the sum-of-six
                                                 reporting of these six gases and the                    emissions from sources using the sum-                  construct, and they emphasize that EPA,
                                                 commitments under the UNFCCC and                        of-six metric. If we based applicability               in order to protect the public, has to
                                                 Kyoto Protocol are based on the                         on individual gases, (assuming, again,                 control all the GHGs it has regulated
                                                 combined emissions of these six gases.                  that we had authority to deviate from                  and reduce the overall impact of the mix
                                                 Finally, as discussed later, it is standard             the definition of ‘‘air pollutant’’ as used            of six GHGs.
                                                 practice to compute the ‘‘CO2                           in the LDVR), we would still need to                      However, a substantial number of
                                                 equivalency’’ of aggregate emissions                    determine what level of permitting is                  commenters, mainly from industry
                                                 using GWP.                                              manageable and appropriate based on                    sectors who also disagree with grouping
                                                    We disagree with commenters who                      thresholds on an individual gas basis                  the GHGs together, contend that only
                                                 argued that grouping all six GHGs is not                and would expect that the final rule                   the constituent gases that are actually
                                                 appropriate because GHGs are not like                   would result in the same levels of                     subject to controls under the LDVR
                                                 other air pollutants that are comprised                 remaining burden. Accordingly, unless                  should be included in determining
                                                 of numerous substances of concern (e.g.,                the permitting program were being                      applicability under the Tailoring Rule.
                                                 VOCs and PM). First, as noted                           implemented at the statutory thresholds,               Some of these commenters believe that
                                                 previously, we are following the                        the effect of a decision to aggregate or               only the three compounds (CO2, CH4,
                                                 approach to a single air pollutant                      not aggregate would not reduce                         N2O) for which the LDVR contains
                                                 comprised of the aggregate of the six                   workload; rather, it would simply shift                emissions standards or caps should be
                                                 GHGs initially adopted in the                           work from permitting facilities that                   considered in the GHG metric for
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                                                 contribution finding and followed in the                trigger based on combined GHGs to                      permitting, while others would also add
                                                 LDVR. Many of these same comments                       those that trigger based on individual                 HFCs (which are included in a credit
                                                 have already been addressed in the                      GHGs. Although we acknowledge that                     flexibility arrangement under the LDVR)
                                                 contribution finding and Response to                    this may affect applicability for a                    for a total of four GHGs. These
                                                 Comment (RTC) document for that                         particular source, we disagree with the                commenters argued that PSD is not
                                                 action, and those responses apply                       comment that doing so would conflict                   triggered for all six GHGs by the LDVR
                                                 equally here.                                           with our conclusions based on the                      because under the proposed PSD


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                                                 interpretation in the Interpretive Memo,                previously, in the final LDVR for GHGs                 definition of air pollutant in the
                                                 actual emission controls under the Act                  and include CO2, CH4, N2O, SF6, HFCs,                  contribution finding, and is included in
                                                 are required to trigger PSD obligations                 and PFCs. We do not have discretion to                 the definition of the air pollutant in the
                                                 for a given pollutant. They also argue                  select only a subset of these gases in                 LDVR for which that rule is applicable.
                                                 that including all six would conflict                   defining our GHG threshold metric for                  We do not believe we have the
                                                 with EPA’s rationale for the Tailoring                  the permitting applicability purposes.                 discretion to define the ‘‘air pollutant’’
                                                 Rule by leading to larger numbers of                    See LDVR, May 7, 2010, 75 FR 25398–                    differently for PSD and title V
                                                 sources subject to permitting, thereby                  99, section III.A.2.c. (discussing EPA’s               applicability purposes than the
                                                 increasing the harm that EPA says it                    exercise of discretion under section                   definition of the ‘‘air pollutant’’ that is
                                                 wants to avoid. They further assert that                202(a) in setting emissions standards                  regulated elsewhere. In any event,
                                                 the EPA cannot exercise its discretion to               applicable to emission of the single air               including SF6 emissions based on the
                                                 widen the scope of PSD and title V                      pollutant).                                            thresholds finalized in this rulemaking
                                                 applicability to six GHGs when it is                       For the same reasons, we disagree that              does not add an excessive
                                                 relying on the judicial doctrines of                    this approach is inconsistent with the                 administrative burden for permitting
                                                 ‘‘absurd results’’ and ‘‘administrative                 Agency’s final action in ‘‘EPA’s                       authorities. Based on our threshold
                                                 necessity’’ to narrow PSD and title V                   Interpretation of Regulations that                     evaluation study, we estimate that less
                                                 applicability. They explain that in their               Determine Pollutants Covered by                        than 40 sources of SF6 nationwide
                                                 view, those doctrines apply only when                   Federal Prevention of Significant                      would exceed the 100,000 tpy CO2e
                                                 EPA has taken all steps possible to                     Deterioration (PSD) Permit Program.’’                  threshold. Furthermore, SF6 is a high
                                                 narrow the scope of PSD and title V and                 While it is the case that only four                    GWP gas and, as discussed elsewhere,
                                                 thereby avoid the administrative                        constituent gases are reduced by the                   we have included a mass-based trigger
                                                 problems that force it to rely on those                 LDVR, the ‘‘air pollutant’’ that is                    for high GWP gases that will likely have
                                                 doctrines.                                              controlled, and thus ‘‘subject to                      the effect of further reducing this count.
                                                    There were a few comments on                         regulation,’’ is the group of six, and it is              For the same reasons, we disagree
                                                 whether to include specific gases as part               this ‘‘air pollutant’’ to which PSD and                with the commenters who suggest we
                                                 of the sum-of-six grouping. Several                     title V apply.                                         include black carbon and other short-
                                                 commenters representing sectors that                       We also disagree with commenters                    lived climate forcers to the list of GHGs,
                                                 have significant SF6 usage specifically                 who suggested that including all six                   as well as commenters asking for an
                                                 argue that SF6 should not be included                   GHGs in determining permitting                         exclusion of CH4 and N2O. The
                                                 as a GHG, at least at this time, because                applicability would conflict with our                  definition of the air pollutant, as cited
                                                 there are no known SF6 controls, it is                  ‘‘absurd results’’ and ‘‘administrative                in the LDVR, includes CH4 and N2O and
                                                 not clear how PTE would be calculated                   necessity’’ rationale for the phase-in                 does not include black carbon or other
                                                 from such facilities, and EPA has not                   periods and applicability thresholds for               short-lived gases.
                                                 addressed the economic burden that                      GHGs. Even if we did have discretion to
                                                                                                         identify the air pollutant for PSD and                 3. Use of GWP vs. Mass-Based GHG
                                                 regulation of these facilities would
                                                                                                         title V purposes as consisting of only                 Thresholds
                                                 create. A solid waste industry
                                                 commenter asserts that the Tailoring                    four of the six well-mixed GHGs, we do                    For the reasons discussed previously,
                                                 Rule should confirm that CH4 and N2O                    not believe that doing so would have                   we are determining permit program
                                                 will not be regulated under PSD or title                any meaningful impact on the                           applicability based on the sum-of-six
                                                 V because these pollutants are only                     administrative burdens that are at the                 well-mixed gases that comprise the GHG
                                                 emitted in miniscule amounts from                       heart of our reliance on the ‘‘absurd                  air pollutant. This section discusses our
                                                 automobiles.                                            results’’ and ‘‘administrative necessity’’             use of both the CO2e metric and mass
                                                    We disagree with commenters who                      doctrines. The number of additional                    emissions of the GHGs for applicability
                                                 suggest that because the LDVR actually                  permitting actions and amount of                       purposes.
                                                 reduces only four of the six GHGs, EPA                  additional permitting burden resulting                    Under our proposal, a source’s
                                                 may apply PSD and title V to only those                 from including all six GHGs, rather than               emissions of all six GHGs would be
                                                 four GHGs. It is true that the LDVR                     four, is minimal. This is because the                  combined into a single metric by
                                                 standard for the single air pollutant that              administrative burden of GHG                           multiplying the mass of each individual
                                                 is comprised of the aggregate of six                    permitting is dominated by CO2 and                     GHG (in tpy) by its GWP value, and
                                                 GHGs consists of individual standards                   CH4 emission sources. For example,                     summing these products to determine
                                                 for only four particular constituents of                with a major source threshold set at                   the total emissions of the GHG pollutant
                                                 the single air pollutant—which are                      100,000 tpy CO2e, the combined                         in tpy CO2e. We received comments on
                                                 emissions limits or caps for three GHGs                 population of sources that would be                    this aspect of the proposed metric.
                                                 (CO2, CH4, and N2O) and an emission                     major for N2O, HFCs, PFCs, and SF6                     Several commenters explicitly support
                                                 crediting option for one GHG (HFCs)—                    accounts for fewer than two percent of                 the use of GWP and the CO2e metric for
                                                 but this does not dictate that only those               the GHG sources that would remain                      GHG emissions. These commenters
                                                 four compounds are subject to                           covered.                                               believe EPA has the authority to select
                                                 regulation for permitting purposes.                        For similar reasons, we disagree with               an appropriate metric to measure GHGs
                                                 Although the LDVR results in                            commenters who specifically suggest                    in the PSD program, and policy
                                                 reductions only with respect to four                    SF6 emissions should not be included in                considerations support the choice of
                                                 specific GHGs, as a legal matter the                    the applicability metric for GHGs. As we               GWP. Some of them note that GWP is
                                                 LDVR standard covers the entire set of                  have stated earlier in this section, our               a widely-used metric which employs
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                                                 GHGs that as a class are the single ‘‘air               selection of the GHG metric is driven by               internationally-recognized conversion
                                                 pollutant’’ in the contribution finding.                the definition of the ‘‘air pollutant’’ as             factors to compare GHGs based upon
                                                 Similar to our rationale for addressing                 defined in the LDVR, and in                            their climate properties, and some add
                                                 the group of six GHGs as one pollutant                  consideration of the final GHG                         that states and local areas that have
                                                 for PSD and title V applicability                       endangerment finding. SF6 is                           climate action plans for GHG reductions
                                                 purposes, we must adhere to the                         specifically included as one of the                    use CO2e. Some of these commenters
                                                 definition of applicability, cited                      ‘‘well-mixed greenhouse gases’’ in the                 believe this metric will ensure a


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                                                 standard measure across all permitting                     After considering these comments, we                the CO2e thresholds we establish under
                                                 agencies and will lead to a more                        have decided to adopt applicability                    the Tailoring Rule. As an example, in
                                                 effective system for permitting                         thresholds in the final rule based on a                rare instances it is possible that a source
                                                 authorities and create more                             CO2e metric for the sum-of-six well-                   may emit only a non-CO2 GHG in very
                                                 opportunities to reduce emissions over                  mixed gases, and also to adopt an                      small amounts, on a mass basis, but one
                                                 the full class of GHGs, rather than                     additional mass-based threshold for the                that carries a very large GWP. In this
                                                 focusing on reducing individual GHGs.                   sum-of-six gases as discussed in the                   case, it is possible that the source may
                                                    On the other hand, some commenters                   proposal. First, as discussed in the                   emit the GHG in amounts that fall below
                                                 oppose the use of GWP and CO2e,                         previous section, we have explained                    the PSD and/or title V statutory
                                                 believing that thresholds should be                     why the appropriate pollutant for PSD                  applicability threshold (100 or 250 tpy,
                                                 based on individual mass-based                          purposes is the single pollutant GHG,                  as applicable) on a mass basis, but
                                                 emissions for each GHG. Some of these                   which is composed of the six well-                     exceed the 100,000 CO2e PSD and title
                                                 commenters felt that EPA has no                         mixed gases. Regarding the CO2e metric,                V applicability thresholds for Step 2
                                                 discretion to ignore the metric for                     we continue to believe there are a                     finalized in this action. Under these
                                                 regulation established by Congress for                  number of advantages, as laid out in the               circumstances, without a mass-based
                                                 PSD in section 169 of the Act. Some                     proposal, to a CO2e measure that would                 threshold, the source would trigger PSD
                                                 commenters were also concerned that                     not be available if we used only a mass-               and title V for its CO2e emissions even
                                                 the use of CO2e will complicate the                     based metric. These include: (1) A CO2e                though its GHG mass emissions would
                                                 implementation of BACT because                          metric, by incorporating the GWP                       not, in fact, exceed the statutory triggers.
                                                 sources that trigger PSD will be required               values, best addresses the relevant                       Upon review of the comments
                                                 to install BACT for each regulated                      environmental endpoint, which is                       pertaining to this issue and further
                                                 pollutant, not for CO2e. As a result, a                 radiative forcing of the GHGs emitted;                 analysis of the legal and programmatic
                                                 source that exceeds the threshold                       (2) when combined with a sum-of-six                    implications, we are adopting a two-part
                                                 primarily due to its CO2 emissions                      gases approach, the CO2e metric best                   applicability process, for both major
                                                 would be forced to install BACT for all                 allows for consideration of their                      source applicability determinations for
                                                 other individual GHGs, regardless of                    combined effects when sources emit any                 GHGs under PSD and title V and for
                                                 how minor those other emissions may                     one or combination of the six well-                    determining if a net increase has
                                                 be. Finally, a commenter was concerned                  mixed GHGs; (3) a cumulative CO2e                      occurred in PSD applicability
                                                 that use of GWP would complicate                        metric is consistent with the metric                   determinations for modifications. As
                                                                                                         used in the mandatory GHG reporting                    explained in the RTC document, we
                                                 implementation because GWP values
                                                                                                         rule and other related rules and                       accomplish this two-step applicability
                                                 can sometimes change.
                                                                                                         guidelines; and (4) a CO2e metric allows               approach by continuing to rely on the
                                                    In our proposal preamble discussion                                                                         existing mass-based applicability
                                                 of GHG metric, EPA also raised the                      more flexibility for designing and
                                                                                                         implementing control strategies that                   provisions in the current regulations,
                                                 possibility of including a limitation in                                                                       and by including new regulatory
                                                 the metric to address the prospect                      maximize reductions across multiple
                                                                                                         GHGs. We recognize the tension                         provisions that add a definition of
                                                 (expected to occur only rarely) that                                                                           ‘‘subject to regulation’’ that in turn
                                                 high-GWP gases could be emitted in                      between the mass-based metric in the
                                                                                                         statute and the CO2e-based metric we                   includes the phase-in thresholds.
                                                 quantities less than statutory thresholds                                                                      Similarly, for PSD modification reviews
                                                 for PSD and title V but nevertheless                    are adopting in this rule, but as
                                                                                                                                                                and associated netting analyses, the
                                                 exceed the proposed thresholds in terms                 discussed later, we will address this by
                                                                                                                                                                same two-step process must be used.
                                                 of CO2e. Most commenters on this                        also retaining the mass-based metric.
                                                                                                                                                                Our summary in section IV.A described
                                                 subject support a dual threshold under                  Moreover, given our need to tailor our
                                                                                                                                                                how we expect this provision to be
                                                 which a source would be subject to title                approach to covering sources of GHGs,
                                                                                                                                                                implemented in practice.
                                                 V or PSD only if its GHG emissions                      we believe that the considerations                        We acknowledge that the possibility
                                                 exceeded both the statutory thresholds                  driving our choice to also use a CO2e-                 of changing GWP values is a downside
                                                 on an actual tonnage basis and the                      based metric are appropriate for                       to the use of CO2e for the GHG metric,
                                                 tailored thresholds on a CO2e basis.                    defining the phase-in and allow for                    and we address this comment in the
                                                 Commenters supporting this approach                     permitting resources to be directed at                 next section, where we discuss our plan
                                                 felt that it would be unlawful to apply                 those sources and modifications that                   to codify GWP values. By codifying
                                                 PSD when GHGs are below the statutory                   have the greatest impact on radiative                  GWP, any changes will be manageable,
                                                 thresholds, or when there is not a net                  forcing of the GHGs emitted.                           and, in our judgment, will not outweigh
                                                 emissions increase. Others added that                      We recognize the concern of                         the benefits of a CO2e-based approach.
                                                 the complexity of accounting for                        commenters who stated that we cannot                   We also acknowledge that a CO2e-based
                                                 emissions according to both mass and                    ignore the statutory thresholds based on               approach may appear to complicate the
                                                 GWP should be manageable and is not                     the mass-based emissions of an air                     BACT review and implementation
                                                 a reason to ignore the role of mass-based               pollutant as described under CAA                       process. However, we disagree with the
                                                 emission rates in determining the                       section 169(1). As we mentioned in the                 commenter’s ultimate conclusion that
                                                 applicability of PSD requirements.                      proposal, because both the PSD and title               BACT will be required for each
                                                 Additionally, one commenter observed                    V statutory thresholds are expressed on                constituent gas rather than for the
                                                 that a dual threshold is consistent with                a mass basis (i.e., tons of a pollutant                regulated pollutant, which is defined as
                                                 phasing in the Tailoring Rule and is an                 with no weighting values applied) we                   the combination of the six well-mixed
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                                                 effective way to address the current                    were concerned from a legal standpoint                 GHGs. To the contrary, we believe that,
                                                 uncertainty surrounding how to                          that the metric proposed (CO2e) could                  in combination with the sum-of-six
                                                 measure high-GWP gases such as SF6. In                  have the effect of subjecting to PSD or                gases approach described above, the use
                                                 contrast, a few commenters stated they                  title V requirements a source whose                    of the CO2e metric will enable the
                                                 do not support a dual threshold,                        emissions fall below the statutory                     implementation of flexible approaches
                                                 primarily on the grounds that there is no               threshold limits on a strictly mass basis,             to design and implement mitigation and
                                                 benefit to the added complexity.                        but whose CO2e-based emissions exceed                  control strategies that look across all six


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                                                 of the constituent gases comprising the                 which GWP values need to be used by                     long) tons. A few commenters support
                                                 air pollutant (e.g., flexibility to account             permitting authorities and allows                       using short tons for this purpose. Others
                                                 for the benefits of certain CH4 control                 sources to plan appropriately for                       prefer the use of metric tons, and most
                                                 options, even though those options may                  possible changes in the GWP values. As                  of them note that the mandatory GHG
                                                 increase CO2). Moreover, we believe that                mentioned in the comments,                              reporting rule is based on metric tons
                                                 the CO2e metric is the best way to                      recommended GWP values from IPCC                        and believe that the Tailoring Rule
                                                 achieve this goal because it allows for                 can change over time. While this is                     should be consistent with that rule.
                                                 tradeoffs among the constituent gases to                infrequent—the last such changes were                   These commenters believe that using
                                                 be evaluated using a common currency.                   in 2007—when it occurs, there are                       different units in the two rules would be
                                                                                                         generally significant lag times in                      confusing and could result in sources
                                                 4. Determining What GWP Values Are
                                                                                                         universal adoption of new values                        that are not subject to the mandatory
                                                 To Be Used
                                                                                                         because of inconsistencies that could be                GHG reporting rule becoming subject to
                                                    At proposal, we proposed to link the                 created in national inventories and                     PSD. Some of the commenters add that
                                                 calculation of CO2e for GHGs to GWP                     emission reporting mechanisms. In a                     various ‘‘cap and trade’’ legislative
                                                 values in EPA’s ‘‘Inventory of U.S.                     regulatory setting, such as in the                      proposals also quantify GHGs in metric
                                                 Greenhouse Gas Emissions and Sinks’’                    permitting programs, this could                         tons. A few other commenters
                                                 (GHG Inventory). See, e.g., proposed 40                 potentially create significant                          recommend that EPA harmonize the
                                                 CFR 51.166(b)(58). Numerous                             implementation issues, such as when a                   applicability thresholds established
                                                 commenters expressed concerns about                     GWP change occurs while a permit                        under the Tailoring Rule and the
                                                 this proposal on various grounds,                       action is in progress.16 EPA also                       mandatory GHG reporting rule without
                                                 including the following:                                recognized similar potential                            expressing a preference for short or
                                                    • The EPA should follow the proper                   implementation issues in developing its                 metric tons.
                                                 notice-and-comment procedures and the                   final mandatory GHG reporting rule,                        We are finalizing our proposal to use
                                                 requirements of the Information Quality                 and codified in the regulatory text for                 short tons because short tons are the
                                                 Act for the relevant technical                          that rule the GWP values to be used in                  standard unit of measure for both the
                                                 underpinnings of the proposal. The EPA                  reporting GHGs as part of that final                    PSD and title V permitting programs
                                                 relies upon the GWPs of the IPCC                        rulemaking.                                             and the basis for the threshold
                                                 without providing the supporting data                      For these reasons, we have decided to                evaluation to support this rulemaking.
                                                 for review, and it is inappropriate to use              follow the approach in the mandatory                    Calculation inputs for PSD are typically
                                                 this as a basis for this rule without first             GHG reporting rule and require that for                 prepared in English units (e.g., pounds
                                                 making all the raw data available for                   PSD and title V permitting                              of fuel, British thermal units (Btu), etc.)
                                                 public inspection and comment.                          requirements, wherever emissions                        which is the common convention for all
                                                    • The EPA cannot tie the definition of               calculations are performed, that                        PSD analyses and the units of the
                                                 GWP to the GHG Inventory because it is                  permitting authorities and sources use                  statutory thresholds under the Act.
                                                 a non-regulatory document that may be                   GWP values that are codified in EPA                        It is true that the GHG reporting rule
                                                 changed without notice-and-comment                      rules. We will establish the GWP values                 uses metric tons, but this does not create
                                                 rulemaking. Before EPA uses a new                       for PSD and title V rules based on a                    an inconsistency between permitting
                                                 GWP, that GWP must be subject to                        cross-reference to the values that are                  programs and the reporting rule because
                                                 notice and comment to comply with the                   codified in the EPA’s mandatory GHG                     the two rules already use different
                                                 requirements of CAA section 307 and                     reporting rule. 74 FR 56395, Table A–1                  applicability approaches. Although we
                                                 the Administrative Procedure Act                        to subpart A of 40 CFR part 98—Global                   originally proposed 25,000 tpy as the
                                                 (APA).                                                  Warming Potentials. Any changes to                      major source level for permitting
                                                    • An annual update of GWP would                      Table A–1 of the mandatory GHG                          programs, which was similar to the
                                                 create a moving target for sources                      reporting rule regulatory text must go                  threshold in the reporting rule, we
                                                 conducting applicability determinations                 through an appropriate regulatory                       decided to adopt substantially higher
                                                 and assessing compliance with minor                     process. In this manner, the values used                thresholds in the final rule.
                                                 NSR and PSD emission limits. The EPA                                                                            Furthermore, even if the numbers were
                                                                                                         for the permitting programs will reflect
                                                 needs to ensure that applicability and                                                                          similar, the thresholds used for the
                                                                                                         the latest values adopted for usage by
                                                 compliance with limits continue to be                                                                           reporting rule are based on actual
                                                                                                         EPA after a regulatory process and will
                                                 based on the GWP that existed when the                                                                          emissions, while the PSD and title V
                                                                                                         be consistent with those values used in
                                                 determination was made or the limit                                                                             programs thresholds are based on PTE.
                                                                                                         the EPA’s mandatory GHG reporting
                                                 was established.                                                                                                Therefore, we are less persuaded by
                                                                                                         rule. Furthermore, the lead time for
                                                    • The EPA should freeze the GWP at                                                                           arguments for consistency, and believe
                                                                                                         adopting changes to that rule will
                                                 the current values by incorporating                                                                             it is more important for ease of permit
                                                                                                         provide a transition time to address
                                                 those values into the regulation. The                                                                           program implementation to ensure that
                                                                                                         implementation concerns raised by
                                                 EPA could still revise the ‘‘NSR’’ GWP,                                                                         GHG emissions calculations for PSD and
                                                                                                         commenters.                                             title V will build on the same set of
                                                 but would have to revise the regulation
                                                 to do so.                                               5. Use of Short Tons vs. Metric Tons                    input variables used to develop short-
                                                    Commenters added that it is                             We proposed that the GHG metric                      ton based estimates for non-GHG
                                                 important to ensure that all permitting                 would be expressed in terms of English                  pollutants. Thus, the use of short tons
                                                 agencies are using the same calculations                (or short) tons, rather than metric (or                 should actually facilitate the
                                                 for the determination of CO2e for GHGs.                                                                         development of the GHG emission
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                                                    We agree with commenters who                            16 We note that our approach does not entirely       estimate. It would likely be more
                                                 suggested we should codify, either in                   avoid the possibility that a GWP change can occur       confusing to require a multi-pollutant
                                                 the Tailoring Rule or through reference                 while a permit is in progress although it will ensure   PSD applicability analysis to present
                                                 to codified values in another                           advance notice of such a change. In the event that      emissions information using different
                                                                                                         we plan to propose a change to GWP values, we
                                                 rulemaking, the GWP values to be used                   will work with permitting authorities as necessary
                                                                                                                                                                 units for different pollutants, as would
                                                 in permitting analyses. We agree that                   to provide guidance to sources on transitional          be the case if we required metric tons
                                                 this approach provides certainty as to                  issues.                                                 for GHG but continue to use short tons


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                                                                     Federal Register / Vol. 75, No. 106 / Thursday, June 3, 2010 / Rules and Regulations                                               31533

                                                 for every other pollutant. Finally, we do               application of statutory provisions. The               requirements would have ‘‘empty’’
                                                 not expect this choice to introduce                     first is the ‘‘absurd results’’ doctrine,              permits, that is, permits that do not
                                                 additional complexity because the                       which authorizes such a departure if the               include any applicable requirements,
                                                 conversion between short tons and                       literal application would produce a                    and that therefore serve relatively little
                                                 metric tons is a very simple calculation.               result that is inconsistent with                       purpose. For these reasons, the ‘‘absurd
                                                 Therefore, based on these                               congressional intent, and particularly if              results’’ doctrine applies to avoid a
                                                 considerations we are requiring that                    it would undermine congressional                       literal application of the thresholds at
                                                 short tons be used as the basis for                     intent. The judicial doctrine of                       this time. By the same token, the
                                                 emission calculations used to meet PSD                  ‘‘administrative necessity’’ authorizes an             impossibility of administering the
                                                 and title V permitting requirements.                    agency to depart from statutory                        permit programs brings into play the
                                                 B. Rationale for Thresholds and Timing                  requirements if the agency can                         ‘‘administrative necessity’’ doctrine.
                                                 for PSD and Title V Applicability to                    demonstrate that the statutory                         This doctrine also justifies not applying
                                                 GHG Emissions Sources                                   requirements, as written, are impossible               the PSD or title V applicability
                                                                                                         to administer. The ‘‘one-step-at-a-time’’              threshold provisions literally to GHG
                                                    In this subsection, we describe our                  doctrine authorizes an agency, under                   sources at this time.
                                                 legal and policy rationale for our                      certain circumstances, to implement a                     The situation presented here is
                                                 determinations concerning PSD and title                 statutory requirement through a phased                 exactly the kind that the ‘‘absurd
                                                 V applicability to GHG emissions                        approach. Each of the three doctrines                  results,’’ ‘‘administrative necessity,’’ and
                                                 sources. This subsection includes: (1)                  fits into the Chevron framework for                    ‘‘one-step-at-a-time’’ doctrines have been
                                                 An overview of our rationale; (2) data                  statutory construction because each of                 developed to address. Separately and
                                                 concerning costs to sources and                         the three is designed to effectuate                    interdependently, they authorize EPA
                                                 administrative burdens to permitting                    congressional intent.                                  and the permitting authorities to tailor
                                                 authorities; (3) a review of the Chevron                                                                       the PSD and title V applicability
                                                 legal framework and the ‘‘absurd                           To apply the statutory PSD and title
                                                                                                         V applicability thresholds literally to                provisions through a phased program as
                                                 results,’’ ‘‘administrative necessity,’’ and                                                                   set forth in this rule, and to use the
                                                 ‘‘one-step-at-a-time’’ doctrines, as well as            sources of GHG emissions would bring
                                                                                                         tens of thousands of small sources and                 initial period of phase-in to develop
                                                 a review of how those doctrines fit into                                                                       streamlining measures, acquire
                                                 the Chevron framework; (4) an overview                  modifications into the PSD program
                                                                                                         each year, and millions of small sources               expertise, and increase resources, all of
                                                 of the relevant PSD and title V                                                                                which would facilitate applying PSD
                                                 requirements and their legislative                      into the title V program. These
                                                                                                         extraordinary increases in the scope of                and title V on a broader scale without
                                                 history; (5) our application of the                                                                            overburdening sources and permitting
                                                 ‘‘absurd results’’ doctrine for tailoring               the permitting programs would mean
                                                                                                         that the programs would become several                 authorities. In this manner, the phased
                                                 the PSD requirements; (6) our                                                                                  approach reconciles the language of the
                                                 application of the ‘‘absurd results’’                   hundred-fold larger than what Congress
                                                                                                         appeared to contemplate. Moreover, the                 statutory provisions with the results of
                                                 doctrine for tailoring the title V                                                                             their application and with congressional
                                                 requirements; (7) our plans to issue                    great majority of additional sources
                                                                                                         brought into the PSD and title V                       intent.
                                                 further rulemaking that will address the
                                                 ‘‘absurd results’’ basis for both PSD and               programs would be small sources that                   2. Data Concerning Costs to Sources and
                                                 title V requirements; (8) our rationale for             Congress did not expect would need to                  Administrative Burdens to Permitting
                                                 the phase-in schedule for applying PSD                  undergo permitting and that, at the                    Authorities
                                                 and title V to GHG sources; (9) our                     present time, in the absence of
                                                                                                         streamlined permit procedures, would                      This final action concerning
                                                 application of the ‘‘administrative                                                                            applicability of PSD and title V to GHG-
                                                 necessity’’ basis for tailoring the PSD                 face unduly high permitting costs.
                                                                                                         Further, again at the present time, in the             emitting sources, including the
                                                 and title V requirements; and (10) our                                                                         decisions on timing for the selected
                                                 application of the ‘‘one-step-at-a-time’’               absence of streamlined permit
                                                                                                         procedures the administrative strains                  permitting thresholds, is based on our
                                                 basis for tailoring the PSD and title V                                                                        assessments of both the costs to the
                                                 requirements.                                           would lead to multi-year backlogs in the
                                                                                                         issuance of PSD and title V permits,                   regulated sources to comply with PSD
                                                 1. Overview                                             which would undermine the purposes                     and title V permitting requirements and
                                                                                                         of those programs. Sources of all types—               the administrative burdens to the
                                                    Under the familiar Chevron two-step
                                                                                                         whether they emit GHGs or not—would                    permitting authorities to process PSD
                                                 approach to construction of agency-
                                                                                                         face long delays in receiving PSD                      and title V permit actions for GHG-
                                                 administered statutes, the agency must
                                                                                                         permits, which Congress intended to                    emitting sources. This section provides
                                                 first, at Chevron Step 1, determine
                                                                                                         allow construction or expansion.                       a summary of our cost and
                                                 whether Congress’s intent in a particular
                                                                                                         Similarly, sources would face long                     administrative burden assessments of
                                                 provision on a specific question is clear;
                                                                                                         delays in receiving title V permits,                   permitting that would be required in the
                                                 and if so, then the agency must follow
                                                                                                         which Congress intended to promote                     absence of any tailoring as well as under
                                                 that intent. If the intent of the provision
                                                                                                         enforceability. For both programs, the                 various tailoring options.
                                                 is not clear, then the agency may, under                                                                          Our estimates of costs to the sources
                                                 Chevron Step 2, fashion a reasonable                    addition of enormous numbers of
                                                                                                                                                                and administrative burdens to the
                                                 interpretation of the provision. The best               additional sources would provide
                                                                                                                                                                permitting authorities from PSD and
                                                 indicator of congressional intent is the                relatively little benefit compared to the
                                                                                                                                                                title V applicability for GHG emissions
                                                 literal meaning of the provision and                    costs to sources and the burdens to
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                                                                                                                                                                are based on labor and cost information
                                                 generally, according to the case law, if                permitting authorities. In the case of
                                                                                                                                                                from the existing Information Collection
                                                 the literal meaning addresses the                       PSD, the large number of small sources
                                                                                                                                                                Requests (ICRs) for PSD and title V
                                                 specific question, then the agency                      that would be subject to control
                                                                                                                                                                programs.17 We apply the same basic
                                                 should follow the literal meaning.                      constitute a relatively small part of the
                                                    However, the courts have developed                   environmental problem. In the case of                    17 ‘‘Summary of Methodology and Data Used to
                                                 three doctrines relevant here that                      title V, a great many of the sources that              Estimate Burden Relief and Evaluate Resource
                                                 authorize departure from a literal                      would be newly subject to permit                                                               Continued




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                                                 31534               Federal Register / Vol. 75, No. 106 / Thursday, June 3, 2010 / Rules and Regulations

                                                 methodology used for the proposal,                      residential source would incur costs of                permit. However, we have determined
                                                 which incorporates information on                       20 percent that amount, or $16,900. 74                 that a more accurate estimate for an
                                                 numbers and types of affected sources                   FR 55337 col. 3 to 55339 col. 3. For this              average commercial or residential
                                                 and estimated permitting actions. We                    action, we retain the same burden                      source is 50 percent of that amount of
                                                 evaluate administrative burdens in                      estimates for an average industrial                    time that an industrial source would
                                                 terms of staffing needs, time for                       source. This type of source would need                 need, up from our proposal of 10
                                                 processing permits, and monetary costs,                 866 hours, which would cost $84,500, to                percent. Thus, an average commercial or
                                                 and we make some judgments about                        prepare the application and the PSD                    residential source would need about 175
                                                 how those burdens would affect the                      permit. However, based on comments                     hours, which would cost $23,200, to
                                                 permitting authorities’ ability to                      received, we have determined that a                    prepare the title V application and
                                                 effectively manage and administer their                 more accurate estimate for an average                  receive the permit. This increase is due
                                                 programs with the addition of GHG                       commercial or residential source is 70                 to the same reasons as with the PSD
                                                 emission sources. We present the                        percent of that amount of time that an                 program just discussed. We now
                                                 administrative burden data for applying                 industrial source would need, up from                  recognize that virtually all commercial
                                                 PSD and title V requirements at the                     our proposal of 20 percent. Thus, an                   and residential sources will have no
                                                 literal statutory thresholds—that is, the               average commercial or residential                      experience with the title V permitting
                                                 100/250 tpy levels for PSD (and 0 tpy                   source would need 606 hours, which                     process and, therefore, will face a
                                                 for modifications) and the 100 tpy level                would cost $59,000, to prepare the PSD                 significant learning curve that will
                                                 for title V—as well as at other                         application and receive the permit. We                 entail more time to assess, for the first
                                                 thresholds, which range from 25,000 tpy                 are increasing this time over what we                  time, their GHG emissions (because
                                                 CO2e to 100,000 tpy CO2e. We have                       proposed because we now recognize                      such sources are not covered by EPA’s
                                                 significantly revised upwards our                       that virtually all commercial and                      mandatory GHG reporting rule),
                                                 assessments of costs to sources and                     residential sources will have no                       complete the application, respond to
                                                 administrative burdens since proposal,                  experience with the PSD permitting
                                                                                                                                                                permitting authority comments, meet
                                                 and we summarize later our reasons for                  process, and therefore will face a
                                                                                                                                                                other title V administrative
                                                 doing so. We also present significant                   significant learning curve that will
                                                                                                                                                                requirements, and respond to interested
                                                 comments concerning administrative                      entail more time to complete the
                                                                                                                                                                stakeholders.19
                                                 burdens, and our responses to those                     application, develop control
                                                 comments.                                               recommendations, and take the other                    b. Administrative Burdens to Permitting
                                                    In the next section, concerning legal                required steps. We believe this learning               Authorities
                                                 and policy rationale for our actions, we                period could extend from 2 to possibly
                                                 discuss how these data on costs to the                  4 years or more from the date that the                 (1) Estimated Permitting Authority
                                                 sources and administrative burdens to                   sources become subject to PSD                          Burden at Proposal
                                                 the permitting authorities informed our                 requirements, depending on the type                       As at proposal, we estimated the
                                                 decisions that PSD and title V                          and actual number of new sources that                  administrative burdens to the permitting
                                                 requirements should not, at present, be                 come in for permitting. In addition, we                authorities at the various threshold
                                                 applied to GHG-emitting sources under                   expect that in many cases, draft PSD                   levels for PSD or title V applicability as
                                                 the literal terms of the statutory                      permits for GHGs will receive comments                 follows. First, for a particular threshold
                                                 thresholds as well as our decisions                     from various stakeholders, from citizens               level, we estimated the number of GHG-
                                                 concerning what thresholds to apply for                 groups to equipment vendors, who will
                                                                                                                                                                emitting sources that would be subject
                                                 Steps 1 and 2 of the applicability phase-               seek to participate in the permit process,
                                                 in approach and the applicability floor                                                                        to PSD requirements because they
                                                                                                         and that all this could add to the hours
                                                 of 50,000 tpy CO2e.                                                                                            would undertake new construction or
                                                                                                         that the permittee will need to invest in
                                                                                                                                                                modification, and the number of
                                                 a. Costs to Sources                                     the process.18 The actual costs to
                                                                                                                                                                existing sources that would be subject to
                                                                                                         sources to install BACT controls, while
                                                    As we did at proposal, we have                       still uncertain at this point, would likely            title V requirements. Second, we
                                                 estimated costs to the sources of                       add additional costs across a variety of               estimated the average additional
                                                 complying with PSD and title V starting                 sources in a sector not traditionally                  administrative burden and cost of each
                                                 from the data in the ICRs. We recognize                 subject to such permitting requirements.               PSD permitting action and each title V
                                                 that the sizes of the sources, as                          For title V, at proposal, we estimated              permitting action for the GHG-emitting
                                                 measured by their emissions, that would                 that on average, an industrial source                  sources. Third, we multiplied those two
                                                 be swept into the PSD and title V                       would incur costs of approximately                     estimates, and the product is the
                                                 programs would vary greatly, and that                   $46,400 to prepare the title V                         additional administrative burden at the
                                                 their permitting costs would vary as                    application and receive the permit, and                particular threshold level. We employed
                                                 well. For example, their PSD permitting                 on average, a commercial or residential                the same methodology for this final rule,
                                                 costs would depend on the amount and                    source would incur costs of 10 percent                 but, as discussed later, and described in
                                                 types of their emissions and their                      that amount, or almost $5,000. 74 FR                   more detail in our final burden
                                                 control requirements. Accordingly, we                   55338 col. 1 to 55339 col. 3. For this                 analysis,20 we have updated several key
                                                 have determined average costs, as                       action, we retain the same burden                      assumptions since the proposal as a
                                                 described later.                                        estimates for an average industrial
                                                    For PSD, at proposal, we estimated                   source. This type of source would need                   19 ‘‘Summary of Methodology and Data Used to
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                                                 that on average, an industrial source                   350 hours, which would cost $46,400, to                Estimate Burden Relief and Evaluate Resource
                                                 would incur costs of $84,500 to prepare                                                                        Requirements at Alternative Greenhouse Gas (GHG)
                                                                                                         prepare the application and the title V                Permitting Thresholds’’; Prepared by EPA Staff;
                                                 the PSD application and receive the                                                                            March 2010.
                                                 permit, and on average, a commercial or                   18 ‘‘Summary of Methodology and Data Used to           20 ‘‘Summary of Methodology and Data Used to

                                                                                                         Estimate Burden Relief and Evaluate Resource           Estimate Burden Relief and Evaluate Resource
                                                 Requirements at Alternative Greenhouse Gas (GHG)        Requirements at Alternative Greenhouse Gas (GHG)       Requirements at Alternative Greenhouse Gas (GHG)
                                                 Permitting Thresholds;’’ Prepared by EPA Staff;         Permitting Thresholds’’; Prepared by EPA Staff;        Permitting Thresholds’’; Prepared by EPA Staff;
                                                 March 2010.                                             March 2010.                                            March 2010.



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                                                 result of our consideration of comments                 conventional pollutants and that, for                     In addition to conducting our burden
                                                 received.                                               even small sources, equal or exceed the                analysis, we also reviewed summary
                                                    First, we present the administrative                 100/250 tpy levels.                                    information from state and local air
                                                 burdens at the statutory levels for PSD                                                                        permitting agencies regarding additional
                                                                                                           Based on the 140-fold increase in                    resources and burden considerations if GHG
                                                 and title V applicability. At proposal,                 permits, we then estimated the per-                    sources that emit above the 100/250-tpy
                                                 for the PSD program, we estimated the                   permit burden on permitting authorities.               thresholds were subjected to the PSD and
                                                 administrative burdens that would                       As we stated in the proposal:                          title V programs. This information covered 43
                                                 result from applying PSD at the 100/250                                                                        state and local permitting agencies,
                                                                                                           We estimated the number of workload
                                                 tpy major emitting facility threshold                                                                          representing programs from different regions
                                                                                                         hours and cost a permitting authority would
                                                 levels in two ways, as described in this                expend on each new source and each                     of the country and various permitting
                                                 section. We stated that at present, 280                 modification. We based these estimates on              program sizes (in terms of geographic and
                                                 sources are subject to PSD each year,                   the workload hours and cost for processing             source population coverage) * * *. This
                                                 both for new construction and                           permits for new sources of non-GHG                     information showed significant burdens
                                                 modifications. This figure served as the                emissions, which we derived from labor and             projected by permitting agencies with adding
                                                 baseline from which to calculate                        cost information from the existing ICRs for            sources of GHG emissions in terms of
                                                                                                         PSD programs. The ICRs show that                       staffing, budget, and other associated
                                                 increases in administrative burdens due                                                                        resource needs. Importantly, the agencies
                                                 to permitting GHG-emitting sources.                     permitting authorities expend 301 hours to
                                                                                                         permit a new or modified industrial source             based their analysis on the assumption that,
                                                    The first method that we used to                                                                            for purposes of determining whether a source
                                                 calculate the administrative burdens to                 * * *.
                                                                                                           We then made assumptions for number of               is major, its emissions would be calculated
                                                 the permitting authorities was in terms                                                                        on an actual emissions (‘‘actuals’’) basis, and
                                                                                                         workload hours and costs for new sources of
                                                 of workload hours, which we then                        GHG emissions. We assumed that permitting              not on a PTE basis. On an actuals basis, the
                                                 converted to monetary costs. To make                    new industrial GHG sources that emit in                agencies estimated a 10-fold increase in the
                                                 the workload calculation, we first                      excess of the 250-tpy threshold would be of            number of permits.
                                                 estimated the number of GHG-emitting                    comparable complexity to permitting non-                  Specifically, the agencies estimated that:
                                                 sources that would become subject to                    GHG emitting industrial sources that are                  • Assuming, again, that number of permits
                                                                                                                                                                was to increase by 10-fold (based on actual
                                                 PSD through new construction and                        subject to PSD. Thus, for these sources, we
                                                                                                         assumed that permitting authorities would              emissions), the resulting workload would
                                                 modification. Based on our GHG                                                                                 require an average of 12 more [full-time
                                                 threshold data analysis, we estimated                   expend the same number of workload hours
                                                                                                         and costs, on a per-permit basis, as they do           equivalents (FTEs)] per permitting authority
                                                 that almost 41,000 new and modified                                                                            at an estimated cost of $1 million/year;
                                                                                                         for non-GHG emitting industrial sources. On
                                                 sources per year would become subject                                                                             • Without the additional FTEs, the average
                                                                                                         the other hand, for commercial and
                                                 to PSD review. We first calculated the                  residential GHG sources that emit GHGs                 processing time for a permit would increase
                                                 number of new sources that would                        above the 250-tpy threshold (and as a result           to 3 years, which is three times the current
                                                 become subject to PSD. To do this, we                   would be subject to the requirements of the            average processing time;
                                                 estimated growth rates for the various                  PSD permitting program at this threshold                  • Permitting authorities would need 2
                                                 sectors, and then applied those growth                  level), we assumed that the workload hours             years on average to add the necessary staff;
                                                                                                                                                                   • Permitting authorities would also need,
                                                 rates to the numbers of sources in those                and cost for permitting these sources would
                                                                                                         be significantly less than—only 20 percent             on average, eight additional enforcement and
                                                 sectors. We then calculated the number                                                                         judicial FTEs;
                                                 of modifications. To do this, we first                  of—the hours and cost necessary to prepare
                                                                                                         and issue initial PSD permits or permit                   • Ninety percent of permitting agencies
                                                 assumed that each year, two percent of                                                                         would need to train their staff in all aspects
                                                                                                         modifications for industrial GHG sources.
                                                 sources that meet or exceed the                                                                                of permitting for sources of GHG emissions.
                                                                                                         This 20-percent estimate amounts to 60 hours
                                                 threshold levels for PSD applicability                  of permitting authority time per residential or           • A quarter of permitting agencies were
                                                 due to their conventional pollutants                    commercial permit.                                     currently under a hiring freeze.
                                                 undertake modifications. We then                          Based on these assumptions, the additional             We went on to explain that this state
                                                 calculated the number of sources that                   annual permitting burden for permitting                survey significantly underestimated the
                                                 would meet or exceed the threshold                      authorities, on a national basis, is estimated         administrative burdens:
                                                 levels for PSD applicability due to their               to be 3.3 million hours at a cost of $257
                                                 GHG emissions, and applied the same                     million to include all GHG emitters above the            It is important to reiterate that the state and
                                                 assumption that two percent of them                     250-tpy threshold.                                     local permitting information on burden was
                                                                                                                                                                based on the number of additional facilities
                                                 would undertake modifications. In this                  74 FR 55301 col. 2.                                    subject to PSD because their emissions of
                                                 manner, we estimated the number of                                                                             GHGs exceed the 100/250-tpy thresholds at
                                                 modifications of GHG-emitting sources                     Note that at the proposal, in
                                                                                                                                                                actual emissions rates, not PTE-based
                                                 that would become subject to PSD.                       calculating the PSD administrative
                                                                                                                                                                emissions rates. However, the PSD
                                                    We noted that currently, 280 PSD                     burdens that would occur each year due                 applicability requirements are based on PTE.
                                                 permits are issued each year, but that                  to GHG emissions, we did not undertake                 By adjusting the increase in number of
                                                 applying PSD to GHG-emitting sources                    separate calculations for the                          permits to account for GHG sources that
                                                 at the 100/250 tpy statutory threshold                  administrative burdens associated with                 exceed the 100/250-tpy applicability
                                                 levels would cause an increase in                       permitting obligations stemming from                   thresholds based on their PTE emissions,
                                                 permits of more than 140-fold. The                      the GHG emissions of the 280 sources                   EPA estimated a 140-fold increase in
                                                                                                         already subject to PSD permitting                      numbers of PSD permits, much more than the
                                                 reason for the extraordinary increase in
                                                                                                         requirements due to their conventional                 10-fold increase estimated by the states based
                                                 PSD applicability lies simply in the fact                                                                      on actual emissions.
                                                 that it takes a relatively large source to              pollutants. In effect, we treated these
                                                 generate emissions of conventional                      280 sources are part of the over 40,000                74 FR 55301 col. 2–3.
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                                                 pollutants in the amounts of 100/250                    sources that would become subject to                      In addition to PSD, we also estimated
                                                 tpy or more, but many sources combust                   PSD due to their GHG emissions.                        title V burdens at the statutory
                                                 fossil fuels for heat or electricity, and                 The second way that we evaluated the                 threshold. At proposal, for the title V
                                                 the combustion process for even small                   burden on permitting authorities was by                program, we estimated the
                                                 quantities of fossil fuel produces                      reviewing a study conducted by state                   administrative burdens that would
                                                 quantities of CO2 that are far in excess                and local air permitting agencies. As we               result from applying title V
                                                 of the sources’ quantities of                           said in the preamble:                                  requirements at the 100 tpy major


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                                                 31536               Federal Register / Vol. 75, No. 106 / Thursday, June 3, 2010 / Rules and Regulations

                                                 source threshold level in the same two                     In light of those demands, we                       to almost 10 years, which is 20 times the
                                                 ways as for PSD, as follows. The first                  estimated the per-permit burden on                     current average permit processing time;
                                                 method was to calculate the                             permitting authorities as follows. Note,                 • Permitting authorities would need 2
                                                                                                                                                                years on average to add the necessary staff;
                                                 administrative burdens in terms of                      at the outset, that as with PSD, we based                • On average, permitting authorities would
                                                 workload hours, which we then                           the workload hours on information in                   need 29 additional enforcement and judicial
                                                 converted to monetary costs. To make                    ICRs for industrial sources, and we then               staff;
                                                 the workload calculation, we first                      assumed that the workload for                            • Eighty percent of permitting authorities
                                                 estimated the number of existing GHG-                   commercial and residential sources                     would need to train their staff in all aspects
                                                 emitting sources that would become                      would be the indicated percentage of                   of permitting for sources of GHG emission.
                                                 subject to title V. Based on our GHG                    the workload for industrial sources:                     • A quarter of permitting agencies were
                                                                                                                                                                currently under a hiring freeze.
                                                 threshold data analysis, we estimated                     As with PSD, we have quantified the extent
                                                 that approximately 6 million sources                    of the administrative problem that would                 As with PSD, we added that this state
                                                 would become subject to title V.                        result in workload hours and cost on the               survey significantly underestimated the
                                                 Compared to the 14,700 title V permits                  basis of information concerning hours and              administrative burdens:
                                                 currently issued, this would be an                      costs for processing existing title V permits            It is important to reiterate that, as with
                                                 increase in permits of more than 400-                   that is indicated on ICRs. However, we                 PSD, the state and local information on
                                                 fold. We noted, in addition, that most of               recognize that more than 97 percent of these           projected permitting burden is based on the
                                                 the 14,700 sources already subject to                   new sources would be commercial and                    number of additional facilities subject to title
                                                                                                         residential sources. We estimate that for              V because their emissions of GHGs exceed
                                                 title V also emit GHGs and may be                       permitting authorities, the average new                the 100-tpy thresholds at actual emissions
                                                 affected as well.                                       commercial or residential permit would                 rates, not the PTE-based emissions rates.
                                                    We then described the type of work                   require 43 hours to process, which is 10               However, the title V applicability
                                                 that the permitting authorities would                   percent of the time needed for the average             requirements are based on PTE. As noted
                                                 need to do for these GHG-emitting                       new industrial permit. For an average                  elsewhere in this preamble, the state and
                                                 sources—the six million that would                      existing permit, which permitting authorities          local agencies estimated a 40-fold increase in
                                                 become newly subject to title V and                     would need to process through procedures               numbers of title V permits based on the
                                                 most of the 14,700 that are already                     for significant revisions and permit renewals,         amount of GHG sources’ actual emissions. By
                                                                                                         adding GHG emissions to the permit would               adjusting the summary estimates provided by
                                                 subject to title V—as follows. Note at the              result in, we estimate, 9 additional hours of          the state and local agencies to account for
                                                 outset that the permitting authorities’                 processing time, which is 10 percent of the            GHG sources that exceed the 100-tpy
                                                 workload is greater for sources newly                   amount of time currently necessary for                 threshold based on their PTE emissions, EPA
                                                 subject to title V than for existing                    processing existing permits. We estimate that          estimated that the average permitting
                                                 sources that seek a revised or renewed                  the total nationwide additional burden for             authority would need 570 more FTEs to
                                                 permit. As EPA noted in the preamble:                   permitting authorities for title V permits from        support its title V permitting program.
                                                                                                         adding GHG emissions at the 100-tpy                    74 FR 55302 col. 3—55303 col. 1.
                                                   [T]he [ ] permits [for the 6 million new
                                                                                                         threshold would be 340 million hours, which
                                                 sources] would need to include any
                                                                                                         would cost over $15 billion.                           (2) Revisions to Proposal Estimates of
                                                 requirements for non-GHGs that may apply to
                                                 the source, such as provisions of an                    74 FR 55302 col. 3.                                    Permitting Authority Burden
                                                 applicable SIP. For any such requirements,                                                                        We received numerous comments
                                                                                                           As with PSD, the second way that we
                                                 permitting authorities would also need to                                                                      from state and local authorities stating
                                                 develop terms addressing the various                    evaluated the burden on permitting
                                                 compliance assurance requirements of title V,           authorities at the statutory threshold                 that EPA had underestimated the
                                                 including monitoring, deviation reporting,              was by reviewing a study conducted by                  administrative burden on the permitting
                                                 six-month monitoring reports, and annual                state and local air permitting agencies of             authorities in the proposal. State and
                                                 compliance certifications.                              the burden of applying title V to existing             local authorities stated that in
                                                   Adding to the burden described above                  GHG-emitting sources at the 100 tpy                    particular, EPA underestimated the
                                                 would be the burden to add GHG terms to the             statutory threshold level. As we said in               number of modifications and the
                                                 14,700 existing title V permits. While, in              the preamble to the proposed rule:                     amount of time it would take permitting
                                                 general, existing title V permits would not                                                                    authorities to process permits,
                                                 immediately need to be revised or reopened                 [W]e also reviewed summary information
                                                                                                         from state and local permitting agencies,              particularly for commercial and
                                                 to incorporate GHG (because as noted above,
                                                 there are generally not applicable                      which showed significant burdens associated            residential sources. Based on the
                                                 requirements for GHGs that apply to such                with adding GHGs in their title V programs             comments and additional analysis that
                                                 sources), permitting authorities may face               in terms of staffing, budget, and other                we have conducted in response, we are
                                                 burdens to update existing title V permits for          associated resource needs.21 Again, note that          revising in several respects our
                                                 GHG under two possible scenarios: (1) EPA               the permitting agencies based their estimates          estimates of the administrative burdens
                                                 promulgates or approves any applicable                  on numbers of permits that would be                    for applying PSD and title V at the
                                                 requirements for GHGs that would apply to               required from sources subject to the 100-tpy           statutory threshold levels.
                                                 such a source, which would generally require            title V applicability threshold on an actuals—            First we present revisions to our
                                                 a permit reopening or renewal application, or           not PTE—basis. Based on that level, the
                                                                                                         agencies assumed a 40-fold increase in
                                                                                                                                                                analysis regarding the burdens at the
                                                 (2) the source makes a change that would                                                                       statutory levels. Before we present those
                                                 result in an applicable requirement for GHGs            numbers of permits, and estimated that:
                                                 to newly apply to the source, such as PSD                  • The resulting workload would require an           changes, we want to note a revision to
                                                 review, which would generally require an                average of 57 more FTEs per permitting                 our methodology that affected our
                                                 application for a permit revision. Permitting           agency at an estimated cost of $4.6 million/           estimate of the number of permits
                                                 authorities will also need to process permit            year;                                                  currently issued under existing
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                                                 renewal applications, generally on a five-year             • Without the additional FTEs, the average          programs. We are revising upwards the
                                                 cycle, and such renewals would need to                  processing time for a permit would increase            number of sources that are already
                                                 assure that the permit properly addresses                                                                      subject to PSD permitting requirements
                                                 GHG. Finally they would have to process title              21 ‘‘NACAA Summary on Permitting GHGs Under
                                                                                                                                                                anyway for their conventional
                                                 V applications for new sources (including all           the Clean Air Act’’; Memorandum from Mary
                                                                                                                                                                pollutants, which, as discussed
                                                 the PSD sources previously discussed).                  Stewart Douglas, National Association of Clean Air
                                                                                                         Agencies to Juan Santiago, EPA/OAQPS, September        previously, we refer to as ‘‘anyway’’
                                                 74 FR 55302 cols. 2–3.                                  3, 2009.                                               sources. This revision has implications


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                                                 both for (1) the number of sources that                 sources, either upon new construction                  commenters indicated that EPA has not
                                                 would become subject to PSD due to                      or modification, would need to add                     adequately accounted for ‘‘synthetic
                                                 their GHG emissions; and also (2) the                   GHG requirements to their otherwise                    minor’’ sources or modification projects,
                                                 baseline number of sources already                      required PSD permitting action.                        stating that many such sources and
                                                 subject to PSD, which we use to                            We should also note that in this                    projects will not be able to keep GHGs
                                                 compare the amount of increases in                      rulemaking we are justifying our                       below the proposed thresholds, and
                                                 administrative burden due to permitting                 conclusions about permitting authority                 those who could do so may not be able
                                                 GHG sources. At proposal, we stated                     administrative burdens on the basis of                 to establish enforceable synthetic minor
                                                 that 280 sources each year are subject to               their PSD and title V cost as calculated               limits. Numerous commenters also
                                                 PSD due to their new construction or                    on both a separate basis and a combined                stated that the EPA has underestimated
                                                 modifications. However, upon further                    basis. That is, we believe that the                    the rate of major modifications for GHGs
                                                 analysis, we have realized that this                    administrative burdens of the PSD                      under PSD. Some commenters assert
                                                 figure is too low because it includes                   program justify our tailoring approach                 that we underestimated the number of
                                                 only sources that have emissions of one                 for the PSD requirements, and the                      permits required for specific industry
                                                 or more NAAQS pollutants at the 100/                    administrative burdens of the title V                  sectors, including the oil and gas
                                                 250 tpy thresholds and that are located                 program justify our tailoring approach                 production industry, the natural gas
                                                 in areas of the country that are                        for the title V requirements, but in                   transmission industry, the
                                                 designated attainment or unclassifiable                 addition, the administrative burdens of                semiconductor industry, the wood
                                                 for all of those pollutants, and thus are               both programs on a combined basis                      products industry, the brick industry,
                                                                                                         justify the tailoring approaches. Viewing              and landfills. Some of the state and
                                                 not designated nonattainment for any of
                                                                                                         the administrative burdens on a                        local commenters also believe that we
                                                 those NAAQS pollutants. We estimate
                                                                                                         combined basis provides a useful                       have overestimated their ability to hire
                                                 that another 520 sources have emissions
                                                                                                         perspective because most permitting                    and train sufficient staff to administer
                                                 of one or more NAAQS pollutants at the
                                                                                                         authorities have a single organizational               GHG permitting.
                                                 100/250 tpy thresholds and are located
                                                                                                         unit that is responsible for both the PSD                 We are persuaded by the data and
                                                 in areas of the country that are
                                                                                                         program and the title V program, and in                arguments provided by the many
                                                 nonattainment for at least one of those
                                                                                                         many cases, the same employees work                    commenters who believe EPA
                                                 NAAQS pollutants. Some of these 520
                                                                                                         on both programs. In addition, in some                 underestimated the number of
                                                 sources may also emit one or more                       jurisdictions, permitting authorities                  permitting actions and the burdens of
                                                 pollutants at the 100/250 tpy level for                 issue a single, merged permit that                     each action, and thus the overall
                                                 which their area is designated                          includes both PSD and title V                          administrative burdens associated with
                                                 attainment or unclassifiable, and                       requirements. For these reasons,                       permitting GHG sources. Accordingly,
                                                 therefore may be subject to PSD for                     considering administrative burdens on a                we have reevaluated our assessment of
                                                 those pollutants. Accordingly, the                      combined PSD and title V basis, offers                 these administrative burdens, for both
                                                 correct number of ‘‘anyway’’ sources                    a more accurate picture of the issues                  the PSD and title V programs. In
                                                 subject to PSD each year is the 280                     these agencies will face in transitioning              conducting this reevaluation, we
                                                 sources that are located in areas that are              to GHG permitting.                                     considered arguments made by the
                                                 attainment or unclassifiable for each                      Turning to the revisions to our burden              commenters, as well as any actual data
                                                 pollutant that the sources emit at the                  estimates that we made as a result of                  they provided, and then we determined
                                                 100/250 tpy level, plus at least some of                public comment, we begin by noting                     whether and how to modify various
                                                 the 520 sources that are located in areas               that many commenters believed that we                  aspects of our detailed assessment of the
                                                 that are nonattainment for at least one                 significantly underestimated the                       burdens. Based on this consideration we
                                                 of the NAAQS pollutants that the                        administrative burdens associated with                 have substantially revised upwards our
                                                 sources emit at or above the 100/250 tpy                the proposed thresholds or that the                    estimate of administrative burdens,
                                                 threshold. In the absence of data on the                administrative burden under the                        based on the analysis included in the
                                                 number of nonattainment NSR permits                     proposed thresholds would still                        final docket for this rulemaking.22 The
                                                 that do not have a PSD component, and                   overwhelm the states and result in                     revisions affect two elements of our
                                                 because we expect this to be a small                    significant permitting delays and                      analysis by showing: (1) A substantial
                                                 number, we have assumed for purposes                    uncertainty for sources. Many of these                 increase in the number of PSD and title
                                                 of this action, that each of the 520                    commenters indicate that our estimate                  V permits that will occur at a given
                                                 sources is subject to PSD for at least one              of the number of sources that would be                 threshold, and (2) an increase in the
                                                 pollutant, so that we will consider all                 subject to permitting is too low, and                  average burden estimate for each such
                                                 800 sources as subject to PSD. Of this                  some add that we have underestimated                   permit.
                                                 number, we estimate that 70 percent, or                 the per-permit effort required. (More                     Regarding the increase in our estimate
                                                 560 sources will undergo a                              detail on these comments is given                      of the number of projects that will
                                                 modification, while the remaining 240                   elsewhere on the methodology used in                   occur, we estimated an increase in both
                                                 permitting actions will involve new                     the analysis.) Several state and local                 PSD and title V permit actions, though
                                                 construction. Of the modifications, we                  agencies provided estimates of the                     the greatest changes were for PSD. At
                                                 assume that 80 percent, or 448, would                   increased number of permits and/or                     proposal, we estimated that, if PSD
                                                 become subject to additional                            staff that would be required under the                 requirements were to apply to GHG
                                                 requirements due to their GHG                           thresholds we proposed that were                       sources at the 100/250 tpy statutory
                                                 emissions because those projects have                   higher than our original estimates.                    levels, 40,496 projects—consisting of
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                                                 combustion-related activities that would                Specifically, commenters recommended                   3,299 projects at industrial sources and
                                                 likely emit GHGs in the requisite                       that we increase the estimated                         37,197 projects at commercial or
                                                 quantities. Our estimate of 80 percent of               administrative burdens for PSD permits
                                                 modification activities significantly                   by anywhere from 100 percent to over                     22 ‘‘Summary of Methodology and Data Used to

                                                 involving combustion activities is based                2,000 percent; and that we increase the                Estimate Burden Relief and Evaluate Resource
                                                                                                                                                                Requirements at Alternative Greenhouse Gas (GHG)
                                                 on a review of a random sample of PSD                   burdens for title V permits by anywhere                Permitting Thresholds’’; Prepared by EPA Staff;
                                                 permits. In total we estimate that 688                  from 29 percent to 240 percent. Many                   March 2010.



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                                                 31538               Federal Register / Vol. 75, No. 106 / Thursday, June 3, 2010 / Rules and Regulations

                                                 residential sources—would need PSD                      utilization patterns at a variety of source            Accordingly, in this action, we are using
                                                 permits each year. Some of these                        categories, before permitting authorities              a 50 percent capacity utilization rate for
                                                 projects involve the construction of an                 will be able to establish procedures and               both of these source categories, which
                                                 entirely new source, but the majority of                rules for developing minor source                      better reflects what can be deemed
                                                 these are modifications. We now                         permit limitations. Therefore, we                      reasonable operation under normal
                                                 estimate that at the 100/250 tpy levels,                adjusted our count of major                            conditions for facilities in these source
                                                 81,598 projects would become subject to                 modification permits under PSD                         categories. This adjustment increased
                                                 PSD each year. These projects include                   upward to account for this.                            the overall number of affected facilities
                                                 26,089 actions at industrial sources and                  The second change to the number of                   at various threshold levels and we have
                                                 55,509 at commercial and residential                    permits concerns the general                           revised our burden analysis accordingly.
                                                 sources. We describe our calculation of                 modification rate of 2 percent that we                    A few commenters asserted that we
                                                 this 81,598 amount in a TSD.23 The                      applied at proposal, based on historical               underestimated the number of
                                                 great majority of these 81,598 projects                 experience across all pollutant types.                 residential homes, commercial
                                                 that would become subject to PSD are                    Commenters provided information that                   buildings, and retail stores that would
                                                 modifications. We base these estimates                  suggest that this 2 percent figure is an               be subject to permitting requirements
                                                 on the assumption that the significance                 underestimate for GHG sources because                  because these commenters believed the
                                                 levels would be 100 tpy regardless of                   their emissions of CO2 are high and                    estimate in EPA’s TSD was based on
                                                 category.                                               accumulate quickly from various                        actual emissions from space heating
                                                   Our estimate of the number of PSD                     changes involving combustion units.                    equipment rather than PTE. We wish to
                                                 modifications is where we made our                      Therefore, a greater percentage of their               clarify that our threshold analysis
                                                 most significant upward revisions from                  physical or operational changes will                   estimates for the number of residential
                                                 our proposal, based on comments. Our                    result in GHG emissions in excess of the               and commercial sources (as well as all
                                                 doubling of the estimated PSD                           significance levels that we identified at              other sources) did use a PTE basis. To
                                                 permitting actions—from 40,496 at                       proposal. In light of these comments, we               calculate the PTE amount for these
                                                 proposal to 81,598—results from three                   reviewed the source populations and                    sources, we extrapolated from the actual
                                                 separate adjustments we made to our                     pollutant mix within the various                       emissions data for the residential and
                                                 estimates at proposal of the number of                  populations, and determined that we                    commercial sources. Specifically, we
                                                 permit actions that would result from                   should revise our general modification                 assumed that a typical residential
                                                 applying PSD to GHG sources. Two of                     rate to 4 percent for GHG sources. This                facility operates its fuel combustion
                                                 these increased the number of major                     4 percent rate was obtained by dividing                sources at only 10 percent of its capacity
                                                 modifications, and one of these                         the current annual major NSR permit                    and a typical commercial facility
                                                 increased the number of major sources                   actions involving modifications by the                 operates at only 15 percent of its
                                                 and modifications. The most significant                 14,700 existing sources. We have                       capacity. Based on these assumptions,
                                                 adjustment, and one that was raised by                  revised our burden analysis accordingly.               we multiplied residential actual
                                                 multiple commenters, was that we                        Again, the burden analysis in the docket               emissions by a factor of 10, and
                                                 undercounted the number of major                        describes our basis for these                          commercial actual emissions by a factor
                                                 modification projects at existing major                 calculations in more detail.                           of 6.6 to obtain PTE-based estimates.
                                                 sources because we did not include the                    The third adjustment to the number of                There is very little information available
                                                 existing projects that avoid major PSD                  permits involves our estimate of the                   on the capacity utilization rates of fuel
                                                 review by either taking ‘‘synthetic                     number of sources with PTE that is                     combustion equipment at different types
                                                 minor’’ limits or by netting out for                    greater than the various thresholds                    of residential and commercial facilities,
                                                 conventional pollutants, but that would                 considered. This affects the number of                 but we believe our methodology was
                                                 not be able to avoid PSD through those                  major sources at the statutory                         reasonable for these types of sources
                                                 mechanisms for GHGs.                                    thresholds, which we used to estimate                  and we did not adjust it in response to
                                                   We agree that the ability and                         the number of PSD and title V major                    this comment. Information on the
                                                 procedures for sources to achieve                       sources, but also has an effect on the                 development of these estimates is
                                                 reductions, or minimize increases, due                  number of major modifications because                  provided in our Technical Support
                                                 to GHGs through adoption of                             the number of modifications depends on                 Document for Greenhouse Gas
                                                 enforceable limits or through netting out               the size of the population of major                    Emissions Thresholds Evaluation.
                                                 are not well established at this point.                 sources. Commenters provided evidence                     The second source of upward
                                                 We believe that there will be numerous                  that our estimates of capacity utilization             revisions to our administrative burden
                                                 instances, particularly for combustion-                 (which, as described previously, we use                estimate is that we are increasing the
                                                 related projects, where it will not be                  for estimating potential-to-emit based on              estimated average cost to permitting
                                                 possible for sources to achieve the same                data for actual emissions) for the general             authorities of issuing each PSD and title
                                                 level of reductions for CO2 emissions as                manufacturing source category (referred                V permit at the statutory thresholds. At
                                                 they do for emissions of nitrogen oxides                to as ‘‘unspecified stationary                         proposal, we estimated that for PSD
                                                 (NOX), for example, simply because                      combustion’’ in our analysis) and for the              permits, permitting authorities would
                                                 there are not as many proven control                    oil and gas industry were not accurate.                expend, on average, 301 hours to permit
                                                 techniques that can reduce CO2                          In our proposal, our estimated range for               an industrial source of GHG emissions,
                                                 emissions to the same degree as NOX.                    capacity utilization for ‘‘unspecified                 and 20 percent of that time, or 60 hours
                                                 Also, more research will be necessary in                stationary combustion’’ varied from 70                 to permit a commercial or residential
                                                 the type of emission units and processes                to 90 percent depending on                             source. After estimating that amount of
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                                                 resulting in GHG emissions, and how                     manufacturing category. For the oil and                workload, we went on to estimate the
                                                 they operate over a wide range of                       gas industry, our estimate was 90                      monetary cost to permitting authorities
                                                                                                         percent. We received comments                          of that workload. Similarly, for title V
                                                   23 ‘‘Summary of Methodology and Data Used to
                                                                                                         indicating that these utilization rates are            permits, we estimated at proposal that
                                                 Estimate Burden Relief and Evaluate Resource            higher than what is normally achieved                  permitting authorities would expend 10
                                                 Requirements at Alternative Greenhouse Gas (GHG)
                                                 Permitting Thresholds’’; Prepared by EPA Staff;         in real-world conditions, particularly for             percent of the number of hours needed
                                                 March 2010.                                             smaller manufacturing type facilities.                 to process an industrial permit in order


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                                                 to process a commercial or residential                  many of these sources will need                        minor’’ limits or restrict their operations
                                                 permit for GHG sources.                                 significantly more permitting authority                to obtain minor source permitting
                                                    We received comments from both                       staff time to assist them in the permit                status. Nor do we have data on the
                                                 permitting authorities and sources                      application and preparation process                    amount of the administrative burden
                                                 asserting that our methodology                          because of their lack of experience with               that would fall on any particular
                                                 underestimated the administrative                       these requirements. In addition,                       permitting authority to establish a
                                                 burden on grounds that (1) Our                          permitting authorities will have little, if            ‘‘synthetic minor’’ limit, except that we
                                                 methodology fails to recognize that                     any, experience in permitting                          understand that the amount varies
                                                 when a source triggers PSD for                          commercial and residential sources, and                widely across states. As a result, we
                                                 conventional pollutants, additional                     therefore will face a learning curve that              opted to include these sources in our
                                                 labor hours would be required to issue                  will entail more time to take permitting               analysis as sources receiving a PSD or
                                                 BACT for GHGs; (2) our estimate of 60                   action. In addition, we expect that in                 title V permit. Therefore, to the extent
                                                 hours (versus 301 hours) to issue PSD                   many cases PSD and title V permit                      that synthetic minor activity occurs, our
                                                 permits to commercial and residential                   applications for GHGs will receive                     estimate would already have included
                                                 sources of GHGs is unrealistically low;                 comments from various stakeholders,                    the burden for that activity. In fact, our
                                                 (3) our estimate failed to account for the              from citizens groups to equipment                      estimate would have overestimated the
                                                 increase in the complexity of permits for               vendors, who will seek to participate in               burden to the extent that a permitting
                                                 criteria pollutants due to (i) increases in             the permit process, and responding and                 authority would have less
                                                 criteria pollutant emissions becoming                   revising permits accordingly will add to               administrative costs to issuing a
                                                 newly subject to BACT at sources that                   the hours that the permitting authority                ‘‘synthetic minor’’ permit, as compared
                                                 are major only for GHGs, which will                     will spend.                                            to a PSD or title V permit.
                                                 result in increased permitting and (ii)                    As a result, we raised the PSD per-                    (3) Revised Burden Estimates at
                                                 BACT controls for criteria pollutants                   permit hours for various steps in the                  Statutory Thresholds Based on the
                                                 (e.g., an oxidizer for VOCs) may result                 permitting process, as described in the                revisions just described, we estimate
                                                 in significant GHG emissions, triggering                burden estimate document. While we                     that in all, if sources that emit GHGs
                                                 an additional BACT determination; and                   continue to estimate that permitting                   become subject to PSD at the 100/250
                                                 (4) our methodology failed to account                   authorities will expend, on average, 301               tpy levels, permitting authorities across
                                                 for the significant additional PSD and                  hours to issue a PSD permit to an                      the country would face over $1.5 billion
                                                 title V burdens due to sources that                     industrial source, and that this would                 in additional PSD permitting costs each
                                                 obtain federally enforceable permit                     cost $23,243, we now recognize that a                  year. This would represent an increase
                                                 limits on GHGs in order to become                       permitting authority would expend 70                   of 130 times the current annual burden
                                                 ‘‘synthetic minors’’ and thereby avoid                  percent of that time or 210 hours, to                  hours under the NSR major source
                                                 PSD (and possibly also title V).                        permit a commercial or residential                     program for permitting authorities. The
                                                    Based on these comments and our                      source, which would cost $16,216.                      permitting authorities would need a
                                                 own reassessment of permitting actions                  Similarly, for title V, while we continue              total of almost 10,000 new FTEs to
                                                 created by the addition of GHGs, we                     to estimate that permitting authorities                process PSD permits for GHG emissions.
                                                 have revised upwards in several ways                    will expend, on average, 428 hours to                     In addition, we estimate that in all, if
                                                 our estimate of the additional per-                     issue a title V permit to an industrial                sources that emit GHGs become subject
                                                 permit costs of applying PSD and title                  source, and that this would cost                       to title V at the 100 tpy level, permitting
                                                 V to GHG sources, including the                         $19,688, we now recognize that a                       authorities across the country would
                                                 following: First we have added an                       permitting authority would expend 50                   incur about 1.4 billion additional work
                                                 estimate of the additional permitting                   percent of the time, or 214 hours, to                  hours, which would cost $63 billion.
                                                 cost for adding a GHG component to                      permit a commercial or residential                     We estimate that most of this work
                                                 ‘‘anyway’’ PSD and title V permitting                   source, which would cost $9,844.                       would be done over a 3 year period,
                                                 actions for conventional pollutants. We                    We disagree with commenters who                     which would amount to 458 million in
                                                 estimated this burden based on                          suggested that by basing our estimates                 additional work hours, and $21 billion
                                                 information in the comments together                    on the numbers of newly constructing                   in additional costs, on an annual basis
                                                 with our own judgment about how to                      and modifying sources with high                        over that 3-year period.
                                                 adjust the burden numbers contained in                  enough emissions to qualify as major                      We also note that the survey of state
                                                 the current supporting statements for                   emitting facilities, we failed to account              and local permitting authorities
                                                 our approved permitting ICRs. These                     for the costs of sources that seek                     described in the proposed rulemaking
                                                 adjustments are found in our revised                    ‘‘synthetic minor’’ permits to avoid PSD,              continues to shed light on the extent of
                                                 burden estimate document.                               and possibly title V, requirements. In                 the administrative burdens, including
                                                    Second, we have raised the per-permit                fact, our methodology includes sources                 staffing, budget, and other associated
                                                 burden hours for commercial and                         that might take such limits as newly-                  resource needs, as projected by the
                                                 residential sources for PSD and title V.                major sources for their GHG emissions;                 permitting authorities. As noted
                                                 At proposal, our estimates were based                   and therefore we count the full                        previously, that survey concluded that
                                                 on the fact that many of these permits                  administrative burden associated with a                application of the PSD requirements to
                                                 will be technically simpler due to such                 PSD permit and a title V permit for                    GHG-emitting sources at the level of
                                                 factors as a lower number of emissions                  those sources. In effect, we assume that               100/250 tpy or more of actual emissions
                                                 points, simpler processes, and less                     such sources would go through PSD or                   would, without additional FTEs,
                                                 required modeling. However,                             title V permitting, rather than take                   increase the average processing time for
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                                                 commenters pointed out that, until EPA                  ‘‘synthetic minor’’ limits. We take this               a PSD permit from one to 3 years. The
                                                 streamlines its permitting procedures,                  approach because although we suspect                   survey further concluded that
                                                 there are many permitting activities that               that there may, in fact, be significant                application of the title V requirements
                                                 represent a fixed cost, such as public                  synthetic minor activity, we do not have               to GHG-emitting sources at the level of
                                                 notice, hearing, and response to                        data that would allow us to determine                  100 tpy or more of actual emissions
                                                 comment activities. In addition, we                     whether, and how many of, these                        would, without additional FTEs,
                                                 agree, as commenters pointed out, that                  sources will be able to adopt ‘‘synthetic              increase the average processing time for


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                                                 a title V permit from 6 months to 10                         processing time for both PSD and title                             GHG sources, we not only estimated the
                                                 years. As we noted at proposal, this                         V permits will be two or three times                               burden at the statutory thresholds, as
                                                 survey assumed a ten-fold increase in                        greater than what we estimated at                                  described previously, but we also
                                                 the number of PSD permits and a 40-                          proposal. The survey of state and local                            estimated the number of sources,
                                                 fold increase in the number of title V                       permitting authorities provided other                              number of permitting actions, and
                                                 permits due to GHG-emitting sources,                         useful information as well, including                              amount of administrative burden at
                                                 but those assumptions were severely                          the fact that it would take the permitting                         various applicability levels for both PSD
                                                 underestimated because they were                             authorities 2 years, on average, to hire                           and title V, based on the revised
                                                 based on actual emissions. At proposal,                      the staff necessary to handle a ten-fold                           methodology described previously, that
                                                 our calculations, which were based on                        increase in PSD permits and a 40-fold                              we used to estimate the administrative
                                                 potential emissions, indicated a 140-                        increase in title V permits, and that 90                           burdens of applying PSD and title V at
                                                 fold increase in PSD permits and a more                      percent of their staff would need
                                                 than 400-fold increase in title V permits.                                                                                      the statutory levels. This information is
                                                                                                              additional training in all aspects of
                                                 In this rulemaking, we recognize that                                                                                           summarized in Table V–1. Note that
                                                                                                              permitting for GHG sources.
                                                 even our estimates at proposal were                                                                                             Table V–1 also includes, in the last
                                                 severely underestimated. We now                              (4) Revised Estimates of Administrative                            column, the administrative burdens,
                                                 recognize that the number of PSD                             Burdens at Various Threshold Levels                                described previously, associated with
                                                 permits will be about twice what we                            In order to determine the appropriate                            the 100/250 tpy thresholds.
                                                 estimated at proposal, and the average                       PSD and title V applicability level for

                                                                                                    TABLE V–1—COVERAGE AND BURDEN INFORMATION
                                                                                                             ‘‘Anyway’’          100k Major         100k Major         100k Major          50k Major          25k Major
                                                                                                               source                                                                                                             100/250
                                                                                          Current            approach              source             source             source             source             source              Major,
                                                                                         program 1           75k major           100k major          75k major          50k major          50k major          25k major          100 mod.
                                                                                                                                    mod.               mod.               mod.               mod.               mod.
                                                                                                                mod.

                                                 Number of Major Sources .......       15,000 .......       15,000 .......       15,550 .......     15,550 .......     15,550 .......     18,500 .......     22,500 .......     6,118,252.
                                                 Number of Newly Major GHG             N/A ............     0 ................   550 ............   550 ............   550 ............   3,500 .........    7,500 .........    6,105,913.
                                                   Sources.
                                                 Number of PSD New Con-                240 ............     240 ............     242 ............   242 ............   242 ............   243 ............   250 ............   19,889.
                                                   struction Actions.
                                                 Number of PSD Modification            448 ............     448 ............     468 ............   1,363 .........    2,257 .........    2,354 .........    9,645 .........    62,284.
                                                   Actions at Covered major
                                                   sources.
                                                 Permitting Authority Cost to          $12M/yr .....        $15M/yr .....        $15M/yr .....      $36M/yr .....      $57M/yr .....      $59M/yr .....      $229M/yr ...       $1.5B/yr.
                                                   Run PSD programs.
                                                 Permitting Authority Work             150,795 .....        185,195 .....        192,055 .....      461,450 .....      730,544 .....      764,781 .....      2.97 M ......      19.7 M.
                                                   Hours to Run PSD pro-
                                                   grams 2.
                                                 Permitting Authority Cost to          $62M/yr .....        $63M/yr .....        $67M/yr .....      $69M/yr .....      $70M/yr .....      $88M/yr .....      $126M/yr ...       $21 B/yr.
                                                   Run Title V Programs.
                                                 Permitting Authority Work             1.35 M ......        1.38 M ......        1.46 M ......      1.49 M ......      1.53 M ......      1.92 M ......      2.74 M ......      460 M.
                                                   Hours to Run Title V Pro-
                                                   grams.
                                                 Annual Total Cost to Run PSD          $74M/yr .....        $78M/yr              $82M/yr            $105M/yr           $127M/yr           $147M/yr           $355M/yr           $22.5 B/yr
                                                   and Title V Programs and                                   5% in-               11% in-            42% in-            72% in-            99% in-            380% in-           30,305%
                                                   percent increase in cost over                              crease               crease.            crease.            crease.            crease.            crease.            increase.
                                                   current program.                                           (once
                                                                                                              states
                                                                                                              adopt).
                                                 % GHG emissions covered 3 ...         0 ................   65% ..........       67% ..........     67% ..........     67% ..........     70% ..........     75% ..........     78%.
                                                   Notes: (1) As explained in the preamble, ‘‘current program’’ figures for PSD permits also reflect NSR permits in nonattainment areas that we
                                                 assume include a PSD component for at least one pollutant. (2) Number of FTEs may be calculated as work hours divided by 2,000 hours. (3)
                                                 Percent of national GHG stationary source emissions emitted from sources that would be considered major for GHG emissions under each
                                                 threshold scenario.


                                                   As described in the TSD, we                                combinations that we assessed. As the                              the NSR program are 153,795 work
                                                 considered several different major                           table indicates, under the current PSD                             hours, and $12 million. For the title V
                                                 source/major modification threshold                          and title V programs, approximately                                program, the 15,000 sources are, for the
                                                 combinations. We chose the                                   15,000 sources qualify as major PSD                                most part already permitted, and
                                                 combinations to reflect representative,                      sources for at least one pollutant and                             therefore need revised permits as
                                                 incremental steps along the possible                         therefore meet the applicability                                   required and renewal permits on a 5-
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                                                 range. Because it is time- and resource-                     thresholds. Of these, approximately 668                            year schedule. The permitting
                                                 intensive to develop estimates for a                         sources are subject to PSD requirements                            authorities’ title V administrative
                                                 given step, we chose intervals that best                     each year for at least one pollutant—240                           burdens on an annual basis are
                                                 reflect representative points within the                     because they undertake new                                         1,349,659 work hours and $62 million.
                                                 range, given those time and resource                         construction, and 448 because they                                    The first threshold Table 1
                                                 constraints. Here, we discuss key                            undertake modifications. The permitting                            describes—and which, as discussed
                                                 observations about some of the                               authorities’ administrative burdens for                            later, we are adopting for Step 1—is the


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                                                 ‘‘anyway’’ source approach. Under this                  Under this approach, (i) sources will be               date the 1984 Chevron decision, in
                                                 approach, (i) PSD applies to the GHG                    subject to PSD on account of their GHG                 which the U.S. Supreme Court
                                                 emissions from projects that are subject                emissions if they newly construct and                  established the framework for
                                                 to PSD anyway as new sources or major                   emit at least 50,000 tpy CO2e, or if they              construing agency-administered
                                                 modifications due to their emissions of                 are existing sources that emit at least                statutes, each fits appropriately into the
                                                 non-GHG pollutants and that result in                   50,000 tpy CO2e of GHGs and make a                     Chevron framework.24
                                                 an increase (or, in the case of                         modification that results in a net                        To reiterate, for convenience, the
                                                 modifications, a net increase) of at least              emissions increase of at least 50,000 tpy              statutory provisions at issue: Congress,
                                                 75,000 tpy CO2e; and (ii) title V applies               CO2e; and (ii) existing sources will be                through the definition of ‘‘major
                                                 to what we will call ‘‘anyway’’ title V                 subject to title V on account of their                 emitting facility,’’ applied the PSD
                                                 sources, that is, sources that are subject              GHG emissions if they emit 50,000 tpy                  program to include ‘‘any * * * source
                                                 to title V anyway due to their emissions                CO2e in GHG emissions. Under this                      [that] emit[s], or ha[s] the potential to
                                                 of non-GHG pollutants. Under this                       approach, each year, the permitting                    emit, one hundred [or, depending on the
                                                 approach, the number of sources subject                 authorities will need to issue GHG                     source category two hundred fifty] tons
                                                 to PSD each year—including new                          permits to 3 additional sources that                   per year or more of any air pollutant.’’
                                                 construction and modifications—is the                   newly construct and 1,900 that                         CAA sections 165(a), 169(1). In
                                                 same as under the current program, but                  undertake modifications above current                  addition, Congress, through the
                                                 the permitting authorities will need to                 permitting levels. Doing so will require               definition of ‘‘modification,’’ applied the
                                                 address GHG emissions as part of those                  613,986 additional workload hours                      PSD program to include ‘‘any physical
                                                 permitting actions each year and, to do                 costing $47 million, compared to the                   change in, or change in the method of
                                                 so, will require, each year, 34,400                     current program. For title V, an                       operation of, a stationary source which
                                                 additional workload hours costing an                    additional 1,189 sources will require                  increases the amount of any air
                                                 additional $3 million. For title V, we                  new title V permits each of the first 3                pollutant emitted by such source or
                                                 estimate that the number of title V                     years and the permitting authorities’                  which results in the emission of any air
                                                 sources that require permitting actions                 associated costs will be 568,017 work                  pollutant not previously emitted.’’ CAA
                                                 will, on average, be the same each year,                hours and $26 million more than the                    sections 165(a), 169(2)(C), 111(a)(4).
                                                 but permitting authorities will need to                 current program.                                       Similarly, Congress, through the
                                                 address GHG requirements for some of                       We present the remaining entries in                 definition of ‘‘major source,’’ specified
                                                 them; as a result, permitting authorities               the table to illustrate how the cost and               that the title V program includes ‘‘any
                                                 will need, each year, 27,468 additional                 burden estimates vary with increasing                  stationary facility or source of air
                                                 work hours costing $1 million in                        or decreasing thresholds relative to                   pollutants which directly emits, or has
                                                 additional funding.                                     those selected in this rule. These                     the potential to emit, one hundred tons
                                                    Another threshold described in Table                 variations are important in                            per year or more of any air pollutant.’’
                                                 V–1 is the one we are adopting under                    understanding how alternative                          CAA sections 502(a), 501(2)(B), 302(j).
                                                 Step 2, as described later, under which                 thresholds would compare to the ones                   EPA, through long-established
                                                 (i) sources will be subject to PSD on                   selected. We also include entries                      regulatory action, in the case of PSD,
                                                 account of their GHG emissions if they                  reflecting the baseline (current program               and long-established guidance, in the
                                                 newly construct and emit at least                       without GHG permitting) and the                        case of title V, has interpreted these
                                                 100,000 tpy CO2e, or if they are existing               burdens if we immediately                              definitions narrowly so that they apply
                                                 sources that emit at least 100,000 tpy                  implemented the full statutory                         only with respect to air pollutants that
                                                 CO2e of GHGs and make a modification                    thresholds on January 2, 2011, without                 are subject to regulation under the CAA.
                                                 that results in a net emissions increase                                                                          Applying these definitions by their
                                                                                                         tailoring or streamlining.
                                                 of at least 75,000 tpy CO2e; and (ii)                                                                          terms, as interpreted narrowly by EPA,
                                                 existing sources will be subject to title               3. ‘‘Absurd Results,’’ ‘‘Administrative                to GHG sources at the present time
                                                 V due to their GHG emissions if they                    Necessity,’’ and ‘‘One-Step-at-a-Time’’                would mean that the PSD and title V
                                                 emit 100,000 tpy CO2e in GHG                            Legal Doctrines                                        programs would apply to an
                                                 emissions. Under this approach, which                   a. Introduction and Summary                            extraordinarily large number of small
                                                 we will call the 100,000/75,000                                                                                sources, the sources would incur
                                                 approach, we estimate that each year,                      Having described the factual                        unduly high compliance costs, and
                                                 compared to current levels, the                         underpinnings of our action, which are                 permitting authorities would face
                                                 permitting authorities will need to issue               the costs to sources and administrative                overwhelming administrative burdens.
                                                 GHG permits to two additional sources                   burdens to permitting authorities, we                  As a result, we believe Congress did not
                                                 that newly construct and to 915                         now describe the legal underpinnings.                  intend for us to follow this literal
                                                 additional sources that undertake                       They involve the framework for                         reading, and instead, with this action,
                                                 modifications. Doing so will require                    analyzing agency-administered statutes,                we chart a course for tailoring the
                                                 310,655 additional workload hours                       as established by the U.S. Supreme                     applicability provisions of the PSD
                                                 costing an additional $24 million,                      Court in Chevron U.S.A. Inc. v. NRDC,                  program and the title V program by
                                                 compared to the current program. For                    467 U.S. 837, 842–43 (1984). In this                   phasing them in over time to the
                                                 title V, an additional 190 sources will                 case, Chevron framework must take into                 prescribed extent.
                                                 require new title V permits each of the                 account the ‘‘absurd results,’’                           For our authority to take this action,
                                                 first 3 years, and the permitting                       ‘‘administrative necessity,’’ and ‘‘one-               we rely in part on the ‘‘absurd results’’
                                                 authorities’ associated costs will be                   step-at-a-time’’ legal doctrines. We                   doctrine, because applying the PSD and
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                                                 141,322 work hours and $7 million                       believe that each of these doctrines                   title V requirements literally (as
                                                 more than the current program.                          provides independent support for our                   previously interpreted narrowly by
                                                    The last approach we will describe                   action, but in addition, the three
                                                 here may be called the 50,000/50,000                    doctrines are directly intertwined and                   24 Although we set out an analysis of how the

                                                 approach, which, as discussed later, we                 can be considered in a comprehensive                   three doctrines fit into the Chevron framework, we
                                                                                                                                                                note that even if the doctrines are viewed
                                                 adopt as the floor for thresholds during                and interconnected manner. Moreover,                   independently of the Chevron framework, they
                                                 the first 6 years after promulgation.                   although each of the three doctrines pre-              support this action.



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                                                 EPA) would not only be inconsistent                     the provision is not clear, then the                       not conceivably have been intended to
                                                 with congressional intent concerning                    agency may, under Step 2, fashion a                        apply’ to the case at hand [citation
                                                 the applicability of the PSD and title V                reasonable interpretation of the                           omitted]’’); Nixon v. Missouri Municipal
                                                 programs, but in fact would severely                    provision. Chevron U.S.A. Inc. v. NRDC,                    League, 541 U.S. 125, 132–33 (2004)
                                                 undermine congressional purpose for                     467 U.S. 837, 842–43 (1984).                               (‘‘any entity’’ includes private but not
                                                 those programs. We also rely on the                         The courts consider the best indicator                 public entities); Raygor v. Regents of
                                                 ‘‘administrative necessity’’ doctrine,                  of congressional intent to be the plain                    Univ. of Minn., 534 U.S. 533, 542–45
                                                 which applies because construing the                    meaning of the statute. However, the                       (2002) (‘‘implying a narrow
                                                 PSD and title V requirements literally                  U.S. Supreme Court has held that the                       interpretation of * * * ‘any claim
                                                 (as previously interpreted narrowly by                  literal meaning of a statutory provision                   asserted’ so as to exclude certain claims
                                                 EPA) would render it impossible for                     is not conclusive ‘‘in the ‘rare cases [in                 dismissed on Eleventh Amendment
                                                 permitting authorities to administer the                which] the literal application of a                        grounds’’); United States v. X-Citement
                                                 PSD provisions. The tailoring approach                  statute will produce a result                              Video, Inc., 513 U.S. 64, 69 (1994)
                                                 we promulgate in this action is                         demonstrably at odds with the                              (rejecting a literal interpretation of the
                                                 consistent with both doctrines. It is also              intentions of the drafters’ * * * [in                      statutory term ‘‘knowingly’’ on grounds
                                                 consistent with a third doctrine, the                   which case] the intention of the drafters,                 that Congress could not have intended
                                                 ‘‘one-step-at-a-time’’ doctrine, which                  rather than the strict language, controls.’’               the ‘‘positively absurd’’ results that some
                                                 authorizes administrative agencies                      United States v. Ron Pair Enterprises,                     applications of such an interpretation
                                                 under certain circumstances to address                  489 U.S. 235, 242 (1989). This doctrine                    would produce, ‘‘[f]or instance, a retail
                                                 mandates through phased action.                         of statutory interpretation may be                         druggist who returns an uninspected
                                                    Our discussion of the legal bases for                termed the ‘‘absurd results’’ doctrine.
                                                                                                                                                                    roll of developed film to a customer
                                                 this rule is organized as follows: In this                  Although, as just noted, the U.S.
                                                                                                         Supreme Court has described the                            ‘‘knowingly distributes’’ a visual
                                                 section V.B.3, we provide an overview
                                                                                                         ‘‘absurd results’’ cases as ‘‘rare,’’ in that              depiction and would be criminally
                                                 of the three doctrines and describe how
                                                                                                         case the Court seemed to be referring to                   liable if it were later discovered that the
                                                 they fit into the Chevron framework for
                                                                                                         the small percentage of statutory-                         visual depiction contained images of
                                                 statutory construction. In section V.B.4,
                                                                                                         construction cases that are decided on                     children engaged in sexually explicit
                                                 we discuss the PSD and title V
                                                                                                         the basis of the doctrine. The DC                          conduct’’); Rowland v. Cal. Men’s
                                                 programs, including each program’s
                                                                                                         Circuit, in surveying the doctrine over                    Colony, 506 U.S. 194, 200 (1993)
                                                 relevant statutory provisions, legislative
                                                 history, and regulatory history. In                     more than a century of jurisprudence,                      (finding that an artificial entity such as
                                                 sections V.B.5 and V.B.6 we discuss the                 characterized the body of law in                           an association is not a ‘‘person’’ under
                                                 ‘‘absurd results’’ approach for PSD and                 absolute numbers as comprising                             the statute, and describing the absurdity
                                                 title V, respectively, that we are                      ‘‘legions of court decisions.’’ In re                      doctrine as a ‘‘common mandate of
                                                 finalizing in our action. In section                    Franklyn C. Nofziger, 925 F.2d 428, 434                    statutory construction’’); United States
                                                 V.B.7., we discuss additional                           (DC Cir. 1991). Indeed, there are dozens                   v. Ron Pair Enterprises, 489 U.S. 235,
                                                 rulemaking in which we may consider                     of cases, dating from within the past                      242 (1989) (the plain meaning of a
                                                 exempting certain categories of sources                 several years to well into the 19th                        statutory provision is not conclusive ‘‘in
                                                 from PSD and title V under the ‘‘absurd                 century,25 in which the U.S. Supreme                       the ‘rare cases [in which] the literal
                                                 results’’ doctrine. In section V.B.8, we                Court has applied the ‘‘absurd results’’                   application of a statute will produce a
                                                 discuss the legal and policy rationale for              doctrine to avoid the literal application                  result demonstrably at odds with the
                                                 the phase-in schedule that we are                       of a statute, or if not so holding, has                    intentions of the drafters’ * * * [in
                                                 adopting for applying PSD and title V to                nevertheless clearly acknowledged the                      which case] the intention of the drafters,
                                                 GHG sources. In section V.B.9 we                        validity of the doctrine. Some of the                      rather than the strict language,
                                                 discuss the ‘‘administrative necessity’’                more recent of these cases include:                        controls’’); Green v. Bock Laundry
                                                 approach for PSD and title V,                           Logan v. United States, 552 U.S. 23, 36–                   Machine Company, 490 U.S. 504 (1989)
                                                 respectively. In section V.B.10, we                     37 (2007) (‘‘[s]tatutory terms, we have                    (provision in Federal Rule of Evidence
                                                 discuss the third legal basis for our                   held, may be interpreted against their                     that protects ‘‘the defendant’’ against
                                                 action, the ‘‘one-step-at-a-time’’ doctrine.            literal meaning where the words ‘could                     potentially prejudicial evidence, but not
                                                                                                                                                                    the plaintiff, refers to only criminal, and
                                                 b. The ‘‘Absurd Results’’ Doctrine                         25 For early cases in which the U.S. Supreme            not civil, defendants); Public Citizen v.
                                                    Turning first to the ‘‘absurd results’’              Court applied the ‘‘absurd results’’ doctrine, see         United States Dep’t of Justice, 491 U.S.
                                                                                                         Holy Trinity Church v. U.S., 143 U.S. 457, 516–17          440, 453–54 (1989) (rejecting a broad,
                                                 doctrine, we note at the outset that we                 (1892) (‘‘any alien’’ does not include a foreign
                                                 discussed the doctrine at length in the                 pastor; Court stated, ‘‘It is a familiar rule, that a      straightforward reading of the term
                                                 notice of proposed rulemaking, and we                   thing may be within the letter of the statute and yet      ‘‘utilize,’’ on grounds that a literal
                                                 incorporate by reference that discussion,               not within the statute, because not within its spirit,     reading would appear to require the
                                                                                                         nor within the intention of its makers * * *. If a
                                                 although we make some refinements to                    literal construction of the words be absurd, the Act
                                                                                                                                                                    absurd result that all of FACA’s
                                                 that discussion in this preamble. The                   must be construed as to avoid the absurdity’’); Chew       restrictions apply if a President consults
                                                 starting point for EPA’s interpretation of              Heong v. United States, 112 U.S. 536, 555 (1884)           with his own political party before
                                                 the PSD and title V applicability                       (rejecting a literal interpretation of treaty that would   picking his Cabinet, and such a reading
                                                                                                         have prevented the re-entry of a person into the
                                                 provisions and reliance on the ‘‘absurd                 U.S. upon the ground that he did not possess a             ‘‘was unmistakably not Congress’
                                                 results’’ doctrine is the familiar Chevron              certificate which did not exist prior to his               intention’’); Watt v. Alaska, 451 U.S.
                                                 two-step analysis. We discuss this                      departure, and which could not possibly have been          259, 266 (1981) (rejecting reliance on
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                                                 analysis in greater detail later, but in                issued); Heyenfeldt v. Daney Gold Mining Co., 93           plain statutory language and concluding
                                                                                                         U.S. 634, 638 (1877) (statutory language expressly
                                                 brief, in interpreting a statutory                      referred to past land sales and dispositions, ‘‘but        that the term ‘‘minerals’’ in section
                                                 provision, an agency must, under                        evidently they were not employed in this sense, for        401(a) of the Wildlife Refuge Revenue
                                                 Chevron Step 1, determine whether                       no lands in Nevada had been sold or disposed of            Sharing Act applies only to minerals on
                                                                                                         by any act of Congress,’’ and the language of the
                                                 Congress’s intent on a particular                       statute ‘‘could not * * * apply to past sales or
                                                                                                                                                                    acquired refuge lands; stating ‘‘[t]he
                                                 question is clear; if so, then the agency               dispositions, and, to have any effect at all, must be      circumstances of the enactment of
                                                 must follow that intent. If the intent of               held to apply to the future’’).                            particular legislation may persuade a


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                                                 court that Congress did not intend                          provisions or that have acknowledged                 action conform to the SIP that is
                                                 words of common meaning to have their                       the doctrine. Some of the most recent                currently in place, EPA may instead
                                                 literal effect’’); Train v. Colorado Public                 ones include: Arkansas Dairy                         require conformity to a revised
                                                 Interest Research Group, Inc., 426 U.S.                     Cooperative Ass’n, Inc., v. U.S. Dep’t of            implementation plan that state commits
                                                 1, 23–24 (1976) (prohibition in Federal                     Agriculture, 573 F.3d 815 (DC Cir. 2009)             to develop; ‘‘[t]his is one of those rare
                                                 Water Pollution Control Act against                         (rejecting the canon of construction that            cases * * * [that] requires a more
                                                 discharging into navigable waters                           presumes that Congress is aware of                   flexible, purpose-oriented interpretation
                                                 ‘‘pollutants,’’ which are defined to                        existing law pertinent to the legislation            if we are to avoid ‘absurd or futile
                                                 include ‘‘radioactive materials,’’ does not                 that it enacts, when in this case, the               results.’ ’’); American Water Works Ass’n
                                                 apply to three specific types of                            presumption that Congress was aware of               v. EPA, 40 F.3d 1266, 1271 (DC Cir.
                                                 radioactive materials); Jackson v. Lykes                    the Departments definition of ‘‘hearing’’            1994) (holding that EPA’s interpretation
                                                 Bros. S.S. Co., 386 U.S. 731, 735 (1967)                    would lead to ‘‘the absurd result that               of the term ‘‘feasible’’ so as to require a
                                                 (refusing to distinguish between a                          Congress intended to impose a                        treatment technique instead of a
                                                 longshoreman hired by ‘‘an independent                      requirement with which the Secretary                 maximum contaminant level (MCL) for
                                                 stevedore company’’ and one hired by                        could not comply;’’ stating: ‘‘Courts, ‘in           lead is reasonable; the court stated:
                                                 ‘‘the shipowner * * * to do exactly the                     interpreting the words of a statute,                 ‘‘Indeed, where a literal reading of a
                                                 same kind of work,’’ despite the clear                      [have] some scope for adopting a                     statutory term would lead to absurd
                                                 terms of the Act, and stating: ‘‘[w]e                       restricted rather than a literal or usual            results, the term simply ‘has no plain
                                                 cannot hold that Congress intended any                      meaning of its words where acceptance                meaning * * * and is the proper subject
                                                 such incongruous, absurd, and unjust                        of that meaning would lead to absurd                 of construction by the EPA and the
                                                 result in passing this Act,’’ when the Act                  results * * * or would thwart the                    courts.’ If the meaning of ‘feasible’
                                                 was ‘‘designed to provide equal justice                     obvious purpose of the statute * * *.’ ’’            suggested by the NRDC is indeed its
                                                 to every longshoreman similarly                             (quoting In re Trans Alaska Pipeline                 plain meaning, then this is such a case;
                                                 situated’’); Lynch v. Overholser, 369 U.S.                  Rate Cases, 436 U.S. 631, (1978));                   for it could lead to a result squarely at
                                                 705, 710, (1962) (statutory construction                    Buffalo Crushed Stone, Inc. v. Surface               odds with the purpose of the Safe
                                                 is not confined to the ‘‘bare words of a                    Transportation Board, 194 F.3d 125,                  Drinking Water Act.’’ (quoting Chem.
                                                 statute’’); United States v. Bryan, 339                                                                          Mfrs. Ass’n v. Natural Res. Def. Council,
                                                                                                             129–30 (DC Cir. 1999) (regulation of
                                                 U.S. 323, 338 (1950) (‘‘Despite the fact                                                                         Inc., 470 U.S. 116, 126 (1985)) (citation
                                                                                                             Surface Transportation Board providing
                                                 that the literal language would                                                                                  omitted); In re Nofziger, 925 F.2d 428,
                                                                                                             that if a notice of exemption ‘‘contains
                                                 encompass testimony elicited by the                                                                              434–35 (DC Cir. 1991) (provision
                                                                                                             false or misleading information, the use
                                                 House Committee in its questioning of                                                                            authorizing payment of attorney fees to
                                                                                                             of the exemption is void ab initio’’ does
                                                 respondent relative to the production of                                                                         the subject of an investigation
                                                                                                             not apply to a notice containing false
                                                 the records of the association, the Court                                                                        conducted by an independent counsel
                                                                                                             information when declaring the notice
                                                 will not reach that result if it is contrary                                                                     of the Department of Justice only if ‘‘no
                                                                                                             void ab initio would undermine the
                                                 to the congressional intent and leads to                                                                         indictment is brought’’ against such
                                                                                                             goals of the governing statute; a conflict
                                                 absurd conclusions. And we are clearly                                                                           individual does not preclude payment
                                                                                                             between the ‘‘literal application of                 of attorney fees when an indictment is
                                                 of the opinion that the congressional
                                                                                                             statutory language’’ and maintaining the             brought but is determined to be invalid).
                                                 purpose would be frustrated if the
                                                                                                             integrity of the regulatory scheme
                                                 words, ‘‘in any criminal proceeding,’’                                                                           c. The ‘‘Administrative Necessity’’
                                                                                                             should be resolved by construing the
                                                 were read to include a prosecution for                                                                           Doctrine
                                                                                                             text in accordance with its purpose);
                                                 willful default under R.S. § 102.’’).26
                                                                                                             Mova Pharm. Corp. v. Shalala, 140 F.3d                  In the proposed rulemaking, we also
                                                    The DC Circuit has also handed down
                                                                                                             1060, 1068–69 (DC Cir. 1998) (as                     described in detail the ‘‘administrative
                                                 numerous decisions that applied the
                                                                                                             discussed later, describes the ‘‘absurd              necessity’’ doctrine, 74 FR 55311 col. 3
                                                 absurd results doctrine to avoid a literal
                                                                                                             results’’ doctrine in the context of the             to 55318 col. 3, and we incorporate that
                                                 interpretation or application of statutory
                                                                                                             Chevron framework for statutory                      discussion by reference into this notice.
                                                     26 For other U.S. Supreme Court cases, see Utah         construction; invalidates a Food and                 Under this doctrine, if a statutory
                                                 Junk Co. v. Porter, 328 U.S. 39, 44 (1946)                  Drug Administration’s (FDA) regulation               provision, however clear on its face, is
                                                 (‘‘literalness may strangle meaning’’); Markham v.          designed to remedy what the FDA                      impossible for the agency to administer,
                                                 Cabell, 326 U.S. 404, 409 (1945) (‘‘The policy as           described as the absurd result of a literal          then the agency is not required to follow
                                                 well as the letter of the law is a guide to decision.’’);
                                                 United States v. American Trucking Associations,
                                                                                                             application of the statutory provisions              the literal requirements, and instead, the
                                                 Inc. 310 U.S. 534 (1940) (the term ‘‘employees’’ in         governing FDA approval of successive                 agency may adjust the requirements in
                                                 the Federal Motor Carrier Act, is limited to                generic drug applications, on grounds                as refined a manner as possible to assure
                                                 employees whose activities affect safety); C.V.             that ‘‘[i]n effect, the FDA has embarked             that the requirements are administrable,
                                                 Sorrels v. U.S., 287 U.S. 435, 446–49 (1932)
                                                 (provisions of National Prohibition Act that
                                                                                                             upon an adventurous transplant                       while still achieving Congress’s overall
                                                 criminalize possessing and selling liquor do not            operation in response to blemishes in                intent. The DC Circuit set out the
                                                 apply if defendant is entrapped; Court declines to          the statute that could have been                     doctrine of ‘‘administrative necessity’’ in
                                                 apply the ‘‘letter of the statute’’ because doing so ‘‘in   alleviated with more modest corrective               a line of cases that most prominently
                                                 the circumstances under consideration is foreign to
                                                 its purpose’’); United States v. Katz, 271 U.S. 354,
                                                                                                             surgery;’’ states that ‘‘[t]he rule that             includes Alabama Power v. Costle, 636
                                                 362 (1926) (holding that the statutory words ‘‘no           statutes are to be read to avoid absurd              F.2d 323 (DC Cir. 1980). The Court cited
                                                 person’’ refer only to persons authorized under             results allows an agency to establish                the doctrine most recently in New York
                                                 other provisions of the Act to traffic alcohol, thus        that seemingly clear statutory language              v. EPA, 443 F.3d 880, 884, 888 (DC Cir.
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                                                 rejecting a literal application of general terms
                                                 descriptive of a class of persons made subject to a
                                                                                                             does not reflect the ‘‘unambiguously                 2006).
                                                 criminal statute); Hawaii v. Mankichi, 190 U.S. 197,        expressed intent of Congress,’’ Chevron,                As we stated in the proposed
                                                 212–14 (1903) (refusing to adopt a literal                  467 U.S. at 842, and thus to overcome                rulemaking, ‘‘We believe that the
                                                 application of the ‘‘Newlands resolution’’ which            the first step of the Chevron analysis’’);           ‘‘administrative necessity’’ case law
                                                 would have entitled every criminal in the State of
                                                 Hawaii convicted of an offense between 1898–1900
                                                                                                             Environmental Defense Fund v. EPA, 82                establishes a three-step process under
                                                 to be set at large, as ‘‘surely such a result could not     F.3d 451, 468–69 (DC Cir. 1996)                      which an administrative agency may,
                                                 have been within the contemplation of Congress’’).          (although Act requires that a federal                under the appropriate circumstances, in


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                                                 effect revise statutory requirements that               implementing the programs are relevant                 schemes, step-by-step agency action
                                                 the agency demonstrates are impossible                  in determining the applicability of the                might not be authorized; but the Court
                                                 to administer so that they are                          ‘‘administrative necessity’’ doctrine.                 emphasized that when it is authorized,
                                                 administrable.’’ 74 FR 55315 col. 1.                                                                           it may offer significant benefits; and the
                                                                                                         d. ‘‘One-Step-at-a-Time’’ Doctrine
                                                 Specifically:                                                                                                  Court went on to delineate some of the
                                                                                                            In addition to the ‘‘absurd results’’ and           circumstances under which its use is
                                                    [T]he three steps are as follows: When an
                                                 agency has identified what it believes may be
                                                                                                         ‘‘administrative necessity’’ doctrines,                justified. In that case, the Court held
                                                 insurmountable burdens in administering a               another judicial doctrine supports at                  that Federal Communications
                                                 statutory requirement, the first step the               least part of EPA’s Tailoring Rule, and                Commission (FCC) acted reasonably in
                                                 agency must take is to evaluate how it could            that is the doctrine that agencies may                 making a spectrum allocation decision
                                                 streamline administration as much as                    implement statutory mandates one step                  that granted direct broadcast satellite
                                                 possible, while remaining within the                    at a time, which we will call the ‘‘one-               service priority use of a gigahertz (GHz)
                                                 confines of the statutory requirements. The             step-at-a-time’’ doctrine. In the notice of            band in 5-years time, and—although
                                                 second step is that the agency must                     proposed rulemaking, we also described
                                                 determine whether it can justifiably conclude
                                                                                                                                                                acknowledging that fixed service users
                                                                                                         this doctrine and recent case law                      that were, at that time, using that band,
                                                 that even after whatever streamlining of                applying it. 74 FR 55319 col. 1–3. As we
                                                 administration of statutory requirements                                                                       would have to relocate to other bands—
                                                 (consistent with those statutory
                                                                                                         noted, that the U.S. Supreme Court                     in postponing the details of the fixed
                                                 requirements) it conducts, the remaining                recently described the doctrine in                     service relocation to future proceedings.
                                                 administrative tasks are impossible for the             Massachusetts v. EPA, 549 U.S. 497, 524                The Court described in some detail
                                                 agency because they are beyond its resources,           (2007), as follows: ‘‘Agencies, like                   ‘‘[t]he circumstances under which * * *
                                                 e.g., beyond the capacities of its personnel            legislatures, do not generally resolve                 [an] agency may defer resolution of
                                                 and funding. If the agency concludes with               massive problems in one fell regulatory                problems raised in a rulemaking,’’ as
                                                 justification that it would be impossible to            swoop;’’ and instead they may
                                                 administer the statutory requirements, as
                                                                                                                                                                follows:
                                                                                                         permissibly implement such regulatory
                                                 streamlined, then the agency may take the               programs over time, ‘‘refining their                      The requisite judgment is in essence a
                                                 third step, which is to phase in or otherwise           preferred approach as circumstances                    pragmatic one. In an ideal world, of course,
                                                 adjust the requirements so that they are                                                                       agencies would act only after comprehensive
                                                 administrable. However, the agency must do
                                                                                                         change and as they develop a more                      consideration of how all available
                                                 so in a manner that is as refined as possible           nuanced understanding of how best to                   alternatives comported with a well-defined
                                                 so that the agency may continue to                      proceed.’’ We assume familiarity with                  policymaking objective, and in some
                                                 implement as fully as possible Congressional            our discussion in the proposal, but we                 circumstances, statutes indeed mandate that
                                                 intent.                                                 expand upon it here to review the case                 agencies proceed by only such a course
                                                                                                         law in greater detail and to highlight                 * * *. But administrative action generally
                                                 74 FR 55315 cols. 1–2.                                                                                         occurs against a shifting background in
                                                                                                         certain components of the doctrine that
                                                    It should also be noted that we believe              are particularly relevant to the Tailoring             which facts, predictions, and policies are in
                                                 the administrative burdens encountered                                                                         flux and in which an agency would be
                                                                                                         Rule. The roots of the doctrine go back
                                                 by the state and local permitting                                                                              paralyzed if all the necessary answers had to
                                                                                                         at least to the DC Circuit’s 1979 decision             be in before any action at all could be taken
                                                 authorities are fully relevant under the                in United States Brewers Association,                  * * *. We have therefore recognized the
                                                 ‘‘administrative necessity’’ doctrine.                  Inc. v. EPA, 600 F.2d 974 (DC Cir. 1979).              reasonableness of [an agency’s] decision to
                                                 Although the case law that discusses the                There, the Court considered a challenge                engage in incremental rulemaking and to
                                                 doctrine focuses on federal agencies (see               to EPA’s guidelines for managing                       defer resolution of issues raised in a
                                                 74 FR 55312–14), under the CAA, state                   beverage containers, which EPA was                     rulemaking even when those issues are
                                                 and local agencies are EPA’s partners in                required to promulgate under the                       ‘‘related’’ to the main ones being considered
                                                 implementing provisions of the CAA,                     Resource Conservation and Recovery                     * * *. At the same time, [an agency] cannot
                                                 and have primary responsibility for                     Act of 1976 (RCRA). RCRA gave EPA                      ‘restructure [an] entire industry on a
                                                 implementing the PSD program. They                                                                             piecemeal basis’ through a rule that utterly
                                                                                                         one year to promulgate the guidelines.                 fails to consider how the likely future
                                                 generally adopt EPA’s PSD requirements                  EPA promulgated a partial set of                       resolution of crucial issues will affect the
                                                 in their SIPs, as required under CAA                    guidelines, started two others, and was                rule’s rationale * * *.
                                                 section 110(a)(2)(C); and they generally                challenged before the year was out by                     Drawing a line between the permissible
                                                 adopt EPA’s title V requirements in                     petitioners who objected to the initial                and the impermissible in this area will
                                                 their title V programs, as required under               guideline, saying it fell short of the                 generally raise two questions. First the
                                                 CAA section 502(d). They issue the PSD                  statutory mandate. The Court upheld                    agency will likely have made some
                                                 and title V permits and are responsible                 the initial guideline, stating: ‘‘Under                estimation, based upon evolving economic
                                                 in the first instance for enforcing the                 these circumstances we think the                       and technological conditions, as to the nature
                                                 terms of the permits. In all these                      question of whether the Agency has                     and magnitude of the problem it will have to
                                                 respects, the law that the state and local                                                                     confront when it comes to resolve the
                                                                                                         fully satisfied the mandate of the statute             postponed issue. With regard to this aspect
                                                 permitting authorities administer is both               is not fit for judicial review at this time,           of the agency’s decision, as long as the
                                                 federal and state law. Under certain                    when the Agency, still well within the                 agency’s predictions about the course of
                                                 circumstances, EPA may become                           one-year period granted by statute, is                 future events are plausible and flow from the
                                                 responsible for permit issuance and                     deeply involved in the process of                      factual record compiled, a reviewing court
                                                 enforcement in the first instance, but                  formulating rules designed to carry out                should accept the agency’s estimation * * *.
                                                 even then, EPA may, and frequently has,                 the congressional mandate. The Agency                  Second, once the nature and magnitude of
                                                 delegated those duties to a state, in                   might properly take one step at a time.’’              the unresolved issue is determined, the
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                                                 which case, the state implements federal                States Brewers Association, Inc. v. EPA,               relevant question is whether it was
                                                 law directly. Thus, although the PSD                                                                           reasonable, in the context of the decisions
                                                                                                         600 F.2d at 982.                                       made in the proceeding under review, for the
                                                 and title V programs are federal                           The Court addressed the doctrine at                 agency to have deferred the issue to the
                                                 requirements, for the most part, it is the              greater length in National Association of              future. With respect to that question,
                                                 states that implement those programs.                   Broadcasters v. FCC, 740 F.2d 1190,                    postponement will be most easily justified
                                                 For this reason, the administrative                     1209–14 (DC Cir. 1984). There, the                     when an agency acts against a background of
                                                 burdens that the states face in                         Court noted that under certain statutory               rapid technical and social change and when



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                                                 the agency’s initial decision as a practical            substantial restoration. Although                       on a permissible construction of the
                                                 matter is reversible should the future                  recognizing that the Overflights Act did                statute.’’
                                                 proceedings yield drastically unexpected                not establish an explicit timetable for                    Chevron U.S.A. Inc. v. NRDC, 467
                                                 results. In contrast, an incremental approach
                                                 to agency decision making is least justified
                                                                                                         meeting the statutory goal, the Court                   U.S. 837, 842–42 (1984).
                                                 when small errors in predictive judgments               stated that ‘‘[t]he language of the                        Thus, Step 1 under Chevron calls for
                                                 can have catastrophic effects on the public             Overflights Act does manifest a                         determining congressional intent for the
                                                 welfare or when future proceedings are likely           congressional concern with expeditious                  relevant statutory directive on the
                                                 to be systematically defective in taking into           agency action,’’ and described the                      specific issue presented. To determine
                                                 account certain relevant interests * * *.               agency’s action variously as ‘‘tardy,’’                 Congress’s intent, the agency must look
                                                 740 F.2d at 1210–11 (citations omitted).                ‘‘undeniably slow,’’ and ‘‘slow and                     first to the statutory terms in question,
                                                    In City of Las Vegas v. Lujan, 891 F.2d              faltering.’’ Id. at 476–77. Even so, the                and generally interpret them according
                                                 927 (DC Cir. 1989), the Court suggested                 Court upheld the FAA’s action against                   to their literal meaning, within the
                                                 that one component of upholding partial                 different challenges from appellants and                overall statutory context, and perhaps
                                                 agency compliance with a statutory                      intervenors that (i) the agency acted                   with reference to the legislative history.
                                                 directive is evidence that the agency                   unreasonably in not promulgating a                      If the literal meaning of the statutory
                                                 was on track for full compliance. There,                complete plan to meet the statutory                     requirements is clear then, absent
                                                 the Court upheld the Department of                      goal, instead of promulgating just the                  indications to the contrary, the agency
                                                 Interior’s decision to list the population              first step; and (ii) the agency acted                   must take it to indicate congressional
                                                 of desert tortoises living north and west               unreasonably in not waiting until it had                intent and must implement it. Even if
                                                 of the Colorado River (the ‘‘Mojave’’                   a complete plan before promulgating the                 the literal meaning of the statutory
                                                 population) as endangered species, but                  first step. The Court stated: ‘‘We agree                requirements is not clear, if the agency
                                                 not the nearby population living south                  that it would be arbitrary and capricious               can otherwise find indications of clear
                                                 and east of the river (the ‘‘Sonoran’’                  for an agency simply to thumb its nose                  congressional intent, such as in the
                                                 population). The agency explained that                  at Congress and say—without any                         legislative history, then the agency must
                                                 the Mojave population faced certain                     explanation—that it simply does not                     implement that congressional intent.
                                                 threats that the Sonoran population did                 intend to achieve a congressional goal                     The DC Circuit has indicated that the
                                                 not, and the Court found nothing to                     on any timetable at all * * *,’’ but went               ‘‘absurd results’’ doctrine fits into the
                                                 fault in that reasoning. The Court added:               on to emphasize that the FAA’s rule was                 Chevron Step 1 analysis in the following
                                                 ‘‘Since agencies have great discretion to               the first of three that the agency assured              way: Recall that in the cases in which
                                                 treat a problem partially, we would not                 would achieve the statutory goal. The                   the courts have invoked this doctrine,
                                                 strike down the listing if it were a first              Court cited City of Las Vegas v. Lujan,                 the literal meaning of the statutory
                                                 step toward a complete solution, even if                discussed previously, for the                           requirements has been clear, but has led
                                                 we thought it ‘should’ have covered                     proposition that ‘‘a court will not strike              to absurd results. This can occur when
                                                 both the Mojave and Sonoran                             down agency action ‘if it were a first                  the literal meaning, when applied to the
                                                 populations.’’ City of Las Vegas v. Lujan,              step toward a complete solution.’ ’’                    specific question, conflicts with other
                                                 891 F.2d 927, 935 (DC Cir. 1989)                        Grand Canyon Air Tour Coalition v.                      statutory provisions, contradicts
                                                 (footnote omitted).                                     F.A.A., 154 F.3d 455, 477–78 (DC Cir.                   congressional purpose as found in the
                                                    In Grand Canyon Air Tour Coalition                   1998).27                                                legislative history—and, in particular,
                                                 v. F.A.A., 154 F.3d 455 (DC Cir. 1998),                 e. Consistency of Doctrines With                        undermines congressional purpose—or
                                                 the DC Circuit added another                            Chevron Framework                                       otherwise produces results so illogical
                                                 component to the ‘‘one-step-at-a-time’’                                                                         or otherwise contrary to sensible public
                                                 doctrine: While reiterating that                           Although the formation of the ‘‘absurd               policy as to be beyond anything
                                                 ‘‘ordinarily, agencies have wide latitude               results,’’ ‘‘administrative necessity,’’ and            Congress would reasonably have
                                                 to attack a regulatory problem in phases                ‘‘one-step-at-a-time’’ doctrines pre-date               intended. See United States v. Ron Pair
                                                 and that a phased attack often has                      the Chevron two-step analysis for                       Enterprises, 489 U.S. 235, 242–43
                                                 substantial benefits,’’ id. at 471, the                 construing statutes that Congress has                   (1989); Griffin v. Oceanic Contractors,
                                                 Court went on to uphold partial agency                  authorized an agency to administer, we                  Inc., 458 U.S. 564, 571 (1982).
                                                 action even when that action was long-                  believe that the doctrines can be                          Under these circumstances, the
                                                 delayed. There, the relevant statute was                considered very much a part of that                     agency must not take the literal meaning
                                                 the Overflights Act, which required the                 analysis, and courts have continued to                  to indicate congressional intent. As the
                                                 Federal Aviation Administration (FAA)                   apply them post-Chevron. Under                          DC Circuit has explained, ‘‘where a
                                                 to reduce aircraft noise from sightseeing               Chevron Step 1, an agency must                          literal reading of a statutory term would
                                                 tours in Grand Canyon National Park,                    determine whether ‘‘Congress has                        lead to absurd results, the term ‘simply
                                                 and established the goal of ‘‘substantial               directly spoken to the precise question                 has no plain meaning * * * and is the
                                                 restoration of natural quiet and                        at issue.’’ If so, ‘‘the court, as well as the          proper subject of construction by the
                                                 experience of the park.’’ The statute                   agency, must give effect to the                         EPA and the court.’ ’’ American Water
                                                 required the agency to develop a plan to                unambiguously expressed intent of                       Works Assn v. EPA, 40 F.3d 1266, 1271
                                                 implement the statutory requirements                    Congress.’’ However, if ‘‘the statute is                (DC Cir. 1994) (quoting Chemical
                                                 within 120 days after enactment, and                    silent or ambiguous with respect to the                 Manufacturers’ Association v. NRDC,
                                                 report to Congress within 2 years after                 specific issue, the question for the court              470 U.S. 116, 126 (1985)). Under these
                                                 the date of the plan as to the plan’s                   is whether the agency’s answer is based                 circumstances, if the agency can find
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                                                 success. In fact, the FAA did not                                                                               other indications of clear congressional
                                                 develop, through rulemaking, a plan                        27 For other cases, see Arizona Public Service Co.   intent, then the agency must implement
                                                 until ten years after enactment, and                    v. EPA, 562 F.3d 1116, 1125–26 (10th Cir. 2009);        that intent. See United States v. Ron
                                                 when it did, it acknowledged that the                   General American Transp. Corp. v. ICC, 872 F.2d         Pair Enterprises, 489 U.S. 235, 242–43
                                                                                                         1048, 1058 (DC Cir. 1989); Hazardous Waste
                                                 plan was only a partial one, and that it                Treatment Council v. EPA, 861 F.2d 277, 287 (DC
                                                                                                                                                                 (1989). This may mean implementing
                                                 would need two more rules and another                   Cir. 1988); Western Union International, Inc. v.        the statutory terms, albeit not in
                                                 ten years to meet the statutory goal of                 FCC, 725 Fl2d 732, 754 (DC Cir. 1984).                  accordance with their literal meaning,


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                                                 but in a way that achieves a result that                   Therefore, if the literal meaning of a              courts will uphold as long as it is
                                                 is as close as possible to congressional                statutory directive would impose on an                 reasonable.
                                                 intent. As the DC Circuit said in Mova                  agency an impossible administrative                       As noted previously, the DC Circuit,
                                                 Pharm. Corp. v. Shalala, 140 F.3d 1060                  burden, then that literal meaning should               has pointed out that this situation may
                                                 (DC Cir. 1998):                                         not be considered to be indicative of                  also occur when the literal language
                                                    The rule that statutes are to be read to             congressional intent. Rather,                          leads to an absurd result, and, in
                                                 avoid absurd results allows an agency to                congressional intent should be                         attempting to implement congressional
                                                 establish that seemingly clear statutory                considered to achieve as much of the                   intent, the agency is ‘‘able to show that
                                                 language does not reflect the ‘‘unambiguously           statutory directive as possible. As a                  there are multiple ways of avoiding a
                                                 expressed intent of Congress,’’ * * * and               result, the agency must adopt an                       statutory anomaly, all equally consistent
                                                 thus to overcome the first step of the Chevron          approach that implements the statutory                 with the intentions of the statute’s
                                                 analysis. But the agency does not thereby               directive as fully as possible. This is                drafters * * *. In such a case, we would
                                                 obtain a license to rewrite the statute. When           consistent with the DC Circuit’s holding               move to the second stage of the Chevron
                                                 the agency concludes that a literal reading of                                                                 analysis, and ask whether the agency’s
                                                                                                         in Mova Pharm. Corp that if
                                                 a statute would thwart the purposes of
                                                                                                         congressional intent is clear, but the                 choice between these options was
                                                 Congress, it may deviate no further from the
                                                 statute than is needed to protect                       plain meaning of a statute does not                    ‘based on a permissible construction of
                                                 congressional intent * * *. [T]he agency                express that intent, then the agency                   the statute.’ ’’ Mova Pharm. Corp, 140
                                                 might be able to show that there are multiple           must, under Chevron Step 1, select an                  F.3d at 1068. As the U.S. Supreme Court
                                                 ways of avoiding a statutory anomaly, all               interpretation that most closely                       has recently said, although in a context
                                                 equally consistent with the intentions of the           approximates congressional intent.                     different than ‘‘absurd results,’’ ‘‘In the
                                                 statute’s drafters * * *. In such a case, we            Mova Pharm. Corp, 140 F.3d at 1068.28                  end, the interpretation applied by EPA
                                                 would move to the second stage of the                      The ‘‘one-step-at-a-time’’ doctrine fits            ‘‘governs if it is a reasonable
                                                 Chevron analysis, and ask whether the                   into the Chevron framework in much                     interpretation of the statute—not
                                                 agency’s choice between these options was               the same manner that the                               necessarily the only possible * * *
                                                 ‘‘based on a permissible construction of the
                                                                                                         ‘‘administrative necessity’’ doctrine                  interpretation, nor even the
                                                 statute.’’ Otherwise, however, our review of
                                                 the agency’s deviation from the statutory text          does. That is, inherent in the statutory               interpretation deemed most reasonable
                                                 will occur under the first step of the Chevron          design is the presumption that Congress                by the courts.’’ Entergy Corp. v.
                                                 analysis, in which we do not defer to the               intended an agency, under certain                      Riverkeeper, Inc., 129 S.Ct. 1498. 1505
                                                 agency’s interpretation of the statute.                 circumstances, to implement the                        (2009).
                                                                                                         statutory requirements in a one-step-at-                  As a related matter, although the
                                                 Id. at 1068 (quoting Chevron U.S.A. Inc.
                                                                                                         a-time fashion, as long as the agency                  courts have described Chevron Step 2 as
                                                 v. NRDC, 467 U.S. 837, 842, 843 (1984)
                                                                                                         stays on a path towards full                           requiring that the agency’s policy be ‘‘a
                                                 (citations omitted)).
                                                                                                         implementation.                                        permissible construction of the statute,’’
                                                    The ‘‘administrative necessity’’                        Under all of the circumstances                      see Mova Pharm. Corp, 140 F.3d at 1068
                                                 doctrine is not as well developed as the                described previously, congressional                    (quoting Chevron, 467 U.S. at 842–43),
                                                 ‘‘absurd results’’ doctrine, so that the                intent is clear—whether it is indicated                if the statutory requirements cannot be
                                                 courts have not had occasion to                         by the plain language or otherwise—and                 read literally because doing so would
                                                 explicitly describe how the doctrine fits               as a result, the agency must follow that               produce ‘‘absurd results,’’ then the
                                                 into the Chevron analytical framework.                  intent under Chevron Step 1. On the                    agency’s policy need not be completely
                                                 However, we think that a reasonable                     other hand, the agency may determine                   consistent with those particular
                                                 approach, in line with the DC Circuit’s                 that congressional intent on the specific              requirements. The policy must still, in
                                                 approach to the ‘‘absurd results’’                      issue is not clear. In these cases, the                order to be upheld, be consistent with
                                                 doctrine as just described, is as follows:              agencies should proceed to Chevron                     Congress’s actions, but those actions
                                                 Recall that under the ‘‘administrative                  Step 2 and select an interpretation or an              should be considered to afford the
                                                 necessity’’ doctrine, an agency is not                  application that is a permissible                      agency broad discretion considering that
                                                 required to implement a statutory                       construction of the statute. This                      both the statutory terms cannot be
                                                 provision in accordance with the literal                situation generally occurs when the                    considered dispositive and underlying
                                                 requirements when doing so would be                     statutory provisions are ambiguous or                  congressional intent is not clear. As the
                                                 impossible, but the agency must                         silent as to the specific issue, and there             U.S. Supreme Court has recently said,
                                                 nevertheless implement the provision as                 are no other indications of clear                      although in a context different than
                                                 fully as possible. Placed in the context                congressional intent. In addition, in                  ‘‘absurd results,’’ In the end, the
                                                 of the Chevron framework, we think that                 some cases in which the literal meaning                interpretation applied by the agency
                                                 that the ‘‘administrative necessity’’                   of the statutory provision, when applied               governs if it is a reasonable
                                                 doctrine is based on the premise that                   to the specific question, leads to an                  interpretation of the statute—not
                                                 inherent in the statutory design is the                 absurd result—and, therefore, the                      necessarily the only possible * * *
                                                 presumption that Congress does not                      statutory provision should be                          interpretation, nor even the
                                                 intend to impose an impossible burden                   considered not to have a plain                         interpretation deemed most reasonable
                                                 on an administrative agency. See                        meaning—there may be no other                          by the courts.’’ Entergy Corp. v.
                                                 Alabama Power v. Costle, 636 F.2d 323,                  indications of clear congressional intent.             Riverkeeper, Inc., 129 S.Ct. 1498. 1505
                                                 357 (DC Cir. 1980) (describing the                      Under all these circumstances, the                     (2009).
                                                 ‘‘administrative necessity’’ approach as                agency is authorized, under Chevron                       There is another aspect of the
                                                 one of the ‘‘limited grounds for the                    Step 2, to develop and implement a                     ‘‘administrative necessity’’ doctrine
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                                                 creation of exemptions [that] are                       construction of the statute that the                   worth noting in this context: The
                                                 inherent in the administrative process,                                                                        doctrine applies when (i) a literal
                                                 and their unavailability under a                           28 We recognize that we described the               application of the statutory directive to
                                                 statutory scheme should not be                          relationship between the Chevron framework and         the case at hand is impossible for the
                                                                                                         the ‘‘administrative necessity’’ doctrine somewhat
                                                 presumed, save in the face of the most                  differently in the proposal, 74 FR 55312, and that,
                                                                                                                                                                agency to administer; and (ii) even so,
                                                 unambiguous demonstration of                            after further analysis, we are refining our view of    either Congress clearly intended the
                                                 congressional intent to foreclose them’’).              that relationship as described previously.             statutory directive to apply to the case


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                                                 at hand or, if Congress did not clearly                 instead to apply them in a manner                        or 250 tpy or GHGs and to all physical
                                                 intend that, then the agency reasonably                 consistent with administrative                           or operational changes by major
                                                 construes the statute to apply the                      resources. This also means phasing                       emitting facilities that ‘‘increase[ ] the
                                                 statutory directive to the case at hand.                them in through the approach in the                      amount’’ of GHGs; and, in the case of
                                                 In contrast, if Congress did not intend                 Tailoring Rule. Finally, the ‘‘one-step-at-              title V, whether the definition of ‘‘major
                                                 the statutory directive to apply to the                 a-time’’ doctrine, which authorizes                      source’’ applies to all GHG sources that
                                                 case at hand, or if congressional intent                incremental action by agencies to                        emit at least 100 tpy GHGs.
                                                 is uncertain and the agency considers                   implement statutory requirements under                      To determine intent, we must first
                                                 another approach to be reasonable, then                 certain circumstances, provides further                  examine the terms of the statute in light
                                                 the ‘‘administrative necessity’’ doctrine               support for the phased tailoring                         of their literal meaning. Here, the literal
                                                 would not apply. As a result, the agency                approach in the Tailoring Rule.                          reading of each provision covers GHG
                                                 would not be required to implement the                                                                           sources. For PSD, a GHG source that
                                                                                                         g. Application of Chevron Approach                       emits at least 100 or 250 tpy GHGs
                                                 statutory directive to the case at hand at
                                                 all, much less in a more administrable                     The Chevron analytical approach, and                  literally qualifies as ‘‘stationary source
                                                 fashion.                                                the three legal doctrines at issue here,                 [ ] of air pollutants which emit[s] or
                                                                                                         apply to this action in the following                    ha[s] the potential to emit, one hundred
                                                 f. Interconnectedness of the Legal                      manner: To reiterate, for convenience,                   [or two hundred fifty] tons per year or
                                                 Doctrines                                               the statutory provisions at issue:                       more of any air pollutant [subject to
                                                    Although we believe that each of the                 Congress, through the definition of                      regulation under the CAA].’’ CAA
                                                 ‘‘absurd results,’’ ‘‘administrative                    ‘‘major emitting facility,’’ applied the                 section 169(1). For modifications, a
                                                 necessity,’’ and ‘‘one-step-at-a-time’’                 PSD program to include (i) ‘‘any * * *                   physical or operational change that
                                                 doctrines provide independent support                   stationary sources of air pollutants                     increases the amount of GHG emissions
                                                 for our action, we also believe that in                 which emit or have the potential to                      qualifies as a ‘‘modification’’ because it
                                                 this case, the three doctrines are                      emit, one hundred [or, depending on the                  ‘‘increases the amount of any air
                                                 intertwined and form a comprehensive                    source category, two hundred fifty] tons                 pollutant emitted’’ by the source.
                                                 basis for EPA’s tailoring approach. As                  per year or more of any air pollutant,’’                 Similarly, for title V, a GHG source that
                                                 just discussed, each of the three                       CAA sections 165(a), 169(1); and (ii) and                emits at least 100 tpy GHGs literally
                                                 doctrines is tied into the Chevron                      such sources that undertake a physical                   qualifies as ‘‘any stationary facility or
                                                 analytical framework because each is                    or operational change that ‘‘increases the               source of air pollutants which directly
                                                 designed to give effect to underlying                   amount of any air pollutant emitted’’ by                 emits, or has the potential to emit, one
                                                 intent. As discussed previously, each of                such sources, CAA sections 165(a),                       hundred tons per year or more of any air
                                                 the three doctrines comes into play in                  169(2)(C), 111(a)(4).30 Similarly,                       pollutant [subject to regulation under
                                                 this case because a literal reading of the              Congress, through the definition of                      the CAA].’’ CAA sections 502(a),
                                                 PSD and title V applicability provisions                ‘‘major source,’’ specified that the title V             501(2)(B), 302(j).
                                                 results in insurmountable                               program includes ‘‘any stationary                           Although each definition is clear that
                                                 administrative burdens. Those                           facility or source of air pollutants which               it applies to GHG sources as a general
                                                 insurmountable administrative                           directly emits, or has the potential to                  matter, applying each definition in
                                                 burdens—along with the undue costs to                   emit, one hundred tons per year or more                  accordance with its literal meaning to
                                                 sources—must be considered ‘‘absurd                     of any air pollutant.’’ CAA sections                     all GHG sources at the specified levels
                                                 results’’ that would undermine                          502(a), 501(2)(B), 302(j). EPA, through                  of emissions and at the present time—
                                                 congressional purpose for the PSD and                   long-established regulatory action, in                   in advance of the development of
                                                 title V programs. Under the ‘‘absurd                    the case of PSD, and long-established                    streamlining methods and greater
                                                 results’’ doctrine, EPA is authorized not               interpretation, in the case of title V, has              permitting authority expertise and
                                                 to implement the applicability                          interpreted these definitions so that they               resources—would create undue costs for
                                                 provisions literally—that is, not to                    apply only with respect to air pollutants                sources and impossible administrative
                                                 implement them as applying on the                       that are subject to regulation under the                 burdens for permitting authorities.
                                                 January 2, 2011 date that PSD and title                 CAA.                                                     These results are not consistent with
                                                 V are triggered to all GHG sources at or                   For each of these applicability                       other provisions of the PSD and title V
                                                 above the statutory thresholds—but                      provisions, the approach under Chevron                   requirements, and are inconsistent
                                                 instead to tailor them in a manner                      is as follows: Under Chevron Step 1, we                  with—and, indeed, undermine—
                                                 consistent with congressional intent.                   must determine whether Congress                          congressional purposes for the PSD and
                                                 That means applying the PSD and title                   expressed an intention on the specific                   title V provisions. Accordingly, under
                                                 V requirements through a phase-in                       question, which is whether the PSD or                    the ‘‘absurd results’’ doctrine, neither the
                                                 approach to as many sources as possible                 title V applicability provisions apply to                PSD definition of ‘‘major emitting
                                                 and as quickly as possible, starting with               GHG sources. Said differently, the                       facility’’ or ‘‘modification’’ nor the title V
                                                 the largest sources, as EPA does with                   specific question is whether, in the case                definition of ‘‘major source,’’ should be
                                                 this Tailoring Rule,29 at least to a certain            of PSD, Congress intended that the                       applied literally to all GHG sources, and
                                                 point. By the same token, the                           definitions of ‘‘major emitting facility’’               therefore none should be considered to
                                                 insurmountable administrative burdens                   and ‘‘modification’’ apply, respectively,                have a literal meaning with respect to its
                                                 bring into play the ‘‘administrative                    to all GHG sources that emit at least 100                application to all GHG sources.
                                                 necessity’’ doctrine, under which EPA                                                                               In analyzing the provisions of each
                                                 is, again, authorized not to implement                     30 A physical or operational change is treated as
                                                                                                                                                                  definition more closely, we believe that
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                                                                                                         a ‘‘modification’’ that is subject to PSD if it either   each has four terms, any one of which
                                                 the applicability provisions literally, but             ‘‘increases the amount of any air pollutant emitted’’
                                                                                                         by the source or ‘‘results in the emission of any air    could be considered not to have its
                                                   29 As discussed later, EPA may, in future
                                                                                                         pollutant not previously emitted.’’ For convenience,     literal meaning, in this respect.
                                                 rulemaking, make a final determination that under       unless otherwise indicated, when we refer to             Specifically, each provision includes (i)
                                                 the ‘‘absurd results’’ doctrine, Congress did not       changes that ‘‘increase[ ] the amount of any air
                                                 intend for EPA to apply PSD to very small sources,      pollutant emitted,’’ we mean both to those types of
                                                                                                                                                                  The term ‘‘any * * * source,’’ or ‘‘a
                                                 that is, those, with emissions at or near the 100/250   changes and changes that ‘‘result[ ] in the emission     stationary source,’’ and that term could
                                                 tpy statutory levels.                                   of any air pollutant not previously emitted.’’           be considered not to refer literally to all


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                                                 of the GHG sources; (ii) either the term                sources. As a result, we believe that as               clear congressional intent for how title
                                                 ‘‘two hundred fifty tons per year’’ or                  a matter of Chevron Step 1, PSD and                    V is to be applied to GHG sources. As
                                                 ‘‘100 tons per year,’’ or the term                      title V generally apply to GHG sources.                discussed later, the relevant title V
                                                 ‘‘increases the amount,’’ and those terms               Our previous regulatory action defining                requirements and statements in
                                                 could be considered not to refer literally              the applicability provisions made this                 legislative history differ from PSD, not
                                                 to the tonnage amount of emissions                      clear, and we do not reopen this issue                 least because they include provisions
                                                 from all of the GHG sources; (iii) the                  in this rulemaking. Moreover, even if                  that concern empty permits that point in
                                                 term ‘‘any air pollutant,’’ 31 and that term            this long-established regulatory position              different directions. As a result, here,
                                                 could be considered not to refer literally              were not justifiable based on Chevron                  too, EPA has the discretion at Chevron
                                                 to the emissions from all of the GHG                    step 1—on the grounds that in fact,                    Step 2 to adopt the Tailoring Rule as a
                                                 sources; and (iv) the term ‘‘subject to                 congressional intent on this point is not              reasonable interpretation of the
                                                 regulation under the CAA’’ (which we                    clear—then we believe that this                        statutory requirements. Alternatively,
                                                 have interpreted ‘‘any air pollutant’’ to               position, that the statutory provisions to             even if the statute does express a clear
                                                 include), and that term could be                        apply PSD and title V generally to GHG                 intent as to title V that, similar to PSD,
                                                 considered not to refer literally to the                sources, was justified under Chevron                   title V requirements must be phased in
                                                 emissions from all of the GHG sources.                  step 2.32                                              as closely to the statutory threshold as
                                                 As long as any one of those four terms                     On the issue of how to apply PSD to                 possible and as quickly as possible, this
                                                 may be considered not to have its literal               GHG sources, including the specific                    Tailoring Rule is consistent with that
                                                 meaning as applied to GHG sources,                      threshold levels and the timing, we                    intent.
                                                 then the definition as a whole—again,                   believe that Congress could be                            It should also be noted that although
                                                 for PSD, the terms ‘‘major emitting                     considered to have expressed a clear                   EPA has concluded that applying the
                                                 facility’’ or ‘‘modifications,’’ and for title          intent that GHG sources be included in                 PSD and title V applicability provisions
                                                 V, the term ‘‘major source’’—cannot be                  the PSD program at as close to the                     literally in the case of GHG sources
                                                 considered to apply literally to GHG                    statutory thresholds as possible, and as               would produce ‘‘absurd results’’ and
                                                 sources. Because we read the terms                      quickly as possible, and at least to a                 therefore is not required, this
                                                 together, as integral parts of each                     certain point, all as consistent with the              conclusion has no relevance for
                                                 definition as a whole, we do not think                  need to assure that the PSD program                    applying other CAA requirements—
                                                 that the choice of which of those four                  does not impose undue costs on sources                 such as the requirements concerning
                                                 terms within each definition cannot be                  or undue administrative burdens on the                 endangerment and contribution findings
                                                 considered to apply literally to GHG                    permitting authorities. Under this view,               under CAA section 202(a)(1) or
                                                 sources has substantive legal effect. In                EPA would be required at Chevron Step                  emission standards for new motor
                                                 other words, we believe that any one of                 1 to adopt the Tailoring Rule because,                 vehicles or new motor vehicle engines
                                                 these terms, or all of them together as                 by phasing in PSD applicability, it most               under CAA section 202—to GHGs or
                                                 part of each definition as a whole,                     closely gives effect to Congress’s intent.             GHG sources. EPA’s conclusions with
                                                 should be considered not to apply                       Under these circumstances, EPA is                      respect to the PSD and title V
                                                 literally in the case of GHG sources.                   authorized to exercise its expert                      applicability requirements are based on
                                                    Having determined that each                          judgment as to the best approach for                   the specific terms of those requirements,
                                                 definition does not have a literal                      phasing in the application of PSD to                   other relevant PSD and title V
                                                                                                         GHG sources.                                           provisions, and the legislative history of
                                                 meaning with respect to the
                                                                                                            Even so, we recognize that it could be              the PSD and title V programs.
                                                 applicability of PSD or title V applies to
                                                                                                         concluded that on the issue of how to                     Within the context of the Chevron
                                                 all GHG sources, we must next inquire                                                                          framework, the ‘‘administrative
                                                                                                         apply PSD to GHG sources,
                                                 as to whether Congress has nevertheless                                                                        necessity’’ doctrine applies as follows:
                                                                                                         congressional intent is unclear. Under
                                                 expressed an intent on that question                                                                           Under the doctrine, Congress is
                                                                                                         these circumstances, EPA has the
                                                 through other means. We discuss the                                                                            presumed to intend that the PSD and
                                                                                                         discretion at Chevron Step 2 to adopt
                                                 statutory terms and legislative history of                                                                     title V applicability requirements be
                                                                                                         the Tailoring Rule because it is a
                                                 the PSD and title V provisions in more                                                                         administrable. Here, those applicability
                                                                                                         reasonable interpretation of the
                                                 detail later, but for now it suffices to say                                                                   requirements, if applied to GHG sources
                                                                                                         statutory requirements (remaining
                                                 that on the issue of whether PSD and                                                                           in accordance with their literal
                                                                                                         mindful that the applicability
                                                 title V apply to GHG sources, we believe                                                                       meaning, would be impossible to
                                                                                                         requirements cannot be applied
                                                 that congressional intent is clear, and                                                                        administer. Accordingly, under Chevron
                                                                                                         literally). Under the Tailoring Rule, EPA
                                                 that is to apply PSD and title V to GHG                                                                        Step 1, it is consistent with
                                                                                                         seeks to include as many GHG sources
                                                 sources generally. We believe that this                                                                        congressional intent that EPA and the
                                                                                                         in the permitting programs at as close to
                                                 intent is clear from the broad phrasing                                                                        permitting authorities be authorized to
                                                                                                         the statutory thresholds as possible, and
                                                 of the applicability provisions—as noted                                                                       implement the applicability
                                                                                                         as quickly as possible, although we
                                                 earlier, the definitions apply by their                                                                        requirements in a manner that is
                                                                                                         recognize that we ultimately may stop
                                                 terms to GHG source generally, even                                                                            administrable, that is, through the
                                                                                                         the phase-in process short of the
                                                 though the definitions should not be                                                                           tailoring approach.
                                                                                                         statutory threshold levels.
                                                 applied literally to all GHG sources—the                                                                          As for the ‘‘one-step-at-a-time’’
                                                                                                            As for title V, we believe that taken
                                                 fact that the various components of the                                                                        doctrine, we believe it applies within
                                                                                                         together, the various statutory
                                                 PSD and title V programs can be readily                                                                        the Chevron framework in conjunction
                                                                                                         requirements and statements in the
                                                 applied to GHG sources, and the fact                                                                           with the ‘‘absurd results’’ and
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                                                                                                         legislative history do not evidence a
                                                 that the two programs can readily                                                                              ‘‘administrative necessity’’ doctrines. As
                                                 accommodate at least some GHG                             32 In this preamble and the response to comments     we discuss elsewhere, the PSD and title
                                                                                                         document we fully address arguments that               V applicability provisions by their terms
                                                   31 We do not believe that this term is ambiguous      commenters and others have presented about             require that sources at or above the 100/
                                                 with respect to the need to cover GHG sources           congressional intent and coverage of GHGs. We do
                                                 under either the PSD or title V program, only with      so to be fully responsive, even though we believe
                                                                                                                                                                250 tpy thresholds comply with PSD
                                                 respect to what sources of GHG should be covered        that this is a settled matter for which the time for   and title V requirements at the time
                                                 under the circumstances presented here.                 judicial review has past.                              those requirements are triggered, which


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                                                 is when GHGs become subject to                          facility which conform to the requirements of          environmental protection and growth.
                                                 regulation. Therefore, if the literal                   this part;                                             CAA section 160. One of the purposes,
                                                 meaning of the applicability provisions                   (2) The proposed permit has been subject             in subsection (1), is specifically ‘‘to
                                                                                                         to a review in accordance with this section
                                                 as applied to GHG sources were                                                                                 protect public health and welfare,’’ and
                                                                                                         * * *, and a public hearing has been held
                                                 controlling—that is, if it reflected                    with opportunity for interested persons                another, in subsection (3), is ‘‘to insure
                                                 congressional intent—it would foreclose                 including representatives of the                       that economic growth will occur in a
                                                 use of the one-step-at-a-time doctrine to               Administrator to appear and submit written             manner consistent with the
                                                 implement a phase-in approach.                          or oral presentations on the air quality               preservations of existing clean air
                                                 However, the literal meaning is not                     impact of such source, alternatives thereto,           resources.’’
                                                 controlling because—in light of the                     control technology requirements, and other               The PSD provisions also include
                                                 absurd results, including the                           appropriate considerations;                            detailed procedures for implementation.
                                                 insurmountable administrative burdens,                  *       *     *       *      *                         Most relevant for sources of GHG are the
                                                 that would result from the literal                        (4) The proposed facility is subject to the          provisions that the proposed permit for
                                                 meaning—congressional intent is not to                  best available control technology for each             each source must be the subject of a
                                                 require the application of the PSD and                  pollutant subject to regulation under this             public hearing with opportunity for
                                                                                                         chapter emitted from, or which results from,
                                                 title V requirements to all GHG sources                                                                        interested persons to comment, CAA
                                                                                                         such facility * * *.
                                                 at or above the statutory thresholds at                                                                        section 165(a)(2), and each source must
                                                 the time that GHGs become subject to                      The term ‘‘major emitting facility’’ is              be subject to BACT, as determined by
                                                 regulation. Instead, as described                       defined, under CAA section 169(1) to                   the permitting authority on a source-by-
                                                 previously, we consider congressional                   include:                                               source basis, CAA section 165(a)(4),
                                                 intent for the applicability provisions,                  * * * stationary sources of air pollutants           169(3).
                                                 as applied to GHG sources, either (i) to                which emit, or have the potential to emit, one
                                                                                                         hundred tons per year or more of any air               (2) PSD Legislative History
                                                 be clear that PSD and title V should be
                                                 phased in for GHG sources as quickly as                 pollutant from [28 listed] types of stationary           The legislative history of the PSD
                                                 possible, or (ii) to be unclear, so that                sources. * * * Such term also includes any             provisions, enacted in the 1977 CAA
                                                                                                         other source with the potential to emit two            Amendments, makes clear that Congress
                                                 EPA may reasonably choose to phase                      hundred and fifty tons per year or more of
                                                 PSD and title V in for those sources in                                                                        was largely focused on sources of
                                                                                                         any air pollutant. This term shall not include
                                                 that manner. Under either view,                                                                                criteria pollutants: primarily sulfur
                                                                                                         new or modified facilities which are
                                                 congressional intent for PSD and title V                nonprofit health or education institutions             dioxide, PM, NOX, and carbon
                                                 applicability to GHG sources                            which have been exempted by the State.                 monoxide (CO). This focus is evident in
                                                 accommodates the ‘‘one-step-at-a-time’’                                                                        the basic purpose of the PSD program,
                                                                                                           As for modification of existing                      which is to safeguard maintenance of
                                                 approach.                                               sources, CAA section 169(1)(C) provides                the NAAQS. See S 95–127 (95th Cong.,
                                                 4. The PSD and Title V Programs                         that the term ‘‘construction,’’ as used in             1st Sess.), at 27.
                                                                                                         CAA section 165(a) (the PSD                              Congress designed the PSD provisions
                                                    Having discussed both the factual                    applicability section) ‘‘includes the
                                                 underpinnings and, immediately above,                                                                          to impose significant regulatory
                                                                                                         modification (as defined in section                    requirements, on a source-by-source
                                                 the legal underpinnings for our tailoring               111(a)(4)) of any source or facility.’’
                                                 approach, we now discuss the PSD and                                                                           basis, to identify and implement BACT
                                                                                                         Section 111(a)(4), in turn, provides:                  and, for criteria pollutant, to also
                                                 title V programs themselves, including,
                                                 for each program, the key statutory                       The term ‘‘modification’’ means any                  undertake certain studies. Congress was
                                                                                                         physical change in, or change in the method            well aware that because these
                                                 provisions, their legislative history, and              of operation of, a stationary source which
                                                 the relevant regulations and guidance                                                                          requirements are individualized to the
                                                                                                         increases the amount of any air pollutant              source, they are expensive. Accordingly,
                                                 documents through which EPA has                         emitted by such source or which results in
                                                 implemented the provisions. We start                    the emission of any air pollutant not
                                                                                                                                                                Congress designed the applicability
                                                 with the PSD program.                                   previously emitted.                                    provisions (i) to apply these
                                                                                                                                                                requirements to industrial sources of a
                                                 a. The PSD program                                        As interpreted by EPA regulations,                   certain type and a certain size—sources
                                                                                                         these provisions, taken together, provide              within 28 specified source categories
                                                 (1) PSD Provisions                                      that new stationary sources are subject                and that emit at least 100 tpy—as well
                                                   Several PSD provisions are relevant                   to PSD if they emit at the 100/250–tpy                 as all other sources that emit at least 250
                                                 for present purposes because of the                     thresholds air pollutants that are subject             tpy, and, by the same token, (ii) to
                                                 specific requirements that they establish               to EPA regulation, and that existing                   exempt other sources from these
                                                 and the window that they provide into                   stationary sources that emit such air                  requirements.33
                                                 congressional intent. These provisions                  pollutants at the 100/250–tpy thresholds                 Although Congress required that CAA
                                                 start with the applicability provisions,                are subject to PSD if they undertake a                 requirements generally apply to ‘‘major
                                                 found in CAA sections 165(a) and                        physical or operational change that                    emitting facilities,’’ defined as any
                                                 169(1), which identify the new sources                  increases their emissions of such air                  source that emits or has the potential to
                                                 subject to PSD, and CAA section                         pollutants by any amount.                              emit 100 tpy of any pollutant, Congress
                                                 111(a)(4), which describes the                            Other provisions of particular                       applied PSD to only sources at 100 tpy
                                                 modifications of existing sources that                  relevance are the requirements for                     or higher in 28 specified industrial
                                                 are subject to PSD. CAA section 165(a)                  timely issuance of permits. The                        source categories, and at 250 tpy or
                                                                                                         permitting authority must ‘‘grant[ ] or
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                                                 provides:
                                                                                                         den[y] [any completed permit                             33 Coverage of modifications by the PSD program
                                                   No major emitting facility on which
                                                 construction is commenced after August 7,
                                                                                                         application] not later than one year after             was addressed by a technical amendment which
                                                 1977, may be constructed in any area to                 the date of filing of such completed                   added a cross reference in section 169 to section
                                                                                                         application.’’ CAA section 165(c).                     111. The legislative history of this provision is scant
                                                 which this part applies unless—                                                                                and there is no suggestion that Congress would
                                                   (1) A permit has been issued for such                   In addition, the PSD provisions                      have contemplated sweeping in large number of
                                                 proposed facility in accordance with this part          articulate ‘‘the purposes of [the PSD                  changes from smaller sources through the addition
                                                 setting forth emission limitations for such             program],’’ which are to balance                       of this provision.



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                                                 more in all other source categories. This               permit process. Such a process is                         sources in the category. The second
                                                 distinction was deliberate: According to                reasonable and necessary for very large                   category ranges in size from 0.3 to 10 x
                                                 Sen. McClure, Congress selected the 28                  sources, such as new electrical                           10 6 Btu/hr, and has a ‘‘typical plant’’
                                                 source categories after reviewing an EPA                generating plants or new steel mills. But                 size of 1.3 x 10 6 Btu/hr, with ‘‘BACT
                                                 study describing 190 industrial source                  the procedure would prove costly and                      emissions from typical plant’’ of 2 tpy,
                                                 categories. 122 Cong. Rec. 24521 (July                  potentially unreasonable if imposed on                    and a total of 11,215 sources in the
                                                 29, 1976) (statement by Sen. McClure).                  construction of storage facilities for a                  category. The memorandum discusses
                                                    Congress also relied on an EPA                       small gasoline jobber or on the                           these two categories in the context of
                                                 memorandum that identified the range                    construction of a new heating plant at                    explaining which source categories
                                                 of industrial categories that EPA                       a junior college, each of which may                       exceed a size of 100 tpy—and therefore
                                                 regulated under its regulations that                    have the potential to emit 100 tons of                    would be subject to PSD if a 100 tpy
                                                 constituted the precursor to the                        pollution annually.’’ S. Rpt. 95–127 at                   threshold were set—by stating,
                                                 statutory PSD program,34 and listed both                96–97.
                                                 the estimated number of new sources                        The enacted legislation differs from                   ‘‘Fortunately, most truly small boilers
                                                 constructing each year and the amount                   the Senate bill by replacing the                          and typical space heating operations
                                                 of pollution emitted by the ‘‘typical                   authorization to EPA to include by                        would not be covered.’’ 122 Cong. Rec.
                                                 plant’’ in the category. The                            regulation source categories in addition                  24549 (July 29, 1976).
                                                 memorandum was prepared by B.J.                         to the listed 28 source categories with                      The legislative history also provides a
                                                 Steigerwald, Director of the Office of Air              an inclusion of all other sources if they                 window into the scope of the program
                                                 Quality Planning and Standards and                      exceed 250 tpy, and with an                               that Congress anticipated and related
                                                 Roger Strelow, EPA’s Assistant                          authorization for the states to exempt                    administrability concerns. According to
                                                 Administrator for Air and Waste                         hospitals and educational institutions.                   the Steigerwald-Strelow memorandum,
                                                 Management (‘‘Steigerwald-Strelow                       But Congress’s overall intention remains                  the number of new sources each year
                                                 memorandum’’). The Steigerwald-                         clear, as the DC Circuit described in                     whose ‘‘BACT emissions from typical
                                                 Strelow memorandum makes clear that                     Alabama Power: ‘‘Congress’s intention                     plant’’ exceed 100 for the 28 listed
                                                 the 100 tpy cut-off for the 28 listed                   was to identify facilities which, due to                  source categories and 250 for all other
                                                 sources categories, and the 250 tpy cut-                their size, are financially able to bear the              source categories is less than 100 per
                                                 off for all other sources, was                          substantial regulatory costs imposed by                   year. Although the Steigerwald-Strelow
                                                 meaningful; that is, there were a large                 the PSD provisions and which, as a                        memorandum does not attempt to
                                                 number of sources below those cut-offs                  group, are primarily responsible for                      estimate the number of modifications, it
                                                 that Congress explicitly contemplated                   emissions of the deleterious pollutants                   appears that based on this information,
                                                 would not be included in the PSD                        that befoul our nation’s air * * *. [With                 Congress had reason to expect the total
                                                 program. Id. at 24548–50.                               respect to] the heating plant operating in
                                                                                                                                                                   size of the PSD program to be measured
                                                    Consistent with this, the legislative                a large high school or in a small
                                                                                                                                                                   in the hundreds or perhaps thousands of
                                                 history on the Senate side also                         community college * * * [w]e have no
                                                                                                                                                                   permits each year. A program of this
                                                 specifically identified certain source                  reason to believe that Congress intended
                                                                                                         to define such obviously minor sources                    size would be manageable by EPA and
                                                 categories that Senators believed should
                                                                                                         as ‘major’ for the purposes of the PSD                    the permitting authorities.
                                                 not be covered by PSD. The Senate bill
                                                 language limited PSD to sources of 100                  provision.’’ 35 636 F.2d at 353–54.                       (3) PSD Regulatory History: Regulations
                                                 tpy or more in 28 listed source                            A particularly important indication of                 Concerning the Definition of ‘‘Major
                                                 categories, and to any other categories                 congressional intent to limit the PSD                     Stationary Source’’
                                                 that the Administrator might add. Sen.                  program it was designing to larger
                                                 Muskie stated that the Senate bill                      sources comes in considering the                              For present purposes, the regulatory
                                                 excluded ‘‘houses, dairies, farms,                      emissions profile of the small-sized                      history of the PSD program is most
                                                 highways, hospitals, schools, grocery                   boilers. Congress focused closely on                      noteworthy because it shows that since
                                                 stores, and other such sources.’’ 123                   identifying which sources with                            the inception of the program following
                                                 Cong. Rec. 18021 (June 8, 1977)                         emissions in excess of 100 tpy should                     the 1977 CAA Amendments, EPA has
                                                 (statement of Sen. Muskie). Sen.                        not be subject to PSD even though they                    interpreted the statutory PSD
                                                 McLure’s list of excluded source                        are subject to CAA requirements                           applicability provisions to apply more
                                                 categories were ‘‘[a] small gasoline                    generally. But Congress viewed a large                    narrowly—to any air pollutant subject to
                                                 jobber, or a heating plant at a                         set of sources as emitting below 100 tpy                  regulation—than their literal meaning
                                                 community college, [which] could have                   and therefore not included in the PSD                     (‘‘any air pollutant’’). EPA’s initial
                                                 the potential to emit 100 tons of                       program. Chief among these sources, in                    rulemaking implementing the PSD
                                                 pollution annually.’’ 122 Cong. Rec.                    terms of absolute numbers of sources,                     program, which was proposed and
                                                 24548–49 (July 29, 1976) (statement of                  were small boilers. The Steigerwald-                      finalized in 1977–1978, made explicit
                                                 Sen. McClure). The Senate Committee                     Strelow memorandum identified two                         that the entire PSD program applied to
                                                 Report included a comparable list, and                  categories of these boilers, differentiated               only pollutants regulated under the Act.
                                                 in describing it, concisely articulated                 by size. The first ranges in size from 10                 43 FR 26380, 26403, 26406 (June 19,
                                                 the cost-conscious basis for the line-                  to 250 x 10 6 Btu per hour (Btu/hr), and                  1978) (promulgating 40 CFR
                                                 drawing: ‘‘[the PSD] procedure * * *                    has a ‘‘typical plant’’ size of 10 7 Btu/hr,              51.21(b)(1)(i)). In 1979–1980, EPA
                                                 must include an effective review-and-                   with ‘‘BACT emissions from typical                        revised the PSD program to conform to
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                                                                                                         plant’’ of 53 tpy, and a total of 1,446                   Alabama Power v. Costle, 636 F.2d 323
                                                   34 Beginning in 1974, EPA implemented a
                                                                                                                                                                   (DC Cir. 1980). 44 FR 51924 (September
                                                 program that required sources of certain NAAQS            35 Note that although Congress specifically

                                                 pollutants seeking to construct in attainment or        authorized the states to exempt ‘‘nonprofit health or     5, 1979) (proposed rule); 45 FR 52676
                                                 unclassifiable areas to implement emission controls     education institutions’’ from the definition of ‘‘major   (August 7, 1980) (final rule). In this
                                                 for the purpose of preventing deterioration in the      emitting facility,’’ this statement by the DC Circuit     rulemaking, EPA did not disturb the
                                                 ambient air quality in those areas. This program        should be taken as the Court’s view that Congress
                                                 was the precursor to the PSD program Congress           did not design PSD to cover sources of the small
                                                                                                                                                                   pre-existing provisions that limited the
                                                 enacted in 1977.                                        size described.                                           applicability of the PSD program to


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                                                 regulated air pollutants.36 In 1996 EPA                  b. Title V Program                                    of receipt thereof * * *.’’ Section
                                                 proposed, and in 2002 finalized, a set of                  Having reviewed the key statutory                   502(b)(6) requires the permitting
                                                 amendments to the PSD provisions that                    provisions, their legislative history, and            authority to develop ‘‘adequate,
                                                 included revisions to conform with the                   the relevant administrative                           streamlined, and reasonable procedures
                                                 1990 CAA Amendments, which, in                           interpretations for the PSD program, we               for expeditiously determining when
                                                 relevant part, exempted hazardous air                    now do the same for the title V program.              applications are complete, for
                                                 pollutants (HAPs) from PSD, under CAA                                                                          processing such applications, for public
                                                 section 112(b)(6). See 61 FR 38250 (July                 (1) Title V Provisions                                notice * * * and for expeditious review
                                                 23, 1996), 67 FR 80186 (December 31,                         The key title V provisions for present            of permit actions, including * * *
                                                 2002). In the preamble to the final rule,                purposes start with the applicability                 judicial review in State court of the final
                                                 EPA noted that based on a request from                   provisions, which are found in CAA                    permit action by [specified persons].’’
                                                 a commenter, EPA was amending the                        sections 502(a), 501(2)(B), and 302(j).               Section 502(b)(7) includes a ‘‘hammer’’
                                                 regulations to ‘‘clarify which pollutants                These provisions provide that it is                   provision designed to reinforce timely
                                                 are covered under the PSD program.’’                     unlawful for any person to operate a                  permit issuance, which is that the
                                                 EPA accomplished this by promulgating                    ‘‘major source’’ without a title V permit,            permitting authority’s program must
                                                 a definition for ‘‘regulated NSR                         section 502(a), and define a ‘‘major                  include:
                                                 pollutant,’’ which listed categories of                                                                           To ensure against unreasonable delay by
                                                                                                          source’’ to include ‘‘any major stationary            the permitting authority, adequate authority
                                                 pollutants regulated under the Act, and                  facility or source of air pollutants which
                                                 by substituting that defined term for the                                                                      and procedures to provide that a failure of
                                                                                                          directly emits, or has the potential to               such permitting authority to act on a permit
                                                 phrase ‘‘pollutants regulated under the                  emit, one hundred tons per year or more               application or permit renewal application (in
                                                 Act’’ that was previously used in various                of any air pollutant.’’ CAA sections                  accordance with the time periods specified in
                                                 parts of the PSD regulations. 67 FR                      501(2)(B) and 302(j). As noted                        [CAA] section 503 * * *) shall be treated as
                                                 80240. The definition of ‘‘regulated NSR                                                                       a final permit action solely for purposes of
                                                                                                          elsewhere, these provisions, taken
                                                 pollutant’’ includes several categories of                                                                     obtaining judicial review in State court of an
                                                                                                          together and as interpreted by EPA,                   action brought by any person referred to in
                                                 pollutants (including, in general,
                                                                                                          provide that stationary sources are                   paragraph (6) to require that action be taken
                                                 NAAQS pollutants and precursors,
                                                                                                          subject to title V if they emit at the 100-           by the permitting authority on such
                                                 pollutants regulated under CAA section
                                                                                                          tpy threshold air pollutants that are                 application without additional delay.
                                                 111 NSPS, Class I or II substances
                                                                                                          subject to EPA regulation.                            Section 502(b)(8) requires the permit
                                                 regulated under CAA title VI) and a
                                                                                                              In addition, although title V does not            program to include ‘‘[a]uthority and
                                                 catch-all category, ‘‘[a]ny pollutant that
                                                                                                          have a set of provisions describing its               reasonable procedures consistent with
                                                 otherwise is subject to regulation under
                                                                                                          purpose, it is clear from its provisions              the need for expeditious action by the
                                                 the Act.’’ E.g., 40 CFR 52.21(b)(50). As
                                                                                                          and its legislative history, discussed                permitting authority on permit
                                                 in the previous rulemakings, EPA did
                                                                                                          later, that its key goal is to gather into            applications and related matters, to
                                                 not address the difference between the
                                                 definition of ‘‘major emitting facility’’                one permitting mechanism the CAA                      make available to the public [certain
                                                 and its regulatory approach or indicate                  requirements applicable to a source and               permit-related documents]’’. Section
                                                 that it had received comments on this                    impose conditions necessary to assure                 502(b)(9) requires a permit revision to
                                                 issue. While the definition of ‘‘major                   compliance with such requirements,                    incorporate requirements promulgated
                                                 modification’’ in the PSD regulations has                and thereby promote the enforceability                after issuance of the permit, but only if
                                                 changed over time with respect to how                    of CAA requirements applicable to the                 the permit is for a major source and has
                                                 emission increases are calculated, the                   covered sources. Section 503(b)(1)                    a term of 3 or more years remaining. In
                                                 regulatory history with respect to                       requires that the source’s permit                     addition, the revision must occur ‘‘as
                                                 pollutant coverage parallels that of                     application contain a compliance plan                 expeditiously as practicable.’’ Section
                                                 major emitting facility.                                 describing how the source will ’’comply               502(b)(10) requires the permit program
                                                    We recount this regulatory history as                 with all applicable requirements’’ of the             to include operational flexibility
                                                 background information. We are not                       CAA, and section 504(a) requires that                 provisions that ‘‘allow changes within a
                                                 reconsidering or reopening these                         ‘‘[e]ach permit issued under [title V]                permitted facility * * * without
                                                 regulations to the extent they interpret                 shall include * * * such * * *                        requiring a permit revision, if the
                                                 the definition of ‘‘major emitting                       conditions as are necessary to assure                 changes are not modifications * * *
                                                 facility’’ and ‘‘modification’’ narrowly to              compliance with applicable                            and * * * do not exceed the emissions
                                                 be limited to pollutants subject to                      requirements of [the Act].’’ See H.R. Rep.            allowable under the permit * * *.’’
                                                 regulation under the Act.                                No. 101–490, at 351 (1990) (‘‘It should                  In addition, title V includes a
                                                                                                          be emphasized that the operating permit               comprehensive and finely detailed
                                                    36 As noted elsewhere in this notice, in Alabama      to be issued under this title is intended             implementation schedule that mandates
                                                 Power, the DC Circuit noted that the definition of       by the Administration to be the single                timely issuance of permits while
                                                 ‘‘major emitting facility’’ under CAA section 169(1)     document or source of all of the                      building in EPA and affected state
                                                 could apply to air pollutants not regulated under
                                                 other provisions of the Act, and discussed the           requirements under the Act applicable                 review, public participation, and timely
                                                 contrast of this broad definition to the narrower        to the source.’’).                                    compliance by the source with reporting
                                                 application of the BACT provisions. 636 F.2d at              Importantly, title V is replete with              requirements. Following the date that
                                                 352–53 & n. 60. In its rulemaking notices
                                                 responding to Alabama Power, EPA discussed at
                                                                                                          provisions designed to make the                       sources become subject to title V, they
                                                 length certain issues, such as the applicability of      permitting process as efficient and                   have 1 year to submit their permit
                                                 NSR to pollutants emitted below the ‘‘major’’            smooth-running as possible, including                 applications. CAA section 503(c). As
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                                                 thresholds, that are based on the reference in ‘‘major   the expeditious processing of permit                  noted previously, the permitting
                                                 emitting facility’’ to ‘‘any air pollutant.’’ However,
                                                 throughout its discussion, EPA interpreted that          applications and the timely issuance of               authority then has 18 months to issue or
                                                 reference as ‘‘any regulated air pollutant,’’ again      permits. Section 503(c) requires that                 deny the permit. CAA section 503(c).
                                                 without specifically acknowledging the difference        ‘‘the permitting authority shall approve              Permitting authorities must provide an
                                                 or without acknowledging the above-noted
                                                 statements in Alabama Power. See 45 FR 52710–
                                                                                                          or disapprove a completed application                 opportunity for public comment and a
                                                 52711. EPA did not indicate that it had received         * * * and shall issue or deny the                     hearing. CAA section 502(b)(6). If the
                                                 comments on this issue.                                  permit, within 18 months after the date               permitting authority proposes to issue


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                                                 the permit, the permitting authority                    stated that he expected ‘‘over 10,000                  expected ‘‘millions of * * * small
                                                 must submit the permit to EPA, and                      permits [to] * * * be issued under this                businesses’’—including ‘‘printers,
                                                 notify affected states, for review. CAA                 program.’’ 136 Cong. Rec. S3239–03                     furniture makers, dry cleaners’’ and
                                                 section 505(a)(1). EPA then has 45 days                 (March 27, 1990). Others in Congress                   many others—to benefit from the CAA
                                                 to review the permit and, if EPA deems                  had similar estimates. See, e.g., 136                  section 507 small source/small business
                                                 it appropriate, to object to the permit.                Cong. Rec. S3166 (‘‘thousands and                      program, but Congress did not expect
                                                 CAA section 505(b)(1). If EPA does                      thousands of permit applications * * *                 them to become subject to the operating
                                                 object, then the permitting authority                   will be required to be submitted’’)                    permit requirements of title V because
                                                 must, within 90 days, revise it to meet                 (statement of Sen. Nickles).                           their emissions fell below 100 tpy,
                                                 the objections, or else EPA becomes                        Furthermore, the legislative history                which is, in general, the threshold for
                                                 required to issue or deny the permit.                   indicates that Congress did not                        title V applicability as a ‘‘major source.’’
                                                 CAA section 505(c). If EPA does not                     contemplate that large numbers of very                    The legislative history of title V
                                                 object, then, within 60 days of the close               small sources would be subject to title                confirms that Congress viewed a
                                                 of the 45-day review period, any person                 V’s requirements.38 This becomes clear                 principal purpose of title V as providing
                                                 may petition EPA to object, and EPA                     by reviewing the legislative history of a              a vehicle to compile the requirements
                                                 must grant or deny the petition within                  companion piece of legislation to the                  applicable to the source. As the report
                                                 60 days. CAA section 505(b)(2). If a                    operating permits provisions that                      of the House Committee on Energy and
                                                 permit is issued, it must include a                     Congress enacted into CAA section 507,                 Commerce (‘‘House Committee Report’’)
                                                 permit compliance plan, under which                     which is the ‘‘Small business stationary               stated, ‘‘It should be emphasized that the
                                                 the permittee must ‘‘submit progress                    source technical and environmental                     operating permit to be issued under this
                                                 reports to the permitting authority no                  compliance assistance program.’’ CAA                   title is intended by the Administration
                                                 less frequently than every 6 months,’’                  section 507. Under this provision,                     to be the single document or source of
                                                 and must ‘‘periodically (but no less                    sources that, among other things, ‘‘are                all of the requirements under the Act
                                                 frequently than annually) certify that                  not major stationary source[s]’’ and that              applicable to the source.’’ H.R. Rep. No.
                                                 the facility is in compliance with any                  emit less than 50 tpy of any regulated                 101–490, at 351 (1990). Combined with
                                                 applicable requirements of the permit,                  pollutant, as well as less than 75 tpy or              the source’s reporting requirements, this
                                                 and [ ] promptly report any deviations                  all regulated pollutants, are eligible for             compilation of applicable requirements
                                                 from permit requirements to the                         assistance under CAA section 507. CAA                  would facilitate public awareness of a
                                                 permitting authority.’’ CAA section                     section 507(c)(1). The House Committee                 source’s obligations and compliance and
                                                 503(b).                                                 Report described this provision—                       would facilitate compliance and
                                                                                                         including what types of sources it                     enforcement.
                                                 (2) Title V Legislative History                         expected this provision to benefit—as                     On the Senate side, Sen. Chafee, one
                                                   The legislative history of title V,                   follows:                                               of the floor managers of the bill, made
                                                 enacted by Congress in the 1990 CAA                        New section [507] is a small source/small           a similar point:
                                                 Amendments, indicates the scope of the                  business provision added by the Committee.               The permits will serve the very useful
                                                 program that Congress expected:                         It seeks to help small businesses to comply            function of gathering and reciting in one
                                                 Congress expected the program to cover                  with the problems that are likely to occur             place—the permit document itself—all of the
                                                 some tens of thousands of sources,                      under the Act as amended by this bill. For             duties imposed by the Clean Air Act upon
                                                 which would approximate the scope of                    purposes of this section, small businesses or          the source that holds the permit. This would
                                                                                                         small emitters are defined as sources that are         clearly be an improvement over the present
                                                 the permit program under the Clean                      emitting 100 tons or less per year and that
                                                 Water Act. The Senate Committee on                                                                             system, where both the source and EPA must
                                                                                                         have a number of employees that would
                                                 Environment and Public Works stated:                                                                           search through numerous provisions of state
                                                                                                         qualify them for assistance from the Small
                                                                                                                                                                implementation plans and regulations to
                                                   EPA estimates that the new permit                     Business Administration (SBA). As we look
                                                                                                                                                                assemble a complete list of requirements that
                                                 requirements will cover about 8,200 major               to the future of environmental protection
                                                                                                                                                                apply to any particular plant * * *.
                                                 sources that emit 100 tons per year or more             under the Act, we take special steps here to
                                                                                                                                                                  Once these permits are in place, plant
                                                 of criteria pollutants (which are regulated             ensure that it is possible for these small
                                                                                                                                                                managers will be better able to understand
                                                 under SIPs). In addition, many smaller                  businesses to comply with minimum hassle
                                                                                                                                                                and to follow the requirements of the Clean
                                                 sources are (or, as EPA promulgates                     and in recognition of the problems that are
                                                                                                                                                                Air Act. At the same time, EPA will be better
                                                 additional regulations, will be) covered by             unique to them. Such small businesses
                                                                                                                                                                able to monitor how well each plant is
                                                 new source performance standards under                  include printers, furniture makers, dry
                                                                                                                                                                complying with those requirements. This is
                                                 section 111 of the Act, hazardous air                   cleaners, and millions of other small
                                                                                                                                                                a highly sensible approach for all concerned.
                                                 pollutant standards under section 112 of the            businesses in this country.
                                                 Act, and nonattainment provisions of this               House Committee Report, H.R. 101–590,                    136 Cong. Rec. S213 (January 24,
                                                 legislation. By comparison, under the Clean             at 354. In this manner, the House                      1990) (statement of Sen. Chafee). Sen.
                                                 Water Act, some 70,000 sources receive                  Committee Report made clear that it                    Lieberman made a similar statement.
                                                 permits, including more than 16,000 major                                                                      136 Cong. Rec. 3172–73 (March 26,
                                                 sources. Although many air pollution sources                                                                   1990) (statement of Sen. Lieberman).
                                                                                                         thereafter in each State or to EPA,’’ H. Rep. 101–
                                                 have more emission points than water                                                                           Thus, a central purpose of the title V
                                                                                                         490 p. 346.
                                                 pollution sources, the additional workload in
                                                                                                                                                                permit program is to compile all the
                                                 managing the air pollution permit system is                38 Title V can apply to certain small businesses

                                                 estimated to be roughly comparable to the               in some circumstances. Under CAA sections 502(a)       requirements applicable to the source
                                                 burden that States and EPA have successfully            and 501(2)(A), title V applies to major sources of     into a single place, the permit. Implicit
                                                                                                         HAPs, which includes sources that may emit as          in this purpose is that the sources
                                                 managed under the Clean Water Act.
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                                                                                                         little as 10 tpy of a single HAP, and which may
                                                                                                         include some dry cleaners and other small
                                                                                                                                                                subject to title V will have applicable
                                                 S. Rep. 101–228, at 353 (1990).37 Sen.                                                                         requirements to be compiled. As Sen.
                                                                                                         businesses. In addition, under CAA section 502(a),
                                                 Mitchell, the Senate Majority Leader,                   title V applies to area sources subject to standards   Chafee directly stated, ‘‘[T]he vast
                                                                                                         under CAA sections 111 or 112 (or required to have     majority of these permit applications
                                                   37 The House Committee on Energy and                  a PSD or nonattainment NSR permit), unless the
                                                 Commerce acknowledged that it was ‘‘uncertain           Administrator exempts those sources from title V
                                                                                                                                                                will * * *, in all likelihood, only codify
                                                 about the magnitude of permit applications likely       because compliance would be impracticable,             the existing requirements of the
                                                 to be submitted under the bill initially and            infeasible, or unnecessarily burdensome.               applicable State implementation plan.’’


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                                                 136 Cong. Rec. S2720 (March 20, 1990)                   reduce costs to sources and promote                    that at the beginning of the program,
                                                 (statement of Sen. Chafee).                             administrability. The ‘‘Chafee-Baucus                  large numbers of permit applications
                                                     More broadly, the legislative history               Statement of Senate Managers’’ for the                 might overwhelm the permitting
                                                 also indicates congressional concern                    bill explained the purpose of the CAA                  authorities. To protect against this,
                                                 about the costs of permitting for small                 section 502(b)(6) requirement for                      Congress included in CAA section
                                                 businesses, and a determination to                      ‘‘[a]dequate, streamlined, and reasonable              503(c) a phase-in schedule for
                                                 minimize those costs to the extent                      procedures for expeditious[ ]’’ permit                 permitting authorities to act on the
                                                 possible. This concern is reflected in                  actions as follows:                                    initial set of permit applications. Under
                                                 several provisions of title V. For                         [M]uch concern has been expressed that              503(c), permitting authorities were not
                                                 example, section 502(a) authorizes EPA                  this new permitting process will unduly                required to act on the initial set of
                                                 to exempt all or part of a source                       delay the proper functioning of many                   permit applications within 18 months
                                                 category—except for any major source                    sources, and we intend to mitigate any delay           after it received the application, but
                                                 from the title V permit program if EPA                  by directing that the process be expeditious.          rather could act on one-third of them on
                                                 ‘‘finds that compliance with [title V]                     In addition to this general directive for           an annual basis over a 3-year period.
                                                 requirements is impracticable,                          expeditious processing, we mandate in new              Sen. Chafee, in describing an early
                                                 infeasible, or unnecessarily burdensome                 section 503 that permitting authorities                version of this provision—which would
                                                                                                         approve or reject permit applications within
                                                 on such categories.’’ Similarly, the                                                                           have allowed permitting authorities to
                                                                                                         certain specified time periods following
                                                 permit fee provisions include a                         filing. In this fashion, we have taken explicit        phase in the submission of permit
                                                 presumptive minimum fee amount, but                     steps to protect against undue delays.                 applications—explained that its purpose
                                                 authorize an exemption from that                                                                               was ‘‘to avoid a logjam of permit
                                                 presumptive amount upon a showing                       136 Cong. Rec. S16941 (statement of
                                                                                                                                                                applications[,] * * * ensure that
                                                 that a lesser amount will meet overall                  Sen. Chafee). The same statement
                                                                                                                                                                [regulatory] gridlock can be avoided,
                                                 fee requirements, CAA section                           explained that the permit revision
                                                                                                                                                                and [ensure] that the permitting process
                                                 502(b)(3)(B)(iv). One of the drafters of                procedures of CAA section 502(b)(9)                    will work with a minimum of
                                                 this provision, Rep. Wyden, explained                   reflect a—                                             disruption and delay.’’ 136 Cong. Rec.,
                                                 that its purpose was to preserve the                    careful effort to ensure that the permit               S2106 (March 5, 1990) (statement of
                                                 flexibility of states to impose lower fees              program works effectively and efficiently.             Sen. Chafee).
                                                 of small businesses:                                    Succinctly, this provision accommodates two
                                                                                                         competing concerns. On the one hand, it is             (3) Title V Regulatory History
                                                   I note that the provision on fees allows              important to ensure that permit requirements
                                                 reductions for small sources where                                                                                 As with PSD, for present purposes,
                                                                                                         remain up-to-date as the provisions of the
                                                 appropriate. The state has some flexibility,            Clean Air Act are developed and new
                                                                                                                                                                the regulatory history of the title V
                                                 under the general permit fee provisions, to             requirements are imposed. On the other                 program is most noteworthy because it
                                                 adjust fee levels for any source so long as the         hand, it also is important to be sure that we          shows that beginning shortly after the
                                                 average fee charged meets the statutory                 do not reduce the permit program to a                  inception of the program following the
                                                 minimum.                                                shambles by requiring sources to engage in a           1990 CAA Amendments, EPA has
                                                 136 Cong. Rec. H12884 (Oct. 26, 1990)                   continuous process of revising their permits           interpreted the statutory title V
                                                 (statement of Rep. Wyden). See, e.g., 136               as these new requirements are imposed.                 applicability provisions to apply more
                                                 Cong. Rec. H2559 (May 21, 1990)                         136 Cong. Rec. 16942 (Oct. 27, 1990)                   narrowly—to any air pollutant subject to
                                                 (statement of Rep. Wyden) (discussing                   (Chafee-Baucus statement of Senate                     regulation—than their literal meaning
                                                 need to ‘‘help small businesses through                 Managers) (statement of Sen. Chafee).                  (‘‘any air pollutant’’). As discussed
                                                 the air permit labyrinth’’).                              In addition, these concerns were at                  previously, title V applies to any ‘‘major
                                                    The legislative history also indicates               the bottom of the following statement by               source,’’ defined, as relevant here, under
                                                 that Congress was deeply concerned                      Sen. Chafee, in which he described how                 CAA sections 501(2)(B) and 302(j), as
                                                 both about the need not to burden                       the bill’s drafters had revised it in                  ‘‘any stationary facility or source of air
                                                 sources generally with undue costs and                  response to a concern by industry that                 pollutants which directly emits, or has
                                                 to assure the administrability of the title             an earlier version of the bill would have              the potential to emit, one hundred tons
                                                 V program, and as a result, was                         put undue costs on industry:                           per year or more of any air pollutant
                                                 determined to make the program as                                                                              * * *.’’ EPA’s regulations mirror the
                                                                                                           We have also heard concerns from industry
                                                 smooth-running as possible. These goals                 that S. 1630 would burden sources unduly by            CAA definitional provisions. 40 CFR
                                                 are reflected in many of the title V                    requiring them to submit—along with their              70.2.
                                                 requirements, as discussed previously.                  permit applications—plans explaining how                   However, since 1993, EPA has
                                                 See, e.g., CAA section 502(b)(6)                        they intend to comply with all requirements            interpreted the applicability provisions
                                                 (requiring ‘‘adequate, streamlined, and                 of the Clean Air Act that apply to them.               more narrowly. At that time, which was
                                                 reasonable procedures for expeditiously                   But, Mr. President, we emphatically do not           shortly after title V was enacted, EPA
                                                 determining when applications are                       intend to burden industry with preparation             issued a guidance document making
                                                 complete, for processing such                           and submission of unnecessary compliance               clear that it interprets this requirement
                                                                                                         plans. The substitute clarifies that any               to apply to sources of pollutants ‘‘subject
                                                 applications, for public notice * * *                   compliance plans would address only those
                                                 and for expeditious review of permit                    matters by which the sources would comply
                                                                                                                                                                to regulation’’ under the Act.
                                                 actions); CAA section 502(b)(7)                         with new requirements imposed by this act              Memorandum from Lydia N. Wegman,
                                                 (includes a ‘‘hammer’’ provision                        as it is finally signed into law. These plans          Deputy Director, Office of Air Quality
                                                 designed to reinforce timely permit                     would not need to address compliance with              Planning and Standards, U.S. EPA,
                                                 issuance); CAA section 502(b)(9)–(10)                   any existing Clean Air Act requirements,               ‘‘Definition of Regulated Air Pollutant
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                                                 (limiting circumstances under which                     unless the source is in violation of those             for Purposes of Title V’’ (Apr. 26, 1993)
                                                 permit revision is required; requiring                  requirements.                                          (Wegman Memorandum). The
                                                 revision to occur ‘‘as expeditiously as                 136 Cong. Rec. S2107 (March 5, 1990)                   interpretation in this memorandum was
                                                 practicable;’’ including operational                    (statement of Sen. Chafee).                            based on: (1) EPA’s reading of the
                                                 flexibility provisions).                                   As another indication of                            definitional chain for ‘‘major source’’
                                                    The legislative history confirms that                congressional concern over                             under title V, including the definition of
                                                 these provisions were designed to                       administrability, Congress recognized                  ‘‘air pollutant’’ under section 302(g) and


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                                                 the definition of ‘‘major source’’ under                revising our regulations to limit PSD                  on the date that the rule takes effect,
                                                 302(j); (2) the view that Congress did not              applicability to GHG emitting sources                  which will be January 2, 2011.
                                                 intend to require a variety of sources to               by revising the regulatory term,                          But absent tailoring, the January 2,
                                                 obtain title V permits if they are not                  ‘‘regulated NSR pollutant,’’ and although              2011 trigger date for GHG PSD
                                                 otherwise regulated under the Act (see                  our revised regulations do not accord                  applicability will subject an
                                                 also CAA section 504(a), providing that                 with a literal reading of the statutory                extraordinarily large number of sources,
                                                 title V permits are to include and assure               provisions for PSD applicability, which                more than 81,000, to PSD each year, an
                                                 compliance with applicable                              are incorporated into the definition of                increase of almost 300-fold. And the
                                                 requirements under the Act); and (3)                    ‘‘major emitting facility’’ and ‘‘major                great majority of these new sources will
                                                 consistency with the approach under                     modification,’’ we have concluded that                 be small commercial or residential
                                                 the PSD program.                                        based on the ‘‘absurd results’’ doctrine,              sources. We believe that for many
                                                    While the specific narrow                            a literal adherence to the terms of these              reasons, this result is contrary to
                                                 interpretation in the Wegman                            definitions is not required. Even so, we               congressional intent for the PSD
                                                 Memorandum of the definition of ‘‘air                   believe Congress did intend that PSD                   program, and in fact would severely
                                                 pollutant’’ in CAA section 302(g) is in                 apply to GHG sources as a general                      undermine what Congress sought to
                                                 question in light of the holding in                     matter. Further, we may apply PSD to                   accomplish with the program. As a
                                                 Massachusetts v. EPA, 549 U.S. 497, 533                 GHG sources in a phased-in manner, as                  result, under our Chevron analysis,
                                                 (2007) (finding this definition to be                   we do through the tailoring approach,                  accounting for the ‘‘absurd results’’
                                                 ‘‘capacious’’), we believe that the overall             because either congressional intent is                 doctrine, the statutory definition for
                                                 rationale for our interpretation of the                 clear on that issue and the tailoring                  ‘‘major emitting facility’’ (as interpreted
                                                 applicability of title V remains sound.                 approach best reflects it, or                          narrowly to include ‘‘subject to
                                                 EPA continues to maintain its                           congressional intent is unclear and the                regulation’’) should not be read to apply
                                                 interpretation, consistent with CAA                     tailoring approach is a reasonable                     to all GHG sources at or above the 100/
                                                 sections 302(j), 501, 502 and 504(a), that              interpretation of the statute.                         250 tpy threshold as of the January 2,
                                                 the provisions governing title V                                                                               2011 date. Rather, the definitions of
                                                 applicability for ‘‘a major stationary                  a. Congressional Purpose for the PSD                   ‘‘major emitting facility’’ and
                                                 source’’ can only be triggered by                       Program                                                ‘‘modification’’ should be tailored so that
                                                 emissions of pollutants subject to                         To reiterate, for convenience, CAA                  they apply to GHG sources on a phased-
                                                 regulation. This interpretation is based                section 169(1) defines a ‘‘major emitting              in basis, with the largest sources first, as
                                                 primarily on the purpose of title V to                  facility’’ to include ‘‘any * * * source[]             we describe in this rule.
                                                 collect all regulatory requirements                                                                               As explained previously, Chevron
                                                                                                         [that] emit[s], or ha[s] the potential to
                                                 applicable to a source and to assure                                                                           Step 1 calls for a determination of
                                                                                                         emit, [depending on the source
                                                 compliance with such requirements,                                                                             congressional intent, and the courts
                                                                                                         category], one hundred [or two hundred
                                                 see, e.g., CAA section 504(a), and on the                                                                      consider the best indicator of
                                                                                                         fifty] tons per year or more or more of
                                                 desire to promote consistency with the                                                                         congressional intent to be the plain
                                                                                                         any air pollutant.’’ CAA section 169(1);
                                                 approach under the PSD program.                                                                                meaning of the statute. However, the
                                                                                                         and a ‘‘modification’’ as any physical or              U.S. Supreme Court has held that the
                                                    In the Tailoring Rule notice of
                                                                                                         operational change in ‘‘a stationary                   literal meaning of a statutory provision
                                                 proposed rulemaking, EPA
                                                                                                         source which increases the amount of                   is not conclusive ‘‘in the ‘rare cases [in
                                                 acknowledged the Wegman
                                                                                                         any air pollutant emitted by such                      which] the literal application of a
                                                 Memorandum and affirmed the
                                                                                                         source,’’ CAA section 169(2)(C),                       statute will produce a result
                                                 memorandum’s continued viability,
                                                                                                         111(a)(4). We also reiterate that, as                  demonstrably at odds with the
                                                 stating that ‘‘EPA continues to maintain
                                                                                                         discussed above, beginning with our                    intentions of the drafters’ * * * [in
                                                 this interpretation.’’ 74 FR 55300, col. 3,
                                                                                                         initial rulemaking in 1977–1978 to                     which case] the intention of the drafters,
                                                 fn. 8; see also 75 FR 17022–23
                                                                                                         implement the PSD program, we have                     rather than the strict language, controls.’’
                                                 (Interpretive Memo reconsideration).
                                                    As with PSD, we recount this                         interpreted these definitions more                     United States v. Ron Pair Enterprises,
                                                 regulatory history as background                        narrowly by reading into them the                      489 U.S. 235, 242 (1989). To determine
                                                 information, and we are not                             limitation that a source is subject to PSD             whether ‘‘the intentions of the * * *
                                                 reconsidering or re-opening this                        only if the air pollutants in question are             drafters’’ differ from the result produced
                                                 interpretation of the definition of ‘‘major             ‘‘subject to regulation under the Act.’’ 40            from ‘‘literal application’’ of the
                                                 source’’ narrowly to be limited to                      CFR 51.166(b)(49)(iv). EPA is not re-                  statutory provisions in question, the
                                                 pollutants subject to regulation under                  opening this interpretation in this                    courts may examine the overall context
                                                 the Act.                                                regulation in this action.                             of the statutory provisions, including
                                                                                                            Under the current interpretation of                 whether there are related statutory
                                                 5. Application of the ‘‘Absurd Results’’                the PSD applicability provision, EPA’s                 provisions that either conflict or are
                                                 Doctrine for the PSD Program                            recent promulgation of the LDVR will                   consistent with that interpretation; and
                                                    Having reviewed the factual                          trigger the applicability of PSD for GHG               the legislative history to see if it exposes
                                                 background, legal doctrines, and the key                sources at the 100/250 tpy threshold                   what the legislature meant by the terms
                                                 components of the PSD and title V                       levels as of January 2, 2011. This is                  in question. In addition, the courts may
                                                 programs, we now turn towards                           because PSD applicability hinges on the                examine whether a literal application of
                                                 interpreting the PSD and title V                        definition of ‘‘major emitting facility,’’             the provisions produces a result that the
                                                 requirements in accordance with the                     which, under EPA’s long-standing                       courts characterize variously as absurd,
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                                                 Chevron framework, accounting for the                   narrowing interpretation, but absent                   futile, strange, or indeterminate, and
                                                 applicable legal doctrines. We begin                    further tailoring, applies PSD to sources              therefore so illogical or otherwise
                                                 with the ‘‘absurd results’’ doctrine, and               of any air pollutant subject that is                   contrary to sensible public policy as to
                                                 apply it first to the PSD requirements.                 subject to regulation under another                    be beyond anything Congress would
                                                    In this action, we finalize, with some               provision of the CAA. EPA’s                            reasonably have intended. In such cases,
                                                 refinements, the ‘‘absurd results’’ basis               promulgation of the LDVR means that                    the literal language cannot be said to
                                                 we proposed. Specifically, we are                       GHGs will become subject to regulation                 reflect the intention of the drafters, and


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                                                 therefore does not control. See United                  requirements for HAPs, and excluded                    discussed later, Congress scrutinized
                                                 States v. Ron Pair Enterprises, 489 U.S.                HAPs from PSD. CAA section 112(b)(6).                  information that EPA provided as to
                                                 235, 242–43 (1989); Griffin v. Oceanic                     Congress was keenly aware that the                  types and sizes of sources, found largely
                                                 Contractors, Inc., 458 U.S. 564, 571                    PSD program needed to serve two                        in the Steigerwald-Strelow
                                                 (1982).                                                 purposes: Protect the environment and                  memorandum. Sen. Muskie stated that
                                                    Here, applying the definitions of                    promote economic growth. Congress                      the Senate bill excluded ‘‘houses,
                                                 ‘‘major emitting facility’’ and                         explicitly identified these two goals in               dairies, farms, highways, hospitals,
                                                 ‘‘modification’’ literally (as EPA has                  the ‘‘purposes’’ section of the PSD                    schools, grocery stores, and other such
                                                 interpreted them more narrowly) at the                  provision, CAA section 160, and various                sources.’’ 123 Cong. Rec. 18021 (June 8,
                                                 present time—in the absence of                          PSD requirements clearly reflect them.                 1977) (statement of Sen. Muskie). Sen.
                                                 streamlining measures or additional                     For example, to protect economic                       McClure stated that PSD should be
                                                 permitting authority resources, and                     growth, the PSD program expedites the                  limited to ‘‘industrial plants of
                                                 without tailoring—would be contrary to                  permit process to include a 1-year                     significant impact,’’ and should exclude
                                                 congressional purpose for the PSD                       limitation on the time that the                        ’’[a] small gasoline jobber, or a heating
                                                 provisions, as found in the statutory                   permitting authority has act on permit                 plant at a community college, [which]
                                                 provisions and legislative history,                     applications. To protect the                           could have the potential to emit 100
                                                 especially in light of the impact from                  environment, in addition to including                  tons of pollution annually.’’ 122 Cong.
                                                 applying those definitions literally.                   many provisions that focus on NAAQS                    Rec. 24548–49 (July 29, 1976) (statement
                                                 Congress established the PSD program                    pollutants, the PSD program requires                   of Sen. McClure). The Senate Committee
                                                 in large measure because it was                         that the preconstruction permit impose                 Report mirrored Sen. McClure’s
                                                 concerned that around the country,                      emission limits that reflect BACT for                  statement, and concisely articulated the
                                                 industrial development, which was                       each pollutant subject to regulation                   cost-related basis for the line-drawing:
                                                 confronting barriers to locating in                     under another CAA provision. CAA                       ‘‘[The PSD] procedure * * * must
                                                 nonattainment areas (that is, areas that                section 165(a)(4). This BACT provision                 include an effective review-and-permit
                                                 do not meet the NAAQS), would                           also makes clear, by its terms, that                   process. Such a process is reasonable
                                                 attempt to locate in clean air areas (that              although Congress designed the PSD                     and necessary for very large sources,
                                                 is, attainment areas or unclassifiable                  program largely with NAAQS pollutants                  such as new electrical generating plants
                                                 areas), but that as a consequence, the                  in mind, Congress also intended that                   or new steel mills. But the procedure
                                                                                                         sources subject to PSD control the                     would prove costly and potentially
                                                 clean air areas would see their air
                                                                                                         emissions of their other pollutants as                 unreasonable if imposed on
                                                 quality deteriorate to the point where
                                                                                                         well. The DC Circuit has recognized the                construction of storage facilities for a
                                                 they, too, would no longer meet the
                                                                                                         twin goals of environmental protection                 small gasoline jobber or on the
                                                 NAAQS. The end result would be the
                                                                                                         and economic development that                          construction of a new heating plant at
                                                 spread of environmental and health
                                                                                                         underlie PSD, and has upheld EPA                       a junior college, each of which may
                                                 problems to those formerly clean air
                                                                                                         interpretations of the PSD program that                have the potential to emit 100 tons of
                                                 areas, as well as more barriers to further
                                                                                                         reflect a balancing of those goals. See,               pollution annually.’’ S. Rpt. 95–127 at
                                                 industrial development. With these
                                                                                                         e.g., New York v. EPA, 413 F.3d 3, 27                  96–97.
                                                 concerns in mind, Congress designed
                                                                                                         (DC Cir.), rehearing en banc den. 431                      The DC Circuit had occasion, in
                                                 the PSD program to require newly                        F.3d 801 (2005).                                       Alabama Power, to acknowledge this
                                                 constructing or modifying sources in                       Congress was also keenly aware that                 legislative history. ‘‘Congress’s intention
                                                 areas with air quality that meets the                   the PSD analyses and controls that it                  was to identify facilities which, due to
                                                 NAAQS (or that is unclassifiable) to                    was mandating had to be implemented                    their size, are financially able to bear the
                                                 analyze their emissions of NAAQS                        on a source-by-source basis, and that                  substantial regulatory costs imposed by
                                                 pollutants and to implement controls as                 this process would be expensive for                    the PSD provisions and which, as a
                                                 needed to assure that those emissions                   sources. As a result, Congress intended                group, are primarily responsible for
                                                 do not significantly deteriorate air                    to limit the PSD program to large                      emissions of the deleterious pollutants
                                                 quality. Many of the PSD requirements,                  industrial sources because it was those                that befoul our nation’s air.’’ Alabama
                                                 and much of the discussion in the                       sources that were the primary cause of                 Power, 636 F.2d at 353. The Court
                                                 legislative history, reflect these aspects              the pollution problems in question and                 added, ‘‘Though the costs of compliance
                                                 of the PSD program. E.g., CAA sections                  because those sources would have the                   with [the PSD] requirements are
                                                 162, 163, 164, 165(a)(3), 165(d)(2),                    resources to comply with the PSD                       substantial, they can reasonably be
                                                 165(e), 166; see generally H. Rep. 95–                  requirements. Congress’s mechanism for                 borne by facilities that actually emit, or
                                                 294, 95th Cong., 1st Sess. (1977) 103–78.               limiting PSD was the 100/250 tpy                       would actually emit when operating at
                                                    Congress also designed the PSD                       threshold limitations. Focused as it was               full capacity, the large tonnage
                                                 program to impose controls on non-                      primarily on NAAQS pollutants,                         thresholds specified in section 169(1).’’.
                                                 NAAQS pollutants, through the                           Congress considered sources that emit                  Id. at 354.
                                                 requirement under CAA section                           NAAQS pollutants in those quantities                       It is not too much to say that applying
                                                 165(a)(4) that the source be ‘‘subject to               generally to be the large industrial                   PSD requirements literally to GHG
                                                 the best available control technology for               sources to which it intended PSD to be                 sources at the present time—in the
                                                 each pollutant subject to regulation                    limited.                                               absence of streamlining or increasing
                                                 under this chapter emitted from, or                        That Congress paid careful attention                permitting authority resources and
                                                 which results from, such facility.’’ For                to the types and sizes of sources that                 without tailoring the definition of
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                                                 example, when Congress enacted the                      would be subject to the PSD program                    ‘‘major emitting facility’’ or
                                                 PSD provisions in 1977, sources                         and designed the thresholds deliberately               ‘‘modification’’—would result in a
                                                 emitting HAPs were required to                          to limit the program’s scope is evident                program that would have been
                                                 implement BACT for those pollutants,                    from the legislative history. Several                  unrecognizable to the Congress that
                                                 although in the 1990 CAA                                Senate floor statements and the                        designed PSD. Congress intended that
                                                 Amendments, Congress redesigned CAA                     Committee Report made clear that PSD                   PSD be limited to a relatively small
                                                 section 112, which includes the                         should not apply to small sources. As                  number of large industrial sources.


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                                                 Without phasing in PSD and title V                      vitiate much of the purpose of the 100                  122 Cong. Rec. 24548–49 (statement of
                                                 applicability to GHG sources so as to                   tpy cut-off for industrial sources.39                   Sen. McClure).
                                                 allow the development of streamlining                      Most telling, in this regard, is the                    Perhaps the most compelling reason
                                                 methods and increases in permitting                     small-sized boilers, which the                          why applying the PSD program to GHG
                                                 authority resources, the PSD program                                                                            sources without tailoring, and before the
                                                                                                         Steigerwald-Strelow memorandum
                                                 would expand by January 2, 2011, from                                                                           development of streamlining methods,
                                                                                                         describes, in terms of size, pollutants
                                                 the current 280 sources per year to                                                                             would be inconsistent with
                                                                                                         emitted, and numbers of sources, as
                                                 almost 82,000 sources, virtually all of                                                                         congressional intent, is that the
                                                                                                         follows: The memorandum identified
                                                 which would be smaller than the                                                                                 resulting program would prove
                                                                                                         two categories of these boilers,                        unadministrable. Although the
                                                 sources currently in the PSD program                    differentiated by size. The first ranges in
                                                 and most of which would be small                                                                                legislative history of the PSD program
                                                                                                         size from 10 to 250 x 106 Btu/hr, and                   does not reveal much explicit
                                                 commercial and residential sources.                     has a ‘‘typical plant’’ size of 107 Btu/hr,
                                                 Until EPA could develop streamlining                                                                            congressional focus on administrability
                                                                                                         with ‘‘BACT emissions from typical                      issues, the Steigerwald-Strelow
                                                 methods, all of the sources that would                  plant’’ of 53 tpy, and a total of 1,446
                                                 become newly subject to PSD—whether                                                                             Memorandum, which identifies the
                                                                                                         sources in that category. The second                    source categories and numbers of
                                                 they be larger or smaller sources,                      category ranges in size from 0.3 to 10 x
                                                 whether industrial or commercial/                                                                               sources that were before Congress as it
                                                                                                         106 Btu/hr, and has a ‘‘typical plant’’ size            considered PSD, suggests that the
                                                 residential sources—would have to                       of 1.3 x 106 Btu/hr, with ‘‘BACT                        program that Congress fashioned could
                                                 undergo source-specific BACT                            emissions from typical plant’’ of 2 tpy,                be expected to cover at most a few
                                                 determinations for their GHG emissions,                 and a total of 11,215 sources in the                    thousand sources each year. This
                                                 as well as their emissions of                           category. That memorandum makes                         appears to be approximately the size of
                                                 conventional pollutants in amounts in                   clear that EPA did not believe that                     the program that EPA administered
                                                 excess of the significance levels. We                   sources in these two categories—and                     before the 1977 CAA Amendments, so
                                                 estimate that the commercial and                        especially the smallest one—would be                    that it seems reasonable to assume that
                                                 residential sources—the great majority                  subject to PSD under a 100 tpy                          Congress expected the PSD program it
                                                 of which are small business—would                       threshold, by stating, ‘‘Fortunately, most              enacted to be within EPA’s and the
                                                 each incur, on average, almost $60,000                  truly small boilers and typical space                   states’ administrative capacities.
                                                 in PSD permitting expenses. This result                 heating operations would not be                            Moreover, the Alabama Power court
                                                 would be contrary to Congress’s careful                 covered.’’ 122 Cong. Rec. 24549 (July 29,               stressed the importance of
                                                 efforts to confine PSD to large industrial              1976). However, these data and                          administrability concerns: Most
                                                 sources that could afford these costs.                  conclusions were all based on emissions                 importantly, the Court held that EPA, in
                                                    A closer look at the legislative history             of NAAQS pollutants, the amounts of                     interpreting the ‘‘modification’’
                                                 confirms the view that Congress did not                 which placed these boilers well below                   provisions that apply PSD to physical or
                                                 expect PSD to apply to large numbers of                 the PSD threshold limitations. In                       operational changes by major emitting
                                                 small sources, including commercial                     general, most boilers of these small sizes              facilities that ‘‘increase the amount of
                                                 and residential sources, and instead                    are fired with natural gas, and a natural               any air pollutant emitted,’’ CAA section
                                                 expected the 100/250 tpy thresholds to                  gas boiler greater than 0.5 x 106 Btu/hr                111(a)(4), may ‘‘exempt from PSD review
                                                 limit PSD’s applicability to larger                     emits at least 250 tpy CO2. Therefore, if               some emission increases on grounds of
                                                 sources. As noted previously, Congress                  the CO2 emissions of these small boilers                de minimis or administrative necessity,’’
                                                 relied on an EPA memorandum—the                         are considered—as would occur by                        and went on to state that in establishing
                                                 Steigerwald-Strelow memorandum—                         applying the definition of ‘‘major                      the exemption thresholds, ‘‘[t]he Agency
                                                 that identified the range of industrial                 emitting facility’’ to GHG sources                      should look at the degree of
                                                 categories that EPA regulated under its                 without tailoring—then most of them                     administrative burden posed by
                                                 program that constituted the precursor                  would in fact be subject to PSD. Again,                 enforcement at various de minimis
                                                 to the statutory PSD program, and listed                this result would directly contravene                   threshold levels.’’ 636 F.2d at 400,405.
                                                 both the estimated number of new                        Congress’s intention to limit PSD to                    In addition, the Court based its holding
                                                 sources constructing each year and the                  ‘‘industrial plants of significant impact.’’            that potential-to-emit for purposes of the
                                                 amount of pollution emitted by the                                                                              applicability thresholds should be
                                                 ‘‘typical plant’’ in the category. The                     39 Specifically, of the 28 source categories under   defined as emissions at full capacity
                                                 Steigerwald-Strelow memorandum                          CAA section 169(1), information available to EPA        with implementation of control
                                                                                                         indicates that all of the sources in the following      equipment, in part on its view that with
                                                 makes clear that the 100 tpy cut-off for                categories emit at least 100 tpy of CO2 annually:
                                                 the 28 listed sources categories, and the               fossil-fuel fired steam electric plants of more than
                                                                                                                                                                 this definition, the number of sources
                                                 250 tpy cut-off for all other sources,                  250 million Btu per hour heat input, Portland           subject to PSD would be manageable:
                                                 would exclude from PSD a large number                   Cement plants, primary zinc smelters, iron and steel      Though the costs of compliance with
                                                                                                         mill plants, primary aluminum ore reduction             section 165 requirements are substantial,
                                                 of sources. 122 Cong. Rec. 24548–50                     plants, municipal incinerators capable of charging
                                                 (July 29, 1976). However, virtually all, if             more than 50 tons of refuse per day, nitric acid
                                                                                                                                                                 they can reasonably be borne by facilities that
                                                                                                                                                                 actually emit, or would actually emit when
                                                 not all, of the sources in half the 28                  plants, petroleum refineries, lime plants, primary
                                                                                                         lead smelters, fossil-fuel boilers of more than 250     operating at full capacity, the large tonnage
                                                 source categories emit CO2 in quantities                                                                        thresholds specified in section 169(1). The
                                                                                                         Btus per hour heat input. In addition, all but a few
                                                 that equal or exceed the 100 tpy                        kraft pulp mills and glass fiber processing plants      numbers of sources that meet these criteria,
                                                 threshold, and almost all of the sources                emit at least 100 tpy CO2 annually. Our information     as we delineate them, are reasonably in line
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                                                 in the remaining categories emit CO2 in                 is incomplete with respect to the remaining source      with EPA’s administrative capability.
                                                                                                         categories, but with the possible exception of
                                                 quantities that equal or exceed the 100                 petroleum storage and transfer facilities with a        Alabama Power, 636 F.2d at 354.
                                                 tpy threshold. Therefore, applying the                  capacity exceeding three hundred thousand barrels,      However, applying PSD to GHG sources
                                                 ‘‘major emitting facility’’ definition to               we suspect that virtually all sources emit at least     before streamlining and without
                                                 GHG sources, in the absence of                          100 tpy CO2 annually. See ‘‘Technical Support
                                                                                                         Document for Greenhouse Gas Emissions
                                                                                                                                                                 tailoring would increase the size of the
                                                 streamlining methods and without                        Thresholds Evaluation’’; Office of Air Quality          PSD program at least an order of
                                                 tailoring, would, as a practical matter,                Planning and Standards; March 29, 2010.                 magnitude beyond what Congress seems


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                                                 to have expected, which would have                      without tailoring—would have on                        both the PSD and title V programs
                                                 been far beyond the ‘‘administrative                    permitting authorities and on the PSD                  together): NACAA, which represents air
                                                 capability’’ that Alabama Power                         program, and we are concerned that this                pollution control agencies in 53 states
                                                 described EPA as having.                                impact could adversely affect national                 and territories, stated it ‘‘* * * agrees
                                                    Beyond this disconnect with                          economic development. The number of                    with the EPA that immediately
                                                 congressional expectations, what is                     PSD permits that would be required                     attempting to implement the PSD and
                                                 most important is that the                              from such an approach is far beyond                    title V programs using the statutory
                                                 extraordinarily large number of permit                  what the PSD program has seen to date.                 thresholds meets the test for invoking
                                                 applications would overwhelm                            It is clear throughout the country, PSD                the administrative necessity and absurd
                                                 permitting authorities and slow their                   permit issuance would be unable to                     results doctrines.’’ Similarly, the
                                                 ability to process permit applications to               keep up with the flood of incoming                     California Air Resources Board stated
                                                 a crawl. Our best estimate at present is                applications, resulting in delays, at the              that it ‘‘* * * concurs with the United
                                                 that permitting authorities would need                  outset, that would be at least a decade                States, EPA that if more appropriate
                                                 to process almost 82,000 permit                         or longer, and that would only grow                    applicability thresholds [as opposed to
                                                 applications per year, compared to, at                  worse over time as each year, the                      the statutory thresholds] are not set for
                                                 most, 800 in the current PSD program.                   number of new permit applications                      GHG it will not be administratively
                                                 The total additional workload, in work                  would exceed permitting authority                      possible to implement these [the PSD
                                                 hours, for PSD permits would be more                    resources for that year. Because PSD is                and tile V] permitting programs.’’ All
                                                 than 19.5 million more work hours,                      a preconstruction program, during this                 other state and local permitting agencies
                                                 compared to 150,795 work hours for the                  time, tens of thousands of sources each                that commented on the proposed
                                                 current PSD program, and the total                      year would be prevented from                           tailoring provided similar comments
                                                 additional costs would be over $1.5                     constructing or modifying. In fact, it is              that they would not have the adequate
                                                 billion, compared with $12 million for                  reasonable to assume that many of those                staff capacity or resources to be able to
                                                 the current PSD program.                                sources will be forced to abandon                      successfully administer their permitting
                                                    At proposal, we noted that the states                altogether plans to construct or modify.               programs with the addition of GHG
                                                 had estimated that the influx of permit                 As a result, a literal application of the              emission sources at the statutory
                                                 applications that would result from                     PSD applicability provisions to GHG                    thresholds for PSD and title V.
                                                 applying the 250 tpy threshold at actual                sources would slow construction                           It is the many-year delays in permit
                                                 emissions would, without additional                     nationwide for years, with all of the                  issuance and the consequent chilling of
                                                 resources, result in permitting delays of               adverse effects that this would have on                economic development that provide
                                                 3 years. In fact, as we noted at proposal,              economic development.                                  perhaps the clearest indication that
                                                 a literal reading of the PSD requirements                  The remedies for this scenario would                applying the PSD applicability
                                                 would require their application at the                  be for permitting authorities to increase              provisions to GHG sources without
                                                 250 tpy PTE level, which would result                   their PSD funding by over 100-fold,                    tailoring produces absurd results. These
                                                 in ten times more permit applications                   from $12 million to over $1.5 billion, or              effects would undermine one of
                                                 than were assumed when the states                       the development by EPA and the                         Congress’s central purposes in
                                                 made the 3-year estimate. Further, our                  permitting authorities of streamlining                 establishing the PSD program, which
                                                 current estimates of the numbers of                     techniques. But it is not possible for                 was to promote development in clean
                                                 sources that would be subject to PSD                    permitting authorities to increase their               air areas by large industrial sources (as
                                                 requirements are about twice what we                    funding to those levels in the                         long as they included environmental
                                                 estimated at proposal, as described                     foreseeable future, partly because of the              safeguards). As discussed previously,
                                                 elsewhere. Moreover, our estimate of the                sheer magnitude of those levels and                    this goal is manifest in the structure of
                                                 number of hours that permitting                         partly because of the financial                        the PSD provisions, and Congress even
                                                 authorities would need to process a                     challenges that states currently face.                 went so far as to make this goal explicit
                                                 permit application from a source in the                 And, for the reasons discussed later,                  in the purposes section of the PSD
                                                 commercial or residential sector—which                  although streamlining offers genuine                   provisions.
                                                 is, by far, the largest single sector—is                promise to improve the manageability of                   Moreover, at the present time, there is
                                                 three and one-half times as long as we                  the PSD workload, streamlining cannot                  relatively little environmental benefit in
                                                 estimated at proposal. And under a                      do so in the very near term and, in any                subjecting large numbers of small GHG
                                                 literal reading of the PSD applicability                event, the extent to which it can do so                sources to the expensive, source-by-
                                                 provisions as applied to GHG sources,                   has not yet come into focus.                           source PSD permitting requirements.
                                                 the permitting authorities would be                        So clear are at least the broad outlines            They represent a relatively small share
                                                 required to implement a program of this                 of this picture that EPA did not receive               of the GHG inventory and the control
                                                 size beginning on January 2, 2011, less                 any substantive comments arguing that                  options available to them, at present, are
                                                 than 9 months from now. We received                     permitting authorities could in fact                   limited. As a result, approaches other
                                                 many comments from states and                           administer the PSD program with the                    than source-by-source permitting
                                                 industry raising concerns about the cost                applicability requirements applied                     presently offer more promise for
                                                 to sources and administrative burdens                   literally to GHG sources beginning in                  generating emissions reductions in an
                                                 of PSD permitting if the statutory                      the very near future.40 Every permitting               efficient manner. These approaches,
                                                 threshold were to apply for GHG                         authority that addressed this issue in                 which may be developed through both
                                                 emissions. One commenter estimated a                    their comments on the proposed                         federal and state efforts, include
                                                 cost of over $5 billion and the                                                                                requirements, incentives, and
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                                                                                                         Tailoring Rule stated unequivocally that
                                                 dedication of over 17,000 FTEs to this                  it could not administer the PSD program                educational outreach to promote
                                                 effort.                                                 at the statutory levels. To cite a few                 efficiency improvements to boilers and
                                                    We consider it difficult to overstate                                                                       furnaces and energy efficient operations,
                                                                                                         examples (each of which considered
                                                 the impact that applying PSD                                                                                   including, for example, weatherization
                                                 requirements literally to GHG sources as                  40 EPA did receive a smaller number of comments      programs.
                                                 of January 2, 2011—before streamlining                  that asserted in conclusory fashion that permitting       For all these reasons, interpreting the
                                                 or increasing permitting resources and                  authorities could administer the 100/250 tpy levels.   definition of ‘‘major emitting facility’’


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                                                 and ‘‘modification’’ literally—that is, as              small sources would not be subject to                  exclude GHG sources. Accordingly, we
                                                 EPA has interpreted them more                           PSD. The legislative history does not                  believe that Congress must be said to
                                                 narrowly, but without tailoring and                     specifically mention GHG sources.                      have intended an affirmative response
                                                 before the program requirements can be                  Looking at these provisions and the                    for whether PSD applies to sources of
                                                 streamlined or permitting authority                     legislative history together, we think                 GHGs as a general matter. Our previous
                                                 resources can be increased—would                        Congress can be said to have intended                  regulatory action defining the PSD
                                                 produce results that are not consonant                  that the PSD program apply to GHG                      applicability provisions made this clear,
                                                 with, and, in fact, would severely                      sources as a general matter. The most                  and we do not reopen this issue in this
                                                 undermine, Congress’s purpose for the                   important indication of congressional                  rulemaking. Moreover, even if this long-
                                                 PSD program. These results may fairly                   intent in this regard is the applicability             established regulatory position were not
                                                 be characterized as the type of absurd                  provisions, which provide, in part, that               justifiable based on Chevron Step 1—on
                                                 results that support our view that the                  PSD applies to (i) ‘‘any * * * source[                 the grounds that in fact, congressional
                                                 literal terms of the PSD applicability                  that] emit[s], or ha[s] the potential to               intent on this point is not clear—then
                                                 provisions do not indicate congressional                emit [the specified quantity] of any air               we believe that this position, that the
                                                 intent for how those provisions should                  pollutant,’’ CAA section 169(1); and (ii)              statutory provisions to apply PSD to
                                                 applied to GHG sources.                                 to any such source that undertakes a                   GHG sources in general, was justified
                                                                                                         physical or operational change that                    under Chevron Step 2.
                                                 b. Congressional Intent for the                                                                                   As to how PSD applies to GHG
                                                 Applicability Provisions                                ‘‘increases the amount of any air
                                                                                                                                                                sources, although, for reasons discussed
                                                                                                         pollutant emitted.’’ CAA section
                                                 (1) Congressional Intent for Whether                                                                           previously, the 100/250 tpy threshold
                                                                                                         169(2)(C), 111(a)(4). These terms are
                                                 and How PSD Applies to GHG Sources                                                                             provision, which establishes the scope
                                                                                                         quite broad, and should be read to
                                                                                                                                                                of PSD applicability, should not be read
                                                   Several of the PSD provisions and                     include GHG sources and GHGs. See
                                                                                                                                                                as applying literally to GHG sources—
                                                 statements in the legislative history are               Massachusetts v. EPA, 549 U.S. 497, 533
                                                                                                                                                                and as a result, the applicability
                                                 particularly important in determining                   (2007) (‘‘Because greenhouse gases fit
                                                                                                                                                                provision as a whole cannot be said to
                                                 whether and how the PSD program                         well within the Clean Air Act’s
                                                                                                                                                                have a plain meaning as to the scope of
                                                 should apply to GHG sources, as                         capacious definition of ‘air pollutant,’
                                                                                                                                                                coverage of GHG sources—we believe
                                                 discussed elsewhere:                                    we hold that EPA has the statutory
                                                                                                                                                                that the applicability provisions and
                                                   (1) The applicability provisions,                     authority to regulate the emission of                  legislative history nevertheless indicate
                                                 under CAA section 165(a) and 169(1).                    such gases from new motor vehicles.’’).                a congressional intent for how PSD
                                                 These provisions are written broadly,                   Moreover, including GHG sources—                       should apply to GHG sources. That is to
                                                 and although, as we explain above, they                 under certain circumstances—is                         apply PSD to as many sources as
                                                 cannot be read literally to apply to GHG                consistent with the PSD provisions that                possible as quickly as possible, at least
                                                 sources at or above the 100/250 tpy,                    refer to other pollutants, establish the               to a certain point. We believe that this
                                                 they nevertheless can be read to indicate               time-frame for acting on PSD                           intent can be inferred from the
                                                 that directionally, Congress intended                   applications, and establish the overall                inclusiveness of the applicability
                                                 that PSD be applied inclusively.                        purpose of the program. In addition,                   provision, combined with the legislative
                                                   (2) The various PSD provisions that                   including GHG sources—again, under                     history that focuses on Congress’s desire
                                                 identify the pollutants subject to PSD.                 certain circumstances—is consistent                    to include in the PSD program sources
                                                 Compare, e.g., CAA sections 162, 163,                   with the legislative history that PSD be               that have the resources to comply with
                                                 164, 165(a)(3), 165(d)(2), 165(e), and 166              limited to sources that cause a                        the requirements and, as the Court in
                                                 (NAAQS pollutants) with CAA sections                    meaningful part of the air pollution                   Alabama Power recognized, Congress’s
                                                 165(a)(3)(C), 165(a)(4) (other pollutants).             problem and have the resources to                      concern about administrability. That is,
                                                 These provisions indicate that a major                  manage the PSD requirements. No PSD                    at first, PSD may apply to the largest
                                                 purpose of the PSD program is to                        provision explicitly imposes any                       GHG sources because they may be
                                                 control NAAQS pollutants, but that the                  limitation of PSD to large industrial                  expected to have the resources to
                                                 program also covers non-NAAQS                           sources, and Congress’s reasoning for                  comply with PSD’s requirements and
                                                 pollutants.                                             focusing on large industrial sources—                  permitting authorities may be expected
                                                   (3) The requirement that permitting                   which was that these sources are best                  to accommodate those sources; and over
                                                 authorities act on PSD applications                     suited to handle the resource -intensive               time, with streamlining and increases in
                                                 within 1 year. CAA section 165(c). This                 analyses required by the PSD program—                  permitting authority resources, PSD may
                                                 provision indicates that Congress                       could extend to GHG sources under                      apply to more GHG sources. As
                                                 anticipated the PSD program would be                    certain circumstances (that is, large                  discussed later, the tailoring approach is
                                                 of a size that would allow permitting                   sources first, and smaller sources after               consistent with congressional intent in
                                                 authorities to meet this deadline.                      streamlining methods are developed).                   this regard.
                                                   (4) The purpose provision. CAA                        Similarly, as discussed previously, it is                 We recognize the tension between the
                                                 section 160. This provision makes clear                 reasonable to read into Congress’s intent              applicability provisions, which are
                                                 that PSD is designed both to protect                    that the PSD program be limited to a                   inclusive, and the statements in the
                                                 public health and welfare and to                        size that permitting authorities would                 legislative history that express
                                                 promote economic growth.                                be able to administer, but it is consistent            Congress’s expectation that PSD be
                                                   (5) In addition, we consider important                with that reading to recognize that the                limited to large industrial sources. At
                                                 the legislative history indicating the                  permitting authorities could take certain              least to a point, the applicability
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                                                 Congress intended PSD to apply to large                 steps—including adoption of                            provisions and these statements can be
                                                 industrial sources because they were the                streamlining measures and ramping up                   reconciled by recognizing that the
                                                 primary source of the air pollution                     resources—that would allow them to                     reason why Congress expected that PSD
                                                 problems and they have the resources to                 handle a higher volume of permitting.                  would be limited to large industrial
                                                 manage the demands of the PSD                           Finally, we find nothing in the PSD                    sources was that Congress recognized
                                                 permitting process; and that, by the                    provisions or legislative history that                 that PSD applied on a source-by-source
                                                 same token, Congress expected that                      would indicate congressional intent to                 basis, that this would be costly to


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                                                 sources, and that only the large                          and can manage its requirements,                         the applicable CAA sections, any
                                                 industrial sources could afford those                     because it will expand PSD’s                             physical or operational change at a
                                                 costs. Taking certain actions—including                   applicability only after streamlining                    stationary source that ‘‘increases the
                                                 streamlining PSD requirements—can                         methods and greater permitting                           amount of any air pollutant emitted by
                                                 render PSD more affordable and thereby                    authority resources will allow for such                  such source’’ or that results in the
                                                 allow its application to smaller sources                  an expansion in an orderly manner.                       emission of a new pollutant is treated as
                                                 in a more cost-effective manner. In this                                                                           a ‘‘modification’’ that is subject to PSD
                                                                                                           (2) Criteria for Establishing Phase-in
                                                 way, PSD’s inclusive applicability                                                                                 requirements. Although the CAA, by its
                                                                                                           Schedule
                                                 provisions can be reconciled with the                                                                              terms, treats as an ‘‘increase’’ any
                                                 narrower scope Congress expected, and                       The specific phase-in schedule under                   amount of emissions that is greater than
                                                 this is part of the reason why we                         the tailoring approach will depend on                    zero, the DC Circuit held in Alabama
                                                 characterize congressional intent as                      several things. The first is our progress                Power v. Costle that EPA may establish
                                                 being consistent with phasing in the                      in developing streamlining methods that                  a threshold—called the significance
                                                 applicability of PSD to GHG sources                       will render the permitting authority                     level—on de minimis grounds for the
                                                 through the tailoring approach.41                         workload more manageable by taking                       amount of any particular pollutant that
                                                    On the other hand, if Congress cannot                  some sources off the table (through                      may be increased. 636 F.2d at 400.
                                                 be said to have expressed an intent as                    regulations or guidance interpreting                        Of particular importance, the Court in
                                                 to the manner and scope of PSD                            PTE), and by allowing for more efficient                 Alabama Power indicated that EPA may
                                                 applicability to GHG sources, then,                       permit processing (through general                       rely on administrative considerations to
                                                 under Chevron Step 2, EPA may apply                       permits and presumptive BACT). At the                    establish significance levels. Id. To
                                                 a reasonable interpretation of the                        same time, streamlining techniques will                  reiterate, the Court held that ‘‘EPA does
                                                 applicability provisions to determine                     lower permitting costs to sources or                     have discretion, in administering the
                                                 the scope of coverage of GHG sources                      even eliminate some sources’                             statute’s ‘modification’ provision, to
                                                 that is consistent with the statutory                     obligations to obtain permits altogether.                exempt from PSD review some emission
                                                 requirements. The Tailoring Rule is a                     The second is the time that permitting                   increases on grounds of de minimis or
                                                 reasonable interpretation under Chevron                   authorities need to ramp up their                        administrative necessity.’’ 636 F.2d at
                                                 Step 2. It is consistent with (1) The                     resources in an orderly and efficient                    400. The Court added a more detailed
                                                 applicability provisions, recognizing                     manner to manage the additional                          exposition of its views in a subsequent
                                                 that as we have seen, those provisions                    workload. The third is information we                    part of its opinion, where it discussed
                                                 cannot be applied literally under these                   have as to the sources’ abilities to meet                the BACT provision, under CAA section
                                                 circumstances,42 (2) the provisions                       the requirements of the PSD program                      165(a)(4), and the Court made clear that
                                                 described above concerning which                          and the permitting authorities’ ability to               those views applied as well to the
                                                 pollutants the PSD provisions cover and                   process permits in a timely fashion.                     ‘‘modification’’ provision. There, the
                                                 the timetable for permitting authority                    That information will be based on the                    Court invalidated an EPA regulation
                                                 action on PSD applications; (3) the                       real-world experience the permitting                     that established a 100- and 250-tpy
                                                 purpose provisions of PSD, and the                        authorities will accumulate as they                      exemption from the BACT requirement.
                                                 accompanying legislative history,                         proceed to process permit application                    Both the BACT provision and the
                                                 because it protects public health and                     for the larger GHG sources.
                                                                                                                                                                    modification provision apply by their
                                                                                                             Thus, under our present approach, we
                                                 welfare without inhibiting economic                                                                                terms to all emissions from a source, but
                                                                                                           will develop streamlining techniques,
                                                 development; and (4) the legislative                                                                               the Court stated that each provision
                                                                                                           we expect the permitting authorities to
                                                 history indicating Congress intended                                                                               must be read to incorporate an
                                                                                                           ramp up resources in response to the
                                                 that PSD be limited to sources that                                                                                exemption based on de minimis or
                                                                                                           additional demands placed upon them
                                                 cause a meaningful part of the problem                                                                             administrative considerations, and
                                                                                                           in the first two steps, and we will gather
                                                                                                           real-world information about the GHG                     explained:
                                                    41 Reconciling the applicability provisions with

                                                 the statements in the legislative history in this         permitting process; and based on all                        We understand that the application of
                                                 manner is also consistent with the U.S. Supreme           that, we will address expanding the PSD                  BACT requirements to the emission of all
                                                 Court’s view that the Clean Air Act has inherent          program in a step-by-step fashion to                     pollutants from a new facility, no matter how
                                                 flexibility, as it stated in Massachusetts v. EPA, 549                                                             miniscule some may be, could impose severe
                                                                                                           include more sources over time. We                       administrative burdens on EPA, as well as
                                                 U.S. 497, 532 (2007):
                                                    While the Congresses that drafted § 202(a)(1)
                                                                                                           intend to follow this process to establish               severe economic burdens on the construction
                                                 might not have appreciated the possibility that           both the PSD applicability thresholds                    of new facilities. But the proper way to
                                                 burning fossil fuels could lead to global warming,        and, as we describe next, the                            resolve this difficulty is to define a de
                                                 they did understand that without regulatory               significance levels.                                     minimis standard rationally designed to
                                                 flexibility, changing circumstances and scientific                                                                 alleviate severe administrative burdens, not
                                                 developments would soon render the Clean Air Act          (3) Criteria for Establishing Significance               to extend the statutory 100 or 250-ton
                                                 obsolete. The broad language of § 202(a)(1) reflects      Levels 43                                                threshold to a context where Congress clearly
                                                 an intentional effort to confer the flexibility
                                                 necessary to forestall such obsolescence. See               The criteria for establishing the                      did not apply it. Just as for the applicability
                                                 Pennsylvania Dept. of Corrections v. Yeskey, 524 U.                                                                of PSD to modifications, the de minimis
                                                                                                           significance levels are the same as for
                                                 S. 206, 212 (1998) (‘‘[T]he fact that a statute can be                                                             exemption must be designed with the
                                                 applied in situations not expressly anticipated by
                                                                                                           establishing the ‘‘major emitting facility’’             specific administrative burdens and specific
                                                 Congress does not demonstrate ambiguity. It               thresholds. As noted previously, under                   regulatory context in mind. This the Agency
                                                 demonstrates breadth’’ (internal quotation marks                                                                   has failed to do. We do not hold that 100 tons
                                                 omitted)).                                                  43 It should be noted that strictly speaking, we do
                                                                                                                                                                    per year necessarily exceeds a permissible de
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                                                    42 For the reasons discussed above, we believe         not, in our drafting of the regulatory revisions that    minimis level; only that the Agency must
                                                 that Step 2 of the Chevron framework, which               are part of this rulemaking, establish a significance    follow a rational approach to determine what
                                                 authorizes the exercise of agency discretion as long      level for GHG emissions based on CO2e. Rather, we
                                                                                                                                                                    level of emission is a de minimis amount.
                                                 as the agency remains consistent with a reasonable        establish an applicability criteria for determining
                                                 construction of the statute, does not require a literal   whether GHGs are subject to regulation with respect
                                                                                                                                                                       A rational approach would consider the
                                                 construction of the statute in a case such as this        to the particular source. We explain our approach        administrative burden with respect to each
                                                 one, in which the ‘‘absurd results’’ doctrine applies     in more detail in the Response to Comments               statutory context: what level of emission is
                                                 so that the statutory requirements cannot be read         document. Throughout this preamble, we refer to          de minimis for modification, what level de
                                                 literally.                                                this action, for convenience, as a significance level.   minimis for application of BACT. Concerning



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                                                 the application of BACT, a rational approach            to implement at the present time in light              similar point, except to state that PSD
                                                 would consider whether the de minimis                   of the costs to the sources and the                    applies more broadly to pollutants with
                                                 threshold should vary depending on the                  administrative burdens to the permitting               a local, ambient impact.
                                                 specific pollutant and the danger posed by                                                                        Some commenters go on to take the
                                                                                                         authorities.
                                                 increases in its emission. The Agency should
                                                 look at the degree of administrative burden
                                                                                                                                                                position that NAAQS pollutants for
                                                                                                         c. Other Possible Approaches to                        which the area is designated attainment
                                                 posed by enforcement at various de minimis              Reconciling a Literal Reading of PSD
                                                 threshold levels. It is relevant that our                                                                      or unclassifiable are the only pollutants
                                                                                                         Applicability Provisions and                           that can be regulated under any
                                                 decision requires the Agency, in its
                                                 evaluation of emissions of facilities, to take
                                                                                                         Congressional Intent                                   provision of the PSD requirements;
                                                 into account the facility’s air pollution                  Commenters have suggested another                   while others take the position that once
                                                 controls. It may also be relevant, though it is         approach to reconciling the                            PSD is triggered for a source on the basis
                                                 certainly not controlling, that Congress made           inconsistency between the definition of                of its NAAQS pollutants, then other,
                                                 a judgment in the Act that new facilities               ‘‘major emitting facility’’ and
                                                 emitting less than 100 or 250 tons per year
                                                                                                                                                                non-NAAQS, pollutants may be
                                                 are not sizeable enough to warrant PSD
                                                                                                         congressional intent. They urge that the               regulated under certain PSD provisions,
                                                 review.                                                 ‘‘major emitting facility’’ definition                 in particular, the BACT provision under
                                                                                                         should be applied so that only sources                 CAA section 165(a)(4). These
                                                 Id. at 405. As just quoted, the Court                   that emit NAAQS pollutants, for which                  commenters agree, however, that
                                                 acknowledged the 100 and 250 tpy                        the area is designated attainment or                   emissions of GHGs, by themselves,
                                                 thresholds for a major emitting facility,               unclassifiable, in the requisite quantities            cannot trigger PSD applicability.
                                                 and did not indicate whether the                        would be subject to PSD, and sources                   Finally, some commenters state that
                                                 modification exemption level could                      would not be subject to PSD based                      even if the PSD provisions cannot be
                                                 exceed those statutory levels, but                      solely on their emissions of non-                      read by their terms to preclude GHGs
                                                 nevertheless, the Court made clear that                 NAAQS pollutants or a NAAQS                            from triggering PSD, then they can be
                                                 EPA may ‘‘consider the administrative                   pollutant for which an area has been                   read to authorize EPA to determine that
                                                 burden’’ associated with modifications                  designated nonattainment. Some                         GHG emissions do not trigger PSD.
                                                 to establish an exemption level for                     commenters argue that this approach is                    We recognize, as we have said
                                                 modifications.                                          mandated by several of the PSD                         elsewhere, that a major purpose of the
                                                    EPA has established significance                     provisions, read together or at least that             PSD provisions is to regulate emissions
                                                 levels for various pollutants, generally                the relevant statutory provisions are                  of NAAQS pollutants in an area that is
                                                 relying on a de minimis basis. See, e.g.,               ambiguous and that this approach is a                  designated attainment or unclassifiable
                                                 45 FR 52676, 52705–52710 (August 7,                     reasonable reading of them. Under this                 for those pollutants. However, we do
                                                 1980). In these actions, EPA generally                  approach, we would not need to phase                   not read CAA sections 161 and the ‘‘in
                                                 established the level based on the                      in the application of PSD by lowering                  any area to which this part applies’’
                                                 triviality of the amount of emissions                   the applicability threshold for GHG                    clause in 165(a), in the context of the
                                                 excluded. To this point, we have not                    emitters.                                              PSD applicability provisions, as limiting
                                                 attempted to determine de minimis—                         Specifically, many commenters have                  PSD applicability to those pollutants.
                                                 that is, trivial—levels for GHGs. Instead,              questioned whether EPA has the                         The key PSD applicability provisions
                                                 in this rulemaking, EPA is establishing                 authority to regulate GHGs under the                   are found in sections 165(a) and 169(1).
                                                 a phase-in schedule for significance                    PSD provisions. Although the specific                  Section 165(a) states, ‘‘No major emitting
                                                 levels based on the Chevron framework,                  lines of reasoning vary somewhat from                  facility on which construction is
                                                 accounting for the ‘‘absurd results,’’                  one commenter to another, in general,                  commenced after August 7, 1977, may
                                                 ‘‘administrative necessity,’’ and ‘‘one-                they based their arguments largely on                  be constructed in any area to which this
                                                 step-at-a-time’’ doctrines. It is not                   CAA sections 161 and 165(a). Under                     part applies unless [certain
                                                 necessary to establish a permanent de                   CAA section 161:                                       requirements are met].’’ A ‘‘major
                                                 minimis level in this rulemaking. For                                                                          emitting facility’’ is defined, under CAA
                                                 one thing, the Court in Alabama Power                     In accordance with the policy of section
                                                                                                         101(b)(1), each applicable implementation              section 169(1), as ‘‘any * * * stationary
                                                 explicitly authorized an administrative                 plan shall contain emission limitations and            source[s] which emit[s], or ha[s] the
                                                 basis for significance levels. Moreover,                such other measures as may be necessary, as            potential to emit, one hundred [or,
                                                 were EPA to establish a de minimis                      determined under regulations promulgated               depending on the source category, two
                                                 level, that amount could be below—                      under this part, to prevent significant                hundred fifty] tons per year or more of
                                                 perhaps even well below—the ‘‘major                     deterioration of air quality in each region (or        any air pollutant.’’ As discussed
                                                 emitting facility’’ thresholds established              portion thereof) designated pursuant to                elsewhere, EPA has long interpreted the
                                                 in this rulemaking on grounds of                        section 107 as attainment or unclassifiable.
                                                                                                                                                                term ‘‘any air pollutant’’ to refer to ‘‘any
                                                 ‘‘administrative necessity’’ and the other              Commenters point out that section 107                  air pollutant subject to regulation under
                                                 doctrines. Accordingly, at present, if we               applies only to NAAQS pollutants and                   the CAA,’’ and for present purposes, will
                                                 were to establish a permanent                           directs that areas be designated as                    continue to read the ‘‘subject to
                                                 significance level on a de minimis basis,               attainment, nonattainment, or                          regulation’’ phrase into that term.
                                                 that level could result in too many small               unclassifiable on a pollutant-by-                         Although section 165(a) makes clear
                                                 sources being required to submit permit                 pollutant basis. Under CAA section                     that the PSD requirements apply only to
                                                 applications while the phase-in is                      165(a), a ‘‘major emitting facility’’ cannot           sources located in areas designated
                                                 occurring. This would give rise to the                  be constructed ‘‘in any area to which                  attainment or unclassifiable, it does not,
                                                 same problems concerning undue costs                    this part applies’’ unless it meets certain            by its terms, state that the PSD
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                                                 to the sources and administrative                       requirements. According to some                        requirements apply only to pollutants
                                                 burdens for the permitting authorities                  commenters, these provisions, read                     for which the area is designated
                                                 for which we are fashioning a remedy.                   together, limit PSD’s applications to                  attainment or unclassifiable. Rather,
                                                 Accordingly, the significance levels we                 only NAAQS pollutants that are emitted                 section 165(a) explicitly states that the
                                                 establish with this action are the lowest               from sources in areas that are designated              PSD requirements apply more broadly
                                                 levels that sources and permitting                      attainment or unclassifiable for those                 to any pollutant that is subject to
                                                 authorities can reasonably be expected                  pollutants. Other comments make a                      regulation. Moreover, another


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                                                 requirement in CAA section 165(a) also                     In addition, PSD requirements are                   sources apply only to pollutants other
                                                 applies to air pollutants broadly. Under                 part of SIPs, and although SIPs generally             than NAAQS or HAPs), section 112(a)(1)
                                                 CAA section 165(a)(3), one of the                        are limited to provisions that implement              (applying air toxics requirements in
                                                 requirements for securing a                              the NAAQS, and therefore generally are                section 112 to sources that emit above
                                                 preconstruction permit is to                             limited to controlling NAAQS                          the specified tonnage thresholds of
                                                 demonstrate that the source’s emissions                  pollutants (or non-NAAQS pollutants                   ‘‘hazardous air pollutants’’).
                                                 ‘‘will not cause, or contribute to, air                  that affect ambient air quality), see                    In addition, although section 161
                                                 pollution in excess of any (A) maximum                   generally CAA section 110, Congress                   requires that SIPs contain emission
                                                 allowable increase or maximum                            explicitly required SIPs to include                   limitations and other measures as
                                                 allowable concentration for any                          requirements to protect visibility, under             necessary to prevent significant
                                                 pollutant in any area [to which the PSD                  CAA section 169A–B. See CAA sections                  deterioration in areas designated as
                                                 requirements apply], (B) [NAAQS] in                      110(a)(2)(D)(i)(II), 169A(b)(2)(A).                   attainment or unclassifiable, it does not
                                                 any air quality control region, or (C) any               Congress took much the same approach                  by its terms limit SIPs to only those
                                                 other applicable emission standard or                    with the PSD program, which was to                    measures.
                                                 standard of performance under this                       require that PSD requirements be                         Most broadly, we read the PSD
                                                 chapter.’’ As just quoted, subparagraph                  included in the SIPs, but to explicitly               provisions and their legislative history
                                                 (C), by its terms clearly applies to non-                require that PSD apply to non-NAAQS                   to evidence Congress’s intent that PSD
                                                 NAAQS pollutants. This is because it                     pollutants.                                           apply throughout the country to large
                                                 refers to (1) ‘‘any other applicable                       These provisions—sections 165(a)(3),                sources that undertake new construction
                                                 emission standard,’’ which distinguishes                 165(a)(4), and 110(j)—all indicate by                 or modifications, and that Congress’s
                                                 it from subparagraph (B) and therefore                   their terms that PSD requirements apply               overall purpose was to assure that, as
                                                 from NAAQS pollutants; and (2) ‘‘any                     to non-NAAQS pollutants. As such,                     the industrial stock of the nation turned
                                                 * * * standard of performance under                      they lend credence to our view that                   over, it would become cleaner for all air
                                                 this chapter,’’ which refers to standards                Congress intended the PSD applicability               pollutants emitted. Greenhouse gas
                                                                                                          provisions to include GHG sources. At                 sources, as a general matter, fit readily
                                                 of performance under section 111,
                                                                                                          the very least, they demonstrate that                 into this overall vision. At the time that
                                                 several of which are for non-NAAQS
                                                                                                          Congress certainly knew how to                        Congress enacted the PSD provisions in
                                                 pollutants. See, e.g., 40 CFR 60.33c(a)
                                                                                                          specifically describe certain air                     1977, every area of the nation was
                                                 ‘‘municipal solid waste landfill
                                                                                                          pollutants—e.g., ‘‘air pollution in excess            designated attainment or unclassifiable
                                                 emissions.’’ By the same token, CAA
                                                                                                          of * * * any other applicable emission                for at least one air pollutant, and that
                                                 section 110(j) specifically contemplates
                                                                                                          standard or standard of performance                   has remained the case to the present
                                                 that a source required to hold a permit
                                                                                                          under this chapter,’’ CAA section                     time. Accordingly, at all times, PSD has
                                                 under title I of the Act, which includes
                                                                                                          165(a)(3)(C)—which indicates that its                 applied in every area of the country.
                                                 a PSD permit, demonstrate that the
                                                                                                          decision not to specifically describe air             The PSD requirements clearly cover all
                                                 source complies with ‘‘standards of                                                                            air pollutants emitted by the source, and
                                                                                                          pollutants in the applicability
                                                 performance,’’ which may include                                                                               provide a process for reviewing those
                                                                                                          provisions suggests an intent to cover
                                                 requirements for pollutants other than                                                                         emissions and determining BACT for
                                                                                                          air pollutants broadly.
                                                 NAAQS.                                                     To return to sections 161 and the ‘‘in              them under CAA section 165(a)(4). It is
                                                    In addition, CAA section 163(a)(4)                    any area to which this part applies’’                 true that at the time Congress adopted
                                                 includes as a PSD requirement that ‘‘the                 phrase in 165(a), which commenters                    the PSD provisions, it was primarily
                                                 proposed facility is subject to the best                 rely on as the cornerstone of their                   concerned about the NAAQS
                                                 available control technology for each                    argument, commenters in effect take the               pollutants—or, as some commenters
                                                 pollutant subject to regulation under                    position that Congress intended the                   assert, pollutants with local, ambient
                                                 this chapter emitted from, or which                      geographic references in these                        impact—because those pollutants
                                                 results from, such facility.’’ Section                   provisions—that is, the references to                 represented a major component of the
                                                 163(a)(4)’s broad reference to ‘‘each                    areas designated as attainment or                     air pollution problems it was aware of
                                                 pollutant subject to regulation under                    unclassifiable—to limit the scope of the              and was addressing. But its overall
                                                 this chapter’’ clearly indicates that it                 permitting provisions. We think it                    purpose was broad enough to cover
                                                 applies to non-NAAQS pollutants, as                      unpersuasive that Congress would have                 additional pollutants; the process it
                                                 long as they are regulated under other                   taken such an indirect, and silently                  enacted for establishing BACT was
                                                 provisions of the Act.44 The DC Circuit,                 implied, route to limit the scope of the              broad enough to encompass additional
                                                 in Alabama Power v. Costle, 636 F.2d                     permitting provisions. As noted                       pollutants; and the applicability
                                                 323, 361 n.90 (DC Cir. 1980) indicated                   previously, the permitting provisions                 provisions it established were phrased
                                                 that, under the law applicable at the                    apply broadly by their terms. Had                     broadly enough to encompass additional
                                                 time the Court handed down the                           Congress intended to limit PSD                        pollutants, see section 169(1). As a
                                                 decision in 1980, PSD applies to                         permitting in the manner urged by                     result, we believe that the PSD
                                                 HAPs.45                                                  commenters, it certainly could have                   applicability provisions, which, again,
                                                                                                          done so directly, such as by limiting                 refer to, as we have interpreted them,
                                                   44 We find no support for the proposition raised       PSD permitting to ‘‘any pollutant for                 ‘‘any air pollutant [subject to regulation
                                                 by some commenters that this provision is limited        which an area is designated attainment                under the CAA],’’ should be seen as
                                                 to ‘‘NAAQS’’ pollutants. To the contrary, ‘‘under this   or unclassifiable.’’ Indeed, Congress did             ‘‘capacious’’ and therefore encompass
                                                 chapter’’ unambiguously signals an intent to cover
                                                                                                          so in other PSD provisions, discussed                 GHG sources, in much the same manner
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                                                 any pollutant regulated under the Act. Had
                                                 Congress intended a narrower focus, they would           previously. Similarly, in other sections              as the U.S. Supreme Court viewed the
                                                 have specified ‘‘any NAAQS pollutant’’ or any            of the CAA, Congress also directly                    definition of ‘‘air pollutant’’ to be
                                                 pollutant subject to regulation under this Part          limited the scope of pollutant                        ‘‘capacious’’ and therefore encompass
                                                 (PSD).                                                   applicability by specifying which
                                                   45 In the 1990 CAA Amendments, Congress added
                                                                                                                                                                GHGs. Massachusetts v. EPA, 549 U.S.
                                                 section 112(b)(6), which provides that PSD ‘‘shall
                                                                                                          pollutants are or are not subject to the              497, 533 (2007).
                                                 not apply to pollutants listed under this section,’’     provision. See, e.g., section 111(d)                     In addition, it should not be
                                                 that is, HAPs.                                           (performance standards for existing                   overlooked that we have applied PSD to


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                                                 non-NAAQS pollutants since the                          requirements for its GHG emissions.                    major stationary facility or source of air
                                                 inception of the program over 30 years                  These results are inequitable and would                pollutants which directly emits, or has
                                                 ago. For example, prior to the 1990 CAA                 create an uneven playing field and for                 the potential to emit, one hundred tons
                                                 Amendments, PSD applied to HAPs                         this reason, too, support our view that                per year or more of any air pollutant.’’
                                                 regulated under CAA section 112; and                    the PSD applicability provisions apply                 CAA sections 501(2)(B) and 302(j).
                                                 over the years, EPA has established                     to GHG sources.                                           Under the current interpretation of
                                                 significance levels for fluorides, sulfuric               Accordingly, we reject the argument                  the title V applicability provisions,
                                                 acid mist, hydrogen sulfide, TRS,                       that section 165 must be, or may                       EPA’s recent promulgation of the LDVR
                                                 reduced sulfur compounds, municipal                     reasonably be, limited in scope to                     will trigger the applicability of title V
                                                 waste combustor organics, municipal                     pollutants for which an area has been                  for GHG sources at the 100 tpy
                                                 waste combustor metals, municipal                       designated as attainment or                            threshold levels as of January 2, 2011.
                                                 waste combustor acid gases, and                         unclassifiable. Rather, the PSD                        This is because title V applicability
                                                 municipal solid waste landfill                          applicability provision—the definition                 hinges on the definition of ‘‘major
                                                 emissions, see 40 CFR 51.166(b)(23)(i);                 of ‘‘major emitting facility’’ in CAA                  source,’’ which, under EPA’s long-
                                                 and EPA has proposed a significance                     section 169(1)—applies by its terms (as                standing narrowing interpretation, but
                                                 level for ozone depleting substances.                   we have interpreted them narrowly                      absent further tailoring, applies title V
                                                 See 61 FR 38307 (July 23, 1996). Of                     through regulation) to sources emitting                to sources of any air pollutant that is
                                                 course, the basis for all these actions is              any air pollutant subject to regulation,               subject to regulation under another
                                                 PSD’s applicability to these non-                       and is not limited to any NAAQS air                    provision of the CAA. EPA’s
                                                 NAAQS air pollutants. We are not aware                  pollutant. Our research has not                        promulgation of the LDVR means that
                                                 that EPA’s actions in establishing                      disclosed any explicit statements in the               GHGs will become subject to regulation
                                                 significance levels for these pollutants                legislative history that Congress                      on the date that the rule takes effect,
                                                 gave rise to challenges on grounds that                 intended to limit PSD applicability to                 which will be January 2, 2011.
                                                 the PSD provisions do not apply to                      sources of NAAQS pollutants.                              But absent tailoring, the January 2,
                                                 them. As the U.S. Supreme Court                                                                                2011 trigger date for GHG PSD
                                                                                                         6. Application of the ‘‘Absurd Results’’               applicability will see an extraordinarily
                                                 recently stated in upholding an EPA                     Doctrine for the Title V Program
                                                 approach in another context: ‘‘While not                                                                       large number of sources—some 6.1
                                                                                                            Having discussed the application of                 million—become subject to title V, an
                                                 conclusive, it surely tends to show that
                                                                                                         the Chevron framework, taking account                  increase of over 400-fold over the 14,700
                                                 the EPA’s current practice is a
                                                                                                         of the ‘‘absurd results’’ doctrine, for the            sources that currently are subject to title
                                                 reasonable and hence legitimate
                                                                                                         PSD applicability requirements, we now                 V. The great majority of these will be
                                                 exercise of its discretion * * * that the               turn towards applying the same                         small commercial or residential sources.
                                                 agency has been proceeding in                           approach to the title V applicability                     We believe that for many reasons, this
                                                 essentially this fashion for over 30                    requirements. Because of the parallels                 result is contrary to congressional intent
                                                 years.’’ Entergy Corp. v. Riverkeeper,                  between the PSD and title V                            for the title V program, and in fact
                                                 Inc., 129 S.Ct. 1498, 1509 (2009)                       applicability provisions, much of the                  would severely undermine what
                                                 (citations omitted).                                    discussion later parallels the previous                Congress sought to accomplish with the
                                                    Finally, we note that excluding GHG                  discussion of PSD. As with PSD, we                     program. As a result, under Chevron,
                                                 sources from PSD applicability would                    finalize, with some refinements, the                   accounting for the ‘‘absurd results’’
                                                 create inequitable results. Consider the                ‘‘absurd results’’ basis we proposed.                  doctrine, the statutory definition for
                                                 hypothetical case of two sources that                   Specifically, we are revising our                      ‘‘major source’’ (as EPA has already
                                                 construct in the same area, each of                     regulations to limit title V applicability             narrowed it to refer to any air pollutant
                                                 which emits the same amount of GHGs,                    to GHG emitting sources by revising the                ‘‘subject to regulation’’) should not be
                                                 and that amount is large enough to                      regulatory term, ‘‘major source,’’ and                 read to apply to all GHG sources at or
                                                 trigger PSD applicability. Assume that                  although our revised regulations do not                above the 100 tpy threshold as of the
                                                 the first one, but not the second, also                 accord with a literal reading of the                   January 2, 2011 date. Rather, the
                                                 emits NAAQS pollutants amounts large                    statutory provisions for title V                       definition of ‘‘major source’’ should be
                                                 enough to trigger PSD applicability. If                 applicability, which are incorporated                  tailored so that it applies to GHG
                                                 GHG sources are excluded from PSD                       into the statutory definition of ‘‘major               sources on a phased-in basis, with the
                                                 applicability, then the first of those                  source,’’ we have concluded that based                 largest sources first, as we describe in
                                                 sources, but not the second, would be                   on the ‘‘absurd results’’ doctrine, a literal          this rule.
                                                 subject to PSD requirements for its GHG                 adherence to the terms of this definition
                                                 emissions. Similarly, consider the                      is not required. Rather, we may apply                  a. Congressional Intent for the Title V
                                                 hypothetical case of two sources that                   title V to GHG sources in a phased-in                  Program
                                                 emit identical amounts of the same                      manner, as we do through the tailoring                    As we said, previously, in a similar
                                                 NAAQS pollutant and identical                           approach, because although                             circumstance involving the PSD
                                                 amounts of GHGs, all amounts of which                   congressional intent is clear that title V             program, applying title V requirements
                                                 are large enough to trigger PSD                         applies to GHG sources in general,                     to GHG sources without tailoring the
                                                 applicability requirements. Assume that                 congressional intent is unclear on the                 definition of ‘‘major source’’—and, as
                                                 the first source constructs in an area that             question of how title V applies, and the               discussed later, without streamlining
                                                 is an attainment or unclassifiable area                 tailoring approach is a reasonable                     the title V requirements or allowing for
                                                 for the NAAQS pollutant that it emits,                  interpretation of the statute.                         time for permitting authorities to ramp
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                                                 and that the second source constructs in                   To reiterate, for convenience, the title            up resources—would result in a
                                                 an area that is not an attainment or                    V applicability provisions provide that                program unrecognizable to the Congress
                                                 unclassifiable area for that NAAQS                      after the effective date of a title V                  that enacted title V, and one that would
                                                 pollutant. Here again, if GHG sources                   program, it is unlawful for any person                 be flatly unadministrable. Without
                                                 are excluded from PSD applicability,                    to operate a ‘‘major source’’ without a                tailoring, the PSD program would
                                                 then the first of those sources, but not                title V permit (CAA section 502(a), and                expand from the current 14,700 sources
                                                 the second, would be subject to PSD                     define a ‘‘major source’’ to include ‘‘any             to some 6.1 million, with the great


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                                                 majority of the sources being small                     become a formula for regulatory                           burdens of this magnitude on these
                                                 commercial and residential sources that                 gridlock. Determined to make the                          sources—individually and in total—
                                                 not only have never been permitted                      program workable, Congress crafted the                    would of course be contrary to
                                                 before, but that in many cases have no                  provisions to be efficient and workable.                  Congress’s efforts to minimize the
                                                 applicable requirements under the CAA                      However, if title V were to apply to                   expenses of title V, especially to small
                                                 to include in the permit. In the next                   GHG sources at the 100 tpy level, until                   sources. The magnitude of the costs is,
                                                 several sections, we will describe some                 EPA could develop streamlining                            in a sense, heightened because a great
                                                 of the specific ways that this literal                  methods, all of these sources newly                       many of these sources will not have
                                                 application of title V would not only                   subject to title V would need to apply                    applicable requirements to include in
                                                 differ from, but would undermine,                       for permits. We estimate that the                         their permits; therefore, much of the
                                                 congressional intent. But the big picture               commercial and residential sources                        costs will produce relatively little
                                                 is readily drawn: The influx of millions                would incur, on average, expenses of                      benefit.
                                                 of permit applications would do nothing                 $23,175, while an industrial source                          Yet, the most important reason why
                                                 less than overwhelm the program                         would incur expenses of $46,350, to                       applying the title V program to GHG
                                                 Congress finely crafted for thousands of                prepare a permit application and receive                  sources without tailoring, and before the
                                                 sources, with its multi-step deadlines                  a permit. The great majority of these                     development of streamlining methods,
                                                 measured in days and months, its                        sources would be small commercial and                     would be inconsistent with
                                                 multiple mandates for expeditious                       residential sources of the type that                      congressional intent, is that the
                                                 permit processing, its nuanced                          Congress did not expect would be                          resulting program would prove
                                                 limitations on the need for permit                      included in title V. For example, as                      unadministrable. Adding some 6.1
                                                 revisions, its efforts to save smaller                  discussed above, the legislative history                  million permit applications to the
                                                 sources permit fees. Regulatory gridlock,               of title V, including both the permit                     14,700 that permitting authorities now
                                                 precisely what Congress strove to avoid,                program under CAA sections 501–506                        handle would completely overwhelm
                                                 would result.                                           and the ‘‘small business stationary                       permitting authorities, and for all
                                                    Most visibly, interpreting the                       source technical and environmental                        practical purposes, bring the title V
                                                 applicability provisions literally to                   compliance assistance program’’ under                     permitting process to a standstill.
                                                 include GHG sources at the 100 tpy                      CAA section 507, indicated that                              The costs to permitting authorities of
                                                 level immediately would revise the                      Congress did not expect that ‘‘printers,                  this multi-million-source program
                                                 program from what Congress envisioned                   furniture makers, dry cleaners, and                       would again be staggering. On average,
                                                 in three major ways, the legislative                    millions of other small businesses’’                      and without streamlining, a permitting
                                                 history of each of which was discussed                  would become subject to title V. House                    authority would expend 214 hours,
                                                 previously:                                             Committee Report, H.R. 101–590, at 354.                   which would cost $9,844, to issue a
                                                    • It would immediately expand the                    These sources generally do not have the                   permit to a commercial or residential
                                                 program to cover several-hundred-fold                   potential to emit conventional                            source; and 428 hours, which would
                                                 more sources than Congress anticipated.                 pollutants at or above the 100 tpy                        cost $19,688, to issue a permit to an
                                                    • It would immediately expand the                    threshold.46 However, many do have the                    industrial source. In all, permitting
                                                 program to cover very small sources that                potential to emit GHGs above that                         authorities would face over $21 billion
                                                 Congress expected would not be                          threshold. Many printers and furniture                    in additional permitting costs each year
                                                 included in the program.                                makers use a variety of combustion                        due to GHGs, compared to the current
                                                    • It would immediately expand the                    equipment that has the potential to emit                  program cost of $62 million each year.
                                                 program so that a large number of                       at least 100 tpy CO2, and many                               Beyond this disconnect with
                                                 sources have empty permits, that is,                    commercial dry cleaners have gas-fired                    congressional expectations as to scope
                                                 permits without applicable requirement,                 driers that have the potential to emit at                 of the program, the extraordinarily large
                                                 and undermine the implementation of                     least 100 tpy of CO2. All told, there are                 number of permit applications would
                                                 the program for sources with applicable                 in fact ‘‘millions of * * * small                         overwhelm permitting authorities and
                                                 requirements.                                           businesses’’ that would become subject                    slow their ability to process permit
                                                    Revising the program in this way                     to title V—of the 6.1 million sources                     applications to a crawl. As described at
                                                 through a literal interpretation of the                 that would become subject to title V, the                 proposal, the survey of permitting
                                                 applicability provisions—without                        great majority are small businesses—if                    authorities conducted by NACAA found
                                                 tailoring the applicability requirements                the title V applicability provisions are                  that a literal application of the title V
                                                 and without streamlining the program                    applied literally to GHG sources.                         applicability provisions to all GHG
                                                 requirements—is clearly inconsistent                       Moreover, the overall cost to all 6.1                  sources would result in permitting
                                                 with Congress’s conception of the                       million sources—before the                                delays of some 10 years. However, as we
                                                 program’s scope, and these                              development of streamlining methods—                      further noted at proposal, this estimate
                                                 inconsistencies are foundational. Most                  would be a staggering $49 billion per                     was based on the assumption that the
                                                 importantly, the program that would                     year over a 3 year period. Imposing                       applicability threshold would be 100
                                                 result would be unduly costly to sources                                                                          tpy based on actual emissions; in fact,
                                                 and impossible for permitting                              46 As noted previously, the fact that some small       the applicability threshold would be
                                                 authorities to implement, and therefore                 sources are subject to title V because they are ‘‘major   100 tpy based on PTE, which would
                                                                                                         sources’’ of HAPs or certain area sources and
                                                 would frustrate the purposes that                       therefore are covered under CAA sections 502(a)
                                                                                                                                                                   sweep in many more sources. Moreover,
                                                 Congress intended to achieve with the                   and 501(2)(A) does not alter the conclusion from          as stated elsewhere, we currently
                                                 program that it did design.                             the legislative history that Congress did not expect      estimate the amount of per-permit work
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                                                    As discussed previously, Congress                    large numbers of small sources to become subject          hours for permitting authorities in
                                                                                                         to title V. The fact that Congress authorized the
                                                 was fully aware that with the title V                   Administrator to exempt area sources from the title       processing title V permit applications to
                                                 program, it was subjecting sources and                  V program where compliance with title V would be          be several times higher than what we
                                                 permitting authorities to additional                    ‘‘impracticable, infeasible, or unnecessarily             estimated at proposal. As with PSD,
                                                                                                         burdensome’’ reinforces the conclusion that
                                                 costs and administrative burdens, and it                Congress did not intend the program to be
                                                                                                                                                                   such a program would be beyond
                                                 was fully aware of concerns that absent                 ‘‘impracticable, infeasible or unnecessarily              anything within our experience, and it
                                                 careful design, the program could                       burdensome’’ for small sources.                           is difficult to give a meaningful estimate


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                                                 for how long the permitting process                        But at least for an initial period, until           of the applicability provisions to be
                                                 would take for each permit on average.                  resources could be ramped up and                       determinative of congressional intent as
                                                 But it is clear that the period would be                streamlining methods could be                          to the applicability of title V to all GHG
                                                 many years longer than even the 10                      developed, the extraordinary numbers                   sources; rather, we should examine
                                                 years estimated by NACAA.                               of these permit applicants would sweep                 other provisions of the statute and the
                                                    In addition, applying title V to all                 aside this carefully constructed                       legislative history to determine
                                                 GHG sources without tailoring would be                  program, and instead, backlog the                      congressional intent on that question. If
                                                 in tension with a specific CAA                          permit authorities. This initial period                congressional intent is clear, we must
                                                 requirement, that of CAA section 503(c),                would last for many years. As discussed                adopt and implement an applicability
                                                 which imposes a time limit of 18                        elsewhere, it would take several years to              approach that is as close as possible to
                                                 months from the date of receipt of the                  develop and apply streamlining                         congressional intent; and if
                                                 completed permit application for the                    measures—in particular, general                        congressional intent is not clear, then
                                                 permitting authority to issue or deny the               permits—and during that time, the                      we must select an interpretation that is
                                                 permit. It would be impossible for                      permit backlog would grow so large that                reasonable and consistent with the
                                                 permitting authorities to meet this                     it would take many more years for                      statutory requirements. This section
                                                 statutory requirement if their workload                 permitting authorities to catch up by                  explains EPA’s view of congressional
                                                 increases from some 14,700 permits to                   raising the requisite funds and hiring                 intent for the applicability of the title V
                                                 6.1 million, and without streamlining.                  and training the necessary employees.                  program to GHG sources and the
                                                 Instead, as just noted, permit                             What’s more, only a fraction of these               principles and approach EPA is using
                                                 applications would face multi-year                      millions of sources newly covered by                   for tailoring. In addition, we also
                                                 delays in obtaining their permits.                      title V will be subject to any CAA                     respond to other approaches that were
                                                    Moreover, these delays would                         requirements due to their GHG                          suggested by commenters.
                                                 undermine the overall statutory design                  emissions, and we suspect that a larger                   To determine congressional intent, we
                                                 that promotes the smooth-running of the                 number will not be subject to any CAA                  consider the statutory provisions and
                                                 permitting process, and the underlying                  requirements at all. As a result, for most             legislative history, and this analysis is
                                                 purpose of the title V program itself. As               of these sources, although they would                  similar to that for PSD. The most
                                                 noted elsewhere, Congress intended                      need to apply for and receive a permit,                important title V provisions and
                                                 through title V to facilitate sources’                  there would be no applicable                           legislative history for this purpose are
                                                 compliance with their CAA obligations                   requirements to include in the permit                  the following:
                                                 by establishing an operating permit                     and thus the exercise would not                           (1) The applicability provisions
                                                 program that requires the source to                     improve compliance.                                    themselves, which, as we have
                                                 combine all of its CAA requirements,                       The picture that emerges from a literal             interpreted them, apply title V to all
                                                 and explain how it will assure                          application of title V’s requirements to               sources that emit at least 100 tpy of any
                                                 compliance with such requirements.                      all GHG sources—at the 100 tpy level,                  air pollutant subject to regulation. CAA
                                                 Congress established a comprehensive                    beginning on January 2, 2011—shows                     sections 502(a), 501(2)(B), 302(j).
                                                 process to implement the operating                      multi-year delays in issuance of all                   Although we do not believe these
                                                 permit program. Through this process,                   permits, for both the sources that have                provisions should be applied literally to
                                                 following the date that sources become                  applicable requirements and that                       GHG sources, their broad phrasing
                                                 subject to title V, they have 1 year to                 Congress clearly intended the program                  indicates, directionally, a congressional
                                                 submit their permit applications. CAA                   to cover, and for the millions of sources              intent towards inclusiveness of sources
                                                 section 503(c). As noted, the permitting                that may not be subject to any                         in title V, including GHG sources.
                                                 authority then has 18 months to issue or                applicable requirements. In short, this                   (2) The provisions for general permits,
                                                 deny the permit. CAA section 503(c).                    literal interpretation would apply title V             CAA section 504(d); and title V fees,
                                                 Permitting authorities must provide an                  to millions of sources that Congress did               CAA section 502(b)(3)(A). These
                                                 opportunity for public comment and a                    not expect be covered, and the ensuing                 provisions give title V an important
                                                 hearing. CAA section 502(b)(6). If the                  administrative burdens—at least                        measure of flexibility as to its scope.
                                                 permitting authority proposes to issue                  initially—would impede the issuance of                 The explicit authorization of general
                                                 the permit, the permitting authority                    permits to the thousands or perhaps                    permits means that title V may be
                                                 must submit the permit to EPA for                       tens of thousands of sources that                      applied to more sources and more
                                                 review, and notify affected states. CAA                 Congress did expect be covered. This is                efficiently, thereby saving costs to both
                                                 section 505(a)(1). EPA then has 45 days                 the type of ‘‘absurd results’’ from a literal          source and permitting authority. The
                                                 to review the permit and, if EPA deems                  application of statutory provisions that               requirements for permit fees provide a
                                                 it appropriate, to object to the permit.                the courts have held should be avoided.                mechanism for permitting authorities to,
                                                 CAA section 503(b)(1). If EPA does                      And even beyond all that, the sheer                    over time, develop their programs to
                                                 object, then the permitting authority                   magnitude of the numbers involved—                     cover more sources. In this sense, these
                                                 must, within 90 days, revise it to meet                 millions of permits requiring thousands                provisions could be construed to
                                                 the objections, or else EPA becomes                     of FTEs at a cost to the permitting                    indicate congressional intent to apply
                                                 required to issue or deny the permit.                   authorities of billions of dollars, all this           title V inclusively, to the extent that
                                                 CAA section 503(c). If EPA does not                     beginning immediately at the time that                 permitting authorities can accommodate
                                                 object, then, within 60 days of the close               GHGs become subject to regulation—                     additional sources through general
                                                 of the 45-day review period, any person                 makes clear that this result of a literal              permits and permit fees.
                                                 may petition EPA to object, and EPA                     application of the title V provisions to                  (3) The detailed procedural
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                                                 must grant or deny the petition within                  GHG sources cannot be what Congress                    requirements—including time periods,
                                                 60 days. CAA section 505(b)(2). This set                intended.                                              such as the 18-month time period for
                                                 of applicant, permitting authority, and                                                                        action on permit applications—for title
                                                 EPA actions and deadlines establishes                   b. EPA’s Reconciliation of Applicability               V permit processing. CAA sections 503,
                                                 the process for the prompt and efficient                Provisions With Congressional Intent                   505. Although these requirements are
                                                 issuance of operating permits for the                      For the reasons just described, we                  consistent with applying title V to GHG
                                                 appropriate universe of sources.                        should not consider the literal meaning                sources—in the sense that at least in


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                                                 theory, there is nothing intrinsic to GHG               we hold that EPA has the statutory                     sources. This tailoring approach is
                                                 sources that would mean that permitting                 authority to regulate the emission of                  consistent with the inclusive direction
                                                 authorities could not comply with these                 such gases from new motor vehicles.’’).                of the applicability provision, the
                                                 requirements—these requirements cast                    Moreover, including GHG sources—                       flexibility in title V’s scope that is
                                                 doubt on whether Congress can be said                   under certain circumstances—is                         inherent in the provisions authorizing
                                                 to have intended that title V cover the                 consistent with the various statutory                  general permits and requiring permit
                                                 many small GHG sources (at least                        provisions and statements in the                       fees, the detailed process requirements,
                                                 immediately) in light of the risk that                  legislative history described previously.              and the legislative history that focuses
                                                 including all those sources in title V                     In the alternative, if it is concluded              on Congress’s concern about costs to
                                                 would strain the process.                               that Congress did not express a clear                  sources and administrability. With the
                                                    (4) The provisions and legislative                   intent on that question, then, under                   tailoring approach, over time, more
                                                 history concerning applicable                           Chevron Step 2, EPA exercises its                      sources may be included in title V,
                                                 requirements, which indicate that a                     discretion to conclude that title V                    consistent with those provisions and
                                                 purpose of title V is to include sources’               applies to GHG sources as a general                    legislative history. This reconciles the
                                                 applicable requirements in their                        matter. This is a reasonable policy                    inclusiveness of the applicability
                                                 permits. CAA sections 503(b)(2), 504(a).                because applying the title V program to                provisions with Congress’s expectations
                                                 These provisions, and the                               at least the larger GHG sources will                   of a more limited scope for the title V
                                                 accompanying legislative history,                       assure promote accountability and                      program.47 However, as part of the
                                                 discussed previously, suggest an intent                 enforceability for those sources, which                tailoring approach, we recognize that we
                                                 to include within title V GHG sources                   is a key goal of the title V program, and              may at some point determine that it is
                                                 that have applicable requirements, but                  will not impose obligations that are                   appropriate to exclude certain sources,
                                                 may also suggest that Congress would                    beyond the resources of those sources or               such as the smallest of the GHG sources.
                                                 not have intended to include in title V                 insurmountable burdens on the                          In addition, we intend to address the
                                                 the large numbers of GHG sources that                   permitting authorities. This policy is a               issue of sources with ‘‘empty permits’’ in
                                                 have ‘‘empty permits,’’ at least where                  reasonable interpretation of the                       a later rulemaking, as discussed
                                                 their inclusion would undermine                         statutory provisions for the same                      previously.
                                                 implementation of the program for                       reasons just discussed.                                   The specific phase-in schedule will
                                                 sources with applicable requirements.                      As to the question of how title V                   depend on the following: We will gather
                                                    (5) The small-business-assistance                    applies to GHG sources, we believe that                information about the permitting
                                                 provisions of section 507 and the                       Congress cannot be said to have                        authorities’ ability to process permits,
                                                 legislative history of title V—both the                 expressed a clear intent. A central                    and we will develop streamlining
                                                                                                         aspect of how title V is to apply to GHG               techniques. Based on that information,
                                                 permitting program and the small-
                                                                                                         sources concerns ‘‘empty permits,’’ and                we will address expanding the title V
                                                 business-assistance program—
                                                                                                         on this aspect, some of the above-                     program in a step-by-step fashion to
                                                 concerning the scope of the permitting
                                                                                                         described provisions and statements in                 include more sources over time. Each
                                                 program and small businesses. These
                                                                                                         the legislative history point in different             step will be based on our assessment of
                                                 indicate that Congress intended title V
                                                                                                         directions. This is particularly true of,
                                                 to cover some tens of thousands of                                                                             the permitting authorities’ and sources’
                                                                                                         on the one hand the title V applicability
                                                 sources, and did not intend that title V                                                                       ability to comply with their respective
                                                                                                         provisions, which apply by their terms
                                                 apply to small businesses. These                                                                               obligations under the title V program.
                                                                                                         inclusively and, on the other hand, the                   We recognize that the availability of
                                                 provisions and legislative history
                                                                                                         requirement that sources include                       permit fees to support title V permit
                                                 suggest that Congress did not intend for                applicable CAA requirements in their
                                                 title V to apply to include large numbers                                                                      actions creates a potentially important
                                                                                                         permits, and the statements in the
                                                 of small GHG sources.                                                                                          source of resources, and that this has
                                                                                                         legislative history indicating that
                                                 Finally, the legislative history of title V                                                                    implications for the permitting
                                                                                                         Congress intended title V to cover
                                                 does not explicitly mention GHG                                                                                authorities’ ability to implement the
                                                                                                         sources subject to other CAA
                                                 sources, which could suggest that                                                                              title V program for sources of GHGs. At
                                                                                                         requirements.
                                                 Congress did not have occasion to focus                    Because Congress cannot be said to                  least in theory, permitting authorities
                                                 on whether and how title V would                        have expressed an intent as to the                     could assess and collect sufficient fees
                                                 apply to GHG sources.                                   manner and scope of title V                            to support hiring and training sufficient
                                                    With all this, we believe that Congress              applicability to GHG sources, then,                    personnel so that they could expand
                                                 had a clear intent on the question of                   under Chevron Step 2, EPA may apply                    their programs to match the expansion
                                                 whether title V generally applies to GHG                a reasonable interpretation of the                     in the number of sources covered by the
                                                 sources, and that was that it does. As                  applicability provision to determine the               program.
                                                 with PSD, the most important indication                 scope of coverage of GHG sources that                     Even so, title V fees cannot be
                                                 of congressional intent in this regard is               is consistent with the statutory                       considered a panacea that will resolve
                                                 the applicability provisions, which                     requirements. The Tailoring Rule                       all resource problems that permitting
                                                 provide, in part, that title V applies to               qualifies as such an interpretation. The               authorities will have, for several
                                                 ‘‘any stationary facility or source of air              Tailoring Rule in effect reads the                     reasons. Permitting authorities will
                                                 pollutants which directly emits, or has                 applicability provisions not to apply                  likely be constrained as to the rate in
                                                 the potential to emit, [the requisite                   title V to GHG sources at or above the                 which they can increase fees in light of
                                                 quantity] of any air pollutant.’’ CAA                   100 tpy level, but instead to apply title
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                                                                                                                                                                   47 As with PSD, this way of reconciling the PSD
                                                 sections 502(a), 501(2)(B), 302(j). This                V to as many of the GHG sources at or                  applicability provisions with Congress’s
                                                 term is quite broad, and should be read                 above that level as possible and as                    expectations for a narrower PSD program is
                                                 to include GHG sources. See                             quickly as possible, starting with the                 consistent with the U.S. Supreme Court’s view that
                                                 Massachusetts v. EPA, 549 U.S. 497, 533                 largest sources first, that is consistent              the CAA should be read to include ‘‘regulatory
                                                                                                                                                                flexibility, [without which] changing circumstances
                                                 (2007) (‘‘Because greenhouse gases fit                  with both the permitting authorities’                  and scientific developments would soon render the
                                                 well within the Clean Air Act’s                         ability to administer the program and                  Clean Air Act obsolete.’’ Massachusetts v. EPA, 549
                                                 capacious definition of ‘air pollutant,’                with a sensible imposition of costs to                 U.S. 532.



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                                                 the costs to sources. As indicated                      rulemakings, we will consider the fees.                in number. As stated elsewhere, we
                                                 elsewhere, at least at the outset of the                EPA’s approach to fees in this                         believe that the tailoring approach we
                                                 program before streamlining techniques                  rulemaking is discussed elsewhere.                     adopt in this rulemaking for Steps 1 and
                                                 have been developed, a literal                                                                                 2 is a reasonable approach that is
                                                                                                         c. Other Possible Approaches to
                                                 application of the title V applicability                                                                       consistent with statutory requirements.
                                                                                                         Reconciling Literal Reading of Title V                    We need to gather more information
                                                 provisions to GHG sources would, on                     Applicability Provisions and
                                                 average, cost each industrial source                                                                           concerning the potential number and
                                                                                                         Congressional Intent                                   utility of ‘‘empty permits’’ for GHG
                                                 $46,400 and each commercial or
                                                 residential source $23,200 to complete                     Having described how the Chevron                    sources, in light of the fact that the need
                                                 the permit application and take other                   framework, accounting for the ‘‘absurd                 for requirements in title V permits will
                                                 associated actions; and it would cost                   results’’ doctrine, applies to title V                 vary based on the requirements of each
                                                 each permitting authority, on average,                  requirements in this case and why it                   SIP, and the fact that some SIPs contain
                                                 $19,688 to process the industrial source                supports this Tailoring Rule—under                     broadly applicable requirements. As
                                                 permit and $9,844 to process the                        which we expect to apply title V to                    stated elsewhere, we intend to consider
                                                 commercial or residential source permit.                more sources, in a step-by-step fashion,               the issue of the applicability of title V
                                                 Particularly in light of the high costs to              over time—we turn to the last part of                  to GHG sources with ‘‘empty permits’’ in
                                                 sources of applying for a permit, it is not             our discussion of this doctrine. Here, we              Step 3 of our tailoring approach. When
                                                 likely that permitting authorities would                address another possible approach                      we do so, we will further assess the
                                                 be able to pass on to the sources in the                suggested by comments, which is that                   potential for the approach of excluding
                                                 form of fees, the entirety of the                       EPA should apply the title V program                   empty permits from title V to relieve
                                                 permitting authorities’ own high costs                  only to sources that are subject to                    burden consistent with statutory
                                                 for processing those permits, at least not              applicable requirements, so that sources               requirements.
                                                 right away. Even to the extent it would                 should not be required to hold ‘‘empty
                                                                                                         permits’’ (e.g., permits issued to a source            7. Additional Rulemaking for the PSD
                                                 be possible to raise permit fees,                                                                              and Title V Programs
                                                 permitting authorities would have to                    that is not subject to any applicable
                                                                                                         requirement for any pollutant). To the                    The previous sections 5 and 6
                                                 undergo a process to assess, impose, and
                                                                                                         extent that commenters argue that the                  discussed our application of the
                                                 collect those fees, and then hire and
                                                                                                         statute requires EPA to adopt a ‘‘no-                  Chevron framework, accounting for the
                                                 train personnel. The survey from the
                                                                                                         empty-permits’’ theory, we disagree. We                ‘‘absurd results’’ doctrine, to the PSD
                                                 state and local agencies described
                                                                                                         believe that although various provisions               and title V applicability requirements,
                                                 previously forecast a 2-year period for
                                                                                                         of title V indicate that one of title V’s              respectively. As another point in this
                                                 hiring and training, without counting                                                                          regard, which is relevant for both PSD
                                                                                                         purposes is to gather a source’s
                                                 time for the fee process. For these                                                                            and title V purposes, we also commit to
                                                                                                         applicable requirements into a single
                                                 reasons, we do not believe that the                                                                            subsequent rulemakings in which we
                                                                                                         permitting mechanism, see CAA
                                                 authorization for fees will allow the                                                                          may further address the ‘‘absurd results’’
                                                                                                         sections 503(b)(1), 504(a), we do not
                                                 permitting authorities either to                                                                               doctrine.
                                                                                                         read those provisions as expressly
                                                 accelerate Steps 1 or 2 of the tailoring                                                                          Specifically, we will propose or
                                                                                                         limiting, as a matter of Chevron Step 1,
                                                 schedule or to permit a larger number of                                                                       solicit comment on establishing a
                                                                                                         title V to sources with applicable
                                                 sources at those steps. Step 1 will take                                                                       further phase-in, that is, a Step 3, that
                                                                                                         requirements. The applicability
                                                 effect on January 2, 2011, Step 2 will                  provisions, by their terms, include                    would apply PSD and title V to
                                                 take effect on July 1, 2011, and the                    sources based on amount of emissions,                  additional sources, effective July 1,
                                                 process for determining and collecting                  and do not include any explicit limits                 2013, and on which we commit to take
                                                 fees, and then hiring and training                      to applicability based on whether the                  final action, as supported by the record,
                                                 personnel will take at least several years              sources has applicable requirements. As                by no later than July 1, 2012. We further
                                                 after July 1, 2011.                                     described previously, we believe that                  commit to completing another round of
                                                    Moreover, we do not believe that the                 Congress, although clearly expressing an               rulemaking addressing smaller sources
                                                 authorization for fees means that                       intent that title V apply to GHG sources               by April 30, 2016. Our action in that
                                                 permitting authorities can reasonably be                generally, did not express a clear intent              rulemaking would take into account the
                                                 expected to permit title V sources at                   as to how title V applies to GHG                       severity of the remaining problems
                                                 levels below 50,000 tpy CO2e before                     sources. The tension between these two                 associated with permitting authority
                                                 2016. The next level below 50,000 tpy                   sets of provisions, which we identified                burden and source costs.
                                                 CO2e for which we have data is 25,000                   in the proposal and commenters further                    While committing to future action, we
                                                 tpy CO2e, and the costs to permitting                   discussed, provides further support for                do not decide in this rule when the
                                                 authorities to run their programs at that               that conclusion. Accordingly, we have                  phase-in process will ultimately end, or
                                                 level ($126 million) is more than double                discretion under Chevron Step 2 to                     at what threshold level, because all that
                                                 their current costs ($62 million). We do                determine a reasonable approach,                       depends on uncertain variables such as
                                                 not consider it reasonable to expect                    consistent with the statutory                          our progress in developing streamlining
                                                 permitting authorities to more than                     requirements, concerning the                           approaches and on permitting
                                                 double their program within the first 6                 application of title V to GHG sources                  authorities’ progress in developing
                                                 years of title V applicability to GHG                   with empty permits.                                    permitting expertise and acquiring more
                                                 sources. That it is not reasonable to                      We note that to date, we have issued                resources. We may continue the phase-
                                                 expect that is made even clearer when                   permits to sources without applicable                  in process with further rulemaking(s)
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                                                 the permitting authorities’ burdens in                  requirements, albeit on rare occasions.                after 2016. Alternatively, we may make
                                                 implementing their PSD programs are                     We have little reason to believe that the              a final determination through future
                                                 considered. The ability of permitting                   ‘‘empty-permits’’ issue will arise in                  rulemaking that, under the ‘‘absurd
                                                 authorities to impose fees may have                     Steps 1 and 2 of our tailoring approach                results’’ doctrine, PSD and/or title V do
                                                 more important implications for                         because we believe there will be no                    not apply to GHG sources that, while
                                                 subsequent steps, and as we address                     ‘‘empty permits’’ in Step 1 or Step 2 or,              small and relatively inconsequential in
                                                 those subsequent steps in future                        if there are, that they will be very few               terms of GHG contribution, are above


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                                                 the statutory tonnage thresholds for                    a. Rationale for Step 1                                approach would provide permitting
                                                 these programs, and thereby end the                         In Step 1 of our tailoring approach,               agencies time to develop experience
                                                 phase-in process. In addition, we may                   which begins on January 2, 2011, PSD                   handling GHG sources and requirements
                                                 consider whether to limit title V                       and title V requirements will apply to                 under the PSD and title V programs; (6)
                                                 applicability to GHG sources in order to                only those sources that are subject to                 this approach would provide EPA and
                                                 minimize the number of GHG sources                      PSD or title V requirements anyway due                 the permitting agencies the time needed
                                                 with ‘‘empty’’ permits.                                                                                        to develop streamlining techniques; (7)
                                                                                                         to their conventional pollutants
                                                                                                                                                                this approach is consistent with the
                                                 8. Rationale for the Phase-In Schedule                  (‘‘anyway’’ sources) and that, in the case
                                                                                                                                                                ‘‘absurd results’’ and ‘‘administrative
                                                 for Applying PSD and Title V to GHG                     of PSD, make modifications that result
                                                                                                                                                                necessity’’ doctrines because the scope
                                                                                                         in an increase in GHG emissions of at
                                                 Sources                                                                                                        of the permitting programs would
                                                                                                         least 75,000 tpy CO2e. No sources would
                                                                                                                                                                remain consistent with both
                                                    Having discussed in sections V.B.5,                  become major for PSD or title V under
                                                                                                                                                                congressional intent and current
                                                 V.B.6, and V.B.7 the reasons for                        this step based on their GHG emissions
                                                                                                                                                                administrative practice, but EPA and
                                                 tailoring the PSD and title V programs,                 alone. This section describes our
                                                                                                                                                                state agencies would still be allowed to
                                                 we now describe our rationale for                       proposal, comments on the proposal                     begin regulating GHG emissions from
                                                 selecting the specific phase-in schedule                and our response to those comments,                    existing PSD and title V sources; and (8)
                                                 in this rule for applying PSD and title                 and our rationale for Step 1.                          sources already required to obtain PSD
                                                 V to GHG-emitting sources. To reiterate                 (1) Proposal                                           permits are best equipped to work
                                                 for convenience, under Step 1 of this                                                                          through BACT issues with permitting
                                                                                                            In our proposal, we proposed (1) the
                                                 schedule, which begins on January 2,                                                                           authorities.
                                                                                                         application of PSD and title V                            Commenters added that if BACT is
                                                 2011, (1) PSD applies to the GHG
                                                                                                         requirements to sources that emit at                   applied for GHGs due to permit actions
                                                 emissions of ‘‘anyway’’ PSD sources, that               least 25,000 tpy CO2e, (2) a PSD
                                                 is, sources that are subject to PSD                                                                            involving non-GHG pollutants, EPA
                                                                                                         significance level of between 10,000 and               would need to set a significance
                                                 anyway due to their emissions of                        25,000 tpy CO2e, and (3) a commitment
                                                 conventional pollutants and that                                                                               threshold for the application of BACT,
                                                                                                         to undertake a study to be followed by                 without which BACT could apply to
                                                 undertake a modification that results in                further rulemaking after 6 years. In
                                                 an increase of at least 75,000 tpy CO2e;                                                                       very small (e.g., 1 ton) GHG increases
                                                                                                         addition, we solicited comment on the                  associated with projects that otherwise
                                                 and (2) title V applies to ‘‘anyway’’ title             alternative of limiting PSD and title V                triggered PSD for increases of non-GHG.
                                                 V sources, that is, sources that are                    applicability to ‘‘anyway’’ sources for at
                                                 subject to title V anyway due to their                  least the first 6 years. Under this                    (3) Determination as to Step 1, PSD and
                                                 emissions of conventional pollutants.                   approach, PSD and title V applicability                Title V Applicability and PSD
                                                 Under Step 2, which begins on July 1,                   would be determined based on non-                      Significance Level
                                                 2011, (1) sources will be subject to PSD                GHG pollutants, and without regard to                    After considering the administrative
                                                 on account of their GHG emissions if                    GHGs, but those sources subject to PSD                 burdens from increased permitting
                                                 they newly construct and emit at least                  would also be subject to BACT                          actions and the need for permitting
                                                 100,000 tpy CO2e, or if they are existing               requirements for GHGs if their GHG                     authorities to have sufficient time to
                                                 sources that emit at least 100,000 tpy                  emissions exceeded the significance                    develop necessary expertise and staffing
                                                 CO2e of GHGs and make a modification                    level established in the final rule, and               resources to address that burden, we
                                                 that results in the emission of at least                those sources subject to title V would be              have decided in this final action to
                                                 75,000 tpy CO2e; and (2) existing and                   required to include any applicable                     establish the ‘‘anyway’’ source approach
                                                 new sources will be subject to title V on               requirements for GHGs in their permits.                as Step 1. Beginning on January 2, 2011,
                                                 account of their GHG emissions if they                                                                         sources subject to PSD requirements for
                                                                                                         (2) Comments
                                                 emit 100,000 tpy CO2e in GHG                                                                                   their conventional pollutants anyway
                                                 emissions. In addition, EPA intends to                     Many commenters supported this                      will be required to apply BACT to their
                                                 begin another round of rulemaking—                      ‘‘anyway’’-source approach, and offered                GHG emissions if they construct or
                                                 Step 3—in 2011 and commits to                           a variety of reasons: According to the                 modify and in so doing, emit at least
                                                 complete it by July 1, 2012. In that                    commenters, (1) This approach is a                     75,000 tpy CO2e in GHGs. Similarly,
                                                                                                         better reading of Congress’s intent in the             sources subject to title V requirements
                                                 rulemaking, we will propose or solicit
                                                                                                         Act and is consistent with Alabama                     anyway due to their conventional
                                                 comment on a further phase-in of GHG
                                                                                                         Power v. Costle, 636 F.2d 323 (DC Cir.                 pollutants will be required to meet
                                                 sources for PSD and title V
                                                                                                         1980); (2) this approach would reduce                  certain requirements for their GHGs, as
                                                 applicability, and we may propose or
                                                                                                         the permitting workload on sources                     described elsewhere. These
                                                 solicit comment on another application                  currently considered minor and focus                   requirements at Step 1 for PSD and title
                                                 of the ‘‘absurd results’’ doctrine that                 PSD and title V requirements on large                  V will not expire. On July 1, 2011, a
                                                 excludes categories of sources from PSD                 sources of non-GHG pollutants, as                      further phase-in of PSD and title V
                                                 or title V. However, under this rule, in                intended by Congress; (3) it is                        applicability—Step 2—will kick in.
                                                 no event will EPA apply PSD or title V                  appropriate to base PSD and title V                      At Step 1, by definition, all of the
                                                 to sources below the 50,000 tpy CO2e                    applicability on non-GHG emissions                     covered sources are already subject to
                                                 levels in Step 3, or any other step we                  until data on GHG emissions are                        PSD and title V permitting
                                                 might promulgate prior to April 2016. In                available from the mandatory GHG                       requirements, and will simply be adding
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                                                 addition, EPA commits to conduct a                      reporting rule; (4) in the initial phase,              a GHG component to what would be an
                                                 study, to be concluded by April 30,                     this approach would be more                            otherwise occurring permitting action
                                                 2015, evaluating the status of PSD and                  straightforward to administer, would                   for conventional pollutants. These
                                                 title V applicability to GHG sources,                   provide a more predictable permitting                  sources include fossil fuel-fired power
                                                 and, based on the study, complete a                     workload, and would prevent a flood of                 plants, petroleum refineries, cement
                                                 rulemaking by April 30, 2016 that                       newly regulated sources from                           plants, iron and steel plants, pulp and
                                                 addresses another round of a phase-in.                  overburdening state agencies; (5) this                 paper plants, petroleum refineries, large


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                                                 31568               Federal Register / Vol. 75, No. 106 / Thursday, June 3, 2010 / Rules and Regulations

                                                 landfills, and other large industrial                   manageable. Importantly, we believe a                  Following this action, permitting
                                                 sources. These sources will need to                     consistent significance level between                  authorities will have only 8 months to
                                                 perform some additional analysis that is                Steps 1 and 2, as opposed to a lower                   prepare for Step 1, when they will need
                                                 unique to GHG emission units,                           significance level in Step 1, will provide             to increase their resources by 5 percent
                                                 particularly related to the BACT review                 for a smoother transition and avoid the                for both the PSD and title V programs
                                                 and selection process, but they will                    problems that would arise if PSD                       combined, and be able to implement
                                                 likely be able to utilize information                   applied to modifications during Step 1                 BACT requirements for GHG sources.
                                                 developed as part of other permitting                   that PSD would not apply to in Step 2.                 During Step 1, they will need to prepare
                                                 requirements for conventional                           Otherwise, we would create a perverse                  for Step 2, when, as discussed later,
                                                 pollutants, such as equipment fuel                      incentive for companies to delay such                  they will need to process over 900
                                                 usage and operational parameters. Also,                 projects until Step 2 to avoid BACT.                   additional PSD permits each year and
                                                 because these facilities are familiar with                 We estimate that Step 1 will result in              begin to process over 1,100 additional
                                                 the case-by-case permitting processes,                  a 23 percent increase in permitting                    title V permit actions.
                                                 including all the steps from the                        authority work hours and a $3 million
                                                                                                                                                                   We have decided to limit Step 1 to the
                                                 application to the final review process,                increase—which amounts to a 25
                                                                                                                                                                ‘‘anyway’’ source approach, and not
                                                 they will not confront a high PSD or                    percent increase from the current
                                                                                                                                                                apply PSD or title V to sources based on
                                                 title V learning curve.                                 program cost of $12 million—in their
                                                                                                                                                                their GHG emissions, for several
                                                    The ‘‘anyway’’ source approach has                   annual costs for running PSD programs.
                                                                                                                                                                reasons. First, we believe that the
                                                 particular appeal during the first step of              This is primarily due to the GHG BACT
                                                 the phase-in approach because it begins                 review requirements. For title V                       administrative burdens described
                                                 to apply key PSD and title V program                    programs, we estimate a 2 percent                      previously are the most that the
                                                 requirements as soon as January 2, 2011                 increase in permitting authority work                  permitting authorities can reasonably be
                                                 to large sources of emissions, but                      hours and a $1 million increase in the                 expected to manage before and during
                                                 because it applies only to sources that                 title V annual program costs for                       Step 1. Tighter PSD and title V
                                                 are already subject to PSD for other                    permitting authorities under Step 1 as                 applicability requirements would mean
                                                 pollutants, it can be implemented                       compared to the current program cost of                greater administrative burdens.
                                                 efficiently and with an administrative                  $62 million. These work hours and costs                   Second, we believe that the costs of
                                                 burden that is manageable in the next 8                 will be needed primarily to review GHG                 GHG permitting to the sources, as
                                                 months. We expect that under this                       emissions information, add any GHG-                    described previously, are substantial
                                                 approach, the sources and permitting                    related requirements to title V revisions              and as a result, necessitate that we wait
                                                 authorities will still face substantial                 and renewal actions that would                         for the permitting authorities to develop
                                                 additional work to address the GHG                      otherwise be occurring, respond to                     the PSD and title V programs for GHG
                                                 emissions. In addition to the activities                comments and petitions from the                        sources during the first 6 months of
                                                 discussed elsewhere, there will be                      public, as well as develop fee                         2011 before subjecting sources to PSD
                                                 significant and complex policy                          requirements and make fee                              and title V requirements on account of
                                                 questions about how BACT will be                        determinations associated with issuing                 their GHG emissions. By July 1, 2011,
                                                 implemented for GHGs that must be                       new or revised title V permits that add                when Step 2 takes effect, the PSD and
                                                 resolved. These issues will include how                 GHG-related information. For both the                  title V programs will be better
                                                 to determine BACT for GHGs, how to do                   PSD and title V programs on a combined                 developed. For example, the permitting
                                                 netting, and other similar issues. Even                 basis, the additional costs for Step 1 will            authorities will have more experience
                                                 with EPA guidance, many case-specific                   be $4 million, which amounts to a 5                    making BACT determinations. In
                                                 policy issues will arise and will have to               percent increase in the current                        addition, by that time, sources will have
                                                 be resolved by the permitting authority                 combined program cost of $74 million.                  had more time to prepare for the
                                                 in the context of a specific permit                        In addition to these workload and                   permitting processes. In addition, as
                                                 application. Nevertheless, with the                     monetary costs, permitting authorities                 suggested by one commenter, the
                                                 ‘‘anyway’’ source approach, this work                   will confront additional burdens before                additional time will allow sources and
                                                 will be manageable because the                          and during Step 1, which we have not                   permitting authorities to address the
                                                 associated permitting burden will be                    attempted to quantify. One of the most                 current uncertainty surrounding how to
                                                 limited to adding a GHG component to                    significant of these is training staff in              measure high-GWP gases.
                                                 each existing permit action for which it                the PSD-related areas of GHG emissions
                                                                                                                                                                   Third, we estimate that ‘‘anyway’’
                                                 will be required, and will avoid the                    calculations and BACT evaluations. In
                                                                                                                                                                sources account for approximately 65
                                                 significantly greater burdens associated                addition, permitting staff will need to
                                                                                                         build staff expertise and capacity for                 percent of total national stationary
                                                 with large numbers of new permit
                                                                                                         addressing GHG requirements in                         source GHG emissions. As a result,
                                                 actions that would be required for
                                                                                                         preparation for Step 2, which will begin               limiting Step 1 to these sources will still
                                                 sources and modifications that would be
                                                                                                         only 6 months after Step 1; and in                     capture a large portion of the GHG
                                                 subject to PSD for the first time. Instead,
                                                                                                         communicating and providing outreach                   inventory.
                                                 this ‘‘anyway’’ source approach allows
                                                 permitting authorities sufficient time to               to sources addressing GHG emissions                       A large number of commenters urged
                                                 develop necessary expertise and staffing                for the first time. Based on comments                  us to leave this ‘‘anyway’’ source
                                                 resources to address GHG BACT.                          we received on the proposal from                       approach in place until such time as we
                                                    We agree with commenters that the                    permitting authorities, we believe these               complete an assessment and conduct
                                                 establishment of a significance level—                  additional training and outreach                       further rulemaking, which we proposed
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                                                 which, in effect, is a BACT threshold—                  requirements—for both the PSD and                      would be 6 years from now. We are not
                                                 is appropriate, and we have decided to                  title V programs—will add significantly                taking this action; rather, for the reasons
                                                 establish this level at 75,000 tpy CO2e                 to the permitting authorities’ burden                  discussed next, we believe it is
                                                 because, for reasons discussed later, that              during the initial 6-month period under                reasonable to use GHG thresholds to
                                                 is the level that will apply during Step                Step 1.                                                begin to phase in PSD and title V
                                                 2. At this level, the administrative                       We believe that these administrative                applicability to additional sources in
                                                 burdens, described later, will be                       burdens are substantial but manageable.                Step 2.


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                                                 b. Rationale for Step 2                                 with Congress’s intent to limit PSD and                RTC document for this final rulemaking
                                                 (1) Proposal                                            title V to large sources when Congress                 for more detailed description of
                                                                                                         set the 100/250 tpy thresholds for the                 comments received on our proposed
                                                   We proposed to establish the                          permitting programs. EPA, in                           burden assessment.
                                                 applicability level for PSD and title V to              collaboration with the SBA, conducted                    Many commenters also recommended
                                                 GHG sources at 25,000 tpy CO2e, and we                  an outreach meeting designed to                        specific PSD GHG significance
                                                 proposed a PSD significance level in the                exchange information with small                        thresholds, including levels of 10,000
                                                 range of 10,000 to 25,000 tpy CO2e. Our                 entities that may be interested in these               (as proposed), 15,000 (within the
                                                 burden estimates at proposal led us to                  regulations. The EPA took this small                   proposed range), 25,000 (also as
                                                 conclude that at those threshold levels,                business outreach effort into account                  proposed), 40,000, 50,000, and 100,000,
                                                 for the PSD program, ‘‘approximately                    when finalizing this rule. Many                        and 150,000 tpy CO2e, as well as
                                                 400 additional new or modified                          commenters from this outreach effort                   suggesting sector-specific thresholds.
                                                 facilities would be subject to PSD                      said that there were many more small                   These recommendations were based on
                                                 review in a given year. These include                   businesses that would become subject to                the view that we had underestimated
                                                 approximately 130 new facilities and                    PSD and title V due to the proposed                    the number of modifications and that
                                                 approximately 270 modifications                         permitting thresholds than EPA                         the burden of permitting at the proposed
                                                 * * *.’’ 74 FR 55331, col. 1. We                        estimated at proposal.                                 levels would therefore be much worse
                                                 estimated that processing these numbers                    Many commenters recommended                         than we projected. A number of the
                                                 of additional permits, along with doing                 specific major source thresholds for PSD               commenters argued that the significance
                                                 the additional work associated with                     and title V, including levels of 25,000                threshold should be no less than the
                                                 GHG emissions from sources subject to                   (as proposed), 40,000, 50,000, 100,000,                major source threshold, at whatever
                                                 PSD anyway due to their conventional                    150,000, 250,000, and 1,000,000 tpy                    level that is set. The largest number of
                                                 emissions, would increase permitting                    CO2e. A majority of the commenters—                    commenters recommended a PSD
                                                 authority burdens by ‘‘approximately                    including both industry and state                      significance threshold of 100,000 tpy
                                                 112,000 staff hours at an additional cost               agency commenters—recommended                          CO2e, although significant numbers also
                                                 of approximately $8 million. This                       major source thresholds of 100,000 tpy                 support 25,000 and 50,000 tpy CO2e.
                                                 workload amount represents an increase                  CO2e. However, several state agency
                                                 of about 1.3 times, or 32 percent, in the                                                                      (3) Rationale for Step 2
                                                                                                         commenters recommended thresholds
                                                 current burden for permitting                           of 50,000 tpy CO2e. Other commenters                      Based on these comments, we
                                                 authorities on a nationwide basis.’’ Id.                recommended sector-specific                            reassessed our original burden estimates
                                                 col. 3. We concluded that ‘‘this                        thresholds. For example, solid waste                   from our proposal. This reassessment is
                                                 additional burden is manageable,’’ but                  industry commenters suggested                          discussed at the beginning of this
                                                 that ‘‘any threshold lower than 25,000                  thresholds of 820,000 tpy CO2e for PSD                 section. We decided that, once this
                                                 tpy CO2e, would create undue                            [which they calculate to be equivalent to              adjustment is taken into account, the
                                                 administrative burdens.’’ Id.                           the existing PSD threshold for                         burdens at the proposed 25,000
                                                   For the title V program, we estimated                 ‘‘municipal solid waste landfill                       threshold and the proposed 10,000–
                                                 that at a 25,000-tpy CO2e permitting                    emissions,’’ i.e., 250 tpy nonmethane                  25,000 significance levels would be
                                                 threshold, ‘‘about 13,600 existing                      organic compounds (NMOC)] and                          unmanageable. We therefore evaluated
                                                 facilities’’ would become subject to title              320,000 tpy CO2e for title V (calculated               higher thresholds ranging from a 25,000
                                                 V, and that to manage the additional                    to be equivalent to the existing major                 tpy CO2e major source applicability
                                                 workload associated with permitting                     source applicability threshold of 100 tpy              level for PSD and title V to a 50,000,
                                                 those sources and with the other permit                 NMOC). Other commenters urged EPA                      75,000, or 100,000 tpy CO2e level, with
                                                 revisions and modifications that would                  to set the GHG thresholds at levels that               associated PSD GHG significance levels
                                                 result from the 25,000 tpy CO2e                         correspond to emissions of conventional                of equal or lesser magnitude; and we
                                                 threshold, permitting authorities would                 pollutants at the 100/250 tpy level.                   selected the 100,000/75,000 tpy CO2e
                                                 require an additional 492 FTEs, which                      Many of the commenters that                         level. Central to our decision to
                                                 would be an estimated 50 percent                        recommended increasing the thresholds                  promulgate higher thresholds than what
                                                 increase over current title V staffing                  cited EPA’s estimates that a particular                we proposed is our recognition, based
                                                 levels. 74 FR 55335, cols. 1–2.                         threshold would significantly reduce                   on comments and further analysis, that
                                                                                                         the number of sources subject to the rule              applying PSD to GHG sources at the
                                                 (2) Comments                                            while causing only a slight reduction in               statutory or any other threshold level or
                                                    We received a significant number of                  the percentage of GHGs captured.                       significance level that we have
                                                 comments from both permitting                           Several of these commenters noted that                 considered would result in (1) a greater
                                                 authorities and industry representatives                Table VIII–2 in the proposal preamble                  number of sources, and significantly
                                                 that our proposed GHG threshold of                      indicates that shifting the major source               greater number of modifications than we
                                                 25,000 tpy CO2e for major source                        threshold for PSD from 25,000 to                       first estimated becoming subject to those
                                                 applicability was too low and would                     100,000 tpy CO2e would reduce the                      programs; and (2) a greater per-permit
                                                 result in an unmanageable amount of                     number of major sources from 13,661 to                 cost than we first estimated to the
                                                 permitting actions in the near term.                    4,850 while reducing the coverage of                   permitting authority of processing those
                                                 Many offered evidence that we severely                  U.S. stationary source GHG emissions                   permit actions. We discussed our
                                                 underestimated both the number of                       by only about 4 percent. Other                         revised estimates and reasoning at the
                                                 permitting actions and the per-permit                   commenters referred to the regulatory                  beginning of this section.
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                                                 administrative burden, for both PSD and                 impact analysis (RIA) for the mandatory                   We now estimate that the 25,000/
                                                 title V programs.                                       GHG reporting rule to conclude that                    25,000 tpy level would result in 250
                                                    Commenters also asserted that the                    raising the threshold from 25,000 to                   additional PSD permit actions for new
                                                 proposed 25,000 tpy threshold is too                    100,000 tpy CO2e would exclude                         construction (either for GHG-only
                                                 low because it will subject small sources               thousands of entities that, on a                       sources or additions to otherwise
                                                 (including many small businesses) to                    combined basis, emit only one percent                  occurring permits) and an additional
                                                 PSD and title V, which is not in keeping                of the nation’s GHG emissions. See the                 9,200 PSD permits for modifications


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                                                 each year (compared to our estimate at                  manufacturing and commercial or                        As a result, they are in industries that
                                                 proposal of 130 for new construction                    residential establishments. They would                 have experience in the permitting
                                                 and 270 for modifications). This level of               also incur burdens associated with                     process. Because of their relatively large
                                                 permitting would require an additional                  reviewing applications, citizen                        size and access to knowledge about the
                                                 2,815,927 work hours, or 1,400 FTEs                     comment and petitions, and the need to                 permitting processes, we believe these
                                                 (compared to our estimate at proposal of                communicate and provide outreach to                    sources will be able to manage the
                                                 112,000 additional work hours, or 57                    new categories of sources, including,                  permitting requirements.
                                                 FTEs); and would cost an additional                     again, significant numbers and types of                   As to the permitting authorities’
                                                 $217 million each year (compared to our                 small manufacturing and commercial or                  capacity to handle the Step 2 workload,
                                                 estimate at proposal of an additional $8                residential sources. Thus, the increased               we note first that our Step 1 approach
                                                 million). See 74 FR 55331 (proposal).                   administrative burdens at the 25,000/                  does not cover newly-major sources. As
                                                 This $217 million amount represents                     25,000 tpy CO2e levels are so great that               a result, the Step 2 threshold and timing
                                                 approximately a 1,800 percent increase                  we have concluded that they would not                  has to be established in a way that takes
                                                 over current permitting authority annual                be consistent with the goals of avoiding               into account permitting authority
                                                 cost of $12 million for the major NSR                   absurd results that contravene                         challenges in addressing many sources
                                                 programs.                                               congressional intent, including avoiding               and categories that would be subject to
                                                    For title V, under our final burden                  a permitting burden that would                         major source permitting for the first
                                                 analysis at a 25,000 tpy CO2e threshold,                overwhelm the capacity of permitting                   time.
                                                 we estimate a $64 million annual                        authorities to effectively implement                      We considered the various PSD and
                                                 increase in program costs to permitting                 their programs.                                        title V threshold applicability and
                                                 authorities to add GHG emission                            Based on our revised burden analysis,               significance level options in our final
                                                 sources, which reflects a greater than                  in this final action, we have decided to               burden analysis, summarized in Table
                                                 100 percent increase over current                       establish a multi-step, phase-in                       VI–1, including levels at 50,000 CO2e
                                                 program costs of $62 million. We                        approach that contains a significantly                 and 100,000 CO2e. As Table VI–1
                                                 estimate that this increased burden                     higher initial threshold level. We have                indicates, we estimate that a 100,000 tpy
                                                 would result in the need for almost 700                 determined that a 100,000 tpy CO2e                     CO2e major source applicability
                                                 new FTEs nationwide at permitting                       major source threshold level for PSD                   threshold would result in approximately
                                                 authorities (compared to our estimate at                and title V purposes, and a 75,000 tpy                 550 sources becoming newly classified
                                                 proposal of 492 additional FTEs, or                     CO2e significance level, produce a level               as major sources for PSD based on their
                                                 about a 50 percent increase in existing                 of permitting activity that would                      GHG emissions, while a 50,000 tpy
                                                 program size). This increase in burden                  certainly be an increase over current                  CO2e threshold would result in 3,500
                                                 is due to an estimated annual increase                  workload, but that would be                            newly classified major sources.
                                                 of 2,500 new title V permits, over 9,500                administratively feasible by July 1,                      We then considered the impact on
                                                 permit revisions, and over 2,600 permit                 2011. As a result, we have decided to                  both PSD and title V programs of
                                                 renewal actions due to GHG emission                     finalize these thresholds as Step 2.                   different PSD significance level options
                                                 sources. These additional title V actions                  In reaching this conclusion, we                     for GHGs. The choice of a PSD
                                                 compare to current annual program                       needed to consider both the sources’                   significance level has a direct impact on
                                                 actions of approximately 50 new title V                 abilities to manage the permitting                     title V burdens because PSD permit
                                                 permits, 1,394 significant revisions, and               process and the permitting authorities’                requirements resulting from
                                                 3,267 permit renewals.                                  capacity to address newly-major sources                modification activities will result in
                                                    Based on this information, we have                   as expeditiously as possible. As to the                required title V permit revisions. We
                                                 decided not to finalize our proposal to                 former, sources subject to Step 2 will,                developed PSD and title V burden
                                                 apply a 25,000 tpy CO2e applicability                   for the most part, continue to include                 estimates based on significance levels of
                                                 threshold to GHG sources at the time                    the ‘‘anyway’’ sources subject to Step 1.              50,000 tpy, 75,000 tpy and 100,000 tpy
                                                 that PSD and title V take effect. At that               In addition, we estimate that Step 2 will              CO2e, combined with a major source
                                                 level, too many sources—many more                       include about 500 additional sources                   applicability level of 100,000 tpy CO2e.
                                                 than we thought at proposal—would be                    that are not already subject to                           At a 50,000 tpy CO2e significance
                                                 subject to high permitting costs. In                    permitting. Most of them will become                   level, we estimated an annual increase
                                                 addition, permitting at that level and at               subject to PSD and title V because of                  of approximately 1,800 PSD permitting
                                                 that time would not be administratively                 fuel burning. In order to meet the                     actions and almost 2,000 additional title
                                                 feasible. The resulting increase in the                 100,000/75,000 threshold, they will                    V permitting actions, as compared to
                                                 number of PSD and title V permitting                    have to burn a significant quantity of                 Step 1. At a 75,000 tpy CO2e
                                                 actions and workload would create                       fuel, and that means they will be a                    significance level, we estimated an
                                                 insurmountable resource demands for                     significant size. In general, these sources            annual increase of approximately 900
                                                 permitting agencies in the near term,                   include municipal or commercial                        PSD permitting actions and just over
                                                 which would jeopardize the functioning                  landfills that are large, but not large                1,000 additional title V permitting
                                                 of these permitting programs. We are                    enough to be covered by the NSPS, pulp                 actions as compared to Step 1. At a
                                                 mindful that not only would the                         and paper facilities, electronics                      100,000 tpy CO2e significance level we
                                                 permitting programs have to bear the                    manufacturing plants, chemical                         estimated an annual increase of
                                                 costs that our estimates are able to                    production plants, and beverage                        approximately 25 PSD permitting
                                                 monetize, but they would also incur                     producers. Although these sources have                 actions and 210 additional title V
                                                 burdens associated with hiring and                      not been subject to PSD permitting                     permitting actions as compared to Step
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                                                 training staff to make and implement                    before, some of them have already been                 1. For title V, under these different
                                                 GHG BACT determinations, GHG                            subject to minor source permitting, and                scenarios, the major source applicability
                                                 emissions evaluations, and other                        so will have some familiarity with the                 level of 100,000 tpy CO2e results in
                                                 evaluations required under the PSD                      permitting process. In addition, in                    approximately 200 new permits
                                                 program for a wide variety of formerly                  general, these sources are in source                   annually, but, as noted, the choice of
                                                 unpermitted sources, including                          categories that have larger sources that               significance levels affects the number of
                                                 significant numbers and types of small                  are already subject to PSD and title V.                required permit revisions.


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                                                    Based on this information, we have                   Greenhouse Gas Emissions Thresholds                    percent of total national stationary
                                                 decided to set our final Step 2                         Evaluation’’ located in the public docket              source GHG emissions. Many
                                                 thresholds at 100,000 tpy CO2e for major                for this rulemaking. In addition, because              commenters felt that this should be an
                                                 source applicability under PSD and title                Step 2 does not begin until July 1, 2011,              important basis for our selection of a
                                                 V and at a 75,000 tpy CO2e significance                 permitting authorities have about 14                   threshold, stating that there is no
                                                 level for PSD. Overall, we estimate that                months to prepare for it.                              significant loss in GHG emissions
                                                 the almost 900 additional PSD                              In addition, we believe that the                    coverage of source categories at the
                                                 permitting actions (virtually all of                    sources that will become subject to PSD                100,000 tpy CO2e threshold, and in
                                                 which would be modifications) per year                  and title V requirements at the 100,000/               some cases arguing that as a result, we
                                                 at these levels will result in an                       75,000 tpy CO2e levels will be able to                 should set the level even higher. We
                                                 approximately $21 million increase                      accommodate the additional costs of                    agree that it is important that the
                                                 (from Step 1) in states’ annual costs for               permitting. For the most part, these                   coverage in Step 2 represents 86 percent
                                                 running PSD programs. In addition, we                   sources will be of a comparable size and               of the coverage at full implementation of
                                                 estimate that the 1,000 additional title V              activity level as those sources that are               the statutory 100/250 thresholds.
                                                 permit actions will cause the total title               already subject to those requirements.
                                                                                                            Because the administrative burdens at               c. Rationale for EPA’s Plan Beyond Step
                                                 V burden for permitting authorities to                                                                         2
                                                 increase by $6 million annually from                    the 100,000/75,000 tpy CO2e level are as
                                                 Step 1. This total increase in permit                   heavy as the permitting authorities can                   EPA commits that after Step 2, EPA
                                                 program burdens of $27 million                          reasonably be expected to carry,                       will begin another rulemaking in 2011
                                                 represents a 34 percent increase over the               adopting these threshold levels is                     and complete it by July 1, 2012, and in
                                                 $78 million in total cost of PSD and title              consistent with our legal basis under the              that rulemaking take comment on a
                                                 V programs at Step 1. We consider this                  ‘‘absurd results’’ doctrine. Under this                further phase-in of GHG sources for PSD
                                                 a substantial increase particularly                     basis, we are reconciling the statutory                and title V applicability (Step 3).
                                                 because Step 2’s start date of July 1,                  levels with congressional intent by                    However, under this rule, in no event
                                                 2011, is only 6 months after Step 1’s                   requiring that the PSD and title V                     will EPA apply PSD or title V to sources
                                                 start date of January 2, 2011. What’s                   requirements be applied to GHG sources                 below the 50,000 tpy CO2e levels prior
                                                 more, Step 1 will entail a substantial                  at levels as close as possible to the                  to 2016. In addition, EPA commits to
                                                 increase in permitting authority                        statutory thresholds, and as quickly as                conduct a study, to be concluded by
                                                 obligations, so that adding the costs of                possible, in light of costs to sources and             April 30, 2015, evaluating the status of
                                                 Step 1 and Step 2 together—$31                          administrative burdens.                                PSD and title V applicability to GHG
                                                                                                            Because the administrative burdens at               sources, and, based on the study,
                                                 million—means that permitting
                                                                                                         the 100,000/75,000 tpy CO2e level are                  complete a rulemaking by April 30,
                                                 authorities will be required to increase
                                                                                                         manageable, we do not believe that                     2016, that addresses another round of a
                                                 their permitting resources by
                                                                                                         higher threshold levels are justifiable for            phase-in.
                                                 approximately 42 percent between now
                                                                                                         Step 2. Specifically, at the 100,000/
                                                 and Step 2. In addition to the                          100,000 level—which would entail a                     (1) Proposal
                                                 administrative burdens we have been                     100,000 tpy CO2e significance level,                     In our proposal, we noted that
                                                 able to monetize, we must be mindful                    rather than a 75,000 tpy CO2e level—                   following implementation of the first
                                                 that permitting authorities will incur                  permitting sources would need to                       phase of PSD and title V applicability to
                                                 other burdens, including the significant                handle only 20 additional modifications                GHG sources, generally at the 25,000 tpy
                                                 support and outreach activities by                      beyond current levels, and thus would                  CO2e threshold, additional action would
                                                 permitting staff for the many newly                     not incur substantial additional costs.                be required over time to assure full
                                                 permitted sources. We believe that any                  By the same token, we disagree with                    compliance with the statute. We did not
                                                 lower thresholds in this timeframe,                     commenters who suggested that we                       establish more steps in the schedule, but
                                                 whether in the PSD and title V                          needed to set permanent GHG                            we did commit to conduct a study, to
                                                 applicability levels or in the                          permitting thresholds for major sources                be completed by 5 years after
                                                 significance level, would give rise to                  at a rate equivalent to the amount of                  promulgation, evaluating the status of
                                                 administrative burdens that are not                     GHGs that would be emitted by                          PSD and title V applicability to GHG
                                                 manageable by the permitting                            conventional pollutants at the 100 and                 sources, and, based on the study,
                                                 authorities.                                            250 tpy level in order to meet the legal               complete a rulemaking by 6 years after
                                                    Although the burdens at the 100,000                  bases of the ‘‘absurd results’’ and                    promulgation that addressed an
                                                 tpy CO2e/75,000 tpy CO2e levels are                     ‘‘administrative necessity’’ doctrines.                additional step of the phase-in.
                                                 steep, we consider them manageable.                     These levels would likely be well above
                                                 Step 2 permitting for GHGs will mostly                  300,000 tpy CO2e, depending on fuel                    (2) Comments
                                                 involve source categories in which some                 types and assumptions regarding the                      A number of commenters supported
                                                 sources have traditionally been subject                 relative emissions of GHGs compared to                 the proposal’s overall approach to phase
                                                 to permitting, which should render                      the conventional pollutants. Our data                  in the permitting of GHGs, mainly
                                                 applying even the new GHG                               show that none of the levels above                     because this approach will allow
                                                 requirements more manageable. These                     100,000/75,000 tpy CO2e would result                   permitting of the largest sources of
                                                 source categories include fossil fuel-                  in significant increases in                            GHGs immediately while collecting
                                                 fired power plants, petroleum refineries,               administrative burdens. As a result,                   more information about smaller sources
                                                 cement plants, iron and steel plants, and               establishing these levels would not                    and more fully considering streamlining
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                                                 petroleum refineries, in addition to                    apply PSD or title V requirements to                   options for subsequent phases. Many of
                                                 other large industrial type source                      GHG sources as quickly as possible, and                these commenters made clear that they
                                                 categories. A full description of the type              thus would not be consistent with our                  do not support implementation of the
                                                 of sources that we expect will have GHG                 approach in the Tailoring Rule.                        statutory 100/250 tpy thresholds, even
                                                 emissions that exceed the 100,000 tpy                      We estimate that facilities meeting the             through a phase-in approach. On the
                                                 CO2e threshold is provided in the                       Step 2 major source applicability                      other hand, one commenter asserted
                                                 ‘‘Technical Support Document for                        thresholds account for approximately 67                that EPA has failed to demonstrate that


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                                                 it needs 6 years to study and implement                 determination through future                           clearly not manageable within the first
                                                 NSR and title V for sources emitting less               rulemaking that, under a Chevron                       6 years after this action. This
                                                 than 25,000 tpy. The commenter                          analysis, accounting for the ‘‘absurd                  applicability level would bring in over
                                                 contends that EPA has not analyzed,                     results’’ doctrine, PSD and/or title V do              7,000 sources that would be newly
                                                 among other things, what combined                       not apply to GHG sources that, while                   subject to title V permitting and result
                                                 effect the full implementation of its                   small and relatively inconsequential in                in close to 10,000 new PSD permitting
                                                 streamlining proposals in the 15 months                 terms of GHG contribution, are above                   actions. This would result in a 380
                                                 before the due-date for title V permit                  the statutory tonnage thresholds for                   percent increase over current program
                                                 applications would be to reduce the                     these programs, and thereby end the                    costs for PSD and title V to run these
                                                 cost, complexity, and number of title V                 phase-in process.                                      programs. Based on comments we
                                                 permit applications that would have to                     In addition, in this action, we are                 received from state and local permitting
                                                 be submitted.                                           determining that in no event—whether                   agencies on our proposed Tailoring
                                                                                                         through Step 3 or a subsequent step—                   Rule, these levels of permitting
                                                 (3) Rationale for Further Steps                         will we apply PSD or title V to sources                activities would far exceed the
                                                    We agree with commenters who                         at the 50,000/50,000 tpy CO2e level or                 administrative capabilities of the
                                                 support a phased-in approach to the                     lower prior to May 1, 2016. We have                    permitting agencies for at least the near
                                                 Tailoring Rule. Our final action reflects               several reasons for making this                        future. Thus, the 6-year exclusion is
                                                 a multi-step process that we believe will               determination at this time. Most                       necessary to provide these agencies and
                                                 facilitate a manageable expansion of                    importantly, our examination of the                    their permittees certainty that this will
                                                 PSD and title V applicability, as                       expected burdens to the permitting                     not occur.
                                                 appropriate, to GHG-emitting sources. In                authorities of applying PSD and title V                   We recognize that at present, we do
                                                 our final action, we have established the               to GHG sources convinces us that                       not have data that would allow us to
                                                 initial two steps of a multi-step phase-                extending the permitting programs to                   compile administrative burden
                                                 in of lower threshold applicability with                sources at or below the 50,000/50,000                  estimates for specific levels between the
                                                 a commitment to take further regulatory                 tpy CO2e level within 6 years of                       50,000/50,000 and 25,000/25,000 tpy
                                                 activity to consider adopting lower                     promulgation would result in                           CO2e levels we assessed. However, it is
                                                 thresholds. We believe this process will                prohibitively heavy burdens. This                      clear that the burdens begin to rise
                                                 provide substantial opportunity for                     threshold option would result in close                 sharply below the 50,000/50,000 tpy
                                                 permitting authorities and sources to                   to 2,000 additional annual PSD                         CO2e level. To reiterate, the combined
                                                 establish enough experience and                         permitting actions per year over the                   PSD and title V administrative burdens
                                                 information, and to provide significant                 current program and more than 1,000                    at the 50,000/50,000 tpy CO2e level cost
                                                 real-world feedback to EPA, so as to                    over Step 2, including both new                        almost twice as much as the current
                                                 better inform decisions on future phase-                construction and modifications. For title              programs, but the burdens at the 25,000/
                                                 in steps.                                               V, we estimated an increase of over                    25,000 tpy CO2e level cost almost four
                                                    With this overall phase-in approach                  1,000 new title V permits (all newly                   times as much as the current programs.
                                                 in mind, in this final rule, EPA includes               permitted sources because of GHG                       As a result, we conclude that dropping
                                                 an enforceable commitment to                            emissions) over 2,000 permit revisions                 the level below 50,000/50,000 tpy CO2e
                                                 undertake a notice-and-comment                          per year over the current program, and                 too soon would quickly expose the
                                                 rulemaking that would begin with an                     about 980 new title V permits and 900                  permitting authorities to unacceptably
                                                 SNPR that we expect to be issued in                     permit revisions more than the Step 2                  high burdens.
                                                 2011 and that we commit will be                         amounts.                                                  As a further reason for concluding
                                                 finalized in 2012. The notice will                         These increases, which could occur                  that we will not reduce thresholds
                                                 propose or solicit comment on further                   between 2013 and 2016 under our                        beyond 50,000/50,000 tpy CO2e during
                                                 reductions in the applicability levels.                 approach depending on the outcome of                   the first 6 years, we recognize that the
                                                 This rulemaking will take effect by July                the Step 3 rulemaking, represent very                  PSD permitting process in particular
                                                 1, 2013, and therefore, in effect,                      substantial additions to the permitting                carries important ramifications for the
                                                 constitute Step 3. In this action, we are               program. In terms of cost, we estimate                 permitting authorities and the affected
                                                 committing to a rulemaking for Step 3,                  that these additional actions would                    sources. If we have underestimated the
                                                 but are not promulgating Step 3,                        result in a $73 million per year increase              permitting burden or the ability of states
                                                 because it is important to allow EPA                    in joint PSD and title V program costs                 to respond to their additional workload,
                                                 and the permitting authorities to gain                  over the current programs—which is                     then permitting backlogs will result, and
                                                 experience permitting sources under                     almost a doubling of costs—and $42                     PSD permit issuance will be delayed,
                                                 Steps 1 and 2, and to allow time to                     million annual cost increase over Step                 and sources seeking a PSD permit will
                                                 develop streamlining methods, before                    2 for the current programs. We believe                 not be able to construct or modify. If
                                                 attempting to determine what would be                   that it would take permitting authorities              this were to happen on a large enough
                                                 the next phase-in levels for PSD and                    some time to adjust to this workload.                  scale, it could have potentially serious
                                                 title V applicability. While committing                 This is particularly true because at the               consequences for the national economy.
                                                 to future action, we do not decide in                   50,000/50,000 tpy CO2e level, smaller                     Moreover, we need to be mindful that
                                                 this rule when the phase-in process will                sources—including ones not previously                  the best information we currently have
                                                 ultimately end, or at what threshold                    subject to permitting requirements—will                as to permitting authority burdens
                                                 level, because all that depends on                      become subject to PSD and title V. It                  represents a national average, as
                                                 uncertain variables such as our progress                will take some time for both the                       described previously. Our information
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                                                 in developing streamlining approaches                   permitting authorities and the sources to              at the individual state and local level,
                                                 and on permitting authorities’ progress                 absorb these new obligations.                          where permitting occurs, is not as
                                                 in developing permitting expertise and                     Importantly, the next lower cut-off—                robust. Accordingly, we recognize that a
                                                 acquiring more resources. We may                        below 50,000 tpy CO2e for the major                    particular state may encounter
                                                 continue the phase-in process with                      threshold level—is the 25,000/25,000                   permitting costs that are higher than
                                                 further rulemaking(s) after 2016.                       tpy CO2e level. For the reasons                        average, and this may result in
                                                 Alternatively, we may make a final                      discussed previously, this level is                    permitting backlogs in that state, with


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                                                 the consequence that sources in that                    may construct or modify without                        landfills, and oil/gas/coal production.
                                                 state will face long delays in                          implementing BACT level controls, and                  Even the approximately 50 newly-
                                                 constructing or modifying. Similarly,                   this could result in additional emissions              subject commercial sources in Step 2,
                                                 even if a particular state’s costs are in               of GHGs. We need to be vigilant and to                 which we estimate to be comprised of
                                                 line with the national average, that state              protect against this outcome. Even so,                 very large hospitals, are likely to be
                                                 may not be able to find the additional                  all things considered, we believe that                 covered by standards for medical waste
                                                 resources to cover those costs as readily               our determination not to apply the PSD                 incinerators. In addition, we expect
                                                 as other states. For this reason, too,                  or title V permitting requirements to                  these sources may well be subject to SIP
                                                 sources in that state could face long                   sources below the 50,000/50,000 tpy                    requirements. Thus, we do not expect
                                                 delays in constructing or modifying.                    CO2e level for the first 6 years also                  any, or at most very few ‘‘empty
                                                    Beyond the administrative burdens to                 represents a reasonable balancing of                   permits’’ during Step 2.
                                                 permitting authorities, we recognize that               protection of the environment with                        In later stages of implementation (e.g.,
                                                 the costs of PSD and title V permitting                 promotion of economic development.                     prospective Step 3) or in the event that
                                                 to sources may be high, and we are not                  This type of balancing is consistent with              we permit smaller, non-traditional
                                                 inclined to allow their imposition at this              our authority under the PSD provisions.                sources of GHGs that have never
                                                 time on sources smaller than the 50,000/                   We also raised the issue of ‘‘hollow’’              otherwise been subject to major source
                                                 50,000 tpy CO2e threshold. At that level,               or ‘‘empty’’ permits in discussing our                 permitting, there would be a greater
                                                 the permitting programs will apply to a                 rationale for why it may make sense to                 potential for ‘‘empty permits’’ to be
                                                 significant number of newly permitted                   delay title V permitting under our                     issued under title V. Cognizant of this,
                                                 sources, including a variety of small                   proposal. We were concerned that many                  we intend to further explore in the
                                                 manufacturing, commercial and                           title V permits for GHG sources would                  rulemaking for Step 3 ‘‘empty permit’’
                                                 residential categories. The next level                  contain no applicable requirements, and                theories under the ‘‘absurd results’’
                                                 that we have analyzed is the 25,000/                    their issuance would therefore be of                   rationale that may serve to permanently
                                                 25,000 tpy CO2e threshold. At that level,               little value and would not be the best                 narrow the scope of title V to exclude
                                                 more than 7,000 more sources would                      use of scarce resources. Several                       sources that would potentially be
                                                 become subject to PSD each year—                        commenters agreed that implementing                    required to obtain an ‘‘empty permit’’
                                                 almost all due to modifications—and                     title V for GHGs will, at least initially,             due to GHG emissions.
                                                 another 4,000 sources would become                      require ‘‘empty permits’’ to be issued to                 In this action, EPA is also finalizing
                                                 subject to title V each year. These                     GHG sources because such sources will                  its proposal to commit to conduct an
                                                 sources would be even smaller than                      not be subject to ‘‘substantive’’                      assessment of the threshold levels—to
                                                 those that already will have become                     requirements, and that this would not                  be completed in 2015, 5 years after this
                                                 subject to PSD and title V due to their                 be the best use of scarce resources.                   action—that will examine the
                                                 GHG emissions. We do not think it                          We believe that the amount of                       permitting authorities’ progress in
                                                 reasonable to subject more of those                     resources that would be spent on, and                  implementing the PSD and title V
                                                 types of sources, and smaller ones, to                  the limited value that would result                    programs for GHG sources as well as
                                                 permitting costs within the next 6 years.               from, ‘‘empty permits’’ does warrant                   EPA’s and the permitting authorities’
                                                    Finally, we note that moving from a                  consideration under the Chevron                        progress in developing streamlining
                                                 50,000 tpy CO2e threshold to 25,000 tpy                 analysis, taking account of the ‘‘absurd               methods. We further commit to
                                                 CO2e will increase the emissions                        results’’ doctrine. Therefore, we intend               undertake another round of
                                                 coverage of GHG stationary sources from                 to consider the role of ‘‘empty permits’’              rulemaking—beginning after the
                                                 70 percent to 75 percent nationwide,                    when we undertake future rulemaking.                   assessment is done, and to be completed
                                                 which we consider to be a relatively                    However, we believe the issue of ‘‘empty               by April 30, 2016—to address smaller
                                                 small amount.                                           permits’’ has limited or no relevance to               sources.
                                                    We recognize that our progress in                    the first two steps of the phase-in that                  We disagree with the commenter who
                                                 developing streamlining methods will                    we are promulgating in this rule. During               asserted that we do not need 6 years to
                                                 be a key determinant to the ability of                  Step 1, permitting for GHGs is only                    study and implement PSD and title V
                                                 permitting authorities to administer,                   required if the source is otherwise                    for smaller sources. As we discussed in
                                                 and sources to comply with, PSD and                     subject to permitting for its emissions of             the proposal, and reiterate in this final
                                                 title V at GHG emission levels below                    non-GHGs. Those sources very likely                    action, we do not have sufficient
                                                 50,000/50,000 tpy CO2e. Although we                     will be subject to existing substantive                information at this time to determine
                                                 commit to pursue streamlining, we                       applicable requirements for non-GHGs                   the applicability and effectiveness of the
                                                 cannot predict our progress. This                       (e.g., NSPS, Maximum Achievable                        various permitting streamlining
                                                 uncertainty may be problematic for                      Control Technology (MACT), and SIP                     techniques. For reasons discussed in
                                                 stakeholders, primarily permitting                      requirements, including PSD). Thus,                    more detail in section V.E.1 regarding
                                                 authorities and industry. That is,                      there should be no, or at least no                     streamlining, we are not now able to
                                                 permitting authorities will face                        additional, ‘‘empty permits’’ during Step              determine how such techniques will be
                                                 uncertainty in planning the scope of                    1. For Step 2, it is possible that sources             implemented or whether they will prove
                                                 their programs over the next few years,                 that become subject to title V                         viable or effective. We agree with the
                                                 and industry will face uncertainty as to                requirements for GHG emissions may                     commenter that these measures may
                                                 what new construction projects and                      not be subject to other requirements, but              reduce the scope, cost, and complexity
                                                 modifications will be subject to PSD for                our assessment suggests that this is very              of these programs, but there is
                                                 GHGs. By determining now that for the                   unlikely. We estimate that virtually all               considerable uncertainty as to the extent
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                                                 next 6 years we will not impose PSD                     of the 550 newly-major sources in Step                 of this effect. We do commit in this
                                                 requirements below a floor at the                       2 will be subject to applicable                        action to fully investigate, propose, and
                                                 50,000/50,000 tpy CO2e level, we add a                  requirements under the CAA because                     evaluate permit streamlining techniques
                                                 measure of needed certainty.                            they are from categories that have been                to determine where they may have
                                                    We also recognize that selecting a                   traditionally subject to regulations, such             applications, how they would be
                                                 level that is too high or keeping a level               as smaller industrial sources from                     applied, and whether they can
                                                 for too long means that some sources                    already regulated categories, large                    withstand legal challenge. Even for


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                                                 31574               Federal Register / Vol. 75, No. 106 / Thursday, June 3, 2010 / Rules and Regulations

                                                 those techniques that may ultimately be     we have seen. These comments would                                    With respect to the endangerment/
                                                 deemed viable, there is a significant       have been relevant only to the proposed                            cause or contribute findings under CAA
                                                 time period necessary for rulemaking        findings and LDVR, and we are not, in                              section 202(a), congressional intent is
                                                 and state adoption, all of which could      this rulemaking, revisiting or reopening                           clear that, as we stated in making the
                                                 take up to 3 years or more. We also note    the findings or the LDVR.48                                        findings and the Supreme Court held in
                                                 that we will be required to complete our        Commenters claim that if EPA                                   Massachusetts v. EPA, we are precluded
                                                 study of the effectiveness of these         promulgates the LDVR, the ‘‘absurd                                 from considering factors other than the
                                                 techniques within 5 years, meaning that,    results’’ doctrine will no longer apply to                         science based factors relevant to
                                                 in order to complete it in time, we will    the Tailoring Rule because it will have                            determining the health and welfare
                                                 essentially need to begin the study as      been EPA’s own action—promulgation                                 effects of the air pollution in question.
                                                 soon as relevant data are starting to       of the LDVR—that gives rise to the                                 Accordingly, EPA determined that
                                                 become available. Finally, the sixth        ‘‘absurd results’’. We disagree for several                        under Massachusetts v. EPA, 549 U.S.
                                                 year, in which EPA must complete            reasons. For one thing, commenters                                 497 (2007) we were precluded from
                                                 rulemaking, requires proposal and           have not cited case law, and our                                   deferring or foregoing the findings due
                                                 promulgation of a rule within 1 year,       research has disclosed none, in which a                            to concern over impacts on stationary
                                                 which is an ambitious schedule.             court specifically addressed a similar                             sources affected by PSD or title V
                                                 Therefore we believe that 6 years is        situation and issued a holding along the                           requirements. See 74 FR at 66496,
                                                 appropriate for this type of effort. We     lines of what commenters urge.                                     66500–01 (‘‘Taken as a whole, the
                                                 also have received a substantial number     Moreover, commenters’ approach would                               Supreme Court’s decision clearly
                                                 of comments from permitting authorities     be punitive because the absurd results                             indicates that policy reasons do not
                                                 that agreed with our 5-year timeframe,      would occur absent this rule going final.                          justify the Administrator avoiding
                                                 or a greater timeframe, to get more         Such an outcome would be counter to                                taking further action on the questions
                                                 prepared for permitting smaller sources.    the purpose of the doctrine. That is, it                           here.’’); see also Massachusetts v. EPA,
                                                 d. Other Comments on ‘‘Absurd Results’’ would mean that PSD and title V would                                  549 U.S. at 533; see also 74 FR at
                                                 Doctrine                                    apply to GHG sources by their terms—                               66515–16 (December 9, 2009). (The
                                                                                             at the statutory levels, as of January 2,                          Administrator ‘‘must base her decision
                                                    We received other comments on our        2011—with all the adverse                                          about endangerment on the science, and
                                                 application of the ‘‘absurd results’’       consequences described elsewhere.                                  not on the policy considerations about
                                                 doctrine, which we respond to in the            In any event, and although we are not                          the repercussions or impact of such a
                                                 RTC document. One comment was
                                                                                             obligated to respond to these comments                             finding).49 Moreover, as EPA also noted,
                                                 overarching, and so we respond to it
                                                                                             on the merits, they are incorrect on the                           ‘‘EPA has the ability to fashion a
                                                 here: Commenters have asserted that
                                                                                             merits, for the reasons that follow. This                          reasonable and common-sense approach
                                                 under the ‘‘absurd results’’ doctrine, EPA
                                                                                             discussion should not be viewed as                                 to address greenhouse gas emissions
                                                 does not have authority to, or at least
                                                                                             reopening the endangerment/cause or                                and climate change.’’ 74 FR at 66516.
                                                 should not, promulgate the
                                                                                             contribute findings or the LDVR                                       Regarding the timing of the LDVR,
                                                 endangerment/cause or contribute
                                                                                             because, as stated previously, we are not                          Congress’s intent was that
                                                 findings (which we will sometimes refer
                                                                                             reconsidering or reopening those two                               endangerment/cause or contribute
                                                 to as the ‘‘findings’’) or the LDVR
                                                                                             actions in this rule.                                              findings under section 202(a) would in
                                                 because doing so would trigger the PSD
                                                 and title V requirements, which in turn         In determining and implementing                                fact lead to control of the air pollutants
                                                 would give rise to ‘‘absurd results’’.      congressional intent, it is important that                         from new motor vehicles and new motor
                                                 According to commenters, under the          the statutory provisions at issue be                               vehicle engines contributing to the
                                                 ‘‘absurd results’’ case law, EPA is obliged considered together—(1) The obligation                             harm. The primary goal of section 202(a)
                                                 to avoid taking any action that would       to make a determination on                                         is to achieve such reductions by
                                                 trigger absurd results and in this case     endangerment and contribution under                                requiring that EPA adopt emissions
                                                 that means foregoing the endangerment/ CAA section 202(a); (2) if affirmative                                  standards, and as a result, proceeding
                                                 cause or contribute findings and/or the     endangerment/cause or contribute                                   with the LDVR is consistent with that
                                                 LDVR, or at least deferring finalizing      findings are made, the obligation to                               goal. In contrast, deferring the LDVR
                                                 them until EPA has time to streamline       promulgate standards applicable to the                             and thereby delaying achievement of the
                                                 PSD and title V requirements so as to       emission of any air pollutant from new                             public health and welfare benefits
                                                 avoid ‘‘absurd results’’. Commenters        motor vehicles or new motor vehicle                                Congress expected and required under
                                                 made the related comment that if we         engines under CAA section 202(a); and                              section 202(a) would run directly
                                                 promulgate the LDVR, and thereby            (3) the PSD and title V applicability                              counter to what Congress intended
                                                 trigger PSD, we cannot rely on the          provisions. The most appropriate                                   under section 202(a)—EPA issuing
                                                 ‘‘absurd results’’ doctrine because it is   reading, and certainly a reasonable                                emissions standards to address the
                                                 our own actions—the promulgation of         reading, is that we are required to take                           public health and welfare problems that
                                                 the LDVR—that will have given rise to       the action we have taken, and are taking                           were identified, not EPA refusing to do
                                                 the ‘‘absurd results,’’ and under those     with this rule, and that is to issue the                           so.
                                                 circumstances, the doctrine is not          findings, promulgate the LDVR, and                                    Moreover, we have compelling
                                                 available.                                  promulgate the Tailoring Rule. Our                                 reasons to proceed with the LDVR, in
                                                    The comments that EPA had no             approach gives effect to as much of                                the manner that we did. As we stated in
                                                 authority to promulgate, or should not      Congress’s intent for each of these                                the LDVR, in response to similar
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                                                 have promulgated, the endangerment/         provisions, and the CAA as a whole, as                             comments that we were not obligated to
                                                 cause or contribute findings or the         possible.
                                                 LDVR at the times that EPA did are not                                                                            49 Note, that at least one petition for
                                                                                                48 EPA does have pending before it ten petitions                reconsideration on the endangerment/contribution
                                                 relevant to this rule, the Tailoring Rule.
                                                                                             to reconsider the endangerment and cause or                        findings raises the same arguments related to the
                                                 EPA has already promulgated the             contribute findings. EPA is carefully evaluating                   timing of decisions and absurd results. As noted
                                                 findings and the LDVR, and the LDVR         those petitions and expects to issue its decision(s)               before, EPA is carefully evaluating all the pending
                                                 triggers PSD and title V applicability, as on or about July 30, 2010.                                          petitions for reconsideration.



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                                                 conduct that rulemaking, or to conduct                  supports issuance of these rules to allow              doctrine. Moreover, it may well take
                                                 it at the time that we did:                             implementation of the national program and             many years before EPA is in a position
                                                     Some of the comments relating to the                avoid ‘‘a myriad of problems for the auto              to come to a conclusion about the extent
                                                 stationary source permitting issues suggested           industry in terms of product planning,
                                                                                                                                                                to which streamlining will be effective
                                                 that EPA should defer setting GHG standards             vehicle distribution, adverse economic
                                                                                                         impacts and, most importantly, adverse                 and therefore be able to come to a
                                                 for new motor vehicles to avoid * * *                                                                          conclusion as to whether any source
                                                 [adverse] stationary source permitting                  consequences for their dealers and
                                                 impacts. EPA is issuing these final GHG                 customers.’’ Letter dated March 17, 2010 from          categories should be permanently
                                                 standards for light-duty vehicles as part of its        Alliance of Automobile Manufacturers to                excluded from PSD or title V
                                                 efforts to expeditiously respond to the                 Senators Harry Reid and Mitch McConnell,               applicability. In our rulemaking today,
                                                 Supreme Court’s nearly three year old ruling            and Representatives Nancy Pelosi and John              we describe what actions we expect to
                                                 in Massachusetts v. EPA, 549 U.S. 497                   Boehner (Docket EPA–HQ–OAR–2009–0472–                  take in the first 6 years after PSD and
                                                 (2007). In that case, the Court held that               11368). Thus, without EPA’s GHG standards
                                                                                                                                                                title V are triggered for GHG sources,
                                                 greenhouse gases fit within the definition of           as part of a federal harmonized program,
                                                                                                         important GHG reductions as well as benefits           and we may well be in a situation in
                                                 air pollutant in the Clean Air Act, and that                                                                   which we continue to evaluate
                                                 EPA is therefore compelled to respond to the            to the automakers and to consumers would
                                                                                                         be lost.165 In addition, delaying the rule             streamlining measures and PSD and title
                                                 rulemaking petition under section 202(a) by
                                                 determining whether or not emissions from               would impose significant burdens and                   V applicability to GHG sources after this
                                                 new motor vehicles cause or contribute to air           uncertainty on automakers, who are already             6-year period.
                                                 pollution which may reasonably be                       well into planning for production of MY                   Accordingly, deferring the
                                                                                                         2012 vehicles, relying on the ability to               endangerment/cause or contribute
                                                 anticipated to endanger public health or
                                                                                                         produce a single national fleet. Delaying the          findings and LDVR until such time that
                                                 welfare, or whether the science is too
                                                                                                         issuance of this final rule would very
                                                 uncertain to make a reasoned decision. The
                                                                                                         seriously disrupt the industry’s plans.
                                                                                                                                                                PSD and title V streamlining would
                                                 Court further ruled that, in making these                                                                      allow full implementation of these
                                                                                                            Instead of delaying the LDV rule and losing
                                                 decisions, the EPA Administrator is required                                                                   programs at the statutory limits would
                                                                                                         the benefits of this rule and the harmonized
                                                 to follow the language of section 202(a) of the                                                                serve only to delay the benefits of the
                                                                                                         national program, EPA is directly addressing
                                                 CAA. The Court stated that under section
                                                                                                         concerns about stationary source permitting            LDVR, as well as the benefits that come
                                                 202(a), ‘‘[i]f EPA makes [the endangerment
                                                                                                         in other actions that EPA is taking with               from phasing in implementation of the
                                                 and cause or contribute findings], the Clean            regard to such permitting. That is the proper
                                                 Air Act requires the agency to regulate                                                                        PSD program to cover larger sources
                                                                                                         approach to address the issue of stationary            first. It would rely on an assumption
                                                 emissions of the deleterious pollutant.’’ 549           source permitting, as compared to delaying
                                                 U.S. at 534. As discussed above, EPA has                the issuance of this rule for some undefined,
                                                                                                                                                                that is unfounded at this point, that is,
                                                 made the two findings on contribution and               indefinite time period.                                that such full compliance will be
                                                 endangerment. 74 FR 66496 (December 15,                                                                        required at some point in the future.
                                                 2009). Thus, EPA is required to issue                   75 FR 25,402 cols. 1–3 (May 7, 2010)                   Delaying the emissions benefits of the
                                                 standards applicable to emissions of this air           (footnote omitted).                                    LDVR and the related emissions benefits
                                                 pollutant from new motor vehicles.                         With respect to both the                            from partial implementation of the PSD
                                                     The Court properly noted that EPA                   endangerment/cause or contribute
                                                 retained ‘‘significant latitude’’ as to the                                                                    program fails to implement Congress’
                                                                                                         findings and the LDVR, it would require                intent that the endangerment/cause or
                                                 ‘‘timing * * * and coordination of its                  speculation and conjecture to defer—or,
                                                 regulations with those of other agencies’’                                                                     contribute findings ‘‘shall’’ lead to
                                                 (id.). However it has now been nearly three
                                                                                                         certainly, to forego altogether—the                    emissions standards for new motor
                                                 years since the Court issued its opinion, and           findings or LDVR until EPA completed                   vehicles contributing to the
                                                 the time for delay has passed. In the absence           streamlining the PSD and title V                       endangerment, and related emissions
                                                 of these final standards, there would be three          requirements on grounds that doing so                  controls for the same air pollutant under
                                                 separate federal and state regimes                      would allow full compliance in the                     the PSD program. EPA need not
                                                 independently regulating light-duty vehicles            future with all PSD and title V statutory              determine at this time what approach
                                                 to increase fuel economy and reduce GHG                 provisions. That is the gist of
                                                 emissions: NHTSA’s CAFE standards, EPA’s
                                                                                                                                                                would be appropriate if there was a
                                                                                                         commenters’ argument—that EPA                          determination that full compliance with
                                                 GHG standards, and the GHG standards                    should defer or forego issuance of the
                                                 applicable in California and other states                                                                      PSD and title V would in fact occur at
                                                 adopting the California standards. This joint
                                                                                                         findings and the LDVR to avoid causing                 some point in the future. In this case,
                                                 EPA–NHTSA program will allow automakers                 an absurd result from implementation of                absent such a determination, it would
                                                 to meet all of these requirements with a                the separate PSD and title V programs.                 be improper to rely on speculation of
                                                 single national fleet because California has            Underlying this claim is the assumption                such a future possibility as a basis under
                                                 indicated that it will accept compliance with           that this would allow EPA to avoid the                 section 202(a) to defer or forego
                                                 EPA’s GHG standards as compliance with                  ‘‘absurd results’’. As we discuss                      issuance of the LDVR on the grounds
                                                 California’s GHG standards. 74 FR at 49460.             elsewhere in this rulemaking, there is                 that EPA should defer or forego the
                                                 California has not indicated that it would              no basis at this point to determine that
                                                 accept NHTSA’s CAFE standards by
                                                                                                                                                                LDVR to avoid causing an absurd result.
                                                                                                         streamlining will ultimately allow full                Likewise there is no basis to defer
                                                 themselves. Without EPA’s vehicle GHG
                                                 standards, the states will not offer the federal
                                                                                                         compliance with the PSD and title V                    proceeding at this time with the
                                                 program as an alternative compliance option             requirements. Rather, it is possible that              streamlining of the PSD and title V
                                                 to automakers and the benefits of a                     EPA may conclude that none of the                      programs.
                                                 harmonized national program will be lost.               available streamlining techniques will                    With respect to the PSD and title V
                                                 California and several other states have                allow all GHG sources at the statutory                 applicability requirements, as we
                                                 expressed strong concern that, without                  thresholds to comply with PSD and title                discuss elsewhere, we believe that
                                                 comparable federal vehicle GHG standards,               V requirements in a manner that does                   Congress expressed a clear intent to
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                                                 the states will not offer the federal program           not impose undue costs on the sources                  apply PSD and title V to GHG sources
                                                 as an alternative compliance option to                  or undue administrative burdens on the                 and that the phase-in approach
                                                 automakers. Letter dated February 23, 2010
                                                 from Commissioners of California, Maine,
                                                                                                         permitting authorities. Under these                    incorporated in the Tailoring Rule is
                                                 New Mexico, Oregon and Washington to                    circumstances, EPA may then                            fully appropriate. Proceeding now with
                                                 Senators Harry Reid and Mitch McConnell                 permanently exclude GHG source                         the endangerment/contribution findings
                                                 (Docket EPA–HQ–OAR–2009–0472–11400).                    categories from PSD or title V                         and LDVR, even if phasing-in of the PSD
                                                 The automobile industry also strongly                   applicability under the absurd results                 and title V programs is required, is


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                                                 consistent with our interpretation of the               welfare and the productive capacity of                 doctrine. Our views concerning this
                                                 PSD and title V applicability                           the population. CAA § 101(b)(1). EPA’s                 doctrine remain similar to what we said
                                                 requirements. Delaying the                              path forward does just this. Thus,                     at proposal, except that in this
                                                 endangerment/contribution findings or                   proceeding with the endangerment/                      rulemaking we place the doctrine more
                                                 LDVR, and thereby delaying the                          cause or contribute findings, the LDVR,                clearly in the Chevron analytical
                                                 triggering of PSD and title V                           and with PSD and title V through the                   framework, we revise our assessment of
                                                 requirements for GHG sources, would                     phase-in approach of the Tailoring Rule                the administrative burdens due to new
                                                 lead to the loss of a practicable                       maximizes the ability of EPA to achieve                analysis we have conducted and
                                                 opportunity to implement the PSD and                    the Congressional goals underlying                     information we have received since
                                                 title V requirements in important part,                 sections 202(a) and the PSD and title V                proposal, and we make certain revisions
                                                 and thereby lead to the loss of important               provisions, and the overarching CAA                    to the tailoring approach.50 This
                                                 benefits. As discussed elsewhere,                       goal of protecting public health and                   analysis and information, as well as the
                                                 promulgating the LDVR and applying                      welfare. Congress called for EPA (1) To                revisions to the tailoring approach, have
                                                 the PSD and title V requirements to the                 determine whether emissions from new                   already been presented previously, in
                                                 largest GHG sources, as we do in this                   motor vehicles contribute to air                       the discussion of the ‘‘absurd results’’
                                                 Tailoring Rule, is practicable because                  pollution that endangers, (2) if that the              basis. In addition, it is not necessary to
                                                 the sources that would be affected by                   determination is affirmative, to issue                 reiterate the lengthy discussion of the
                                                 the initial implementation steps we                     emissions standards for new motor                      ‘‘administrative necessity’’ doctrine that
                                                 promulgate in this rule are able to bear                vehicles to address the endangerment,                  we included in the proposal or the
                                                 the costs and the permitting authorities                and (3) to implement the PSD and Title                 factual data presented previously; as a
                                                 are able to bear the associated                         V program to address similar emissions                 result, this section briefly highlights the
                                                 administrative burdens. Promulgating                    in their permitting program as another                 conclusions we have reached about the
                                                 the LDVR now provides important                         tool to address the air pollutant at issue.            application of this doctrine.
                                                 advantages because the sources that                     Delaying both the LDVR and PSD/title V                    As noted previously, under the PSD
                                                 would be affected by the initial steps are              implementation, as commenters have                     and title V applicability provision—read
                                                 responsible for most of the GHG                         called for, would run directly counter to              literally, as we have long interpreted
                                                 emissions from stationary sources.                      these Congressional expectations.                      them—EPA’s recent promulgation of the
                                                    It should also be noted that as                      Commenters’ calls for deferral or                      LDVR will trigger the applicability of
                                                 discussed elsewhere in this rulemaking,                 foregoing of the findings or LDVR are                  PSD and title V for GHG sources at the
                                                 our ability to develop appropriate                      generally phrased in a conclusory                      100/250 tpy and 100 tpy threshold
                                                 streamlining techniques for PSD and                     fashion, and do not demonstrate how                    levels, respectively, as of January 2,
                                                 title V requirements is best done within                EPA could take the required CAA                        2011. This is because PSD applicability
                                                 the context of actual implementation of                 actions concerning GHGs while                          hinges on the definition of ‘‘major
                                                 the permitting programs, and not in                     remaining within the requirements of                   emitting facility’’ and title V
                                                 isolation of them. That is, because the                 each of the various CAA provisions, and                applicability hinges on the definition of
                                                 great majority of GHG sources have not                  achieving the overall goals of the CAA.                ‘‘major sources,’’ and those terms, read
                                                 been subject to PSD and title V                         As such the comments do not provide                    literally, and under EPA’s long-standing
                                                 requirements, we will need to rely on                   a valid basis for the deferral of agency               narrowing interpretation, apply PSD
                                                 the early experience in implementing                    action they suggest.                                   and title V, respectively, to sources of
                                                 the permitting requirements for the very                                                                       any air pollutant that is subject to
                                                 large sources that initially will be                    9. ‘‘Administrative Necessity’’ Basis for              regulation under another provision of
                                                 subject to those requirements in order to               PSD and Title V Requirements in                        the CAA. EPA’s promulgation of the
                                                 develop streamlining techniques for                     Tailoring Rule                                         LDVR means that GHGs will become
                                                 smaller sources. It is the real world                      EPA believes that the ‘‘administrative              subject to regulation on the date that the
                                                 experience gained from this initial                     necessity’’ doctrine, within the Chevron               rule takes effect, which will be January
                                                 phase that will allow EPA to develop                    framework, also justifies this                         2, 2011.
                                                 any further modifications that might be                 rulemaking. Applying the applicability                    Absent tailoring, the January 2, 2011
                                                 necessary. This would not and could                     requirements of the PSD and title V                    trigger date for GHG PSD applicability
                                                 not occur if the LDVR were delayed                      programs according to a literal reading                will give rise to an extraordinarily large
                                                 indefinitely or permanently, so that PSD                of their terms (as EPA has narrowed                    number of PSD permitting actions—we
                                                 and title V requirements were not                       them in the past through interpretation)               estimate more than 81,000 per year—
                                                 triggered. It is unrealistic to expect that             to GHG sources beginning on the                        representing an increase of almost 300-
                                                 delaying action until a future tailoring                January 2, 2011 date that regulation of                fold over the current 280 PSD
                                                 rule could resolve all of the problems                  GHGs takes effect would sweep so many                  permitting actions each year. In
                                                 identified in this rulemaking, absent any               sources into those programs as to render               addition, over 6 million sources will
                                                 real world implementation experience.                   the programs impossible for the                        become subject to title V, an increase of
                                                    At its core, commenters’ argument is                 permitting authorities to administer.
                                                 that EPA should delay (if not forego                    Although streamlining the PSD and title                   50 In addition, we base our reliance on the

                                                 altogether) doing anything to address                   V programs offers some promise to                      ‘‘administrative necessity’’ doctrine on the
                                                                                                                                                                administrative burdens to the permitting authorities
                                                 GHG emissions and the problems they                     improve the administrability of the                    of permitting smaller GHG sources, but not on the
                                                 cause until it can do so in a way that                  programs, given the time needed to                     relatively small amount of GHG emissions
                                                 does not cause any implementation                       implement such streamlining, the step-                 associated with the smaller sources. See Alabama
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                                                 challenges, even if that delay results in               by-step expansion of PSD and title V                   Power v. Costle, 636 F.2d 323, 357 (DC Cir. 1980)
                                                                                                                                                                (establishing the ‘‘administrative necessity’’ doctrine
                                                 continued endangerment to public                        requirements to GHG sources that we                    as ‘‘inherent in the administrative process’’ and
                                                 health and welfare. EPA does not take                   are promulgating is the most that the                  presumptively available under the statutory
                                                 such a myopic view of its duties and                    permitting authorities can reasonably be               scheme, absent clear congressional intent to the
                                                                                                                                                                contrary; but adding that in contrast, ‘‘there exists
                                                 responsibilities under the CAA.                         expected to administer.                                no general administrative power to create
                                                 Congress wrote the CAA to, among other                     This section discusses the application              exemptions to statutory requirements based upon
                                                 things, promote the public health and                   of the ‘‘administrative necessity’’                    the agency’s perceptions of costs and benefits’’).



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                                                 more than 400-fold over the 14,700                      tools available in the streamlining                    GHGs—January 2, 2011—or shortly
                                                 sources that currently are subject to title             toolbox for the PSD permitting                         thereafter. Developing streamlining
                                                 V. The permitting authorities will find                 threshold level, the PSD significance                  methods would entail acquiring more
                                                 it impossible to administer programs of                 level, and the title V permitting                      information about the affected industry,
                                                 these sizes as of that date.                            threshold,’’ specifically:                             may entail rulemaking, and would
                                                    All this results from a literal                         For the PSD permitting threshold level and          likely entail some type of public review
                                                 application of the PSD and title V                      significance level, there are at least three           of proposals for streamlining even if not
                                                 applicability provisions to GHG sources.                such tools: The first is interpreting the              done through rulemaking. As discussed
                                                 However, under Chevron, we must                         definition of ‘‘potential to emit’’ so that the        in section V.E, we do not expect that we
                                                 interpret and apply statutory                           amount of a source’s emissions that counts in          could complete all those steps for
                                                 requirements on the basis of                            determining whether it qualifies as a major            meaningful streamlining measures
                                                 congressional intent. Although the                      source and therefore is above the permitting           within 2 years.
                                                 literal meaning of the statutory                        threshold requirements is closer to the
                                                 provisions is the first and generally the               amount of its emissions when it is in actual           b. Second Step of the ‘‘Administrative
                                                                                                         operation, rather than the amount of                   Necessity’’ Analysis: Demonstration of
                                                 best indicator of congressional intent,                 emissions that the source would emit if it
                                                 there are cases in which that is not so.                                                                       Administrative Impossibility
                                                                                                         were operating continuously. Narrowing the
                                                 As discussed previously, we believe that                definition of PTE is a potentially extremely              With no streamlining measures
                                                 as a general matter, statutory directives               important tool in this context because                 available at the time that PSD and title
                                                 should be considered to incorporate                     identifying the amount of a source’s                   V would apply to sources of GHGs or
                                                 Congress’s intent that they be                          emissions as closer to its actual emissions in         shortly thereafter, under the second step
                                                 administrable, and we believe that this                 this manner would mean that very large                 of the ‘‘administrative necessity’’
                                                 proposition is implicit in the                          numbers of residential and commercial
                                                                                                         sources would have significantly lower
                                                                                                                                                                analysis, we must determine whether
                                                 ‘‘administrative necessity’’ doctrine that                                                                     implementation of the statutory
                                                                                                         emissions and would fall below the statutory
                                                 the DC Circuit has established and that                 threshold requirements for triggering PSD.             requirements at that time would be
                                                 we believe applies here. See Alabama                    Second, EPA believes it may be able to                 administratively impossible for the
                                                 Power v. Costle, 636 F.2d 323, 356–57                   develop programs involving general permits,            permitting authorities. We are mindful
                                                 (DC Cir. 1980). This doctrine authorizes                under which large numbers of similarly                 that the DC Circuit has cautioned that
                                                 EPA to undertake a process for                          situated sources would each be covered by              this showing is a high hurdle. See 74 FR
                                                 rendering the PSD and title V                           essentially the same permit established                55317.
                                                 requirements administrable. Indeed, the                 through a regulatory action by the permitting
                                                                                                         authority. This approach could achieve
                                                                                                                                                                   Even so, we believe there is no
                                                 Court in Alabama Power established                                                                             question that a literal application of the
                                                 this doctrine specifically in the context               economies of scale and thereby reduce
                                                                                                         administrative burden. Third, EPA believes it          PSD and title V programs to GHG
                                                 of the PSD provisions, including, in                    may be able to streamline the single most              sources as of January 2, 2011 would be
                                                 particular, the modification provision.                 time-consuming element of the PSD permit               flatly impossible for the state and local
                                                 As noted elsewhere, the Court held that                 program, which is the determination of                 permitting authorities to administer for
                                                 EPA may ‘‘consider the administrative                   BACT as required under CAA § 165(a)(4), by             at least an initial period of time.51 The
                                                 burden’’ associated with applying PSD                   establishing presumptive BACT levels for               key facts have been recounted
                                                 for emissions increases, and establish                  certain source categories that comprise large          previously, and no more than a brief
                                                 significance levels designed to avoid                   numbers of sources. As for title V, as
                                                                                                         discussed below in detail, EPA believes that
                                                                                                                                                                recitation is necessary here. On the PSD
                                                 ‘‘severe administrative burdens on EPA,                                                                        side, annual permit applications would
                                                 as well as severe economic burdens’’ on                 defining ‘‘potential to emit’’ to reflect more
                                                                                                         closely a source’s actual operation and                increase by over 300-fold, from 280 to
                                                 sources. Id. at 405.                                                                                           almost 82,000; costs to the permitting
                                                    As we said in the proposal, we read                  developing a program of general permits
                                                                                                         could streamline the administration of title V         authorities would increase more than
                                                 the case law to establish a three-step                  permits.                                               100-fold, from $12 million to $1.5
                                                 approach for implementing the
                                                                                                         74 FR 55315 col. 2–3.                                  billion; and the permitting authorities
                                                 ‘‘administrative necessity’’ doctrine: An
                                                                                                            At proposal we stated that we would,                would need to hire, train, and manage
                                                 agency is not required to adhere to
                                                                                                         and we still commit to, vigorously                     9,772 FTEs. For title V, total permit
                                                 literal statutory requirements if the
                                                                                                         pursue development of these                            applications would increase by over
                                                 agency, as the first step, makes every
                                                                                                         streamlining measures, and, as                         400-fold, from 14,700 to 6.1 million;
                                                 effort to adjust the requirements within
                                                                                                         indicated in our discussion of                         costs to the permitting authorities
                                                 the statutory constraints, but concludes
                                                                                                         streamlining methods in section V.E.1                  would increase from $62 million to $21
                                                 with justification—at the second step—
                                                                                                         and in response to comments, we have                   billion; and the permitting authorities
                                                 that it would be impossible to comply
                                                                                                         already begun developing those                         would need to hire, train, and manage
                                                 with the literal reading of the statute.
                                                                                                         measures. For example, as described                    229,118 FTEs.
                                                 Under those circumstances, the agency
                                                                                                         elsewhere, we have done much work—                        We have elaborated upon these
                                                 may—at the third step—develop what is
                                                                                                         both with stakeholders and in-house—to                 burdens elsewhere in this notice. They
                                                 in effect a compliance schedule with the
                                                                                                         begin to develop recommendations for                   bespeak an impossible administrative
                                                 statutory requirements, under which the
                                                                                                         what controls would qualify as BACT                    task. It is not hyperbole to say that if
                                                 agency will implement the statute as
                                                                                                         for various industries. This work is                   these administrative responsibilities are
                                                 much as administratively possible and
                                                                                                         important as a foundation for                          not considered impossible within the
                                                 as quickly as administratively possible.
                                                 See 74 FR 55315—55316.                                  developing presumptive BACT, which
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                                                                                                                                                                  51 We recognize that in a few states, we are the
                                                                                                         is a potentially efficient streamlining                permitting authority. We do not think that this
                                                 a. First Step of the ‘‘Administrative                   measure.                                               changes the calculation of administrative burdens.
                                                 Necessity’’ Analysis: Streamlining                         However, it is not possible for us or               We do not believe that we could reasonably be
                                                    In the proposed rulemaking, EPA                      the state and local permitting authorities             expected to adjust our budget to accommodate the
                                                                                                                                                                large new permitting burdens, and even if we could,
                                                 discussed at length the prospect of                     to develop and implement streamlining                  the administrative burdens would remain in most
                                                 streamlining both PSD and title V. EPA                  techniques by the time that PSD and                    of the rest of the nation where it is the state or local
                                                 described ‘‘several potentially useful                  title V are triggered for sources emitting             agencies that bear permitting responsibility.



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                                                 meaning of the ‘‘administrative                            In addition, as noted above, in a         FCC, 740 F.2d 1190, 1210 (DC Cir. 1984)
                                                 necessity’’ doctrine, then it is difficult to           subsequent rulemaking, we may                (‘‘National Association of
                                                 imagine what would be considered                        conclude that title V should not apply       Broadcasters’’), incremental agency
                                                 impossible.                                             to GHG sources with ‘‘empty permits,’’       action is most readily justifiable ‘‘against
                                                                                                         under the ‘‘absurd results’’ doctrine. The   a shifting background in which facts,
                                                 c. Third Step of the ‘‘Administrative                   basis for this conclusion could be a         predictions, and policies are in flux and
                                                 Necessity’’ Analysis: Tailoring                         determination that (1) although the          in which an agency would be paralyzed
                                                    Under the third step of the                          applicability provisions apply by their      if all the necessary answers had to be in
                                                 ‘‘administrative necessity’’ analysis, we               terms to sources on the basis of their       before any action at all could be taken.’’
                                                 must demonstrate that the steps we                      emissions, and without regard to             Those circumstances are present here,
                                                 intend to take towards implementation                   whether the sources would hold ‘‘empty       and so is that fact that the task at hand
                                                 of the statutory requirements are the                   permits,’’ those provisions cannot be        is extraordinarily demanding. As
                                                 most that can be done during the                        read literally under the ‘‘absurd results’’  discussed previously, EPA and the
                                                 indicated time frames, in light of                      doctrine; and (2) it is not clear whether    permitting authorities’ progress in
                                                 administrative resources. In this                       Congress intended that title V apply to      implementing the PSD and title V
                                                 manner, we adhere most closely to the                   such sources, and EPA has reasonably         programs for GHG sources will depend
                                                 statutory requirements. See 74 FR                       determined, under Chevron Step 2, that       in large measure on the development of
                                                 55318. This amounts to establishing a                   title V does not. If we come to that         streamlining measures and increases in
                                                 schedule for phasing in PSD and title V                 conclusion, then, at that point in time,     permitting authorities’ resources, and
                                                 applicability to GHG sources. Because                   the ‘‘administrative necessity’’ doctrine    those things carry some uncertainty and
                                                 this step is based on the administrative                would remain relevant for title V            in any event, under the best of
                                                 resources of the permitting authorities,                purposes only if it is necessary, for        circumstances, cannot have much
                                                 our analysis is similar, and leads to the               administrative reasons, to phase in the      impact for at least several years. It will
                                                 same conclusions, as we described                       application of title V to GHG sources        take EPA that long to develop
                                                 previously concerning the ‘‘absurd                      that have applicable requirements, and       streamlining measures, and it will take
                                                 results’’ basis. That is, we believe that               that therefore do not have ‘‘empty           permitting authorities that long to begin
                                                 our tailoring approach—including Step                   permits.’’ This is because the               to raise money and hire and train FTEs.
                                                 1, to be implemented as of January 2,                   ‘‘administrative necessity’’ doctrine is        Second, as the Court stated in
                                                 2011; Step 2, to be implemented as of                   relevant only when a statutory directive,    National Association of Broadcasters,
                                                 July 1, 2011; the additional rulemaking                 read literally, imposes impossible           ‘‘the agency [should] ma[k]e some
                                                 that we commit to finalize by July 1,                   administrative obligations, and Congress     estimation, based upon evolving
                                                 2012, and that will address further                     may be presumed to have intended that        economic and technological conditions,
                                                 threshold reductions as a Step 3; the                   the directive be administrable. The          as to the nature and magnitude of the
                                                 study and subsequent rulemaking to                      ‘‘administrative necessity’’ doctrine        problem it will have to confront when
                                                                                                         would not come into play if it is            it comes to [undertake the remaining
                                                 address smaller sources by April 30,
                                                                                                         concluded either that under the ‘‘absurd     steps]’’ and that estimation must be
                                                 2016; and the determination not to
                                                                                                         results’’ doctrine Congress did not          ‘‘plausible and flow from the factual
                                                 lower the threshold below 50,000/
                                                                                                         intend the statutory directive or that,      record compiled.’’ Id. at 1210. Here, EPA
                                                 50,000 tpy CO2e before April 30, 2016
                                                                                                         under that doctrine, Congress’s intent       has done this by estimating the number
                                                 at the earliest—is the most that we can
                                                                                                         was not clear and EPA reasonably             of PSD and title V permits and the costs
                                                 do to expand the PSD and title V
                                                                                                         decided that the directive does not          of issuing them, and has provided as
                                                 programs, based on administrative
                                                                                                         apply.                                       much information as possible about the
                                                 resources and the information we
                                                                                                                                                      development of streamlining methods
                                                 currently have about the prospects for                  10. ‘‘One-Step-at-a-Time’’ Basis for         and permitting authority resources.
                                                 streamlining and increasing permitting                  Tailoring Rule                                  Third, again as the Court stated in
                                                 resources.                                                 In addition to the ‘‘absurd results’’ and National Association of Broadcasters, it
                                                    As noted previously, at some point in                ‘‘administrative necessity’’ doctrines, the must be ‘‘reasonable, in the context of
                                                 the process of additional rulemaking,                   ‘‘one-step-at-a-time’’ judicial doctrine,    the decisions made in the proceeding
                                                 we may conclude under the ‘‘absurd                      within the Chevron framework, supports under review, for the agency to have
                                                 results’’ doctrine that we will not apply               EPA’s Tailoring Rule. The case law           deferred the issue to the future. With
                                                 PSD or title V to GHG sources below a                   under this doctrine, described               respect to that question, postponement
                                                 certain size level. The same conclusion                 previously, indicates that the doctrine      will be most easily justified when an
                                                 may be supportable under the                            justifies an agency’s step-by-step           agency acts against a background of
                                                 ‘‘administrative necessity’’ doctrine if we             approach under the following                 rapid technical and social change and
                                                 decide, based on the information                        circumstances or conditions: (1) The         when the agency’s initial decision as a
                                                 available to us, that even with all of the              agency’s ability to comply with a            practical matter is reversible should the
                                                 streamlining that we are able to                        statutory directive depends on facts,        future proceedings yield drastically
                                                 accomplish and even with a significant                  policies, or future events that are          unexpected results.’’ Id. at 1211. Here,
                                                 expansion of permitting resources, it                   uncertain; (2) the agency has estimated      our tailoring approach is reasonable in
                                                 may not be administratively feasible to                 the extent of its remaining obligation;      light of changes in permitting authority
                                                 implement PSD or title V to sources                     (3) the agency’s incremental actions are     capacity that may occur with the
                                                 below that level. See Alabama Power v.                  structured in a manner that is               development of streamlining methods
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                                                 Costle, 636 F.2d at 358 (acknowledging,                 reasonable in light of the uncertainties;    and increased resources. In addition, the
                                                 in discussing the ‘‘administrative                      and (4) the agency is on track to full       first two steps that EPA promulgates
                                                 necessity’’ doctrine, that ‘‘[c]ategorical              compliance with the statutory                today are reasonable initial steps that
                                                 exemptions from the clear commands of                   requirements. EPA’s Tailoring Rule           we expect to build on by lowering
                                                 a regulatory statute [are] sometimes                    fulfills each of those four.                 thresholds, as appropriate, in the future.
                                                 permitted,’’ although emphasizing that                     First, as the DC Circuit stated in        We have no reason to suspect that we
                                                 such exemptions ‘‘are not favored’’).                   National Association of Broadcaster v.       may need to reverse either of the first


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                                                 two steps. Having received and                             and title V applicability to be phased in,           EPA-approved part 70 title V programs
                                                 analyzed extensive comment on the                          and the first two steps we promulgate in             by limiting our prior approval of those
                                                 number of permitting actions to expect                     this notice would be upheld as                       programs to the revised applicability
                                                 and on permitting authority resources,                     reasonable initial steps toward full                 thresholds for GHGs.53 These changes
                                                 we consider it unlikely that we would                      compliance with the literal terms of the             would have the effect of putting the
                                                 need to establish a higher threshold                       CAA. As we have described elsewhere,                 higher thresholds adopted under the
                                                 level than what we have established in                     there is little question but that sources            Tailoring Rule in place in states PSD
                                                 Steps 1 and 2. In addition, if we were                     and permitting authorities cannot                    and title V programs as a matter of
                                                 to adopt an ‘‘empty permits’’ approach                     reasonably be expected to comply with                federal law. However, state commenters
                                                 for title V, we would not need to reverse                  or implement PSD and title V                         expressed concern that they would not
                                                 either of Steps 1 and 2, as explained                      applicability requirements in the near               be able to adopt the Tailoring Rule
                                                 above.                                                     term—by January 2, 2011 and July 1,                  under state laws on an expeditious
                                                    Finally, as the DC Circuit stated in                    2011—except to the limited extent                    basis. To address this, our final action
                                                 Grand Canyon Air Tour Coalition v.                         described under Steps 1 and 2. Nor is                differs from our proposed rule in the
                                                 F.A.A., 154 F.3d 455, 477–78 (DC Cir.                      applicability of the PSD and title V                 way we incorporate the limitations
                                                 1998), the Courts will accept an initial                   requirements at levels below 50,000 tpy              promulgated in this Tailoring Rule into
                                                 step towards full compliance with a                        CO2e reasonable before 6 years from                  the ‘‘major stationary source,’’ ‘‘major
                                                 statutory mandate, as long as the agency                   promulgation of this rule, as discussed              modification’’ and ‘‘major source’’
                                                 is headed towards full compliance, and                     elsewhere. If further steps resulting in             definitions. This approach relies on
                                                 we believe that the doctrine is                            full compliance with the literal terms of            further defining the term ‘‘subject to
                                                 applicable here. EPA intends to require                    the applicability provisions of PSD and              regulation’’ and although this approach
                                                 full compliance with the CAA                               title V were required, it would be                   is not substantively different in effect
                                                 applicability provisions of the PSD and                    reasonable for those steps to occur in               from the proposed rule, it will facilitate
                                                 title V programs, but we believe that in                   the future, as part of the rulemaking to             more rapid adoption and
                                                 the case of GHG-emitting sources, by                       be completed by the sixth year after                 implementation of the Tailoring Rule by
                                                 application of the ‘‘absurd results’’                      promulgation, to which EPA commits                   states through interpretation of language
                                                 doctrine or the ‘‘administrative                           itself as part of this action, or as part of         in existing state regulations. We believe
                                                 necessity’’ doctrine, full compliance                      subsequent actions. See Grand Canyon                 these differences are a logical outgrowth
                                                 with the applicability provisions does                     Air Tour, 891 F.2d at 476–77 (upholding              of our proposed rule. We are also
                                                 not necessarily mean full compliance                       agency action as a step towards full                 delaying action on our proposed limited
                                                 with the literal terms of those                            compliance with statutory mandate                    approval of EPA-approved PSD
                                                 provisions.52 Rather, as we have                           when the agency expected full                        programs and part 70 title programs to
                                                 explained elsewhere, in the case of GHG                    compliance to occur some 20 years after              determine how each state will
                                                 sources, full compliance may mean                          the deadline in the statute).                        implement the final rules.
                                                 compli