[Federal Register Volume 75, Number 214 (Friday, November 5, 2010)]
[Proposed Rules]
[Pages 68265-68272]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-28009]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 52
[EPA-R04-OAR-2010-0696-201042; FRL-9222-1]
Approval and Promulgation of Implementation Plans; Tennessee:
Prevention of Significant Deterioration; Greenhouse Gas Tailoring Rule
Revision
AGENCY: Environmental Protection Agency (EPA).
ACTION: Proposed rule.
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SUMMARY: EPA is proposing to approve a draft revision to the State
Implementation Plan (SIP), submitted by Tennessee, through the
Tennessee Department of Environment and Conservation (TDEC), Air
Pollution Control Division, to EPA on August 30, 2010, for parallel
processing. The proposed SIP revision modifies Tennessee's New Source
Review (NSR) Prevention of Significant Deterioration (PSD) program.
Specifically, the
[[Page 68266]]
proposed SIP revision establishes appropriate emission thresholds for
determining which new stationary sources and modification projects
become subject to Tennessee's PSD permitting requirements for their
greenhouse gas (GHG) emissions. Tennessee's August 30, 2010, SIP
revision is necessary because without it, on January 2, 2011, PSD
requirements would apply at the 100 or 250 tons per year (tpy) levels
provided under the Clean Air Act (CAA or Act), which would overwhelm
Tennessee's permitting resources. EPA is proposing approval of
Tennessee's August 30, 2010, SIP revision relating to PSD requirements
for GHG-emitting sources because the Agency has made the preliminary
determination that this SIP revision is in accordance with the CAA and
EPA regulations regarding PSD permitting for GHGs.
DATES: Comments must be received on or before December 6, 2010.
ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R04-
OAR-2010-0697, by one of the following methods:
1. http://www.regulations.gov: Follow the on-line instructions for
submitting comments.
2. E-mail: [email protected].
3. Fax: (404) 562-9019.
4. Mail: EPA-R04-OAR-2010-0697, Regulatory Development Section, Air
Planning Branch, Air, Pesticides and Toxics Management Division, U.S.
Environmental Protection Agency, Region 4, 61 Forsyth Street, SW.,
Atlanta, Georgia 30303-8960.
5. Hand Delivery or Courier: Ms. Lynorae Benjamin, Chief,
Regulatory Development Section, Air Planning Branch, Air, Pesticides
and Toxics Management Division, U.S. Environmental Protection Agency,
Region 4, 61 Forsyth Street, SW., Atlanta, Georgia 30303-8960. Such
deliveries are only accepted during the Regional Office's normal hours
of operation. The Regional Office's official hours of business are
Monday through Friday, 8:30 to 4:30, excluding Federal holidays.
Instructions: Direct your comments to Docket ID No. ``EPA-R04-OAR-
2010-0697.'' EPA's policy is that all comments received will be
included in the public docket without change and may be made available
online at http://www.regulations.gov, including any personal
information provided, unless the comment includes information claimed
to be Confidential Business Information (CBI) or other information
whose disclosure is restricted by statute. Do not submit through http://www.regulations.gov or e-mail, information that you consider to be CBI
or otherwise protected. The http://www.regulations.gov Web site is an
``anonymous access'' system, which means EPA will not know your
identity or contact information unless you provide it in the body of
your comment. If you send an e-mail comment directly to EPA without
going through http://www.regulations.gov, your e-mail address will be
automatically captured and included as part of the comment that is
placed in the public docket and made available on the Internet. If you
submit an electronic comment, EPA recommends that you include your name
and other contact information in the body of your comment and with any
disk or CD-ROM you submit. If EPA cannot read your comment due to
technical difficulties and cannot contact you for clarification, EPA
may not be able to consider your comment. Electronic files should avoid
the use of special characters, any form of encryption, and be free of
any defects or viruses. For additional information about EPA's public
docket visit the EPA Docket Center homepage at http://www.epa.gov/epahome/dockets.htm.
Docket: All documents in the electronic docket are listed in the
http://www.regulations.gov index. Although listed in the index, some
information is not publicly available, i.e., CBI or other information
whose disclosure is restricted by statute. Certain other material, such
as copyrighted material, is not placed on the Internet and will be
publicly available only in hard copy form. Publicly available docket
materials are available either electronically in http://www.regulations.gov or in hard copy at the Regulatory Development
Section, Air Planning Branch, Air, Pesticides and Toxics Management
Division, U.S. Environmental Protection Agency, Region 4, 61 Forsyth
Street, SW., Atlanta, Georgia 30303-8960. EPA requests that if at all
possible, you contact the person listed in the FOR FURTHER INFORMATION
CONTACT section to schedule your inspection. The Regional Office's
official hours of business are Monday through Friday, 8:30 to 4:30,
excluding Federal holidays.
FOR FURTHER INFORMATION CONTACT: For information regarding the
Tennessee SIP, contact Ms. Twunjala Bradley, Regulatory Development
Section, Air Planning Branch, Air, Pesticides and Toxics Management
Division, U.S. Environmental Protection Agency, Region 4, 61 Forsyth
Street, SW., Atlanta, Georgia 30303-8960. Ms. Bradley's telephone
number is (404) 562-9352; e-mail address: [email protected]. For
information regarding the Tailoring Rule, contact Ms. Heather Abrams,
Air Permits Section, at the same address above. Ms. Abrams' telephone
number is (404) 562-9185; e-mail address: [email protected].
SUPPLEMENTARY INFORMATION:
Table of Contents
I. What action is EPA proposing in today's notice?
II. What is the background for the action proposed by EPA in today's
notice?
III. What is the relationship between today's proposed action and
EPA's proposed GHG SIP Call and GHG FIP?
IV. What is EPA's analysis of Tennessee's proposed SIP revision?
V. Proposed Action
VI. Statutory and Executive Order Reviews
I. What action is EPA proposing in today's notice?
On August 30, 2010, TDEC submitted a draft revision to EPA for
approval into the Tennessee SIP to establish appropriate emission
thresholds for determining which new or modified stationary sources
become subject to Tennessee's PSD permitting requirements for GHG
emissions. Final approval of Tennessee's August 30, 2010, SIP revision
will put in place the GHG emission thresholds for PSD applicability set
forth in EPA's Tailoring Rule (75 FR 31514, June 3, 2010), ensuring
that smaller GHG sources emitting less than these thresholds will not
be subject to permitting requirements when these requirements begin
applying to GHGs on January 2, 2011. Pursuant to section 110 of the
CAA, EPA is proposing to approve this revision into the Tennessee SIP.
Because this draft SIP revision is not yet state-effective,
Tennessee requested that EPA ``parallel process'' the SIP revision.
Under this procedure, the EPA Regional Office works closely with the
state while developing new or revised regulations. Generally, the state
submits a copy of the proposed regulation or other revisions to EPA
before conducting its public hearing. EPA reviews this proposed state
action and prepares a notice of proposed rulemaking. EPA publishes this
notice of proposed rulemaking in the Federal Register and solicits
public comment in approximately the same time frame during which the
state is holding its public hearing. The state and EPA thus provide for
public comment periods on both the state and the federal actions in
parallel.
After Tennessee submits the formal state-effective SIP revision
request (including a response to all public comments raised during the
state's
[[Page 68267]]
public participation process), EPA will prepare a final rulemaking
notice for the SIP revision. If changes are made to the SIP revision
after EPA's notice of proposed rulemaking, such changes must be
acknowledged in EPA's final rulemaking action. If the changes are
significant, then EPA may be obliged to re-propose the action. In
addition, if the changes render the SIP revision not approvable, EPA's
re-proposal of the action would be a disapproval of the revision.
II. What is the background for the action proposed by EPA in today's
notice?
Today's proposed action on the Tennessee SIP relates to EPA's
``Prevention of Significant Deterioration and Title V Greenhouse Gas
Tailoring Rule,'' Final Rule (the Tailoring Rule). 75 FR 31514. In the
Tailoring Rule, EPA established appropriate GHG emission thresholds for
determining the applicability of PSD requirements to GHG-emitting
sources. These applicability thresholds were designed to ensure that
smaller GHG sources will not be subject to GHG permitting requirements.
While Tennessee already has authority to issue PSD permits governing
GHGs when PSD requirements begin applying to GHGs on January 2, 2011,
Tennessee needs to amend its SIP to incorporate the Tailoring Rule's
applicability thresholds. Today's notice announces EPA's proposed
approval of a revision to Tennessee's SIP that would put these
applicability thresholds in place.\1\
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\1\ On September 2, 2010, EPA proposed a ``SIP Call'' that would
require those states with SIPs that do not authorize PSD permitting
for GHGs to submit a SIP revision providing such authority. 75 FR
53892. In a companion rulemaking, EPA proposed a federal
implementation plan (FIP) that would apply in any state that is
unable to submit the required SIP revision by its deadline. 75 FR
53883 (September 2, 2010). Because Tennessee's SIP already
authorizes Tennessee to regulate GHGs once GHGs become subject to
PSD requirements on January 2, 2011, Tennessee is not subject to the
proposed SIP Call or FIP.
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Below is a brief overview of GHGs and GHG-emitting sources, the CAA
PSD program, minimum SIP elements for a PSD program, and EPA's recent
actions regarding GHG permitting. Following this section, EPA
discusses, in sections III and IV, the relationship between the
proposed Tennessee SIP revision and EPA's other national rulemakings as
well as EPA's analysis of Tennessee's SIP revision.
A. What are GHGs and their sources?
A detailed explanation of GHGs, climate change and the impact on
health, society, and the environment is included in EPA's technical
support document for EPA's GHG endangerment finding final rule
(Document ID No. EPA-HQ-OAR-2009-0472-11292 at http://www.regulations.gov). The endangerment finding rulemaking is discussed
later in this rulemaking. A summary of the nature and sources of GHGs
is provided below.
GHGs trap the Earth's heat that would otherwise escape from the
atmosphere into space and form the greenhouse effect that helps keep
the Earth warm enough for life. GHGs are naturally present in the
atmosphere and are also emitted by human activities. Human activities
are intensifying the naturally occurring greenhouse effect by
increasing the amount of GHGs in the atmosphere, which is changing the
climate in a way that endangers human health, society, and the natural
environment.
Some GHGs, such as carbon dioxide (CO2), are emitted to
the atmosphere through natural processes as well as human activities.
Other gases, such as fluorinated gases, are created and emitted solely
through human activities. The well-mixed GHGs of concern directly
emitted by human activities include CO2, methane
(CH4), nitrous oxide (N2O), hydrofluorocarbons
(HFCs), perfluorocarbons (PFCs), and sulfur hexafluoride
(SF6), hereafter referred to collectively as ``the six well-
mixed GHG,'' or, simply, GHGs. Together these six well-mixed GHGs
constitute the ``air pollutant'' upon which the GHG thresholds in EPA's
Tailoring Rule are based. These six gases remain in the atmosphere for
decades to centuries where they become well-mixed globally in the
atmosphere. When they are emitted more quickly than natural processes
can remove them from the atmosphere, their concentrations increase,
thus increasing the greenhouse effect.
In the U.S., the combustion of fossil fuels (e.g., coal, oil, gas)
is the largest source of CO2 emissions and accounts for 80
percent of the total GHG emissions by mass. Anthropogenic
CO2 emissions released from a variety of sources, including
through the use of fossil fuel combustion and cement production from
geologically stored carbon (e.g., coal, oil, and natural gas) that is
hundreds of millions of years old, as well as anthropogenic
CO2 emissions from land-use changes such as deforestation,
perturb the atmospheric concentration of CO2, and the
distribution of carbon within different reservoirs readjusts. More than
half of the energy-related emissions come from large stationary sources
such as power plants, while about a third come from transportation. Of
the six well-mixed GHGs, four (CO2, CH4,
N2O, and HFCs) are emitted by motor vehicles. In the U.S.,
industrial processes (such as the production of cement, steel, and
aluminum), agriculture, forestry, other land use, and waste management
are also important sources of GHGs.
Different GHGs have different heat-trapping capacities. The concept
of Global Warming Potential (GWP) was developed to compare the heat-
trapping capacity and atmospheric lifetime of one GHG to another. The
definition of a GWP for a particular GHG is the ratio of heat trapped
by one unit mass of the GHG to that of one unit mass of CO2
over a specified time period. When quantities of the different GHGs are
multiplied by their GWPs, the different GHGs can be summed and compared
on a carbon dioxide equivalent (CO2e) basis. For example,
CH4 has a GWP of 21, meaning each ton of CH4
emissions would have 21 times as much impact on global warming over a
100-year time horizon as 1 ton of CO2 emissions. Thus, on
the basis of heat-trapping capability, 1 ton of CH4 would
equal 21 tons of CO2e. The GWPs of the non-CO2
GHG range from 21 (for CH4) up to 23,900 (for
SF6). Aggregating all GHG on a CO2e basis at the
source level allows a facility to evaluate its total GHG emissions
contribution based on a single metric.
B. What are the general requirements of the PSD program?
1. Overview of the PSD Program
The PSD program is a preconstruction review and permitting program
applicable to new major stationary sources and major modifications at
existing stationary sources. The PSD program applies in areas that are
designated ``attainment'' or ``unclassifiable'' for a national ambient
air quality standard (NAAQS). The PSD program is contained in part C of
title I of the CAA. The ``nonattainment NSR'' program applies in areas
not in attainment of a NAAQS or in the Ozone Transport Region, and it
is implemented under the requirements of part D of title I of the CAA.
Collectively, EPA commonly refers to these two programs as the major
NSR program. The governing EPA rules are contained in 40 CFR 51.165,
51.166, 52.21, 52.24, and part 51, Appendices S and W. There is no
NAAQS for CO2 or any of the other well-mixed GHGs, nor has
EPA proposed any such NAAQS; Therefore, unless and until EPA takes
further such action, the nonattainment NSR program does not apply to
GHGs.
The applicability of PSD to a particular source must be determined
in
[[Page 68268]]
advance of construction or modification and is pollutant-specific. The
primary criterion in determining PSD applicability is whether the
proposed project is sufficiently large (in terms of its emissions) to
be a major stationary source or modification, both of which are
described below. EPA has implemented these requirements in its
regulations, which use somewhat different terminology than the CAA
does, for determining PSD applicability.
a. Major Stationary Sources
Under PSD, a ``major stationary source'' is any source belonging to
a specified list of 28 source categories that emits or has the
potential to emit 100 tpy or more of any air pollutant subject to
regulation under the CAA, or any other source type that emits or has
the potential to emit such pollutants in amounts equal to or greater
than 250 tpy. See, e.g., 40 CFR 52.21(b)(1). We refer to these levels
as the 100/250-tpy thresholds. A new source with a potential to emit
(PTE) at or above the applicable ``major stationary source threshold''
is subject to major NSR. These limits originate from section 169 of the
CAA, which applies PSD to any ``major emitting facility'' and defines
the term to include any source that emits or has a PTE of 100 or 250
tpy, depending on the source category. Note that the major source
definition incorporates the phrase ``subject to regulation,'' which, as
described later, will begin to include GHGs on January 2, 2011, under
our interpretation of that phrase as discussed in the recent memorandum
entitled, ``EPA's Interpretation of Regulations that Determine
Pollutants Covered by Federal Prevention of Significant Deterioration
(PSD) Permit Program.'' 75 FR 17004 (April 2, 2010).
b. Major Modifications
PSD also applies to existing sources that undertake a ``major
modification,'' which occurs when: (1) There is a physical change in,
or change in the method of operation of, a ``major stationary source;''
(2) the change results in a ``significant'' emissions increase of a
pollutant subject to regulation (equal to or above the significance
level that EPA has set for the pollutant in 40 CFR 52.21(b)(23)); and
(3) there is a ``significant net emissions increase'' of a pollutant
subject to regulation that is equal to or above the significance level
(defined in 40 CFR 52.21(b)(23)). Significance levels, which EPA has
promulgated for criteria pollutants and certain other pollutants,
represent a de minimis contribution to air quality problems. When EPA
has not set a significance level for a regulated NSR pollutant, PSD
applies to an increase of the pollutant in any amount (that is, in
effect, the significance level is treated as zero).
2. General Requirements for PSD
This section provides a very brief summary of the main requirements
of the PSD program. One principal requirement is that a new major
source or major modification must apply best available control
technology (BACT), which is determined on a case-by-case basis taking
into account, among other factors, the cost effectiveness of the
control and energy and environmental impacts. EPA has developed a
``top-down'' approach for BACT review, which involves a decision
process that includes identification of all available control
technologies, elimination of technically infeasible options, ranking of
remaining options by control and cost effectiveness, and then selection
of BACT. Under PSD, once a source is determined to be major for any
regulated NSR pollutant, a BACT review is performed for each attainment
pollutant that exceeds its PSD significance level as part of new
construction or for modification projects at the source, where there is
a significant increase and a significant net emissions increase of such
pollutant.\2\
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\2\ EPA notes that the PSD program has historically operated in
this fashion for all pollutants--when new sources or modifications
are ``major,'' PSD applies to all pollutants that are emitted in
significant quantities from the source or project. This rule does
not alter that for sources or modifications that are major due to
their GHG emissions.
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In addition to performing BACT, the source must analyze impacts on
ambient air quality to assure that sources do not cause or contribute
to violation of any NAAQS or PSD increments and must analyze impacts on
soil, vegetation, and visibility. In addition, sources or modifications
that would impact Class I areas (e.g., national parks) may be subject
to additional requirements to protect air quality related values
(AQRVs) that have been identified for such areas. Under PSD, if a
source's proposed project impacts a Class I area, the Federal Land
Manager is notified and is responsible for evaluating a source's
projected impact on the AQRVs and recommending either approval or
disapproval of the source's permit application based on anticipated
impacts. There are currently no NAAQS or PSD increments established for
GHGs, and therefore these PSD requirements would not apply for GHGs,
even when PSD is triggered for GHGs. However, if PSD is triggered for a
GHG-emitting source, all regulated NSR pollutants that the new source
emits in significant amounts would be subject to PSD requirements.
Therefore, if a facility triggers NSR for non-GHG pollutants for which
there are established NAAQS or increments, the air quality, additional
impacts, and Class I requirements would apply to those pollutants.
Pursuant to existing PSD requirements, the permitting authority
must provide notice of its preliminary decision on a source's
application for a PSD permit and must provide an opportunity for
comment by the public, industry, and other interested persons. After
considering and responding to comments, the permitting authority must
issue a final determination on the construction permit. Usually NSR
permits are issued by a state or local air pollution control agency
that has its own authority to issue PSD permits under a permit program
that has been approved by EPA for inclusion in its SIP. In some areas,
EPA has delegated its authority to issue PSD permits under federal
regulations to the state or local agency. In other areas, EPA issues
the permits under its own authority.
C. What are the CAA requirements to include the PSD program in the SIP?
The CAA contemplates that the PSD program be implemented in the
first instance by the states and requires that states include PSD
requirements in their SIPs. CAA section 110(a)(2)(C) requires that--
Each implementation plan * * * shall * * * include a program to
provide for * * * regulation of the modification and construction of
any stationary source within the areas covered by the plan as
necessary to assure that national ambient air quality standards are
achieved, including a permit program as required in part[] C * * *
of this subchapter.
CAA section 110(a)(2)(J) requires that--
Each implementation plan * * * shall * * * meet the applicable
requirements of * * * part C of this subchapter (relating to
significant deterioration of air quality and visibility protection).
CAA section 161 provides that--
[E]ach applicable implementation plan shall contain emission
limitations and such other measures as may be necessary, as
determined under regulations promulgated under this part [C], to
prevent significant deterioration of air quality in each region * *
* designated * * * as attainment or unclassifiable.
These provisions, read in conjunction with the PSD applicability
provisions as well as other provisions such as the BACT provision under
CAA Section 165(a)(4), mandate that SIPs include
[[Page 68269]]
PSD programs that are applicable to, among other things, any air
pollutant that is subject to regulation. As discussed below, this
includes GHGs on and after January 2, 2011.\3\
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\3\ In the Tailoring Rule, EPA noted that commenters argued,
with some variations, that the PSD provisions applied only to NAAQS
pollutants, and not GHG, and EPA responded that the PSD provisions
apply to all pollutants subject to regulation, including GHG. See 75
FR at 31560-62. EPA maintains its position that the PSD provisions
apply to all pollutants subject to regulation, and the Agency
incorporates by reference the discussion of this issue in the
Tailoring Rule.
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A number of states do not have PSD programs approved into their
SIPs. In those states, EPA's regulations at 40 CFR 52.21 govern, and
either EPA or the state as EPA's delegatee acts as the permitting
authority. However, most states have PSD programs that have been
approved into their SIPs, and these states implement their PSD programs
and act as the permitting authority. Tennessee has a SIP-approved PSD
program.
D. What actions has EPA taken concerning PSD requirements for GHG-
emitting sources?
1. What are the endangerment finding, the Light Duty Vehicle Rule, and
the Johnson Memo reconsideration?
By notice dated December 15, 2009, and pursuant to CAA section
202(a), EPA issued two findings regarding GHGs that are commonly
referred to as the ``Endangerment Finding'' and the ``Cause or
Contribute Finding.'' ``Endangerment and Cause or Contribute Findings
for Greenhouse Gases Under Section 202(a) of the Clean Air Act,'' 74 FR
66496. In the Endangerment Finding, the Administrator found that six
long-lived and directly emitted GHGs--CO2, CH4,
N2O, HFCs, PFCs, and SF6--may reasonably be
anticipated to endanger public health and welfare In the Cause or
Contribute Finding, the Administrator ``defin[ed] the air pollutant as
the aggregate group of the same six * * * greenhouse gases,'' 74 FR at
66536, and found that the combined emissions of this air pollutant from
new motor vehicles and new motor vehicle engines contribute to the GHG
air pollution that endangers public health and welfare.
By notice dated May 7, 2010, EPA published what is commonly
referred to as the ``Light-Duty Vehicle Rule'' (LDVR), which for the
first time established federal controls on GHGs emitted from light-duty
vehicles. ``Light-Duty Vehicle Greenhouse Gas Emission Standards and
Corporate Average Fuel Economy Standards; Final Rule.'' 75 FR 25324. In
its applicability provisions, the LDVR specifies that it ``contains
standards and other regulations applicable to the emissions of six
greenhouse gases,'' including CO2, CH4,
N2O, HFCs, PFCs, and SF6. 75 FR at 25686 (40 CFR
86.1818-12(a)).
On December 18, 2008, EPA issued a memorandum, ``EPA's
Interpretation of Regulations that Determine Pollutants Covered by
Federal Prevention of Significant Deterioration (PSD) Permit Program''
(known as the ``Johnson Memo'' or the ``PSD Interpretive Memo,'' and
referred to in this preamble as the ``Interpretive Memo''), that set
forth EPA's interpretation regarding which EPA and state actions, with
respect to a previously unregulated pollutant, cause that pollutant to
become ``subject to regulation'' under the Act. Whether a pollutant is
``subject to regulation'' is important for the purposes of determining
whether it is covered under the federal PSD permitting program. The
Interpretive Memo established that a pollutant is ``subject to
regulation'' only if it is subject to either a provision in the CAA or
regulation adopted by EPA under the CAA that requires actual control of
emissions of that pollutant (referred to as the ``actual control
interpretation''). On February 17, 2009, EPA granted a petition for
reconsideration on the Interpretive Memo and announced its intent to
conduct a rulemaking to allow for public comment on the issues raised
in the memorandum and on related issues. EPA also clarified that the
Interpretive Memo would remain in effect pending reconsideration.
On March 29, 2010, EPA signed a notice conveying its decision to
continue applying (with one limited refinement) the Interpretive Memo's
interpretation of ``subject to regulation,'' ``Interpretation of
Regulations that Determine Pollutants Covered by Clean Air Act
Permitting Programs.'' 75 FR 17004. EPA concluded that the ``actual
control interpretation'' is the most appropriate interpretation to
apply given the policy implications. However, EPA refined the Agency's
interpretation in one respect: EPA established that PSD permitting
requirements apply to a newly regulated pollutant at the time a
regulatory requirement to control emissions of that pollutant ``takes
effect'' (rather than upon promulgation or the legal effective date of
the regulation containing such a requirement). In addition, based on
the anticipated promulgation of the LDVR, EPA stated that the GHG
requirements of the vehicle rule would take effect on January 2, 2011,
because that is the earliest date that a 2012 model year vehicle may be
introduced into commerce. In other words, the compliance obligation
under the LDVR does not occur until a manufacturer may introduce into
commerce vehicles that are required to comply with GHG standards, which
will begin with model year 2012 and will not occur before January 2,
2011.
2. What is EPA's Tailoring Rule?
On June 3, 2010 (effective August 2, 2010), EPA promulgated a final
rulemaking, the Tailoring Rule, for the purpose of relieving
overwhelming permitting burdens that would, in the absence of the rule,
fall on permitting authorities and sources. 75 FR 31514. EPA
accomplished this by tailoring the applicability criteria that
determine which GHG emission sources become subject to the PSD program
\4\ of the CAA. In particular, EPA established in the Tailoring Rule a
phase-in approach for PSD applicability and established the first two
steps of the phase-in for the largest GHG-emitters. Additionally, EPA
committed to certain follow-up actions regarding future steps beyond
the first two, discussed in more detail later in this notice.
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\4\ The Tailoring Rule also applies to the title V program,
which requires operating permits for existing sources. However,
today's action does not affect Tennessee's title V program.
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For the first step of the Tailoring Rule, which will begin on
January 2, 2011, PSD requirements will apply to major stationary source
GHG emissions only if the sources are subject to PSD anyway due to
their emissions of non-GHG pollutants. Therefore, in the first step,
EPA will not require sources or modifications to evaluate whether they
are subject to PSD requirements solely on account of their GHG
emissions. Specifically, for PSD, Step 1 requires that as of January 2,
2011, the applicable requirements of PSD, most notably, the BACT
requirement, will apply to projects that increase net GHG emissions by
at least 75,000 tpy CO2e, but only if the project also
significantly increases emissions of at least one non-GHG pollutant.
The second step of the Tailoring Rule, beginning on July 1, 2011,
will phase in additional large sources of GHG emissions. New sources
that emit, or have the potential to emit, at least 100,000 tpy
CO2e will become subject to the PSD requirements. In
addition, sources that emit or have the potential to emit at least
100,000 tpy CO2e and that undertake a modification that
increases net GHG emissions by at least 75,000 tpy CO2e will
also be subject to PSD requirements. For both steps, EPA notes that if
sources or modifications
[[Page 68270]]
exceed these CO2e-adjusted GHG triggers, they are not
covered by permitting requirements unless their GHG emissions also
exceed the corresponding mass-based triggers in tpy.
EPA believes that the costs to the sources and the administrative
burdens to the permitting authorities of PSD permitting will be
manageable at the levels in these initial two steps and that it would
be administratively infeasible to subject additional sources to PSD
requirements at those times. However, EPA also intends to issue a
supplemental notice of proposed rulemaking in 2011, in which the Agency
will propose or solicit comment on a third step of the phase-in that
would include more sources, beginning on July 1, 2013. In the Tailoring
Rule, EPA established an enforceable commitment that the Agency will
complete this rulemaking by July 1, 2012, which will allow for 1 year's
notice before Step 3 would take effect.
In addition, EPA committed to explore streamlining techniques that
may well make the permitting programs much more efficient to administer
for GHG, and that therefore may allow their expansion to smaller
sources. EPA expects that the initial streamlining techniques will take
several years to develop and implement.
In the Tailoring Rule, EPA also included a provision, that no
source with emissions below 50,000 tpy CO2e, and no
modification resulting in net GHG increases of less than 50,000 tpy
CO2e, will be subject to PSD permitting before at least 6
years (i.e., April 30, 2016). This is because EPA has concluded that at
the present time, the administrative burdens that would accompany
permitting sources below this level would be so great that even with
the streamlining actions that EPA may be able to develop and implement
in the next several years, and even with the increases in permitting
resources that EPA can reasonably expect the permitting authorities to
acquire, it would be impossible to administer the permit programs for
these sources until at least 2016.
As EPA explained in the Tailoring Rule, the threshold limitations
are necessary because without them, PSD would apply to all stationary
sources that emit or have the potential to emit more than 100 or 250
tons of GHG per year beginning on January 2, 2011. This is the date
when EPA's recently promulgated LDVR takes effect, imposing control
requirements for the first time on CO2 and other GHGs. If
this January 2, 2011, date were to pass without the Tailoring Rule
being in effect, PSD requirements would apply to GHG emissions at the
100/250 tpy applicability levels provided under a literal reading of
the CAA as of that date. From that point forward, a source owner
proposing to construct any new major source that emits at or higher
than the applicability levels (and which therefore may be referred to
as a ``major'' source) or modify any existing major source in a way
that would increase GHG emissions would need to obtain a permit under
the PSD program that addresses these emissions before construction or
modification could begin.
Under these circumstances, many small sources would be burdened by
the costs of the individualized PSD control technology requirements and
permit applications that the PSD provisions, absent streamlining,
require. Additionally, state and local permitting authorities would be
burdened by the extraordinary number of these permit applications,
which are orders of magnitude greater than the current inventory of
permits and would vastly exceed the current administrative resources of
the permitting authorities. Permit gridlock would result since the
permitting authorities would likely be able to issue only a tiny
fraction of the permits requested.
The Tailoring Rule's thresholds are based on CO2e for
the aggregate sum of six GHGs that constitute the pollutant that will
be subject to regulation, which we refer to as GHG.\5\ These gases are:
CO2, CH4, N2O, HFCs, PFCs, and
SF6. Thus, in EPA's Tailoring Rule, EPA provided that PSD
applicability is based on the quantity that results when the mass
emissions of each of these gases is multiplied by the GWP of that gas,
and then summed for all six gases. However, EPA further provided that
in order for a source's GHG emissions to trigger PSD requirements, the
quantity of the GHG emissions must equal or exceed both the
applicability thresholds established in the Tailoring Rule on a
CO2e basis and the statutory thresholds of 100 or 250 tpy on
a mass basis.\6\ Similarly, in order for a source to be subject to the
PSD modification requirements, the source's net GHG emissions increase
must exceed the applicable significance level on a CO2e
basis and must also result in a net mass increase of the constituent
gases combined.
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\5\ The term ``greenhouse gases'' is commonly used to refer
generally to gases that have heat-trapping properties. However, in
this notice, unless noted otherwise, we use it to refer specifically
to the pollutant regulated in the LDVR.
\6\ The relevant thresholds are 100 tpy for title V, and 250 tpy
for PSD, except for 28 categories listed in EPA regulations for
which the PSD threshold is 100 tpy.
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In the Tailoring Rule, EPA adopted regulatory language codifying
the phase-in approach. As explained in that rulemaking, many state,
local and tribal area programs will likely be able to immediately
implement the approach without rule or statutory changes by, for
example, interpreting the term ``subject to regulation'' that is part
of the applicability provisions for PSD permitting. EPA has requested
permitting authorities to confirm that they will follow this
implementation approach for their programs, and if they cannot, then
EPA has requested that they notify the Agency so that we can take
appropriate follow-up action to narrow federal approval of their
programs before GHGs become subject to PSD permitting on January 2,
2011.\7\ On July 30, 2010, Tennessee provided a letter to EPA
confirming that the State has the authority to issue PSD permits
governing GHG emissions as of January 2, 2011, but explaining that
Tennessee needs to amend its SIP to enable it to implement the
Tailoring Rule thresholds. See the docket for this proposed rulemaking
for a copy of Tennessee's letter.
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\7\ Narrowing EPA's approval will ensure that for Federal
purposes, sources with GHG emissions that are less than the
Tailoring Rule's emission thresholds will not be obligated under
Federal law to obtain PSD permits during the gap between when GHG
PSD requirements go into effect on January 2, 2011 and when either
(1) EPA approves a SIP revision adopting EPA's tailoring approach,
or (2) if a state opts to regulate smaller GHG-emitting sources, the
state demonstrates to EPA that it has adequate resources to handle
permitting for such sources. EPA expects to finalize the narrowing
action prior to the January 2, 2011 deadline with respect to those
States for which EPA will not have approved the Tailoring Rule
thresholds in their SIPs by that time.
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3. What is the GHG SIP call?
By Federal Register notice dated September 2, 2010, EPA proposed
the GHG SIP Call. In that action, along with the companion GHG FIP
rulemaking published at the same time, EPA took steps to ensure that in
the 13 States that do not appear to have authority to issue PSD permits
to GHG-emitting sources at present, either the state or EPA will have
the authority to issue such permits by January 2, 2011. EPA explained
that although for most states, either the State or EPA is already
authorized to issue PSD permits for GHG-emitting sources as of that
date, our preliminary information shows that these 13 States have EPA-
approved PSD programs that do not appear to include GHG-emitting
sources and therefore do not appear to authorize these States to issue
PSD permits to such sources. Therefore, EPA
[[Page 68271]]
proposed to find that these 13 States' SIPs are substantially
inadequate to comply with CAA requirements and, accordingly, proposed
to issue a SIP Call to require a SIP revision that applies their SIP
PSD programs to GHG-emitting sources. In the companion GHG FIP
rulemaking, EPA proposed a FIP that would give EPA authority to apply
EPA's PSD program to GHG-emitting sources in any State that is unable
to submit a corrective SIP revision by its deadline. Tennessee was not
one of the States for which EPA proposed a SIP Call.
III. What is the relationship between today's proposed action and EPA's
proposed GHG SIP call and GHG FIP?
As noted above, by notice dated September 2, 2010, EPA proposed the
GHG SIP Call. At the same time, EPA proposed a FIP to apply in any
state that is unable to submit, by its deadline, a SIP revision to
ensure that the state has authority to issue PSD permits to GHG-
emitting sources.\8\ As discussed in Section IV of this rulemaking,
Tennessee interprets its current PSD regulations as providing them with
the authority to regulate GHGs, and as such, Tennessee is not included
on the list of areas for the proposed SIP call. Additionally, Tennessee
would not be subject to the FIP to implement GHG for PSD applicability.
Tennessee's August 17, 2010, proposed SIP revision (the subject of this
rulemaking) merely modifies Tennessee's SIP to establish appropriate
thresholds for determining which stationary sources and modification
projects become subject to permitting requirements for GHG emissions
under the PSD program of the CAA.
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\8\ As explained in the proposed GHG SIP Call (75 FR 53892,
53896), EPA intends to finalize its finding of substantial
inadequacy and the SIP call for the 13 listed states by December 1,
2010. EPA requested that the states for which EPA is proposing a SIP
call identify the deadline--between 3 weeks and 12 months from the
date of signature of the final SIP Call--that they would accept for
submitting their corrective SIP revision.
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IV. What is EPA's analysis of Tennessee's SIP revision?
On August 30, 2010, TDEC provided a revision to Tennessee's SIP to
EPA for parallel processing and eventual approval. This revision to
Tennessee's SIP is necessary because without it, PSD requirements would
apply, as of January 2, 2011, at the 100- or 250-tpy levels provided
under the CAA. This would greatly increase the number of required
permits, imposing undue costs on small sources; which would overwhelm
Tennessee's permitting resources and severely impair the function of
the program.
The State of Tennessee's August 30, 2010, proposed SIP revision
establishes thresholds for determining which stationary sources and
modification projects become subject to permitting requirements for GHG
emissions under Tennessee's PSD program. Specifically, Tennessee's
August 30, 2010, proposed SIP revision includes changes to Tennessee's
Air Quality Regulations, 1200-03-09-.01(4)--Construction and Operating
Permits, Prevention of Significant Deterioration \9\ and addresses the
thresholds for GHG permitting applicability.
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\9\ Tennessee's submittal also revises regulation 1200-03-
09-.02(11)--Operating Permits, however, these definitions relate to
Title V and are not included in the SIP. As such, EPA is not
proposing to take action to approve Tennessee's update to this
regulation in this rulemaking.
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Tennessee is currently a SIP-approved state for the PSD program,
and has incorporated EPA's 2002 NSR reform revisions for PSD into its
SIP. In a letter provided to EPA on July 30, 2010, Tennessee notified
EPA of its interpretation that the State currently has the authority to
regulate GHGs under TDEC's SIP-approved Rule 1200-03-09-.01(4)--
Construction and Operating Permits, Prevention of Significant
Deterioration, which includes the preconstruction review program
required by Part C of title I of the CAA. The current Tennessee program
(adopted prior to the promulgation of EPA's Tailoring Rule) applies to
major stationary sources (having the potential to emit at least 100 tpy
or 250 tpy or more of a regulated NSR pollutant, depending on the type
of source) or modifications constructing in areas designated attainment
or unclassifiable with respect to the NAAQS.
EPA performed a line-by-line review of the proposed change to
Tennessee's SIP-approved PSD regulations (1200-03-09-.01(4)--
Construction and Operating Permits, Prevention of Significant
Deterioration) and preliminarily determined that the proposed change is
consistent with (and substantively the same as) the change to the
federal provisions made by EPA's Tailoring Rule. Furthermore, EPA
preliminarily determined that this revision to Tennessee's SIP is
consistent with section 110 of the CAA. See, e.g., Tailoring Rule, 75
FR at 31561.
V. Proposed Action
EPA is proposing to approve Tennessee's August 30, 2010, SIP
revision, relating to PSD requirements for GHG-emitting sources.
Specifically, Tennessee's August 30, 2010, proposed SIP revision
establishes appropriate emissions thresholds for determining PSD
applicability with respect to new and modified GHG-emitting sources in
accordance with EPA's Tailoring Rule. EPA has made the preliminary
determination that this SIP revision is approvable because it is in
accordance with the CAA and EPA regulations regarding PSD permitting
for GHGs.
VI. Statutory and Executive Order Reviews
Under the CAA, the Administrator is required to approve a SIP
submission that complies with the provisions of the Act and applicable
federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in
reviewing SIP submissions, EPA's role is to approve state choices,
provided that they meet the criteria of the CAA. Accordingly, this
proposed action merely approves the State's law as meeting federal
requirements and does not impose additional requirements beyond those
imposed by the State's law. For that reason, this proposed action:
Is not a ``significant regulatory action'' subject to
review by the Office of Management and Budget under Executive Order
12866 (58 FR 51735, October 4, 1993);
Does not impose an information collection burden under the
provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
Is certified as not having a significant economic impact
on a substantial number of small entities under the Regulatory
Flexibility Act (5 U.S.C. 601 et seq.);
Does not contain any unfunded mandate or significantly or
uniquely affect small governments, as described in the Unfunded
Mandates Reform Act of 1995 (Pub. L. 104-4);
Does not have Federalism implications as specified in
Executive Order 13132 (64 FR 43255, August 10, 1999);
Is not an economically significant regulatory action based
on health or safety risks subject to Executive Order 13045 (62 FR
19885, April 23, 1997);
Is not a significant regulatory action subject to
Executive Order 13211 (66 FR 28355, May 22, 2001);
Is not subject to requirements of Section 12(d) of the
National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272
note) because application of those requirements would be inconsistent
with the CAA; and
Does not provide EPA with the discretionary authority to
address, as appropriate, disproportionate human health or environmental
effects, using
[[Page 68272]]
practicable and legally permissible methods, under Executive Order
12898 (59 FR 7629, February 16, 1994).
In addition, this proposed rule does not have tribal implications
as specified by Executive Order 13175 (65 FR 67249, November 9, 2000),
because the SIP is not approved to apply in Indian country located in
the State, and EPA notes that it will not impose substantial direct
costs on tribal governments or preempt tribal law.
List of Subjects in 40 CFR Part 52
Environmental protection, Air pollution control, Intergovernmental
relations, and Reporting and recordkeeping requirements.
Authority: 42 U.S.C. 7401 et seq.
Dated: October 26, 2010.
A. Stanley Meiburg,
Acting Regional Administrator, Region 4.
[FR Doc. 2010-28009 Filed 11-4-10; 8:45 am]
BILLING CODE 6560-50-P