[Federal Register Volume 75, Number 222 (Thursday, November 18, 2010)]
[Proposed Rules]
[Pages 70657-70664]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-29144]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 52
[EPA-R07-OAR-2010-0932, FRL-9228-5]
Approval and Promulgation of Implementation Plans; Kansas:
Prevention of Significant Deterioration; Greenhouse Gas Permitting
Authority and 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 the Kansas Department of Health
and Environment (KDHE) on October 4, 2010 for parallel processing. The
proposed SIP revision (Kansas Administrative Regulation 28-29-350) to
Kansas's Prevention of Significant Deterioration (PSD) program provides
the state of Kansas with authority to regulate GHG emissions under the
PSD program. The proposed SIP revision also establishes appropriate
emission thresholds and time-frames for which stationary sources and
modification projects become subject to Kansas's PSD permitting
requirements for their GHG emissions, in accordance with the provisions
of the ``PSD and Title V Greenhouse Gas Tailoring Final Rule''
published June 3, 2010, in the Federal Register at 75 FR 31514. EPA is
proposing approval through a parallel processing action.
DATES: Comments must be received on or before December 20, 2010.
[[Page 70658]]
ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R07-
OAR-2010-0932, 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: (913) 551-7844.
4. Mail: Air Planning and Development Branch, Air and Waste
Management Division, U.S. Environmental Protection Agency, Region 7,
901 North 5th Street, Kansas City, Kansas 66101.
5. Hand Delivery or Courier: Mr. Larry Gonzalez, Air Planning and
Development Branch, Air and Waste Management Division, U.S.
Environmental Protection Agency, Region 7, 901 North 5th Street, Kansas
City, Kansas 66101. 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 a.m. to 4:30
p.m., excluding Federal holidays.
Instructions: Direct your comments to Docket ID No. EPA-R07-OAR-
2010-0932. 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 Air Planning and Development
Branch, Air and Waste Management Division, U.S. Environmental
Protection Agency, Region 7, 901 North 5th Street, Kansas City, Kansas
66101. 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 a.m. to 4:30 p.m., excluding Federal holidays.
FOR FURTHER INFORMATION CONTACT: For information regarding the Kansas
SIP, contact Mr. Larry Gonzalez, Air Planning and Development Branch,
Air and Waste Management Division, U.S. Environmental Protection
Agency, Region 7, 901 North 5th Street, Kansas City, Kansas 66101. Mr.
Gonzalez's telephone number is (913) 551-7041; 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 Kansas's proposed SIP revision?
V. Proposed Action
VI. Statutory and Executive Order Reviews
I. What action is EPA proposing in today's notice?
On October 4, 2010, KDHE submitted draft revisions to Kansas
Administrative Regulations to EPA for approval into the state of
Kansas's SIP to (1) provide the state with the authority to regulate
GHGs under its PSD program; and (2) establish appropriate emission
thresholds and time-frames for determining which new or modified
stationary sources become subject to Kansas's PSD permitting
requirements for GHG emissions. These thresholds and time-frames are
consistent with the ``PSD and Title V Greenhouse Gas Tailoring Final
Rule'' (75 FR 31514) hereafter referred to as the ``Tailoring Rule.''
Final approval of Kansas's October 4, 2010, SIP revision will make
Kansas's SIP adequate with respect to PSD requirements for GHG-emitting
sources. Furthermore, final approval of Kansas's October 4, 2010, SIP
revision will put in place the GHG emission thresholds for PSD
applicability set forth in EPA's Tailoring Rule, 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 Kansas SIP.
Due to the fact that this proposed rule revision is not yet state-
effective, Kansas requested that EPA ``parallel process'' the 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 Kansas submits the formal state-effective rule and SIP
revision request (including a response to all public comments raised
during the state's public participation process), EPA will prepare a
final rulemaking notice for the SIP revision. If changes are made to
the state's proposed rule 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 Kansas SIP relates to three Federal
rulemaking actions. The first rulemaking is EPA's ``Prevention of
Significant Deterioration and Title V Greenhouse Gas Tailoring Rule,''
Final Rule, (the Tailoring Rule). 75 FR 31514
[[Page 70659]]
(June 3, 2010). The second rulemaking is EPA's ``Action to Ensure
Authority to Issue Permits Under the Prevention of Significant
Deterioration Program to Sources of Greenhouse Gas Emissions: Finding
of Substantial Inadequacy and SIP Call,'' Proposed Rule, (GHG SIP
Call). 75 FR 53892 (September 2, 2010). The third rulemaking is EPA's
``Action to Ensure Authority to Issue Permits Under the Prevention of
Significant Deterioration Program to Sources of Greenhouse Gas
Emissions: Federal Implementation Plan,'' Proposed Rule, 75 FR 53883
(September 2, 2010) (GHG FIP), which serves as a companion rulemaking
to EPA's proposed GHG SIP Call. A summary of each of these rulemakings
is described below.
In the first rulemaking, the Tailoring Rule, EPA establishes
appropriate GHG emission thresholds for determining the applicability
of PSD requirements to GHG-emitting sources. In the second rulemaking,
the GHG SIP Call (which is not yet final), EPA proposed to find that
the EPA-approved PSD programs in 13 states (including Kansas) are
substantially inadequate to meet CAA requirements because they do not
appear to apply PSD requirements to GHG-emitting sources. For each of
these states, EPA proposes to require the state (through a ``SIP
Call'') to revise its SIP as necessary to correct such inadequacies.
EPA is proposing an expedited schedule for these states to submit their
SIP revision, in light of the fact that as of January 2, 2011, certain
GHG-emitting sources will become subject to the PSD requirements and
may not be able to obtain a PSD permit in order to construct or modify.
In the third rulemaking, the proposed GHG FIP, EPA is proposing 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
for GHG-emitting sources. Kansas is now seeking to revise its SIP to
make it adequate with respect to PSD requirements for GHG-emitting
sources. Furthermore, Kansas is seeking to revise its SIP to put in
place the GHG emission thresholds for PSD applicability set forth in
EPA's Tailoring Rule, thereby 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.
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 Kansas SIP revision and EPA's other national rulemakings as
well as EPA's analysis of Kansas'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 GHGs,'' 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
GHGs range from 21 (for CH4) up to 23,900 (for
SF6). Aggregating all GHGs on a CO2e basis at the
source level allows a facility to evaluate its total GHG emissions
contribution based on a single metric.
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 generally contained in 40 CFR
51.165, 51.166,
[[Page 70660]]
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 advance of construction or modification and is pollutant-specific.
The primary criterion in determining PSD applicability for a proposed
new or modified source is whether the source is a ``major emitting
facility,'' based on its predicted potential emissions of regulated
pollutants within the meaning of CAA section 169(1), that either
constructs or undertakes a modification. EPA has implemented these
requirements in its regulations, which use somewhat different
terminology than the CAA does, for determining PSD applicability.
a. Major Stationary Source
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. 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,
``Reconsideration of Interpretation of Regulations that Determine
Pollutants Covered by Clean Air Act Permitting Programs.'' 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.\1\
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\1\ 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 may impact 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--
[[Page 70661]]
Each 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 for such region * * *
designated * * * as attainment or unclassifiable.
These provisions, read in conjunction with the PSD applicability
provisions--which, as noted above, applies, by its terms, to ``any air
pollutant,'' and which EPA has, through regulation, interpreted more
narrowly as any ``NSR regulated pollutant''--and read in conjunction
with other provisions, such as the BACT provision under CAA section
165(a)(4), mandate that SIPs include PSD programs that are applicable
to, among other things, any air pollutant that is subject to
regulation, including, as discussed below, GHGs on and after January 2,
2011.\2\
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\2\ 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 31560-62 (June 3, 2010). EPA is not re-opening that issue in this
rulemaking, and does not solicit comment on it.
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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. On the other hand, 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. Kansas 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, pursuant to CAA section 202(a),
EPA issued, in a single final action, 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 ``define[d] the air
pollutant as the aggregate group of the same six * * * greenhouse
gases,'' 74 FR 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 and the National Highway Traffic
Safety Administration 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 25686 (40 CFR
86.1818-12(a)). Shortly before finalizing the LDVR, by notice dated
April 2, 2010, EPA published a notice commonly referred to as the
Johnson Memo Reconsideration. 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'' (``Reconsideration of
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 for the purpose of relieving overwhelming permitting burdens
that would, in the absence of the rule, fall on permitting authorities
and sources, i.e., the Tailoring Rule. 75 FR 31514. EPA accomplished
this by tailoring the applicability criteria that determine which GHG
emission sources become subject to the PSD program \3\ 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.\4\
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\3\ The Tailoring Rule also applies to the title V program,
which requires operating permits for existing sources. However,
today's action does not affect Kansas's title V program.
\4\ EPA adopted the Tailoring Rule after careful consideration
of numerous public comments. On October 27, 2009 (74 FR 55292), EPA
proposed the Tailoring Rule. EPA held two public hearings on the
proposed rule, and received over 400,000 written public comments.
The public comment period ended on December 28, 2009. The comments
provided detailed information that helped EPA understand better the
issues and potential impacts of the Tailoring Rule. The preamble of
EPA's Tailoring Rule describes in detail the comments received and
how some of these comments were incorporated in EPA's final rule.
See 75 FR 31514 for more detail.
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[[Page 70662]]
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 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.
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.\5\ On October 1, 2010, the state of Kansas provided a letter to
EPA with the requested modification. See the docket for this proposed
rulemaking for a copy of Kansas's letter.
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\5\ 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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The thresholds that EPA established 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.\6\ 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.\7\ Similarly, in order
[[Page 70663]]
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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\6\ 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.
\7\ 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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3. What is the GHG SIP Call?
By notice dated September 2, 2010, EPA proposed the GHG SIP Call.
In that action, along with the companion GHG FIP proposed 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 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. Kansas was one of the states for which EPA proposed a SIP
Call. The state's comments regarding the proposed SIP call, submitted
October 1, 2010, are included in the docket for this rulemaking.
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 proposed
rulemaking, Kansas does not interpret its current PSD regulations as
providing it with the authority to regulate GHG, and as such, Kansas is
included on the list of areas for the proposed SIP call. Kansas's
October 4, 2010, proposed SIP revision (the subject of this rulemaking)
addresses this authority. EPA will not take final action on the GHG SIP
Call for the state of Kansas if the state submits its final SIP
revision to EPA prior to the final rulemaking for the GHG SIP Call.
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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. In its October 1, 2010
letter, Kansas requested the earliest possible deadline, either
December 22, 2010, or three weeks after signature of the final SIP
Call.
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IV. What is EPA's analysis of Kansas's proposed SIP revision?
On October 4, 2010, KDHE provided a revision to Kansas's SIP to EPA
for parallel processing and eventual approval. This revision to
Kansas's SIP is necessary because without it, (1) the state of Kansas
would not have authority to issue PSD permits to GHG-emitting sources,
and as a result, absent further action, those sources may not be able
to construct or undertake modifications beginning January 2, 2011; and
(2) assuming that the state of Kansas attains authority to issue PSD
permits to GHG-emitting sources, 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 Kansas's permitting
resources and severely impair the function of the program.
The state of Kansas's September 26, 2010, proposed SIP revision:
(1) Provides the state of Kansas with the authority to regulate GHG
under the PSD program of the CAA, and (2) establishes thresholds for
determining which stationary sources and modification projects become
subject to permitting requirements for GHG emissions under the PSD
program. Specifically, Kansas's October 4, 2010, proposed SIP revision
includes changes to Kansas Air Regulations (KAR) 28-19-350--Prevention
of significant deterioration of air quality. These revisions update
Kansas's air regulations by providing the state the authority to
regulate GHGs and aligning the thresholds for GHG permitting
applicability with those specified in the Tailoring Rule.
The state of Kansas is currently a SIP-approved state for the PSD
program. However, Kansas does not interpret its current rules, which
are generally consistent with the Federal rules, to be applicable to
GHGs. In the letter dated October 1, 2010, referenced above, Kansas
notified EPA that the state does not currently have the authority to
regulate GHG and thus is in the process of revising its regulation (the
subject of this proposed action) to provide this authority. To provide
this authority, Kansas is updating the definitions for ``major source''
and ``subject to regulation'' to explicitly include GHG as a regulated
NSR pollutant under the CAA. Specifically, the Kansas proposed rule
would incorporate by reference 40 CFR 52.21 as of July 1, 2007, and as
amended by the Tailoring Rule promulgated on June 3, 2010. EPA has
preliminarily determined that this change to Kansas's regulation is
consistent with the CAA and its implementing regulations regarding
GHG.\9\
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\9\ Kansas's submittal incorporates by reference 40 CFR 52.21 as
of July 1, 2007, as amended by the Tailoring Rule. In today's
proposed rulemaking, EPA is not taking action on any of Kansas's
changes to their PSD regulations regarding the ``Ethanol Rule'' (72
FR 24060, May 1, 2007). Kansas submitted its Ethanol Rule revision
in 2009, and EPA intends to act on that revision in a separate
rulemaking. Kansas has not adopted EPA's ``Fugitive Emissions Rule''
(73 FR 77882, December 19, 2008), so this proposal also does not
address the Fugitive Emissions Rule.
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The changes included in this submittal are substantively the same
as EPA's Tailoring Rule. The Kansas rules have been formatted to
conform to Kansas's rule drafting standards, but in substantive content
the rules that address the Tailoring Rule provisions are the same as
the federal rules. As part of its review of the Kansas submittal, EPA
performed a line-by-line review of Kansas's proposed changes to its
regulations and has preliminarily determined that they are consistent
with the Tailoring Rule. These changes to Kansas's regulations are also
consistent with section 110 of the CAA because they are incorporating
GHGs for regulation in the Kansas SIP.
V. Proposed Action
Pursuant to section 110 of the CAA, EPA is proposing to approve the
state of Kansas's revisions to the Kansas Administrative Regulations
that were submitted to EPA on October 4, 2010, relating to PSD
requirements for GHG-emitting sources. Specifically, Kansas's October
4, 2010, proposed submission: (1) Provides the state of Kansas with the
authority to regulate GHGs under its PSD program, and (2) establishes
appropriate emissions thresholds for determining PSD applicability 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
[[Page 70664]]
approvable because it is in accordance with the CAA and EPA regulations
regarding PSD permitting for GHGs.
As noted above, at Kansas's request, EPA is ``parallel processing''
this proposed rule revision. After Kansas submits the formal state-
effective rule revisions (including a response to all public comments
raised during the state's public participation process), EPA will
prepare a final rulemaking notice for the SIP revision. If changes are
made to the state's proposed rule 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 these changes render the SIP
revision not approvable, EPA's re-proposal of the action would be a
disapproval of the revision.
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 practicable and legally permissible methods, under
Executive Order 12898 (59 FR 7629, February 16, 1994).
In addition, this 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 of Kansas, 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, Incorporation by
reference, Intergovernmental relations, and Reporting and recordkeeping
requirements.
Authority: 42 U.S.C. 7401 et seq.
Dated: November 9, 2010.
Karl Brooks,
Regional Administrator, Region 7.
[FR Doc. 2010-29144 Filed 11-17-10; 8:45 am]
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