EPA Proposes to Exclude Smaller Facilities from Green House Gas Regulation

In accordance with AGC’s recommendations, the U.S. Environmental Protection Agency (EPA) has proposed to maintain the applicability thresholds for greenhouse gas (GHG)-emitting stationary sources at the current levels as begun under steps one and two of the Tailoring Rule (Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule; Final Rule, 75 Federal Register 31,514, June 3, 2010).  The current levels apply to large emitters such as power plants and large industrial facilities.  EPA released this “step three” proposal on February 24, 2012; comments are due April 20, 2012. As previously reported, two stationary source permitting programs under the Clean Air Act (CAA) were triggered for GHGs once the agency began regulating such gases under the Act, which happened in 2010 when it finalized first-ever GHG emission limits for new motor vehicles.  The New Source Review Prevention of Significant Deterioration (PSD) and title V programs require facilities to obtain permits if they currently or plan to emit certain pollutants.  These programs were implemented to address traditional air pollutants; therefore, the emissions thresholds were set to very low amounts – levels at which would have been “absurd” for controlling GHGs.  The low emission thresholds in the CAA required for PSD and title V would have led to tens of thousands of PSD permits and around six million title V permits.  If the lower emissions thresholds had remained in place for GHGs, new construction and renovation would literally have come to a halt from permitting delays. In order to avoid the administrative burden and “absurd results” that would have occurred should the very low levels in the CAA apply to GHGs, EPA finalized the Tailoring Rule to temporarily raise the emissions thresholds specific to those gases and set a timetable for phasing in the permitting of medium and possibly even small facilities.  Step one came into effect in 2011 and applied to facilities that were already obtaining CAA permits for other pollutants.  Also in 2011, step two expanded coverage to all new facilities with emissions of at least 100,000 tons per year and modifications at existing facilities that would increase GHG emissions by at least 75,000 tpy.  Under step three, scheduled for 2012, EPA would determine whether to lower the thresholds further and include medium to small sources of emissions. For step 3, EPA considered the capacity of the states to manage the permitting programs should they increase with more applicable facilities and noted “that lowering the thresholds to include the relatively low-emitting sources currently under consideration for Step 3 would result in a very small addition to the amount of GHG emissions subject to permitting requirements while potentially adding thousands of sources to the permitting process.” EPA goes on to state that the agency “propose[s] in Step 3 to maintain, and not lower, the current applicability thresholds.”  EPA also has put forward for comment two streamlining techniques in the interest of decreasing the administrative burden of the permitting programs. A pre-publication copy of the proposal is available on EPA’s website. To submit comments online, please go to www.regulations.gov and follow the instructions for submitting comments to the docket for EPA‐HQ‐OAR‐2009‐0517. For more information, contact Melinda Tomaino at (703) 837-5415 or tomainom@agc.org.