Federal Register: December 30, 2010 (Volume 75, Number 250)
DOCID: fr30de10-9 FR Doc 2010-32757
ENVIRONMENTAL PROTECTION AGENCY
Environmental Protection Agency
CFR Citation: 40 CFR Parts 52 and 70
RIN ID: RIN 2060-AQ63
EPA ID: [EPA-HQ-OAR-2009-0517; FRL-9245-4]
DOCUMENT ACTION: Final Rule.
Action To Ensure Authority To Implement Title V Permitting Programs Under the Greenhouse Gas Tailoring Rule
DATES: This final rule is effective on December 30, 2010.
The final greenhouse gas (GHG) Tailoring Rule includes a step- bystep implementation strategy for issuing Federallyenforceable permits to the largest, most environmentally significant sources beginning January 2, 2011. In this action, EPA is finalizing its proposed rulemaking to narrow EPA's previous approval of State title V operating permit programs that apply (or may apply) to GHGemitting sources. Specifically, in this final rule, EPA is narrowing its previous approval of certain State permitting thresholds for GHG emissions so that only sources that equal or exceed the GHG thresholds established in the final Tailoring Rule would be covered as major sources by the Federallyapproved programs in the affected States. By raising the GHG thresholds that apply title V permitting to major sources in the affected States, this final rule will reduce the number of sources that will be issued Federallyenforceable title V permits and thereby significantly reduce permitting burdens for permitting agencies and sources alike in those States.
Action to Ensure Authority to Implement Title V Permitting Programs under Greenhouse Gas Tailoring Rule
For information related to a specific State,
local, or Tribal permitting authority, please contact the appropriate EPA regional office:
Contact for regional
EPA regional office mailing address, Permitting authority telephone number)
I........................... Dave Conroy, Chief, Connecticut, Air Programs Massachusetts, Branch, EPA Region Maine, New 1, 5 Post Office Hampshire, Rhode Square, Suite 100, Island, and Boston, MA 02109 Vermont. 3912, (617) 918
II.......................... Raymond Werner, New Jersey, New Chief, Air Programs York, Puerto Rico, Branch, EPA Region and Virgin Islands. 2, 290 Broadway,
25th Floor, New
York, NY 10007
1866, (212) 637
III......................... Kathleen Cox, Chief, District of Permits and Columbia, Delaware, Technical Maryland, Assessment Branch, Pennsylvania, EPA Region 3, 1650 Virginia, and West Arch Street, Virginia. Philadelphia, PA
IV.......................... Lynorae Benjamin, Alabama, Florida, Chief, Regulatory Georgia, Kentucky, Development Branch, Mississippi, North Air, Pesticides and Carolina, South Toxics Management Carolina, and Division, EPA Tennessee. Region 4, Atlanta
Federal Center, 61
SW., Atlanta, GA
V........................... J. Elmer Bortzer, Illinois, Indiana, Chief, Air Programs Michigan, Branch (AR18J), Minnesota, Ohio, EPA Region 5, 77 and Wisconsin. West Jackson
VI.......................... Jeff Robinson, Arkansas, Louisiana, Chief, Air Permits New Mexico, Section, EPA Region Oklahoma, and 6, Fountain Place Texas. 12th Floor, Suite
1200, 1445 Ross
Avenue, Dallas, TX
VII......................... Mark Smith, Chief, Iowa, Kansas, Air Permitting and Missouri, and Compliance Branch, Nebraska. EPA Region 7, 901
North 5th Street,
Kansas City, KS
66101, (913) 551
VIII........................ Carl Daly, Unit Colorado, Montana, Leader, Air North Dakota, South Permitting, Dakota, Utah, and Monitoring & Wyoming. Modeling Unit, EPA
Region 8, 1595
Denver, CO 80202
1129, (303) 312
IX.......................... Gerardo Rios, Chief, Arizona; California; Permits Office, EPA Hawaii and the Region 9, 75 Pacific Islands; Hawthorne Street, Indian Country San Francisco, CA within Region 9 and 94105, (415) 972 Navajo Nation; and 3974. Nevada. X........................... Nancy Helm, Manager, Alaska, Idaho, Federal and Oregon, and Delegated Air Washington. Programs Unit, EPA
Region 10, 1200
Sixth Avenue, Suite
900, Seattle, WA
98101, (206) 553
I. General Information
A. Does this action apply to me?
Entities affected by this action include States, local permitting authorities, and Tribal authorities.
Entities potentially affected by this rule also include sources in
all industry groups, which have a direct obligation under the Clean Air
Act (CAA or Act) to apply for and operate pursuant to a title V permit
for GHGs that meet the applicability thresholds set forth in the
Tailoring Rule. The majority of entities potentially affected by this action are expected to be in the following groups:
Industry group NAICS \a\ Agriculture, fishing, and hunting...... 11.
Utilities (electric, natural gas, other 2211, 2212, 2213.
Manufacturing (food, beverages, 311, 312, 313, 314, 315, 316. tobacco, textiles, leather).
Wood product, paper manufacturing...... 321, 322.
Petroleum and coal products 32411, 32412, 32419. manufacturing.
Chemical manufacturing................. 3251, 3252, 3253, 3254, 3255, 3256, 3259.
Rubber product manufacturing........... 3261, 3262.
Miscellaneous chemical products........ 32552, 32592, 32591, 325182, 32551.
Nonmetallic mineral product 3271, 3272, 3273, 3274, 3279. manufacturing.
Primary and fabricated metal 3311, 3312, 3313, 3314, 3315, manufacturing. 3321, 3322, 3323, 3324, 3325, 3326, 3327, 3328, 3329. Machinery manufacturing................ 3331, 3332, 3333, 3334, 3335, 3336, 3339.
Computer and electronic products 3341, 3342, 3343, 3344, 3345, manufacturing. 4446.
Electrical equipment, appliance, and 3351, 3352, 3353, 3359. component manufacturing.
Transportation equipment manufacturing. 3361, 3362, 3363, 3364, 3365, 3366, 3366, 3369. Furniture and related product 3371, 3372, 3379.
Miscellaneous manufacturing............ 3391, 3399.
Waste management and remediation....... 5622, 5629.
Hospitals/nursing and residential care 6221, 6231, 6232, 6233, 6239. facilities.
Personal and laundry services.......... 8122, 8123.
Residential/private households......... 8141.
Nonresidential commercial............. Not available. Codes only exist for private households, construction, and leasing/ sales industries. \a\ North American Industry Classification System.
B. How is this preamble organized?
The information presented in this preamble is organized as follows: I. General Information
A. Does this action apply to me?
B. How is this preamble organized?
II. Overview of the Final Rule
III. Proposed Rule
IV. Final Rule
A. Narrowing of Title V Programs Under Parts 70 and 52
B. Legal Basis
1. Title V Applicability
2. Minimum Requirements for Approved Title V Programs
3. Basis for Reconsideration and Narrowing of Approval
C. Authority for EPA Action
V. Comments and Responses
VI. Effective Date
VII. Statutory and Executive Orders Reviews
A. Executive Order 12866Regulatory Planning and Review
B. Paperwork Reduction Act
C. Regulatory Flexibility Act
D. Unfunded Mandates Reform Act
E. Executive Order 13132Federalism
F. Executive Order 13175Consultation and Coordination With Indian Tribal Governments
G. Executive Order 13045Protection of Children From Environmental Health and Safety Risks
H. Executive Order 13211Actions That Significantly Affect Energy Supply, Distribution, or Use
I. National Technology Transfer and Advancement Act
J. Executive Order 12898Federal Actions To Address
Environmental Justice in Minority Populations and LowIncome Populations
K. Congressional Review Act
L. Judicial Review
II. Overview of the Final Rule
This action finalizes EPA's proposal to narrow the approval of title V operating permit programs that we included in what we call the proposed Tailoring Rule, ``Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule: Proposed Rule,'' 74 FR 55292, 55340 (October 27, 2009). EPA finalized the Tailoring Rule by Federal Register notice dated June 3, 2010, ``Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule: Final Rule,'' 75 FR 31,514.
In the final Tailoring Rule, EPA narrowed the applicability of
title V to GHGemitting sources at or above specified thresholds by
setting thresholds at which GHG emissions become subject to regulation
for Prevention of Significant Deterioration (PSD) and title V
purposes.\1\ Title V requires all ``major sources,'' and certain other
sources, to apply for and operate pursuant to an operating permit,
which is generally issued by a State or local permitting authority
pursuant to an approved State title V program. As discussed in more
detail subsequently, ``major source'' under title V includes any source
that emits, or has the potential to emit, 100 tons per year (tpy) or
more of any air pollutant. Under EPA's longstanding interpretation,
codified in the final Tailoring Rule, this requirement applies to
emissions of air pollutants ``subject to regulation.'' Absent the
Tailoring Rule, GHGs would become ``subject to regulation'' for title V
purposes on January 2, 2011. Under the Tailoring Rule, however, a
source becomes a ``major source'' subject to title V requirements based
on its GHG emissions only if, as of July 1, 2011, it emits GHGs at or above 100,000 tpy measured on a carbon dioxide equivalent
\1\ Only the title V provisions are relevant for this action.
However, in proposing the Tailoring Rule, EPA recognized that even
after it finalized the Tailoring Rule, some approved State title V
programs woulduntil they were revisedcontinue to use the statutory
thresholds for purposes of the permitting thresholds, even though the
States would not have sufficient resources to implement the title V
program at those levels. Accordingly, the proposed Tailoring Rule
included a proposal to limit EPA's previous approval of title V
programs to the extent those provisions required permits for sources
whose emissions of GHG equal or exceed 100 tpy but are less than the
permitting threshold of the Tailoring Rule.\2\ When EPA finalized the
Tailoring Rule, EPA did not finalize that part of the proposal.
Instead, EPA waited to collect more information from the States to
determine whether such action was necessary, and if so, for which
States. As detailed in the following, EPA is now finalizing that part
of the Tailoring Rule proposal for most permitting authorities.
\2\ The permitting threshold originally proposed for the
Tailoring Rule was 25,000 tpy CO
EPA asked States to submit informationin the form of letters due within 60 days of publication of the Tailoring Rule (which we refer to as the 60day letters)that would help EPA determine whether it needed to narrow its approval of any title V programs. Some States informed EPA in their ``60 day letters'' or subsequently that they have adequate authority to issue permits to sources of GHGs and that they have interpreted the requirements of their approved title V programs consistent with the final Tailoring Rule thresholds. Other States and permitting authorities either indicated that their programs would require changes to permit GHG sources at the final Tailoring Rule thresholds, or did not provide a clear indication of the scope of their title V programs with respect to GHG sources.
Thus, in this action, EPA is narrowing its previous approval of most State title V programs to the extent the programs require title V permits for sources of GHG emissions below the Tailoring Rule thresholds. The other portions of these title V programs, including portions requiring permits for GHGemitting sources with emissions at or above the Tailoring Rule thresholds, remain approved. States affected by this rule will not be required to take any action under the Federal CAA as a result of this rule.
The effect of EPA narrowing its approval in this manner is that
there will be no Federallyapproved title V program that requires permits for sources due to emissions of GHG below
the final Tailoring Rule threshold of 100,000 tpy CO
III. Proposed Rule
We assume familiarity here with the statutory and regulatory background discussed in the preambles for the Tailoring Rule proposal and final action, and will only briefly summarize that background here.
Title V of the CAA requires, among other things, a ``major source'' to obtain an operating permit that: consolidates all CAA requirements applicable to the source into a document; includes conditions necessary to assure compliance with such requirements; provides for review of these documents by EPA, States, and the public; and requires permit holders to track, report, and annually certify their compliance status with respect to their permit requirements.
A ``major source'' is defined to include, among other things, a source that actually emits or has the potential to emit 100 tpy or more of ``any air pollutant.'' CAA sections 501(2), 302(j). See also 40 CFR 70.2 and 71.2. Since 1993, EPA has interpreted the CAA to define a ``major source'' for purposes of title V to include any source that emits, or has the potential to emit, at least 100 tpy of an air pollutant subject to regulation under the CAA. Memorandum from Lydia N. Wegman, Deputy Director, Office of Air Quality Planning and Standards, U.S. EPA, ``Definition of Regulated Air Pollutant for Purposes of Title V'' (Apr. 26, 1993); 75 FR 3155354.
In recent months, EPA completed four distinct actions related to
regulation of GHGs under the CAA. These actions include, as they are
commonly called, the ``Endangerment Finding'' and ``Cause or Contribute
Finding,'' which we issued in a single final action,\3\ the ``Johnson
Memo Reconsideration'' (also called the ``Timing Decision''),\4\ the
``LightDuty Vehicle Rule'' (LDVR, or simply the ``Vehicle Rule''),\5\
and the ``Tailoring Rule.'' \6\ In the Endangerment Finding, which is
governed by CAA Sec. 202(a), the Administrator exercised her
judgement, based on an exhaustive review and analysis of the science,
to conclude that ``six greenhouse gases taken in combination endanger
both the public health and the public welfare of current and future
generations.'' 74 FR 66496. The Administrator also found ``that the
combined emissions of these greenhouse gases from new motor vehicles
and new motor vehicle engines contribute to the greenhouse gas air
pollution that endangers public health and welfare under CAA section
202(a).'' Id. The Endangerment Finding led directly to promulgation of
the Vehicle Rule, also governed by CAA Sec. 202(a), in which EPA set
standards for the emission of GHGs for new motor vehicles built for
model years 20122016. 75 FR 25324. The other two actions, the Timing
Decision and the Tailoring Rule, governed by the PSD and title V
provisions in the CAA, were issued to address the automatic statutory
triggering of these programs for GHGs due to the establishment of the
first controls for GHGs under the Act. More specifically, the Timing
Decision reiterated EPA's interpretation that only pollutants subject
to regulation under the Act can trigger major source status for
purposes of title V, and further concluded that the earliest date GHG
would be subject to regulation for purposes of title V would be January
2, 2011. The Tailoring Rule established a series of steps by which PSD
and title V permit requirements for GHG could be phased in, starting with the largest sources of GHG emissions. 75 FR 31514.
\3\ ``Endangerment and Cause or Contribute Findings for Greenhouse Gases Under Section 202(a) of the Clean Air Act.'' 74 FR 66496 (December 15, 2009).
\4\ ``Interpretation of Regulations that Determine Pollutants Covered by Clean Air Act Permitting Programs.'' 75 FR 17004 (April 2, 2010). This action finalizes EPA's response to a petition for reconsideration of ``EPA's Interpretation of Regulations that Determine Pollutants Covered by Federal Prevention of Significant Deterioration (PSD) Permit Program'' (commonly referred to as the ``Johnson Memo''), December 18, 2008.
\5\ ``LightDuty Vehicle Greenhouse Gas Emission Standards and Corporate Average Fuel Economy Standards; Final Rule.'' 75 FR 25324 (May 7, 2010).
\6\ ``Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule; Final Rule.'' 75 FR 31514 (June 3, 2010).
In the proposed Tailoring Rule, EPA proposed a major stationary
source threshold for purposes of title V of 25,000 tpy for GHG on a
EPA relied for its authority for the proposed limitations of approval on CAA section 301(a), as it incorporates the authority of an agency to reconsider its actions, and in the Administrative Procedure Act (APA) section 553. See 74 FR 55345. EPA indicated in the proposal that it considered and decided against issuing a notice of deficiency under CAA section 502(i)(1), in part because EPA did not anticipate that program submissions would be necessary following EPA's action to limit approvals. 74 FR 5534555346.
In the final Tailoring Rule, EPA adopted a 100,000 tpy
The mechanism EPA chose in the final rule to implement the 100,000
Some States advised EPA that they would likely be able to implement
the Tailoring Rule thresholds by interpreting provisions in their
approved title V programs. A State's implementation of the Tailoring
Rule in this manner would obviate the need for EPA to narrow its
approval of the State's title V program. Thus, in the final Tailoring
Rule, EPA deferred making any decision regarding whether to narrow its
approval of any title V programs until after learning how States
intended to implement the Tailoring Rule. Rather than taking final action on
our proposal to limit approval for State title V programs, EPA asked States to submit informationin the form of letters due within 60 days of publication of the final Tailoring Rule (which we refer to as the 60day letters)that would help EPA determine what action it would need to take to ensure that GHG sources would be permitted consistent with the final Tailoring Rule, and specifically for which States it would need to limit its approval of State title V programs.
Almost all States submitted 60day letters. After reviewing the letters, some States have indicated that they have been able to interpret their existing approved title V programs in a manner consistent with the final Tailoring Rule. Other permitting authorities indicated that they needed regulatory or legislative changes either to implement title V permitting for GHG sources, or else to apply the final Tailoring Rule thresholds when they implement title V permitting for GHG sources. Some States indicated that some regulatory or legislative changes to their title V programs were necessary, but did not clearly indicate which types of changes were required. In some cases, the State's 60day letter addressed PSD permitting but not title V permitting, or else did not clearly distinguish between the two programs in discussing how the State intended to implement permitting of GHG sources. Finally, a few States did not submit 60day letters.
Most States that need to take some action indicated that they were
actively in the process of updating their title V programs to be
consistent with the final Tailoring Rule. Indeed, many programs were
projected, as of the date of the 60day letter, to be revised to
incorporate the Tailoring Rule threshold at the State level before January 2, 2011.
IV. Final Rule
A. Narrowing of Title V Programs Under Parts 70 and 52
EPA is taking final action to narrow its approval of the title V program for certain States. In the final Tailoring Rule, EPA established levels of GHG emissions for purposes of determining applicability of title V. However, most EPAapproved State title V programs currently provide that sources of GHGs will become subject to title V requirements even where the sources emit GHGs below the final Tailoring Rule thresholds. Under the final Tailoring Rule, GHGs emitted below the Tailoring Rule thresholds are not treated as a pollutant ``subject to regulation'' under the CAA (and thus, under the final Tailoring Rule, a source emitting GHGs below the Tailoring Rule thresholds would not be treated as a major stationary source subject to title V on account of its GHG emissions). Thus, EPA is now narrowing its approval of most approved title V programs so that those title V programs are approved to apply to GHGemitting sources only if those sources emit GHGs at or above the final Tailoring Rule thresholds. EPA is accomplishing this by reconsidering and narrowing its previous approval of those title V programs to the extent they apply to GHG emitting sources that emit below the final Tailoring Rule thresholds.
In the proposed Tailoring Rule, EPA proposed to narrow its approval
for all 50 States, as well as the District of Columbia, Puerto Rico,
and the U.S. Virgin Islands.\7\ EPA now finalizes this narrowing of
approval for the States with title V programs that will apply to GHG
emissions at belowTailoring Rule levels as of January 2, 2011, and for
States that EPA cannot clearly determine do not fall in this category.
The States for whom EPA is narrowing its approval of the title V
program in this action are: Alabama, California, Colorado, District of
Columbia, Georgia, Hawaii, Illinois, Iowa, Kansas, Louisiana, Maine,
Maryland, Minnesota, Mississippi, Missouri, Nebraska, Nevada, New
Hampshire, New York, Ohio, Oklahoma, Pennsylvania, Rhode Island, South
Carolina, South Dakota, Tennessee, Utah, Vermont, Virgin Islands,
Virginia, Washington, West Virginia, and Wisconsin. For all the other
StatesStates with no authority to permit sources due to their status
as major sources of GHG or States which apply the Tailoring Rule
thresholds by interpretationEPA is not taking final action on its
proposal to narrow its approval of the title V program at this time
because those States will not subject GHG sources with emissions below
the Tailoring Rule thresholds to the requirements of title V on January 2, 2011.
\7\ 40 CFR 70.2 defines ``State'' to include any nonFederal permitting authority, including local, interstate and statewide permitting authorities, and also including the District of Columbia, the Commonwealth of Puerto Rico, and U.S. territories, although ``[w]here such meaning is clear from the context, `State' shall have its conventional meaning.'' This notice follows the same approach to the use of the term ``State.''
For most States, title V programs are Federallyapproved only under 40 CFR part 70, and EPA need only amend Appendix A to part 70 in order to narrow its approval of the title V program. However, in some cases, States have chosen to submit their title V programs as part of their State implementation plans (SIPs) and EPA has approved those programs into the SIP as codified in 40 CFR part 52. Three States [Arizona (Pinal County Air Quality Control District)], Minnesota, and Wisconsin) whose title V programs require narrowing have title V applicability provisions that were Federally approved under both part 70 and part 52. For these States, EPA is amending its approval of the title V program in both part 70 and part 52, in order to ensure that the scope of the approved title V program is consistent in both parts.
B. Legal Basis
EPA is narrowing its previous approval for most State title V programs because of an important flaw in the approved title V programs. EPA is rescinding its previous approval for the part of the title V program that is flawed, and EPA is leaving in place its previous approval for the rest of the program. Since there is no need under Federal law to permit sources below the final Tailoring Rule threshold, the title V programs whose approval is being narrowed by this action will continue to be fully approved under CAA section 502.
Among the minimum requirements for a title V program are those for ``adequate personnel and funding to administer the program.'' CAA section 502(b)(4). These requirements need to be understood in context of Congress' clear concern for ``the need for expeditious action by the permitting authority on permit applications and related matters.'' CAA section 502(b)(8); see also CAA sections 502(b)(6), 502(b)(7), & 503(c), 40 CFR 70.4(b)(8).
The flaw in the prior approved programs is that certain program provisions were phrased so broadly that they could, under certain circumstances, sweep in more sources than the permitting authority could process in an expeditious manner in light of the resources that were available or could be made available. Thus, EPA is narrowing the scope of its approval of those title V provisions to include, for purposes of GHG emissions, only title V permitting for sources emitting GHGs at or above final Tailoring Rule thresholds. EPA believes permitting at these thresholds will require resources at a level consistent with the descriptions of adequate resources the State provided, and EPA determined in the final Tailoring Rule that States will have adequate resources to issue operating permits to sources emitting GHGs at this level.
As noted above, for three States it is necessary to revise the SIP in order to
narrow the approved title V program. The basis for narrowing the program is the same under part 52 as under part 70. Indeed, EPA does not believe it would make sense to narrow its approval under part 70 without also narrowing its approval under part 52. Accordingly, for these States EPA is not only exercising its authority to reconsider its approval of the title V program, but also its authority to reconsider and to correct errors in its approval of a SIP.
EPA is narrowing its approval of the title V programs for all States that have indicated that they have authority under their title V programs to issue permits to sources of GHG emissions, but at the statutory level of 100 tpy or more on a mass emissions basis. As a precautionary measure, EPA is also narrowing its approval for States that did not clearly indicate to EPA whether they are in this situation. EPA recognizes that the actual status of the States subject to this rule varies to some degree; while some States have authority to issue permits to sources due to their emissions of GHGs under their title V programs but at the statutory threshold only, other States may have been able to alter their State regulations but have not yet submitted such changes or had them approved by EPA, and still other States did not provide a 60day letter with sufficient information to determine the status of their title V permit programs in relation to GHG sources. EPA believes it is appropriate to narrow the approved title V program for all of these States. In the case of programs that have made Statelevel changes but have not yet received EPA approval for those changes, this approach provides an efficient means of ensuring that at no time is there a requirement under a Federally approved program for sources below the final Tailoring Rule threshold to obtain a permit. For this reason, as a precautionary matter, EPA is narrowing approval for States that did not inform us that they can implement the thresholds in the final Tailoring Rule under their current approved programs.
Some States may lack authority to require permits for GHG sources
at all. Where there is clear and unambiguous evidence that such State
programs do not require permits for any sources due to their status as
a major source of GHG emissions, EPA is not narrowing such programs,
because they do not present the flaw discussed previously.\8\ There may
be some States that similarly lack authority to issue title V permits
to sources due to their status as major sources of GHG emissions, but
have not clearly articulated that fact to EPA in their 60day letters.
EPA intends to narrow its approval for all States where the status of
the title V program in relation to major sources of GHG is unclear.
Although it may turn out that some of these programs do not present the
flaw discussed previously, EPA is only narrowing its approval of
programs ``to the extent'' they require sources of GHG in excess of the
threshold to apply for title V permits as major sources of GHG. Thus,
if indeed a State's program does not require permits for these sources
at all, there are no consequences to sources or the permitting
authority from EPA's decision to narrow the scope of the State's
approval.\9\ On the other hand, if EPA were to refrain from narrowing
its approval, and then learn that the program indeed does require
sources that emit or have the potential to emit 100 tpy or more of GHGs
on a mass basis to apply for title V permits, there would be
significant adverse consequences for the permitting authority and
sources, as described previously in this final rule and in the final
Tailoring Rule. Accordingly, EPA is refraining from narrowing the title
V programs for States that cannot implement the Tailoring Rule
thresholds only if EPA is certain that those State programs do not require permits for sources due to their emissions of GHG.
\8\ If a State with an approved title V program lacks any authority to permit sources that are major sources subject to title V as a result of their GHG emissions, then there is no title V permit program ``applicable to the source'' and those sources in that State have no obligation to apply for a title V permit until after such time as a permit program becomes applicable to them. See CAA section 503(a). EPA intends to work with States, through program revisions, notices of deficiency and/or application of the Federal title V program, in order to assure that major sources of GHGs in all States are subject to title V programs.
\9\ Likewise, if a State did not provide sufficient information to EPA in a 60day letter and it turned out that the State could apply the permitting thresholds of the final Tailoring Rule under its existing approved title V program, there would be no harm to the permitting authority or sources as a result of EPA's decision to narrow its approval consistent with the final Tailoring Rule thresholds.
The following section discusses these issues in more detail, beginning with the title V applicability provisions; then the minimum State program requirements; and then how the two, read together, gave rise to the flaws in the approved State title V programs.
1. Title V Applicability
Each of the States subject to this rule has an approved title V operating permits program and has not clearly indicated to EPA that it has the ability to permit sources of GHG consistent with the thresholds in the final Tailoring Rule. In most of these States, the approved title V program contains applicability provisions that are written broadly to include all pollutants subject to regulation under the CAA for the purposes of determining whether a source is a major source covered by the title V operating permits program. As a result, as soon as EPA promulgates a rule regulating a new pollutant under any provision of the CAA, these title V programs expand to cover additional sources that are major for that new pollutant. Depending on the pollutant, and the number and size of sources that emit it, these applicability provisions could result in a required significant and rapid expansion of the title V program. This is precisely what is happening at present, now that GHG will become subject to regulation under CAA section 202(a) and will become subject to PSD when emitted from certain stationary sources starting on January 2, 2011.
Importantly, the States affected by this action do not interpret their applicability provisions or any other provision in the title V programs to incorporate any limits on title V applicability with respect to new pollutants, and the programs do not contain any other mechanism that would allow the State to interpret applicability more narrowly, at least for GHGs. As a result, the affected States' title V applicability provisions include no way to limit the speed or extent of the expansion a title V program might be required to undergo to address new pollutants.
This sudden expansion of permitting responsibilities is precisely what is now happening in the case of GHGs. As described in the Timing Decision and final Tailoring Rule, GHG will become subject to regulation on January 2, 2011. EPA defined GHGs as the group of six air pollutants made up of carbon dioxide, methane, nitrous oxide, sulfur hexafluoride, hydrofluorocarbons, and perfluorocarbons. 75 FR 31514, 31519 (June 3, 2010) (Tailoring Rule discussion); 75 FR 25324 (May 7, 2010) (LDVR). Absent the limits of the final Tailoring Rule, sources that emit or have the potential to emit at least 100 tpy of GHGs would be potentially subject to title V permitting as of that date. EPA does not have information showing that the approved title V programs in States subject to this rule can interpret their programs more narrowly, to apply to only GHGemitting sources at or above the final Tailoring Rule thresholds. In contrast, as noted elsewhere, several other States are able to interpret their title V programs more narrowly and, as a result, are not subject to this action.
The scale of the administrative program needed to effectively
permit all sources emitting GHGs at the 100 tpy level has highlighted
the unconstrained nature of the title V program's applicability
provisions. EPA has recognized that immediately subjecting major
sources of GHGs at the 100 tpy level to title V requirements is
administratively unmanageable and creates absurd results that were not
intended by Congress when it enacted title V. Thus, in the final
Tailoring Rule, EPA implemented limits on when GHGs become ``subject to
regulation'' for purposes of title V, such that emissions of GHGs will
not trigger major source status, and thus will not trigger title V
permit requirements, unless the source emits both 100 tpy of GHG on a
mass basis and 100,000 tpy CO
2. Minimum Requirements for Approved State Title V Programs
Each of the States subject to this rule submitted a title V program for approval. In order to be approved by EPA, the State program was required to meet certain minimum requirements laid out in the CAA and in 40 CFR part 70. One of these requirements, contained in section 502(b)(4), specifies that every program must provide ``for adequate personnel and funding to administer the program.'' These requirements are further detailed in 40 CFR 70.4(b)(6) through (b)(8).
As noted previously in this rule, and in the Tailoring Rule, the CAA also contains several other provisions making clear Congress' intent that title V permits be processed in an expeditious manner, and these are likewise reflected in 40 CFR part 70. See generally CAA section 502 and 40 CFR 70.4.
Therefore, at the time that the State submitted the title V program for EPA approval, the title V program was required to include assurances that adequate resources would be available to process title V permits in an expeditious manner, according to the requirements of the CAA and part 70.
The title V programs affected by this action, however, will not be able to meet these minimum requirements for a title V program as a result of their applicability to GHGemitting sources. In the proposed and final Tailoring Rule, EPA stated that on a nationwide basis, applying title V to GHGemitting sources at the 100 tpy level will result in far greater numbers of sources (over 6 million) requiring permitting than currently do (about 15,000), and the great majority of these additional sources would be smaller than the sources currently subject to title V. EPA added that the administrative burdens associated with permitting these large numbers of small sources would overwhelm the affected permitting authorities. As a result, for each State, EPA proposed to rescind approval of the part of the title V program that applies title V to GHGemitting sources below the Tailoring Rule thresholds. During the comment period on this proposal, no authority contested this understanding of the facts, none stated that it could administer title V at the 100 tpy levels, and none contested the proposal on grounds that it has adequate resources. In the final Tailoring Rule, EPA refined, on the basis of comments, the precise extent of the administrative burden, but confirmed that the burden was overwhelming and that States lacked adequate resources. As noted above, in the final Tailoring Rule, EPA requested that States submit letters within 60 days of publication of the rule describing how they intended to implement title V for GHGemitting sources. In those letters, none of the States claimed they could, or intended to, implement the approved title V program at the statutory levels. From all this, it is clear that none of the States had included in the title V program submitted for approval an adequate plan or strategy to assure resources to administer the title V program for their GHGemitting sources at the 100 tpy level.
We note that there is nothing inherently problematic with a title V
program submission that did not include the previouslydescribed plan
to acquire additional resources. Only title V programs that lack
appropriate constraints to limit title V applicability for new
pollutants (consistent with Federal law) to match their resources must be narrowed to include such constraints.\10\
\10\ As stated earlier, States included in this rule are in this situation, or else EPA currently lacks sufficient information to determine that they are not in this situation.
3. Basis for Reconsideration and Narrowing of Approval
Based on the previous analysis, it is clear that EPA's approval of the title V programs subject to this action was flawed. They each are structured in a manner that may impose a title V permitting requirement on sources of pollutants newly subject to regulation under the Act without limitations, and yet they do not have a plan for acquiring resources to adequately permit large new categories of sources. As explained previously, the combination of these title V programs' broader applicability to additional stationary sources that emit pollutants newly subject to regulation, and the failure of the approved title V program to plan for adequate resources for that broader applicabilityand to ensure that permits could be issued consistent with the requirements for expeditious processing of permit applicationsis a flaw in these programs. In short, the title V program applicability provisions and the assurances provided in the State program submission are mismatched and therefore EPA needs to reconsider its approval of these programs. As discussed previously, EPA's recently promulgated GHG rules have highlighted this flaw.
It may be true that at the time the affected States submitted their State programs for approval, the precise course of events that have recently transpired concerning GHGs and that have exposed the mismatch between title V applicability and State assurances may have been difficult to foresee. Even so, it could have been generally foreseen that the breadth of the affected State program applicability provisions, combined with the programs' limited State assurances, was at least a potential mismatch that could eventually lead to title V applicability greatly outstripping permitting authority resources. EPA does not believe it is required to wait for that to occur, and then issue a Notice of Deficiency (NOD), to address the issue. Rather, this is a flaw in the title V programs that provides a basis for EPA to reconsider its approval.
In the proposed Tailoring Rule, EPA proposed to narrow its approval
for all approved State programs. EPA now finalizes this narrowing of approval for only the States which have indicated
that their title V programs will apply to sources that emit or have the potential to emit at least 100 tpy of GHG as of January 2, 2011, or for which EPA has not been able to clearly establish whether or not the program will apply to such sources. The States for which EPA is narrowing its approval of the approved State title V program in this action include: Alabama, California, Colorado, District of Columbia, Georgia, Hawaii, Illinois, Iowa, Kansas, Louisiana, Maine, Maryland, Minnesota, Mississippi, Missouri, Nebraska, Nevada, New Hampshire, New York, Ohio, Oklahoma, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Utah, Vermont, Virgin Islands, Virginia, Washington, West Virginia, and Wisconsin. For each of these States, EPA is finalizing an amendment to Appendix A of 40 CFR part 70 that will state ``For any permitting program located in the State, insofar as the permitting threshold provisions concern the treatment of sources of GHG emissions as major sources for purposes of title V, EPA approves such provisions only to the extent they require permits for such sources where the source emits or has the potential to emit at least 100,000 tpy CO
\11\ EPA notes that where an approved State program includes multiple permitting authorities, EPA is narrowing the approved State program if any permitting authority requires narrowing.
EPA notes that the following States have stated either that they can permit major sources of GHG in their approved title V program consistent with the Tailoring Rule thresholds or that they have no authority under their current approved title V program to permit sources due to their status as major sources of GHG: Alaska, Arkansas, Arizona, Connecticut, Delaware, Florida, Idaho, Indiana, Kentucky, Massachusetts, Michigan, Montana, New Jersey, New Mexico, North Carolina, North Dakota, Oregon, Puerto Rico, Texas, and Wyoming. Accordingly, it is not necessary at present to narrow the title V program approval for these States. As noted previously, EPA intends to work with these States as necessary, through program revisions, notices of deficiency and/or application of the Federal title V program, to assure that major sources of GHGs in all States are subject to title V programs, but only at the Tailoring Rule thresholds.
C. Authority for EPA Action
EPA has determined that this flaw in the approved State programs
warrants reconsideration of the prior program approvals, and narrowing
of those approvals. EPA believes it may reconsider its prior actions
under authority inherent in CAA section 502, with further support from
CAA section 301(a), and the reconsideration mechanisms provided under
CAA section 307(b) and APA section 553(e).\12\ In addition, with
respect to the two SIP revisions, EPA has authority to correct errors in SIP approvals, as well as to reconsider them.
\12\ See CAA section 307(d) (omitting title V program approvals from the list of specific types of rulemakings under the CAA not subject to the APA).
In approving the State programs under CAA 502(d), EPA retained
authority to revise that action. The courts have found that an
administrative agency has the inherent authority to reconsider its
decisions, unless Congress specifically proscribes the agency's
discretion to do so. See, e.g., Gun South, Inc. v. Brady, 877 F.2d 858,
862 (11th Cir. 1989) (holding that agencies have implied authority to
reconsider and rectify errors even though the applicable statute and
regulations do not provide expressly for such reconsideration); Macktal
v. Chao, 286 F.3d 822, 82626 (5th Cir. 2002); Trujillo v. General
Electric Co., 621 F.2d 1084, 1086 (10th Cir. 1980) (``Administrative
agencies have an inherent authority to reconsider their own decisions,
since the power to decide in the first instance carries with it the
power to reconsider''); see also New Jersey v. EPA, 517 F.3d 574 (DC
Cir. 2008) (holding that an agency normally can change its position and
reverse a prior decision but that Congress limited EPA's ability to
remove sources from the list of hazardous air pollutant source
categories, once listed, by requiring EPA to follow the specific delisting process at CAA section 112(c)(9)).\13\
\13\ For additional case law, see Belville Mining Co. V. United States, 999 F.2d 989, 997 (6th Cir. 1993); Dun & Bradstreet Corp. v. United States Postal Service, 946 F.2d 189, 193 (2d Cir. 1991); Iowa Power & Light Co. v. United States, 712 F.2d 1292 (8th Cir. 1983).
Section 301(a) of the CAA, in conjunction with CAA section 502 and the case law just described, provides statutory authority for EPA's reconsideration action in this rulemaking. Section 301(a) of the CAA authorizes EPA ``to prescribe such regulations as are necessary to carry out [EPA's] functions'' under the CAA. Reconsidering prior rulemakings, when necessary, is part of ``[EPA's] functions'' under the CAA. Cf. CAA section 307(b). Furthermore, the case law previously cited establishes that a grant of authority to approve State title V programs carries with it the inherent right to reconsider that approval, particularly since Congress has not prescribed any specific alternative mechanism for such reconsideration. Thus, CAA sections 502 and 301(a) confer authority upon EPA to undertake this rulemaking.
EPA finds further support for its authority to narrow its approvals in APA section 553(e), which requires EPA to give interested persons ``the right to petition for the issuance, amendment, or repeal of a rule,'' and CAA section 307(b)(1), which expressly contemplates that persons may file a petition for reconsideration under certain circumstances (at the same time that a rule is under judicial review). The right to petition to reconsider, amend, or repeal presumes that an agency has the discretion to grant such a petition. If EPA has the authority to grant a petition from another person to reconsider, amend or repeal a rule if justified under the CAA, then it follows that EPA should be considered as having authority to reconsider, amend or repeal a rule when it determines such an action is justified under the CAA, even without a petition from another person.
EPA recently used its authority to reconsider prior actions and
limit its prior approval of a SIP in connection with California
conformity SIPs. See, e.g., 68 FR 15720, 15723 (discussing prior action
taken to limit approvals); 67 FR 69139 (taking final action to amend
prior approvals to limit their duration); 67 FR 46618 (proposing to
amend prior approvals to limit their duration, based on CAA sections
110(k) and 301(a)). EPA had previously approved SIPs with emissions
budgets based on a mobile source model that was current at the time of
EPA's approval. Later, EPA updated the mobile source model. But, even
though the model had been updated, emissions budgets would continue to
be based on the older, previously approved model in the SIPs, rather
than the updated model. To rectify this problem, EPA conducted a
rulemaking that revised the previous SIP approvals so that the approvals of
the emissions budgets would expire early, when the new ones were submitted by States and found adequate, rather than when a SIP revision was approved. This helped California more quickly adjust its regulations to incorporate the newer model.
EPA notes that it considered but decided not to use the NOD process, which is explicitly provided for in CAA section 502(i), to address the flaw presented by these program approvals. There are several reasons why EPA determined that it was neither necessary nor appropriate to use the NOD process to address this issue in this rule.
The CAA provides that the NOD is to be used ``whenever the Administrator makes a determination that a permitting authority is not adequately administering or enforcing a program'' and provides that States must correct the deficiency within 18 months. CAA section 502(i).
Here, the problem is not with the way the State is administering or
enforcing its approved State title V program. States are issuing
permits, and modifications, and enforcing the various requirements of
title V as provided for under the Act. The flaw is the mismatch between
the breadth of the applicability provisions and the limited State
assurances of adequate resources, in light of the possibility that a
very large number of new major sources could become subject to title V.
This flaw does not relate at all to the current administration and
enforcement of the title V program, but rather to the overbroad nature
of the underlying structure and scope of the title V program. The
distinction is further underlined by the fact that section 502(i)
contemplates that States would need to take corrective action to
address the notice of deficiency. However, in the case of the flaw
addressed here, EPA believes that no further State action will be
necessary to address this mismatch once the approved title V program has been narrowed by this action.\14\
\14\ As noted in the Tailoring Rule, there may be good reasons for States to update their State laws and regulations to reflect the narrowing and the thresholds of the Tailoring Rule, but the States will still have fully approved programs, and once the Federally approved program is narrowed, the obligation under Federally approved programs to apply for a permit will no longer exist for sources below the Tailoring Rule thresholds.
EPA views the NOD as specific authority for addressing specific circumstances, but concludes that it is not the sole means of changing an approved State program, and it is not the appropriate means in these circumstances. EPA believes nothing in section 502(i) displaces its authority to reconsider prior program approvals and, for the reasons described previously in this rule and in the Tailoring Rule proposal, concludes that such a reconsideration and narrowing is warranted and appropriate.
With respect to the two SIPs being revised, EPA is also exercising its authority to correct errors in SIPs, pursuant to CAA section 110(k)(6), as well as its authority to reconsider its actions. Under CAA section 110(k)(6), once EPA determines that its action in approving the PSD SIPs was in error, EPA has the authority to correct the error in an ``appropriate'' manner, and through the same process as the original approval, but without requiring any further State submission.
EPA's narrowing of its approval of the title V program corrects an error by addressing the flaw previously discussed, that the approved program could, under certain circumstances, sweep in more sources than the permitting authority could process in an expeditious manner in light of the resources that were available or could be made available. EPA believes correcting these SIPs is a reasonable exercise of its authority for the reasons stated herein and for the reasons stated in the PSD Narrowing Rule (``Limitation of Approval of Prevention of Significant Deterioration Provisions Concerning Greenhouse Gas EmittingSources in State Implementation Plans'').
V. Comments and Responses
Comments: Several industry commenters (4019, 4118, 4691, 5083,
5140, 5181, 5278, 5317) and one State commenter (4019) generally
disagreed with our proposal to narrow our approval of previously
approved title V programs. Specific arguments against the proposed approach include the following:
An industry commenter (4298) supports EPA's efforts to limit or conform its prior approvals through CAA sections 301(a)(1) and 110(k)(6) with respect to applicability thresholds. However, the commenter believes EPA should take affirmative steps to ensure that States immediately either revise their regulations to raise existing lower thresholds or demonstrate that they have adequate resources and funding to manage their programs utilizing those existing lower thresholds.
The same commenter states that EPA should issue a NOD, under CAA section 502(i)(1), to all States concurrent with the final Tailoring Rule, unless a State can demonstrate that it has commenced and is committed to finalizing any changes necessary under State law to make it consistent with the Tailoring Rule (4298). The commenter adds that EPA should not finalize any action that would trigger GHG permitting until each State program has been amended. Another commenter (5306) suggests EPA establish an expeditious deadline for States to submit corrective program revisions by adopting model guidelines to help inform State rulemaking, and EPA should complete this process by the end of 2010. The commenter explains that EPA can promptly issue a notice of deficiency and call for expeditious corrective action. See 42 U.S.C. 7661a(i). (5306).
Several comments state that there is no provision in title V, similar to error correction provisions for SIPs, for EPA to use to correct an error in its original approval of a title V program (5140, 5181, 5278).
Response: As discussed previously, EPA believes that it has
authority under sections 502 and 301 to reconsider its approvals of
State title V programs and under section 110 to reconsider SIP
approvals and correct errors in the SIP. Section 502(d) explicitly
requires EPA to approve or disapprove State title V programs, and EPA
believes under the case law cited previously, this authority inherently
includes the authority for EPA to reconsider its prior approval. EPA is
citing CAA 307(b) and APA section 553(e) to indicate that Congress
understood that EPA had the authority to reconsider its action in
response to a petition. There is no reason to believe that EPA's authority to reconsider its
action is limited solely to situations where a person has filed a petition.\15\
\15\ We further note that it is not clear the comment
challenging the citation of section 553(e) in the absence of a petition was intended to reference title V.
While Congress ``undoubtedly can limit an agency's discretion to reverse itself,'' and ``EPA may not construe a statute in a way that completely nullifies textually applicable provisions meant to limit its discretion,'' New Jersey v. EPA, 517 F.3d 574, 583 (DC Cir. 2008) (quotation omitted), there is no evidence that Congress limited EPA's discretion to reconsider its decisions with respect to title V program approvals, or that EPA's approach would nullify any provisions intended to limit its discretion. The only provision that commenters have identified as potentially limiting EPA's discretion is section 502(i), but that section is explicitly directed to the administration and enforcement of an approved program. Where there are problems with how an approved program is being implemented, the notice of deficiency process provides an avenue for working with States to fix those problems. Where, however, EPA realizes (as here) that its approval of a program was based on a structural flaw in the programthat is, a mismatch between the scope of sources potentially covered and the resources to cover themthat may cause future problems with administrability, there is no reason to believe that Congress intended to limit EPA's ability to reconsider its decision.
As noted previously, the distinction between current deficiencies in the administration and enforcement of the title V program, as compared to the overbroad nature of the underlying structure and scope of the title V program, is further underlined by the fact that section 502(i) contemplates that States would need to take corrective action to address the notice of deficiency. However, in the case of the flaw addressed here, EPA believes that no further State action will be necessary once the approved title V program has been narrowed by this action.
The conclusion that Congress did not intend to limit EPA's ability to reconsider its decisions is further supported by the fact that (unlike the situation the DC Circuit considered in New Jersey v. EPA, discussed previously) Congress did not establish any specific substantive limits on EPA's discretion in issuing a notice of deficiency. Rather, EPA is to issue a notice ``whenever the Administrator makes a determination that a permitting authority is not adequately administering and enforcing a program * * * '' Section 502(i)(1). Thus, EPA's decision to reconsider its approval in no way nullifies any provisions meant to limit its discretion.
Finally, the fact that there is no provision similar to section 110(k)(6) for title V provides no basis for concluding that Congress intended to limit EPA's ability to reconsider its approvals. Section 110(k)(6) was enacted in response to a court decision, Concerned Citizens of Bridesburg v. EPA, 836 F.2d 777 (2d Cir. 1987), where the court narrowly construed EPA's authority to correct errors in SIP approvals as limited to typographical or similar errors. In response, Congress added section 110(k)(6) as part of the 1990 amendments to make clear that EPA has authority to correct any errors. No court has ever suggested that EPA lacks authority to reconsider its decisions to approve title V programs, and under the case law the lack of an explicit mechanism to correct errors in title V program approvals is entirely consistent with EPA's view that such authority is inherent in CAA section 502, as discussed previously.
EPA believes this case law also supports its authority to reconsider the approvals into part 52 of two title V programs which are being narrowed. Furthermore, EPA believes we have authority not only to reconsider these SIP approvals, but also to narrow these SIPs using our error correction authority under CAA section 110(k)(6). EPA disagrees with commenters who believe that this provision may only be used for te
FOR FURTHER INFORMATION CONTACT
Mr. Jeff Herring, Air Quality Policy Division, Office of Air Quality Planning and Standards (C50403), Environmental Protection Agency, Research Triangle Park, NC 27711; telephone number: (919) 5413195; fax number: (919) 5415509; email address: firstname.lastname@example.org.